Incorporated Societies Act 2022: Information Hub - Parry Field Lawyers

The Trade Marks Act 2002 outlines that trade marks must be rejected if they are likely to offend a significant section of the community. The first part of this article discusses trade marks that are likely to offend a significant section of the community more broadly, while the second part focuses specifically on trade marks that are likely to offend Māori.

Likely to offend a significant section of the community

Adopting the Macquarie Dictionary’s definition, the Intellectual Property Office of New Zealand (IPONZ) acknowledges the word ‘offend’ means to ‘irritate in mind or feeling’ and ‘to cause resentful displeasure in’. Under this definition, when assessing whether a trade mark is likely to offend a significant section of the community, IPONZ outlines that its examiners will take into account the following considerations:

– Each case must be decided on its own merits.

– The question must be considered as at the date of application.

– The question must be considered objectively, from the point of view of “right-thinking members of the public”.

– A mark should be considered likely to offend a significant section of the community where:

– The mark is likely to cause a significant section of the community to be outraged; and/or

– A significant section of the community is likely to feel that the use or registration of the mark should be the subject of censure.

– A significant section of the community is likely to feel that the mark should be the subject of censure where the mark is likely to undermine current religious, family or social values.

Influential on the New Zealand approach to assessing what suffices ‘a significant section of the community’ was the 1976 ‘Hallelujah Trade Mark’ case in the UK. When deciding whether to allow the trade mark ‘Hallelujah’ as the name of a women’s clothing brand, the Registrar’s Hearing Officer found the trade mark was “reasonably likely to offend the religious susceptibilities of a not insubstantial number of persons”.

Although this trade mark application might be decided differently today, the Hearing Officer stressed that rejection of an application is warranted even where the group of people offended are a minority, so long as they are substantial in number. Influenced by this UK decision, IPONZ also outlines that its examiners will also take into account the following considerations:

– The significant section of the community may be a minority that is nevertheless substantial in number.

– A higher degree of outrage or censure among a smaller section of the community, or a lesser degree of outrage or censure among a larger section of the community, may suffice.

Lastly, one interesting principle that the IPONZ examiner will consider is that the application should not be rejected merely because the mark is considered to be poor taste. In a more recent decision by the Office for Harmonisation in the Internal Market (the trade mark registry for the European Union) the previous examiner had rejected the trade mark ‘Dick & Fanny’ on the basis it could offend a significant portion of English speaking consumers. However upon appeal, the trade mark was accepted, on grounds that the trade mark “may, at most, raise a question of taste, but not one of public policy or morality”.

This decision has made it clear that a distinction should be drawn between trademarks that are offensive and trade marks that could be considered poor taste. While the former will be rejected, registration of the latter is not necessarily prohibited.

Likely to offend Māori

In the mid 1990’s, in response to claims that the Trade Marks Act 1953 insufficiently protected Māori intellectual property, the New Zealand Government established the Māori Trade Marks Focus Group. On the focus group’s recommendation, the commissioner now has access to the Māori Trade Marks Advisory Committee when making decisions on Māori trade marks. While not binding, the committee provides advice to the commissioner to minimise the risk of registering trade marks that are likely to cause offence to Māori.

All trade mark applications using Māori text or imagery will be referred to the advisory committee, who will then make a recommendation to the commissioner. One of their key considerations concerns the Māori words ‘Tapu’ and ‘Noa’. Tapu is the strongest force in Māori life, and can be used to describe people, objects or places that are ‘sacred’ or carry ‘spiritual restrictions’. Conversely, noa can be used to describe people, objects and places that are ‘common’, from which the tapu has been lifted. Therefore, trade marks that combine or associate tapu and noa can be considered offensive or inappropriate to a number of Māori.

For example, in 1927 the ‘Native Brand Co’ produced Worcester sauce under a logo that depicted a rangatira (Māori Chief, which is a position considered tapu). IPONZ considers that such a trade mark would not likely be registered today, because associating tapu (a Māori Chief) and noa (a household food items) signifies an attempt to lift the tapu of a Māori Chief, which could be considered offensive.

In some circumstances, it may be appropriate for a Māori name to be gifted to a business or organisation by tangata whenua – the Māori people of the land. Such a gifting or blessing is often done in accordance with mana whenua – the mana or power that comes from the land or rights to the land. A recent example was the gifting of the name ‘Tūranga’ to the new Christchurch City Central Library by Ngāi Tūāhuriri, a subtribe of Ngāi Tahu. Because the name honours a North Island settlement that was home to the Ngāi Tahu ancestor Paikea, use of the name without Māori consent could have likely been considered offensive.

If you are still unsure whether your trade mark might be considered as too offensive to be registered, you may like to consider getting a ‘Search and Preliminary Advice Report’ from IPONZ. This preliminary assessment will give an indication whether your Trade Mark will be allowed. You can read our article about getting a Search and Preliminary Advice Report here.

Should you need any assistance with these, or with any other Commercial matters, please contact Kris Morrison or Steven Moe at Parry Field Lawyers (+64 3 348 8480).
For a more general overview of registering a trade mark, please see our original article here.

We just released our new free ebook “Start Ups Legal Toolkit 2018” with a super fun and interactive presentation at Ministry of Awesome‘s “Coffee & Jam” in Christchurch, New Zealand – had a busking theme with a bit of juggling thrown in from Steven Moe and Kris Morrison!

For more info on the book click here

(If you’d like a free copy of the startups ebook mentioned here just email stevenmoe@parryfield.com – also check out our other free resources for startups at Parry Field and our other recent book “Social Enterprises in New Zealand: A Legal Handbook” at Change for Good)

Also mentioned during the presentation: Seeds: Talking Purpose Podcast Greenhouse Christchurch & Canterbury NZ

We get many questions from start-ups, charities and social enterprises on what they need to consider when establishing themselves. This made us think – “why not put all our answers in one spot?!”

After the initial buzz of coming up with your great idea, the next practical stage can be quite overwhelming – particularly if this is your first time engaged in a start-up. This toolkit seeks to guide you through the process, informing you on different structures, key contracts, and highlighting the topics people often forget about.

The book covers a range of topics including:

how to set up a company;
specific guidance on social enterprise and not for profits;
fundraising;
liability and ongoing duties;
employment issues; and
includes a template of a non-disclosure agreement.

With the success last year of “Social Enterprises in New Zealand: A Legal Handbook,” we are excited to see the impact this book will have.

To get the ebook, click here.

The book launch, which includes a bit of a busking theme by Kris Morrison and Steven Moe can be viewed here

If you find this resource helpful then please consider joining us in spreading the word to others by sharing this page on social media or emailing the link to one or two other people.

The Government abolished Gift Duty on the 1^st October 2011. When this news was first announced about a year prior to that date, many people thought they would simply wait and then make a large, perhaps final gift, to their Trust and so avoid the need to carry on with a regular gifting programme. Due to the change in the law, that is certainly now possible.

Points to consider

While the news is a welcome change, we would express caution. There are several reasons why you may wish to take a conservative approach at this stage:

Consider whether it is a good idea to gift all the debt owing by you to your Trust. In some instances it may be appropriate to leave some money owing. For example, the retention of some of the debt gives you greater control over the value of the Trust’s assets and therefore, distribution amounts to beneficiaries, some of whose personal circumstances and life choices you may not approve. Reasons may vary, but it is certainly a point worth discussing with us first.

Recent advice by Ministry of Social Development (“MSD”) indicates that there will be a potential disadvantage if you make large gifts. When assessing a person’s eligibility for a residential care subsidy, MSD take into account gifting over the previous 5 years (the Gifting Period) and treat any gifts made during that time exceeding $6,000.00 per annum as a couple, as your assets. They will then include them in your financial means assessment. Gifting outside the last 5 years before the assessment (“Historic Gifting”) must not exceed $27,000.00 per annum for both parties as a couple. Again, to the extent it does, MSD will include the excess gifting as your assets, the total value of which is likely to exceed MSD’s minimum asset threshold for subsidy eligibility.

Even if you pass the asset test you may fail MSD’s income test. This is because both tests are separate and MSD can find there’s been income deprivation from assets gifted off at allowable amounts under the first test! Currently the exempt income limit for a couple who are both in care is only $1,925.00 per annum.

In other words, if one of your reasons for making a larger than usual gift is to gain a possible advantage for future residential care subsidy purposes, then you may achieve the very opposite of what you intend.

In addition to the above, if you are intending to gift more than $27,000.00 in any one year, we are recommending that clients arrange a Certificate of Solvency, ideally prepared by their accountant, for greater credibility. This would be attached to the usual Deed of Forgiveness of Debt. This Certificate is a statement that the assets being retained by you are sufficient to meet your current known liabilities. This is designed to provide evidence that the gifting cannot be construed as an intention to defeat a known creditor’s ability to satisfy their account by accessing your assets, which a lump sum gift may jeopardise.

It is also important to ensure that annual Trust minutes or resolutions are attended to even if your gifting programme has finished. This is evidence of the on-going activity of the Trustees and their attention to the matters of the Trust. Among other advantages, such activities reduce the likelihood of a claim that your Trust is an “illusory” Trust (ie: not a real trust).

Every situation is unique so please discuss your particular case with a professional advisor who can provide you with a tailored solution. Please contact Pat Rotherham at Parry Field Lawyers, (03 348 8480) patrotherham@parryfield.com

Where your policy provides that the insurer will repair your home to a condition “substantially the same as new” what does it mean? The case of East v Medical Assurance New Zealand Limited recently considered this question.

The insurer argued that the standard of repair was that in existence when the home was first built. The homeowner argued that the standard was when the home was repaired or rebuilt (i.e. modern standards).

The Court agreed with the homeowner, holding that “as new” contemplates a restoration to a condition as new at the time of the rebuild or restoration and in accordance with contemporary building standards.

The Policy

The policy stated:

the insurer will “cover the cost of rebuilding or restoring the dwelling to a condition substantially the same as new, so far as modern materials allow, and including any additional costs which may be necessary to comply with any statutory requirements or Territorial Authority by-laws”.

The Decision

The Court held that the policy wording meant that the insurer was required to restore the home to a condition as new at the time of the rebuild/repair and in line with current building requirements. This was because:

The policy had been changed prior to the earthquakes to refer to “as new” rather than “when new”. This change clearly contemplated restoration to a condition as new at the time of the restoration.
“As new” also naturally implies rebuild or restoration in accordance with contemporary standards. This was also reinforced by the policy wording requiring the insurer to meet current statutory requirements.

However, as the word “substantially (the same as new) was used, the policy did not mean completely new. Nonetheless, it did require that modern materials be used and that the restoration meet minimum building requirements.

As a result of the Court’s interpretation, in the context of the specific foundation works being considered, it was held that the Court must be satisfied on the balance of probabilities (more likely to be true than not true) that the foundation works proposed by the homeowner were necessary to meet current Building Code standards.

Section 112 of the Building Act

The Court also expressly considered section 112 of the Building Act, a section which is often misinterpreted as allowing a lower standard of repair.

In short, section 112 provides that, when a building is altered (e.g. repaired), a Council in granting a building consent for the repairs must be satisfied that, after the repairs, the building will continue to comply with the Building Code to at least the same extent as before the repairs.

The insurer’s expert argued that this meant any repair only had to comply with the Building Code to at least the same extent as it had done before the repairs. In other words, if the damaged area did not meet the current Building Code at the time of the earthquakes, the insurer was not required to pay to upgrade the damaged area to ensure that it now met the relevant requirements.

The Court disagreed, recognising that s112 does not negate the requirement that any repair must still comply with the current Building Code. Instead, s112 simply means that there is no additional obligation to upgrade other undamaged areas to meet the current Building Code (except in certain limited aspects, such as fire safety).

Discussion

This case was appealed by the insurer to the Court of Appeal which agreed with the homeowner that the standard is when the home was repaired or rebuilt (i.e. modern standards). The Court specifically noted that there was no rational basis for limiting the homeowner’s right to compliance costs to those in existence when the house was built rather than in 2015 when restoration work was likely to be carried out.

The Court of Appeal also found that it was irrelevant that the foundations themselves were not damaged in the earthquake (most damage was caused by post earthquake settlement). The Court held it would be artificial to separate damage to the house from the foundations when they are “part of an integrated whole”. It was particularly relevant that unless the foundation were addressed as part of the repairs, the house would not be restored to a condition substantially the same as new in accordance with current Building Code requirements.

This article is not a substitute for legal advice and you should talk to a lawyer about your specific situation. If we can assist in any way please do not hesitate to contact Paul Cowey at Parry Field Lawyers (348-8480), paulcowey@parryfield.com

The ADLS (Auckland District Law Society) Deed of Lease is the document most commonly utilised for commercial tenancies. An updated version (6th edition) has recently been released.

The updated lease contains a number of key changes which, if left unamended, could prove problematic for landlords and/or tenants. We summarise some of those changes/issues below.

We always recommend that, before you sign a new Agreement to Lease, you forward it to us for our review – as once signed, it sets the terms of the Lease in stone, potentially having significant consequences down the track.

Insurance

The Lease now makes it clear that the tenant is responsible for meeting (part of) the insurance excess in respect of a claim – increased to a maximum of $2,000 (previously $500). The parties can of course negotiate a different excess amount, and some landlord will require tenants to meet the whole of their excess, which can be significant, particularly for earthquake damage.

It is important that Landlords ensure they can meet the insurance obligations set out in the lease and, if not, make specific changes to the documents which reflect the true insurance position. While the lease does provide that the Landlord will not be in breach if insurance cover becomes unavailable (other than because of the Landlord’s act or omission) the Landlord must still use all reasonable endeavours on an on-going basis to obtain cover. There are also additional obligations to advise the Tenant when cover becomes unavailable and to give reasons, as well as provide the Tenant with reasonable information relating to the cover on request.

The types of “optional” insurances that the Landlord may insure against – loss of rent, loss to fixtures and fittings and public liability – have been moved to the First Schedule and, if not specifically deleted, mean a landlord may be obliged to effect insurance that they do not have in place.

Landlords should also be aware that, as a result of the Canterbury earthquakes:

they may be unable to obtain certain types of insurance (eg full replacement cover);
the annual insurance premiums are likely to have increased significantly; and
they may be liable for an excess much higher than the $2,000 set out in the lease.

This reiterates the need for even the Agreement to Lease to accurately reflect the landlord’s specific circumstances.

Lack of Access in an Emergency

New provisions have been included in an attempt to address situations such as the “red zone” in Christchurch where the leased premises were either not damaged or only partly damaged but could not be accessed by the tenant and the lease remained on foot.

In such cases, there is now to be an abatement (reduction) of a fair proportion of rent and outgoings where the tenant is unable to gain access to fully conduct its business because of reasons of safety of the public or the need to prevent any hazard, harm or loss that may be connected with the emergency. These provisions only apply however if the lease has not been cancelled as a result of the premises being totally or substantially destroyed.

The new provisions specifically include as reasons of safety/need to prevent harm:

a restricted access cordon;
prohibition of the use of the premises pending completion of structural engineering or other reports; and
a restriction on occupation of the premises imposed by any competent authority.

In these situations, the lease also now provides that either the landlord or tenant may cancel the lease if access cannot be gained for a period specified in the lease (the default period being nine months) or if the party cancelling can at any time prior to cancellation establish with reasonable certainty that the tenant will be unable to gain access to the premises for that period.

Landlords need to consider their insurance position if rent is abated in circumstances where there is no damage to the premises – i.e. can they in fact cover this risk when most loss of rental policies only respond to actual damage to the premises?

Legal Costs

Previously the tenant was liable to pay the landlord’s costs for the preparation of the lease and any variation or renewal of it. Now each party is to meet their own costs unless the lease specifies otherwise.

The landlord’s costs of providing consent and legal costs relating to enforcement are still chargeable.

Rent reviews

If no rent review date is specified in the lease (again, including the Agreement to Lease), the default position is now that there are no reviews. Previously, the default position had provided for a rent review on each renewal date. There is also no default review upon a lease renewal – again, a review on that date will need to be specified.

In addition, the lease now provides for a choice between market rent review or CPI rent review (or a combination of both throughout the lease term). Both forms of rent review will operate as “ratchets”, even if a CPI rent review follows a market review.

Premises Condition Report

A Fifth Schedule has been attached being a Premises Condition Report which, if completed, provides evidence of the condition of the premises at the commencement date of the lease. The intention is to avoid disputes as to the condition of the premises at the end of the lease.

Outgoings

Clause 16 of the First Schedule provides for an estimate of the Outgoings as at the Commencement Date. This may not always be easy to ascertain with any degree of certainty and it may be prudent to consider deleting this part.

Maintenance and Improvements

The re-decoration clauses in the lease now clarify that replacement items (eg floor coverings) are to be to a same or better quality, specification and appearance as before.

The landlord also now has an express obligation to keep the building weather-proof.

The 6th edition makes it clear that the landlord is responsible for the maintenance and replacement of “building services” – which are those services provided by the landlord as an integral part of the building – e.g. water, gas, electricity, lighting, air conditioning, heating, lifts and escalators etc. The cost of replacing these are not recoverable by the landlord as an outgoing – the rationale being that this is consistent with the expectations of a tenant who pays rent for premises with a level of services enabling that tenant to use the premises for it’s specified business use.

Make good/reinstatement must now occur by the end the lease term – not within a reasonable time thereafter, as had previously been the case.

If the landlord requires access to the premises to comply with the requirements of any statute or regulation (such as bringing a building up to building code) then the tenant must grant such access, but an abatement (reduction) of a fair proportion of rent and outgoings will apply if the tenant’s use of the premises is “materially disrupted”. The landlord can require the tenant to vacate the premises altogether while repairs are being carried out.

There is also a good faith requirement on the part of the landlord, supposedly to ensure that there is reasonable co-operation with the tenant in terms of timing and extent of work. Particularly where upgrades to meet the Building Code are involved, timing may be very important – e.g. avoiding the Christmas season for retailers.

The improvements rent percentage has been deleted, partly out of fear that landlords may try to inappropriately pass expensive building strengthening costs onto tenants under the clause. This does not, of course, stop the parties themselves specifying what terms should apply if building strengthening/improvements are in fact contemplated during the term of the lease.

Related to the above, clause 13 of the Outgoings Schedule now specifies that the costs of upgrading the building to comply with the Building Act 2004 are not an outgoing recoverable from the tenant.

Counterpart clause

A counter part clause is now included which means that, in essence, the Lease can be signed concurrently by the Landlord and the Tenant in their respective lawyers’ offices.

This article is not a substitute for legal advice and you should talk to a lawyer about your specific situation. Please contact Tim Rankin at Parry Field Lawyers (348-8480) timrankin@parryfield.com

From 1 April 2011 all employers are able to employ new employees on a trial period of up to 90 calendar days. This means that, subject to certain conditions, an employer can dismiss a new employee within that period without the employee being able to take a personal grievance for reasons of unjustified dismissal. Read more

In February 2009, the New Zealand Government announced an intention to increase the Disputes Tribunal jurisdiction limits. Presently, claims are limited to $7,500.00, or $12,000.00 if the defendant agrees. These limits are to be lifted to $15,000.00 and $20,000.00 respectively.