Legal Insights, Uncategorized

A new Immigration Bill: What’s in it for work and student visa holders?

On 5 May 2020, the Minister of Immigration presented an urgent Immigration Bill to Parliament to ensure that the Government can respond appropriately and efficiently to the COVID-19 outbreak by providing additional flexibility in the immigration system.

The Immigration (Covid-19) Response Amendment Bill will enable the government to amend visa conditions for groups of people, extend visas for groups of people for varying periods of time (enabling processing to be staggered), stop people overseas from making visa applications while it is not possible to travel to New Zealand due to border restrictions, and provide the ability to refuse entry to people who are deemed to hold a visa.

Work visa holders

As it was already discussed in our last article (Post-lockdown: Impact on migrant workers), we could expect many migrant workers to lose their jobs. In fact, some of our clients have already indicated plans to lay off some staff, the majority of whom are migrant workers.

In order to address the increasing number of job losses, the Bill will be useful to amend employer specific conditions of work visas. This means unemployed migrant workers might be able stay in New Zealand, especially those who are unable to return to their home country due to border closures. If these workers are able to stay in New Zealand, then other industries that rely heavily on migrant labour will be able to find more workers within the country.

Given the number of business permanently shutting down, work visa holders could struggle find a new job suitable to their skills. Even if they are fortunate enough to find a new job, their pathway to residency might be affected unless they re-train and are able to match their qualifications and previous work experience with their new found job.

Student visa holders

There is a possibility that the Bill may affect international student visa holders who were given the right to work part time while studying. With the increasing rate of unemployment in New Zealand, international students might lose their right to work as the government fills vacant jobs with New Zealand residents or citizens.

Conclusion

On the one hand, we understand the significance of this legislation in helping to manage the backlog of visa applications being processed (even before the Covid-19 crisis began). In addition, the Bill will give Immigration New Zealand a way to prevent any foreseeable problems in late September when all the visas that were automatically extended under the Epidemic Management Notice expire.

On the other hand, this new Bill as discussed above could be of concern to working migrants, their employers, and international students.

This Bill is set to become law on Friday, 15 May 2020.

If you require any specific immigration advice that may affect your current visa or future application due to these changes to New Zealand immigration policies, please contact Oneal Mendoza (omendoza@corbanrevell.co.nz) or one of our lawyers to assist you.

The advice above is current at the time of writing, 9 May 2020. This article is published for general information purposes only. Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice

Legal Insights, Uncategorized

Key Changes to Trust Law

The new Trusts Act 2019 will come into force on 30 January 2021. This is the first major reform to trust law in New Zealand which provides greater transparency of trustee activities and increased trust compliance requirements.

If you are a settlor or a trustee of a trust (or family trust), it is important to review your trust in light of any personal, legal and policy changes provided under the new Act.

Here are some of key changes to the new Act.

Formalised roles of Trustee and Beneficiary

The Trusts Act incorporates a new concept by classifying the duties as either ‘mandatory’ or ‘default’.

Mandatory duties

Mandatory duties must be performed by the trustee and may not be modified or excluded by the terms of the trust. Otherwise, it may be evidence that there was no intention to create a trust and will undermine the asset protection strategy if the trust is ever challenged.

The mandatory duties include that the trustees must:

  1. Know the terms of the trust
  2. Act in accordance with the terms of the trust
  3. Act honestly and in good faith
  4. Act in the interest of the beneficiaries in accordance with the terms of the trust deed
  5. Exercise their powers for a proper purpose 

Default duties

These default duties include a general duty of care, which the trustees must perform unless they have been excluded or modified in the trust deed.

Some of the general duties of care include:

  • Duty to invest prudently
  • Duty not to exercise power for own benefit
  • Duty to consider exercise of power
  • Duty to include to avoid conflict of interest
  • Duty not to profit
  • Duty to act unanimously

If your current trust deeds already excluded some of the default duties, this will continue to be acceptable provided that the exclusions fit within the permitted limits. 

Obligation to give certain information to beneficiaries

The Act creates a presumption that a trustee must make ‘basic trust information’ available to every beneficiary and ‘trust information’ available to beneficiaries who request it.  The purpose of such disclosures is to hold the trustees accountable for their duties and obligations.

“Trust information” is information that it reasonably necessary for the beneficiary to have to enable the trust to be enforced. However, before providing the trust information, the trustees must consider a range of factors and if the trustee reasonably considers that the information should not be disclosed, then it may withhold the information.Those factors, amongst other things, include:

  • The nature and interests of the beneficiary (such as the likelihood of the beneficiary receiving trust property in the future)
  • Whether the information is subject to personal or commercial confidentiality
  • The intentions of the settlor when the trust was established
  • The age and circumstances of the beneficiary in question and the other beneficiaries of the trust
  • The effect on trustees and other beneficiaries of the trust of providing the information; and
  • Other factors a trustee reasonably considers is relevant.

Trustees will have to carefully consider any decision not to disclose information.

Replacement of the Rules Against Perpetuities

Previously the maximum duration was 80 years after which the property had to be vested upon beneficiaries. The Act now establishes a definite, extended maximum duration of 125 years for most trusts. 

Record retention requirements

The Act prescribes what information trustees should keep and for how long. Each trustee will be obliged to keep copies of the trust deed and any variations.

Trustees must keep their own copies of ‘core trust documents’ or at least one of the other trustees holds all of the core trust documents and will make them available on request.

Restrictions on exemption and indemnity clauses

The Act makes it clear that trust deeds must not limit a trustee’s liability or provide an indemnity for dishonesty, wilful misconduct or gross negligence.

Any terms in a trust deed that purport to limit the liability of the trustee or to indemnify them in breach of these provisions is invalid. Trustees should be aware of these restrictions when acting.  

If you are involved in or thinking of establishing a trust, we recommend talking with us about how the new Trusts Act will affect you.

Contact:

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

Legal Insights

Immediate changes to executing a Will during Alert Levels 3 and 4

Immediate changes: Executing a Will during Alert Levels 3 and 4

With many New Zealanders isolating alone or in a bubble that comprises their immediate family, spouse or other relatives, they may not be able to arrange for two other adults to be physically present to witness. The Wills Act provides that any person who witnesses a will or whose spouse/partner witnesses a will cannot benefit from that will.

To overcome that problem on 16 April 2020, the Government passed the Epidemic Preparedness (Wills Act 2007- Signing and Witnessing of Wills) Immediate Modification Order 2020.

The Order allows the will-maker during Alert Levels 3 and 4 to use adults who are not in the will-maker’s physical presence to witness the will-maker’s signature via audio-visual link such as Skype, Zoom, Messenger or Face Time.

We note that the Order requires that the will-maker and witnesses have access to simultaneous audio-visual conferencing capabilities.

It is also important to keep in mind that the video should be positioned so that the camera captures the signature being applied to the document. Parties must also have access to a printer and tools to scan or share a photograph of the executed document immediately after signing.

Should you need any assistance in executing (or preparing) your Will, please contact Tom Allen (TAllen@corbanrevell.co.nz) or Oneal Mendoza (omendoza@corbanrevell.co.nz

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

Other articles you may be interested in:

Legal Insights

Post lockdown and Migrant workers

Post lockdown: Impact on migrant workers

Most employers and migrant workers are aware that all Immigration New Zealand (INZ) offices, onshore and offshore offices included, are currently closed due to the COVID-19 pandemic and the current lockdowns happening around the world.

Some INZ staff are working out of the INZ head office in Wellington and some are working remotely. As a result, visa processing capacity is currently limited and will remain limited even when New Zealand moves into Alert Level 3 on Tuesday, 28 April 2020. This is understandable given that INZ does not have capability to deliver their essential services remotely even under Alert Level 3

To date, INZ has focused their processing resources on COVID-19 related applications but they are now in a position to start processing some visa categories for applicants who are already in New Zealand, including:

  • Visas for victims of domestic violence
  • Partnership category temporary visas (including reassessments)
  • Full fee paying international student visas
  • Post study work visas

INZ advised the assessments of these applications or requests may take longer than usual.  Applications will generally be assessed in date order and will be allocated to an Immigration Officer as soon as possible.

Applicants will only be contacted if further information is required or once a decision is made on their application. If additional information is required, no deadline will be set to provide this information as INZ appreciates it may be difficult to obtain documentation in current circumstances.

INZ advised that while they will focus on the above visa applications, immigration officers will retain the discretion to prioritise other applications where the circumstances of the application require particular urgency. INZ did not provide any guidelines on when immigration officers could use their discretion. We believe that this type of decision will only apply to exceptional cases.

There is an indication that INZ may review these priorities. We expect that they will be able to process more visa types as soon as we move in at Alert Level 2 or below. We however, do not expect that all processing timeframes will return to normal due to the fact that hundreds of temporary visa applications are normally processed in overseas INZ offices. As we know, other countries are also in lockdown and may not have capacity to work remotely.

Further comments

As we move to Alert Level 3 on Tuesday, 28 April, we expect the flow of immigrants into the country will continue to slow down. Applying and renewing temporary work visas will be challenging.

As the pool of unemployed skilled labour increases (even after the lockdown), employers will have difficulty securing work visas for a worker unless they are able to prove that there is no other New Zealander who is available to perform the job.

Many migrant workers who are currently stranded overseas will also find themselves unable to return to New Zealand following the announcement from the Immigration Minister in regards to maintaining the current border restrictions for a prolonged period as the country recovers from the COVID-19 crisis.

We expect to see more amendments on NZ immigration policy which might assist the majority of the migrant workers who are already in the New Zealand. There are many sectors that rely on migrants for labour and skills, and amending the current policy to accommodate all the sectors’ needs could be a possible solution.

INZ policies are constantly evolving during this COVID-19 crisis. Our advice, therefore is to keep an eye out for future policy announcements from the government. Also, if you require any specific immigration advice that may affect you or your future application, please get in touch with O’neal Mendoza or one of our lawyers to assist you.

The advice above is current at the time of writing, 24 April 2020. This article is published for general information purposes only. Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice

Contact:

O’neal Mendoza

DDI: 09 837 5745

Email: omendoza@corbanrevell.co.nz

Legal Insights

Covid-19 and Insolvency

Given the Covid-19 lockdown it is, unfortunately likely several businesses will be considering insolvency.  Insolvency has a number of legal implications.

As a result, the Government is considering making changes to insolvency and company law.

These include:

  • A ‘Safe Harbour’ for Directors from some of their duties
  • Placing business debts in Hibernation until the start of normal trading

SAFE HARBOUR

The Companies Act places several obligations on Directors.  One of these duties is the decision to keep trading when a company is facing insolvency.

The Government is proposing that a decision to keep trading will not result in a breach of this duty if:

  • In the good faith opinion of the Directors, the company is facing significant liquidity problems as a result of Covid on them or their creditors
  • The company was able to pay its debts as they fell due on 31 December 2019
  • The Directors consider in good faith that it is more likely than not that the company will be able to pay it debts as they fall due within 18 months

DEBT HIBERNATION

The implications of Covid-19 will make it more difficult than normal for a company to pay its debts.  However, as is perhaps obvious, there would be significant implications for all, if companies simply stop paying their debts.

Given this the Government is proposing Debt Hibernation.  The key features are:

  • A threshold (details yet to be provided)
  • 50% of Creditors (by number and value) agree
  • A one month moratorium on debts from notification (of the proposal), with a further 6 months if the proposal is agreed

Voidable Preference

One important principle of liquidation/insolvency law is that all creditors should be treated evenly. This equal treatment is to ensure that creditors do not spend all their time monitoring the financial position of their debtors. Equal treatment requires that in certain circumstances where one creditor is better off than another creditor, the better off or preferred creditor should return some of his bounty to the liquidator.

Part of the Governments Hibernation proposal is to reduce the circumstances where a creditor will be required to return this bounty to a liquidator.

CAN I HELP?

The Official Assignee is often appointed by the Court to liquidate companies. I worked for the Official Assignee’s office between 1996 to 1999 and have practiced as a lawyer for over 22 years.

This experience enables me to very quickly guide you through insolvency issues including those referred to above.

Call me if you have any questions or require further details.

Mobile:  021 944 001

Email: corton@corbanrevell.co.nz