The announcement by Oyster Property Group that its syndicated offering of Orion House in Grafton has closed more than a week early and is over-subscribed, should give the investing public greater confidence in investing in commercial property, says Scott Ratuki, a partner at specialist commercial law firm Tompkins Wake.

Orion Health sold the complex to Oyster Property Group for $21.5 million and Oyster subsequently offered 115 shares at $100,000 each in the 4673sq m, three-level property with a projected initial pre-tax return of 8.47 per cent, paid monthly.

Ratuki says the Oyster offering is the first since the expiry of the exemption to the Securities Act (Real Property Proportionate Ownership Schemes) Exemption Notice 2002 which related to commercial property syndication.

He says this latest market proposition follows a move last year by the Financial Markets Authority (FMA) to impose tighter controls on syndicate offerings, which now must comprise a full form prospectus and investment statement in relation to the particular offer and appoint a statutory supervisor to look after investor interests.

“The commercial property investment market now has the same disclosure rules as any other public offering.

It cannot rely on the exemption notice,” Ratuki says.

“The Orion offering shows willingness by one of the major operators in the industry to embrace the new regime and demonstrates that the commercial property syndication market can continue to operate without the exemption notice.

“The Orion offering gives the investment public confidence as there is a registered prospectus that has been subject to FMA consideration in the same way as any other offering, a deed of participation which is a registered public document and a statutory supervisor to oversee the offering. These things give investors greater protection and comfort.”

Ratuki says that the rules – as exemplified through the Oyster Group’s Orion Building offering – now mean that participants/syndicators are subject to a greater level of disclosure and compliance.

“The FMA have been extremely helpful in this process. We engaged with them early on in the project. Initially they provided feedback, advice and direction on specific issues we had in relation to constructing a commercial property investment product within the prospectus regime. This was helpful to our initial drafting.

“Investors now have greater protection as, over and above the appointment of the statutory supervisor, there are incidental changes to the structure we have traditionally employed.

“One such change is that the statutory supervisor controls the appointment of directors to the company that has legal ownership of the property on behalf of investors. This means that the scheme manager does not control the property owning entity, which has been a problem in relation to some schemes set up under the exemption notice. This is another factor that should also give investors confidence.”

Tompkins Wake says the full disclosure regime doubles the amount of time needed to bring a commercial property syndication to market, and increases the legal fees involved by about a third.

Required documentation now includes the prospectus, a deed of participation setting out how the scheme will operate, and an investors’ statement summarising the offer.

“The process involved under the exemption notice saw offerors, rather than independent third parties, take responsibility for compliance in a regime that was totally prescriptive,” Ratuki said. “We used to be able to bring syndications to the market within two weeks, but now we’d recommend participants allow for at least a month.”

It’s no laughing matter when relationships with your home staff go bad. Have a think about the following case, when and if you are considering hiring someone to help out around the home, be it to look after the kids, do a bit of gardening or clean the house.

In the case of Fisher v O’Brien, Mrs O’Brien thought she had agreed to allow Ms Fisher to try picking her five children up from school to ascertain whether she needed any assistance on an ongoing basis. Ms Fisher, on the other hand, thought she was being employed as a nanny on a part time basis. The children didn’t like Ms Fisher and things were not going well.

One night, Ms Fisher was looking after the children while Mr and Mrs O’Brien went out for dinner with friends. The dinner was interrupted by telephone calls from Ms Fisher and one of the children. This was really the last straw and Mrs O’Brien decided things were just not working out.

The Employment Relations Authority was satisfied that the work with respect to looking after the children was “casual” in nature and Mrs O’Brien was able to bring that work to an end. However, during the relationship, Mrs O’Brien suggested Ms Fisher also take over from her cleaner. This was accepted and every Monday Ms Fisher undertook the house cleaning duties for Ms O’Brien.

The Authority, relying on well settled principals that employment relationships may change over time, concluded that when Ms Fisher commenced the regular cleaning work her employment relationship changed from casual to ongoing part-time employment. Given that, Mrs O’Brien was not able to simply terminate the relationship when it all went wrong.

Mrs O’Brien was an individual with no knowledge of employment law, however, the old adage that “ignorance is no excuse” came into play and Mrs O’Brien was ordered to pay remedies of $5,779.00 to Ms Fisher for an unjustified dismissal.

But wait there’s more! Because of the finding that Ms Fisher was an employee, the issue of holiday pay needed to be addressed as no holiday pay had been paid to her when the relationship ended. This case demonstrates the importance of the parties discussing their arrangements and putting these in writing at the outset.

The Employment Relations Act requires all employers to provide written employment agreements to their employees. Breaches of this requirement may attract penalties of up to $10,000 for an individual and $20,000 to a company. Perhaps luckily for Mrs O’Brien, Ms Fisher did not seek any penalties for Mrs O’Brien’s breach of the Act for having no written agreement in place!

The lesson is to ensure that before you commit to engaging any home help – make sure the terms are clear irrespective of whether the person is being engaged as an employee or as an independent contractor.

Not sure or need help? The call our Employment Specialist Vicki Campbell at Tompkins Wake Lawyers on 07 838 6034

The Intellectual Property Office of New Zealand (IPONZ) is preparing itself to use an international Trade Mark Filing System, and will accept filings under the Madrid Protocol by the end of 2012. Once the Madrid Protocol systems goes ‘live’, a trade mark owner will be able to designate over 80 countries in one international trade mark application.

The Madrid Protocol system will make it easier and more economical for New Zealand businesses to file international trade mark applications. Rather than having to instruct local agents to file an application in each country of interest, a single, multi-country application can be filed with IPONZ. Once the trade mark is registered, many transactions affecting an international trade mark (renewals, assigning ownership, change of name and address) can be carried out centrally with a single request. This will allow businesses to save time and money when managing their trade mark portfolios worldwide.

It is envisaged that the number of foreign applications and oppositions are likely to increase as a result of the new system. Therefore, it is important that your trade mark portfolio is sufficiently protected before the Madrid Protocol system comes into effect.

Please contact Tonia Brugh to discuss how you and your business can take advantage of the Madrid Protocol system. Tonia has extensive knowledge about the Madrid Protocol system, gained from her time in working with multi-national companies in the UK and European Union.

The law allowing employers of fewer than 20 employees to utilise periods of up to 90 days to trial new employees has been around since 1 March 2009. On 1 April 2011 the law was amended to allow all employers to use these trial periods. 14 months and two Employment Court cases later, employers and their trial periods are not faring well with a 100% fail rate (all four cases for dismissals after 1 April 2011 have been found to be unjustified) in the Employment Relations Authority.
These employers did not get the basics right – it’s that simple. Understanding the law and what you are required to do as the employer is key to getting the 90-Day trial period right.

Since it came into force on 1 October 2000, the Employment Relations Act 2000 has required employers of prospective employees (where no collective agreement is in place) to first provide their prospective employees with a copy of the intended individual employment agreement and secondly provide an opportunity to seek independent advice about the intended individual employment agreement. Failure by an employer to meet its obligations in this respect can attract a penalty.

Nearly 12 years on and in spite of the possible fine doubling, many employers are still not providing their prospective employees with a copy of the intended employment agreement. Failure to do so results in trial periods having no legal effect.

The Court has made it clear that in order to be able to rely on a trial period the employer must be able to demonstrate that it provided its prospective employee with a copy of the intended individual employment agreement, which included the trial period with all the required components, before the employee was employed. This means before the employee has been offered and has accepted employment.

The basics are easy to get right. Making an offer of employment by providing a copy of the intended individual employment agreement (whether in person or by email or post) means being prepared. It also means being clear to the prospective employee that the offer of employment is accepted when, and only when, an individual employment agreement is signed, so that until an individual employment agreement has been signed, the employment and the work will not commence.

Getting the basics right means peace of mind and certainty in an employment relationship. It also means not having to face the consequences of getting it wrong, which can include a fine over and above an order to pay lost wages and compensation for distress.

Ensure you have the basics right in your business: talk to us if you have any concerns about the employment process you use.