Hello Matthew
I can't immediately put my finger on a case directly concerning exemplary damages for an insurer's breach of the duty of good faith. However, in the leading decision of the Court of Appeal in Paper Reclaim Ltd v Aotearoa International Ltd [2006] 3 NZLR 188 (which went on appeal on another point), Chambers J rejected exemplary damages for breach of contract and declined to leave open the possibility of a claim in exceptional circumstances. He said that this would only create uncertainty and allow claims to go to trial unnecessarily. There was no gap in the range of compensatory damages needing to be filled. Contractual remedies included expectation damages, reliance damages, and damages for non-pecuniary loss, mental distress, disappointment and loss of amenity, and even an account of profits. In addition, indemnity costs might be available for improper conduct in the course of litigation, and there were the non-monetary remedies of injunction and specific performance. There was no reason to add yet another remedy that would give a contracting party a windfall profit. However, he did not rule out the possibility that exemplary damages might be available in circumstances where the breach of contract also constituted a tort for which exemplary damages were recoverable.
Stephen

Stephen Todd
Professor of Law, University of Canterbury
Professor of Common Law, University of Nottingham

-----Original Message-----
From: Harrington Matthew P. [mailto:matthew.p.harrington@umontreal.ca]
Sent: 19 November 2014 17:23
To: obligations@uwo.ca
Subject: Tort of insurer bad faith in New Zealand?

I am looking at a problem involving punitive damages and am trying to get a better understanding of the position of New Zealand courts on the availability of punitive or exemplary damages for breach of the duty of good faith by an insurer.

Can anyone on the list give a clear answer as to whether such a tort is recognised and if so whether punitives are available? Anyone have a good case I can look at?

And, please don't hesitate to self-promote: If anyone has written an article on this, I'd be most grateful to have it.

Thanks.
Matt

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Matthew P. Harrington
Professeur titulaire

Faculté de droit
Université de Montréal
3101 chemin de la Tour
Montréal, Québec H3T 1J7
514.343.6105
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