Attention trustees and fiduciaries: is it time for a change to the non-profit rule and duty to account?

Attention trustees and fiduciaries:  is it time for a change to the non-profit rule and duty to account?

A fiduciary, including a trustee, is under a duty not to profit from their office.  Where a fiduciary is in default, equity requires them to account to their principal for any profit made. 

A recent decision of the UK Supreme Court has considered whether the non-profit rule and the duty to account are due for a change.  This is a particularly important issue for professionals, such as lawyers and accountants, who regularly act as trustees and provide other services as fiduciaries.

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New Zealand courts say ‘yes’ to Common Fund Orders in representative proceedings

New Zealand courts say ‘yes’ to Common Fund Orders in representative proceedings

In the recent decision of Simons & Ors v ANZ Bank New Zealand Limited & ASB Bank Limited, the Court of Appeal approved the High Court judgment of Venning J, in which it was held that the High Court has jurisdiction to issue a common fund order (CFO) – the first authority of its kind in New Zealand.  CFOs “are a mechanism which provide a way of sharing the costs of bringing a class action between all class members, regardless of whether they have signed the funding agreement” with the litigation funder.

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Duty of fair presentation of the risk – who has knowledge of a company’s circumstances?

Duty of fair presentation of the risk – who has knowledge of a company’s circumstances?

As insurers start preparing for the implementation of the Contracts of Insurance Acts, underwriters, product teams and brokers will be considering how the new duties of disclosure will operate in practice.  The new New Zealand non-consumer duty of fair presentation of risk is almost identical to the duty in the UK Insurance Act 2015, so decisions by Courts in England and Wales will be very persuasive in New Zealand. 

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Maritime New Zealand v Gibson [2024] NZDC 27975

Maritime New Zealand v Gibson [2024] NZDC 27975

On 30 August 2020 Pala’amo Kalati was killed while working as a lasher at the Ports of Auckland.  Mr Kalati was crushed by a falling shipping container while working within an exclusion zone near an operating crane - a practice prohibited under Ports of Auckland Limited’s (POAL) safety policies.  Anthony Michael Gibson was the CEO of POAL from 2011 to 2021.  Maritime New Zealand (MNZ) brought charges against Mr Gibson for failing to fulfil his duties under the Health and Safety at Work Act 2015 (HSWA).  MNZ successfully argued that Mr Gibson did not exercise due diligence to ensure POAL complied with its health and safety obligations.

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Asking the right underwriting questions in the digital age

Asking the right underwriting questions in the digital age

New disclosure rules which will come into effect with the Contracts of Insurance Act 2024 will require insurers to review policy proposal questions and content to ensure that the right questions are being asked of potential customers, and the consequences of inaccurate disclosure are highlighted.  When tackling this job, insurers should also keep in mind the importance of asking clear and unambiguous questions.  A recent English decision highlights the importance of unambiguous questions in a digital application or proposal form. 

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The Intertwining of Tikanga into Aotearoa’s Common Law: Trying to keep up

The Intertwining of Tikanga into Aotearoa’s Common Law: Trying to keep up

It is now settled law that tikanga forms part of the common law in New Zealand.  Following the Supreme Court decision in Ellis v R (Continuance)[1], the use of tikanga has gained momentum in most areas of the law, however, its application is still largely uncertain.  With the fast pace of this development, we consider whether the judicial system, and litigation lawyers in particular, are keeping pace.

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Insurance contract law reform firmly back on the agenda

Insurance contract law reform firmly back on the agenda

Insurer uncertainty about the new Government’s prioritisation of insurance law reform came to an end recently following the introduction of not one, but two, Bills into Parliament. The Insurance Contracts Bill, a member’s Bill, was drawn at the end of March, while the Government’s Contracts of Insurance Bill received its first reading in early May. We focus on the provisions in the Government Bill in this article.

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Port of Auckland CEO on trial following death of stevedore

Port of Auckland CEO on trial following death of stevedore

Former Port of Auckland CEO Tony Gibson is on trial in the Auckland District Court following the death of a stevedore at the Port in August 2020. Mr Gibson is facing two charges, laid by Maritime New Zealand, under sections 48 and 49 of the Health and Safety at Work Act 2015. These charges concern alleged failures to comply with a duty that exposes an individual to the risk of death, serious injury, or serious illness (section 48), and failing to comply with a duty under the Act (section 49).

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Tenants exonerated in fire

Tenants exonerated in fire

Inlet Storage Limited v United Movers Limited [2024] NZDC 6928

This case involved consideration of the provisions of the Property Law Act which exonerate tenants from liability for fire at leased premises where the landlord is insured.  The District Court took a stronger line than has been the case in previous judgments, saying that the exoneration provisions apply to bar claims for all losses that might otherwise be sued for.   Pauline Davies and Dayna Vautier acted for the successful defendant.

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New NZICA Rules come into effect

New NZICA Rules come into effect

The New Zealand Institute of Chartered Accountants (NZICA) has recently issued a revised set of Rules pursuant to the New Zealand Institute of Chartered Accountants Act 1996.  The new Rules replace the 4 December 2020 version and became effective on 11 March 2024.  They contain a number of amendments, including providing for accounting firms, partnerships and other practice entities to be members of NZICA

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Directors’ Continuous Disclosure Obligations

Directors’ Continuous Disclosure Obligations

In a recent High Court decision, CBL Corporation Ltd (CBLC) and four of its former directors – Sir John Wells (chairman of the board of directors), Tony Hannon, Paul Donaldson, and Ian Marsh (each of whom were independent non-executive directors) – were ordered to pay pecuniary penalties relating to the making of false and misleading statements and for continuous disclosure breaches under the Financial Markets Conduct Act 2013 (Act).  The defendants had previously made admissions of liability in relation to contraventions of the Act in a settlement agreement entered into with the FMA in May 2023, so the focus of the hearing was on the level of the imposed penalties.

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RMA Redemption - Page v Greater Wellington Regional Council [2024] NZCA 51

RMA Redemption - Page v Greater Wellington Regional Council [2024] NZCA 51

It is not often that a person is sentenced to prison for breaching the Resource Management Act.  It is even more infrequent that such convictions are overturned on appeal.  Just such a case occurred last week.  For those accustomed to representing defendants in this prosecutor-friendly jurisdiction, this case presents a rare and satisfying win for the defendants.

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