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Welcome to our Spring 08 issue of news from Paul Gallagher Legal.
In this issue we talk about new developments within our industry and thought-provoking situations we have seen with our clients. We admit it has been a very challenging year for us and our clients alike. We have been exposed to a very diverse range of work this year, which has kept us up to speed in a variety of areas beyond the more prescriptive ‘conveyancing’ type of matters. We would also like to welcome a new addition to our team – Harvey Faux. We’ve got Harvey ‘covered’ further in the newsletter.
Client Care – fostering good client relationships
In our Summer 07/08 newsletter we briefly overviewed a new ‘Code of Conduct’ the Law Society has been planning to implement. This has now been introduced for all Legal Firms to follow. This Code of Conduct has been incorporated into our Terms of Engagement as required. It now forms part of our existing process to inform any existing and potential clients about how we do business.
Who will be working for you?
We will select a lawyer/staff member who we feel is best suited to your needs, thus ensuring that your matter is handled in a manner that sees you obtain the best advice in the most economical and efficient way. Our selection is also made after we consider your clear instructions to us and have gained an understanding of all the issues raised during this process. We will provide you with an estimate of fees which is covered in our ‘Fees Estimate Schedule’. This will be based upon which member of our Firm will be working under your instructions and what is involved in resolving your matter.
Payment of fees
We also specify our terms of payment in our Terms and Conditions. These may change depending upon the nature of your request to us and this is outlined at the time we first discuss your requirements. We see this as a way for both parties to have a clear expectation of what can be a real ‘sticking’ point – people have a natural reluctance to start talking about things in terms of dollars!
Confidentiality and Ownership of Information
During the course of acting for you, be assured we will hold in confidence all information we acquire concerning you or your affairs. We will not disclose any of this information to any other person other than those in our firm providing legal services for you - except in special circumstances outlined in our Terms and Conditions. Under the Privacy Act 1993 you have the right of access to, and correction of, your personal information held by us.
Claims and insurance
Like most firms within the legal profession there are methods of protection for our clients that ensure they are protected against potentially ‘dodgy’ legal practitioners. The Lawyers’ Fidelity Fund exists to provide compensation of up to $100,000.00 (per claim) for clients who suffer a financial loss in certain circumstances. These circumstances include the theft by a Lawyer of money or other valuable property entrusted to that Lawyer while they are providing legal services to the public or while they are acting as a Solicitor-Trustee. We also hold professional indemnity insurance that covers certain situations, with the cover exceeding the minimum standards from time to time specified by the New Zealand Law Society.
If you have a complaint
We will provide you with competent, timely service following your instructions, but if you have any complaint at all about our service please raise it with the person responsible for your matter, or, if you prefer, directly with Paul Gallagher. If you are not satisfied with the outcome, you have the right to take the matter up with the New Zealand Law Society which runs a complaints service.
Our agreement with our clients
The entire copy of our standard terms, together with our engagement letter or letters, will form an entire agreement between our clients and our Firm. A full copy of our Terms and Conditions as well the Client Care material is made available to our clients before we start to act under any instructions. We ask that our clients read it and understand that it is the foundation of the work we will be undertaking. We have copies of this available at our offices and also on our website. We make it a policy of ours to be open and honest with our clients and encourage transparency in our dealings with you. However, if you have any areas of concern we invite you to contact us to discuss them.
If there is anything you need to discuss we invite you to call either Paul, Cherie or Harvey, they’ll be happy to talk with you further.
Ph: 415 9321
Keeping those debtors under control
Businesses have many facets, and the thought of trying to collect overdue invoices due for payment to your business can sometimes fall to the bottom of the ‘to do’ list. This can be especially the case with a small business where other tasks just seem to take more priority. But, if you don’t keep those invoices under control, pretty soon what can be a gentle reminder to someone owing money for services or products can turn into a nasty dispute.
So, here are tips on how to get this under control:
- Make sure your customers know your terms of trade, and stick to them. If your clients respect you then there is a better chance they’ll pay you first.
- Get your invoices out in a timely manner, don’t leave it till the last moment and then stress about payment.
- Communicate with suppliers and clients alike. People deal with people and if you are regularly talking with your business contacts, it is easier to manage their expectations.
- Be careful who you give credit to, and keep a close eye on existing customers so that if there are any issues, you notice it straight away.
- Don’t put all your eggs in one basket. Having that large customer can be a lot of work and a lot of risk. Try to have smaller customers as well as the ‘big fish’, that way your risk is minimised.
We have more information about how to keep those debtors under control on our website, so log onto www.lawfirm.co.nz and look under our services section. Also, give Paul, Cherie or Harvey a call to talk about business matters too. Remember, we are a small business and are faced with the same issues as most businesses. We’d love to hear from you.
Rain, rain, go away?
The leaky homes ‘crisis’ has been in effect for quite some time now with many homeowners being caught up in the fall out. John Gray, president of the Home-owners and Buyers Association was reported in the Herald on Sunday July 13, 2008 as estimating that up to 80,000 homes are affected. I’m sure we all know of at least one person who has been tied up in some respect in this whole ‘can of worms’.
And,… the Body Corporate?
If the owner has a leaky home, and the land is a ‘fee simple’ (which means there is a separate title for the land, not just the house), then they are able to make decisions regarding how they would like to proceed independent of the involvement of neighbouring properties, or others they don’t want involved. However, owners of Unit Title developments such as apartments, flats, townhouses, office blocks, shopping centres and other building developments where multiple owners own a type of property known as a ‘Unit Title’, as well as property common to the development, are bound by a different set of obligations.
The Owners Collective
This is where the rights and responsibilities of a Body Corporate comes into play. This is a collective of all owners in a Unit Title development – and the role of the Body Corporate is to manage the building development and the common property.
There are different types of Bodies Corporate as well as different ways of voting and how the decisions are made; what are the roles, duties and functions; financial responsibilities; relationships with developers, members, owners and purchasers; and methods of resolving disputes. You can’t opt in or out, you are a member of that Body Corporate. If you are considering owning or investing in a development that has a Body Corporate then make sure you know what your unit entitlement is i.e. your share of expenses.
Paying Your Fair Share
The implication of this is that the owners of a development governed by a Body Corporate are governed by a specific set of rules. Shared ownership arrangements that exist for most apartment and townhouse developments (under the Unit Titles Act) has a Body Corporate administering the owners' affairs. The act and rules impose constraints on your ownership that will see you assume very significant responsibilities and liabilities. You need to be aware that in most cases you will assume liability for your share of the repairs and maintenance of the common property associated with the complex and the general running expenses of the Body Corporate.
So, how does this relate to the leaky homes scenario? A specific case – as reported on the Leaky Homes Action Group website – deals with a three level apartment in a complex of twenty five apartments in Auckland. It's expected that each owner will have to come up with his share of the cost, about $120,000. That is a conservative estimate. What if the owner cannot raise the finds to cover the repairs? The owner is aware that the Bodycorp can sell the apartment on the owner’s behalf and accept any price as long as it covers the rebuilding, plus legal cost. Therefore it is a difficult position when a home-owner cannot raise the money for the repair bill and needs to sell their home while their Bodycorp is insisting on them paying their share of the repair bills and legal costs.
The Weathertight Homes Resolution Service was set up by the Government to help owners of leaky homes less than 10 years old. To quote from the website specifically regarding this “The purpose of the WHRS Act is to provide speedy, flexible and cost-effective procedures for resolving leaky home disputes as an alternative to the courts.” To find out more about this log onto:
http://www.dbh.govt.nz/weathertight-services
Therefore it is important for anyone looking to purchase a dwelling that is subject to the rulings of a Body Corporate to be aware of the following; even if your home is not leaky, you are still obliged to pay up to the Body Corporate to fix everyone else’s apartment! If you would still like to pursue this option, and let’s face it, sometimes it can be the only feasible option available, we would then recommend that your house purchase agreement is conditional on obtaining copies of the Body Corporate minutes for the past few years. As a potential purchaser you can then see if there has been any mention of a leaky house scenario.
If you have a leaky home and need assistance please give us a call. For additional support, there is an action group dedicated to leaky homes – they can be contacted on the following web site:
http://www.leakyhomesactiongroup.org.nz/
And, if you are looking at investing in a complex, the ARC has put out a great publication to help out with the groundwork you’ll need to do - ‘The Mysteries of Bodies Corporate – well worth a read if this is something you are considering. http://www.bodycorporate.net.nz/images/BC%20Info.pdf.
As with anything of this nature – we are in a position to offer some great independent advice. If you are likely to be looking at investing in a dwelling of this nature or already have, give us a call – I’m sure we can help you answer any queries you have.
Ph 09 415 9321 or www.lawfirm.co.nz
What is an Enduring Power of Attorney all about?
It won’t happen to me! That is what the majority of us would think if we consider the possibility that through illness, accident or just plain old age, we may lose the ability to make decisions for ourselves. This includes the major possibility of our personal wellbeing and property being affected. It is also a commonly held perception that if something like this should happen, our partner or family member would automatically be responsible for all decisions regarding our personal wellbeing and property. Not so!
There is specific legislation that was put in place to safeguard for just this possibility. The main purpose of the legislation was protective, and originally with the elderly in mind, it pre-empts a person becoming mentally incapacitated at some later date. Thus the Protection of Personal and Property Rights Act 1988 (“the Act”) was ‘born’ – allowing for the making of an Enduring Power of Attorney (EPA).
Taking Control
There are two forms of EPA. The first relates to property, and enables one person (‘the donor’) to give another person (‘the attorney’) - quite often a family member, close friend or unrelated professional advisor - power to act in respect of all or some of the donor’s property affairs. “Property” refers to real property, such as land, or personal property, such as jewellery and motor vehicles. In this circumstance, it can be structured to take effect immediately upon signing and continue after the advent of the donor’s mental incapacity, or to commence only after such mental incapacity has occurred. The second form of EPA relates to personal care and welfare, and empowers the attorney to make decisions about the donor’s health and wellbeing, only commencing once the donor has become mentally incapable.
If a person becomes mentally incapacitated without an EPA in place, then application would need to be made to the Courts to appoint someone to manage that person’s affairs. If a person wishes to ensure that someone they know and trusts will become his attorney, then they need to specify that person in an EPA.
It’s a Matter of Trust
This brings us to the trust that the ‘donor’ needs to have in their ‘attorney’. There have been a number of disturbing reported instances where attorneys have made decisions under EPAs which have not been in the best interests of their donors. This has been noticeably so where the attorney is a family member who has made decisions more of benefit to himself rather than his donor. Typically, such decision-making process will have involved some form of coercion, undue influence or misrepresentation by the attorney over a donor who is ill or frail.
Because of this, the current legislation has been amended with the specific intention of reducing the likelihood of abuse of the EPA. The activation of the provisions of the Protection of Personal and Property Rights Amendment Act 2007 (‘the Amending Act’) is due to take effect as at 26 September 2008.
The Amending Act therefore seeks to:
- give donors greater control over the management of their own affairs and to make it more difficult for attorneys to promote their own interests over those of the donor.
- make specific process and procedural changes, aimed at such problem areas as the activation of EPAs, decision making and continuation of gifting - making it quite clear that an attorney must act in the best interests of the donor.
- ensure that the attorney keeps records of all financial transactions involved in order to keep the donor, or any persons specificed in the EPA (including members of the donor’s family) informed about what he/she is doing.
- enable certain people (other than the donor) to have the automatic right to apply to the Family Court to have access to, and review the attorney’s actions. Currently, anyone other than the donor needs to have ‘leave of the Court’ to do this. This should give greater opportunity for compensation from attorneys who abuse their powers.
There are many other significant changes that will be made to present EPA practices by the Amending Act. This reflects the importance that has come to be attached to EPAs as a means of protecting those who are no longer capable of managing their own affairs by reason of accident, illness or the infirmities of old age.
An EPA is an effective and empowering way to make sure future circumstances are protected, especially with regards to property and personal care and welfare. If you have existing EPAs, it is important these are reviewed to ensure your future wishes are taken into account. Paul, Cherie and Harvey have considerable experience in this field so please contact them to discuss your requirements.
Introducing Harvey Faux
Harvey is our newest staff member, having started with us in July 2008. Harvey has a huge amount of legal experience especially in the conveyancing and commercial areas, having gained knowledge from working both locally and in Hong Kong.
Born in England, Harvey moved to New Zealand with his family at the age of five, initially living in Auckland (Ponsonby and Newmarket). In time his family settled in Opotiki where he completed his schooling at Opotiki College, eventually graduating from Victoria University with an LL.B in 1968.
Harvey first worked as a staff solicitor for a practice in Mt.Maunganui gaining expertise in conveyancing. In the early 1970s he travelled to the UK and Europe, taking in the 1972 Munich Olympic Games before returning to New Zealand shortly afterwards where he joined a Whakatane law firm - becoming a partner of that firm in 1973. In 1976 Harvey's wanderlust again took over and he travelled to the US, Canada and Mexico - this time taking in the Montreal Olympic Games.
In 1982 Harvey took up a position with the Registrar General's Department in Hong Kong and spent 14 years there rising up to become an Assistant Director of the Intellectual Property Department. He returned to New Zealand with his family in 1996 and eventually returned to the private practice of the law with a Howick law firm where he was for 6 1/2 years before joining PGL.
Harvey lives ‘on the other side’ in Remuera with his wife and two children. In his spare time Harvey is a keen follower of sports especially rugby and cricket and enjoys family life. His weekends are often spent watching his son play rugby for Auckland Grammar.
Harvey has settled in over the past month and is a welcome addition to our team. We're sure you’ll hear more of him over the next few months.
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