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Deed of Settlement Template

A deed of settlement brings a legal or commercial dispute to a close on agreed terms. Use our free New Zealand template to document a full and final settlement, mutual release, and confidentiality under the Property Law Act 2007 and the Contract and Commercial Law Act 2017.

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DEED OF SETTLEMENT
PARTY 1 (CLAIMANT)
Marcus T. Hemi
14 Lambton Quay, Wellington 6011
PARTY 2 (RESPONDENT)
Capital Works Construction Ltd.
88 Courtenay Place, Wellington 6011
By: Rachel A. Burke, Managing Director
Executed: 15 April 2026
Settlement: $25,000.00 NZD
This Deed of Settlement ("Deed") is entered into as of 15 April 2026 by and between Marcus T. Hemi ("Party 1") and Capital Works Construction Ltd. ("Party 2") (together the "Parties"). This Deed is intended to constitute a binding and enforceable deed under New Zealand law, including the Contract and Commercial Law Act 2017 (CCLA 2017). The Parties agree as follows:
1.
BACKGROUND AND DISPUTE
The Parties have been involved in a employment dispute (the "Dispute"). The nature of the Dispute is described as follows: Unjustifiable dismissal claim by Mr Hemi arising from termination of employment on 12 January 2026, including claims for unpaid wages and hurt and humiliation. The Parties have agreed to resolve the Dispute on a full and final basis on the terms set out in this Deed, without any admission of liability by either Party.
2.
SETTLEMENT PAYMENT
In full and final settlement of the Dispute, Party 2 agrees to pay Party 1 the sum of $25,000.00 NZD (the "Settlement Sum"). The Settlement Sum shall be paid by direct bank transfer to the Claimant's nominated bank account on or before 30 April 2026. Time is of the essence in relation to the payment obligation. Receipt of the Settlement Sum shall constitute full satisfaction of all claims arising from or related to the Dispute.
3.
NO ADMISSION OF LIABILITY
Neither Party admits any liability, wrongdoing, or breach of duty by entering into this Deed. The payment of the Settlement Sum does not constitute any admission of liability by Party 2. This Deed is entered into as a compromise of a disputed claim and is made for the purpose of avoiding further cost, delay and uncertainty of litigation.
4.
DISCONTINUATION OF PROCEEDINGS
The Parties agree that, upon receipt of the Settlement Sum: (a) Party 1 shall immediately file all necessary documents to discontinue, withdraw, or dismiss any proceedings, complaints, or claims filed in any court, tribunal, or regulatory body in relation to the Dispute (including any Employment Relations Authority proceedings and any District Court or High Court proceedings); and (b) each Party shall bear its own legal costs and disbursements incurred in relation to the Dispute and this Deed, unless otherwise expressly agreed in writing.
5.
MUTUAL OBLIGATIONS
Each Party agrees: (a) to cooperate in executing any further documents reasonably required to give effect to this Deed; (b) not to make any application for costs or disbursements against the other Party in relation to the Dispute; (c) not to lodge or pursue any further complaint, claim, or proceeding against the other Party arising from or related to the circumstances giving rise to the Dispute; and (d) that this Deed is a final and complete settlement of all matters between the Parties arising from or related to the Dispute.
6.
ENTIRE AGREEMENT
This Deed constitutes the entire agreement between the Parties with respect to the settlement of the Dispute and supersedes all prior negotiations, representations, and agreements relating thereto. No amendment, variation, or waiver of this Deed is effective unless made in writing and signed by both Parties.
7.
GOVERNING LAW
This Deed shall be governed by and construed in accordance with the laws of New Zealand, including the Contract and Commercial Law Act 2017 (CCLA 2017). Any dispute arising out of or in connection with this Deed shall be subject to the exclusive jurisdiction of the courts of Wellington, New Zealand. The Parties acknowledge that New Zealand courts may award enforcement of a deed as a binding instrument distinct from a simple contract.
8.
ELECTRONIC EXECUTION
This Deed may be executed electronically. Electronic signatures are valid and legally enforceable under the Contract and Commercial Law Act 2017 (CCLA 2017, Part 4 — Electronic Transactions). A counterpart transmitted electronically (including by PDF) shall be treated as an original. Each executed counterpart together forms one binding Deed.
9.
SEVERABILITY
If any provision of this Deed is found by a court of competent jurisdiction to be invalid, illegal, or unenforceable, that provision shall be modified to the minimum extent necessary to make it enforceable and the remaining provisions shall continue in full force and effect.
10.
FULL AND FINAL RELEASE
In consideration of the Settlement Sum and the mutual promises herein, each Party, for itself and its heirs, executors, administrators, successors, and assigns, hereby fully, finally, and irrevocably releases and forever discharges the other Party and its officers, directors, employees, agents, successors, and assigns from any and all actions, causes of action, claims, demands, costs, losses, damages, and liabilities of any kind whatsoever, whether known or unknown, arising from or related to the Dispute, including any claim that could have been raised in any proceeding. Each Party acknowledges that this release is intended to be as broad as legally permissible under New Zealand law.
11.
NON-DISPARAGEMENT AND CONFIDENTIALITY
Each Party agrees: (a) not to make any statement, oral or written, to any person or entity that could reasonably be expected to disparage, criticise, or damage the reputation of the other Party, including to media, social media, industry contacts, or regulatory bodies; and (b) to keep the existence and terms of this Deed strictly confidential, except to the extent required by law or necessary to obtain legal or tax advice (in which case the recipient must be subject to equivalent confidentiality obligations). A breach of this clause shall entitle the non-breaching Party to seek injunctive relief in addition to any damages suffered.
12.
TAX TREATMENT
The Parties acknowledge that the tax treatment of the Settlement Sum will depend on its nature and the circumstances of each Party's situation. Under the Income Tax Act 2007 (ITA 2007), certain settlement payments may be taxable as income (for example, payments made in lieu of wages, salary, or lost income from employment may be subject to PAYE or income tax). Each Party is responsible for obtaining independent tax advice from a qualified tax adviser or from Inland Revenue (IR) regarding their own tax obligations arising from this settlement. Party 2 makes no representation regarding the tax treatment of the Settlement Sum for Party 1. Payment will be made as a gross amount.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date first written above.
PARTY 1 (CLAIMANT)
Marcus T. Hemi
Date: ____________________
PARTY 2 (RESPONDENT)
Rachel A. Burke
Managing Director
Capital Works Construction Ltd.
Date: ____________________

What Is a Deed of Settlement?

A deed of settlement is a formal legal document that resolves a dispute between two or more parties by recording the terms on which the dispute is settled. It is called a "deed" because it is executed with the formalities prescribed for deeds under New Zealand’s Property Law Act 2007 — which gives certain practical advantages over a simple contract, including enforceability without consideration.

Deeds of settlement are used to resolve all sorts of disputes: commercial contract breaches, employment grievances, debt claims, construction disagreements, shareholder disputes, and claims under the Consumer Guarantees Act 1993 or Fair Trading Act 1986. They can be entered at any stage — before proceedings are filed, during litigation, at mediation, or on the steps of court — and are the usual mechanism for giving legal effect to a mediated settlement.

A well-drafted deed of settlement sets out the background to the dispute, the agreed settlement sum or actions, a mutual release discharging all related claims, confidentiality, and often a no-admission-of-liability clause. It should be drafted carefully because a release typically extinguishes the signatory’s right to pursue the released claims forever, even if further evidence later emerges.

What's Covered in This Template

Our deed of settlement template captures every provision needed to achieve a clean, binding resolution of a dispute.

Parties

Legal names, NZBNs (where applicable), and addresses of all parties to the settlement.

Recitals and Background

Neutral summary of the dispute and why the parties have decided to settle.

Settlement Sum or Actions

Agreed payment amount, payment date, and any non-monetary actions (apology, correction, delivery of property).

Payment Mechanics

Bank account, payment method, and any conditions on payment.

Mutual Release

Comprehensive release discharging each party from all claims arising out of the dispute.

No Admission of Liability

Clear statement that settlement is not an admission of liability by either party.

Confidentiality

Obligation to keep the terms of settlement confidential, with specified permitted disclosures.

Non-Disparagement

Mutual agreement not to make negative statements about the other party.

Discontinuance of Proceedings

Agreement to discontinue any filed proceedings without costs (or on agreed costs).

Tax Treatment

Allocation of the settlement sum for tax purposes and GST treatment.

Breach and Remedies

Consequences of breach, including reopening of released claims.

Execution as a Deed

Proper execution under section 9 of the Property Law Act 2007 — signed and witnessed (or under company seal).

How to Create a Deed of Settlement

Follow the steps below to produce a comprehensive deed of settlement.

  1. 1

    Enter the Parties

    Provide the legal names, NZBNs, and addresses of every party to the dispute.

  2. 2

    Summarise the Dispute

    Describe the dispute neutrally in the recitals, including any court proceedings by file number.

  3. 3

    Agree the Settlement Terms

    Set out the settlement amount, payment date, and any non-monetary actions.

  4. 4

    Configure Release and Confidentiality

    Decide the scope of the mutual release, no-admission wording, and confidentiality terms.

  5. 5

    Execute as a Deed

    Sign before a witness (or under company seal), deliver, and retain a signed original for each party.

Legal Considerations

Deeds of settlement are final, binding documents with significant legal consequences and should be reviewed carefully.

This template is for informational purposes only and does not constitute legal advice. Before signing any deed of settlement, take advice from a New Zealand lawyer — once signed, a deed is very difficult to unwind.

Reviewed for New Zealand law

Execution as a Deed

Section 9 of New Zealand’s Property Law Act 2007 sets out the formalities for a deed. For individuals, the deed must be signed by the party and the signature witnessed by a person who is not a party. For companies, execution is typically by two directors or a director and a company secretary, or under the common seal consistent with the company’s constitution and section 180 of the Companies Act 1993. Under New Zealand law, a deed is binding without consideration, unlike a simple contract.

Scope of the Release

A release in a deed of settlement typically extinguishes the released claims permanently. New Zealand courts take a narrow view of releases — in Calltech Communications Ltd v Television New Zealand Ltd [2005] 1 NZLR 104, for example, the Court of Appeal confirmed that a release will not generally cover claims the parties did not know about at the time of settlement unless clear words are used. Careful drafting of the scope ("all claims known and unknown") is important.

Tax Treatment of Settlement Sums

Settlement sums can have varied tax treatment. Payments for lost income are usually taxable; payments for capital loss are often not. For employment settlements, there are specific rules under the Income Tax Act 2007 for hurt and humiliation payments under section CE 9. GST treatment depends on whether the settlement is consideration for a supply. Parties should take tax advice before settling.

Confidentiality and Its Limits

Confidentiality clauses are common but have limits. They cannot prevent disclosures required by law, to regulators, to legal/tax advisers, or for enforcement of the deed itself. Where the settlement involves sexual harassment or serious misconduct, public-interest considerations (and in some contexts the Protected Disclosures Act 2022) may limit the reach of confidentiality.

Frequently Asked Questions

Close the Dispute for Good

Create a clear, New Zealand-compliant deed of settlement that achieves a full and final resolution, mutual release, and confidentiality.

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