vLex New Zealand

In brief: The FMA has finalised the standard conditions that will apply to full financial advice provider licences. The biggest win is the removal of the condition requiring financial advice providers to maintain professional indemnity cover. We submitted that this condition was inflexible and may create barriers to entry in the market. The additional guidance regarding the outsourcing condition is also pleasing. We have concerns about some changes to the record-keeping condition, and the lack of further consultation on these changes. The FMA also confirmed that instead of Classes A, B, and C licences, we will have Classes 1, 2, and 3. With four months to go until the commencement of the new regime, we are still awaiting some significant pieces of the puzzle, including the client money and property and implementation regulations. The FMA will begin accepting full licence applications from 15 March 2021. (See Article)

The week (2 to 6 November) is 'Privacy Week' in New Zealand. While we think that privacy is important in every week of the year, it is a great time to reflect on what has been a fairly important year when it comes to the development of privacy law in New Zealand. (See Article)

A year full of unprecedented events has delivered one more: for the first time since MMP was introduced in 1996, one party has won a Parliamentary majority. Labour was expected to dominate, but few, even in Labour, would have predicted the extent of the red-wash. Once the special votes are counted Labour is expected to have the third largest vote in its history, and the largest since 1946. Jacinda Ardern and Labour can govern alone for the next three years. Anyone worried that the Greens will hold a disproportionate sway can rest easy. This is going to be a Labour Government led by a careful thinker who wants a third term. Last night’s election result was a ringing endorsement of Labour’s (See Article)

With less than a month to go until election night, policies are being revealed at an ever-increasing rate. While the COVID-19 response packages have grabbed the headlines, Labour has proceeded to deliver a suite of policies targeted at assisting and energising their traditional base. (See Article)

There have been some changes to watch in the freshwater policy space, with recent amendments made to the Resource Management Act (RMA) to establish a new 'freshwater planning process'. The recent RMA amendments also introduced a new requirement for farms to have certified ‘freshwater farm plans’ to manage effects of farming on freshwater. While these requirements are likely to be focused on more nutrient-intensive activities like dairy farming, they will also apply to any ‘horticultural land use. Please see full article below for more information. (See Article)

If you engage influencers – or even just provide free products and services to influencers – from Monday 14 September 2020, the Advertising Standards Authority’s new influencer guidance will apply to you. The ASA’s new AdHelp Information on influencer advertising introduces new requirements that apply to all ad content from 14 September 2020, including a broad range of influencer content. (See Article)

In the latest issue of The Property Lawyer, Partner Michelle Hill and Senior Associate Amy Johns, look at one of the first commercial lease cases since COVID-19 in which the High Court looks at the question of whether a landlord must exhaust a rent bond before pursuing the tenant for arrears. Please see full article below for more information. (See Article)

As of today, the anticipated licensing regime for insolvency practitioners is in force. The commencement of the licensing regime and remaining provisions of the Insolvency Practitioners Regulations Act 2019 (IPRA) was postponed earlier this year due to COVID-19. (See Article)

The Ministry of Business, Innovation, and Employment (‘MBIE’) has released a discussion document on consumer data rights for New Zealand – whether such rights are needed and what form such rights should take. What is a consumer data right? A consumer data right is the statutory ability for a consumer to freely and securely share their data, held by one person (for example, their bank), with a trusted third party (for example, another bank the consumer is interested in doing business with). This concept is known as “data portability”. (See Article)

In the past two weeks, Aotearoa has experienced its first ‘resurgence’ of COVID-19 in the community, following a 102-day period without community transmission. Whether or not this latest outbreak was inevitable and/or whether future outbreaks are also likely to ‘pop up’ from time-to-time as the world continues its battle to contain COVID-19 can remain the subject of debate for another day. (See Article)

Auckland will now remain in Level 3 lockdown at least until Wednesday, 26 August 2020, and the rest of New Zealand will remain in Level 2. In Level 3, unlike in Level 4, many businesses beyond those which provide “essential services” can continue to operate. However, this is subject to them meeting a range of strict legal requirements, which for most businesses include: physical distancing (keeping workers 1 metre away from other workers, so far as reasonably practicable); contract tracing (including ensuring the QR code is displayed in a prominent place at or near the main entrances to the workplace); and prohibition of customer entry to the premises – other than to collect goods through a method that minimises physical contact and does not involve entering a building. (See Article)

After nearly a year since the package was first released for consultation, the Government has now made the key policy changes that comprise the ‘Action for Healthy Waterways’ reforms. The new National Policy Statement for Freshwater Management 2020 (NPS-FM 2020), National Environmental Standards for Freshwater 2020 (NES-FW), stock exclusion regulations, and measurement and reporting of water takes regulations were gazetted on Wednesday 5 August, and will take effect on 3 September 2020. (See Article)

Last month, the Commerce Commission released its new Environmental Claims Guidelines, which are intended to help businesses understand their Fair Trading Act obligations when making ‘green’ claims. The guidelines, which replace the Commission’s earlier Guidelines for Green Marketing from 2008, show that the Commission is taking environmental claims seriously, and businesses need to exercise care when using these sorts of claims in the marketplace. In recent years, these sorts of claims have become increasingly common on everything from dishwashing liquid to fruit rollups. But how can consumers be sure they accurately understand these sorts of ‘green’ claims, and how can businesses make sure they don’t fall foul of the law? Please see full article below for more information. (See Article)

The COVID-19 upheaval has already claimed many jobs. While borders remain closed, everyone whose income relies in some way on tourism faces the toughest of times. The impact on other parts of the economy may not be as severe (yet) as first predicted but doubtless employers and employees alike are looking ahead with teeth clenched. But as unfolding events in Australia show, there may still be more pain to come. Please see full article below for more information. (See Article)

Winegrowers need to make a number of important decisions to get their wine from vine to shelf. But protecting your business's recipe for success is equally as important. In this article we examine the sorts of IP you may have in your business and how to best protect those valuable assets. Please see full article below for more information. (See Article)

The long awaited overhaul of the Unit Titles Act 2010 has moved one step further with the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Bill having been introduced into Parliament earlier this month. The proposed changes address a number of issues that were identified in a 2016 MBIE consultation paper as needed to bring the Act into line with modern practice. Please see full article below for more information. (See Article)

Upheaval is far from over. Uncertainty remains about the persistence of the international health and economic crisis. In-house legal teams will have important contributions to make, particularly in helping organisations to adapt safely to new conditions. Businesses are working to urgent imperatives. Market conditions are changing quickly and businesses are making commercial decisions faster than usual, seizing a new opportunity swiftly, in recognition that it might be a long wait for the next one. Please see full article below for more information. (See Article)

During difficult times, it is important that contractors seek to ensure they have security for payment from their clients. Katrina Van Houtte, Sara Cheetham and Andrea Lim discuss popular methods for obtaining security and how they can help reduce the financial impact if the principal fails to pay in New Zealand Construction News Magazine. Please see full article below for more information. (See Article)

...Changes to The Way Foreign Investment is Reviewed In Australia & New Zealand - In this update we highlight changes to the legislation governing foreign direct investment in each country. Australia - On 29 March 2020, the Australian Government announced changes to the way foreign investment in Australia will be reviewed. Two key changes - 1. All monetary screening thresholds in the Foreign Acquisitions and Takeovers Act 1975 (Act) have been reduced to $0 meaning all proposed foreign investment into Australia (unless exempt under the Act) will require approval by the FIRB regardless of the value or nature of the foreign investor; and... 2. In order to ensure sufficient time for screening applications, the time frame for reviewing both new and existing applications to the FIRB has increased from 30 days to six months... Please see full Business Guide below for more information. (See Article)

After postponing the licensing of insolvency practitioners due to COVID-19, the licensing regime and the remaining provisions of the Insolvency Practitioners Regulation Act 2019 (IPRA) will now commence on 1 September 2020. What has already come into force? (See Article)

The Advertising Standards Authority Complaints Board – New Zealand’s advertising watch-dog – has released its first substantive decision on the requirements applicable to influencer advertising. Elements of the decision might come as a surprise to businesses that deal with influencers. The ASA’s recent decision on this must be understood in the context of the underlying Advertising Standards Code Rules. (See Article)

When the pandemic broke, hand brakes were swiftly pulled, and just like that, the record-breaking bull run of M&A activity was over. It's a very different landscape now credit has become tighter and investors have become more measured. Conventional notions of deal certainty and risk are being severely challenged by an unfamiliar and uncertain environment, and even industry veterans are starting to wonder how long the fear of the unknown will linger. (See Article)

The FMA has signalled its intentions for the full licensing of financial advice providers (‘FAPs’) under the new regulatory regime for financial advice by releasing a consultation paper on the proposed standard conditions for those licences and classes of financial advice service. The standard licence conditions proposed provide us with one of the final pieces of the jigsaw puzzle that will make up the regulatory compliance obligations for FAPs once the new regime is finally into full swing. (See Article)

After much anticipation, the Privacy Bill has passed its third and final reading and is set to be signed into law, with a commencement date for most provisions of 1 December 2020. We’ve published numerous articles on the Bill’s journey and the general outlook for privacy law in New Zealand, including information about what businesses will need to know to prepare for the new Act coming into force. (See Article)

The Government has announced it will proceed with a series of changes to the Commerce Act 1986 in 2021 including: Amending the test for determining whether a business has taken advantage of market power (section 36) to an ‘effects’ based test in line with Australia. Removing exceptions that shield some types of intellectual property related conduct. Increasing penalties for firms that engage in anti-competitive mergers or acquisitions. (See Article)

The further we move into the digital world, the more obvious it becomes that you cannot leave your privacy management on cruise control. Your business needs a privacy breach plan. And you need to know which levers to pull in a crisis. The latest developments in the Capital One saga - which involved a privacy breach that saw over 100 million people’s data compromised across the US and Canada - are a lesson that crisis management expertise is indispensable when dealing with a breach. Capital One had arranged protection, but not sufficient to block an enormous breach, and they had done so in a way that left them liable to have their shortcomings exposed to the fullest public gaze. Please see full article below for more information. (See Article)

In the latest edition of The Property Lawyer, we examine the avenues available to commercial landlords and tenants for resolving rent abatement disputes that have arisen as a result of the Government's COVID-19 safety measures. (Note: Since writing, there have been further Government announcements that may impact commercial landlords’ and tenants’ rent abatement negotiations but such laws have not yet been passed.) Please see full article below for more information. (See Article)

A liquidated damages clause appears in nearly all construction contracts (for example, 10.5 of NZS 3910:2013). Where the contractor fails to complete the contract works by the agreed due date for completion, it is required to pay the stipulated daily or weekly amount in damages to the principal until such time as the works are completed. There are limited avenues for a contractor challenging the application of liquidated damages and so it has become commonplace for disputes over whether the liquidated damages are a genuine pre-estimate of loss and therefore, enforceable, or whether the clause is void as a penalty. This would still leave the contractor exposed to general damages, but these would need to be proven by the principal. (See Article)

There were some significant announcements for the construction sector in Budget 2020: NZ$3 billion in additional infrastructure spending; 8000 more homes to be built by Kainga Ora; a range of training initiatives. All of that will be welcome and much-needed support for the sector. (See Article)

The Government has now released its decisions on a number of freshwater policy initiatives that were first revealed in September 2019 under the banner ‘Essential Freshwater – Action for Healthy Waterways’. The announcements see the new National Policy Statement, National Environmental Standards and Stock Regulations proceed largely unchanged, but with notable tweaks to the time frames, nutrient limits, and regulatory mechanisms. Most notably, dissolved organic nitrogen and dissolved reactive phosphorous will no longer have ‘national bottom lines’, restrictions on farm intensification and stock exclusion requirements will both be relaxed slightly in response to submissions, and the Resource Management Act (RMA) will be amended to include a new regime for farm management plans. (See Article)