A government backed scheme to assist primary producers in financial distress took effect on 1 July.  Unlike some of the other recent debt relief measures that apply to business more generally, this was not a COVID related measure, but recognises the particular pressures that primary producers are facing.  It is backed by the Farm Debt Mediation Act. 

The scheme applies to primary producers in fields such as agriculture, horticulture and aquaculture.  Some primary producers, such as forestry, fishing and lifestyle farming are excluded.

At the heart of the scheme is the mandatory requirement for banks, and other security holders, to go through a formal mediation process, in good faith, with their farmer clients before they can take any action to enforce their security (for example beginning a mortgagee sale process).  Farmers don’t have to wait for their creditors to act and can initiate the mediation process themselves.  The scheme provides a streamlined process for setting up the mediation and farmer’s costs are capped at $2,000.  A mediator is appointed and they then conduct a mediation meeting with the parties.

The scheme is no “magic cure-all” for farmers given that mediators have no ability to impose solutions on either party.  If the farmer cannot reach an agreement with their creditor at the mediation then the creditor can proceed with enforcement, provided they have negotiated in good faith.

However mediation can still be a very useful process.  Firstly there is the practical aspect of forcing the parties to put all other matters to one side for the day and focus their energies on resolving this one issue.  It can be surprising what a difference this focussed approach can make.  Secondly the parties have the benefit of a mediator who is skilled at assisting parties in working through their issues and arriving at a mutually acceptable solution.  With a mediator involved parties are much less inclined to walk away from the table and instead will often continue negotiating past their usual comfort point. 

Accordingly we would urge farmers who are experiencing financial difficulties to consider using this scheme on a proactive basis.  If your bank invokes the scheme, then we would recommend that farmers take appropriate professional advice on how to approach the mediation to maximise the opportunity for achieving a positive outcome.

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The much heralded Health & Safety at Work Act 2015 has been in force for several years now. When it was enacted it was claimed that it would bring in a new era enhancing the safety of New Zealand’s workers. However in my view it was often difficult to see how the new legislation differed significantly from the old law.

There is now a steady stream of cases decided under the new legislation, and again I don’t think these cases have taken the law in a fundamentally new direction.

The most significant impact has been the substantial increase in fine levels.  In some cases this has come up against the reality that not all small traders can afford to pay a fine at the new level, and therefore reduced fines have been imposed.  However for those with the ability to pay, the fines are now truly significant. Businesses cannot insure against fines.  Another development has been the increased use of improvement notices and enforceable undertakings as alternatives to prosecution.

For those concerned that the new law would place unreasonable burdens on employers, they may find some reassurance from the practical approach taken by the Court in a recent decision involving the horticulture sector. 

The decision dealt with the overlapping obligations of different participants in the industry.  It arose from an accident on a kiwifruit farm.  The export authority, Zespri required an independent contractor to test fruit before harvest.  For logistical reasons the packhouses contracted the testing contractor.  The contractor’s employees occasionally used a quad bike, and were trained in its use.  The system was intended to minimise contact between the growers and the contractor’s employees to maintain the independence of the sampling.  In the course of carrying out sampling, the contractor’s employees left the kiwifruit blocks and drove up a slope covered in long grass. 

There was no need for the employee to go up the slope during the sampling process.  Tragically the quad bike rolled and the employee died as a result.  All parties involved were prosecuted.  The contractor pleaded guilty, and an arrangement was agreed with Zespri.  The packhouse and grower defended the charges against them.  WorkSafe claimed that the grower was required to identify potential hazards across the entire farm, not just the areas where the sampling would be taking place, and then take steps to reduce those risks through (for example) signage or creating no-go areas.  The grower pointed out the practical difficulties this would cause.  It did not operate quad bikes, and its management had no expertise in their use.  The contractor had the expertise in operation of quad bikes. 

The Court agreed with the grower and the packhouse that WorkSafe’s stance would place impractical burdens on them and they were both found not guilty.  It has to be stressed that each of these situations depend very much on their own facts, and the facts were unusual here in that the whole arrangement was predicated on minimising the contact between the growers and the sampling contractor, therefore the growers had very little control over the contractor’s staff.  However it does illustrate that the Courts are prepared to draw a line on liability and take into account the realities of these multi-party arrangements.

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I note with some satisfaction the recent demise of a statutory provision which caused much grief to an unlucky few in the rural community.

I refer to a section of the Forest and Rural Fires Act which made anyone who caused a rural or forest fire liable for any damage caused by the fire, and the cost of putting out that fire, regardless of whether they had been negligent. So long as the root cause of the fire could be traced back to you, you could be liable even if you had done everything right to contain the fire source, or thought you had completely extinguished the fire. 

In many cases the Fire Service’s costs of putting out rural fires were huge, and could exceed the amount of any material loss. If helicopters with their monsoon buckets were involved, costs mounted very rapidly. 

Over the years, individuals caught out by this included farmers whose burn offs had got out of control, and hunters whose campfires got away on them. Unexpected wind changes could cause havoc. Often the cause was embers coming back to life under favourable weather conditions when people quite reasonably thought they had long ago gone out. 

In many cases the Fire Service’s costs of putting out rural fires were huge, and could exceed the amount of any material loss. If helicopters with their monsoon buckets were involved, costs mounted very rapidly. Over the years, individuals caught out by this included farmers whose burn offs had got out of control, and hunters whose campfires got away on them. Unexpected wind changes could cause havoc. Often the cause was embers coming back to life under favourable weather conditions when people quite reasonably thought they had long ago gone out. 

If you had the right insurance in place then you were ok, but you had to have specific cover for liability under the Act and for the type of activity you were carrying out when the fire started. Cover could be a bit of a lottery. Some small block owners did not have the right cover for all the commercial activities carried out on their land. The financial consequences of not having cover could be catastrophic. This provision always seemed unfair to me because in other accident or emergency situations you are not expected to pay the full costs of the emergency response, even if you caused the accident.

The strict liability provision has been swept away with the repeal of the Forest and Rural Fires Act by the Fire and Emergency New Zealand Act 2017.  The Rural Fire Service is not funded by levies. A new criminal regime has been put in place whereby anyone who behaves intentionally or recklessly with regard to fire can face large fines. I think we can all agree that this is reasonable. 

While the no fault statutory liability has gone other potential legal liability does remain so that if it can be shown that a person has allowed a fire to escape as a result of negligence then they may find themselves sued by any property owners who suffered damage as a result.

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