NEW ZEALAND Law and Practice Contributed by: Fionnghuala Cuncannon and Kate Muirhead, Cuncannon
the court for approval, often resulting in the proceed- ings being stayed except for the purpose of enforcing the settlement terms. 8.4 Setting Aside Settlement Agreements A settlement agreement may be set aside on the same grounds as any other contract, such as mistake and misrepresentation. 9. Damages and Judgment 9.1 Awards Available to the Successful Litigant Civil remedies that a court may award include: • damages; • prohibitory or mandatory injunctions; • specific performance (requiring the defendant to perform a contract); • restitution or accounts for profits (requiring the defendant to pay the successful plaintiff the amount by which they have benefitted from their wrongdoing); • freezing and seizing orders (including charging orders, caveats, search orders and preservation of property orders); • proprietary remedies (including constructive or resulting trusts, equitable liens, subrogation and recission); An award of damages will attempt to put the plaintiff in the position they would have been in had a contract been performed, or had a tort not been committed (subject to the steps the plaintiff took or should have taken to mitigate loss). Damages are intended to compensate a party for the losses they have actually suffered. Depending on what is appropriate in the circumstances, a plaintiff may elect to seek damages on an expectation or reliance basis. Beyond these principles, there are few pro- scriptive rules governing the calculation of damages. • contribution; and • declaratory relief. 9.2 Rules Regarding Damages
Punitive or exemplary damages are available where the defendant’s conduct is egregious, requiring con- demnation and/or deterrence. Such damages are awarded rarely, and with care to avoid double pun- ishment for the same conduct. A clause stipulating a consequence for breach of a contractual term will be unenforceable if the conse- quence is out of all proportion to the legitimate inter- ests of the innocent party in performance of the pri- mary obligation. Legitimate interests in performance include an interest in enforcing performance or some appropriate alternative to performance. A conse- quence will be out of all proportion if it is exorbitant when compared with those legitimate interests. Because New Zealand has a state-provided accident compensation scheme, compensatory damages for personal injury may not be claimed. 9.3 Pre-Judgment and Post-Judgment Interest Under the Interest on Money Claims Act 2016, the courts are generally required to award interest in every money judgment as compensation for delay in pay- ment, including the period before judgment, unless the Act expressly provides otherwise. The period for calculating interest begins on the day the cause of action arose or, if the amount was not quantified, on a later specified date, and ends when the judgment debt is paid in full. Under the Act, interest may not be claimed on costs awarded nor on exemplary damages ordered before the dates on which costs are awarded or judgment is given for exemplary damages. Interest is calculated using an online calculator, which uses simple interest based on recent observations of the retail six-month term deposit rate, plus a small premium. This interest rate applies unless another statute applies or the parties have agreed on a differ- ent interest rate for breach of contract (provided the agreed interest rate is not an unenforceable penalty). 9.4 Enforcement Mechanisms of a Domestic Judgment Domestic judgments can be enforced using enforce- ment orders, as follows.
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