Chapter 14 - The commercial provisions in the Judicature Act 1908

Section 92: Discharge of debt by acceptance of part in satisfaction

The effect of section 92 of the Judicature Act 1908 is that where a creditor, or his or her agent, acknowledges in writing that receipt of part of a debt owed to him or her satisfies the whole of the debt, that acknowledgement releases the debtor from the obligation to pay the debt.

This provision modified the common law, which provided that no debt could be released on payment of part of it; the debt had to be repaid in full.427

In order for section 92 to apply, there must be an acknowledgement in writing, and it must expressly state that the part-payment of the debt is in satisfaction of the whole debt.428 Section 92 has been referred to in a number of cases, but in most it is held not to apply because there has not been a clear acknowledgement in writing that meets these requirements.429

The provision does not apply where the claim is for an unliquidated sum or where the amount of the debt is disputed. In these cases it cannot be said that what is offered equates with what is owing because there is insufficient definition of what is owing.430

We are not aware of any issues with this provision. It appears to be well-understood and regularly relied on. Because section 92 varies the common law, it should be retained in statute. Again, the Courts Bill is unlikely to be the best place for this section.

Q44

Do you agree that section 92, which relates to discharge of debt by acceptance of part in satisfaction, should be retained?

Meikle v Wellington Loan Co Ltd (1911) 31 NZLR 217 (SC).

Meikle v Wellington Loan Co Ltd (1911) 31 NZLR 217 (SC); Chambers v Commissioner of Stamp Duties [1943] NZLR 504 (CA); Re McCathie (dec’d) [1969] NZLR 393 (SC).

See, for instance, Wilding v Vango Ltd HC Auckland CIV-2010-404-1161, 2 June 2010; Harris v Birchwood Farm Holdings Ltd [2002] 2 ERNZ 392 (EMC).

James Wallace Pty Ltd v William Cable Ltd [1980] 2 NZLR 187 (CA); Homeguard Products (NZ) Ltd v Kiwi Packaging Ltd [1981] 2 NZLR 322; Laws of New Zealand Contract (online ed) at [78].