LawNews- Issue 34

Contents

LawNews is an official publication of Auckland District Law Society Inc. (ADLS).

Editor: Jenni McManus

Publisher: ADLS

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Reweti Kohere 09 306 3997 Reweti.Kohere@adls.org.nz

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Cover: Rebecca Ronald / Getty Images

Photo: Noel Hendrickson / Getty Images

Law Commission publishes roadmap for blending tikanga and state law

Much like the court’s commercial panel, which was set up in 2017 to deal with specialist commercial disputes, a ‘tikanga panel’ of appropriately qualified High Court judges could be allocated cases involving tikanga-related disputes to manage and adjudicate

Reweti Kohere

A specialist High Court panel could be set up to help weave tikanga into domestic law, as could an expanded jurisdiction for the Māori Land Court and the appointment of tikanga experts as lay members of the court.

These are just some of the options explored by the Law Commission in its recently-released study paper “He Poutama”, led by Justice Christian Whata (Ngāti Pikiao and Ngāti Tamateatūtahi).

Requested by the government in 2021 and building on a 2001 study paper on Māori custom and values in New Zealand law, the nearly 300-page report – together with three externally commissioned, independently authored appendices – reviews tikanga in domestic law and aims to guide lawmakers and others interested in the continuing interaction of tikanga and state law. The courts, lawyers and civil servants now have a principled framework to inform their interactions with tikanga as they develop the common law and write legislation, Justice Whata says.

“Throughout the project, we have been focused on the deep significance of tikanga to Māori and the importance for both tikanga and state law of improving general understanding

of tikanga, while proceeding with care. We asked pūkenga (experts) to guide us and have aimed to give an account of tikanga for those engaging with it in a legal context that is both authentic and connected with the law.”

‘A slow weave’

Tikanga must be understood within te ao Māori, the paper repeatedly emphasises, for it is “lived and practised every day on the more than 700 marae spanning the length and breadth of Aotearoa New Zealand”.

State law – or legislation and regulations, the common law, state institutions, and norms and conventions – is rapidly interacting with tikanga, with as-yet unsettled boundaries. Tikanga and its institutions remain vulnerable to the state’s machinery; there are concerns too that state law may be adversely affected by the “unfettered” incorporation of tikanga.

“All of this emphasises the need for care and manaakitanga by state institutions in the interpretation and application of tikanga,” the commission says. “We have therefore adopted a modest, incremental approach – a slow weave.”

To ensure coherence between the common law and tikanga, and to maintain the integrity of both, lawyers and judges must apply a “tikanga lens”, grounded in a core group of concepts such as connection (whakapapa and whanaungatanga); equilibrium (mauri, utu and ea); status (mana, tapu and noa); responsibility (kaitiakitanga, manaakitanga, aroha and atawhai); and processes and procedures, or kawa.

“It is important both to view tikanga as part of an integrated system of principles and also to understand that tikanga

Continued on page 04

TIKANGA

With tikanga increasingly interacting with state law, the courts and the legal profession must raise their level of understanding to ensure the engagement is done right each time

Photo: David Sollis

Continued from page 03

is pragmatic and can vary according to context. Properly understood, the fundamental concepts of tikanga also provide natural boundaries for its application by the common law, which assists in maintaining the coherence of the common law,” the commission says.

Tikanga panel

Future engagement could rest on enhancing current dispute resolution processes and developing new, tailor-made alternatives.

The ability of the Chief High Court Judge, under s 19 of the Senior Courts Act 2016, to establish panels to deal with a particular kind of proceeding could be called on. Much like the court’s commercial panel, which was set up in 2017 to deal with specialist commercial disputes, a “tikanga panel” of appropriately qualified High Court judges could be allocated cases involving tikanga-related disputes to manage and adjudicate.

Such a panel could help ease the court’s workload, be set up without having to establish a new court or expand an existing specialist court’s jurisdiction and litigants could identify their case as being suitable for the panel.

But the panel’s likely small size could put members at risk of conflicts of interest or allegations of “panel stacking”, the commission says. Panel members, while having general expertise in tikanga, would lack the specialist expertise others could bring and appeal rights would also sit with a nonspecialist appellate court. The option of a tikanga panel is worthy of consideration, the commission says.

“The potential disadvantages may mean it is preferable to explore the alternative options discussed below, such as referrals to the Māori Land Court. However, at this time the need to enable the High Court to engage with tikanga appropriately and effectively on matters of intergenerational impact is a matter of considerable importance and urgency.”

Expanded Māori Land Court

Having existed for more than 150 years, the Māori Land Court has traditionally focused on resolving issues connected to land claims. But much has been written about the court of record’s jurisdiction and its potential to assume a broader role, the commission says.

Like other courts set up by statute, the Māori Land Court is limited to hearing matters conferred by legislation. The bulk of its jurisdiction derives from Te Ture Whenua Maori Act 1993 (TTWMA), which deals with retaining and developing Māori land in Māori hands. But the court also has jurisdiction under other statutes: where issues related to taonga tūturu (Māori cultural, historical or social objects) arise, for example, the Protected Objects Act 1975 confers jurisdiction on the Māori Land Court.

The court’s potential to consider tikanga issues should

be considered, the commission says. In 2004, as part of a broader look at the structure of the courts, the commission recommended extending the Māori Land Court’s jurisdiction to include “all disputes involving communal Māori assets” and that the Māori Appellate Court should decide “any disputed issue of tikanga in all court litigation”, with parties being able to appeal only to the Supreme Court. The government did not adopt the recommendations though.

“Many of those recommendations could be revisited, including those relating to the court’s jurisdiction,” the commission says, noting that support for further expanding the jurisdiction beyond the area of communal assets is limited.

Pūkenga commissioners

Enabling the High Court to appoint pūkenga to sit with a judge as commissioners on tikanga is another possible strategy, but it would require legislative amendment, the commission says.

No general provision exists to have pūkenga commissioners appointed to help the court, although they can be appointed to the Māori Appellate Court to hear High Court-stated cases on tikanga, under s 62 of TTWMA. Other kinds of lay commissions can be appointed – s 254 of the Resource Management Act 1991, for example, allows the appointment of commissioners and deputy commissioners of the Environment Court.

Section 9(2) of the Senior Courts Act 2016 anticipates that enactments might provide for the appointment of people other than High Court judges to sit with them or as members of the court in specific proceedings. The Commerce Act 1986 is one such enactment: under s 78, lay members can be appointed to hear and determine certain matters under the statute. But the additional lay members are not co-equal decision-makers, the commission notes.

These provisions could provide a model for appointing pūkenga to sit as commissioners in complex cases involving conflicting tikanga positions or where the powers, rights or obligations of non-Māori are engaged. However, experience suggests parties may not necessarily support their appointment. Under s 99 of the Marine and Coastal Area (Takutai Moana) Act 2011, the High Court can refer to the Māori Appellate Court of pūkenga for opinion or advice on tikanga.

“In some cases, parties have objected to these processes being instigated and the extent to which the expertise of pūkenga is relied upon,” the commission says. “While these issues will need to be considered, we do not think they rule out further consideration of the appointment of pūkenga as commissioners.”

Another strategy mooted is the development of default rules in the Arbitration Act 1996 to better enable tikanga-consistent arbitration. The alternative dispute resolution process, which encourages party autonomy and ownership of outcomes, is already available to parties who can agree on a tikanga-

Continued on page 05

The need to enable the High Court to engage with tikanga appropriately and effectively on matters of intergenerational impact is a matter of considerable importance and urgency

Continued from page 04

appropriate way forward. However, where there is disagreement, the statute’s default rules apply – rules that work well in commercial disputes but weren’t drafted with tikanga disputes in mind, the commission says.

Judicial manaakitanga

With tikanga increasingly interacting with state law, the courts and the legal profession must raise their level of understanding to ensure the engagement is done right each time. Manaakitanga, or the obligation to care for and uphold the mana of tikanga, can be a useful guide, the commission says. Judges should be guided by manaakitanga when deciding whether to appoint pūkenga, when to defer to tikanga processes entirely or when to refer issues to a specialist court.

Under s 61 of TTWMA, the High Court may state a case on “any question of tikanga Māori”, refer it to the Māori Appellate Court and be bound by its answer. The commission anticipates the High Court might use its case-stated power more often, given the increasing number of cases where tikanga issues arise.

This power – which is much broader than the Māori Land Court’s narrower statutory jurisdiction – can bring tikanga issues before judges with considerable experience in tikanga (Māori Appellate Court judges must have suitable knowledge and experience in tikanga to sit on the bench). Tikanga questions will be heard in a forum where pūkenga can be appointed as co-decision makers (under s 62 of TTWMA) and a decision of the Māori Appellate Court, which binds the High Court, is final.

Referring a stated case to the Māori Appellate Court is a “powerful” yet underused option, the commission says.

“There would be value in the generalist courts being required to consider stating a case for the Māori Appellate Court in any case in which tikanga as law is at issue, particularly where the court is asked to determine what the applicable tikanga is. There is no statutory basis for this at present. However, the High Court could require the parties to consider

the use of this procedure, relying on the High Court Rules and its inherent powers.”

Sound basis

The commission has been “acutely conscious” of the immense significance tikanga has to Māori, says Law Commission President Amokura Kawharu (Ngāti Whātua and Ngāpuhi), who expects a wide range of views on the study – including encouragement and pushback.

“While tikanga is increasingly being woven into statute and the common law, there’s still misunderstanding about the concept, which has implications for the integrity of both tikanga and the law. While much work is still to be done, we are hopeful the paper will provide a sound basis for future interaction between tikanga and state law,” Kawharu says.

The paper arrives at a time of active engagement: for at least the past decade, Parliament and the courts have recognised tikanga, mātauranga and other Māori ways of thinking in their own right. The District Court has also started embedding its Te Ao Mārama model, which aims to incorporate (among other things) tikanga into its operations. But outside of the Māori communities where tikanga is lived, mainstream and state institutional understanding is lacking, the commission says.

About half the paper is dedicated to explaining tikanga, its role in te ao Māori and key concepts that ground tikanga. Hypothetical case studies, where tikanga concepts are applied to realistic, contemporary situations, can help guide readers, although the commission accepts there are limits to how much help they can give – in many situations, it will be proper and necessary to seek guidance from pūkenga, for instance.

The remainder of the paper looks at the ways in which tikanga and state law interact and how this relationship has evolved over time. Strategies for future engagement are detailed and the need for a more tikanga-proficient public service is outlined.

The commission says there is “little utility” in readdressing whether or why state law and tikanga should engage. “Instead, we have focused primarily on identifying ways in which they may properly do so, that are respectful of both systems’ parameters.” ■

While tikanga is increasingly being woven into statute and the common law, there’s still misunderstanding about the concept

Residential property managers face licensing under new bill

landlords managing the properties themselves

Regulation is on its way for residential property managers. Currently, anyone can hang out their shingle without training, licensing or even knowledge of the relevant law. Property managers handle thousands or even tens of thousands of dollars at a time on behalf of landlords and tenants. Some have not proved to be honest.

Google “rogue property manager” or similar and the results bring up several examples of the type of behaviour that legislation could quell, says Joanna Pidgeon, a director of Pidgeon Judd, a former ADLS president and a member of the ADLS Property Law committee.

All too common are headlines such as: “Property manager siphons $50,000 in rent payments”, “Property manager filmed resident in bed” and “Property manager stole bonds, gave herself a bonus”.

Other groups handling client money, such as lawyers, real estate agents and body corporate managers, are regulated. Just not independent property managers, Pidgeon points out.

Moves to bring in regulation have received wide support from organisations ranging from the Real Estate Institute of New Zealand (REINZ) to Renters United and Anglican Advocacy.

Currently, property managers who work directly for real estate agencies are required to have audited trust accounts, are regulated, and complaints can be made to the independent Real Estate Authority (REA) which in turn can fine and censure those managers.

However, independent property managers who do not work for real estate agencies are not subject to those requirements. Licensed real estate agents have long called for these independent property managers to be regulated to level the playing field.

For individual property managers, the comprehensive regulator regime outlined in the Residential Property Managers Bill will be a major change

The bill:

■ establishes minimum entry requirements

■ sets professional standards of practice

■ creates an independent, transparent, and effective complaints and disciplinary process through the REA and the Real Estate Agents Disciplinary Tribunal and

■ applies a range of offences and penalties.

The Bill also amends the Real Estate Agents Act 2008 to provide for an expanded role of the Real Estate Agents Disciplinary Tribunal. This will include determining allegations of misconduct by residential property manager licensees.

Rogue property managers can cause problems for both tenants and the landlords they’re working for.

The legislation follows on from reform of the Residential Tenancies Act (RTA) in 2021 and the introduction of the Healthy Homes Guarantee and the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Act 2022, Pidgeon says.

She singles out the Unit Titles Amendment Act as an example of evolving legislation that set the path for the current bill. Among other things, it improved access to dispute resolution, added measures to increase the professionalism and standards of body corporate managers and brought in new enforcement tools to support compliance with the Act.

Previously, owners in unit title buildings had little recourse to any official authority if they had a complaint about body corporate managers, even though the bodies corporate

Diana Clement

Other groups handling client money, such as lawyers, real estate agents and body corporate managers, are regulated

You do not have to search very deep to see that only 42% of private rentals are managed by property managers and that most of the complaints taken by MBIE against landlords are against private

Joanna Pidgeon

Continued from page 03

themselves were regulated.

The issue of managers handling owners’ money is similar to that faced by landlords who employ rogue property managers. “In the [property] industry, there has been a move towards regulating people who hold other people’s money,” Pidgeon says.

Another issue is that landlords can be penalised if property managers fail to comply with the RTA, through ignorance or deliberate behaviour. Sometimes property managers don’t even tell landlords when cases have gone against them in the Tenancy Tribunal.

Yet landlords are liable by law for the penalties handed out by the tribunal. “All of a sudden, you've got this judgment against you and limited time to appeal,” Pidgeon says. “You don't have the necessary information because the rogue property manager has it all. Landlords are at quite a disadvantage.

"When there’s a shortage of housing, there is a bit of a power imbalance. So, it’s important people who are providing property management services have the necessary training, so they are operating in a compliant manner.”

Code of professional conduct

Under the bill, the Real Estate Agents Authority will establish a code of professional conduct and prescribe continuing professional development requirements. Issues such as conflicts of interest will likely be brought into the code. “That's another element that was in the Unit Titles Act,” Pidgeon says. “If you're getting kickbacks because your local plumber gives you a rebate or something, you would have to disclose it.”

She says tenancy law is becoming more complex and the educational requirements of the bill will help to ensure practitioners are acting in a compliant manner. Organisations that train real estate agents will probably extend into property manager training and insurers specialising in real estate cover will offer policies relevant to property managers.

The requirement to being a “fit and proper person” will also be an improvement. “It means people who aren't suitable can't become property managers. If you’ve gone to jail for embezzling money, it’s unlikely you’ll be allowed to be a property manager.”

Welcoming the bill, REINZ chief executive Jen Baird said the growing complexity of property management made it necessary. “Over the past four years, we’ve seen a raft of changes to legislation, including the Residential Tenancies Amendment Act, Healthy Homes legislation, changes to the Privacy Act and Health and Safety at Work Act and more. Add to that environmental social challenges such as Cyclone Gabrielle and we have a profession that New Zealanders have come to rely on.”

Landlords excluded

Currently, landlords who are unhappy with unlicensed property managers need to take a contractual dispute to the Disputes Tribunal or court, Pidgeon says. The new law will allow them to complain to the REA and have their matter heard. The REA will

prosecute on their behalf.

Landlords themselves are not covered by the bill because tenants can complain to the Tenancy Tribunal.

Otago University housing researcher Dr Lucy Telfar-Barnard has called the exclusion of landlords a “missed opportunity”. Her housing research team submitted in favour of the idea because it would give an extra layer of protection to tenants.

In its earlier discussion paper, the Ministry of Housing and Urban Development wrote that landlords were already adequately regulated under the RTA.

The new bill, however, introduces a two-strikes rule for landlords by amending the RTA to give the Tenancy Tribunal the power to order a landlord to use the services of a residential property manager if he or she has committed two or more of the unlawful acts specified in the bill within a five-year period. Those “unlawful acts” include:

■ s 45(1A) or 66I(4) (landlord’s responsibilities: cleanliness, maintenance, smoke alarms, healthy homes standards, and buildings, health, and safety requirements)

■ s 45(1AB) or 66I(5) (landlord’s responsibilities: contaminated premises)

■ s 54(3) (retaliatory notice of termination)

■ s 60AA (acting to terminate without grounds)

■ s 137(2) (contracting to contravene or evade the provisions of this Act) and

■ subsection (3) applies.

Mickey Mouse property managers

Angela Maynard of the Tenants Protection Association (Auckland) would have preferred landlords to be included but is grateful that problematic property managers will be brought into line.

“There are some Mickey Mouse property managers out there. [Currently] you could just decide tomorrow that you want to be a property manager and set yourself up,” Maynard says. “We see managers who have no idea of the Residential Tenancies Act. They think they’re going to get a vulnerable tenant that doesn’t know anything and will just do what they like. We get a lot of calls of that nature.”

For example, Maynard dealt with a case recently where the tenant signed a tenancy agreement with the property manager. Three months later the property manager wanted to increase the rent, even though the law allows only annual increases. The property manager told the tenant he had to sign a new tenancy agreement.

Self-regulation not working

Professional bodies have been set up to represent independent property managers. However, self-regulation wasn’t seen by legislators to be working and the Labour Party campaigned at the last election on reforming the property management sector.

The Residential Property Managers Association of NZ (RPMA)

Continued on page 08

Licensed real estate agents have long called for these independent property managers to be regulated

David Pearse

Continued from page 07

chairman David Pearse says his organisation is a strong supporter of regulating the industry, but he sees issues with the bill as it stands.

Pearse argues that property managers are not the problem. “You do not have to search very deep to see that only 42% of private rentals are managed by property managers and that most of the complaints taken by MBIE against landlords are against private landlords managing the properties themselves.

“Most of the proposed regulation is a cost on the industry that does little to improve the quality of service to property owners and tenants which was the main aim of the legislation, according to housing minister Megan Woods.”

But he says the main issue with the proposed bill is that the REA, which regulates real estate agents, will also be regulating property managers but has limited knowledge and experience in working with the RTA. Pearse adds that Australian experience suggests there will be problems.

“The minister of housing says that [the bill] is to improve the quality of service to owners and tenants. But what is being proposed is similar to the requirement of residential property managers in Australia. It does nothing at all to address the main issue with poor service. The average property manager in Australia lasts only nine months in the industry because of the unrealistic expectations put on residential property managers by their employer, and as the case in Australia this is predominately the real estate sales industry” he says.

“We find it frustrating that she will not even make the time to meet us since she became minister, when we enjoyed regular meetings with Phil Twyford and Kris Faafoi when they had the roles. Megan Woods wants us regulated like lawyers, accountants and valuers. So why not follow that model? The cost would be lower and have a consistent outcome.”

Costs

Licensing and auditing of trust accounts will add cost for property managers.

The licensing costs alone could add about $3,000 per year

for a sole trader. “It is a concern that the model will mean huge licensing costs which will drive out boutique companies who have been providing the level of service the minister is looking for,” Pearse says.

“It would make it more difficult for property managers to start their own business. They [would] need to apply for a licence after being in the industry for at least 18 months. They also would need to employ the services of a supervisory residential property manager to oversee the supervision of property managers.”

Trust accounts will not necessarily create the outcome expected, he says. Cases where managers have stolen money have involved trust accounts of REINZ property managers, which were already supposedly audited.

Regarding insurance, Pearse says property managers should already have public liability, professional indemnity and statutory liability insurance.

Another issue that concerns the organisation is training. Pearse says suggestions from REINZ that 15 hours training would be sufficient to get a licence would be “a joke”. He says a Level 4 Certificate in Residential Property Management would be more appropriate.

If National wins the election, the RPMA will be asking Chris Bishop, who will likely become Housing Minister, to reconsider the bill and encourage him to treat residential property managers like any other professional organisation or association – ie, with their own professional body. “This has been the case for lawyers, accountants and valuers. So, why not residential property managers?”

The RPMA supports the Welsh model where property managers and private landlords are both licensed.

Public landlords excluded

Public landlords such as Kāinga Ora and community housing providers will not be regulated under the bill.

Community housing providers come under the Community Housing Regulatory Authority, Pidgeon says. “If the oversight of the financial side is the main reason for regulating property managers, then [Kāinga Ora] already has oversight….and the civil service is required to comply with the law.”

Submissions on the bill close on October 12. ■

Property managers should already have public liability, professional indemnity and statutory liability insurance

Sutton v Bell: keeping pre-relationship assets from a partner has just got harder

Anthony Grant

When a person (typically a man) with assets from what I will call “relationship one” wants to preserve them before entering into “relationship two”, it is common for him to settle the assets on a trust. If the settlement occurs before relationship two begins, it is commonly understood that the assets cannot be intercepted by the second spouse. (I will use the term “spouse” to refer to people who are married as well as to people in a de facto relationship .)

This is because the courts have accepted that it is fair for him to preserve the assets from relationship one since his second spouse had no role in creating them.

The law has now changed. The Supreme Court has held in Sutton v Bell [2023] NZSC 65 that if the assets from relationship one are settled on a trust when the man and his prospective partner have “a clear and present intention to become parties to a de facto relationship”, the settlement can be set aside and the in-coming spouse can take as many of the assets from relationship one as were settled on the trust as a court will allow.

The case in which the Supreme Court reached this outcome had unusual facts. A Family Court judge held that the couple had been in a de facto relationship for eight or nine months before the man’s property was settled on a trust but a High Court judge, with some additional facts, disagreed. On the High Court judge’s analysis, the property from relationship one was transferred to a trust a few days before relationship two began.

I will not lengthen this article with a fuller account of the facts of the case but will say in summary that readers may think the Supreme Court’s decision was understandable on the unusual facts.

However, the bright-line test that existed before Sutton v Bell has now gone. To the court’s credit, O’Regan J has tried to simplify the test the courts are to apply when deciding whether to set such trusts aside. The test is this:

“If [a] disposition of property is made in circumstances where the parties are in a romantic relationship and/or are living together but do not have a clear and present intention to become parties to a de facto relationship, then we do not

consider that it would be right to infer an intention to defeat a claim or rights that may, or may not, arise in the future…” [69] The critical words in this formulation are that a disposition of property to a trust can be set aside if at the time of the settlement the man and his prospective partner had “a clear and present intention to become parties to a de facto relationship”.

By contrast, if at the time of the settlement of the property on a trust, the parties are living together “in a romantic relationship” (for “romantic” read “sexual”) but they do not have a “clear and present intention to become parties to a de facto relationship”, the settlement cannot be set aside.

Although the test is expressed simply, it may be difficult to apply in many cases. In some cases, it will be easy to say the settlement of the property on a trust was made when the settlor had no intention “to become parties to a de facto relationship”.

But there will be other cases where it is not clear if the relationship will be a de facto relationship or something less. The term “de facto” is so vague that lawyers will often struggle to know if a relationship can be categorised in that way and if lawyers struggle to give a clear answer to that question, the non-lawyer participants to the relationship will have no hope of being able to give a reliable assessment.

A person who wishes to avoid being caught in this trap may need to be ruthless and sever a pending relationship until sufficient time has passed that it can safely be predicted that there was no “clear and present intention” at the time of the settlement for the couple to “become parties to a de facto relationship”. Alternatively, the person will need to arrange for a s 21 agreement to be entered into.

The notion that a person who merely intends to live with someone in a relationship which might not be a “de facto” relationship must nevertheless have a s 21 agreement is likely to lead to a change in social behaviour. Just as New Zealanders have generally got used to the need to negotiate a pre-nuptial agreement with a prospective spouse, so they will now need to get used to negotiating a “pre-nuptial” agreement with a person who might not be categorised by a court as a de facto partner. ■

Anthony Grant is an Auckland barrister and trustee specialising in trusts and estates ■

A disposition of property to a trust can be set aside if at the time of the settlement the man and his prospective partner had ‘a clear and present intention to become parties to a de facto relationship’

Although the test is expressed simply, it may be difficult to apply in many cases

Anthony Grant

Offshore investors eye up cell-tower leases

When the rental is only a few thousand dollars per annum, why would a third party come along and want to pay my client more than 10 times the annual rental, upfront?

Jeremy Callander

I have a client who owns a piece of land. I know, right? True story.

My client has leased some of his land to a telecommunications company which has, in turn, installed a telecommunications tower or “cell tower”. My client has also granted some easements (for example, access) to the telco. The telco pays my client a modest rental under the terms of a lease which is arranged much as you might expect and is altogether uninteresting.

Except for the interesting bit.

These mobile site subdivision agreements present landlords with a potentially lucrative opportunity

The lease expressly prohibits the landlord from entering into something called a mobile site subdivision agreement. Moreover, the lease grants to the telco the right to take some fairly punitive actions against the landlord in the event that the landlord breaches said prohibition.

So what exactly is a mobile site subdivision agreement?

Under the terms of my client’s lease, it is an arrangement:

■ whereby a third party is granted a beneficial or legal ownership interest/right in all or part of the leased land; and/or

■ whereby a relationship is created (or purported to be created) between the telco and a third party that is in the nature of, or substantially similar to, a landlord/tenant relationship; and/or

■ which effectively constitutes the granting (by the landlord) of a power of attorney in respect of the leased land to a third party; and/or

■ which effectively creates a concurrent lease – that is, a third party leases the reversionary interest (and takes on the obligations) of the landlord in relation to the existing lease; and/or

■ which otherwise grants a third party to receive the rental that is payable by the telco.

Perhaps the simplest way of understanding mobile site subdivision agreements (by whatever name), is to think of the third party as being in a similar role to that of a property manager. The third party collects the rent and manages the lease.

But here’s the kicker. Landlords pay property managers to collect the rent and manage the lease. Under the terms of a mobile site subdivision agreement, the third party pays the landlord for the privilege of collecting the rent and managing the cell-tower lease.

It took me a while to get my head around the economics of this arrangement. What’s in it for the third party? Where’s the payoff?

When the rental is only a few thousand dollars per annum, why would a third party come along and want to pay my client more than 10 times the annual rental, upfront?

And why would the telco be so concerned about this possibility that the lease would contain a provision that expressly prohibits this?

Building portfolios

Well, as it turns out, these third parties (yes, there’s more than one) are overseas investment groups that are focused on building up portfolios of cell-tower leases. As it happens, Wall Street-level investment isn’t really a world that I know, so I’m going to draw upon my lived experience of a world that I do know.

In 1982 (as I’m sure you will be well aware), guitar manufacturer Ibanez released a bunch of guitar effects pedals that quickly became known as the “9-series”. The most famous is the TS-9 Tubescreamer, used by Stevie Ray Vaughan and thousands of Stevie Ray Vaughanabes the world over.

Now if you have an original early ‘80s TS-9, it’s going to be worth a wee bit. And if you’ve also got the AD9 Analog Delay, the BC-9 Bi Mode Chorus or any of the other sonic gems that make up the 9-series, well then together they’re going to be worth a bit more.

But if you have the whole set…

From a purely financial point of view, these mobile site subdivision agreements present landlords with a potentially lucrative opportunity. After all, $150k today has the potential to be much more useful than $10k per annum for 30 years.

But on the other hand, cell towers – even where they are privately owned – are part of New Zealand’s critical infrastructure. Do we want overseas hedge funds to have a free hand in the quiet acquisition and accumulation of such infrastructure?

Food for thought. ■

Jeremy Callander is a solicitor at Lucas and Lucas Ltd in Dunedin ■

Trump on trial: key legal and political questions about what could happen next

Neither the constitution nor US legal precedent prevents a candidate from running for office due to an indictment or a conviction

Donald Trump has notoriously become the only former US president to face a criminal indictment – much less four. Opinions on the prosecutions, predictably, break along partisan lines

But whether one subscribes to the Trump-a-victim or villain narratives, the high-stakes charges raise profound legal and political questions. Here’s what’s at stake.

Can a president be indicted?

The US constitution doesn’t prohibit the criminal prosecution of a current president, and Supreme Court precedent (in United States v Nixon) makes it clear that the executive is not above the law. However, since 1973, the Department of Justice (DOJ) has maintained a policy (reaffirmed in 2000) against prosecuting an incumbent on the grounds of not undermining the capacity of the office.

Congress possesses the ability to impeach federal officials for crimes of treason, bribery and “other high crimes and misdemeanours” and remove them from office. Impeachment – unlike an indictment – is primarily a political process, not a legal one. It’s designed to hold presidents accountable for grievous breaches of power, but it happens outside the jurisdiction of the courts.

No similar DOJ restrictions exist on indicting a former president. Nixon v Fitzgerald holds that the president enjoys immunity from civil liabilities related to the duties of office, as do members of Congress. But this does not apply to criminal indictments. Still, because precedent on the question is limited, expect Trump to make a case for executive immunity

Should a current presidential candidate face indictment?

Trump’s run for the White House again in 2024 complicates the legal terrain. The DOJ has a longstanding norm of avoiding politically sensitive indictments near election cycles, typically within 60 to 90 days of Americans casting their ballots

It’s one reason why US attorney general Merrick Garland sought to avoid a Trump indictment in the run-up to the 2022 midterm elections.

As expected, Trump and his GOP allies have framed the DOJ’s prosecutions as “election interference” and an effort to knock out current US president Joe Biden’s most likely opponent next year. They’ve similarly criticised the indictments for trying to distract from the legal woes of the president’s son Hunter Biden, who now faces a DOJ special counsel investigation of his own

Garland tried to mitigate concerns of politicisation by delegating to special counsel, Jack Smith, the decision on whether to indict Trump. However, because Smith technically reports to Garland, and the DOJ sits within the executive branch, it’s impossible to avoid the appearance of partisanship. For his part, Biden has shied away from discussing Trump’s cases publicly.

DOJ guidelines hold that prosecutions should serve the public interest. Considerations include the gravity of the alleged offences, the level of culpability, potential deterrent effects, likely consequences of a conviction and any unique circumstances.

In addition to arguing that Trump’s indictments are politically motivated, Republicans voice concerns that they will further divide the country.

The DOJ (and New York and Georgia prosecutors)

have held that their indictments serve the public interest of maintaining the rule of law and protecting the integrity of US institutions. Yet sceptics suggest this is essentially tautological. The public interest caveat becomes moot if any prosecution can be linked back to a “law-and-order” justification.

Can an indicted or convicted candidate run for president?

Neither the constitution nor US legal precedent prevents a candidate from running for office due to an indictment – or a conviction. Candidates can even run (though not vote in most states) while incarcerated. In 1920, socialist Eugene Debs infamously received nearly one million votes – about 3% of the popular vote at the time – when he ran for president while in jail.

Some states outlaw convicted felons from running for office, but these statutes apply only to state and local positions, not federal. Running a campaign or serving as president from jail would pose untold challenges, but it’s not prohibited. An indictment alone can’t disqualify a politician from being elected because all defendants are “innocent until proven guilty”.

Some legal analysts contend that Trump should be ineligible for the presidency due to section three of the 14th amendment, which prohibits anyone who has “engaged in insurrection of rebellion” or “given aid or comfort to the enemies thereof” from holding public office again.

But the election interference charges against Trump don’t align exactly with insurrection. If convicted, disqualification would be subject to extensive debate.

Can presidents self-pardon?

Timelines for Trump’s trials remain unclear, and possibly more delays and appeals are ahead. Deference goes to the defendant in criminal cases,

Continued on page 15

Thomas Gift & Julia M Norman

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Continued from page 11

even if government lawyers prefer speedier trials. If prosecutions are still ongoing, and if Trump is elected, he could dismiss the federal cases (though not the state-level cases) because he will control the DOJ.

The question of a self-pardon is trickier. A president has no pardoning power of any kind over state-level convictions. But the constitution does not expressly forbid a self-pardon at the federal level, although many legal scholars believe that it would violate the precept of “not being the judge in your own case”. The DOJ argued prior to Richard Nixon’s resignation that a president could not selfpardon, but the memo is an opinion only and not law

At least some of Trump’s current Republican presidential primary opponents, most vocally Vivek Ramaswamy, would consider a pardon if elected. Various commentators have made the case that Biden, if re-elected, should do the same. In 1974, then president Gerald Ford pardoned Nixon, which was controversial at the time but largely respected in hindsight. A pardon of Trump, by a Democrat or a Republican, would doubtlessly prove even more fraught.

By all current polls, 2024 is likely to see either Trump or Biden re-elected. But it may be a pyrrhic victory unless the US can restore faith – from both parties – in elections and rule of law. ■

Thomas Gift is Associate Professor and Director of the Centre of US Politics at University College London. Julia M Norman is Associate Professor in Politics and International Relations and co-director of the Centre of US Politics at UCL. ■

The above first appeared in The Conversation and is reprinted with permission

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