Business Law Relating to Entities

BLAW 211

RULES
Moral Rules
Legal Rules

Laws = Rule enforceable

by the State

LEGAL SYSTEM

Public Law
Constitutional Law
Administrative Law
International Law
Criminal Law

LEGAL SYSTEM

Civil Law
Contract
Tort
Family
Property
Equity

LEGAL SYSTEM
Criminal Proceeding
Action by State for breach of Criminal Law (The
Queens Peace)

Civil Proceeding
Action bought by one individual against another.
(The individual may be the Crown if they are
involved in Civil Wrong)

The Constitution

Does new Zealand have one?

What is a Constitution?

Rules and practices that

determine the
composition and
functions of Government
and which regulate the
rights and duties
between citizen and
state

Types of constitution

Constitutional monarchy
Monarchy
Dictatorship
Republic

The Kingdom of New

Zealand

Head of State
Elizabeth, Queen of New Zealand
The Governor-General

Constitutional Concepts
Rule of Law
Separation of Powers
Executive
Legislature
Judiciary

THE EXECUTIVE
Head of State
Executive Council
Cabinet
The Prime Minister
Cabinet Ministers

Ministers and Government

Departments

PARLIAMENT
Head of State
House of Representatives
Members of Parliament
The Speaker of the House
Select Committees

JUDICIARY
Judges

Quasi Judicial Officers

CONSTITUTIONAL CONVENTIONS

Convention
The Governor
General

Law

(Examples)

(Examples)

Must Assent to Bills

Must appoint leader

who has confidence of
House of Reps

Must appoint on
advice of PM

Must appoint on
advice of A-G
(Attorney-General)

Power not to assent to

Bills
Power to Appoint PM

Power to appoint
Ministers
Power to appoint
Judges

THE CONSTITUTION

THE END

SOURCES OF LAW
How are Laws Made and
Interpreted?

Laws
Legislation:
Statutes
Subordinate Legislation

Common Law and Equity

Judge Made Law

Statutes
Status
Supreme Law
Overides Subordinate legislation
Overides Common Law and Equity

Statutes
Parliamentary Supremacy

(The Theory)

Dicey:
Parliament can make any law at all
Except, Parliament cannot bind a future parliament
Entrenchment?

The Power of the people?

Statutes
How Statutes Are Made
Bill proposed
First reading
Select Committee stage

(in most cases)

Second reading
Committee stage (House in Committee) (in most cases)
Third Reading
Royal Assent

Statutes
United kingdom and English
Statutes

Subordinate Legislation
Status
Subordinate to Statutes
Override common law and equity

Types
Regulations and Rules
Orders
Notices

Ultra Vires

Interpretation of
Legislation
Rules
Literal Rule (Strict literal meaning)
Golden Rule (avoid absurdity)

Mischief Rule (What mischief is the

Act trying to prevent)
Purposive approach

Example
Whosoever being married shall marry any
other person during the life of the former
husband or wife shall be guilty of
felony

Section 57 Offences Against the Person Act 1861 (UK)

R v Allen (1872) LR 1 CCR 367

Under the Marriage Act any marriage

registration involving a party who is
already married is invalid.

Interpretation of
Legislation
Eusdem Generis (Things of the
same kind)
Unless the context otherwise requires,Animal means dogs, cats, guinea pigs,
canaries, goldfish, and other animals.

Interpretation of
Legislation
Noscitur a Sociis (A word is known by its
neighbour)

Unless the context otherwise requires,-

Road means any road, highway,

street, lane, footway, or alley

Interpretation of
PresumptionsLegislation
Act will not bind the crown unless Act says
otherwise.
Common Law will not be altered unless there is no
other interpretation.
Implied repeal
Clear wording required to restrict the liberty of the
individual
Cannot take private property without compensation
without clear words
No retrospective effect without clear words

Interpretation of
Legislation

Interpretation Act 1999 and Interpretation

Sections

Case Law
Hansard
Treaty of Waitangi
Dictionaries

Common Law and Equity

Common Law Equity Distinction
Status
Where does it Come From?

COURT PROCEEDINGS
Procedure and Pleadings

Trials (Hearings)

Law Reports

Case Analysis
Doctrine of Precedent
Hierarchy of the Courts

Case Analysis
Reading a Judgment
The Facts
The Applicable Law
Distinguishing Cases
Ratio Decidendi
Obiter Dictum
Findings of Fact
The Decision in the Case

SOURCES OF LAW
THE END

TREATY OF WAITANGI
AN OVERVIEW OF THE LEGAL
POSITION

Background:

Missionaries and whalers

Colonial Office attitude to NZ
The Elizabeth Incident
British Resident
Confederation of United Tribes of
New Zealand
French settlement
New Zealand Company
Lt Governor Hobson
Treaty signed on 6 February 1840.

The Nature of Treaties in

Law
Agreements between sovereign
states
Recognised as binding in
International Law
No legal means of enforcement in
International Law (although breaches
may have consequences)
A treaty is not a law of a state unless
incorporated into domestic law by

Circumstances in which the Treaty was

signed

Treaty between the Crown (of United Kingdom) and

various Maori Chiefs

Drafted by Hobsons staff - No legal training for such a

task.

Drafted hastily

One draft given to missionary to translate into Maori

An English language copy and a Maori language copy

signed.

The two copies are not entirely the same. (Contra

proferentum)

The Maori version contains words that do not accurately

reflect the precise meaning of the equivalent English
words.

The Essential Provisions of the

Treaty

(Article 1) - Confederation of United Tribes

and Independent Chiefs cede sovereignty
to the Queen of England
(Article 2) - Queen guarantees:
Undisturbed possession of Land forests,
fisheries and other properties; and
Chiefs grant exclusive right of preemption of land to the crown.
(Article 3) - Queen grants status of British
Subjects to Maori people.

Problems of Translation
(Examples)
Article 1
Cede sovereignty
Kawanatanga
Governance
Complete government
Full sovereignty

This could mean some sort of protectorate

Problems of Translation
(Examples)
Article 2
Undisturbed possession of Land
forests, fisheries and other properties
Rangitiratanga
Unqualified exercise of chieftainship

Toanga
Treasures
Anything highly prized

Legal Status of the

Treaty
International legal personality
(Statehood) required for a treaty
Was the Confederation of the
United Tribes of New Zealand
plus Independent Chiefs a state
as understood in 1840?

Legal Status of the

Treaty
Negative arguments:
Not a treaty at all Consent to annexation
Maori not politically organised
No consensus of government
No consensus of law
Therefore not a state

Legal Status of the

Treaty

Affirmative Arguments:

Tribal societies were subject of

treaties with European states for a
long time before 1840 (State Practice)
Maori had a developed system of law
and land tenure
There was a form of political
organisation amongst Maori

Judicial Opinion
The Ends of the Spectrum
Wi Parata v Bishop of Wellington

[1]

No body politic to form a treaty with

so no cession of sovereignty. To that
extent the treaty is a simple nullity.
[2]

NZ Maori Council v A-G

[1] (1877) 3 NZ Jur (NS) 72
[2] Wi Parata v Bishop of Wellington (1877) 3 NZ Jur (NS) 72 at 78
[3] [1987] 1 NZLR 641

[3]

The Treaty Today

Many Acts now refer to the treaty.
Treaty as an aid to interpretation generally.
Proposal to entrench Treaty of Waitangi in a written
constitution:
Gives the Court power to strike down policies or
laws in breach of the Treaty
Gives power to majority to amend the terms of the
Treaty without consent of Maori people.

The Waitangi Tribunal

Treaty of Waitangi Act 1975
Maori alleging a breach of the Treaty may bring a
claim to the Waitangi Tribunal
Tribunal has power to investigate claims that the
Treaty has been breached.
Tribunal makes decisions on claims and makes
recommendations to the Government
Tribunal decisions are not binding. The decision
on whether or not to remedy a breach is political.

LAW OF PROPERTY
INTRODUCTION

REAL PROPERTY
Land (including things fixed to land
e.g. buildings paths fences retaining
walls)

PERSONAL PROPERTY
Chattels (Possession e.g. car ,
computer, furniture.)
Chose in Action (Not capable of
physical possession) [e.g. book debts,
shares, negotiable instruments such as
cheques, money{right to them cannot
be asserted by taking possession, but
only by taking court action}]

PROPERTY EXPANDING
CONCEPT
Intellectual property [ exclusive
rights to ideas and expression]
Licences [e.g. fishing Quota]
Goodwill

Ownership

Bundle of Rights
Person with the most rights in the
property is owner

Restrictions on Use
Resource Management Act 1991

Building Act 1991

Public Works Act 1981

Common Law Nuisance and Rylands
v Fletcher (1868) LR 3 HL 330

Acquiring Ownership

Purchase
Gift:
Inter Vivos (during lifetime)
Under a will (after death)

Vesting by Operation of Law

OWNERSHIP
Nemo Dat Quod Non Habet [one
cannot give what one does not have]
Statutory Exceptions:
Mercantile Law Act 1908
Land Transfer Act 1952

OWNERSHIP
Ownership - Possession
Distinction
Property as Security

Real Property

CONCEPTS
Background
Doctrine of Estates
Classification of Estates
Fee Simple
Life estate
Stratum Estate
Leasehold

Time Classification
Fee simple
Duration uncertain
Ends when owner dies without
heirs.
potentially forever

 Life Estate

Duration is for life of estate

holder
Duration uncertain

Subject to rights of holder of land

after life interest therefore no
right to waste, no right to alter
property w/o consent.

Stratum Estate
Land divided into units

rights of owners of units

same as fee simple in
relation to unit but other
obligations for common
areas
This Estate created by

 Leasehold Estate
Duration normally specified in lease
and therefore certain (Commercial
leases especially)
~

But termination on notice is common

(Residential Tenancies especially)
Right of renewal clauses
Right to occupy and use subject to the
terms of the lease

Classification According to
Use
Estate in Possession
Estate in expectancy
Reversions
Remainders

Legal vs Equitable Interests

Enforceability:

Legal - enforceable against

anyone.

Equitable - defeated by bona fide

purchaser for value.

Legal vs Equitable
Interests
Creation and Transfer:
Legal formalities required

Equitable no formality necessary

(although there often is)

The Land Transfer (Torrens)

System
Terminology
Title
Deed
Conveyance
Certificate of Title
Registered Proprietor

The Land Transfer (Torrens)

System

Background
Land Transfer System
Indefeasable Title
Exceptions to Indefeasible Title
Defective Title
Void Transactions - Frazer v
Walker [1967] NZLR 1069 (PC)
Fraud

FRAUD
Actual fraud
Knowledge of fraud
Wilful blindness

Constructive fraud will not defeat

indefeasibility

Fraud against a registered

proprietor

Heron v Broadbent[1]

[1] (1919) 20 SR (NSW) 101 as described in Hinde McMorland and Sim Introduction to Land Law
(Butterworths 1979) 89

Statutory Limitations to
Indefeasibility
Examples:
Property Law Act (protection of Lessees)
Public Works Act (compulsory acquisition)
Insolvency Act (Automatic vesting in assignee)
Property (Relationships) Act

Fraud Against Unregistered

Interest

The Courts Approach

Registration of Fee Simple in name of new RP will sweep

away unregistered interests unless:
Actual fraud (dishonesty of some sort) by the new RP.
If the new RPs designed object of the transfer was to cheat
someone out of their known unregistered interest or right, that is
fraud.
Knowledge that any trust or unregistered interest exists is in itself
not enough to constitute fraud [2]

Loke Yew v Port Swettenham Rubber Co Ltd

[2] Section 182 Land Transfer Act 1952
[3] [1913] AC 491 (PC)

[3]

MORTGAGES
~

Terminology
Mortgagor borrower (Gives
the security)
Mortgagee lender (Receives
the security)

Mortgages

Nature
Legal Mortgages
Equitable Mortgages
Priority
Equity of Redemption
Fairclough v Swan Brewery Co
Limited [1912]AC 565

Mortgagee Sales
Registrars sale:

allows mortgagee to purchase

sale by auction
safe

Mortgagee Sales
Private sale:
Duty to obtain best price obtainable
as at the time of sale
No need to wait for market to pick
up.

Proceeds of Sale
Costs of sale
Repayment of debt owed to
mortgagee
Repayment to subsequent
mortgages
Any balance to Mortgagor