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			    <title>Articles | NZ Legal News</title> 
				<link>http://nzlegalnews.com/Articles</link> 
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			<title>Courts rejects trustee waiver</title>
			<link>http://nzlegalnews.com/nzlegalnews/Courts+rejects+trustee+waiver</link>
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The High Court has warned that it will not endorse any waiver by a trustee of its obligations and accordingly declined to make an order in a case relating to a trust acting as a corporate trustee for law firm clients.

In Newmarket Trustees Ltd v Commissioner of Inland Revenue HC, Auckland, CIV 2009-404-008108, 14 April 2010, the applicant applied under s 290(4) of the Companies Act 1993 to set aside a statutory demand for $293,251 allegedly owing to Inland Revenue for taxes.

Section 290(4) provides that the court may grant an application to set aside a statutory demand if it is satisfied that there is a substantial dispute as to whether or not the debt is owed, the company appears to have a counterclaim, or the demand ought to be set aside on other grounds.

The applicant claimed that the order was justified under s 290(4)(c) – the “other grounds” provision.

Newmarket Trustees Ltd acted as a bare corporate trustee for the clients of a firm of barristers and solicitors, CB. It had no assets in which it held a beneficial interest but was a corporate trustee for 118 trusts and a registered proprietor of 145 properties in which the law firm’s clients had interests.

The current demand had arisen in relation to a family trust for which the applicant was a corporate trustee.

The trust had been established for CB’s client, Tony Goh, who had undertaken the task of managing the day-to-day affairs of the trust, including the filing of tax returns.

The applicant argued that the circumstances justified the exercise of the discretion under s 290(4)(c) because no useful purpose would be served by putting the company into liquidation as it was a bare corporate trustee and had no assets, had had no involvement in the day-to-day management of the debtor trust, and there would be considerable and needless inconvenience to a number of CB’s clients if the company were put into liquidation.

The applicant further submitted that, as a matter of public policy, the demand should be set aside because a failure to do so might lead to a situation in which partners of law firms would cease to provide corporate trustee services to clients.

Associate Judge Faire noted that the evidence before him was lacking in a number of regards and referred to an earlier Court of Appeal statement that the use of s 290(4)(c) must be confined to cases clearly justifying departure from the fundamental principle that insolvency should bring the end of the company’s existence.

He ruled that the court would not endorse any waiver by a trustee of its obligations.
The fact that, in this case, the applicant company took no active part in the day-to-day management of the trust could not be advanced as an excuse justifying the exercise of the court’s discretion.

The application to set aside the statutory demand was refused.

LawTalk 754, 12 July 2010 

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			<title>Court spells out iwi’s RMA rights</title>
			<link>http://nzlegalnews.com/nzlegalnews/Court+spells+out+iwi%E2%80%99s+RMA+rights</link>
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Councils must consult with iwi as tangata whenua under the Resource Management Act 1991 (RMA) before the notification of proposed plans, the High Court has held.

Hamilton, CIV 2009-404-008108, 3 June 2010, the plaintiff sought judicial review of a decision by Hamilton City Council to notify publicly a proposed variation to the Hamilton City Proposed District Plan.

Waikato Tainui argued that the council had breached a duty to consult with it as the relevant iwi authority and sought an order directing the council to consult with it before approving and publicly notifying any proposed variation.

Tainui was the owner and landholder of The Base, a large retail shopping centre at Te Rapa worth $200 million. It was on a 29-hectare site vested in the local iwi as part of the Raupatu treaty claim settlement.

The High Court granted the judicial review application, declared the decision to notify publicly the proposed variation unlawful and quashed it, and directed the council to consult with the plaintiff before any further variation was approved and publicly notified.

The plain meaning interpretation of clause 3 supported the conclusion that consultation must occur prior to notification.

The clause requires consultation during the preparation of a proposed plan and the process of preparing a plan ceased at the point at which it was notified.

LawTalk 754, 12 July 2010 

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			<title>Charities definition under scrutiny</title>
			<link>http://nzlegalnews.com/nzlegalnews/Charities+definition+under+scrutiny</link>
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A High Court decision relating to charities could have implications for hundreds of organisations around New Zealand seeking charitable status under new charities laws, Bell Gully tax specialist John Bassett says.

The decision had already resulted in further proceedings and there was conjecture that more cases in a similar vein could come before the courts.

In Canterbury Development Corporation v Charities Commission HC, Wellington, CIV 2009-485-2133, 18 March 2010 Canterbury Development Corporation, Canterbury Development Corporation Trust and the Canterbury Economic Development Fund applied to the Charities Commission for registration as charities under s 17 of the Charities Act 2005.

All three entities had previously been registered as charities under the Charitable Trusts Act 1957.

The Commission declined all of the applications and the entities filed appeals in the High Court under s 59.

They argued that the appeals raised the issue of whether a community development purpose was a charitable purpose under New Zealand law and asserted that the commission’s approach - that a community development purpose was only charitable when the relevant community was disadvantaged – was wrong.

The shares of Canterbury Development Corporation were wholly owned by the Canterbury Development Corporation Trust. The corporation received a yearly grant from Christchurch City Council and this, together with money from a contract for services with New Zealand Trade and Enterprise and other government money, funded its work. Most of the money was spent on wages and administrative costs.

The corporation had a Strategy and Services Team responsible for the economic development strategy for Christchurch and Canterbury, and an Industry Development Team which provided business advice.

The appellants argued that the charitable purpose of the corporation was relief of poverty, the advancement of education and beneficial effects to the community through the development of industry and commerce.

However, Justice Ronald Young dismissed the appeals, holding that he did not accept that the purpose of the corporation was to assist the unemployed and thereby relieve poverty. The unemployed could be one of the ultimate beneficiaries, but none of the corporation’s activities was directly focused on the creation of employment for the unemployed.

Justice Young said he did not consider that the corporation’s services of providing financial, marketing and technical advice to businesses came within the provision of the enhancement of education as intended by the Charities Act. To be a charitable purpose, opportunities must be provided to a broad section of the public and public benefit must be expressly shown when the claimed purpose of a trust was benefit to the community.

That test was not satisfied.

Discussing s 61B, which provided for the deletion of certain provisions in trusts to leave only the charitable purposes, he concluded that the provision should not be applied as there was not a simple amendment which could be undertaken to enable the corporation to bring itself within the definition of a charitable entity.

Mr Bassett said that the decision was a departure from existing trends. According to those cases, and particularly the Australian authorities, the appellants could have expected favourable responses to their applications for charitable status.

However, Justice Young had apparently decided not to follow the Australian authorities and had adopted a narrower approach.

Mr Bassett described the decision as unexpected and said that its implications were potentially quite significant. The Commission was now seeking to apply the decision in relation to other organisations seeking charitable status and the status of up to 700 organisations could be in doubt, though not all of those would be affected by the business limb issue.

Bell Gully partner Willy Sussman said that practitioners would be keen to keep a close eye on developments, especially as a further High Court decision relating to the same issue was awaited.

LawTalk 754, 12 July 2010 

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			<title>Building Act review “challenging”</title>
			<link>http://nzlegalnews.com/nzlegalnews/Building+Act+review+%E2%80%9Cchallenging%E2%80%9D</link>
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The Government had set itself a challenging objective in its review of the Building Act 2004, according to DLA Phillips Fox property and construction partners Justin March and Mark Williamson.

The review aimed to improve efficiency and cost effectiveness, while not compromising safety and quality, they said.

“The proposals around exempting low risk buildings from the requirement to obtain consents and streamlining the process for major commercial buildings are consistent with this objective. It will obviously be critical to identify clearly what work is included in each category.

“The proposed streamlined process for many major commercial buildings recognises the skills and expertise of the parties involved and is generally consistent with the approach taken by the courts, which have not imposed a duty of care on BCAs in the context of commercial projects.”

Last August the Government announced a review of the Building Act, to be conducted by the Department of Building and Housing with assistance from a reference group and senior officials from other government agencies.

The first phase of the exercise examined options for updating the building control system and a discussion document inviting public submissions was released in February. The paper said that there were weaknesses in certain parts of the system, such as consumer protection, and the system was out of balance.

“The current regulatory settings have resulted in an unduly low tolerance for risk, with a strong emphasis on central and local government protecting homeowners from the risks of building defects and failures.”

The document suggested that more of the lowest-risk work could be exempted from consent requirements, there could be a more streamlined process for simple residential buildings when work was undertaken or overseen by licensed building practitioners, and a speedier process could be introduced in the commercial sector.

The paper also proposed that options for more cost-effective administration of the building regulatory control system be explored, and that consumers be provided with better information.

Other recommendations were encouraging surety as a financial backstop for warranties, making warranties more effective, and providing better access to dispute resolution.

Minister for Building and Construction Maurice Williamson updated the building industry on progress with the review in 12 June.

He noted more than 1,000 people had attended meetings to discuss the issues, and more than 380 formal submissions had been made.

He identified the two issues proving the most contentious.

First, the idea of exempting more work from building consents and reducing council checks and inspections of low-risk building work. The feedback had demonstrated that the Government needed to “take another good, hard look at the options, to make sure that anything we do to reduce cost does not compromise quality.”

Second, how to sort out responsibility and liability.

“A lot of the submissions asked for a legal change away from joint and several liability. That is one of the areas we are still considering. That would be a major change to New Zealand’s legal framework.”

The Minister indicated that the review was likely to take more time than had been anticipated as major issues were being considered and it was important to get them right.

Justin March and Mark Williamson said the proposals in the document relating to minimum contractual terms, disclosures and warranties had the potential to enhance consumer protection.

“… We see the real issue as being whether New Zealand has the capacity or desire to put in place comprehensive home owner warranty insurance schemes such as those which exist in other jurisdictions. As has been evident to many homeowners, warranties without financial backing are of little assistance to consumers,” they said.

They also agreed that parts of the Building Code needed to be updated and improved.

The NZLS submission is available at www.lawsociety.org.nz/publications_and_submissions/submissions

“Overall, we believe the proposals are generally positive for the industry and consumers. As always, the devil will be in the detail, but, in principle, the ‘one process for all’ approach that is in place needs to be made more flexible to recognise the complexities and risks associated and risks of different building works.”

LawTalk 754, 12 July 2010 

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			<title>Court extends application of Adoption Act</title>
			<link>http://nzlegalnews.com/nzlegalnews/Court+extends+application+of+Adoption+Act</link>
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By Anthony Davies

The High Court has handed down a landmark judgment in a case stated on how it is permissible to interpret the expression “spouses” in s 3 of the Adoption Act 1955. The Court ruled “spouses” could also mean a man and woman in a committed, de facto relationship – but not gay couples or couples in a civil union.

In Re: A M M and K J O, HC Wellington, CIV 2010-485-328, 24 June 2010, Justices Wild and Simon France ruled that, contrary to the stated intentions of the legislators at the time, it is permissible to interpret the expression “spouses” in s 3 of the Act to include a man and a woman who are unmarried but in a stable and committed relationship.

The case concerned a couple, AM and KO, who had been in a settled, de facto relationship for nearly 10 years and had a daughter, D. When their relationship began, AM already had an 18 month old son, S, whom she had conceived through a sperm donor programme. S’s natural father was unknown, and AM and KO had jointly parented S for most of S’s life.

AM and KO now both wished to be S’s legal parents. KO could become S’s legal parent only via adoption. However, if he were to apply for adoption on his own, and his application were granted, AM’s status as S’s mother would be terminated – as, under the Adoption Act, adoption kills off any existing parental status in favour of new parents. However, the Adoption Act also impeded them from jointly applying to adopt S, as it allows only spouses – defined as a married couple – to adopt.

At issue for the Court was whether the Adoption Act’s discrimination against de facto couples constituted unjustified discrimination – and, if so, whether the Court was able to remedy it or should it be left to Parliament to remedy via legislative change.

The constitutional significance of the question at law was recognised by counsel representing the Attorney-General as intervenor.

The issue was neatly summed up by a passage, cited in the Court’s judgment, from an a recent article by Claudia Geiringer, senior lecturer in law at Victoria University and counsel for the appellants: “Where does the constitutionally permissible territory of judicial interpretation end and the constitutionally impermissible territory of judicial legislation begin?”

In deciding this question, the Court needed to consider whether s 6 of the New Zealand Bill of Rights Act 1990 (NZBORA) allowed “a more expansive meaning of the word [spouses] to be taken that would allow this de facto couple to adopt S.”

Section 6 provides that:

“Wherever an enactment can be given a meaning that is consistent with the rights and freedoms contained in this Bill of Rights, that meaning shall be preferred to any other meaning.”

However, applying s 6 would cut across s 4 NZBORA “which says Parliament is supreme, and is permitted to enact legislation that amounts to an unreasonable limit on a protected freedom.” (Para22)

Section 4 provides that:

“No court shall, in relation to any enactment (whether passed or made before or after the commencement of this Bill of Rights),—

(a) Hold any provision of the enactment to be impliedly repealed or revoked, or to be in any way invalid or ineffective; or

(b) Decline to apply any provision of the enactment—

by reason only that the provision is inconsistent with any provision of this Bill of Rights.”

While Justices Wild and France were reluctant to rewrite the law and acknowledged “there are some real limits on the extent to which the Court can act under s 6 to remove an inconsistency” (Para31), they also held that, given “the purpose of limiting joint applications to married couples was to ensure that the applicants were a man and a woman, and that they were in a committed relationship (Para35), “to extend ‘spouses’ to include applications by a de facto couple would not be inconsistent with either the text or purpose of the [Adoption] Act.” (Para37)

They also cited several other statutes where “spouse” is/was defined more expansively: s 2 Companies Act 1993, s 3 Accident Rehabilitation and Compensation Insurance Act 1992 (repealed), s 47A Income Tax Act 1976 (repealed), and s 2 Rates Rebate Act 1973.

However, balancing these passages, the judges also noted that while 103 statutes were amended by the Relationships (Statutory References) Act 2005 intended to remedy legislative discrimination for reason of marital status, the Adoption Act was not included and “[s 3] was deliberately not given an expanded meaning.”

After considering counsels’ submissions, the judges ruled in favour of the applicants.

“Even though it is plainly arguable that Parliament wishes to correct the discrimination on its own timeframe, we have come to the view that it is our task to alleviate the discrimination now to the extent possible.

“Accordingly, we allow the appeal. We answer the case stated in these terms.

Is it permissible to interpret the expression ‘spouses’ in s 3 of the Adoption Act 1955 so as to include a man and a woman who are unmarried but in a stable and committed relationship? Yes.” (Paras72-73)

LawTalk 754, 12 July 2010 

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			<title>Webinar “first” for CLE</title>
			<link>http://nzlegalnews.com/nzlegalnews/Webinar+%E2%80%9Cfirst%E2%80%9D+for+CLE</link>
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Lawyers shopping for continuing education are just a click away from “Webinars” – the stay-away seminars you can load into a shopping cart and attend where you want.

CLE has opened registrations for its first Webinar on 19 July. To register all participants have to do is visit www.lawyerseducation.co.nz, find the webinar, flash the credit card and it’s in the cart.

NZLS CLE Ltd chief executive Dick Edwards says the webinar is a “first” for CLE.

“We’re excited by the possibilities webinars bring to the continuing legal education area and looking forward to our first presentation that lawyers can participate in, either at their desks or at home,” he says.

In a webinar presenters speak to you while you view their Powerpoint presentations, you listen through headphones plugged into your computer via USB or bayonet port, you can type in questions for answer during the presentation and you can pay … online.

“It’s all about convenience and keeping up to date,” Mr Edwards says.

LawTalk 754, 12 July 2010 

“Webinars have many benefits. For example nationally recognised presenters who may not normally be available, still come to you.

“You can access the webinar from your computer either at the time of the presentation or at a later time if need be. If you join the live webinar you can ask questions of the presenters and, you will receive a short background booklet and Powerpoints setting out the main points of the presentation.”

The first webinar presentation, Domestic Violence Changes for Criminal Lawyers, focuses on significant legislative changes in the Domestic Violence Act, introducing Police Safety Orders, the Bail Amendment Act and the Sentencing Amendment Act (No 2).

Presenters are Wellington barrister and solicitor Leah Davison and Wellington Judge Ian Mill .

CLE reminds participants that their registration form and payment should reach NZLS at least five days before the presentation.

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			<title>Civil rights law then and now</title>
			<link>http://nzlegalnews.com/nzlegalnews/Civil+rights+law+then+and+now</link>
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Tim McBride’s first book, the New Zealand Civil Liberties Handbook, was published in 1973 when the author was just two years out of law school.

A slender volume of 110 pages designed to be carried in the back pocket to demonstrations and protests, the book sold nearly 10,000 copies and “once held the dubious honour of being the most stolen New Zealand non-fiction book in the Christchurch library,” according to McBride.

McBride’s long-standing commitment to civil rights was stimulated by an inspiring university lecturer.

“I first got involved in this area when I was a final-year law student at Victoria University,” he says.

“I was privileged to have as my supervisor Dr Roger Clark who had been a distinguished professor in the United States. A wonderful teacher, passionate about civil rights, he used to be down in the old Magistrate’s Court defending anti-Vietnam protestors… I was just incredibly fortunate to end up having this very gifted law teacher.”

Nearly 40 years on, McBride has now authored the New Zealand Civil Rights Handbook. The title may be nearly identical to his first book, but the length has expanded to 672 pages, reflecting the increasing complexity and specialisation of this area of law over the past 40 years. The purpose of both books has remained the same, however – to serve “as an accessible first reference for people from a wide-range of situations.”

McBride stresses that, above all, the book is supposed to be functional.

“It’s not the perfect book, but I’ve done my best to make sure that it’s a book that will be useful,” he says.

“Over the years… the compliment I most enjoy [is] when someone says ‘I found your book useful.’ That always gives me a special feeling… not that it’s a clever book but that it’s actually been useful.”

The last edition was published in 2001 by the Legal Information Service, an organisation that McBride co-founded. He describes acting as both writer and co-publisher as a “huge undertaking… and it was just too much for us really.”

So when Craig Potton publishers expressed an interest in publishing a new edition he quickly accepted the offer.

“It’s a huge area I have covered… [in the new edition] and the focus has expanded,” McBride says.

“It has been entirely revised from the 2001 edition – it’s basically a new book… you will find the occasional paragraph or two where I’ve been able to use material from the previous edition, but it was remarkable how great the changes have been.”

The book uses New Zealand’s obligations under United Nations (UN) Covenant on Civil and Political Rights as a framework, “reflect[ing] the importance of those international human rights obligations that our Government has taken on-board.”

McBride is circumspect when asked how New Zealand measures up to those obligations.

“I think, as our new Minister of Justice has discovered when he went off to Geneva [to present New Zealand’s National Report to the UN Human Rights Council], there are areas where there are concerns about New Zealand’s performance. Clearly he got put through some fairly rigorous questioning over the use of tasers and also in terms of the very expansive powers given to law enforcement agencies.”

One of the things of most concern to McBride is the effectiveness in practice of available remedies.

“The privacy field [is] an area where there are all these remedies… but on a number of occasions I’ve had to say to people ‘is it worth pursuing these remedies? Yes you may have a remedy… but the most you’d get in compensation is probably about $2,000 - $3,000 and you’re going to have to go through all these steps to get there.’ [People think] ‘this is just a waste of my effing time’, as someone screamed at me as they shot out of my office… So I have concerns as to how effective from a complainant’s point of view the various remedies on paper are.”

McBride is relieved to have finally had the book published.

“It’s proven to be the largest research project I have ever undertaken. It’s been a huge challenge and… it’s taken an immense amount of non-remunerative time. It was a pretty difficult task and it left me mentally exhausted at the end of it… I’m very excited to finally see the book. I completed that manuscript in February last year.”

However the delay between finishing the manuscript and it being published turned out to be a blessing.

“This firm of publishers, this is their first legal book… and I think they found it quite a challenge. Then I was quite relieved the process took so long because then I was able to incorporate at least some references to the various legislative changes that occurred last year… It’s every author’s fear, a book going out of date. It’s pretty much up to date in most areas, it’s a very difficult thing, decisions are pouring out... it really has been pretty hard on my frayed nerves.”

Would anything induce McBride to write another edition of the book?

“I think I’ll be in my mobility scooter days by then! If you go back to the New Zealand Listener of that time [when the first edition was published] people wrote letters saying ‘how dare this wet-behind-the-ears kid write this seditious material?’ By now they would be saying ‘this guy is too old for this stuff!’”

LawTalk 754, 12 July 2010 

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			<title>Obituary</title>
			<link>http://nzlegalnews.com/nzlegalnews/Obituary</link>
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Jolene Patuawa-Tuilave

Jolene Patuawa-Tuilave, the co-president of Te Hunga Roia Maori o Aotearoa (THRMOA), the Maori Law Society, died of cancer on 24 June.

Jolene, who served on the society’s executive for several years in a range of roles, was elected co-president in 2008.

Fellow co-president Damian Stone described her as a tireless and committed worker for THRMOA

“Without question, she played an instrumental role in the society evolving to what it has become today,” he said.

Jolene graduated from Otago University with an LLB/BA in 2000 and began private practice in Tauranga at Holland Beckett. She moved to Wellington in 2006 to work in the Maori Legal Group at Kensington Swan where she advanced to Senior Associate before returning to Tauranga in 2009 to be a partner at Jackson Reeves.

“In the short space of 10 years Jolene had a significant impact on Treaty jurisprudence and the recognition of Treaty rights,” Mr Stone said.

“She led claims in the Waitangi Tribunal with involvement in the Tauranga Raupatu, Central North Island, Tauranga Stage II, Northland, East Coast, Whanganui, National Park and Te Arawa settlement.”

Jolene also represented her iwi, Ngati Whatua, in their Treaty settlement negotiations with the Crown as well as Ngati Raukawa regarding the Waikato River negotiations.

“She will be remembered not only for her fearless spirit and strength, but also for her amazing sense of humour and overwhelm-ingly generous nature,” Mr Stone said.

She is survived by her husband Rob and their two children.

LawTalk 754, 12 July 2010 

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			<title>Lawyers asked to help in legal education research</title>
			<link>http://nzlegalnews.com/nzlegalnews/Lawyers+asked+to+help+in+legal+education+research</link>
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Lawyers are being asked to help with research into the extent of continuing legal education (CLE) in New Zealand.

Most lawyers will now have received their practising certificates for 2010/2011. The mailout included a request for lawyers to assist with the collection of information on their CLE over the next year.

Consultant Annette Black says the NZLS Board agreed in 2009 to introduce a competency assurance scheme which will include some form of mandatory continuing legal education.

“One of the first steps in working towards a compulsory CLE system is to gather information on what sort of continuing education activities lawyers are involved in now,” she says.

“All lawyers will receive a letter with suggestions on how they can help our research by keeping a record of their CLE in the coming year.”

Mrs Black says that while legal CLE is compulsory in some jurisdictions, others – such as the Canadian provinces of Ontario and British Colombia – have only recently introduced a compulsory requirement.

“As we are doing, both the Canadian provinces carried out research with lawyers before they changed their CLE systems. Both found that the majority of practitioners did more CLE than had been expected. On the other hand, they did find that around one-third of lawyers reported they did no CLE at all.”

Mrs Black says it is important to get a good understanding of the types of legal education New Zealand lawyers participate in. She says as well as the “structured” educational programmes such as conferences and seminars, “unstructured” or self-study activities are very important.

“This includes the time lawyers spend reading printed materials, viewing materials and courses on the internet and on DVD, and also participating in informal discussion of matters related to the law.”

Material sent to lawyers suggests a method for noting their CLE activities over the next year, and examples of the types of activity which should be recorded.

LawTalk 754, 12 July 2010 

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			<title>NZ film and entertainment lawyer gets Shanghai nod</title>
			<link>http://nzlegalnews.com/nzlegalnews/NZ+film+and+entertainment+lawyer+gets+Shanghai+nod</link>
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Wellington film and entertainment lawyer Michael Stephens has been appointed New Zealand’s International Delegate of the Shanghai International Film Festival (SIFF) by the festival’s organising committee.

The SIFF is one of the largest film festivals in Asia. First held in 1993, the SIFF was held biennially until 2001 and now runs annually.

Mr Stephens’ appointment, which is for a two-year term, acknowledges his support and long association with the Chinese film industry and that country’s leading film festival.

Mr Stephens has been closely involved in the development of New Zealand’s film production and digital entertainment industry for more than 15 years. The founding principal of Wellington law firm Stephens Lawyers, he has a personal and professional interest in the future of East/West co-productions as well as funding for film, animation and other digital content projects.

LawTalk 754, 12 July 2010 

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