At first instance and then on appeal, the High Court and the Court of Appeal adopted a recast rule against contractual penalties, reflecting developments in England and Australia. The Supreme Court has now delivered its judgment, confirming New Zealand's adoption of the recast rule and clarifying the test and its relationship with concepts of unconscionability and the relative bargaining power of the parties.
The High Court recently issued a decision on a judicial review application which challenged the lawfulness of exemption decisions made pursuant to an order under the Health Act and sought urgent interim relief. The decision was the first consideration by the court of the lawfulness of actions taken during the exercise of the sweeping powers assumed by the government in response to the COVID-19 pandemic.
Representative actions, New Zealand's version of class actions, are becoming increasingly frequent across the litigation landscape. Notably, the Court of Appeal recently issued what may be a landmark decision for the future of representative actions in New Zealand. In overturning a decision of the High Court, the Court of Appeal approved the plaintiffs bringing a representative action in which the represented group would be formed on an opt-out basis, similar to class actions in other jurisdictions.
Two recent decisions have provided insightful authority in New Zealand on a challenging area of law: the loss of a chance doctrine. The significant feature of a loss of a chance claim is that if a plaintiff proves that it has lost a chance of some value, the damages to which it is entitled will be assessed on a probabilities basis, rather than the usual civil all-or-nothing standard.
Contrary to media reports, the Supreme Court's recent decision in Shark Experience Ltd v PauaMAC5 Inc has expressly left the question of whether shark cage diving is an offence in New Zealand open for a future case in which a breach of Section 63A of the Wildlife Act 1953 is alleged. The decisions of the Supreme Court and the lower courts illustrate the challenges of statutory interpretation and the resulting potential for differing judicial views.
The Supreme Court recently dismissed an appeal, holding that the right to replacement under an insurance policy cannot be assigned where the insured party has not incurred the reinstatement costs. The case should be considered by homeowners and their brokers when choosing a replacement home insurance policy and by purchasers and their advisers if assignment of claims is in prospect.
The Court of Appeal recently upheld a High Court judgment, confirming New Zealand's adaption of the recast rule. In doing so, the Court of Appeal has set out the context for adopting the revised rule. However, as the appellant has been granted leave to appeal to the Supreme Court, the final word is awaited.
The Supreme Court recently confirmed that the requirements outlined in Section 292 of the Companies Act 1993 are all that is required in order to void an insolvent transaction. In particular, the court confirmed that there is no additional common law principle stating that the transaction must have diminished the net pool of assets available to creditors. This is a helpful decision which brings certainty to the test for voidable transactions and avoids adding unnecessary complexity into the corporate insolvency regime.
The Supreme Court recently overturned the position set out in Joint Action Funding (that lawyer-litigants are not entitled to costs). While the certainty created by the court will be a relief to lawyer-litigants and organisations that are regularly represented in court by employed lawyers alike, the intervening decisions indicate that the days of the status quo may be numbered – in particular, the differential treatment of lawyer-litigants and lay-litigants.
The High Court recently dismissed an interim injunction against Viagogo AG, holding that it did not have jurisdiction to consider and determine the application without service on Viagogo. The case clarifies that the courts will not overlook the requirement for service and highlights the difficulty of seeking an interim injunction against companies that are based overseas.
The Supreme Court recently considered the liability of those associated with the 2004 Feltex Carpets initial public offering of shares under NZ securities legislation. The decision is a useful determination of a number of securities law liability issues in the NZ context. Among other things, it has clarified that an untrue statement for the purposes of Section 56 of the Securities Act need not be misleading to a material extent to be untrue.
A recent High Court decision adopted the perspective taken in the United Kingdom and Australia on the contractual penalties rule, shifting focus from a comparison between secondary obligations and genuine pre-estimates of damage caused by breach to comparing secondary obligations and the innocent party's performance interest. The decision confirmed the continued relevance of Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd but not the rigour of its application in earlier cases.
Since 1983 it has been the position in New Zealand that a party can recover costs in cases where it has been represented by a lawyer that it employed. However, a recent Christchurch High Court decision held that this is no longer the case. The decision will have a significant impact on entities which are routinely represented in court proceedings by in-house lawyers.
The Supreme Court recently considered a judicial review application about the length of runway end safety areas under a proposed runway extension. Users of the airport might be reassured by the Supreme Court's finding that, under the existing statutory regime, more than a cost-benefit analysis is required; among other matters, a mandatory consideration includes the need to improve aviation safety.
The Supreme Court recently reversed a Court of Appeal judgment that a local authority did not owe a duty of care to a commissioning owner in issuing a code compliance certificate for a non-compliant building. The judgment is significant because it recognises that local authorities owe a duty of care even to commissioning owners that engage their own professionals to ensure compliance with building standards.
The Supreme Court recently issued a somewhat controversial decision of significance in the area of litigation funding. The decision contains guidance on the key question of whether a funding agreement amounted to an impermissible assignment of a bare cause of action that would constitute trafficking in litigation. It remains to be seen whether, and to what extent, the decision may be used by defendants seeking to challenge funding agreements.
The Evidence Amendment Act 2016 came into force in January 2017 and is the fourth and most substantial amendment to the Evidence Act since its introduction in 2006. Most of the amendments relate to evidence in criminal proceedings. However, several amendments are relevant to civil proceedings. The amendments relate to the definitions relevant to the application of privilege, legal advice privilege, settlement privilege, prior consistent statements and the prohibition on using previous decisions as evidence.
The Supreme Court recently clarified the law applicable to unused registered trademarks in New Zealand and limited the scope of protection afforded to trademarks under the Trademarks Act 2002. The decision will affect companies which have sought to expand the protection available under the act by acquiring, but not actually using, trademarks that resemble their own purely to prevent other traders from using them.
The New Zealand Court of Appeal recently had to determine whether late payment fees of A$28 million on a 60-day loan of A$37 million were an unenforceable penalty according to the law of New South Wales, Australia, which was the law of the contract. Although the judgment addresses the law of New South Wales, it offers some insight into the New Zealand court's view of recent international developments on penalties.
The High Court recently ordered that a substantial amount be provided as security for costs by a litigation funder in relation to claims brought against seven defendants. The fact that the litigation was being funded by a third party was a significant consideration in the determination that the plaintiff could not pay costs itself and the exercise of the court's discretion to order that security be provided.