LINZ News

Christmas - New Year opening hours

• Landonline will operate normal business hours until 7pm on Friday 23 December
• Landonline will be available again in the New Year from 7am on Wednesday, 4 January 2006
• The 0800 ONLINE support closes at 7pm on 23 December and will be available again in the New Year from 7am on 4 January
• LINZ Processing Centres close for business at 4pm on Friday, 23 December and will re-open at 9am on Wednesday, 4 January 2006
• Landwrap will take a break in January – the first 2006 edition will be out late February.

Extension to Survey Re-submission waiver

The Survey re-submission fee waiver has been extended until 30 June, 2006 for those who fully and correctly use the Survey Report Template.

Message from Sharon Cottrell regarding Landonline

We would like to apologise for the recent difficulties Landonline customers have experienced accessing and using the system. While these issues were unforeseen, they affected Landonline performance or caused the system to be unavailable for varying periods of time.

From the calls to our 0800 support staff, as well as the letters and emails received, we know many of you have been frustrated and inconvenienced and that this has had an impact on your business.

We are very aware that our customers absolutely rely on the Landonline e-channel being available and working well. The latest e-dealing and e-survey lodgement data shows total electronic-capable lodgements for both services continued to grow in November, reinforcing your growing reliance on the Landonline system. Our priority is to ensure the end-to-end system has the necessary resiliency and that you have greater certainty of service delivery than we have been able to provide over the recent past.

We undertake to resolve residual customer issues. We will be reviewing all the points of interaction between customers and Landonline to identify single points of failure that could interrupt your businesses where they involve Landonline.

We will also review the actions and outcomes of the Disaster Recovery management and data recovery processes to ensure that the lessons learned from the 30 November disk failure are built into plans for the future.

LINZ will involve both the NZIS and the NZLS on the scope and outcomes of these reviews. Your professional bodies have always asked LINZ the hard questions, including during these events. It is our job to ensure we address those questions in a manner that satisfies your representatives.

From our viewpoint, it is extraordinarily frustrating and disappointing to have worked so hard to establish a robust and stable system, only to be let down by some of the surrounding infrastructure, compounded by what has effectively been bad luck. Likewise it is frustrating for you to have put so much effort into training and moving onto the system, to then lose momentum. A more detailed explanation of what occurred is available in this issue of Landwrap.

The provision of services to our legal, survey, territorial authority, and search customers is of the utmost importance to LINZ. We are committed to ensuring, as far as possible, that the incidents of the past few weeks do not reoccur.

We would like to thank you all for your patience and apologise once again for any inconvenience and frustration experienced by you and your staff. We would also like to thank those customers who sent messages of support and encouragement during this difficult period. These were appreciated enormously by everyone at LINZ.

Finally, on behalf of everyone of the LINZ team, we would like to wish all our customers and your families a peaceful, safe and enjoyable Christmas and New Year.

Yours sincerely,

Sharon Cottrell
General Manager Customer Services

Further Information on Landonline Difficulties

Many customers have been interested in a high-level explanation of what occurred during recent weeks.

The Landonline system has a "front end" of web servers, a Secure Citrix Gateway, Active Directory servers, and Citrix servers. These parts of the system recognise and authenticate Landonline subscribers and their digital certificates, and also provide the interface between customers and the Landonline database and application.

At the "back end" are the Landonline database and application components - the Informix database holding the latest data, FileNet holding images in a manner that allows faster reproduction, Storage Area Networks disk array, a service processor to hold the enormous amount of data associated with the land titles register and the cadastral and geodetic survey systems. The "back end" includes other components such as a optical disks that hold the supporting document images and an image index database, and a batch server which provides the request product list and plan generation amongst other functions.

The October and November issues with logon, passwords, profiles, printing, certifying and signing, and system speed related to the 'front end' of the system, in particular the Active Directory and Citrix servers. These issues resulted, in the main, from difficulties in replicating data to the disaster recovery environment.

These issues were to be resolved with the implementation of a new Active Directory and Citrix server environment prepared as part of the planned migration to Windows 2003, scheduled for implementation on 1 December. As with any system changes, the Windows 2003 environment was tested prior to release, including limited load testing in a pilot environment to determine maximum numbers and adjustments for performance on each server.

Despite this, customers experienced some issues in the new environment. These included H:drive and error messages when customers logged on and were caused by unsupported Internet browser settings or customer network settings needing to be re-set. These issues have, for the most part, been resolved individually with customers.

The disk failure at the "back end" which caused Landonline to be out of commission from 30 November until the morning of 2 December resulted from a disk microcode problem that affected the movement of data between the databases, their associated server processors and the storage area network hardware. Microcode, which is sometimes called firmware, is in almost every modern electronic device we use – it is not specific to the Landonline system. Our software and hardware suppliers have fixed the problem and fully analysed and reported the cause to management. They are of the very firm view the chances of this type of event re-occurring are extremely remote.

The subsequent problems that occurred with the FileNet component from 7-9 December and affected submitting, printing, batch server, plan generation and attachments functions were all linked to the microcode problem and have taken some days to resolve.

Unfortunately, further pressure was placed on Landonline customers when Internet Service Providers experienced access problems in Christchurch and Auckland on 2 December. This ISP failure denied some customer's access to the Internet while others were "dropped" out of their session with Landonline - an unexpected event for those affected to deal with, on top of the issues we already had.

It has been very frustrating and time consuming for those who have experienced interruptions to their usual business functions relating to Landonline. Overall, while the system is robust and does have built-in redundancy and back-up, it is still possible for rare and unique events such as the one we experienced with microcode to occur.

The prior planning completed for a possible Disaster Recovery event meant LINZ staff and our Landonline software and hardware vendors were well-prepared when the November 30 event occurred. The impact of this event was minimised as a result of that planning.

Often, your calls to our 0800 support staff inform us of issues that we are not aware of and we value and rely on your calls and feedback to help us help you. Customer feedback and issues received by the 0800 support team are reported to the executive management of LINZ. Your concerns are also acted upon.

Please don't hesitate to call us if you have an issue or problem with Landonline. The 0800 support team are tasked with immediately alerting the wider LINZ team of any issue and helping individual Landonline users overcome any specific issues that are immediately solvable to restore their use of the system as quickly as possible.

If anyone has any questions about this summary, please email us at info@linz.govt.nz

Regulatory

Unit Titles and Body Corporate Rules Changes – A Cautionary Note

The recent decision in Fifer Residential Limited v Kline and Others (High Court Auckland – CIV 2004/404/2189) highlights the need for practitioners to pay careful attention to the procedural requirements of Unit Titles Act 1972 ("UTA") and the timing of actions such as body corporate rule changes.

Background

This case involved a dispute between a company that had acquired rights to redevelop an existing multi-storey unit titled building and the owners of the units.

One of the issues examined by the Court was the validity of the change of rules of the body corporate. In this case the rule changes were effected by the original owner/developer when the land was still held in fee simple. The change of rules document was actually lodged for registration with the unit plan deposit documents.

Validity of the Amended Rules

The Court examined section 37(3) and (4) of the Unit Titles Act 1972. It concluded that these provisions required the existence of both the stratum freehold estate and the body corporate before any decision to change the rules set out in the Second and Third Schedules to the UTA could be validly made. Neither came into being until the unit plan had been deposited by the Registrar-General of Land. A change of rules that predates the deposit of the unit plan is therefore ostensibly invalid.

Possible Application of Unanimous Assent Rule

In reaching its decision the Court considered an earlier High Court case. This was Chambers v Strata Title Administration Limited (2004) 5 NZ ConC 193,864 (Paterson J). In that case the change of rules was also made before the body corporate had come into existence, although the notice of change was not lodged for registration until 6 months after the unit plan had been deposited.

However, because all the purchasers of the units had signed a sale and purchase agreement that recognised and adopted the amended rules, this was seen as amounting to unanimous assent to the change of rules even though they were not made in accordance with the statutory requirements. The Court held that this overcame any "irregularity" with the process that was used to amend the rules. This unanimous assent rule came from an earlier case Bobbie Pins Ltd v Robertson [1950] NZLR 301 that decided that a company is bound by an intra vires and honest transaction that has the subsequent assent of all the corporators (unit owners/body corporate in this context) even if it was irregular at the time it was entered into.

In Fifer the Court distinguished the Chambers decision because of those different facts.

Implications for registration

Land Information New Zealand (LINZ) has traditionally accepted body corporate rule changes even if they accompany the documents lodged to deposit a unit plan.

Were it not for the possible application of the "unanimous assent rule" LINZ might, on the basis of Fifer, be justified in refusing to accept rule changes presented contemporaneously with the plan deposit dealing.

It would not, however, be practicable for LINZ to attempt to assess whether any breach of the statutory requirements set out in section 37(3) and (4) UTA had been cured by the subsequent unanimous assent of the unit owners or body corporate. That would require a level of inquiry that is beyond the scope of LINZ's functions.

The role of LINZ in recording the notice of change of rules is essentially administrative. Although entry of the notice on the supplementary record sheet is required in order to give effect to that change (see section 37(7) UTA), LINZ does not thereby give any assurance that the prescribed process was correctly followed or that the new rules are valid and binding. In the Chambers case [48-50] the Court rejected any suggestion that recording the change of rules brought into play the indefeasibility provisions of the Land Transfer Act 1952.

Conclusion

LINZ is not in a position to requisition body corporate rule changes merely because the timing of lodgement casts doubt on the correctness of the process that lies behind the change and thus on the validity of the amended rules.

The onus is therefore on the lodging party and their legal advisers to ensure that all procedural prerequisites have been observed. The Fifer case highlights the possible pitfalls in that regard.

(NB: see also the article by John Greenwood on page 4 of the November 2005 edition of the Wellington District Law Society's publication Council Brief).

Office of the Surveyor-General update on GPS and Cadastral Surveys

The established practice of showing observed GPS vectors on survey plans is causing problems due to clutter on some surveys. While vectors can be tabulated to reduce clutter on the face of the plan the removal of system generated vectors from e-survey digital plans can be tedious and the vectors will still clutter the spatial view in Landonline and views derived from LandXML downloads.

LINZ is currently looking at ways to overcome these problems. On the one hand we need to be able to validate the survey and maintain the integrated cadastral network. On the other hand we need to be able to accommodate the use of technology such as GPS in an efficient way.

One way to reduce the clutter would be to replace most of the observed GPS vectors from base stations with calculated vectors between adjacent witness marks and between witness marks and boundary marks. This approach would result in a plan that looks similar to a conventional survey which would be easier for many users to interpret.

Replacing measured GPS vectors with calculated GPS vectors exposes surveyors to additional risks of errors going undetected. Landonline validation will not detect some errors in calculated data.

It is expected that the proposed changes to GPS data presentation requirements can be implemented early next year following further investigation of the risk management issues and the Landonline validation and network adjustment implications.

Proof of Identity in the Absence of Photo ID

The NZLS Guidelines for the Use of Landonline for an Electronic Transaction outline the steps that practitioners should take to verify client identity when acting in conveyancing transactions. As one would expect, the primary means of identification relies upon a client having some acceptable form of photo ID, such as a passport, driver licence or firearms licence.

The need to establish the identity of a client is a legislative requirement in any conveyancing matter, whether it be a paper or e-dealing transaction (s 164A(3)(b) Land Transfer Act 1952). See the NZLS Property Law Section's best practice guidance for obtaining proof of identity for property transactions - (pdf).

Although it is unusual for a person not to have any form of photo ID, this does occur from time to time. In these circumstances practitioners need to consider alternative means of verification. How this can be achieved will depend on the circumstances, but the key points to remember are:

• the purpose is to gain adequate assurance as to the identity of your client
• the steps taken to verify identity must be documented in some way

In the absence of acceptable photo ID, practitioners must exercise their professional judgement as to what other forms of verification they may reasonably choose to rely upon. The level of formality and extent to which corroborating documentation should be obtained will largely depend on the circumstances and the risks involved.

While it is not practical to attempt a codification of all the possible scenarios, the following examples provide some guidance as to the type of inquiry a practitioner might reasonably make in the absence of reliable photo ID:

Scenario 1: Elderly client who is a long term resident in a rest home

In the case of an elderly client who has been a long term resident in a rest home, it may, for example, be sufficient to obtain confirmation of identity from the manager or other senior staff member of the institution. This could be documented by means of an exchange of correspondence following a face to face meeting with the client and rest home staff.

Scenario 2: A new client with expired photo ID

In the case a new client with, say, an expired passport, it would generally be sufficient to retain a copy of the passport, having sighted the original and confirmed that the photo appears to be that of the client. In such circumstances it would be appropriate also to obtain more contemporary corroborating material such as a recent rates demand combined with a bank statement addressed to the client.

Scenario 3: A new client with no photo ID

In the case of a new client who has no other means of identification, it may be appropriate to have his or her identity formally verified by a reliable witness. The procedure required in order to obtain a New Zealand passport is a useful model in that regard:

• the witness should be an independent person (i.e. not a relative, partner or spouse), aged 16 or over, whose identity you can verify by reference to a reliable form of photo ID (preferably a passport) and who has known your client for at least a year.
• the supporting evidence should take the form of a statutory declaration with a recent photograph of your client attached and witnessed (an example form of declaration is attached).

See the sample "declaration of identity" template below.

The above examples are not exhaustive and if any suspicions are aroused as to the bona fides of a client, further inquiry should of course be made. Practitioners should be particularly vigilant when dealing with new clients who are purporting to transfer or mortgage unencumbered properties or refinancing. A simple phone call to the residential address of the property may, for example, be a very effective cross check in some circumstances.

Lease in renewal if lease clarified

A customer has queried whether a Variation of Lease Instrument (Form 13 - Second Schedule - Land Transfer Regulations 2002) can be used to renew an expired lease. These instruments were designed for use only for dealings under Section 116 Land Transfer Act 1952.

Pursuant to Section 116 (2), a lease variation instrument extending the term of a lease must be registered before the expiry of the then current term of the lease.

Consequently, a new Lease Instrument (Form 12) in renewal is required once the term of the existing lease has expired.

Landwrap

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