Government measures in key jurisdictions 4th edition - Flipbook - Page 91
New Zealand
Insolvency
Has the
government made
any changes
to insolvency
legislation?
she or he will be able to invoke the safe harbour by showing that she or he is of the opinion that:
•
•
any significant liquidity problems over the next six months are, or will be, a result of the effects of COVID-19
on the company, its debtors, or its creditors; and
it is more likely than not that the company will be able to pay its due debts on and after 30 September 2021.
A director will be able to rely on the safe harbour regime until 30 September 2020. The Government may also
re-instate the regime after that date if there is a need to do so. The temporary COVID-19 safe harbour
legislation is scheduled to be repealed on 31 May 2022.
Details of these changes are available here.
Contractual
Issues
What measures
have been taken
to reinforce
contracts?
There has been no Government intervention in contract law, and the usual rules apply. However there has
been an increased focus on contractual small print, including:
•
questioning whether the COVID-19 Alert Level Four lockdown period was excluded from working day
provisions in a contract (not for most contracts, but for those that determine a working day to be a day
that a bank is open for business this was less clear-cut); and
•
force majeure clauses, which will suspend the performance of the contract during the force majeure
event.
Details of how a Force Majeure Clause can affect the performance of a construction contract is available
here.
In addition, the Commerce Commission (New Zealand’s competition regulator) have recognised the greater need for
commercial cooperation during the COVID-19 pandemic.
The Commerce Commission is allowing more flexibility to enable businesses to work together, potentially share
resources or otherwise cooperate to ensure consistency of supply of both products and services required by New
Zealanders.
Detail of the permitted commercial cooperation is available here.
Property
Commercial property
Have any changes
been made to
the laws around
property, rent and
enforcement?
Many commercial property leases include a clause providing for an abatement of a “fair
proportion” of rent and outgoings if the property cannot be used during an emergency. The
COVID-19 pandemic is an emergency in terms of those leases, but the question of what is a fair
proportion is to be negotiated between the landlord and tenant depending on their
own particular circumstances.
The Government has announced that it will subsidise mediation or arbitration for small
businesses if an agreement cannot be reached on the amount of the abatement. A previously
announced change to legislation to imply an abatement clause will no longer
happen. Details of the operation of the standard lease clause are available here.
The Government has also made changes to the powers under the Property Law Act 2007 (PLA)
in respect of Landlords’ rights to terminate commercial leases and the powers for
Mortgagees to take possession or sell mortgaged land. The changes mean that a landlord now
needs to wait thirty working days (rather than the previous ten working days) before they can
cancel a lease for rental arrears. This change will be in place until the end of 2020.
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Government measures in key jurisdictions