ARTICLE by John Kahukiwa, Partner
June 2010

 “Family business structures found guilty of tax avoidance”

 Introduction

On the 4^th June 2010 Court of Appeal, by a 2 – 1 majority, has found that two Christchurch orthopaedic surgeons (independently of each other) deliberately avoided paying higher taxes. Each Surgeon set up his practice so that it was run by a company and owned substantially by his respective family trust. The case is worthwhile noting, because of the common use of this type of structure across New Zealand, and its relevance to a range of family run businesses.

 The Facts

The facts are that Ian Penney and Gary Hooper (the subject tax payers) initially conducted their practices on their own accounts but later set up companies to buy their practices. The companies were owned substantially by Mr Penney's and Mr Hooper's family trusts respectively and the men were employed by them at salaries determined by the companies.

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ARTICLE by Georgia Bates, Solicitor
June 2010

An employment law update on the proposed changes to employees’ break entitlements

The current position

In April last year changes to the Employment Relations Act 2000 took effect, creating a statutory entitlement for employees to rest and meal breaks during their shift or work period. The changes were designed to reflect and codify what was seen as standard practice in New Zealand. 

Following this amendment, employees have been entitled to take paid rest and unpaid meal breaks in the middle of the work period (where reasonable and practical) within the following schema:

1. Where the employee worked more that two hours but not more than four hours, they were to be given a paid 10 minute rest break.
2. If an employee worked more than four hours but less than six hours, they were permitted to have a paid 10 minute rest break and an unpaid 30 minute meal break.
3. Where an employee worked more than six hours but less than eight hours, they were to be given two paid 10 minute rest breaks and one unpaid 30 minute meal break.

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ARTICLE by Bruce Johnson, Partner
May 2010

On Tuesday 18 May 2010 the Government announced a new scheme to assist the owners of leaky homes. Implementation of the scheme is conditional upon take up by Local Authorities and banks.

Corban Revell Lawyers has been assisting leaky homeowners since the problem manifested in the late 90s. Corban Revell are able to provide comprehensive advice and expert assistance to leaky homeowners.

At this time, only the main points of the rescue package have been released. If the scheme is approved by Local Authorities and banks the Government anticipates having the new package up and running in early 2011. The details of the package that have been released are as follows:

• The cost of “agreed repair costs” shall be met by the Government as to 25%, the local authority as to 25% and the homeowner as to 50%

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ARTICLE by Barbara McDonald, Registered Legal Executive
October 2008

Enduring Powers of Attorney for Personal Care and Welfare and/or Property enable a person (the donor) to appoint an attorney to look after their affairs on their behalf when they no longer have the mental capacity to do this for themselves.

However previously there have been concerns raised by Social Workers and Age Concern that there was misuse of enduring powers of attorney and that the donor did not have adequate protection from misuse. As a result a report was prepared by the Law Commission and from the 26th September 2008 The Protection of Personal and Property Rights Amendment Act 2007 came into effect.

Article Published in the Western Leader: 2 October 2007
Written by Tom Allen, Registered Legal Executive

Father of four young children deceased suddenly.  The father had always been conscious about the need to look after his widow and the four young children.  He had taken out a life insurance policy over his life for a substantial sum of money.  However, after the father passed away, what should have been a simple process became complicated because the father:

(i)         failed to make out a will; and

(ii)        failed to name his widow or children as beneficiaries under the life insurance policy.
 

Article Published in the Western Leader: 11 September 2007
Written by: Lisa Roberts, Associate

You will have heard in the news recently about a couple who were ordered by the Court of Appeal to pay damages to the Vendor (Seller) on a Northland property deal as the couple had “not done enough” to sell their home, pursuant to a condition contained in an Agreement for Sale and Purchase.

Corban Revell have acted on a similar matter, also with a successful outcome for the Vendors.  Initially, Corban Revell was instructed by the Vendors to act on the sale of their residential property, conditional on the Purchasers obtaining finance approval. Subsequently the Purchasers cancelled the Agreement on the grounds that the Purchasers could not obtain finance.