The recent case of Liow v Martelli [2026] NZCA 101 determined that Disputes over a cross-lessor’s refusal of consent to alterations are governed by a fact-specific reasonableness inquiry. That position is materially different from the long-standing test that applied under Smallfield v Brown (1991) 2 NZ ConvC 191,110, which was weighted in favour of the objecting neighbour.

The current test

The test that now applies is as stated by Thomas J in Liow v Martelli. The question of whether consent has been unreasonably withheld is a fact-specific assessment, judged by reference to what a reasonable lessor in the position of the cross-lessor would do, having regard to a broad range of considerations. Those considerations include, but are not limited to:

• the nature, scale, and visual impact of the proposed alteration on the objecting neighbour;
• the benefit to the party seeking consent, without it needing to be characterised as substantial;
• what is normal or to be expected for the locality, including comparable alterations in the immediate area;
• the parties’ prior dealings, including any earlier alterations made without objection. The Court endorsed a “live and let live” approach between reasonable neighbours; and
• the terms of the particular cross-lease, which remain the starting point in every case.

The assessment is not weighted in favour of the objecting neighbour. The fulcrum sits in the middle of the competing interests of the parties. A cross-lessor who refuses on grounds that are exaggerated, idiosyncratic, or unrelated to the matters protected by the covenant is at real risk of being found to have withheld consent unreasonably and having costs awarded against them.

Practical implications

Acting for the cross-lessee seeking consent

Detailed plans, elevations, and visualisations need to accompany any request for consent. Practitioners should anticipate the concerns a reasonable neighbour might raise, including light, outlook, privacy, location, and noise during construction, and address them in the request. The request should demonstrate that the proposal is consistent with what is typical for the locality.

Acting for the cross-lessor considering a refusal

An objection based solely on aesthetic preference is unlikely to be considered reasonable. Reasons for refusal should be tied to identifiable detriment and be proportionate. Where the cross-lease provides for an arbitration pathway, the arbitrator will apply a balanced reasonableness inquiry.

Pre-purchase due diligence

The alterations covenant for a cross-lease title needs to be reviewed. Purchasers planning future works need to be made aware that, while consent is readily obtainable for reasonable alterations, it is not automatic.

Prior refusals

Refusals issued in reliance on Smallfield may be able to be reassessed. Where consent was withheld on a trifling-detriment basis, the party seeking consent can consider whether the changed legal position justifies a reassessment of the matter.

Changes to the AML/CFT regime introduced by the Anti-Money Laundering and Countering Financing of Terrorism Amendment Act 2026 apply from 19 May 2026.

The amending Act is intended to improve the effectiveness, efficiency, and consistency of the anti-money laundering regulatory regime for the benefit of Kiwi businesses.

The changes include:

• amended definitions of beneficial owner, trust and company service provider, and money or value transfer service;
• a new definition of stored value instrument for the purpose of the prohibitions on transactions above the applicable threshold value and cross-border transport and reporting; it means a portable device other than a debit or credit card that represents or contains monetary value but is not physical currency, and can be redeemed for cash – for example, casino chips, vouchers, gold, and diamonds – and such items are now caught by the same prohibitions, cross-border transport restrictions, and reporting obligations as cash;
• a change from the term ‘customer’ to ‘person’ regarding the requirements for standard, simplified, and enhanced customer due diligence, to clarify that the obligations extend to new enquiries, not just existing clients;
• removal of low risk trusts from the automatic obligation to conduct enhanced customer due diligence regarding verification of identity requirements; and
• a requirement for the AML/CFT compliance officer to be, or report to, a senior manager of the reporting entity.

The commentary on AML/CFT, and the relevant AML/CFT policies, in the By Lawyers Practice Management publication have been updated to reflect these changes.

Changes effective 26 May 2026 under the Crimes Legislation (Stalking and Harassment) Amendment Act 2025 include a new standalone criminal offence for stalking and harassment, punishable by up to 5 years’ imprisonment.

The scope of prohibited conduct is expanded to include repeated unwanted contact, monitoring, technology-facilitated abuse, and online harassment. The definition under new s 216P of the Crimes Act 1961 of specified acts that can constitute the new offence is reflected in corresponding amendments to the definition of psychological abuse under s 11 of the Family Violence Act 2018.

The amending Act also amends the Sentencing Act 2002 to introduce new aggravating factors for offending involving persistent stalking behaviour or breaches of restraining orders.

Courts also have new powers to impose restraining orders and harmful digital communications orders even where an offender is discharged without conviction.

The By Lawyers District Court Criminal and Family Violence publications have been updated accordingly.