New Zealand Case Law: Decisions & Judgments

Topic

Penalty clause

Legal area

Court

3 Feb 2023

THAVARAG v WILLIS STREET PARKING LIMITED [2023] NZHC 105

Citation

[2023] NZHC 105
Court

High Court

The appeal court held the District Court erred by further considering and entering summary judgment after the original summary judgment application had been dismissed and there was no extant application or judgment; the Judge failed to identify or follow any procedural path (including seeking leave) and breached the appellant's right to be heard; the supplementary judgment was set aside and the matter remitted to the District Court for proper case management.
16 Sept 2022

CSR POKENO LTD v YES INVESTMENT NZ LTD [2022] NZHC 2378

Citation

[2022] NZHC 2378
Court

High Court

Although CSR raised serious questions for trial about the call option's construction and potential penalty or CCCFA relief, the balance of convenience favoured YINZ: damages were adequate, an injunction would rewrite the parties' bargain and cause irremediable prejudice to YINZ who provided majority capital; accordingly interim injunction was declined and consent interim orders discharged.
14 Jul 2021

LION RESIDENCES LTD v ROBERT BELL CONSULTANTS LTD [2021] NZHC 1760

Citation

[2021] NZHC 1760
Court

High Court

Defendant failed to make agency and the identity of the principal plain to the plaintiff; the 19 June text message did not disclose an identified principal so clause 1.4(2) of the SPA left defendant personally liable; the plaintiff's statement of costs was not a misleading actionable misrepresentation; contractual damages including interest at 14% and forfeited deposit were enforceable and not penal; summary judgment granted for plaintiff.
15 Apr 2020

MAIN RD HOLDINGS LTD v THOR CONSTRUCTION GROUP LTD [2020] NZHC 745

Citation

[2020] NZHC 745
Court

High Court

The Court found there was a genuine and arguable dispute about the recoverability of the bulk of MRH's claim (the late completion amounts alleged to be penalties) and TCG's solvency was not conclusively established; accordingly a permanent stay of the winding up proceeding and prohibition on advertising was ordered conditional on TCG paying the undisputed sum of $18,885.64 within ten working days, failing which MRH's application would proceed and the stay would not be granted.
23 May 2019

BEACHAM PARTS & SERVICE LIMITED v JAGUAR LAND ROVER LIMITED [2019] NZHC 1137 [23 May 2019]

Citation

[2019] NZHC 1137
Court

High Court

There was no substantial dispute under s290(4)(a): the Independent Lawyer made clear findings of breaches; clause 6.5 operates to award liquidated damages absent a determination that breaches were purely technical; damages are payable per breach as reasonably read into the deed; the statutory demands for $137,485.29 were valid and must be paid, so the applications to set them aside were dismissed.
31 Jul 2018

VECTOR LTD v SUNVERGE ENERGY, INCORPORATED [2018] NZHC 1936

Citation

[2018] NZHC 1936
Court

High Court

Set aside protest: New Zealand is the appropriate forum because the contract is governed by New Zealand law with a non-exclusive NZ jurisdiction clause, the goods were supplied to and used in New Zealand, the critical evidence and inspections are located in NZ, potential US third-party claims are speculative, and the risk of a NZ judgment being unenforceable in California was not shown to be substantial.
2 May 2017

JAQUES v MAIN & OR [2017] NZHC 857

Citation

[2017] NZHC 857
Court

High Court

Clause 2 of the settlement agreement, which provided for $4,000 plus GST per week to accrue, is a penalty provision and unenforceable; pleadings relying on clause 2 are struck out, leaving only the $30,000 debt which is within District Court jurisdiction and should be transferred unless settled; the proceeding is not struck out for failure to pay security for costs because non-compliance was not deliberate and prejudice is addressed by costs; indemnity costs awarded to defendants for unreasonable conduct by plaintiff.
2 May 2017

WILACI PTY LIMITED v TORCHLIGHT FUND NO 1 LP (IN RECEIVERSHIP) [2017] NZCA 152 _x000b_

Citation

[2017] 3 NZLR 293
Court

Court of Appeal

The late payment fee was a secondary obligation triggered by default but, applying Cavendish and Paciocco, it was not out of proportion to Wilaci's legitimate commercial interests measured in the commercial context and on the parties' own assessment of the value of the facility, and therefore was not an unenforceable penalty.
4 Nov 2016

T.K (HONG KONG) LIMITED v DIAMOND MILK FORMULAS LIMITED [2016] NZHC 2642

Citation

[2016] NZHC 2642
Court

High Court

Leave to file a statement of defence out of time was refused because the defendant is presumptively and in substance insolvent and therefore leave should not be granted to delay liquidation, and the defendant did not provide a satisfactory explanation for the delay; on the merits clause 10 is not an unenforceable penalty, the force majeure defence is arguable but not determinative, and the no-consideration argument is untenable.
22 Apr 2016

D A JAQUES v V R MAIN and T C HODGSON [2016] NZHC 779

Citation

[2016] NZHC 779
Court

High Court

Given the plaintiff's lack of accessible cash, the reliance on unproven trust interests and equivocal trustee/wife undertakings, his bankruptcy history, the weak prospects on substantial contract damages, and absence of credible evidence he can meet costs, the Court inferred a real risk he would be unable to pay defendants' costs and ordered security of $30,000 to be paid into Court and stayed the proceeding until payment; leave reserved to seek further security when trial costs can be assessed.