COVID-19 and the business-as-usual side of disputes
By: Shane Campbell, Greg Simms
Published: 19/03/2020 | Updated: 19/03/2020
As the COVID-19 pandemic develops, much focus is on its most catastrophic effects.  Rightly so.  However, it is also important during times like these to remember the ‘business as usual’ aspects of life and litigation that, if ignored, can create bigger issues down the track.  Below we detail some matters relating to disputes and litigation that fall into this category.

Current court timetables
If you have a current court timetable for a proceeding, the starting point is that there is an expectation and obligation that the timetable is complied with.  This includes:
  • deadlines for filing pleadings (statements of defence, replies, third party notices, counterclaims, cross-claims etc);
  • deadlines for memoranda, interlocutory applications, discovery and inspection;
  • time for filing evidence including affidavits, briefs of evidence, will-say statements and agreed statements of fact;
  • filing of submissions, chronologies, bundles and other documents necessary for a hearing; and
  • hearings and trials that are currently scheduled.
Despite this starting point, Judges in New Zealand are practical.  Expectations around timetables will yield to practicalities and requirements of life.  The situation we are facing is unprecedented in New Zealand.  You should be thinking about the following:
  • Tell your lawyer if you need to self-isolate, are symptomatic or have COVID-19.
  • Tell your lawyer if you are going to have difficulties meeting deadlines. 
  • Keep in touch with witnesses to ensure they are aware of what is happening with your proceeding, particularly if they are subject to subpoena. 
  • If you, or a witness, needs to make an affidavit then you should speak with your lawyer to make arrangements to ensure this is done in a safe way. 
  • Any meetings necessary for litigation can be undertaken by video conference.  The courts have audio-visual systems that can be used to facilitate remote access to courts.
New Zealand courts are sophisticated, resilient and adaptive.  They will respond to this situation, but it will require co-operation and patience from all involved.

Swearing affidavits
Affidavits are a form of written evidence.  They must be made in accordance with the Oaths and Declarations Act 1957 and the High Court Rules 2016.  What this means practically is that there are some technical requirements that need to be complied with.  As a result, the majority of affidavits in New Zealand are sworn or affirmed before lawyers in law firms.

As professional services firms move towards remote working, it may become more difficult to swear affidavits.  It is important that you remain able to make affidavits.  We recommend that you call law firms in advance before taking an affidavit for swearing or affirmation.  Wynn Williams is available in Auckland and Christchurch to assist with the taking of evidence.  If you need assistance, please try our reception in each centre first.

Statutory demands and responses to statutory demands
In the midst of a pandemic, there are obvious economic implications.  The word ‘recession’ is being used.  Importantly, this means that creditors may be looking to call in debts in a more aggressive and immediate way than usual.  Where a debtor company (not a natural person) is not paying its debts, a creditor can issue what is called a “statutory demand” under s 289 of the Companies Act 1993.

A statutory demand is a formal demand that requires undisputed and due debts to be paid within 15 working days from the date the statutory demand is served.  If payment is not made, or the statutory demand is not set aside (and you only have 10 working days to apply to set it aside) then that creates a presumption that the debtor is insolvent.  This in turns entitles the creditor to bring an application to liquidate the debtor company. 

Statutory demands can be served in a variety of ways.  This includes by:
  • delivering it to a director;
  • leaving it at the director’s residential address;
  • leaving it at the company’s registered office or address for service;
  • posting it to the company’s registered office, address for service, or delivering it to a box at an exchange the company is using;
  • facsimile to a number used for this purpose;
  • the terms of an agreement made with the director; or
  • emailing to the company at an email address that is used by the company.
If you receive a statutory demand, do not just sit on it.  You need to consult a lawyer immediately as you only have 10 working days to apply to set the demand aside if the debt is disputed.  If you miss that deadline, it cannot be extended.

Caveat proceedings
A caveat is a legal instrument that is lodged on the title of a property.  It prevents any party dealing with the property while the caveat is lodged (with few exceptions).  They are usually lodged to prevent the sale of a property.  Not anyone can lodge a caveat and they must have a caveatable interest.

When a caveat has been lodged, it is common for the party that owns land to trigger a process to ‘lapse’ the caveat under the provisions of the Land Transfer Act 2017.  Once an application to lapse a caveat has been made, strict and non-extendable time limits apply.  These can be summarised as follows:
  1. The application that a caveat lapse is made.
  2. The Registrar must give notice of the application that the caveat lapse is given to the party that lodged the caveat (called the ‘caveator’).
  3. The caveator must make an application to the High Court within 10 working days of notice being given by the Registrar.  They must also notify the Registrar that the application has been made.  If the application is not made within this deadline, the caveat will lapse automatically.
  4. The party that applied must then file an opposition, and notify the Registrar, within 20 working days.
Injunctions
Not even a global event like COVID-19 will put a halt to disputes.  In particular, people and companies will at times still have a need to seek urgent or interim relief from the Courts.  In most cases this is an order that another party must do something (mandatory injunction) or stop doing something (prohibitive injunction).  This can include stopping someone building a house or fence, making someone remove something from a property, obtaining the return of property, and other similar matters.

A lot of work goes into bringing or defending an application for an injunction.  This includes preparing applications, oppositions, evidence, submissions and bundles of documents.  Many of these steps require other witnesses, person-person contact, and contact with the Court.

Regulators and investigations
It is often said that the only two certainties in life are death and taxes.  The other certainty in law could be that regulators will continue to perform their role and do it well.  This includes the Commerce Commission, the Financial Markets Authority, the Department of Internal Affairs and the Overseas Investment Office.

Regulators, however, are not as inevitably relentless as either death or taxes.  They are willing to be reasonable and are very responsive to other demands facing people and companies.  What is essential, however, is communication with the regulator.  If you are having difficulties responding to voluntary requests, production orders, or interviews, you should get in touch immediately. 

Limitation periods
If the Canterbury earthquakes have taught lawyers anything it is that limitation is both an important and unyielding beast.  The general rule is that claims must be filed within six years of the date on which a cause of action arose (Limitation Act 1950) or the act or omission upon which the claim is based (Limitation Act 2010), otherwise claims are time barred.

However, limitation is much more nuanced.  There are some exceptions to limitation (including in cases of fraud), there are late knowledge dates, long-stop dates, and some legislation contains unique limitation regimes.
 
The strictures of limitation periods will continue to apply during COVID-19.  Absent Parliamentary intervention, they simply cannot be changed. 

Relationship Property Agreements
‘Pre-nuptial’ agreements, or settlement agreements, are special agreements in New Zealand.  These are agreements entered into before, during or after a relationship that determine how property will be divided in the event of a separation / divorce.

Because of their unique nature, these agreements are required to meet certain technical requirements.  One of these requirements is that a lawyer gives independent legal advice to the signing party and the lawyer certifies that he or she has explained to his or her client the effect and implications of the agreement.

There are a number of ways that an agreement can be certified.  In some circumstances, remote certification can be possible.

Separation
Uncertain times can sometimes have a negative effect on relationships. Unfortunately this may lead to separations.  In the event that this is something you are facing and have questions, we are able to support you through the legal process. Separating in a situation of turmoil has its own challenges – both with care of children as well as dividing property.  If you are separating during this time then it is important to seek advice early to understand what your rights and the best way through for you.

Please get in touch
If you have any queries or need any assistance on a current matter with us, please get in touch with your usual point of contact with us.

Jeremy Johnson, Shane Campbell or Greg Simms for commercial or civil disputes.
Andrew Watkins, Jeremy Johnson or Shane Campbell for relationship property matters.
 

Wynn Williams is a member of SCG Legal, a global network of more than 110 independent law firms with both legal and public policy practices serving businesses in all 50 U.S. state capital cities and the District of Columbia, as well as capital cities and major commercial centers in more than 50 countries. SCG Legal has developed a COVID-19 Global Resource Center, which is focused on up-to-date legal and public policy developments from more than 25 different countries and most U.S. States. To access it, visit scglegal.com/coronavirus-resources.
 
Download article in PDF format



Enter security code:
 Security code

Wynn Williams Christchurch
Level 5, Wynn Williams House, 47 Hereford Street, Christchurch 8013, New Zealand.
PO Box 4341, DX WX11179, Christchurch 8140.
+64 3 379 7622
+64 3 379 2467
Wynn Williams Auckland
Level 25, Vero Centre, 48 Shortland Street, Auckland 1010, New Zealand.
PO Box 2401, Shortland Street, Auckland 1140.
+64 9 300 2600
+64 9 300 2609
Top

This page is best viewed in an up-to-date web browser with stylesheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so. The latest version of Firefox, Safari or Google Chrome will work best if you're after a new browser.