Terms of Engagement

Terms of Engagement

These terms, together with any covering letter of engagement, set out the basis of our professional relationship with you in accepting and actioning your instructions. By instructing us you are deemed to have accepted these terms. These terms will apply whenever you ask us to act for you unless we agree (in writing) to vary them.

1. Instructions

We will only act on your clear and reasonable instructions. Our engagement is with you. Any advice applies to you only and is not intended to be relied on by or provided to any third party.

2. Client Checks

We are required to comply with all laws and regulations binding on us including:

• the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT); and
• the United States Foreign Account Tax Compliance Act and the relevant provisions of the Tax Administration Act 1994 (together FATCA).

You acknowledge that before we can act for you or undertake any trust account transactions for you, we are required to perform client due diligence and account monitoring, keep records and report any unusual or suspicious transactions where required by AML/CFT, FATCA or any other law.

We may be required to assist any bank or other entity with whom we transact as your agent or with whom we deposit money on trust for you to comply with that entity’s legal obligations in any jurisdiction.

We will periodically advise you what information and documents are required for these purposes. We may retain this information for future reference and provide it to a bank or other entity and disclose them to any law enforcement or regulatory agency or court as required by law.

We may have to refuse to accept your instructions or we or our bank or other entity (as the case may be) may suspend services and/or delay or block any trust account transactions for you without notice if:

• the required information has not been provided; or
• it is suspected that the business relationship or transaction is unusual or may breach any applicable law.

Under the AML/CFT we must report any suspicions of money laundering or criminal activity to the relevant authorities. We may not be allowed to tell you if we make such a report. We will not be liable to you for any consequences of such a report made in compliance with our legal obligations.

3. Collection and Use of Client Information

You authorize us to collect, use and disclose personal information about you and your representatives for purposes of undertaking your instructions and the following purposes:

1. complying with laws and regulations binding on us including undertaking client due diligence and monitoring in accordance with the AML/CFT and our obligations under FATCA;
2. identifying you and verifying any information that you give (or information we may collect from other sources) with third parties for the purposes of fraud prevention or the AML/CFT;
3. carrying out reasonable credit checks or for the purposes of AML/CFT which may require us to give your information to a credit reporting agency;
4. assisting our bank, IRD and other government agencies to meet their legal obligations under the AML/CFT or FATCA; and
5. for any related purpose in connection with the above.

You acknowledge and agree that we may use third party service providers or third-party databases to carry out the above. When we use these services the service providers may hold your information in their systems and use it (including disclosing your information to third parties) to provide their specific services and for any other lawful purpose.

4. Our Fees

Our fees will be charged on the basis that they will be fair and reasonable having regard to the circumstances of the matter and the nature of our work for you. While the time and resources involved will be important factors, we will also consider the results achieved and the urgency, level of skill, complexity, responsibility, and specialist knowledge involved.

For time-based invoicing our hourly rates are reviewed annually and may include the promotion of our lawyers through their respective experience levels.

We will arrange for each part of your work to be dealt with by the person with the appropriate level of skill and expertise.

We will invoice you at monthly intervals (unless otherwise agreed). Payment of our invoice is due by the seventh day following issue of our invoice unless alternative arrangements have been made with us. Our invoices include an office service charge to cover the cost of routine copying, printing, binding, telephone, fax and courier expenses. The office service charge is 3% of all fees on all invoices unless otherwise stipulated by us in writing.

We may deduct from any funds held on your behalf in our trust account any fees expenses or disbursements for which we have provided an invoice except where we receive the funds from you for a special purpose (other than security for our fees) and they remain in our trust account for that special purpose.

Where we have an arrangement with you that we will address the invoice to another person, you will pay that invoice if that other person does not pay the invoice.

Where monies are held in our trust account on deposit for you, we deduct withholding tax at the applicable rate and may charge and deduct an administration fee of up to 5% of the gross interest earned.

In providing the services outlined in our letter of engagement (Services), we may incur disbursements and payments to third parties on your behalf. You authorize us to incur these disbursements (which may include such items such as search fees, court filing fees, registration fees and travel and courier charges) which are reasonably necessary to provide the Services. You also authorize us to make payments to third parties on your behalf which are reasonably required to undertake the Services (which may include items such as experts’ costs or counsel’s fees). These will be included in our invoice to you, shown as “Office Expenses”, when the expenses are incurred (or in advance when we know we will be incurring them on your behalf).

If you do not pay our invoice when due, we may:

• charge you interest on a calendar monthly basis on the amount the debt remains outstanding on the 20th of the month following issue until payment is made in full. Interest will be charged at the then current ASB commercial overdraft rate from time to time;
• charge you the cost of recovery or attempting to recover any outstanding debt owed to us;
• stop doing further legal work for you.

5. Interest Bearing Deposit

Where your instructions result in payment of funds, we may lodge those funds on interest bearing deposit (IBD). In most circumstances before we can place client monies on IBD in our trust account we must first hold a completed and signed “Self-certification and consent to release of Client information” form (SCF) as required by FATCA and supported by the Tax Administration Act 1994. We reserve the right to require a SCF for all IBD transactions and will provide you with a SCF where required. You acknowledge that this information may be released to our bank who may release this information the Inland Revenue Department (IRD) who may in turn release this information to the tax revenue services of other countries.

6. Residential Land Withholding Tax

If you sell residential land and we receive the sale proceeds on your behalf, we may be legally required to withhold residential land withholding tax (RLWT) from the sale proceeds. This will apply if, under the Income Tax Act 2007:

• you are an “offshore RLWT person”;
• the land is “residential land” in New Zealand; and
• you sell the land within the five year “bright-line” period.

In this event, we must remit the RLWT to the IRD. We will account to you for the net sale proceeds only after withholding RLWT and any other amounts we are permitted to deduct (including our fees).

You must provide us with all information we need to determine whether you are liable for RLWT and (if so) for how much. This includes both the information the Tax Administration Act 1994 requires you to provide and any other information we reasonably request. If you do not give us all this information promptly, we may assume that RLWT applies and withhold the RLWT from the sale proceeds.

We have no liability to you for or in relation to IRD in respect of any RLWT.

7. Electronic Services and Communication

Where we communicate with you by electronic means or provide any electronic service to you, we will take reasonable precaution to ensure those communications or services are accurate, reliable, complete, confidential and secure. We cannot however always be certain that those communications or services are error-free and because they will in most cases be internet-based certain risks exist which are outside of our control. As such we cannot and do not represent or warrant that those communications or services will always be accurate, reliable, complete, confidential, and secure. We also exclude all warranties to the extent permitted by law.

8. Client Care and Service

We will advise you of the names and status of the person or persons who will have the general carriage of or overall responsibility for your work on each matter.

The New Zealand Law Society (NZLS) client care and service information is set out below. Whatever legal services we provide to you we must:

• act competently, in a timely way, and in accordance with instructions received and arrangements made;
• protect and promote your interests and act for you free from compromising influences or loyalties;
• discuss with you your objectives and how they should be best achieved;
• provide you with information about the work to be done, who will do it and the way the services will be provided;
• charge you a fee that is fair and reasonable and let you know how and when you will be billed;
• give you clear information and advice;
• protect your privacy and ensure appropriate confidentiality;
• treat you fairly, respectfully and without discrimination;
• keep you informed about the work being done and advise you when it is completed;
• let you know how to make a complaint and deal with any complaint promptly and fairly.

The obligations lawyers owe to clients are described in the Rules of Conduct and Client Care for Lawyers. Those obligations are subject to other overriding duties, including duties to the courts and to the justice system.

If you have any questions, please visit www.lawsociety.org.nz or call 0800 261 801.

9. Professional Indemnity Insurance

We hold professional indemnity insurance that meets or exceeds the minimum standards specified by the NZLS. We will provide you with particulars of the minimum standards upon request.

10. Lawyers Fidelity Fund

The NZLS maintains the Lawyers Fidelity Fund for the purposes of providing clients of lawyers with protection against pecuniary loss arising from theft by lawyers. The maximum amount payable by the Fidelity Fund by way of compensation to an individual claimant is limited to $100,000. Except in certain circumstances specified in the Lawyers & Conveyancers Act 2006, the Fidelity Fund does not cover a client for any loss relating to money that a lawyer is instructed to invest on behalf of the client.

11. Limitation of Liability

Any limitations on the extent of our obligations to you or any limitation or exclusion of liability are set out in our letter of engagement.

In addition to the extent permitted by law, our total liability to you in connection with any matter (or series of related matters) on which you engage us will not exceed the lesser of NZ$2,000,000 or the amount of five times the value of fees paid to us (excluding our Office Expenses, disbursements and GST) in respect of that matter. This limitation applies to liability of any kind whether in contract, tort (including negligence), equity or otherwise. We may override this limitation but only where this is specifically agreed with you in our letter of engagement.

If we provide services to any persons or entities related to or associated with you or to anyone at your request (whether, we also advise you) on a matter (or series of related matters) on which you engage us then our aggregate liability to you and all persons and entities in respect of that matter (or series of related matters) will be subject to this limitation (and you will ensure that those persons and entities agree to this).

12. Document and File Destruction

At the end of your matter, we will keep your file and documents for the minimum period required by law. We may then destroy them. This will be done in a confidential manner. If you wish to make other arrangements, please advise us of those arrangements.

13. Complaints

At the same time as you receive this information we provide you with the names and contact details of the person or people at Ellis Gould who will have responsibility for your work.

If you have a complaint about Ellis Gould or any of the services provided you may:

1. refer your complaint to the person or people at Ellis Gould who have overall responsibility for the work and service provided to you;
2. if you are not satisfied with the response to your complaint or if you wish to speak to another person about your complaint you may contact any partner of Ellis Gould. The name, direct phone number and email address of Ellis Gould partners are on our website at www.ellisgould.co.nz;

You may also make a complaint to the complaints service established by the New Zealand Law Society. To do so, you should contact the New Zealand Law Society at PO Box 5041, Lambton Quay, Wellington 5145, telephone +64 4 472 7837, email complaints@lawsociety.org.nz, or visit the website www.lawsociety.org.nz.