COVID 19 UPDATE – Level 2

Level 2 Updates (18 May 2020)

  • At 11.59pm on Wednesday 13 May 2020 New Zealand went into Alert Level 2
  • NOTE:  Given the number and speed of changes we have prepared a new note.  Accordingly, this doesn’t shown changes from our earlier updates

LEGISLATION

State of National Emergency

  • The National State of Emergency ended and a National Transition Period (“NTP”) came into force at 12.21pm on Wednesday 13 May 2020.  The NTP is in force for 90 days and ends at 12.21pm on Monday 10 August 2020 unless extended or terminated early.
  • The NTP supports a move from an emergency response into the initial recovery phase.  During the NTP civil defence continues to have similar powers to those under a State of National Emergency – all of which are designed to assist with recovery (to include rights to manage roads, traffic and public places, and provide first aid, shelter, food and accommodation). Police can also exercise additional powers during the NTP.

(Legislation:  Civil Defence Emergency Management Act 2002)

COVID-19 Public Health Response Act 2020

  • This Act was controversially rushed through Parliament and has been criticised heavily for the further (and invasive) powers given to (essentially) the police.  Given the strength of opposition against the powers granted under the Act (see further commentary below) the law is being referred to select committee for extra scrutiny. The Act will (after amendment) be reviewed every 90 days.
  • Some of the Act’s more controversial powers include an ability for the Minister of Health or Director-General to make an order (a section 11 order) “in relation to any places, premises… or other things, to require specified actions to be taken, require compliance with any specified measures, or impose specified prohibitions that contribute or are likely to contribute to preventing the risk of the outbreak or spread of COVID-19, including (without limitation) any of the following:
    • require things to be closed or only open if specified measures are complied with;
    • prohibit things from entering any port or place, or permit the entry of things into any port or place only if specified measures are complied with;
    • prohibit gatherings of any specified kind in any specified places or premises, or in any specified circumstances;
    • require things to be isolated, quarantined, or disinfected in any specified way or specified circumstances;
    • require the testing of things in any specified way or specified circumstances.
  • Any order made under section 11 may be enforced by a wide variety of persons who can be authorised under the Act, the consensus being that the powers will be enforced by the NZ Police.  The enforcements powers include the following:
    • Powers of Entry – clause 20 gives wide powers to an enforcement officer to enter, without a warrant, any land, building, craft, vehicle, place, or thing if they have reasonable grounds to believe that a person is failing to comply with any aspect of a section 11 order;
    • Power to give directions;
    • Power to close roads and public places and stop vehicles;
    • Power to direct person to provide identifying information;
    • Power to direct business or undertaking to close.
  • Enforcement directions may be given verbally or in writing.  Penalties for intentionally failing to comply with a section 11 order can extend to a term of imprisonment not exceeding 6 months or a fine not exceeding $4,000.00.
  • The Act will therefore allow police to enter private homes to break up gatherings that violate the rules on the numbers of people assembling.  Enforceability to date has relied on the Epidemic Notice, the Health Act and the Civil Defence Emergency Management Act.

COVID-19 Public Health Response (Alert Level 2) ) Order 2020

  • Came into effect at 12:01am on 14 May 2020.
  • This Order details the requirements of Alert Level 2.  The Order specifies requirements around the operation of businesses and the provision of services, funerals and tangihanga, gatherings, infection control measure requirements for premises and ability to close non-compliant premises and prohibitions on gatherings.
  • By way of summary, the general requirement for all businesses and services is to:
    • keep all people 2 metres away from each (to the greatest extent practicable),
    • keep all workers 1 metre away from each other (to the greatest extent practicable);
    • mitigate the risks that arise where the physical distancing requirements are not fully maintained;
    • permit no more than 10 people who are part of a gathering of friends and whānau (at any one time) to be in the workplace and less than 1 metre away from each other;
    • keep records to enable contact tracing of all workers who enter the workplace or carry out work for the business or service; and
    • ensure that food or drink is not sold or provided for consumption in the workplace that sells or provides it, except in accordance with clause 12 of the Order.
  • There are specific requirements for certain businesses and services such as gyms, libraries, swimming pools, cinemas, theatres, stadiums, concert venues, conference venues, casinos, museums, courts and tribunals.
  • Event facilities such as such as cinemas, theatres, stadiums, concert venues, conference venues, and casinos must permit no more than 100 customers or clients to be in the workplace at any 1 time (not including workers).
  • Premises offering food and drinks, such as restaurants and cafes have specific requirements, to (in summary):
    • permit no more than 100 customers at any one time;
    • have each customer seated;
    • let no more than 10 customers be seated at a table together;
    • ensure there is at least a 1 metre gap between tables; and
    • keep records to enable contract tracing of customers.
  • Clubs, bars and taverns are permitted to open on and from 21 May – the rules above apply – essentially, patrons must be served by a single waiter, seated and separated. No dancing is permitted and patrons won’t be able to order from the bar.
  • Businesses or services that cannot operate without physical contact or close proximity between people (such as massage and hairdressing services, small passenger services, and professional sports) must comply with the specific proximity requirements set out in clause 13 of the Order.
  • Gatherings of friends and whanau must consist of no more than 10 people.  An authorised funeral or tangihanga gathering can extend to 50 people if certain criteria are fulfilled. Gatherings outside the sated requirements are considered “high risk” and are not permitted.

Please either contact us or refer to the Order for further details.

Health Act Orders

  • A number of orders have been created since late March which have subsequently been revoked or have expired.  The current Health Act Orders are as follows:
    • Section 70(1)(e), (ea) and (f) extension and amendment of notice to arrivals – 8 May 2020
    • Section 70(1)(e), (ea) and (f) notice to arrivals – 9 April 2020
    • Section 70(1)(f) notice to arrivals – 31 March 2020

As these orders relate to persons arriving to NZ we will not comment on the specifics as the quarantine requirements on arrival are generally understood (and of no relevance to those who were in NZ at the time of the initial restrictions).  If you require specific details of the Heath Act Orders either contact us or refer to https://covid19.govt.nz/resources/key-documents-and-legislation/.

IMMEDIATE MODIFICATION ORDER (IMO)

  • Epidemic Preparedness (Wills Act 2007—Signing and Witnessing of Wills) Immediate Modification Order 2020:
    • The Government has made a temporary law change under the Epidemic Preparedness Act to modify the requirements for signing and witnessing wills under section 11 of the Wills Act 2007 to overcome the current impossible/impracticable statutory requirements with signing and witnessing requirement during the COVID-19 epidemic (i.e. requiring signing of the will in the physical presence of two witnesses).
    • Wills are now able to be signed and witnessed using audio-visual means:
      • A person who is signing on the will-maker’s behalf (pursuant to section 11(3)(b)), can sign in front of the will-maker by audio-visual link from another place.
      • Witnesses can witness the will-maker sign a copy of the document by audio-visual link.
      • Witnesses can sign a copy of the document in front of the will-maker by audio-visual link.
      • All people signing a copy of the will must make it clear on the copy that it is signed this way because an epidemic notice is in force.
      • Photographs or scans of the signed copies must be sent as soon as practical to a person who has been chosen to hold the document and all photographs or scans of signed copies of the will. If a lawyer or trust company has been involved in preparing and witnessing your will, they can hold the document and all photographs or scans of signed copies of the will.
  • Epidemic Preparedness (Oaths and Declarations Act 1957) Immediate Modification Order 2020:
    • The Government has made a temporary law change under the Epidemic Preparedness Act to modify the requirements for signing and witnessing of oaths, affirmations (such as affidavits) and declarations under the Oaths and Declarations Act 1957. 
    • The change clarifies that there is no requirement for a person taking oaths, affirmations or declarations to be in the physical presence of those making them.  The witness is also not required to physically sign the same document as the person making it.
    • These can now be administered using audio-visual means.
    • Other requirements for taking oaths, affirmations and statutory declarations remain the same.

It is important to note that these changes are temporary and the modification order will expire after the Epidemic Notice is lifted

Level 2 Measures (effective from 11.59 on Wednesday 13 May 2020)

  • People can reconnect with friends and family, and socialise in groups of up to 10, go shopping, or travel domestically, if following public health guidance.
  • Keep physical distancing of two metres from people you don’t know when out in public or in retail stores. Keep one metre physical distancing in controlled environments like workplaces, where practicable.
  • No more than 10 people at gatherings (to be reviewed 25 May), except funerals and tangihanga, which can have a maximum of 50 people if registered with Ministry of Health.
  • Businesses can open to the public if following public health guidance including physical distancing and record keeping. Alternative ways of working are encouraged where possible.
  • Hospitality businesses must keep groups of customers separated, seated, and served by a single person. Until 21 May alcohol can only be served when purchasing a meal. Maximum of 100 people at a time.
  • Sport and recreation activities are allowed, subject to conditions on gatherings, record keeping, and – where practical – physical distancing. Initially, community sports will be limited to groups of 10.
  • Public venues such as museums, libraries and pools can open if they comply with public health measures and ensure 1 metre physical distancing and record keeping.
  • Event facilities, including cinemas, stadiums, concert venues and casinos have a limit of 100 customers in each workplace at any time, with 1 metre physical distancing and record keeping.
  • Health and disability care services operate as normally as possible.
  • It is safe to send your children to schools, early learning services and tertiary education. There will be appropriate measures in place.
  • People at higher-risk of severe illness from COVID-19 (e.g. those with underlying medical conditions, especially if not well-controlled, and seniors) are encouraged to take additional precautions when leaving home. They may work, if they agree with their employer that they can do so safely.
  • Travel – you can travel around the country, but people must do this in a safe way by following hygiene and distancing rules and keeping track of your journey including (if applicable) where and when you boarded and where you’re sitting.

Worksafe’s Guidelines

WorkSafe is finalising guidance for businesses and workers following the signing of the COVID-19 Public Health Response (Alert Level 2) Order 2020.  Worksafe’s initial guidance noted as follows:

  • Workplaces must minimise the risk of transmission and look to maintain physical distancing (one metre) between workers where possible,
  • Workplaces must take practical hygiene steps to avoid the spread of the virus e.g. supplying soap and water or hand sanitiser to ensure workers can frequently wash their hands; splitting meal breaks to reduce the number of people using a kitchen; increased cleaning of high touch surfaces,
  • Workplaces must hold centralised records of any workers working together and set up contact tracing measures (i.e. sign-in and sign-out procedures for customers and staff, recording interactions and floor access),
  • Workers are not to attend the workplace if they have any symptoms of feeling unwell or are being tested for COVID-19,
  • Workers are not to attend the workplace if they have been in close contact with anyone who is displaying respiratory symptoms, being tested for COVID-19, or has a confirmed or probable case of COVID-19,
  • Workers who are, or come into close contact with someone who is, considered ‘higher risk’ of becoming severely ill from COVID-19 may attend the workplace but are advised to take additional precautions when leaving the home.

Companies Act 1993 (“CA”) – Changes made by way of COVID-19 Response (Further Management Measures) Legislation Act 2020

  • The proposed changes as detailed in our last update have now been enacted, with the COVID-19 Response (Further Management Measures) Legislation Act 2020 coming into force on 15 May 2020. 
  • By way of short summary only, the legislative changes are as follows:
  •  “Safe harbour” scheme – new Schedule 12 of the Act
    • gives relief during the initial safe harbour period (3 April 2020 to 30 September 2020) from insolvency duties/reckless trading obligations under the CA for directors of companies facing liquidity issues as a result of the effects of COVID-19, to allow directors to make efforts to retain and revive a company rather than be forced into an insolvency measure because of the risk of personal exposure.  Other duties, such as to act in good faith and not dishonestly incur debts, will remain.  Schedule 12 allows directors to keep trading and take on new obligations without breaching duties if:
      • the directors consider, in good faith, that the inability to meet debts within the next 6 months (ends 30 September 2020) is a result of the effects of COVID-19;
      • 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 its debts on and after 30 September 2021.
  • Business debt hibernation (“BDH”) – new Schedule 13 of the Act
    • Allows directors to liaise with creditors with a proposal for hibernating debts, to allow directors to retain control of the company with a view to maximising the chances of the entity continuing in existence (or resulting in a better return to the entity’s creditors than would result from an immediate liquidation)
    • 80% of the directors of the entity must vote in favour of a resolution for the entity to enter into a BDH and each director who votes in favor of the resolution must sign a certificate which states that:
      • as at 31 December 2019 the company was able to pay its debts as they fell due; and
      • the entity has, or in the next 6 months is likely to have, significate liquidity problems; and
      • the liquidity problems are, or will be, a result of the effects of COVID-19 on the entity, its debtors, or its creditors; and
      • it is more likely than not that the entity will be able to pay its due debts on and after 30 September 2021.
    • If an entity is in BDH the following (temporary) protections apply:
      • a mortgage or other charge over the entity’s property is unenforceable:
      • an owner or a lessor must not recover property used by the entity:
      • a proceeding in a court, a tribunal, or an arbitral tribunal must not be begun or continued against the entity:
      • enforcement processes against the entity are halted.
    • The protections do not apply in relation to a creditor with security over the whole, or substantially the whole, of the entity’s property
    • The protections start when the entity delivers to the Registrar a notice that the entity is entering into BDH – a copy of this notice must be sent to each known creditor.
    • The protection initially lasts for up to one month.
    • If the arrangement is approved by the majority of the creditors (in number and value), the protection may continue for a further six months.
    • If approved the BDH is binding on all creditors to whom notice was sent (subject to conditions within the proposal).
    • If BDH is rejected, existing insolvency options are available (e.g. voluntary administration).
    • If the BDH is agreed, the business can continue to trade (subject to restrictions or conditions in the BDH).
    • During the protection period for an entity in BDH, except with the court’s permission, a guarantee of a liability of the entity must not be enforced against—
      • a director of the entity; or
      • a shareholder or other member of the entity; or
      • the spouse or relative of a director, a shareholder, or any other member of the entity.
  • A transaction is entered into during the protection period (which is authorised under an approved arrangement) which is made at arm’s length and in good faith is exempt from the:
    • voidable transactions regime of the Act, i.e. no ‘clawback’; and
      • setting aside dispositions that prejudice creditors regime of the Property Law Act 2007. 
    • The regime is available to all business entities (including partnerships, trusts etc.) other than sole traders (the ability to distinguish business from personal debts is considered to be too difficult).
  • Several changes made to section 292 of the CA (Insolvent transaction voidable) to include the voidable transactions clawback period being reduced from 2 years to 6 months
    • Allowing the use of electronic signatures in security agreements containing powers of attorney.  This is a temporary change only.
    • Temporary extension of various statutory deadlines under the Act (in relation to meetings and reporting for companies and other entities, for example annual return filing)
    • Temporary relief where an entity is unable to fulfil an obligation under its constitution

Taxation Measures

  • Depreciation – depreciation deductions at the rate of 2% for commercial and industrial buildings, to assist businesses with cash flow and encourage investment in property to assist in the economic recovery.  This does not apply to residential buildings.
  • Discretion to be given to IRD to temporarily change dates, timeframes and procedural requirements where businesses and individuals are affected by COVID-19.  It is expected, for example, that interest on late tax payments may be waived where it can be shown that tax payment difficulties have occurred as a result of COVID-19.
  • Other assistance available includes:  application for early refunds on provisional tax, extension of filing dates, write-offs due to serious hardship.
  • Tax Loss Carry-Back Scheme (temporary) – businesses expecting to make a loss in either the 2019/20 year or the 2020/21 year would be able to estimate the loss and use it to offset profits in the past year. In other words, they could carry the loss back one year, and means tax already paid for the year in profit could be refunded, and businesses could cash out some or all of their losses in 2019/20 or 2020/21. 
  • Tax Loss Carry-Back Scheme (permanent) – applying to 2021/22 and later income years also proposed (public consultation commences in second half of 2020).
  • Relaxation of tax continuity rules, from current “51% change” rule to a “same or similar business” test, modelled on Australian tax rules.  This will allow wider options for capital raising for businesses (public consultation commences in second half of 2020).

Commercial Tenancies

  • Click here for our separate Memorandum regarding a general commentary on issues that have arisen through the inclusion (or otherwise) of a “no access” provision in a commercial lease arrangement. 
  • The Government is working to put in place some temporary law changes to support commercial tenants and landlords impacted by COVID-19. These changes are designed to make it easier to retain lease arrangements and get back to business as usual. We eagerly await details on the proposed changes and will provide comment on these post announcement.

Residential Tenancies

  • Temporary rent freeze:  no rent increases for any residential tenancy.
  • Rent increase notices given prior to 26 March that had not come into effect, are no longer of any effect.
  • Rent freeze continues for 6 months from 26 March 2020.
  • Maximum fine for breaching the rent freeze – $6,500
  • Tenancy termination restrictions:  no tenancy can be terminated without agreement of all parties.
  • All fixed term tenancies that expire will continue as a periodic tenancy except where specific and limited reasons apply.
  • Tenancy termination restrictions apply for 3 months from 26 March 2020.
  • Termination for non-payment of rent not available until rent is 60 days overdue.  The Tenancy Tribunal will take into account fairness and the tenant’s efforts to pay when considering the termination order.
  • Tenant may elect to remain in the tenancy even if it has given a notice to terminate prior to 26 March.
  • Where an outgoing tenant elects to (or must, because of travel restrictions) remain in the tenancy, any incoming tenant has no right to occupy the premises.
  • Maximum fine for breaching tenancy termination restrictions – $6,500
  • Privacy:  a tenant is not required to inform their landlord of their or any resident’s COVID-19 status.  A tenancy cannot be terminated on the grounds that the tenant or a resident has tested positive for COVID-19.
  • Tenanted properties
    • Landlords are able to carry out virtual inspections provided they have the tenant’s consent and do not interfere with tenant’s reasonable peace, comfort or privacy.
    • During alert level 3, in person inspections can only go ahead during emergency situations (e.g. emergency maintenance).
    • Landlords can now tenant vacant property during level 3.
    • More guidance to be released by relevant authorities.

POLICY

Courts

  • Courts continue to expand the range of work they undertake.  Measures are in place to ensure that proceedings are conducted safely.  Physical distancing and cleaning regimes continue to play important roles. 
  • Rather than repeat here, the link provided below allows you to access the protocols the various courts are operating under Alert Level 2

https://www.courtsofnz.govt.nz/publications/announcements/covid-19/court-protocols/

LINZ

  • Survey and title transactions submitted electronically are still being accepted by LINZ.
  • Application for lapsing of caveats against dealings (under s143 of the Land Transfer Act 2017) are not being processed because of difficulty in complying with service and notice timeframes.  Withdrawals of caveats by caveators are still being processed.
  • Manual dealings are not being accepted.

Construction Protocol

  • The key principles and minimum requirements under Alert Level 2 remain (essentially) as per Level 3 –  on-site work is permitted provided a COVID-19 control plan is in place to ensure the working environment meets COVID-19 health and safety requirements.  The COVID-19 Construction Sector Health and Safety Framework and what information is required in a control plan can be found on CHASENZ’s website ­ https://www.chasnz.org/covid19.
  • Other services such as Plumbers, electricians and tradespeople can also work from customers’ properties (including homes), with physical distancing and record keeping for contact tracing purposes.
  • To ensure the sector has the materials it needs, retailers and suppliers can supply goods to customers by phone or online order and contactless delivery or pick up.
  • The Accord, a collaboration between private and public sector construction industry leaders, is advising the Government on how the industry can be maintained during and after the COVID-19 virus.
  • A Response Plan has been developed for the sector focusing on maintaining potential projects during the lockdown, implementing measures to expedite recommencement or commencement after the lockdown, health and safety guidelines for the post virus environment, and financial support for the industry during and after lockdown.

Employment & Wage Subsidy Scheme

Initial Scheme

  • Subsidy available to businesses which experience a 30% drop in turnover in any of the months of January to June 2020 (compared to the same period last year), and that decline is related to COVID-19.  The business must have taken active steps to have mitigated the impact of COVID-19 on the business. Available also to businesses that have been operating for less than a year that can show a 30% drop compared with a previous month. 
  • Set rate of $585 per full-time employee per week, taxable in the hands of the employee and subject to student loan, family support and other usual deductions (not subject to GST).
  • Businesses receiving the subsidy must undertake best endeavours to pay employees 80% of previous income, and if that is not possible then the whole of the wage subsidy is to be paid to each employee (unless its usual wage is less than the amount of the subsidy).
  • Business must also keep the employees in employment for the period of the subsidy (up to 12 weeks).
  • The scheme is open to all employers, sole traders, self-employed people, registered charities and incorporated societies registered and operating in New Zealand.
  • Applicants granted the subsidy will appear on a publicly searchable register.
  • Privacy:  employers must be careful to comply with privacy obligations in respect of employees, including in respect of the employees’ health information.  For situations where there is a necessity to prevent or reduce the risk of a serious threat to the health and safety of others there are exceptions under the privacy legislation.

Wage Subsidy Extension

  • A Wage Subsidy Extension (“Extension”) payment will be available to support employers who are still significantly impacted by COVID-19 after the initial scheme ends. The Extension will be available from 10 June 2020 until 1 September 2020. Eligible employers will need to reapply through Work and Income once their current 12-week subsidy has come to an end.
  • The weekly rates will be the same as noted above, and the Extension will provide an 8-week payment per named employee. It will be paid to the employer as a lump sum. Any payment must be used to pay employees’ wages and receiving it does not change existing employment law obligations.
  • The Extension will be open to the same types of employers currently eligible for the wage subsidy. To access the Extension, an employer must have experienced a revenue loss of at least 50% for the 30 days before the employer applies for the extension, compared to the closest period last year. There are different calculations for organisations where this is not possible, such as new businesses or pre-revenue firms.

HEALTH AND SAFETY

  • A large number of businesses are permitted to return to operation under Alert Level 2. The key to a successful return to operations (and a requirement of the restrictions in place) is the development and implementation of a plan to allow employees to work safely and to allow any invitees the also safely access and/or conduct business.  Employers need to discuss and share the plan with all interested parties – including workers, contractors, and suppliers – before the work starts. Once the plan is prepared it should be reviewed and updated regularly.
  • High level details of what workplace activities are permitted at different alert levels can be found on business.govt.nz https://www.business.govt.nz/covid-19/workplace-operations-covid-19-alert-levels/
  • Section 83 of the HSWA, states that an employee can refuse to work if they have reasonable grounds to believe that the work they are required to perform is likely to expose them to a serious risk to their health or safety arising from an immediate or imminent exposure to a hazard. 
  • Regardless of the uncertainties and pressures created by COVID-19, businesses are still expected to meet their legal obligations in undertaking their work.
  • WorkSafe is clear that it will not tolerate PCBUs using COVID-19 as an excuse to endanger employees or the public. PCBUs must still eliminate or minimise where is not possible to eliminate work health and safety risks so far as is reasonably practicable.
  • WorkSafe recognises that essential services may need to manage work health and safety differently during the Covid Alert Levels. Some of the usual risk mitigations we would expect to see in place may not be possible without compromising the delivery of essential services.
  • WorkSafe won’t take enforcement action if a PCBU’s actions meet its expectations under HSWA, even if a worker or other person contracts COVID-19.
  • Notifiable events must still be reported, although WorkSafe’s capacity to respond may be reduced.

Business Finance Guarantee Scheme

  • Government guarantee of 80% of a bank loan for approved borrowers (according to individual bank assessment criteria).
  • Available for businesses with an annual turnover between $250,000 and $80 million.
  • Maximum loan that can be guaranteed is $500,000, guarantee term maximum is 3 years.
  • The purpose of the loan must be cashflow related, with certain excluded uses including capital projects.

Small Business cash flow loan scheme (SBCS)

  • One-off Government loans are available for businesses and organisations impacted by COVID-19, including sole traders and the self-employed, to help with cash flow. Applications are open from 12 May to 12 June 2020 and can be made through myIR.
  • The SBCS is open to small to medium businesses with 50 or fewer full-time employee equivalents.
  • Each application will be based on individual circumstances, however by way of short summary the loan terms and amounts are as follows:
  • $10,000 to be provided to eligible businesses
  • an additional $1800 per full-time employee equivalent
  • interest free if the loans are paid back within a year
  • an interest rate of 3% for a maximum term of five years
  • repayments not required for the first two years.

The maximum amount you can borrow depends on the number of full-time and part-time employees you have. If you are a business without employees, i.e. sole trader or self-employed, you can receive a loan of up to $11,800.

Retail Bank Mortgage Holiday Scheme

  • The Government has worked with retail banks to enable banks to offer deferment of repayments for residential mortgages for up to 6 months.
  • Interest will still accrue, deferred interest will be added to the principal amount of the loan.
  • Each bank has its own criteria for assessing suitability for each customer and for implementing the deferral.

Execution of Documents

  • Simple contracts and deeds may be signed in ink and scanned.  A counterparts clause should be inserted to allow for signatures on separate pieces of paper that will be considered a single document.  In practice, electronic signatures such as scanned ink signatures, tick to accept, or typed names have been accepted forms of execution for certain types of documents.  However, this essentially depends on what the party or parties expecting to rely on the document is willing to accept.  Some may require original ink signed documents to follow scanned documents, or may require a more secured form of electronic signing (see digital signing below). 
  • Generally, electronic execution of documents is allowed by the Contract and Commercial Law Act 2017 provided that:
    • there must be an ability to link the e-signature to the signatory and no other person;
    • the means of creating the e-signature was under the control of the signatory and no other person;
    • any alteration of the e-signature made after the time of signing is detectable;
    • if the parties are relying on the e-signature to provide assurance as to the integrity of the information in the document then any alteration of the document must be detectable after the time of signing.

This means, insertion of a ‘cut and paste’ of a scanned ink signature is not sufficient for the purposes of the Act and cannot be relied upon.

  • Digital signatures, a form of electronic signature, provide a higher level of security and are able to provide confirmation that the copy of the contract is the correct copy.  A digital signature is encrypted into a document meaning the document cannot be subsequently amended without it being easily apparent.  This provides the necessary assurance for parties to be able to rely on the integrity of the document at the time of signing.
  • Remote witnessing using audiovisual technology is possible for certain documents including Authority and Instruction forms (LINZ) and most deeds.  See also earlier commentary on this topic.  Keeping a video record of any remote witnessing is a recommend practice.

ADDITIONAL COMMENTARY

Property sales and settlements under Alert Level 2

  • At Alert Level 2, it is possible to conduct and complete property sales and settlements in person, as long as the necessary public health and physical distancing requirements are complied with.
  • At Alert Level 2:
  • people can meet with their lawyer or agent in person
  • open homes can take place, as long as certain conditions are met, including contact tracing and maintaining the necessary physical distancing requirements at all times
  • property professionals and tradespeople may visit the property to complete due diligence or complete work to meet the conditions of sale
  • auctions can take place under certain conditions.

Legislation, policy and information relating to COVID-19 changes rapidly and often.  The information provided in this update is current only as at the time of issue of this update.  The information provided in this update is intended as a quick reference guide to various sources of information only and cannot be relied on as legal advice of any sort.