Going strong after 65 years in the law
Sixty-five years ago, when Chapman Tripp senior partner Arthur Young took his first job as a law clerk, the sale of a corner dairy or grocery store was regarded as a large commercial transaction.
In his new job, Young wrote with a fountain pen, though ballpoints were not too far away. Obviously, there was no internet but there were no fax machines nor photocopiers either.
Young’s secretary took oral dictation – in shorthand - and worked on a manual typewriter, using carbon paper to make copies. Typing the articles of association for a company would take her an entire day.
Firms were tiny by today’s standards: an Auckland ‘mega firm’ had only four or five partners, none of whom was a woman.
The lack of female lawyers reflected the gender imbalance at law school. The year Young and his 25 (or so) classmates graduated, only one was a woman. To graduate, students needed to pass stage one Latin, presumably so they could grapple with the intricacies of Roman law.
On 1 April 1959, just five years after joining Joe Sheffield’s firm as a law clerk, Young was made a partner. In those days, all who went into the profession became partners quite quickly. Some of Young’s contemporaries, such as Sir Ian Barker and Sir Robert Smellie, later became judges.
In the newly-minted Sheffield & Young there was a “modest amount” of litigation and commercial work, Young says, but most of the firm’s business hinged around the burgeoning property market.
Back then, there were few legal specialists,” Young says. “We more or less did everything. It was mainly property as large numbers of new houses were being built, financed by the [government-owned] State Advances Corporation and by capitalisation of the family benefit and, later on, by suspensory loans and insurance companies having leasehold rights over land.”
On the commercial side, Young cut his teeth on small deals common in the 1950s and 1960s.
“Commercial work was quite different from the modern world,” he says. “A significant transaction was acting for someone who bought into a grocery shop or a corner dairy. There were lots of smallish businesses and they were financed by bank loans backed by the supply companies.
“So, you’d act for a person going into a corner dairy or a grocer’s shop in, say, Mt Eden Rd. They’d have to form a company and there’d be a guarantee from the supply merchants and some bank finance. One learnt a lot of commercial law through those types of transactions.”
Gradually the firm became more specialised. Young was heavily involved in land subdivision work in the 1960s and 1970s with one of Auckland’s largest players in that market He also acted for client who bought houses in those subdivisions.
At that stage, the profession itself was still small.
“At one stage, in the early years, I’d had some interaction in person with every partner in every law firm in Auckland, either for mortgage releases or accident compensation settlements or property transactions or other sort of settlements,” Young says.
He also became somewhat of a specialist in divorce work.
Not only was divorce viewed very differently from today but, as Young puts it, “divorce involved applications and a big process and a court appearance in a wig and gown before a judge”.
The hearings were in public and, if damages were sought by an aggrieved spouse, a jury trial was needed.
“Often there was a big list on court days [which happened] once a month for defended divorces. In one day, I could have two or three cases. One needed to have witness evidence, and quite an established routine of paperwork. It was quite a process.”
Young was junior counsel in what he believes to be the last New Zealand case where damages were sought from a co-respondent (the so-called “guilty” party).
“It was reasonably sexist in that the co-respondent was always male,” he says. “If the third party was a woman, she was described as “the person entitled to intervene” and she could not be liable for damages.
In the days before faxes, photocopiers and scanners, proof of service could become an issue, particularly if one of the parties was outside the New Zealand jurisdiction.
Tax work also became a lucrative source of income for Sheffield & Young, particularly around death duties (or estate tax). Until its abolition in 1992, this was levied at a hefty 40% of assets above a certain value and had to be paid in cash as estate duty.
“That was one significant tax planning area where Joe Sheffield and I became well-practised,” Young says. “With that came different approaches to making wills to [ensure] that assets didn’t have quick succession and be taxed twice when they passed on.
“Things called mutual (or mirror) trusts were set up. They were complicated and not easy to explain to people but they served their purpose. When estate duty got swept away some years later, mirror trusts became outmoded.”
For the abolition of death duties, we have Sir Joh Bjelke-Petersen, the New Zealand-born former Premier of Queensland, to thank.
Because estate duty was a state, rather than a federal, tax in Australia, Sir Joh decided to scrap it, resulting in an influx of tax refugees from NSW, Victoria and New Zealand.
“Eventually the other states and New Zealand had to meet the market and estate duty everywhere was abolished,” Young says. “It had been a significant revenue-raiser for the government in the 1940s and 1950s.”
Step-by-step during the 1970s and 1980s, this tax work led Young into the commercial arena of law.
In particular he recalls a property speculation tax introduced by then Prime Minister Rob Muldoon as an emergency measure in a bid to curb inflation, which was by then well into double figures.
“One of my tasks for two groups of people who were very active in this housing field was to devise a way to save them from being liable for this property speculation tax,” Young says.
The election of the Lange government in 1984 and the progressive elimination of import licensing changed everything.
Today it is difficult to comprehend what life was like in Fortress New Zealand from the 1950s to the mid 1980s. Young recalls buying a new car required import and no-remittance licences, and a long wait “unless you were a very good customer of one of the existing motor companies”.
And had he wished to take a holiday overseas – almost unheard of in those days – Young was required to present himself at the IRD’s offices in downtown Auckland and get a tax clearance before going to Air New Zealand to buy his tickets.
Since then, gradually and progressively, there has been specialisation and compartmentalisation in the law.
New areas of law have sprung up, such as competition, employment and the environment.
“With these laws has come increased specialisation so one has had the need for law firms to be able to service over a broad range of areas and, with that, there are now specialists in lots of those areas,” Young says.
“That itself has been a contributor to the growth in the size of law firms – the need to cover so many bases where previously it was so straightforward.”
Consolidation of legal partnerships became more widespread in the 1980s; big firms today are the product of mergers, initially between a firm’s Auckland and Wellington offices.
Was justice more affordable when the profession was smaller?
Access to justice has been an issue “for the whole time I’ve been in practice”, Young says. “This is not a new issue. It might be more acute and severe now than in the past but there have always been concerns about whether the man and woman in the street is able to have adequate legal representation in a way that’s accessible.
“There is an issue but it’s not new and I suspect it might always be an issue. But I don’t think it’s necessarily the profession’s fault.”
In his early days, there was more control over legal costs. There was a scale of fees, laid down by the law society, for property and commercial transactions. The fee was based on the value of the transaction, meaning those buying expensive homes subsidised those buying something more modest.
Likewise, for accident compensation claims prior to the Woodhouse reforms (which established the modern, no-fault ACC) the rule of thumb for lawyer’s fees was 10% of the claim. These restrictions disappeared with the restructuring of ACC in the late 1960s.
Now 84, Young is showing no signs of slowing down.
His main focus is private client work, including family trusts, succession planning and inter-generational change. These clients are long-standing (some have been with him for 40 years), and many are arranging for businesses and property to pass from their generation to the next.
“There’s a big need for succession planning and a significant number of people tend to leave it later than they should,” Young says. But these clients are active and generate a great variety of work.
“The thing that keeps me going is that the clients – as far as I can tell – want me to continue to be involved,” he says.