Investing in machinery: will it do the job?

A large investment for any business is the purchase of machinery and equipment.  With more sophisticated technology available every year, not only are there increased costs involved with purchasing the machinery, there is also a greater reliance on the manufacturer and dealer to ensure that the machinery being purchased is suitable for the buyer’s needs.

It is not always apparent whether machinery purchased is right for the job, or will do what is promised, until it has been delivered and put into operation.  Even then it may take some time to identify any problems or defects in the machinery.

We understand that the impact of machinery breaking down or not working correctly can be stressful, time consuming and expensive, especially at key times in the season, such as seeding, spraying and harvest.

Should you find yourself in this situation, there are a number of options that may be pursued to seek to recover some or all of the loss that you have suffered.

First, it is important to keep a full copy of the purchase agreement, user manuals and warranty documents.  These documents often provide key terms under which you purchased the machinery.  They may provide rights to repairs or a replacement machine.

If a solution cannot be found in the written terms of the agreement or warranty, there are also terms that are implied by Statute. 

    Such ‘implied’ terms may include that machinery:

  • will be fit for the purchaser’s purpose (if this purpose was communicated to the seller); and
  • will be of merchantable quality (meeting a level of quality and performance that could have been reasonably expected by the purchaser).

Where you have machinery that is broken down or not working as expected, it is important to maintain detailed records and to review the options as early as possible.  Sometimes dealers will enter into negotiations to assist you to keep your business moving along smoothly.  If you are not successful in finding a solution you may wish to consider a stronger approach, such as dispute resolution processes or initiating court proceedings, to recover your losses.

‘Promised’ or just expected? Death and Assets the subject of testamentary promises.

It is common in farming families for children to dedicate significant time working on the farm with the expectation, based on a verbal promise or belief, that someday the farm will be theirs.

Arrangements like this often continue for decades without any formal documentation and the child wrongly believing that ‘everything has been taken care of’ by the parents.

Matters come to a head however when the parent passes away and the working child discovers that no legal provision has been made for the farm to pass to them, despite devoting their life to it.  All they have to rely on is a ‘testamentary promise’ at best.

It is then up to the Courts to decide on the validity of the ‘promise’ and how that promise is to be treated relative to any other family members claims. Questions are often raised about whether the deceased actually made a promise or whether the working child held a mistaken expectation that the farm would one day become theirs. The onus lies with the child to prove on the balance of probabilities that the promise was made.

Additional complications arise where farm land is held in discretionary trust structures, where the person making the promise is not in fact the legal owner of the land and the land does not form part of their estate on death.

Testamentary promise arguments extend beyond just farm lands. They are also raised in situations where one party has provided care or other services to another in return for the promise of an asset or larger share of an estate.

Testamentary promise cases are complex, lengthy and expensive. The best form of protection is to ensure that arrangements are accurately documented whilst all parties are still alive. This enables all parties to clearly communicate their intentions and understandings.

Employee accommodation: what happens when the employment relationship ends?

In many cases in the rural sector, part of an employee’s remuneration package includes accommodation. If the relationship doesn’t work out and the employer wants to dismiss the employee, it can be complicated to get the employee out of the house. It can be even more awkward when the accommodation is required for a new employee coming in.

As well as their rights under their employment agreement (either written or verbal), the employee may have further, separate rights as a tenant under the Residential Tenancies Act 1987 (the Act).  The former employees’ rights under this Act include that he or she may remain in the accommodation even after the employment relationship has ended.

A key requirement of the Act is that the tenant (in this case the employee) be given written notice, in the prescribed form, specifying the owner’s (employer’s) grounds for terminating the tenancy arrangement.

There are specific periods of notice of termination required under the Act, usually 60 days from the notice date.  This means that the employee can remain in the accommodation for 60 days from the day that notice is given, even if they are no longer employed.

Notice of termination of employment is not the same as notice of termination of Tenancy – you must do both.

If, after proper notice is given to the employee, the person refuses to move out, a court order can be sought to move the person on.  This can be a difficult and time consuming process and potentially costly.

We are often asked for assistance on the proper processes to be implemented when the employer wishes to dismiss the employee and evict them from accommodation.  There are certain circumstances where either the Residential Tenancy Act may not apply, or where preventative measures can be taken to ensure that the obligations of the owner can be met without having to apply a lengthy notice period and thereby prevent a new employee, or the owner, from using the accommodation.

Disclaimer: This information is of a general nature only and is not intended to be a substitute for legal advice.  It is recommended that these matters be discussed with your lawyer.

Article kindly provided by Bailiwick Legal.

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