Jeremy Johnson acknowledged for Arbitration Amendment Bill

13/04/2017

The Arbitration Amendment Bill was read in Parliament for the first time yesterday.  Paul Foster-Bell acknowledged Jeremy Johnson of Wynn Williams for his help with the drafting.  Jeremy is the youngest fellow in the history of the Arbitrators and Mediators Institute of New Zealand.

To read the full transcript on the New Zealand Parliament website click here, or to watch the video click here

University prize winner to join Wynn Williams as a graduate

16/03/2017

On Wednesday 15 March, partners at law firm Wynn Williams joined other Wynn Williams staff and law faculty staff from the University of Canterbury to celebrate the success of two of the university's students. Kate Dickson received a Prize in Resource Management Law and Nic Wilson received a Prize in Torts.

Read the full article on Scoop here

Wynn Williams announces three new partners

10/02/2017

By: Rachelle Mathews

Wynn Williams is pleased to announce the appointment of three new partners to the now twenty strong partnership.

"Our national presence has been strengthened by these key appointments" said National Managing Partner Jared Ormsby, "they each represent a wealth of knowledge and experience, and demonstrate our commitment to having the best people to help clients achieve their goals."

Read full article here or as it appeared in NZ Lawyer and NBR.

Christchurch pair to pedal 545km in South Island race to raise money for Heart Kids

5/02/2017

Read the full article on Stuff: http://ow.ly/Bpcf308JVAd

Two Christchurch corporates have swapped suits for Lycra and are pedalling 545 kilometres for a children's charity.
 

Matthew Jones and Nicholas Lawrence, both of law firm Wynn Williams, kicked off The Pioneer Mountainbike race on Sunday with a 20km circuit around the Christchurch Adventure Park – the race's shortest leg.
 

Jones and Lawrence join almost 400 others on the six remaining legs of the race, ranging from about 45km to 120km and with an overall climb of 15,508 metres.
 

Nicholas Lawrence and Matthew Jones are competing in the seven-day race to raise money for Heart Kids.

Wynn Williams strong performer internationally

2/02/2017

By: Rachelle Mathews

Wynn Williams has received a number of rankings in the highly respected Chambers Asia-Pacific 2017 guide.  The guide is the culmination of thousands of in-depth interviews by the largest independent research team of its kind, trusted globally to objectively rank the world’s best lawyers and law firms.  As one client elaborated "We have great confidence in Wynn Williams, they build very good client relationships and produce excellent work".

Read the full article here

Jared Ormsby comments on landmark $28m trust battle

30/03/2016

By: Jared Ormsby

Reported in NZ Herald on 26 March 2016: read original article here



Wednesday marked the final act in the marathon $28 million battle between divorcees Melanie and Mark Clayton, with the release of two Supreme Court judgments.

Although the estranged couple are no doubt interested in the result, it won't affect their fortunes, given that they reached an eleventh hour settlement while awaiting the rulings.

Just who got what in this confidential, out-of-court compromise is not publicly known.

Despite the deal, the Supreme Court forged on and published its decisions because of the public importance of the issues raised in the case. And rightly so - tens of thousands, if not hundreds of thousands, of New Zealanders have trusts.

When the Court of Appeal ruled in the Claytons' case last February, Queen's Counsel Lady Deborah Chambers said it had "redrawn the landscape" around trusts and relationship property.

Some commentators this week made similar comments about the Supreme Court's decisions, saying they were "landmark".

Powers as property
A key feature of the Court of Appeal's decision was the finding that the power to appoint and remove a trust's beneficiaries could be personal property and therefore divided up in a separation. The value of this power as property was equal to the value of a trust's assets.

The Supreme Court took a different approach.

In one of this week's decisions, its five judges said the power to appoint and remove beneficiaries alone did not constitute property.

But they said this ability, when combined with other personal powers under a trust deed, could amount to relationship property. A trust deed, in simple terms, contains the rules under which a trust must operate.

In the Claytons' case, the package of powers Mark Clayton held under the particular deed meant he faced none of the usual constraints in a trust relationship.

Some lawyers told Business Insider they believe the ruling limits the relevance of Clayton v Clayton and how it could be applied to other cases.

However, barrister Ross Knight disagreed.

"Both the Court of Appeal and Supreme Court, for different reasons, held that personal powers within a trust could be property for the purposes of the Property [Relationships] Act, valued by reference to assets in the trust. That is landmark," he said.

"Some purist trust law specialists would probably have quite negative views about this decision because it means now that there is likely to be thousands of trust deeds out there that may be subject to the same level of scrutiny as the Claytons' in the event of a relationship property dispute. This could compromise the whole reason why a trust was set up in the first place," Knight said.

[Court rulings] could compromise the whole reason why a trust was set up in the first place.
Barrister Ross Knight
That reason is usually someone wanting to avoid claims against a trust in the event of a separation.

Law firm Wynn Williams' executive chairman Jared Ormsby also believed the decision was "landmark".

"The big question that we're all going to be asking ourselves now is what happens if you don't have all the powers [Clayton had under the trust deed] but are approaching that level?" Ormsby said.

Lawyer Vanessa Bruton said a lesson from this case for those setting up a trust would be to limit the settlor's control.

"So make sure there is more than one trustee, carefully consider giving the settlor or principal family member the power to remove beneficiaries rather than making it a trustee power, and make sure they're proscribed from voting on any decision to benefit themselves," she said.

Nuptial settlements
Bruton believed the second of this week's Supreme Court decisions, dealing with nuptial settlements, was of more significance for the trust-holding public.

This part of the case concerned whether a Clayton trust was a nuptial settlement and therefore caught by the Family Proceedings Act.

A particular section of that law allows for a court to vary a settlement for the benefit of children or parties in a marriage.

The Family Court, High Court and Court of Appeal all ruled that this trust was not a nuptial settlement because it was created for business purposes and Melanie Clayton had no expectation of gaining an interest in its assets.

But the Supreme Court, according to a summary of its decision, said a "more generous approach" should be taken.

"In this case, there was a clear connection between the marriage and the settlement of the trust. Therefore the trust is a nuptial settlement," the summary said.

Given that the trust in question was set up during the marriage for the benefit of the Clayton family unit, the Supreme Court would have made an order to split it in two - had the ex-couple not resolved their dispute.

Bruton said that, in the wake of the decision, it should be easier for spouses to make claims against a trust when they aren't a named beneficiary.

"If people are going to use trusts as part of their estate and relationship property planning mechanisms, they would be wise to also have a pre-nup agreement which says the other spouse has no right to make a claim on the trust assets," Bruton said.

Who are the Claytons
Mark and Melanie Clayton were together for about 20 years and had two children before splitting up in 2006.

Mark Clayton set up his own business and in the mid-1980s established Claymark Industries, the brand under which he would develop a major sawmilling enterprise.

The business and other assets were owned by a series of firms and trusts.

In their property fight, Mark Clayton considered none of the trust assets were relationship property and felt his ex-wife was entitled only to their $850,000 home and $30,000. Melanie Clayton, however, believed she was entitled to half of the value of the business and trust assets.

Her valuer was of the view that if her approach was upheld, she could be due half of a total property pool estimated at $28.83 million when the parties were in the Family Court.

Her case, first filed in the Family Court in 2007, went to the High Court, the Court of Appeal and then to the Supreme Court last September. It settled in December.

Read the two articles that Wynn Williams wrote about this case here:

Wynn Williams House wins engineering award

28/09/2015

Read the full Press story here

Stylish new timber buildings in Christchurch have been recognised in national design awards.

A factory-built modular home design and two office buildings took honours in the New Zealand Wood Resene Timber Design Awards on Tuesday night.

The rebuilt Trimble Navigation office headquarters in Middleton, designed by Andrew Brown, of Opus International, was  joint  winner of the Engineering Innovation Award and highly commended in the overall category.

Sharing the engineering innovation award was  Wynn Williams  House – a Hereford St office building designed on the old St Elmo Courts site by Grant Wilkinson, of Ruamoko Solutions.

Both buildings have glass exteriors and use a new technology called post-tensioned timber for their framing. Both also had seismic safety features, the judges noted.


Innovative use of timber has been a notable feature of the Christchurch rebuild, appearing in commercial and residential buildings. Engineered timber, created by laminating or otherwise bonding timber pieces to create strong structural components, has been a particular standout.

A home in North New Brighton known as the Beach Barn won the Novel Application of Timber Award. The home was the factory-built to a modular design by Dan Tremewan of  Welhaus  Ltd, and can be transported around the country or exported overseas.

Tremewan designed the home as part of a range intended to add value to New Zealand timber after seeing logs waiting for export at Lyttelton Port.

The judges said the home used a range of wood products to deliver "a sustainable, energy efficient building for a realistic price".

Other buildings in Nelson, Wellington, Wellington and Bay of Plenty won awards in categories, including residential and commercial architectural excellence, interior innovation, excellence in engineered wood products, exterior innovation and infrastructure, novel use of timber, and use of native and specialty timbers.

The overall winner was a community library on Waiheke Island, Auckland.

Daniel Scheibmair, competition judge and president of the Timber Design Society, said wood's rapid uptake globally could be partly attributed to New Zealand's " world leading " research and innovation.

NZLawyer Report: Insurance Law

30/06/2015

By: Richard Johnstone

Insurance risks drive robust legal activity
From earthquakes to the high seas

 
Almost half a decade after the first powerful quake shook the Canterbury region in 2010, we might expect earthquake-related legal insurance work to be tailing off. While the opposite is true – 3,000 reclassified cases is just one of many catalysts for new work – there are a number of other maritime and regulatory risks driving insurance activity in the legal industry. Sarah Megginson reports.
 
It’s been almost five years since Canterbury was charged with a 7.1 magnitude earthquake, the first of many powerful quakes to hit the region from September 2010.
 
The following February, 185 people lost their lives as a deadly 6.3 magnitude quake struck closer to Christchurch. It changed the city and its residents forever, and several years on, many of them are still dealing with the aftershocks as they attempt to rebuild their lives.
 
From a legal perspective, one might have anticipated that the Canterbury earthquake would be a diminishing source of work for lawyers in this area. But that’s not the case, says Andrew Horne, partner at Minter Ellison Rudd Watts; in fact, the opposite is occurring.
 
“You might have expected that as increasing numbers of claims were resolved, the dispute would die down, but we’re seeing the opposite occur,” he explains.

“There’s an increasing number of intractable cases that insurers haven’t been able to settle, which is perhaps owing to a greater willingness by private individuals to take matters further; these are people who have been waiting patiently, but realise that they can’t resolve matters any other way.”

There’s another big driver of Canterbury activity that has emerged in recent months, says Richard Johnstone, partner as Wynn Williams.
 
“There is actually a bubble of new claims that have come about, as the Earthquake Commission (EQC) has resolved to push these claims over cap,” Johnstone says.
 
“These are claims that have been sitting within EQC’s responsibility for some years, but in the course of this year, the Commission has identified them as being over-cap – so there’s a dump of nearly 3,000 claims that were, until now, virtually unknown to insurers. That’s a significant change, and for homeowners who have been dealing with EQC for many years, they now have to almost start again with their insurer.”
 
Other key changes over 2015
Reclassification of cases isn’t the only major change impacting the industry.
Johnstone reports that a number of house repair programs have come (or are coming) to a close, which is adding complexity to already complicated cases.
 
“EQC closed their repair program earlier in the year, and a couple of the other large insurers have also done so, officially or unofficially,” he explains.
 
“They’re trying to encourage homeowners to cash out rather than repair, and that’s raising significant issues about the scope of works, coverage under the policy, and finding building contractors to actually do the work. Ultimately, a homeowner who is not a repeat client will pay a different figure to an insurer who brings them a lot of business. The last few months has seen a lot of new disputes.”
 
Elsewhere in the insurance legal landscape, lawyers are guiding their clients through significant changes to three major Acts.
 
“The key regulatory changes over the last year in insurance law are the amendment of the Fair Trading Act 1986, to prohibit unfair contract terms, and the amendment of the Sentencing Act 2002 to allow reparation sentences to top-up ACC payments,” explains Crossley Gates, Insurance Partner, DLA Piper New Zealand.
 
“The amendment of the Fair Trading Act 1986 led to most insurers reviewing their policy wordings and making some changes. The industry is generally taking a ‘wait and see’ approach to the amendment to the Sentencing Act 2002.”
 
There’s also the Financial Markets Conduct Act (FMCA), which came into force in two stages, in April and December 2014.
 
“This means that brokers now fall under the jurisdiction of the Financial Market Authority (FMA) rather than the Commerce Commission, and the FMA are likely to be much tougher regulator,” says Andrew Horne.

“We’re seeing increasing activity in that area already. Brokers need to be aware that they’re in a new era, and they need to understand their duties under the Act and make sure they perform them.”
 
Insurance law on the high seas
It’s not just earthquake-related claims and regulatory change driving legal insurance activity in 2015.
 
With its relatively isolated geographical position, to the east of Australia and far east of Asia, New Zealand is exposed to some unique and noteworthy maritime insurance risks.
 
There are, of course, the usual risks associated with marine industries –namely, that a ship could sink or leak. Such was the case when the Rena ran aground on the Astrolabe Reef, off the port of Tauranga, in 2011.
 
It was described by then-Environment Minister Nick Smith as “New Zealand's most significant maritime environmental disaster”, as the fuel on board consisted of 1,700 tonnes of heavy oil and 200 tonnes of diesel fuel. The New Zealand government estimates that the clean-up bill was in the vicinity of $130m, but marine insurance law expert Matthew Flynn, partner at McElroys, says the financial and safety ramifications of that event have continued to impact the shipping and marine industries in the years since then.
 
“There is an increase in concerns over navigational safety around the New Zealand coastline, following incidences such as the Rena, which has become the second-most expensive salvage of any vessel in the world,” Flynn says. 
 
“There also continues to be a high degree of interest internationally in the salvage of vessels, safe navigation and the regulatory prescriptions for limitation of liability, given the high value of a large number of maritime claims.”
 
At McElroys, Flynn says they are “regularly working on a number of matters where cargos involved in international trade are damaged or delayed in transit from New Zealand”.
 
“A number of issues [have arisen], caused by political and labour unrest at various New Zealand export destinations, all of which have a flow-on impact to the arrival of goods in time and in good condition, and there are challenges arising due to the vagrancies of the weather conditions encountered at sea, as well as differing methods of carriage of our primary products out of New Zealand,” Flynn explains.
 
“As New Zealand is so distant from any markets, there can also be issues to do with sourcing the right type of ships, and for many ship owners it is a long way to bring a vessel to New Zealand with no cargo.
 
New Zealand has 10 export ports, which is a large number for a country of this size. The industry faces continuing issues over the logistic requirements to get its export goods from the place of production to its final markets, and our works revolves around some of those issues.”
 
A “marked increased” in the amount of new construction work has been a recent development, with buyers coming to New Zealand to purchase vessels and construct new ones.  “This seems to bode well for New Zealand’s marine manufacturing industry,” Flynn says.
 
Predictions for the year ahead: In 2015 and beyond
 
An increasing appetite to litigate
“Historically, New Zealand has gone from being one of the lighter regulatory environments, to now one that is becoming increasingly regulated, with a much more active regulator. With increasing activity from the New Zealand Exchange and other regulators, we’re seeing a surge in the amount of work in directors and officers liability insurance. We’re also seeing more insurance claims where people are brought in for questioning and proceedings are issued against them, with an uptick in professional negligence, and increasing instructions from insurers and the insured with an appetite to litigate.” – Andrew Horne, Partner, Minter Ellison Rudd Watts.
 
Ongoing challenges for all participants
“Changes to the Health and Safety in Work legislation is expected to have a significant impact on the local marine industries, with relatively risky operations such as fishing and heavy equipment handling required to make changes to meet the more stringent requirements. Another interesting trend going forward is that ships are slowing down, resulting in large fuel savings and less environmental impact, but slower transit times. These trends are being managed by both the shipping companies and the New Zealand exporters, and represent an ongoing challenge for all participants,” – Matthew Flynn, Partner, McElroys
 
Core changes on the horizon for some years
“The Canterbury earthquakes created a huge demand for legal work. The issues they raised were unprecedented on a global scale, because of the succession of separate events and the level of underinsurance. That work is still driving activity, although it is mostly the difficult claims that are left. Meanwhile, regulation is on the increase and core changes to insurance law have been on the horizon for some years now. The UK Parliament has recently passed a new Insurance Contracts Act and we expect New Zealand will follow suit in the near future. This will be a step-change for the insurance industry in New Zealand.” – Crossley Gates, Insurance Partner, DLA Piper New Zealand.
 
Building disputes in Canterbury: 10 years to resolve
“We’re involved in both the insurance side and the wider construction aspect in Christchurch, with building disputes related to unsatisfactory repairs and inadequate new construction jobs. I think we’re going to see more building disputes coming out of Canterbury; it will literally be another 10 years’ [worth of work].

We’re also seeing more desperate homeowners, if only because the claims are getting harder. Legally, the work is still complex, still challenging and it’s personally rewarding. The diverse work coming out of our Auckland practice – including general liability instructions, and life and health insurance work – gives us something to think about other than earthquakes.” – Richard Johnstone, Partner, Wynn Williams
 
 

How Equity Crowdfunding is accelerating start-ups in NZ

12/05/2015

By: Hayley Buckley

BRW - 12 May 2015: Click here to read this article in it's original format

The New Zealand government is backing innovation and we in Australia seem to be watching on as our smaller neighbour becomes more agile and starts to get noticed overseas. The recent introduction of crowdfunding is just one example of how the entrepreneurial landscape in New Zealand is changing. With platforms such as Snowball Effect signing licensing agreements with the new regulator, the Financial Markets Authority, Kiwi entrepreneurs and investors are off to a flying financial start.

Lawyer Hayley Buckley of New Zealand based Wynn Williams Lawyers estimates more than $NZ7.2 million has been raised via equity crowdfunding; $NZ5.7 million of that with Snowball Effect. Six companies have received significant investments to date, including Invivo Wines raising $2 million and capping out.

Wynn Williams Lawyers has found that the average investment for an individual is a mere $4500 with the investment range between $100-$500,000 ($500,000 being the individual cap for a single investment).

What do these recent movements in New Zealand mean for Australia? While the Australian government has made progress supporting start-ups in the past year with reforms to employee share schemes and tax cuts, it still needs to take steps to reduce the red tape when it comes to small businesses accessing equity crowdfunding options.

Equity crowdfunding could create an accelerated small business and entrepreneur environment, a segment that many now recognise as the engine of our country. Of course, all investments have risks. There is an enormous appetite for equity crowdfunding here, but self education is required and this requires the availability of information that can be easily understood. However, I believe crowdfunding should not require a detailed Investment Memorandum, which many investors rarely read.

I think you would be hard pressed to find a boot-strapped start-up who knows how to write an Investment Memorandum or even understand the investment structures of the Australian investor landscape.

The Australian population needs to become vastly more informed of the nature of equity crowdfunding and what that can mean for the prospect of a burgeoning SMB market and the larger entrepreneurial landscape in general.

What is crowdfunding?

In short, crowdfunding creates a two sided marketplace that anyone can enter. The angel and seed fund investors don’t necessarily get exposure to the best deals first and the market becomes an open playing field.

There are three tiers when it comes to crowdfunding:

1. Product:
A minimum viable product is resold in single and multiple units, sometimes packaged or bundled to create value for a higher volume of bought items. This allows the entrepreneur to have working capital to produce the product in the quantities ordered without the guess work around over stocking the produced item - for instance Rare Birds pre-sold our first book, Australia’s 50 Influential Women Entrepreneurs, via a crowdfunding platform prior to production.

2. Service:
As above, but for services rather than products. For example, Rare Birds used Indiegogo offer to offer services, such as events and seminars conducted by myself, in exchange for funds.

These first two forms of crowdfunding are often referred to as rewards-based crowdfunding. It is hosted through platforms such as Kickstarter, Indiegogo and Pozible and there are no legal restrictions on who can create or support projects.

3. Equity:
Exchange of units of equity for capital, essentially exchanging money in return for shares. In Australia this is legally restricted to wholesale investors who qualify because of minimum net worth or income. However, a number of other countries, including New Zealand and the UK, have opened it up to retail investors. This form of crowdfunding is relatively new and is really what is leading the way in New Zealand.

For example, currently Mad Mex (Mad Group) a chain of Mexican restaurants has the aim to raise between $NZ750,000 and $NZ1.5 million for up to 13.3 per cent of the business using the Snowball Effect platform. The investment is to fund the growth of the Mad Mex business, with a vision to expand to more than 100 stores across three or four brands, both franchised and company owned, over the next five years. To date the company has raised $NZ166,500, 22 per cent of its $NZ750,000 target.

Australian equity crowdfunding landscape

In Australia, a Treasury discussion paper written after the final report of the Financial System Inquiry called on the government to enable equity crowdfunding for retail investors. Several submissions to the inquiry indicated that Australia was already lagging other countries in equity crowdfunding and called for a new regulatory body to enable it. The inquiry report, led by former Commonwealth Bank boss David Murray found that “a well-developed crowdfunding system can aid broader innovation and competition in the financial system”.

The Small Business Minister, Bruce Billson, has flagged his intention to introduce legislation to open up equity crowdfunding to retail investors.

Who should invest and what are the benefits?

Ideally, anyone can invest. This means even peer-to-peer funding becomes accessible for university and high school students and those wishing to validate ideas to minimum viable product before they have even entered the workforce or finished studying. This offers an incredible avenue for young people to try their ideas out when risk and failure is almost obsolete and the confidence to try again becomes greater.

Crowdfunding is critical for start-ups and younger entrepreneurs who may not be able to access capital from a traditional lender. If you look overseas, you see that the United States, Britain and New Zealand are all ahead of Australia in allowing equity crowdfunding, and it’s time the Australian government caught up.

All crowdfunding platforms are brilliant for marketing, often offering global exposure and potentially garnering free PR. For example, Indiegogo has exposed many start-ups to the international investor community.

For existing entrepreneurs, small businesses and students, crowdfunding can be a platform to test and trial new ideas, to see market appetite and to test validation, prior to large wasted investments.

Ultimately, alternative financing is going to be very disruptive as we move forward. How entrepreneurs interact and use tech to finance companies to trade and exchange assets, is evolving and will continue to do so in the coming years. The major banks mostly have debt raising facilities, with nothing much on offer for the start-up. The risk profile just does not fit an entrepreneur at ideation, MVP or seed stage.

Engaging potential customers in the early stages of these ventures via crowdfunding could be vital to their success. Being at the front of such potential is incredibly exciting, if Australia can just manage to get themselves into position.

Should the government want a willing participant that believes in values, fair play and enabling entrepreneurs and start-ups with a shot at starting strong with crowdfunding, Rare Birds will be a willing player.

Kiwi lawyer grabs prime seat for market on brink of boom

10/01/2015

By: Hayley Buckley

NZLawyer: 10 January 2014

Wynn Williams partner Hayley Buckley speaks with great passion about a client she’s been working with over the past two years, and she says what they offer lends huge opportunities to the New Zealand legal profession.


The specialist in the sale and purchase of businesses and helping companies raise funds got involved with the founders of a unique Kiwi online equity crowdfunding platform called Snowball Effect.

At the time, the concept of raising money by leveraging the public over the internet was just beginning to take the world by storm.

But in New Zealand, such an equity crowdfunding concept was not possible thanks to the legislation at the time – and new legislation hailed “a new era of financial market regulation” was in the process of being drafted.

Buckley worked closely with the three founders of Snowball Effect to prepare submissions on the early stages of this - what was then called the Financial Market Conduct Bill - and would eventually give the company the opening they needed to go to market when the Financial Markets Conduct Act was passed into law in September 2013.

Buckley told NZ Lawyer it’s been all go ever since.

“The first extensive piece of work was the license application - the platform itself which comes under the supervision of the FMA, is relatively heavily regulated,” she says. “As a result, that legal process was quite extensive. There are then obviously continuing legal and regulatory obligations for Snowball Effect as a platform.”

These include the legal ramifications for overseas investors, and all the risks and issues associated with money laundering.

But Buckley says it’s proven a success, and on Monday the second company listed on Snowball Effect hit its funding target, giving the company two out of two wins.

It’s a pretty big deal. Monday night’s success was the first major feature film in the world to become equity crowd funded (as opposed to the reward crowd funded platform).

The film, The Patriarch, has now reached 107% of its $300,000 target, and still has almost 15 days remaining on the platform.

It will be Once Were Warriors’ director Lee Tamahori’s second New Zealand film, and is based on Witi Ihimaera’s novel Bulibasha.

Once Were Warriors cost $2 million and returned $6.5 million to its New Zealand investors. The Patriarch has the same team behind it, but with more experience and money.

The first successfully completed offer on Snowball Effect is New Zealand pioneer craft brewing company Renaissance Brewing.

It aimed to raise $600,000 to grow its craft beer business domestically and overseas, and hit its maximum target of $700,000 by the close of the offer.

Snowball Effect has big plans for the future.

“There are a number in the pipeline across different sectors so we can expect to see more going live very soon,” Buckley says.

“It’s exciting on the investor side and the NZ company side. There are some fantastic Kiwi businesses out there and some amazing Kiwis running those businesses as well; it’s bringing some of these companies out of the woodwork in a way that makes them more accessible to the general Kiwi public.”

She says it’s fascinating acting as legal counsel for the concept and she’s been interested to see unique characteristics emerging out of the New Zealand crowd funding market that haven’t been seen in other European models.

Thus far, there hasn’t been such a thing as a standard offer here, and Buckley thinks the legal side will continue to change from company to company.

The newness of it also makes future trends or challenges tricky to predict, she says, but building up consumer confidence after the recent bout of New Zealand finance company collapses will certainly be key.

One of the major legal considerations to date has been the Takeovers Code which proves particularly tricky for some smaller companies.

As this applies to companies with 50 or more shareholders (and share parcels), most companies utilising equity crowdfunding can expect it to apply to them unless they structure their offer in a way to take it outside the Takeovers Code, Buckley says.

She acknowledges that like any equity investment, it can be a risky business.

“There will always be risk, and there’s a measure and balance that each platform needs to undertake in relation to this,” says Buckley. “It will take time for investors to understand this new way of investing properly... It is important that we rebuild that confidence to the best extent we can.”

But to take advantage of the growing prospects in the equity crowd funding market, the New Zealand legal profession also need to buy into the idea and have confidence in it, she says.

It lends massive opportunities to lawyers with clients who are looking to raise capital but for various reasons the more traditional ways have not been appropriate for them.

“That’s the exciting opportunity for lawyers: Being able to say ‘here’s a more cost-effective and timely way you can test the market and look to raise capital’,” says Buckley.

“I think that given the fact the legislation went live on April 1 in regards to this and the first crowd-funding licenses were given in July… at the moment certainly I’m in a unique position. I expect that raising funds in this way will become mainstream overtime, and hope that most commercial and corporate lawyers will become involved with it.”
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