Legal quarrel? Don’t rest on your laurels!

October 2022

If you believe that you have a legal claim, New Zealand law requires that you actively take steps to pursue it within a defined period of time. If you fail to do so, the claim cannot proceed. This is known as the limitation period.

In a debt recovery/money claims context, a person usually only has a period of six years to recover the debt before the limitation periods prohibits them from doing so.

Section 11 of the Limitation Act 2010 records that it is a defence to a claim for money if the defendant can prove that the date on which the claim is filed is at least 6 years after the date of the act or omission on which the claim is based. The law requires claimants to make claims for monetary or other relief without undue delay by providing defendants with defences to stale claims.

The six-year timeframe commences on the date the debt is owed to the creditor, or the date the debtor last makes part payment of the debt. If the creditor fails to actively pursue the debt within the limitation period, they will be precluded from doing so at a later date.

The limitation period may be extended in certain circumstances, such as by a “late knowledge date”. For monetary claims the late knowledge extension is 3 years, with a 15 year long-stop.

The purpose of the limitation period is to promote the prompt application of justice. It prevents people from making old claims against others and, if creditors fail to bring their claim within the prescribed timeframe, they risk being unable to bring a claim altogether.

Get in contact with us early to discuss your claim, or the claim that has been brought against you. We can assess the limitation period together with any other causes of action, or defences, depending on what side of the claim are you on. We have experts in this area of the law ready to take away some of the stress and to assist you.

Need assistance?

If you have any questions about a potential claim please contact one of our Litigation experts:

Jared Higby - Associate
jared.higby@tp.co.nz
021 917 140

Sara Jamieson - Partner
sara.jamieson@tp.co.nz
021 221 1388