Spring 2010 Newsletter

When is land landlocked – What is reasonable access to land?

The Court of Appeal recently considered this issue in the case of Murray and Tuohy v BC Group (2003) Limited and Ors [2010] NZCA 163. Murray and Tuohy and their neighbours owned adjoining properties in the Wellington hillside suburb of Ngaio.  The properties were created by a subdivision in 1963.  Murray and Tuohy purchased their property in 1989 with the only access to the property via a steep council-owned pedestrian footpath.

Twenty years later and suffering health problems, Murray and Tuohy asked the Court to make an order under Section 129B of the Property Law Act 1952 requiring their immediate neighbours to provide access over their property by a right of way easement, on the basis that Murray and Tuohy’s land was landlocked.

The Court of Appeal said that the approach in Section 129B cases is well settled and involves three stages (briefly) stated as:

  • deciding whether the claimant’s land is landlocked within the meaning of the section;
  • if yes, determining how the discretion given to the Court by the section should be exercised; and
  • if the Court decides to grant access to the landlocked land, to determine the terms of access.

Under section 129B(1)(a) a “piece of land is landlocked if there is no reasonable access to it”.  It was Murray and Tuohy’s case that, taking into account modern day community expectations and standards, a residential property without vehicular access does not enjoy “reasonable access” and is therefore landlocked.

In the Court of Appeal, Justice Gendall, who delivered the reasons of the Court, stated “we cannot accept that it is necessarily the case that under modern day community standards vehicular access onto the site of a residential property is necessary for it to enjoy reasonable access”.

Further into the judgment Justice Gendall stated “obviously, if people cannot get onto their property it has no reasonable access.  If they can access it from a public roadway or walkway through a suitable pedestrian route then such access may be reasonable, depending on the circumstances”.  In this case there was evidence from the respondents that this was typical of access to properties in Wellington’s hilly suburbs.

The Court of Appeal considered, having regard to contemporary standards, the present access was reasonable and that vehicular access was primarily a matter of convenience for Murray and Tuohy.  As a result, their application for access over the neighbour’s land was declined.

Contact Graeme McLelland on (09) 407 0179 or Sue Wooldridge on (09) 407 0174 for information and advice on land related issues.

 

Directors’ Duties

While companies provide limited liability and are considered a separate legal entity, directors may become personally liable if they breach their duties.  These duties have become increasingly important in light of the recent financial downturn.  When there is financial uncertainty, directors are more likely to make decisions for which they could be held liable.

Under the Securities Act directors face fines of up to $500,000 in civil proceedings, and up to five years imprisonment or fines of up to $300,000 in criminal proceedings.  Directors need to be aware of their obligations to the company.

Duties under the Companies Act 1993

The key duties, found in Part 8 of the Companies Act 1993 sections 131-137, include the following:

  • The duty to act in good faith and in the best interests of the company.
  • The duty to use directors’ powers for the purpose for which they were conferred and not for any ulterior motive.
  • The duty to act in accordance with the obligations under the Companies Act 1993 and the company’s constitution.
  • A director must not agree to cause or allow the company’s business to be conducted in a manner likely to create a substantial risk of serious loss. To determine this, the Court will look at what an ‘ordinary prudent director’ would have done in the circumstances.
  • The duty not to take on any obligations unless it is believed on reasonable grounds that the company will be able to perform those obligations when required to do so, and
  • The duty to use the reasonable care, diligence and skill a reasonable director would exercise in the circumstances.

Recent Director Liability Cases

Directors must actively ensure that they are meeting their obligations. The recent case FXHT Fund Managers Ltd v Oberholster held that directors who are not actively engaged in the company or ‘sleeping directors’ can be liable. In this case the inactive director was held liable for a breach of his duty of care even though it was his co-director who defrauded investors. Initially he was not aware of his co-director’s dealings, but as soon as he became aware he reported the matter to the authorities; however he was still held liable.

Similarly, in Lewis v Mason and Meltzor the directors relied on a manager and did not exercise sufficient control over the company’s financial position or the day to day running of the company. It was found that reliance on a manager does not excuse a director from liability and the directors were ordered to contribute to the Company’s debts.

Summary

The above cases show the need for directors to take positive steps to discharge their obligations under the Companies Act, and be proactive directors who are aware of and adhere to the duties imposed on them.

If you would like advice and information on safe practices for directors, please contact Sarah Jury on (09) 407 0176 or Graeme McLelland on (09) 407 0179.


Police Safety Orders

As from 1 July 2010, amendments to the Domestic Violence Act 1995 enable the police to issue on-the-spot ‘Police Safety Orders’ (‘PSO’).

Under this new regime, a qualified constable may issue a PSO where the parties are in a domestic relationship, and where police have reasonable grounds to believe that family violence has occurred or may occur but there is insufficient evidence to make an arrest.

In issuing a PSO the constable must consider whether domestic violence is or has been taking place, the hardship the PSO may cause to any party, and any other matters the constable considers relevant.

The PSO may last for up to 5 days and provides the victim with immediate protection. It is hoped that the order will provide a way of filling the gap between an incident occurring and the issuing of a Temporary Protection Order.

An important element of the PSO is that it does not require the consent of the victim. As a result victims who are too scared or intimidated to act will have interim protection while taking further steps to secure their ongoing safety, such as an application to the Family Court.

The person bound by the PSO order must:

  • vacate the premises for up to 5 days,
  • surrender all firearms and their firearm licence for the period of the PSO,
  • not threaten, assault, intimidate or harass the protected person or encourage anyone else to do so, and
  • not contact the protected person.

The PSO also protects any children who live with the protected person, and suspends any parenting orders or access or care agreements which benefit the person bound by the order.

The conditions under a PSO are similar to those under a Court ordered protection order. However, unlike a protection order, the protected person under a PSO cannot consent to residing with the person bound by the PSO.

If the PSO is breached, the offender can be taken into custody and must appear before the Court which may then:

  • direct the Police to issue a further PSO,
  • release the person without further order, or
  • issue a Temporary Protection Order if the protected person does not object.

These orders have the potential to assist victims to escape domestic violence, especially as a victim’s consent is not needed for an order to be made.

For advice on relationship issues, phone Sarah Jury on (09) 407 0176.

 

Snippets

The Importance of a Current Will

The recent High Court decision in re Trotter is a timely reminder of the importance of having a current will, particularly for parties who have recently separated.

Murray and Christine Trotter separated in May 2001 without a separation agreement or the making of a separation order. In October of that year a relationship property agreement was finalised providing for the transfer of the matrimonial home into the sole ownership of Murray and the payment to Christine of half the equity in the home.

Murray occupied the home until his death in 2009 when he died without having made a will. Christine applied for Letters of Administration on the grounds that she was the only person entitled to claim the estate.

This is almost certainty not the outcome Murray would have wanted.

If you have separated from your spouse or de facto partner, contact Sarah Jury on (09) 407 0176 about making a new will.

 

All information in this newsletter is to the best of the authors’ knowledge true and accurate.  No liability is assumed by the authors or publishers for any losses suffered by any person relying directly or indirectly upon this newsletter.  It is recommended that clients should consult a senior representative of the firm before acting on this information.

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