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Credit Contracts and Consumer Finance Act 2003

Enforcement and remedies - Pecuniary penalties

107D: Restriction on indemnities

You could also call this:

"You can't get out of paying a penalty if you break the law, no one can pay it for you."

Illustration for Credit Contracts and Consumer Finance Act 2003

You cannot be protected from paying a penalty if you break the law under the Credit Contracts and Consumer Finance Act 2003. This means your company cannot pay the penalty for you. Your company also cannot pay for your costs if you have to go to court because of the penalty. If your company tries to protect you from paying the penalty, it is not allowed. This protection is considered void. In this situation, to indemnify someone means to protect them from having to pay for something. It also means to relieve or excuse them from being liable, which is like being responsible for something, whether it happens before or after the event.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS301460.

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Topics:
Money and consumer rights > Consumer protection
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107C: Relationship between pecuniary penalties and criminal liability, or

"You can't be punished twice for the same mistake - either criminally or with a fine."

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107E: Restriction on insurance, or

"No insurance for law-breaking fines"

Part 4Enforcement and remedies
Pecuniary penalties

107DRestriction on indemnities

  1. A body corporate must not indemnify any director, employee, or agent, or former director, employee, or agent, of the body corporate or of any related body corporate (person A) in respect of—

  2. any pecuniary penalty imposed on person A under this Act; or
    1. any costs incurred by person A in defending any civil proceedings in which the pecuniary penalty referred to in paragraph (a) is imposed.

      1. An indemnity given in contravention of subsection (1) is void.

      2. In this section and section 107E, indemnify includes relieve or excuse from liability, whether before or after the liability arises, and indemnity has a corresponding meaning.

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      Notes
      • Section 107D: inserted, on , by section 43 of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).