Interest on Money Claims Act 2016

14 Calculation if judgment debt paid in full in 1 payment

(1)

If a party pays, or were to pay, a judgment debt in full in 1 payment, the amount payable is to be calculated using the Internet site calculator by inserting the initial amount, the start date, and the last day.

(2)

The resulting amount is the total amount, including interest, that is required to satisfy the judgment debt.

Example
Assumed facts

On 15 March 2012, the debtor purchased goods from the creditor for $10,000 and failed to pay for them. On 1 July 2012, a court gave judgment in respect of the goods sold for an amount of $10,000 plus interest under this Act. The cause of action arose, and the amount on which interest was awarded was quantified, on 15 March 2012 (the date of the sale). The judgment debtor paid in full on 15 December 2012. For each day in the period between 15 March 2012 and 15 December 2012, the average of the 6 most recent observations of the retail 6-month term deposit rate published by the Reserve Bank of New Zealand at that date is used as the base interest rate. The margin of 0.15% is added to the base rate and the result is expressed as a daily effective interest rate.

Calculation

The start date (15 March 2012), the last day (15 December 2012), and the initial amount ($10,000) are entered into the Internet site calculator.

Using that information, the total amount, including interest, required to satisfy the judgment debt on 15 December 2012 is calculated. That total amount is $10,323.25.

All calculations are made by the Internet site calculator.