Wednesday, 28 April 2010
Tuesday, 27 April 2010
I have previously commented on the Law Commission and the report on sale of liquor. Apparently the long awaited report is due any day now and will make sweeping recommendations about the great wave of liquor which is washing over the country, destroying all in its way. Or so many of the submitters will be saying. Apart from my serious reservations about jurisdiction, that a law reform organisation is writing about social policy, well outside of its purpose and function, I am wondering how much real empirical evidence will be provided to back up the statements. After the Legal Aid Review which attacked Manukau legal aid lawyers with no real evidence, I expect better from an organisation which recently completed a review of the law of evidence. I am confident that I will be disappointed. I will acknowledge this here if I am wrong but the leaks to date give me some fear that I am right.
Friday, 23 April 2010
The recent decision in the case of Newmarket Trustees Limited v The Commissioner of Inland Revenue 14 April 2010 Associate Judge Faire Auckland High Court CIV-2009 -404-8108 is a timely warning of the difficulties which can be faced by a corporate trustee which administers family trusts. Newmarket Trustees Limited is a bare corporate trustee of the clients of a firm of corporate lawyers in Auckland. The company was a trustee of a family trust for one of the clients. Their client was responsible for preparing his own tax returns, but of course the corporate trustee assumed liabilities on behalf of the trust including tax. The client defaulted in his tax obligations, and the Commissioner served a statutory demand on the corporate trustee. The corporate trustee made an application to set aside the statutory demand, and this decision explains why the application was rejected. Although the deed establishing the trust contained a clause seeking indemnity, counsel for the Commissioner cited well-established principles of trustee law which are worth setting out in full taken from Foundation Custodians Ltd v Morton HC Auckland CIV-2009-404-3112, 2 November 2009 at .
A trustee is personally liable for all debts incurred in the conduct of a trust, and the personal assets of the trustee are available to meet the liabilities of the trust.
b) A trustee will normally have indemnity in the first instance from the assets of the trust in respect of liability in a trust transaction: Trustee Act 1956, s 38.
c) Trustees may avoid personal liability for the debts of the trust under a contract with a third party if their liability is expressly limited to the assets of the trust and their personal liability is expressly excluded by the terms of the contract. The need for an express provision in the contract arises because there is a presumption in favour of personal liability: NZHB Holdings Ltd v Bartells at  per Baragwanath J.
d) Whether the personal liability of a trustee has been excluded will depend on the language of the particular contract. In NZHB Holdings the following language, quoted at  and , was sufficient to exclude liability for an independent trustee but not for anyone else:
Persons, except independent trustees, who sign this document shall at all times remain personally liable for all obligations of the persons on whose behalf they have signed. An independent trustee is a person who is not a settler of the trust or has no rights to an interest in or assets of the trust except as a trustee of the trust.
The problem of course for the corporate trustee, was that they were the trustee for many other trusts, including other family trusts which owned property, shares and other interests. The judge was critical of a lack of evidence of the client's affairs and of any enquiry as to whether the clients trust had any money. The potential immense inconvenience was stressed by counsel. But, the application was refused because of the above principles which are well established law. The judge did allow a further period of time for the corporate trustee to negotiate with the Commissioner. Reading between the lines, one senses a frustration by the Commissioner as to a lack of information provided. Obviously liquidation of the corporate trustee would provide nothing for the Commissioner, and cause enormous inconvenience for the corporate law firm. But it may make them actively pursue their client, which may have been the object of the Commissioner. The decision, from the senior associate judge, must carry considerable weight but cause a frisson of fear among professional trustees. They should be taking a more active involvement in their clients affairs, and ensure that the Commissioner is kept informed.
Tuesday, 20 April 2010
Saturday, 17 April 2010
Friday, 16 April 2010
Monday, 12 April 2010
Saturday, 10 April 2010
Thursday, 8 April 2010
Wednesday, 7 April 2010
I think Tom Scott got it right in the Dominion cartoon today
Friday, 2 April 2010
- The litigation
- If, like many trade and professional associations, the BCA was not incorporated but consisted simply of the totality of its members, neither individually nor collectively would they have had standing to sue. Some corporations – municipal ones, for example - also lack standing to sue in defamation. The BCA is not subject to either of these disadvantages. If the present claim is well founded in law, the BCA is entitled to pursue it. Moreover, as the law presently stands, it was entitled, for its own reasons, to reject the opportunity fairly offered to it by the Guardian to take issue with and refute the criticisms expressed by Dr Singh and to demonstrate the fallacy of his opinions. Instead the BCA sued Dr Singh, but not the Guardian, for libel.
- It is now nearly two years since the publication of the offending article. It seems unlikely that anyone would dare repeat the opinions expressed by Dr Singh for fear of a writ. Accordingly this litigation has almost certainly had a chilling effect on public debate which might otherwise have assisted potential patients to make informed choices about the possible use of chiropractic. If so, quite apart from any public interest in issues of legal principle which arise in the present proceedings, the questions raised by Dr Singh, which have a direct resonance for patients, are unresolved. This would be a surprising consequence of laws designed to protect reputation.
- By proceeding against Dr Singh, and not the Guardian, and by rejecting the offer made by the Guardian to publish an appropriate article refuting Dr Singh's contentions, or putting them in a proper prospective, the unhappy impression has been created that this is an endeavour by the BCA to silence one of its critics. Again, if that is where the current law of defamation takes us, we must apply it.
- However this may be, we consider that the judge erred in his approach to the need for justification by treating the statement that there was not a jot of evidence to support the BCA's claims as an assertion of fact. It was in our judgment a statement of opinion, and one backed by reasons.
- We would respectfully adopt what Judge Easterbrook, now Chief Judge of the US Seventh Circuit Court of Appeals, said in a libel action over a scientific controversy, Underwager v Salter 22 Fed. 3d 730 (1994):
- In an area of law concerned with sometimes conflicting issues of great sensitivity involving both the protection of good reputation and the maintenance of the principles of free expression, it is somewhat alarming to read in the standard textbook on the Law of Libel and Slander (Gatley, 11th edition) in relation to the defence of fair comment, which is said to be a "bulwark of free speech", that "…the law here is dogged by misleading terminology… 'Comment' or 'honest comment' or 'honest opinion' would be a better name, but the traditional terminology is so well established in England that it is adhered to here".
- We question why this should be so. The law of defamation surely requires that language should not be used which obscures the true import of a defence to an action for damages. Recent legislation in a number of common law jurisdictions - New Zealand, Australia, and the Republic of Ireland - now describes the defence of fair comment as "honest opinion". It is not open to us to alter or add to or indeed for that matter reduce the essential elements of this defence, but to describe the defence for what it is would lend greater emphasis to its importance as an essential ingredient of the right to free expression. Fair comment may have come to "decay with … imprecision". 'Honest opinion' better reflects the realities.
- This appeal must be allowed.
"[Plaintiffs] cannot, by simply filing suit and crying 'character assassination!', silence those who hold divergent views, no matter how adverse those views may be to plaintiffs' interests. Scientific controversies must be settled by the methods of science rather than by the methods of litigation. … More papers, more discussion, better data, and more satisfactory models – not larger awards of damages – mark the path towards superior understanding of the world around us."
Thursday, 1 April 2010
Science, News - The Independent