Contents

Chapter 10
The Commercial List and specialisation in the High Court

Relevant considerations

Empirical difficulties

10.41It would not be sensible for any jurisdiction to introduce change into a quality generalist jurisdiction unless the need to do so can be properly demonstrated. We have endeavoured to get to grips with how much work there is in particular categories of proceedings in the High Court, that might attract the need for panel attention.

10.42Unfortunately, the Ministry of Justice statistics do not drill down into this issue. There appear to be at least two reasons for this. First, if reference is made to the Annual Report of the Ministry of Justice for 1 July 2010 to 30 June 2011, it will be noted that the ultimate justice sector outcome is “a safe and just society, which is achieved through two high-level sector outcomes of safer communities and the civil and democratic rights and obligations enjoyed”.147

10.43There are then 8 specific shared outcomes which are sought to be advanced. There is a very heavy emphasis in those desired outcomes on crime reduction and offenders being held to account. Indeed no direct outcome relating to civil justice is listed at all. The nearest is Outcome 4 “Accessible Justice Services” which “seeks that individuals and communities have access to resources, legal information and representation, as necessary, so that they can have their rights upheld and fulfil their legal obligations”. It is a fair comment on the objectives of the justice sector, as thus expressed in the Annual Report, that civil justice does not rate anywhere near the top of the list. Hence, for reporting purposes, the statistical priorities reflect the outcomes sought to be achieved.

10.44The second reason likely flows from this first point. In the Ministry’s Annual Reports, civil justice statistics receive little attention, and then only in a global sense. For instance, in the “output” of the “higher court services”, the High Court is dealt with in a single line (number of civil cases “managed by the High Court”) as being an actual figure of 3,771 cases, against an expressed standard of 3,950.148  By comparison, the number of civil cases “managed” by the District Court in that year was 36,266.149  The short point here is that the Ministry appears to be interested in management statistics, but correlated for its own reporting purposes.150

10.45Over the last quarter of a century the judiciary has expressed concern about the lack of statistics as to the character of work going through the courts. This would tell Heads of Bench, List Judges and indeed the judiciary and the public generally, what kind of things are being dealt with, and to what extent, by our courts.

10.46The Judicial and Court Statistics 2011, published on 28 June 2012 by the Ministry of Justice in the United Kingdom, give a much more precise idea of what is happening in the United Kingdom courts.151  By way of example, it is recorded that of the 4,726 claims issued in the Queen’s Bench Division at the Royal Courts of Justice in London, a quarter related to debt, and around one in five were related to breach of contract.152  That sort of information indicates what kinds of things are coming before the courts, and is functionally useful.

10.47The Chief High Court Judge has rightly been concerned to try and “excavate” (to use her terminology) relevant figures. For instance, it has been established that in 2007 the High Court disposed of 1,349 general proceedings; in 2011 the Court disposed of 2,062. Between six to 10 per cent of civil proceedings were disposed of through a full defended civil trial. But a high percentage (nearly 25 per cent) of High Court civil cases are disposed of by summary judgment today. It is useful at this point to also note, because of the importance of it in the context of the High Court, the figure of 157 judicial review applications disposed of in 2011.

10.48The Ministry of Justice has however been able to assist the Commission with figures from one specific exercise. A sample of physical civil court files was reviewed in the Wellington and Auckland High Court registries in 2010. In Wellington, a sample of 95 cases from the civil ready list that was disposed of between 1 January 2008 and 28 April 2010 was reviewed. A sample of 140 civil cases in Auckland (mostly general proceedings) that were filed between 2008 and 2010 and were subsequently disposed of was also taken from the civil ready list. The sample had to be restricted to those years due to restrictions around accessing archived files. There is an admitted difficulty with this procedure in that older cases (which often require more time to hear and extensive case management) were excluded.

10.49The material so reviewed produced the following outcome.

WELLINGTON SAMPLE
Case Category Total
Breach of Contract 14
Breach of Fiduciary Duty 3
Breach of Statutory Duty 2
Citizenship Act 1997 1
Companies Act 1993 6
Contract 9
Copyright 1
Damage to Property 2
Defamation 1
Department of Social Welfare 7
Enforcement of Judgment 1
Fair Trading Act 1986 3
Family Protection Act 1955 1
Incorporated Societies Act 1908 1
Insolvency Act 2006 1
Land Act 1948 1
Leaky Home 5
Lease 1
Negligence 3
NZ Bill of Rights Act 1990 3
Property (Relationships) Act 1976 1
Property Act 1952 1
Public Works Act 1981 1
Tax 6
Trust 3
Trustee Act 1956 2
(blank) 15
Grand Total 95
AUCKLAND SAMPLE
Case Category Total
Bill of Exchange Act 1908 1
Building Contract 2
Citizenship Act 1977 1
Companies Act 1993 13
Construction 1
Consumer Guarantees 1
Contract 12
Copyright 1
Declaration 1
Fair Trading Act 1986 14
Family 4
Guarantee 1
Insolvency Act 2006 2
Insurance 4
Leaky building claim 12
Lease 2
Māori Customary Law 1
Maritime Transport Act 1994 1
Mortgage 2
Negligence 9
Partnership Act 1908 1
Property 3
Public Works Act 1981 1
Resource Management Act 1991 1
Sale & Purchase 9
Tax 3
Tort 2
Trust 7
Trustee Act 1956 1
Unit Titles Act 2010 1
(blank) 28
Grand Total 142
TOTAL SAMPLE
Case Category Total %
Bill of Exchange Act 1908 1 0.42
Breach of Fiduciary Obligation 3 1.27
Breach of Statutory Duty 2 0.84
Building Contract 2 0.84
Citizenship Act 1977 2 0.84
Companies Act 1993 19 8.02
Construction 1 0.42
Consumer Guarantees 1 0.42
Contract 35 14.77
Copyright 2 0.84
Damage to Property 2 0.84
Declaration 1 0.42
Defamation 1 0.42
Department of Social Welfare 7 2.95
Enforcement of Judgment 1 0.42
Fair Trading Act 1986 17 7.17
Family 5 2.11
Guarantee 1 0.42
Incorporated Societies Act 1908 1 0.42
Insolvency Act 2006 3 1.27
Insurance 4 1.69
Land Act 1948 1 0.42
Leaky Building Claim 17 7.17
Lease 3 1.27
Māori Customary Law 1 0.42
Maritime Transport Act 1994 1 0.42
Mortgage 2 0.84
Negligence 12 5.06
New Zealand Bill of Rights Act 1990 3 1.27
Partnership Act 1908 1 0.42
Property 4 1.69
Property (Relationships) Act 1976 1 0.42
Public Works Act 1981 2 0.84
Resource Management Act 1991 1 0.42
Sale & Purchase 9 3.80
Tax 9 3.80
Tort 2 0.84
Trust 10 4.22
Trustee Act 1956 3 1.27
Unit Titles Act 2010 1 0.42
(blank) 43 18.14
Grand Total 237 100

10.50This classification was done by court staff based on their interpretation of the relevant statements of claim. Consequently the classification is not necessarily as accurate as if it had been done by legally trained people. And because a large number of case categories were used, each of which was relatively small, it is difficult to get a broad sense of the overall classes of case. The samples also excluded a number of cases that settled. Nevertheless, there are features of interest in the tables.

10.51First, contract-related cases were over one third of the total. And, it is likely agreements for sale and purchase were in some sense contract disputes also. Fair Trading Act cases were close to 20 per cent, as were leaky building claims. Many other categories, however, had only one or two claims.

10.52As a comparison, in the Commercial Court in London some 1331 claims were issued in 2011. Around 54 per cent of these related to breach of contract, agreement or debt.

10.53As to commercial work “diverted” away from the High Court to alternative dispute resolution, the Commission is not, and nor is anybody else, in a position to get behind the decisions made by commercial solicitors, their clients and senior counsel as to why and how much work goes in a particular direction outside the High Court. Those discussions are confidential, and we cannot “discover” them out of court records. Patently, a number of factors must enter into such a decision, amongst which must be practical accessibility to justice, cost, and the timeousness and quality of a given result.

10.54We do, however, consider that the concerns expressed by commercial solicitors and counsel that this diversion is occurring are entitled to real weight. It seems there has been a respectable “bleeding off” of civil litigation where there is a choice of the means of disposal of a dispute. That aspect, according to the Bar, has contributed to the rise, or at least fuller use of, alternative dispute resolution, and less use of the formal civil justice system.

10.55It is difficult to see that trend not continuing. “Mediated justice” is now an established fact-of-life. It integrates law and lawyers with the psychological and social realities of people living together. It is a more robust justice where interests, perceptions and entitlements are all given weight. Settlements are not mere capitulations to the over-whelming costs and delays of litigation. Traditional “adjudicated justice” is certainly under pressure from the concern of “mediated justice” to integrate the rule of law with the present needs and interests of real people. A failure to deliver what consumers really want, and need, will inevitably deal a severe blow to the future prospects of adjudicative civil justice.153

Qualitative assessment

10.56Leaving aside such statistical evidence, there is the awkward question of whether there is a want of confidence in some High Court judges, particularly in the commercial law area.

10.57It has been suggested to the Commission, and asserted in some professional literature, that some High Court judges are regarded as professionally “weak” in this area. And that this has had the unfortunate effect – given that litigants do not know what judge they are going to get in advance – of diverting some work away from the courtroom door, at the outset. Counsel, or so it is said, do not want the courtroom risk of an underperforming judge.

10.58Whatever the truth of those assertions in individual instances, submitters in general expressed real confidence in the High Court judiciary in New Zealand. There are objective ways of checking this. One is to ask how New Zealand judgments are received in other jurisdictions. In a good number of instances they have been referred to with approval by other senior courts. One example is the case of Guardian News and Media Limited v City of Westminster Magistrates Court in the United States of America,154  where Lord Justice Toulson (with Lord Neuberger concurring) approved and relied on a judgment of the Supreme Court of New Zealand.
10.59Another test is whether overseas institutions and persons will actually resort to New Zealand as a jurisdiction for their business affairs. New Zealand is considered to have sophisticated levels of advice from lawyers and accountants, and a judiciary that is relatively advanced in understanding trusts.155  Tax legislation requires the disclosure of details of foreign trusts by New Zealand resident trustees of foreign trusts. The Inland Revenue Department has advised us that since October 2006 there have been approximately 7,500 foreign trust registrations. That does not suggest some kind of crisis of confidence in this jurisdiction.

10.60Statistics are not all: how things present themselves to the business sector is an important intangible element. And there can be little doubt, given the worldwide acceptance of its importance in many jurisdictions, that the actual “availability” – regardless of the numerical impact – of a commercial court or panel is perceived to be of some moment. It is a confidence factor in a particular jurisdiction that is not easily quantified.

10.61Part of the strategy of the present New Zealand administration is to encourage a growing and vibrant economy. Commercial disputes are necessarily part of any such regime. Efficient and adequate dispute resolution mechanisms are an important support mechanism. So is “certainty” in commercial law. That can only be supplied by the courts. Mediators and arbitrators need to know what the current legal context is in which to assess matters which come before them. In that sense, in-court and out-of-court dispute mechanisms are complementary.

Managerial improvements

10.62The point was rightly made to the Commission that, in rules of court terms, what were “innovations” in the Commercial List have, along with further developments, taken (or are about to take) their place in the standard Rules. That has been the lasting legacy of the Commercial List: overall, better case management.

10.63That, by itself, will not however yield up what seems to be at the heart of the concern of the Bar and the commercial community: the need for judges who “know” their commercial law through and through, for ready application in the particular case.

Personnel problems

10.64Patently, a number of the present High Court judges do not welcome the prospect of a number of judges being “siphoned off” from the general High Court pool to serve a respectable percentage of their time on a commercial panel.

10.65Our response is three-fold. It is the proper needs of the public which come first. Secondly, distinctions have always had to be made in the judiciary, for particular purposes, such as divisional appellate courts and the like. The judicial principle has to be that a judge serves where, and as, required. Thirdly, as we suggested in Issues Paper 29, “panel judges” should still be required to do other High Court work.

147Ministry of Justice “Annual Report 1 July 2010 – 30 June 2011” at 4. At the time of writing, this was the most recent Report available to the Commission <www.justice.govt.nz>.
148At 47.
149At 51.
150This is reflected in what is made available to the High Court, for inclusion in the High Court Review which is published on the Courts of New Zealand website. Those figures too, are globalised, not broken down.
151Ministry of Justice (UK) “Judicial and Court Statistics 2011” <www.justice.gov.uk>.
152At 10.
153A very pessimistic assessment – that civil litigation as we know it in the Senior Courts will come to an end – has been proffered by Hon John Doyle AC, the retiring Chief Justice of South Australia, in “Imagining the past, remembering the future: the demise of civil litigation” (2012) 86 ALJ 240. He states (at 245): “The unpalatable fact is that the distinctive features of our common law system of civil litigation are the sources of the problems that are strangling our system.” See also S Righarts and M Henaghan “Public Perceptions of the New Zealand Court System: An Empirical Approach to Law Reform” (2010) 12 Otago Law Review 329; G Davies “Can Dispute Resolution be Made Generally Available” (2010) 12 Otago Law Review 305; L Arthur “Reform of the Civil Justice System: The New Meaning of Justice and the Mitigation of Adversarial Litigation Culture” (2011) 19(2) Waikato Law Rev 160.
154Guardian News and Media Limited v City of Westminster Magistrates Court in the United States of America [2012] EWCA Civ 420.
155Mark Bridges “Recent international trust cases will have a material impact on the trusts industry” (paper presented to the Society of Trusts and Estate Practitioners, New Zealand Trusts Conference, Auckland, March 2012).