Key Legal Highlights from 2021
2021 has been a busy year with amendments and development in many different areas of the law. We take this opportunity to reflect on some key legal highlights from this year.
New Zealand Trust Law changes were live from 30 January 2021. The Trusts Act 2019 contains both mandatory and default trustee duties. The mandatory duties cannot be excluded or modified by the Trust Deed and are imposed on all Trustees. A significant change is the codification of disclosure requirements. Under the new Act, there is a presumption that all beneficiaries should be informed of basic trust information, for example, that they are a beneficiary of the trust, the name and contact details of the trustees, and when any trustees retire, are removed or appointed. There is also a further presumption that, if requested, beneficiaries should be provided more detailed trust information, such as the trust deed, details of the trust's assets, and financial statements. Although there are instances when these presumptions do not apply, we are encouraging active reviews of existing Trust Deeds and are assisting with developing action plans to ensure compliance with the new legislation is maintained.
Whilst COVID-19 induced lockdowns created a window of opportunity for some to review their Trust Deeds and estate planning matters, these lockdowns caused significant rental and business disruption. The impacts of COVID-19 were particularly felt by ‘non-essential’ business tenants, who were forced to close during the COVID-19 Alert Level 4 stage but remained subject to lease costs for their business premises. In many circumstances the rent and outgoings were reduced by a “fair proportion”.
On 24 July 2021 the Holidays (Increasing Sick Leave) Amendment Act came into effect. This legislation increased the minimum sick leave entitlement from 5 to 10 days per year. Unused sick leave at the end of a 12 month period can still be carried over and added to an employees entitlement for the following year, however this is generally capped at 20 days. Looking forward, the Government has begun work to implement the recommendations of the Holiday Act Taskforce, which includes providing access to sick leave from the commencement of employment. This legislation is expected early 2022.
Continuing with the theme of COVID-19, health and support for businesses, the Government distributed a further wage subsidy via a high trust model. The scheme is reportedly the Governments largest single area of Covid-related spending, now running at an estimated $16 billion. On 29 September 2021 the Ministry of Social Development filed separate criminal charges against two people in relation to multiple wage subsidy applications in the Auckland District Court. We understand that the Ministry is currently considering civil action in eight cases and has referred 1061 cases for investigation. We expect the audits and reviews to continue in 2022 and will be interested to watch as these cases progress.
On 7 November 2021 assisted dying became legal in New Zealand. This is not a replacement for palliative care or health services more generally, it provides another option for people with terminal illnesses in certain circumstances. With the introduction of this new legislation, the process governing assisted dying is now forming part of a wider conversation around wills, enduring powers of attorney and advance care plans. These are all aspects of the estate planning process that your TP team are well trained to assist with.
Finally, the New Zealand property market has been booming with reports that the National average property value is now in excess of one million dollars. This year the Government announced its plans to repeal the existing Resource Management Act 1991 and to replace this with three new pieces of legislation. The three new proposed Acts are:
- Natural and Built Environments Act;
- Strategic Planning Act; and
- Climate Adaption Act
An aspect of the proposed legislation focuses on intensification of living in residential areas. We look forward to following the developments of the reform in 2022 and encourage you to contact us if you have any questions along the way.
From the perspective of your local TP team, we are experiencing greater demand in acquisition, disposal, subdivision and development of property in Canterbury. We have seen many clients choosing to refinance to take advantage of low interest rates and to fix them before a predicted rise in interest rates. Many clients are choosing to subdivide and develop their land in an attempt to maximize their investments and to assist with demand. We cannot predict whether these trends will continue but are pleased to be working in a buoyant economy.
We genuinely thank all our clients for their continued support in 2021 and are looking forward to meeting more of the community in 2022.