New Zealand needs to consider promoting passive overseas investment in developed assets. We are pleased to see that the New Zealand Government has signalled changes to allow for foreign investment in established build-to-rent developments (while still retaining the residential restrictions more generally).
Contractor insolvencies are continuing in the construction industry in 2024. This follows recent challenges relating to supply chain issues, labour shortages, and increased material costs. Such challenges are part of the broader macroeconomic climate of high inflation and interest rates.
We outline below steps that a Principal can take at different stages of a project to mitigate the impact of Contractor insolvency on its project, and to protect its interests.
Key takeaways
Our prediction
With New Zealand’s economy in recession, we predict an increase in insolvency-related disputes and litigation over next 12-months.
Why?
A variety of factors combine to give rise to the expected uptick in insolvency-related claims:
The Supreme Court’s long awaited decision in Yan v Mainzeal Property and Construction Ltd (In Liq) offers some much needed clarity on directors’ duties in New Zealand. Our initial summary of the decision and its implications is here. This article provides a more detailed review of the state of directors’ obligations post-Mainzeal.
The long awaited Supreme Court decision on the Mainzeal appeal is out, addressing issues of “fundamental importance to the business community”. The judgment essentially upheld the factual findings of the lower Courts that the Mainzeal directors had breached directors’ duties under the Companies Act 1993, and it provides important clarity of the legal principles - and practical steps - that are relevant to directors of companies facing financial difficulties.
Important learnings
Snapshot
Contents Section Page New Zealand in a Nut Shell 1 Business Landscape 2 Overseas Investment Regime 6 Immigration 10 Structuring the Business 13 Capital Markets and Takeovers 17 Tax 21 Trade Practices 28 International Trade 32 Intellectual Property 34 Employee Relations 36 Real Property and Resource Management 40 Taking Security over Personal Property 42 Corporate Insolvency Law 44 Climate Change and Emissions Trading 47
New Zealand in a Nutshell
A creditor wanting to keep the benefit of a potentially voidable transaction must be able to prove that value was given to the debtor company at the time payment was received, the Court of Appeal has held in Farrell v Fences & Kerbs Limited [2013] NZCA 91.
This guide introduces you to New Zealand's business and trading environment, with particular focus on legal and regulatory matters.
This FYI outlines the things you need to know about the Insolvency Practitioners Bill in its latest form. You can follow this link to access the Bill on the New Zealand legislation website. The Bill is new legislation that seeks to improve the regulation of administrators, liquidators, and receivers. It proposes amendments to the Companies Act 1993 and the Receiverships Act 1993.