Terms and Conditions
These Terms and Conditions of Engagement (“Terms”) apply in respect of all work carried out by Smith and Partners (“us”, “we” and “our”) for the client (“you”, “your” and “yours”), except to the extent that we otherwise agree with you in writing.
1.1 The services we will provide for you are outlined in our engagement letter.
1.2 We will only act on your clear instructions. Where you cannot or will not provide such instructions we will cease work until clear instructions are received, and cannot accept any liability in such circumstances. Once we have been instructed by you, we have a contractual relationship with you known as a “retainer”.
1.3 By instructing us, you accept liability to pay the account that we will render for work done and all agency disbursements incurred in respect of such instructions.
1.4 If we provide professional services to you for the purposes of a business, or in relation to your business, you acknowledge that, pursuant to Section 43 of the Consumer Guarantees Act 1993 (“the Act”), the provisions of the Act shall not apply with respect to such professional services.
2.1.1 When we open a file we do not know how significant the work involved will be. It is therefore usually impossible to give a fixed quote.
2.1.2 The fees we will charge or the manner in which they will be arrived at, are set out in our engagement letter.
2.1.3 Where possible, we will give you an estimate. The estimate will be our “best guess” as to what the fee is likely to be. If, however, the work does not proceed as we had expected due to unexpected complications, or if the work proves more complicated than originally anticipated, we reserve the right to charge for all additional work done. This will be based on our usual hourly rate as advised to you.
2.1.4 If the engagement letter specifies a fixed fee, we will charge this for the agreed scope of our services. Work which falls outside that scope will be charged on an hourly rate basis. We will advise you as soon as reasonably practicable if it becomes necessary for us to provide services outside the agreed scope and, if requested, give you an estimate of the likely amount of the further costs.
2.1.5 Where fees are calculated on an hourly basis, the hourly rates are available upon request. The differences in those rates reflect the differing experience and specialisation of our professional staff. Time spent is recorded in 6 minute units, with time rounded up to the next unit of 6 minutes.
2.1.6 Where we are required to carry out Customer Due Diligence and associated client account monitoring (“CDD”) under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“AML Act”), we will charge an amount that reflects the amount of work carried out to complete your CDD. This amount is to cover the costs incurred by us in complying with the AML Act.
2.2 Disbursements and expenses:
2.2.1 In providing services we may incur disbursements or have to make payments to third parties on your behalf. These will be included in our invoice to you when the expense is incurred. We may require an advance payment for the disbursements or expenses which we will be incurring on your behalf.
2.3 Office Expenses
2.3.1 In addition to our fee, we will charge you an office expenses fee that will be proportional to the work completed on your matter.
2.4 Electronic Searches
2.4.1 Where the work being carried out requires us to carry out searches and registration on the Land Information New Zealand, Companies Office, PPSR or similar websites, we will charge an electronic service expense as a separate item in addition to the office expenses referred to in paragraph 2.3. This electronic service expense is to cover the costs incurred to maintain our systems to enable them to carry out these services.
2.5 Goods and Services Tax (“GST”)
2.5.1 GST is payable by you on our fees and charges.
2.6 When will you be billed?
2.6.1 We will bill you at the completion of your matter, or at the end of the month during which we perform the work. If the work is going to extend over a period of time longer than a month we will provide interim invoices to you at the end of each month. This will help you to spread the payments over time. It will also enable you to keep track of how much the work is costing. Where files are billed monthly your account will usually be calculated on the basis of the time spent and work performed. When a final bill is rendered an adjustment may be made to allow for those factors mentioned above.
2.7 Credit Policy:
2.7.1 You may be allocated a credit limit, which will be:
a. Confidential between you and Smith and Partners;
b. The total amount that we will allow to be owed or due to us by you at any time;
c. Able to be increased or decreased or withdrawn by us at any time;
2.7.2 We may stop doing work (and instruct others to stop doing work) for you if your credit limit is exceeded and payment not received by us in accordance with our invoice.
2.8 When do you have to pay?
2.8.1 Our accounts are all due within seven days of rendering an invoice. If we are holding money for you (for example from the sale of your house) we will deduct the account from that money and give you a full statement.
2.8.2 In certain circumstances we may agree to fees being paid by way of automatic payment authority.
2.8.3 We are not obliged to agree to such a proposal and the provisions of clause 2.13 may apply to such an arrangement.
2.8.4 We reserve the right to cease work until accounts are paid up to date.
2.9.1 We may ask you to prepay amounts to us, or to provide security for our fees and expenses. You authorise us:
a. to debit against amounts pre-paid by you; and
b. to deduct from any funds held on your behalf in our trust account any fees, expenses or disbursements for which we have provided an invoice.
2.10 Third Parties:
2.10.1 Although you may expect to be reimbursed by a third party for our fees and expenses, and although our invoices may at your request or with your approval be directed to a third party, nevertheless you remain responsible for payment if the third party fails to pay us.
2.10.2 If we are acting for you in your capacity as a landlord in terms of a lease under which the tenant is required to pay your costs and legal expenses, and if the tenant has not paid your costs, we reserve the right, three months after we have submitted the bill to the tenant, to look to you for payment of those costs. You will be aware in terms of your lease you have a right to take action against the tenant for recovery of those fees. We, on the other hand, have no such right as we have no contract with the tenant, our contract being with you as our client.
2.11 Instructing Counsel:
2.11.1 If Counsel is to be instructed we reserve the right to require payment of Counsel’s estimated fees into our trust account beforehand. By instructing Counsel we undertake an obligation to pay Counsel’s fees and accordingly require to be protected for these. We may require you to enter a payment arrangement directly with Counsel.
2.12 Credit checks:
2.12.1 You authorise any person or company to provide us with such information as we may require in response to our credit enquiries.
2.13 What if you can’t pay on time?
2.13.1 If you anticipate difficulty in the payment of any account you must contact us at the first available opportunity and discuss arrangements for payment. The provisions of clause 2.15 and 2.16 may apply. Interest is payable at the rate of 18 % per annum (calculated on a monthly basis) on any account more than 30 days overdue. If we incur costs in obtaining payment you will be liable for those costs.
2.13.2 All recovery costs incurred by us arising out of your failure to pay by the due date including full legal costs and all disbursements shall be payable by you on demand.
2.14 Companies and Trusts:
2.14.1 If you are instructing us in your capacity as a director or shareholder of a company or as a settlor or trustee of a trust or executor or administrator of an estate or on behalf of another entity, then your instructions are accepted on the basis that you remain at all times personally liable (along with the company, trust, estate or other entity) to pay our fees and disbursements.
2.15.1 When we have done work but we have not been paid by you then as a general rule we have the right to retain certain original documents and correspondence on your file until such time as all outstanding fees, disbursements and other expenses have been paid. This is known as a lien. This will be particularly important in circumstances where you decide for whatever reason to instruct another Firm. That Firm may be obliged to give us an undertaking to pay all of your outstanding fees and disbursements before your file is released to it.
2.16 Agreement to mortgage:
2.16.1 In consideration of our provision of professional legal services and extending credit to you pursuant to the terms of this agreement you agree to mortgage all your estate and interest in all real estate owned by you from time to time. Pursuant to this agreement to mortgage you hereby irrevocably grant to us a power of attorney to execute on behalf of you a registrable mortgage in the form customarily employed by solicitors practising in the Auckland District to secure unpaid fees and disbursements.
3.1 We will hold in confidence all information concerning you or your affairs that we acquire during the course of acting for you. We will not disclose any of this information to any other person except:
3.1.1 to the extent necessary or desirable to enable us to carry out your instructions; or
3.1.2 to the extent required by law, under the AML Act or by the Law Society’s Rules of Conduct and Client Care for Lawyers.
3.2 Confidential information concerning you will as far as practicable be made available only to those within our firm who are providing legal services for you.
3.3 We will of course, not disclose to you confidential information which we have in relation to any other client.
4.1 You agree that if, in providing legal services to you, we create new “works” protected by copyright law, we are the original owners of those works. You are then granted an automatic, irrevocable, non-exclusive licence to use the works once you have paid our account for the relevant matter.
5.1 You may terminate our retainer at any time.
5.2 We may terminate our retainer in any of the circumstances set out in the Law Society’s Rules of Conduct and Client Care for Lawyers and is obliged to decline to act for you in certain circumstances under the AML Act.
5.3 If our retainer is terminated you must pay us all fees due up to the date of termination and all expenses incurred up to that date.
6. Retention of Files and Documents
6.1 You authorise us (without further reference to you) to destroy all files and documents seven years after our engagement ends, or earlier if we have converted those files and documents to an electronic format.
6.2 We will hold certain deeds and documents in safe custody for you. We periodically audit the deeds and documents held and in the event that we believe that certain deeds and documents have expired then you will be notified at your last known address to uplift the deed or document. If we do not receive any response from you, you authorise us to destroy the deed or document.
7. Conflicts of Interest
7.1 We have procedures in place to identify and respond to conflicts of interest. If a conflict of interest arises we will advise you of this and follow the requirements and procedures set out in the Law Society’s Rules of Conduct and Client Care for Lawyers.
8. Duty of Care
8.1 Our duty of care is to you and not to any other person. Before any other person may rely on our advice, we must expressly agree to this.
9. Trust Account
9.1 We maintain a trust account for all funds which we receive from clients (except monies received for payment of our invoices). If we are holding significant funds on your behalf we will normally lodge those funds on interest bearing deposit with a bank. In that case we will charge an administration fee of 5% of the interest derived.
10.1 These Terms apply to any current engagement and also to any future engagement, whether or not we send you another copy of them.
10.2 We are entitled to change these Terms from time to time, in which case we will upload the amended Terms to our website.
10.3 Our relationship with you is governed by New Zealand law and New Zealand courts have non-exclusive jurisdiction.
11. Financial Advisers Act 2008 – What We Cannot Do For You
11.1 We are not financial advisers regulated by the Financial Advisers Act 2008;
11.2 We are not permitted to give you financial advice but may need to refer to or comment on your financial arrangements when this is incidental to the legal advice we are giving you;
11.3 If you need financial advice you must engage an authorised or registered financial adviser. We can assist you to identify the level of advice you need.
12. Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“AML Act”)
12.1 We are bound by the requirements of the AML Act and related regulations and are obliged by the AML Act to carry out Customer Due Diligence and associated client account monitoring (“CDD”). You agree to promptly provide all information requested from you and acknowledge that we cannot commence acting for you, or in some circumstances continue acting for you, until CDD has been completed as required by the AML Act.
12.2 You acknowledge that we may be required by law to provide information collected about you to the Police Financial Intelligence Unit and/or the Department of Internal Affairs.
13. Foreign Account Tax Compliance Act (“FATCA”) and OECD Common Reporting Standard (“CRS”)
13.1 In certain circumstances, we are bound by the requirements of the Foreign Account Tax Compliance Act (“FATCA”) and the OECD Common Reporting Standard (“CRS”) to obtain certain information and certification from you in respect of your legal or financial status, in particular your taxation status in other jurisdictions, before we can place your funds on interest bearing deposit. If FATCA or CRS applies, you agree to promptly provide all information requested from you and acknowledge that we are unable to place funds on interest bearing deposit until the necessary information is provided.
14. Residential Land Withholding Tax
14.1 If you are selling a residential property and we deem you to be an offshore person for the purposes of the Income Tax Act 2007, you accept that in certain circumstances we are obliged to calculate and deduct Residential Land Withholding Tax from the sale proceeds and account to the Inland Revenue Department for such moneys deducted.