Hi all
I was asked to explain my reasoning why I think it is the best business decision to stay with McMillan & Co.
Background:
Helen Davidson lawyer at Polson, than Polson McMillan, has been UCOL’s lawyer from the beginning. Helen has been very helpful for setting up our legal documents to define us as UCOL and our future intentions. Late last year Helen left (now) McMillan & Co to start her own practice / join another practice.
In the middle of March this year a UCOL subgroup of four (2 directors, 2 from the BCG) was formed to research which lawyer / firm to use for the remaining work (mainly 'unit titles' and 'final sale and purchase settlement') for Ucol, and come back with a recommendation for the group. In early May the subgroup came back with a recommendation (3 for, and one director neutral) to stay with McMillan & Co. After a lengthy discussion, a motion to stay with McMillan was not passed (10 green, 6 blue, 3 orange, 1 red). The following week the group was asked to see if a third lawyer, Anthony Hamel (who represents 6 individuals) was willing to represent UCOL. I had reservations as I thought there would be a conflict of interest. I believe the subgroup never reported back on Mr Hamel's formal reply: In short, A) Anthony Hamel saw a conflict of interest , B) he did not have the expertise nor the resources for the work to be done, C) he recommended to stay with Helen. Because of unsuccessful discussion within the group, a reversed straw poll was held in early June, That we stay with Helen and move away from McMillan (6 green, 5 blue, 4.5 orange, 3 red).
The remaining legal work for UCOL is mainly issuing of Unit titles and Settlement of the sales and purchase agreements. Both Helen and McMillan estimate the cost for these works to total between $30,000 and $40,000. The remaining UCOL budget for legal expenses is $60,010 to date.
My thoughts on work remaining:
The unit title process will begin when all new build has cladding to their ground floor units (end of 2019 / early 2020?). The surveyor will then do his final survey, prepare all relevant drawings and paperwork (he may need our bodycorp rules by then!!!), and somehow our lawyer will be involved to make sure the Deed of Covenant is on them, they are registered with Land information NZ, and no doubt Kiwibank will be on all 24 unit titles registering their interest (total 7.5 million dollars). This process will take some time, but is probably not very time sensitive.
The settlement of the sale and purchase will be a very time critical process, as we are expected to settle all 24 sales agreements on the same day. UCOL will have given the UCOL lawyer instructions to turn all personal loans of the unit holders into deposits for their unit. The balance of the unit price incl GST (with is in most cases the amount of the personal guarantee to Kiwibank) will be transferred from all 24 unit holders (one being DCC excl GST) from their personal lawyers to the UCOL lawyer. On settlement date UCOL’s lawyer is expecting 9.9 million dollars. Once they have received the amount owing to Kiwibank, around 7.5 million dollars, they will transfer this money to Kiwibank, so that Kiwibank will release the titles to UCOL, and ultimately to the individual unit holder. The balance of 2.4 million dollars is for GST (1.628 million dollars) and other private loans of friends of UCOL. This day will require a lot of preparation and super efficiency on the day!
Choice of lawyer / firm:
McMillan & Co has 6 lawyers and 5 support staff (Simon Milne the only male). This month McMillan & Co advertised (for the second time in two weeks) for two positions for Legal executive / Senior legal secretary. I have included the ad (ODT). McMillan advertise on their website that their specialist area of legal practise is in property and commercial law (2nd item, Simon the expert). Susan Jack has had good contacts with Simon, and while their response to us regarding remaining costs took a little longer than Helen’s, Simon was clarifying subdivision issues with the surveyor.
Helen Davidson is very difficult to find a contact for. Searching the internet, there is only one link to the Family Law section of the New Zealand Law Society. On that website the firm Helen works at, has been in the past: Anja Klinkert, then Fernhill Lawyers Ltd t/a Klinkert Law, and now is Klinkert Law. Helen's email contact on that website has always been anja@klinkertlaw.co.nz. There is no mention of Helen Davidson on the website of Anja Klinkert. Alex mentioned that Helen isn’t that fond of IT. Roz mentioned that when she proofread our documents, again finding a lot had mistakes that she had previously pointed out. I tried to find our Deed of Covenant and found, when searching through the big document we signed in July last year, that the Deed of Covenant was not included?! Little mistakes? that are more 'error of judgements’ like her stand-down as lawyer over backdating a will, and her recent drink driving conviction.
My conclusion:
The settlement is a critical process, which can cost us a lot of money and inconvenience if things are held up. For the settlement a very efficient team with special attention to detail is needed. If Anthony Hamel does think he has enough resources, I can’t see how Helen Davidson would. We have used a lot of different engineers for our project. I can’t see why we shouldn’t use different lawyers / firms for different legal requirements.
For me there is no question that UCOL, a firm of a 13 million dollar property development, has to stay with McMillan & Co. This is solely a business decision.
regards Rainer
I check my emails once a day. Please call me if you need an urgent reply.
Rainer Beneke +64 21 144 7700
www.rainerbeneke.nz
