5 Jun 2020
127 HOBSON STREET LIMITED v HONEY BEES PRESCHOOL LIMITED [2020] NZSC 53
- Citation
- [2020] 1 NZLR 17
- Court
- Supreme Court
The indemnity clause in the Collateral Deed is not an unenforceable penalty because, properly construed, it was confined to indemnifying payment obligations (rent and outgoings) for the initial lease term and its consequences were not out of all proportion (not exorbitant) to Honey Bees' legitimate interest in securing installation of a second lift and protecting the commercial viability of the preschool; the proportionality test does not require mandatory calculation of common law damages in every case.