Auckland District Law Society challenges Justice Minister to withdraw statement on lease changes

Auckland District Law Society President Marie Dyhrberg QC is calling on Justice Minister Kris Faafoi to correct his statement suggesting the society provided “anecdotal evidence” as part of its move to pass emergency legislation on commercial leases.

On September 27, Faafoi announced changes to the Property Law Act which would “insert a clause into commercial leases requiring a ‘fair proportion’ of rent to be paid where a tenant has been unable to fully conduct their business in their premises due to the Covid-19 restrictions”.

The announcement was made minutes before the legislation was introduced into Parliament and caught both property and retail representatives completely unaware.

Faafoi has refused interview requests on the changes but provided a statement to the Herald in response to questions about why the moves were kept secret and what consultation it had conducted before making the changes.

“The understanding of the issues faced by parties to commercial leases is based on anecdotal evidence from discussions and correspondence with lawyers, including members of the Auckland District Law Society and the New Zealand Law Society, and correspondence from hospitality and retail representative groups,” Faafoi said.

On Wednesday Dyhrberg, a leading criminal barrister, said Faafoi’s statement was wrong. ADLS challenged Faafoi to correct his claim that he received “anecdotal evidence” from it before announcing a controversial amendment to the Property Law Act.

“No input or advice was requested by the ministry from ADLS, and accordingly, none was given,” Dyhrberg said in a statement.

While ADLS did meet with Ministry of Justice officials in September about its leases – commonly used and containing a clause which covers what happens when a tenant cannot enter their building – it appears that the society was not even aware that law changes were being contemplated.

“There were no policy discussions, anecdotal or not. The first we knew of the proposed amendment was the press release from the minister’s office on September 28,” Dyhrberg said.

“We are perplexed by the statement as ADLS was not asked to provide input to the policy as implied. The discussions the minister is referring to simply did not happen.”

The ADLS meeting with Ministry of Justice staff on September 17 was confined to the general application of the clause in the current Covid-19 environment, and in the context of the lease, Dyhrberg said.

“At no time did the discussion touch on policy issues, and there was no suggestion that policy changes were imminent.

“In fact, ADLS has subsequently learned that the Government decided to make the amendment to the Property Law Act on September 9 – eight days before Ministry of Justice staff met with ADLS.

“ADLS did not have any input into the policy that culminated in the proposed amendment to the Property Law Act.”

Dyhrberg declined to discuss the merits of the Government’s proposals, with the criticism limited to Faafoi’s claims about ADLS’s involvement.

On Wednesday evening Faafoi said he stood by his comments, but appeared to confirm that the discussions with ADLS were not related to its policy plans. “They were not requested to provide specific input into the Government’s policy.”

Asked whether he stood by the claim that ADLS provided anecdotal evidence, a spokeswoman said: “ADLS providing their account of the current situation with leases and the issues facing parties to commercial leases is what we would consider anecdotal evidence.”

Act leader David Seymour said the answers Faafoi provided to Parliament on the subject did not mislead the House but the Minister “carefully worded his answer to obscure the fact that there was no meaningful consultation”.

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