News and Events

Uniting Against Covid-19

There are many ways New Zealanders can make a difference in the fight against Covid-19.  From staying home and maintaining social distancing to working in our supermarkets or essential medical and social services. Amongst the Corban Revell whānau we even have people using their 3D printers to create protective face shields.

One of the whānau has had their 3D printer working constantly during the lockdown producing face shields to be donated to NZ medical professionals and first responders.

3D printer covid-19

Many Kiwi Makers are participating in this effort to help protect our front line personnel in the fight against Covid-19.  For further information, to volunteer or to make a donation please follow this link to the ShieldsUp webpage

Legal Insights

Commercial Rent Break?

Can we take a break from paying our commercial rent during Covid-19 lockdown?

The impact of COVID-19 and the unprecedented lockdown have created a lot of uncertainty in business. Non-essential businesses find themselves scrambling to find ways to make ends meet. Many tenants, in particular, are finding they are unable to pay their lease rental and outgoings during the lockdown period.

Taking a break from rent payment is going to depend on what the lease says.  The commonly used Auckland District Law Society (“ADLS”) Deed of Lease precedent, provides a wide-ranging clause which covers situations such as government lockdown as grounds for some rent reduction or even suspension of rent. In particular, the No Access in Emergency clause of ADLS form provides that:

“If there is an emergency and the Tenant is unable to gain access to fully conduct the Tenant’s business from the premises… including restriction on occupation of the premises by any competent authority [which includes New Zealand Government]…then a fair proportion of the rent and outgoings shall cease to be payable commencing on the date when the Tenant became unable to gain access to the premises…”

We are of the view that this clause would apply given that a national state of emergency has been declared and most businesses are unable to access the leased premises to continue operating their business.

An apparent issue with this clause is interpreting the meaning of “fair proportion.” We consider that fair proportion would not necessarily equate to a zero payment but at least a reduction in the rent and in some cases a substantial reduction.

Of course, it is unlikely that the landlord would be bound to agree to the full amount of rent to be waived given that there is some minimal on-going use of the premises for storage of their stock or using the IT systems to facilitate working remotely. There is also the tenant’s share of the outgoings on insurance.

Many tenants then are wondering how much rent reduction they are entitled to. This will depend on the industry, size and the impact of the lockdown on profits. Bear in mind that this is also difficult for the landlords as they may also have mortgage repayment obligations and fixed outgoings to pay on the premises. It is therefore understandable that landlords may not easily agree to a reduction of rent.

Not all leases have this type of “No Access in Emergency” clause so the advice we would need to give you potentially could vary from tenancy to tenancy, so it is important that tenants check and read the fine print of their particular lease to get the right advice for their own circumstances.

If such a clause is present, we recommend that the tenants engage to a discussion early with their landlords. In some cases, it is better to not invoke the “No Access in Emergency” clause at the first instance but an open, honest conversation with the landlord might actually provide a better arrangement.

Other alternatives: Force majeure and the doctrine of frustration

In some other rare instances, tenants may have the right to terminate the lease using the doctrine of frustration or a ‘force majeure’ clause.

Frustration can bring a contract to an end when performance of the contract is rendered impossible by an unforeseen event,  and thus outside the control and contemplation of both parties. Frustration effectively makes the parties absolved of their obligations under the lease. Tenants, however, have to bear in mind that using the doctrine of frustration as a ground for terminating the agreement is assessed at a very high threshold by the Court.

The Supreme Court is unwilling to terminate a contract using Frustration when the main objective of the contract,  based on its terms,  can still be accomplished. The doctrine of frustration is a particularly complex area of law. We recommend that a tenant seeks to obtain legal advice before attempting to rely on this doctrine. It will depend on the lease,  the nature of the business and circumstances of each case.

For example, a temporary change such as a short-term closure of premises would ordinarily not amount to frustration, even if premises are closed for an extended period of time. At the time of writing, the country has been in lockdown for a week, it is unlikely that the tenant has a reasonable certainty that they will be unable to access the premises for a longer period. (It is also worth noting that the ADLS standard lease normally provides a 9 month no access period, so terminating the lease at this stage is unlikely to be a viable option.)

Given the complexity of the doctrine of frustration, tenants may invoke a ‘force majeure’ clause if it’s included in the contract. Force Majeure is a clause designed to release a party from fulfilment of its contractual obligations as a result of uncontrollable events. This type of relief could be used as an alternative to the doctrine of frustration.

It is arguable that a pandemic amounts to a force majeure but relying on a ‘force majeure’ clause will depend on the wording of the contract. In some contracts, it can provide for cancellation of the lease and others may suspend the lease during the uncontrollable event. Essentially, the use of ‘force majeure’ clause depends on the specific wording of the contract.

If you are a tenant and in a situation where you do not know what your rights and obligations are, particularly in these uncertain times, our commercial team is able to review your lease and advise you accordingly.

We highly recommend that you do not withhold any rent payment without advising the landlord of your intention, otherwise the landlord is entitled to charge penalty interest for the rent in arrears.

Contacts:

This article is published for general information, interest and discussion purposes only. Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice.

News and Events

Level 4 Alert – Update 1

With the updated guidance today we can advise as follows:
Corban Revell Lawyers will be working remotely until Level 4 is downgraded to Level 3 or lower. We know a lot of you are in the same position.
You can still ring our main line, direct lines and mobiles if you need assistance (when the networks aren’t overloaded that is). Our reception is being managed remotely. If you need to make arrangements for couriers please call our main line to find where to send them to.
You can still email us – details for most of our staff are on our website.
We are all set up to work remotely and we can still work on many things for you. We can still complete many types of property matters, but not all during Level 4.
Some Court matters have been delayed and your lawyer will keep you up to date about that. We can start to prepare new Court matters for you if you need.
While we are all in lockdown it may be a good time to reflect on matters relating to your business or personal matters that you have not had time to attend to recently. It may also be the that this lockdown has consequences for you or changed plans for you or your business and so you may have increased needs for advice over this time.
We are here to help, only a phone call or email away for a wide range of matters including:
  • Civil court matters
  • Leasing and lease disputes
  • Family law
  • Criminal matters
  • Property law including refinancing
  • Employment law
  • Immigration advice
  • Wills and estates
  • Commercial Matters Generally
  • Maori Land Matters
  • Legal Aid matters
Keep safe everyone and let us know what you need, we can help you out (except for flour to make bread! if anyone has any let us know!)
We look forward to seeing you all in person again in about 4 weeks and in the meantime we’ll be happy to Skype, FaceTime, message, call or email you.

The Team at Corban Revell

News and Events

Covid-19 Update 2

With the increased alert by the government to level 3 from 24 March, we have implemented our remote work plan. All our staff are able to work remotely and many will start to do so from tomorrow. Direct lines will be diverted to cellphones from 24 March.
You will still reach us by phone, email or fax by the normal methods.
We can still conduct interviews by phone or Skype or FaceTime
We can still witness document signing for existing clients over Skype or FaceTime.
We will be doing our very best to ensure we can complete your property settlements (noting it takes the other side of the deal to also be able to settle) and we have the technology and systems to do that even without the office physically open.
As per our previous updates, your lawyer will keep you updated about your court matters.
We are well prepared to carry on business and look after your legal matters. We are here for you and we are here to help.
Feel free to call or email us if you have any questions as many as you have been already
Kia kaha,
The Team at Corban Revell
News and Events

Covid-19 Update

An update to Corban Revell’s response to Covid-19
Corban Revell will be making daily decisions as to whether to open the office during Monday to Friday, or for our staff to work from home,  from 23 March 2020 based on the alert system announced by the government this weekend.
As a guide, while the alert level remains at 2, we intend to work from the office but with more controls in place in order to keep our staff and clients safe as we possibly can from Covid-19.
From now and until further notice, please call ahead before coming to our office, so we can ensure meeting times are appropriately staggered and avoid too many people being in the office at one time.
Meetings will be by appointment only and our front reception doors will be locked during the day to control this. There is a doorbell on the right hand wall by the front doors you can use if there is no one on reception, but the hope is that this system will work well.
We will ask you if you are unwell or have recently travelled and other questions before we agree to accept face to face appointments at the office. We will have Skype and FaceTime meetings available as an alternative to almost all kinds of meetings. By law some meetings have to be face to face and we understand that, also sometimes you will just need to come in to see us to give us documents and the like.
We promise to work with you to find a way that works! We have the people, the skills and the technology to get through this time with a few adjustments to keep us all safe.
We ask that if you are coming to sign documents over this period that you please bring your own pens and your own water bottles if you need a drink and take them with you when you go.
You are welcome to take your own precautions as you wish such as wearing masks and gloves to meetings. We will ensure we only use meeting rooms large enough to provide adequate distance between clients and staff and we have hand sanitiser on reception you can use.
If the Corban Revell staff member you are due to meet is unwell for any reason, they will go home and we will let you know in advance and we will make alternative arrangements for your meeting.
For Court matters, your lawyer will advise you in advance what the plan is. The Courts are keeping in touch with us as to any delays or changes to planned hearings.
Should you have any queries, please call us on 09 837 0550.
Many thanks for working with us to keep us all safe and well.
The Team at Corban Revell