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PO Box 57138, Mana, 5247
Wellington, New Zealand
STEPHEN IORNS
Phone: +64 4 974 9121
Email: stephen@iornslegal.co.nz
RODERICK MULGAN
Phone: +64 4 974 9089
Email: mulgan@iornslegal.co.nz
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When Business Dealings go wrong – What we do…

August 27, 2014

When business is running smoothly, the relationships with those you interact with are easily cultivated and maintained. A bit like a new relationship, with rose-tinted glasses your new CEO, business partner, contractor or supplier can do no wrong. They are the breath of fresh air you need to set the business soaring to new heights. But, when things do not go to plan, it can greatly impact your stress levels, your bottom line, and ultimately your security, quality of life, financial and mental wellbeing. Extracting yourself from these relationships with the least possible harm requires caution and diplomacy. That is where we come in…

 

As barristers, we generally see people when things go wrong. We are not there to set up the business, to draft the contract, to assist with financing; that is what our instructing solicitors do (if you need a good one, let us know and we’ll point you to one!). We are called in when the proverbial hits the fan. Often, we are called in too late to be of the most benefit, but, as the old saying goes – better late than never.

 

When we first meet our clients, we sit them down, hear them out, get our heads around the problem, and work out the best way to extract them from the dispute with the least harm possible. This could mean issuing or defending proceedings, undertaking mediation, or simply negotiating with the other party informally. While things can go monumentally wrong in an unlimited number of ways, there are a few recurring themes we see in our civil and commercial practice. They fall in to three broad categories: contract disputes, liquidation / bankruptcy proceedings, and employment disputes. Sometimes, where disputes have been particularly poorly managed, there are also Harassment Act implications. Very occasionally, the criminal law comes in to play.

 

Contract Disputes

 

Whether you’re buying or selling goods or services, the laws of contract come in to play. Be it a 38 page franchise agreement, some terms scribbled on the back of a napkin, or the contents of a verbal agreement sealed with a handshake, if there’s money changing hands there’s almost certainly a contract.

 

If the contract governing the relationship is in writing – great. It makes the dispute easier for us to advise on. That being said, if it was possible to write a contract that had no room for argument, we’d be out of a job! There can be arguments about what words, or sentences mean, or, arguments about things that are not included in the contract. Often, there are simply arguments about the contract not being complied with. If it’s a compliance issue, the dispute can be reasonably straightforward, if there is no dispute as to the facts. If there is, then, it becomes an issue of what evidence we can gather to support your version of events. Are there letters, emails or text messages? Who was present when the claimed fact did or did not occur? What is there about you that makes you inherently more trustworthy than the other party? It there anything about them that makes them lack credibility? The same considerations come in to play where there are contracts made verbally. And keep in mind, that some contracts can be a combination of written and verbal terms. Each contract, be it written, verbal, or a combination of the two, needs a careful assessment before the right course of action is chosen.  

 

When advising on a contract, we like to take some time listening to your side of the story, spend a little time researching the law, then give you your options and prospects of success (in a percentage range) in writing. This preliminary step is hugely beneficial. In many instances, clients who have come with a preconceived notion about the strength or weakness of their position are empowered with the knowledge we give them regarding the law, and confident that they have received the right advice to allow them to decide what course of action to take. Think of your business as a custom made high performance sports car – if something strange is clearly wrong with it, would you prefer the mechanic to thoroughly investigate the fault before giving you your options to fix it, or simply apply the standard fix that they use for any old car? Clearly, having an expert take the time to look at the whole situation is going to be of immense benefit.

Of course, the focus of preliminary advice will vary greatly depending on the facts of your case. If you’ve come to us having been served with proceedings, we are going to focus on how best to defend them. If you are not at that stage, though, a whole range of options is open. The sliding scale of dispute resolution techniques are available, starting at a picking up the phone or sending a letter, moving to round table negotiations, then mediation, arbitration, or issuing proceedings in the District or High Court, or any applicable tribunal. Each of these options have their merits, and each are more appropriate than others depending on the facts of the case and your circumstances. In any event, we do our utmost to advise you of the likely cost of each step, and keep cost down where we can. At the same time, though, you don’t want a back-yard mechanic touching your custom-built high performance business, when it’s not at its peak. At the end of the day, you get what you pay for, and we do our best to deliver a quality service, ultimately providing value to our clients by fixing their problems, before the turn in to large ones.

 

Liquidation / Bankruptcy

 

Sometimes, however, we do not meet our clients until they are already facing large problems. We act for both debtors and creditors. We issue statutory demands and bankruptcy notices, and follow through with to liquidation or bankruptcy. Conversely, we represent those that have been served with a bankruptcy notice or statutory demand. We have a much, much easier time when we are consulted early in the piece. If it’s your company that’s looking at liquidation, voluntary liquidation is much, much easier than forced. If it can be avoided, even better. On receipt of a statutory demand, we assess the validity of the demand, and if it’s invalid point this out to the other side immediately. Failing its withdrawal, we can apply to have it set aside. If it is valid, we work with you to negotiate a payment plan regarding the subject of the demand. The exact same process applies for bankruptcy notices.

 

We often hear from people who are being chased by the liquidators of their failed companies. In almost every one of these cases, we could have saved many thousands of dollars by assisting with the process from the minute liquidity was in issue. While paying a lawyers bill is the last thing you think you can afford when your business is going under, the converse is true – we actually save you money here. When we guide you through the process, we assist with settling as many accounts as possible, and, if liquidation is inevitable, appoint a friendly liquidator. On the other hand, if the creditors are not satisfied, and the Court appoints a liquidator, they will go through the past two years worth of business records to see if anything can be set aside, to cover their fees (and if anything’s left over, pay creditors).

 

When things are already unmanageable, we are open to discussing how our fees will be paid very early on in the piece, and trying to get you through this and continue to trade. We’re not going to get you up an running again only to bankrupt you with our fees – that just wouldn’t be right, and after all, we like to help people through difficult times.

   

Employment matters

 

As a general rule, we do not take employment cases. The exception to that is when they fall within a dispute that concerns a client’s role as a director of a company, be it managing or otherwise. If it’s part of a bigger dispute, we have the capacity and knowledge to represent you in employment disputes. It doesn’t make sense to send you to one of our colleagues when the employment side of it is closely intertwined with the bigger dispute. Within our chambers, though, there are a number of lawyers who can assist if the problem is solely an employment one.

 

Harassment Proceedings / Criminal Law  

 

As I explained above, sadly, we see people when it’s all gone wrong. Sometimes, this means they’ve behaved in a way they thoroughly regret. Sometimes, they are the recipient of threats and abuse. Whether you’ve acted poorly and are facing an application for a restraining order (or protection order), or have been charged with some minor infringement of the criminal code (or, let’s face it, something major) we are skilled court-room advocates with a strong track record of defending protection / restraining orders, and criminal charges. If you need protection from abuse, conversely, we are have applied for countless orders to protect people from physical and psychological abuse.

 

Whatever the issue, all we can stress is that hesitating to contact us is the most consistent mistake we see. Whether it’s the kiwi “she’ll be right” mentality, a penchant for DYI, or burying one’s head in the sand, all too often we see people long after we could be of the most benefit. When your water heater breaks, you call a plumber. When you have a tooth ache, you see the dentist. When you have a heart attack or aneurism, you see the appropriate medical practitioner. When your high performance car breaks down, you track down a good mechanic, who won’t charge you an arm and a leg. And when you need a good barrister to get you out of a bad situation, with as little pain as possible, you contact us

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