Maori: Takamore v. Clarke

Maori custom came hard up against pakeha practice with the Supreme Court deciding by a narrow margin of 3:2 that the person in charge of a deceased estate has primary authority in deciding where the deceased should be buried.

Recent years have seen a run of distressing instances known colloquially as “body-snatching cases” where extended family have tussled with close relatives of a deceased over funeral arrangements.   Maori custom demands burial at the home urupa.  A surviving spouse and children usually prefer burial closest to the family home.

This sensitive issue came before New Zealand’s highest court following the 2007 death of James Junior Takamore.  His immediate family wanted to have him buried in Christchurch where they had lived for the previous twenty years.  Plans for the Christchurch burial were thwarted when members of Takamore’s hapu from Kutarere in the Bay of Plenty took his body north over the objections of his widow for burial on the home marae.  

The Supreme Court ruled that his widow was entitled to possession of Mr Takamore’s body as executor of his estate.  She was given permission to exhume his body for reburial at a place of her choice.

The five judges sitting in the Supreme Court were not unanimous in their ruling on this cross-cultural dispute.

Three of the judges relied on the traditional pakeha common law rule: those appointed as executors or administrators of a deceased estate have the duty and obligation to dispose of the deceased.  They should take into account the views of close family members and, importantly, take into account any views the deceased made before death.  “Body-snatching” is not the way to deal with differences of opinion.  Those disagreeing with decisions about burial should air their differences in court and have a judge weigh up the conflicting viewpoints.

Two of the judges considered primary responsibility for burial decisions should not lie with the executor or administrator.  Disputes should be put before a court prior to any burial.

The five Supreme Court judges were of the same view on one point: the “might is right” approach of traditional Maori custom which saw disputes settled by force has no place in modern society.

Takamore v. Clarke – Supreme Court (18.12.12)

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Insurance: Insurance Brokers v. Fire Service

A failure by the Fire Service to break down what it considers a commercial rip-off in both composite and “split-tier” insurance contracts came to nought when the High Court ruled these policies are legitimate even where they have the effect of reducing the fire levy payable.  Fire service union members are up in arms as well.  They argue underpayment of fire levies reduces funding for the service and reduces resources available for wages. 

Split-tier policies are used by large commercial operations to manage their risk at reduced cost.  Insurance cover is split out into several policies to separate out cover assessed for fire service funding.  These policies are often combined with composite policies. The commercial reality is that a business with operations nationwide is not going to have all its plant and buildings damaged simultaneously by fire, earthquake or flood. Composite cover for assets nationwide is offered at an expressed indemnity value being only a fraction of the nationwide asset replacement value.  The fire service levy is calculated on this lower indemnity value, not the nationwide replacement value.

The Fire Service has grizzled for years about split-tier and composite policies.   The Insurance Brokers Association, concerned that penalties might be imposed for a failure to comply with the Fire Service Act 1975, bought matters to a head by going to court seeking a ruling that these practices did comply with the Act.

As a test case, the court was asked to consider insurance arrangements implemented since 2008 between Vero and eight New Zealand ports acting together in what is called the NZ Ports Collective.

One single policy covered assets of the eight ports to an aggregate amount of $250 million for fire damage alone.  The fire service levy was calculated and paid on this amount.  Separate policies provided cover totalling an extra $500 million: for fire cover above the indemnity cover, for material damage other than fire and for business interruption cover.  No fire service levy was paid on this extra $500 million cover.

Use of one global composite policy benefitted NZ Ports Collective because they got the cover each wanted at a reduced premium: the premium was apportioned between ports on the value of their respective port assets.  Each port did bear the risk that a large prior claim in any one year by one port could deplete the sum payable under the policy for later claims by another port.   Insurance Brokers said splitting the cover into tiers did comply with the Act and no further levy was payable.  The Fire Service said it was in fact eight separate policies with eight different ports and further levies were payable.

In the High Court Justice Heath ruled that split-tier policies did comply with the Act because a fire levy was payable only on the declared indemnity value.  And as a composite policy the Vero cover also complied with the Act.  While the insurance policy covered different assets owned by different ports it was nevertheless a single policy.

Insurance Brokers Association v. NZ Fire Service – High Court (17.12.12)

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Matrimonial: R. v. Kendall

Auckland businessman and former firefighter, Graeme John Kendall, was sentenced to home detention for perjury after giving false evidence in what was described as a deliberate mis-use of the legal system to inflict considerable harm on his former wife.

The High Court was told that Kendall lived for twelve months in a de facto relationship before marrying his de facto partner in March 2006.  The marriage was at an end within nine months.

Prior to the marriage, his de facto partner decided to buy a residential unit in Takapuna which adjoined a unit she already owned.  He suggested she use one of his many private companies for the purchase.  All the shares in Home Pride Ltd were transferred into her name and this company purchased the unit.  She was assured, as was her solicitor, that Home Pride was a “clean company”: a shell company with no assets and no liabilities.

Within months of the marriage ending, she received a statutory demand claiming that Home Pride owed $64,400 for rent due on a storage unit in Rosebank Road, Avondale.  This was a storage unit where some of her personal property had been stored previously.  If payment was not made it was likely that Home Pride would be wound up by the court and the Takapuna residential unit sold to pay the claimed debt.

She spent $33,000 in legal fees disputing the debt; a debt claimed by one of her former husband’s companies.

It was proved that Kendall had fabricated lease documents to make it appear that Home Pride owed rent for the storage unit.  He was convicted of perjury.  He served three months imprisonment before being convicted again on the same charge following a retrial.  Justice Toogood took this earlier period of imprisonment into account when sentencing him to seven month’s home detention for perjury.  Kendall was also ordered to pay $25,000 to his former wife.

R. v. Kendall – High Court (11.12.12)

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Maori: NZ Maori Council v. Attorney General

The High Court has dismissed out of hand legal action by Maori interests to delay government moves to sell down its stake in electricity generator Mighty River Power.  Some Maori claim ownership of the water which generates electricity by passing through Mighty River turbines.

The High Court did not need to decide who might own water.  It ruled that government plans to sell down its interests in Mighty River Power did not affect rights of water ownership, whoever might own the water.

In June 2012, government altered the legal status of government-owned Mighty River Power, changing it from a state-owned enterprise (SOE) to a mixed-ownership model (MOM) company.  This did not change the government’s ownership of Mighty River, it changed the legal structure under which the company operated.  Government plans to sell down a 49% stake in four of its electricity generation companies: Mighty River Power, Genesis Power, Meridian Power and Solid Energy.

Maori interests claim the proposed sell down may defeat pending Treaty of Waitangi compensation claims.  Once an asset passes from government ownership, no direct Treaty claim can be made against the asset.

In the High Court, Justice Ronald Young refused to block preliminary steps taken by government to achieve the proposed sell down.  Changing a company’s status does not alter the status of assets held by that company.

New Zealand Maori Council v. Attorney General – High Court (11.12.12)

12.035

Insurance: Turvey Trustee v. Southern Response

Christchurch homeowners with AMI “premier house cover” offering full replacement cover for earthquake losses are entitled to a new house of the same style and quality of materials as the house written off but substitute materials or method of construction is permitted where that does not affect the functionality or character of the replacement structure.

The High Court was asked to rule on AMI costs for the replacement of a 1911 Edwardian-style villa at 23 Aynsley Terrace written off after the February 2011 earthquake.  A particular feature of the villa was its use of native timber for flooring and joinery.

All AMI house insurance policies for Christchurch have been hived off into a special government controlled entity with the taxpayer subsidising any shortfall on funds needed to meet earthquake claims.

Turvey Trustee, the owner at Aynsley Terrace, exercised its right under the policy to rebuild on a new site, but there was a dispute as to the extent to which the new construction should mirror the house written off.   In particular, methods of construction and building materials in common use have changed markedly since the original construction in 1911.

Justice Dobson ruled that replacement does not mean replication; it means “as new”, being an equivalence of the old as measured by size, functionality, relative quality and re-creation of character and appearance.

A case from Australia in a dispute over replacement cover in insurance had identified that it would be appropriate to use plaster board for wall lining rather than the plaster and lath previously in use and radiata pine framing timber rather than Oregon pine.

In this case, it was replacement of native timber in use for flooring and joinery which was most in dispute.  Justice Dobson ruled that in those rooms where the floorboards were exposed or covered only by loose carpets, then AMI was obliged to pay for replacement native timber flooring in the new house.  But for those rooms where the timber flooring had been covered by vinyl or tiles, chipboard flooring would suffice.  Similar rules applied to joinery.  Exposed native timber joinery had to be replaced with native timbers.  But joinery which had been painted over could be replaced simply with painted pine.  Hard plaster ceiling features in the 1911 villa could be replaced by use of a polystyrene mould and plaster covering with no material difference in appearance.

Turvey Trustee Ltd v. Southern Response Earthquake Services – High Court (11.12.12)

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Insolvency: re Window Holdings Ltd

Most creditors paid prior to a company liquidation will be able to keep their money thanks to new insolvency rules.  Creditors paid up to two years prior to a debtor company being wound up insolvent can keep the money provided they received payment in good faith, did not know the debtor was insolvent and had provided goods or services to the debtor equal in value to the payment received.

Insolvency law has detailed rules to even out the losses when a debtor company goes into insolvent liquidation forcing some creditors who were paid in full before the liquidation to repay the money received.  They are left to prove as unsecured creditors.  In practice, money recovered is used first to pay the liquidator’s fees.  Frequently, little is left for unsecured creditors as a whole.

Changes to insolvency law in 2006 replaced earlier recovery rules which were widely viewed as being unworkable.

Auckland insolvency specialist Jeff Meltzer challenged these new rules arguing they should be interpreted restrictively: any creditor paid in the two years prior to liquidation and getting 100 cents in the dollar should have to return that money if there are unpaid creditors.

In the High Court, Justice Toogood applied the plain wording of the new rules.  Creditors can keep their 100 cents in the dollar provided, at the time of payment, they acted in good faith, had no knowledge that the debtor company was insolvent and had provided monies worth in goods or services to the debtor company.

re Window Holdings Ltd (in liquidation) – High Court (5.12.12.)

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