Interest on Money Claims Act 2016

Schedule 3 Consequential amendments to other enactments

s 29

Part 1Consequential amendments to Acts

Accident Compensation Act 2001 (2001 No 49)

Replace section 114(2) with:

(2)

The Corporation is liable to pay the interest—

(a)

for the period from the date on which payment should have been made to the date on which it is made (the liability period); and

(b)

at the interest rate or rates for the liability period.

(3)

The period described in subsection (2)(a)—

(a)

does not include the day on which the payment should have been made; and

(b)

includes the day on which the payment is made.

(4)

In this section, interest rate means the base rate plus the premium where—

(a)

the base rate is—

(i)

for any day on or after 1 July in a year to the close of 30 June in the year that follows, the average of the 6 observations for the retail 6-month term deposit rate most recently published by the Reserve Bank of New Zealand before 30 April in that year; or

(ii)

if another base rate has been prescribed for the purposes of this section, that base rate:

(b)

the premium is—

(i)

0.95%; or

(ii)

if another premium has been prescribed for the purposes of this section, that premium.

(5)

The interest rate (as defined in subsection (4)) is a per annum simple interest rate.

Example 1
Calculation where same interest rate applies for whole liability period

The Corporation is liable to make a payment of $100 on 15 November 2018 but does not do so until 15 March 2019. The liability period, for which the Corporation is liable to pay interest on this amount, is therefore 120 days.

For the liability period, the 6 most recent observations for the retail 6-month term deposit rate published by the Reserve Bank of New Zealand* before 30 April 2018 are, for the purposes of this example, assumed to be 3.25%, 3.35%, 3.35%, 3.38%, 3.31%, and 3.31%, being the published rates for the months from October 2017 to March 2018. The average of these 6 observations is 3.325%. This is the base rate.

The base rate and the premium, namely 0.95% in this case, is 4.275%. This is the interest rate that must be used to calculate how much interest the Corporation must pay, in addition to the overdue amount, on 15 March 2019. The total interest payable may be calculated using the equation—

I = P (rt)

where—

I

is the total amount payable

P

is the amount of the payment that should have been made

r

is the interest rate

t

is the liability period expressed in years

I = 100 (0.04275 x 120/365) = 1.4055

I = $1.41

*See “B3 Retail interest rates on lending and deposits” at http://www.rbnz.govt.nz

Example 2
Calculation where interest rate changes during liability period

The Corporation is liable to make a payment of $100 on 15 May 2018 but does not do so until 15 November 2018. The liability period, for which the Corporation is liable to pay interest on this amount, is therefore 184 days.

The base rate for the 46 days from 15 May 2018 to 30 June 2018 is the average of the 6 most recent observations for the retail 6-month term deposit rate published by the Reserve Bank of New Zealand before 30 April 2017. For the purposes of this example, these are assumed to be 3.15%, 3.21%, 3.21%, 3.28%, 3.25%, and 3.25%, being the published rates for the months from October 2016 to March 2017. The average of these 6 observations is 3.225%.

The base rate plus the premium, namely 0.95% in this case, is 4.175%. This is the interest rate that must be used for the first 46 days of the liability period.

The base rate for the remaining 138 days of the liability period, starting on 1 July 2018 and ending on 15 November 2018, is the average of the 6 most recent observations for the retail 6-month term deposit rate published by the Reserve Bank of New Zealand before 30 April 2018. For the purposes of this example, these are assumed to be 3.25%, 3.35%, 3.35%, 3.38%, 3.31%, and 3.31%, being the published rates for the months from October 2017 to March 2018. The average of these 6 observations is 3.325%.

The base rate plus the premium, namely 0.95% in this case, is 4.275%. This is the interest rate that must be used for the remaining 138 days of the liability period.

The total interest payable may be calculated using the equation—

I = P(r1t1 + r2t2)

where—

I

is the total interest payable

P

is the amount of the interest that should have been paid

r1

is the interest rate for the 46 days of the liability period up to 30 June 2018

t1

is the portion of the liability period up to 30 June 2018 expressed in years

r2

is the interest rate for the 138 days of the liability period starting on 1 July 2018

t2

is the portion of the liability period starting on 1 July 2018 expressed in years

I = 100(0.04175 x 46/365 + 0.04275 x 138/365) = 2.1425

I = $2.14

After section 114, insert:

114A Corporation must publish applicable interest rate and premium

(1)

The Corporation must, before 1 July in each year, publish the interest rate to apply under section 114(4) on and from 1 July in that year, on an Internet site maintained by or on behalf of the Corporation.

(2)

Neither a failure to comply with subsection (1) nor an error in a 6-month term deposit rate published by the Reserve Bank of New Zealand affects the Corporation’s liability to pay interest in accordance with section 114.

After section 326, insert:

326A Regulations relating to interest on late payments of weekly compensation

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for all or any of the following purposes:

(a)

prescribing an indicator interest rate (or a formula or other methodology for setting another interest rate) as the base rate for the purposes of section 114(4)(a) on and from a specified date:

(b)

prescribing a percentage as the premium for the purposes of section 114(4)(b) on and from a specified date.

(2)

The Minister may recommend the making of regulations under this section only if the Minister is satisfied that the interest rate would be consistent with, or promote, the following objectives:

(a)

simple, accessible, and predictable law:

(b)

realistic and fair compensation for claimants:

(c)

encouraging the Corporation to calculate and pay claims for weekly compensation as soon as practicable.

Administration Act 1969 (1969 No 52)

Replace section 39(2) with:

(2)

If interest is payable on a legacy or on arrears of an annuity for a period under the will or instrument pursuant to which the legacy or annuity is payable or any enactment or rule of law, unless the will or instrument otherwise provides or the court otherwise orders, the interest on the legacy or arrears of the annuity for that period must be calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016.

Arbitration Act 1996 (1996 No 99)

In section 12(1)(b)(i), replace “up to the date of the award” with “up to the day on which the sum awarded (including all interest) is paid in full”.

Companies Act 1993 (1993 No 105)

Replace section 112B(1) with:

(1)

If a sum that must be paid under section 112 or 112A (the initial amount) is outstanding after it falls due under that section,—

(a)

in the case of a share price determined under section 112, interest is payable from the date on which the initial amount falls due until the date of payment of the initial amount (and for this purpose the interest must be calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016):

(b)

in the case of a share price determined under section 112A, interest is payable on the basis and at the rate that the arbitral tribunal thinks fit having regard to all of the circumstances.

In section 309(2), replace “at the prescribed rate (within the meaning of section 87(3) of the Judicature Act 1908)” with “at the interest rate as defined in section 12(3) of the Interest on Money Claims Act 2016 (as at the date of commencement of the liquidation)”.

In section 311(1)(b), replace “at such rate as is payable” with “of the amount that is payable”.

In section 311(2), replace “interest shall be paid at the prescribed rate on those claims” with “the specified interest must be paid on those claims”.

Replace section 311(3) with:

(3)

If any surplus assets remain after the payment of specified interest in accordance with subsection (2), interest must be paid, on all admitted claims referred to in subsection (1)(a), of an amount equal to the difference between the specified interest paid under subclause (2) and the interest that would have been payable under the contract for that period and, if the amount of the surplus assets is insufficient to pay interest in full on all those claims, payment must abate rateably among them.

Replace section 311(4) with:

(4)

For the purpose of subsection (2), specified interest means interest calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016.

Disputes Tribunal Act 1988 (1988 No 110)

In section 20(1), replace “interest at such rate, not exceeding the prescribed rate, as it thinks fit” with “interest, calculated in accordance with (or on a basis that ensures it does not exceed interest calculated in accordance with) Schedule 2 of the Interest on Money Claims Act 2016,”.

In section 20(3), replace “interest at such rate, not exceeding the prescribed rate, as the Tribunal thinks fit” with “interest, calculated in accordance with (or on a basis that ensures it does not exceed interest calculated in accordance with) Schedule 2 of the Interest on Money Claims Act 2016,”.

District Court Act 2016 (2016 No 49)

In section 4, repeal the definition of prescribed rate.

In section 75(1)(b), replace “that may be payable under section 87 of the Judicature Act 1908” with “that may be payable under the Interest on Money Claims Act 2016”.

Replace section 129(2)(b) with:

(b)

may also order B to pay interest calculated in accordance with (or on a basis that ensures it does not exceed interest calculated in accordance with) Schedule 2 of the Interest on Money Claims Act 2016.

Employment Relations Act 2000 (2000 No 24)

In Schedule 2, replace clause 11(1) with:

(1)

In any matter involving the recovery of any money, the Authority may, if it thinks fit, order the inclusion, in the sum for which judgment is given, of interest, calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016, on the whole or part of the money for the whole or part of the period between the date when the cause of action arose and the date of payment in accordance with the determination of the Authority.

In Schedule 2, repeal clause 11(3).

In Schedule 3, replace clause 14 with:

14 Power to award interest

In any proceedings for the recovery of any money, the court may, if it thinks fit, order that the amount awarded include interest, calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016, on the whole or part of the money for the whole or part of the period between the date when the cause of action arose and the date of payment in accordance with the judgment.

Holidays Act 2003 (2003 No 129)

In section 84(3), delete “at the rate”.

Insolvency Act 2006 (2006 No 55)

In section 253(2), replace “rate prescribed under section 87(3) of the Judicature Act 1908” with “interest rate as defined in section 12(3) of the Interest on Money Claims Act 2016 (as at the date of adjudication)”.

In section 267, replace “rate of interest prescribed from time to time under section 87(3) of the Judicature Act 1908” with “interest rate as defined in section 12(3) of the Interest on Money Claims Act 2016 (as at the date when the claim is paid)”.

Land Transfer Act 1952 (1952 No 52)

Replace section 235(3)(a) with:

(a)

that interest, calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016, is payable on any unpaid fee for the period specified in the regulations; and

Life Insurance Act 1908 (1908 No 105)

In section 41A(3), replace “at the rate from time to time prescribed for the purposes of section 87 of the Judicature Act 1908” with “on the basis applicable under Schedule 2 of the Interest on Money Claims Act 2016”.

In section 67B(1)(a), replace “thereon (compounded annually) at the rate from time to time prescribed for the purposes of section 87 of the Judicature Act 1908 at the date of the death of the minor” with “on the total amount of premiums calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016”.

Maori Reserved Land Amendment Act 1997 (1997 No 101)

Replace section 23(2) with:

(2)

The interest paid under subsection (1) must be calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016.

In Schedule 1, clause 8, replace “is to be paid at the rate prescribed by or under section 87 of the Judicature Act 1908” with “must be calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016”.

In Schedule 1, replace clause 25(3) with:

(3)

The interest payable under subclause (2) must be calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016.

Prisoners’ and Victims’ Claims Act 2005 (2005 No 74)

Replace section 47(3) to (5) with:

(3)

The Tribunal may, if it thinks fit, include in the amount ordered to be paid to a victim under section 46(3) or (4) interest calculated in accordance with, or on a basis that ensures it does not exceed interest calculated in accordance with, Schedule 2 of the Interest on Money Claims Act 2016, on some or all of the damages for all or a part of the period between the date on which the cause of action arose and the date of the order.

Public Works Act 1981 (1981 No 35)

In section 94, replace “at such rate as it thinks fit” with “, calculated in accordance with (or on a basis that ensures it does not exceed interest calculated in accordance with) Schedule 2 of the Interest on Money Claims Act 2016,”.

Retirement Villages Act 2003 (2003 No 112)

Replace section 70(1)(c) with:

(c)

an order that the operator must pay the resident interest calculated in accordance with (or on a basis that ensures it does not exceed interest calculated in accordance with) Schedule 2 of the Interest on Money Claims Act 2016:

Sharemilking Agreements Act 1937 (1937 No 37)

In the Schedule, clause 157, replace “rate prescribed under section 87(3) of the Judicature Act 1908” with “rate that would apply on an award of interest on a money judgment under Part 1 of the Interest on Money Claims Act 2016”.

Te Ture Whenua Maori Act 1993 (1993 No 4)

In section 24B, replace “section 62B of the District Courts Act 1947” with “Part 1 of the Interest on Money Claims Act 2016”.

Trustee Act 1956 (1956 No 61)

In section 34A, replace “at the rate of 6% or such other rate as the Governor-General may for the time being by Order in Council prescribe” with “of an amount calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016”.

Waste Minimisation Act 2008 (2008 No 89)

In section 35(1), formula, replace “has the same meaning as in section 87(3) of the Judicature Act 1908” with “is the business lending rate published by the Reserve Bank of New Zealand on the most recent 1 July before the day of calculation”.

Weathertight Homes Resolution Services Act 2006 (2006 No 84)

In Schedule 3, replace clause 16 with:

16 Power to award interest

In any adjudication for the recovery of any money, the tribunal may, if it thinks fit, order the inclusion, in the sum for which a determination is given, of interest, calculated in accordance with (or on a basis that ensures it does not exceed interest calculated in accordance with) Schedule 2 of the Interest on Money Claims Act 2016, on the whole or part of the money for the whole or part of the period between the date when the cause of action arose and the date of payment in accordance with the judgment.

Part 2Consequential amendments to legislative instruments

Cadastral Survey (Fees) Regulations 2003 (SR 2003/123)

Replace regulation 4(3)(a) with:

(a)

calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016; and

Electricity Industry (Enforcement) Regulations 2010 (SR 2010/362)

In regulation 46(3), replace “at the prescribed rate (within the meaning of section 87 of the Judicature Act 1908)” with “, which must be calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016”.

In regulation 89(4), replace “at the prescribed rate (within the meaning of section 87 of the Judicature Act 1908)” with “, which must be calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016”.

Financial Markets Conduct Regulations 2014 (LI 2014/326)

In Schedule 20, Part 1, replace “[interest rate that is prescribed for the purposes of section 87(3) of the Judicature Act 1908]” with “[annual rate that is equivalent to the 6-month term deposit rate most recently published by the Reserve Bank of New Zealand before the date of the offer]”.

In Schedule 20, Part 2, clause 1, formula, item i, replace “rate prescribed, on the date of the offer, for the purposes of section 87(3) of the Judicature Act 1908” with “annual rate that is equivalent to the 6-month term deposit rate most recently published by the Reserve Bank of New Zealand before the date of the offer”.

In Schedule 20, Part 2, clause 1, Example 1, replace “the Judicature (Prescribed Rate of Interest) Order 2011 prescribes 5% per year for the purposes of section 87(3) of the Judicature Act 1908” with “the annual rate that is equivalent to the 6-month term deposit rate most recently published by the Reserve Bank of New Zealand is 5%”.

Gas Governance (Compliance) Regulations 2008 (SR 2008/253)

In regulation 56(3), replace “at the prescribed rate (within the meaning of section 87 of the Judicature Act 1908)” with “, which must be calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016”.

High Court Rules 2016 (LI 2016/225)

In rule 7.65(3), replace “at the rate prescribed under section 87 of the Act” with “calculated in accordance with (or on a basis that ensures it does not exceed interest calculated in accordance with) Schedule 2 of the Interest on Money Claims Act 2016”.

Replace rule 11.27 with:

11.27 Interest as part of judgment debt

Interest must be awarded in a money judgment in accordance with the Interest on Money Claims Act 2016.

Replace rule 16.20(c)(ii) with:

(ii)

if no rate is prescribed by the instrument or instruments creating the debt or debts, interest calculated in accordance with (or on a basis that ensures it does not exceed interest calculated in accordance with) Schedule 2 of the Interest on Money Claims Act 2016.

In rule 20.20(2)(b), replace “interest at a rate no greater than the prescribed rate (within the meaning of section 87(3) of the Judicature Act 1908)” with “interest, calculated in accordance with (or on a basis that ensures it does not exceed interest, calculated in accordance with) Schedule 2 of the Interest on Money Claims Act 2016,”.

In Schedule 1, form E 7, replace note with:

1

The money seized will not be enough if it—

(a)

cannot discharge any claims that by law are entitled to be paid in priority to the entitled party’s claim; and

(b)

cannot pay the costs and expenses of executing this order; and

(c)

does not comprise—

(i)

the whole/a portion* of the judgment debt sought by this order of $[amount] (inclusive of interest calculated using the Internet site calculator in accordance with the Interest on Money Claims Act 2016 and the entries set out in paragraph 2 of this note); and

(ii)

subsequent costs/disbursements† of $[amount].

*Select one depending on whether enforcement is sought for less than the full amount for which judgment was sealed. If enforcement is sought for less than the full amount, add the following words: “(, which is less than the full amount of the judgment debt)”.
†Select one.
2

For this paragraph select the statement that applies.

Statement A (if the liable party pays or were to pay the judgment debt in full in 1 payment)

The entries made in the Internet site calculator for the purposes of calculating interest are—

(a)

initial amount: $[amount]

(b)

start date: [date]

(c)

last day: [date].

Statement B (if the liable party has paid an instalment or instalments of the judgment debt)

The entries made in the Internet site calculator for the purposes of calculating interest are—

(a)

initial amount: $[amount]

(b)

start date: [date]

(c)

last day: [date]

††(d)

instalment amount: $[specify the amount of each instalment]

††(e)

date of payment: [specify the date of each instalment].

††Repeat for each instalment if more than 1 has been paid.

In Schedule 1AA, Part 1, after clause 2(1)(b), insert:

(ba)

the application of provisions of the former High Court Rules relating to interest on money claims:

Land Information New Zealand (Fees and Charges) Regulations 2003 (SR 2003/124)

Replace regulation 4(4)(a) with:

(a)

calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016; and

Land Transfer Regulations 2002 (SR 2002/213)

Replace regulation 42(3)(a) with:

(a)

calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016; and

Retirement Villages (General) Regulations 2006 (SR 2006/298)

In regulation 44, replace “the same as the prescribed rate as defined in section 87(3) of the Judicature Act 1908” with “the same as applies to the calculation of interest under Schedule 2 of the Interest on Money Claims Act 2016)”.

Sharemilking Agreements Order 2011 (SR 2011/295)

In the Schedule, clause 157, replace “set interest rates in excess of the rate prescribed under section 87(3) of the Judicature Act 1908” with “award interest that exceeds interest calculated in accordance with Schedule 2 of the Interest on Money Claims Act 2016”.