Financial Markets Conduct Act 2013

Enforcement, liability, and appeals - Civil liability - Defences for person in contravention of civil liability provisions

499: General defences for person in contravention

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"Excuses for breaking financial rules that might let you off"

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If you break a civil liability rule, you might have a defence. You can say you relied on information from someone else. You can also say someone else or something else caused the problem and you tried to stop it. When you say someone else caused the problem, it does not include your employees or people working for you. There are some rules where you cannot use these defences, like if you break rules in section 82, 99, 427(2) or (6), 431P, 431Y, or clause 27 of Schedule 1, but you can look at sections 500 and 501 for other defences.

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This page was last updated on 15 July 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4702260.

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498: Terms of other civil liability orders, or

"What happens if you break the rules: the court's orders to fix things"

500: Disclosure defences for person in contravention, or

"Breaking a finance rule: when you can say you didn't know or did your best"

Part 8Enforcement, liability, and appeals
Civil liability: Defences for person in contravention of civil liability provisions

499General defences for person in contravention

In any proceeding under this subpart against a person (A) for a contravention of a civil liability provision, it is a defence if A proves that—
A's contravention was due to reasonable reliance on information supplied by another person; or
both of the following apply:
1. A's contravention was due to the act or default of another person, or to an accident or to some other cause beyond A's control; and
2. A took reasonable precautions and exercised due diligence to avoid the contravention.

For the purposes of subsection (1)(a) and (b), another person does not include a director, an employee, or an agent of A.
Subsection (1)(b) does not apply to a contravention of section 82, 99, 427(2) or (6), 431P, or 431Y or clause 27 of Schedule 1 (but see the defences in sections 500 and 501).

Compare

1986 No 121 s 44(1) and (2)

Notes

Section 499(3): amended, on 15 March 2021, by section 39 of the Financial Services Legislation Amendment Act 2019 (2019 No 8).