Contents

Chapter 12
The District Courts

Civil jurisdiction

Issues Paper 29

12.11Issues Paper 29 raised the question of the appropriate civil jurisdiction limit of the District Courts.173  We noted that the current limit of $200,000 was set in 1992 and that, due to inflation, that amount would be worth more than $300,000 in today’s money.174

12.12We then went on to comment that the District Courts are the “people’s courts” and are intended to be the primary courts of first instance, and that there are valid arguments that the limit should be even higher than $300,000 (for example, New South Wales and Queensland both are at A$750,000). However, we noted that a decision such as this involves substantive issues of policy, including questions of geographical and financial accessibility, and considerations regarding the most efficient and cost-effective forum, the need to balance civil and criminal matters, and the availability and expertise of judges.

Submissions

12.13Almost all submitters were in favour of increasing the upper limit of the District Courts’ jurisdiction. The lone dissenter argued that the procedure for bringing a claim in the District Courts is not amenable to complicated claims, which might involve multiple causes of action or more than two parties, and said that claims of a higher value are more likely to be complicated claims.

12.14However, even if it is right that the District Courts are not well placed to handle complicated claims (a point which is debatable), we do not accept that the value of a claim is necessarily a proxy for how complicated it is.175  In any event, we are not suggesting the District Courts have any exclusive jurisdiction (a point we return to below), or the ability to apply to transfer a claim from the District Court to the High Court, when the relevant conditions are met,176  be disturbed.177

12.15In terms of the size of any increase in the civil jurisdiction limit, there was disagreement as to the level to which it should be raised. Some favoured an increase to only the inflationary measure of $300,000, while others suggested $400,000 or $500,000.

12.16The District Courts’ Civil Committee advocated most strongly for an increase to $500,000. In its view, such an increase would mean more litigants could utilise the District Courts’ “settlement first” approach, which would increase access to justice. It also noted there are now more specialised civil designated judges (who are specifically trained in case settlement and with civil litigation and commercial backgrounds) on the District Courts bench, and inflation alone does not reflect the growing transactional, commercial and land values in New Zealand’s economy. A limit of $500,000 was also the most popular option (with 45 per cent support) in a survey the New Zealand Bar Association conducted of its members (56 per cent of members said the jurisdiction should be increased).

12.17The New Zealand Law Society submitted that the civil jurisdiction limit should be $400,000, but did not provide any reasons why, other than that the A$750,000 limits in New South Wales and Queensland appear too high for New Zealand circumstances.178  Those who favoured $300,000 (including the Senior Courts’ judges) seemed to base this solely on the inflationary measure.

Our view

12.18We consider that, ideally, the civil jurisdiction limit should be raised to $500,000, largely for the reasons advanced by the District Courts’ Civil Committee. We also note that the matter may not be looked at again for a long time, and therefore a limit of $500,000 seems reasonable.179

12.19We say “ideally” because, as noted in Issues Paper 29, it is difficult to gauge what effect such an increase might have on, for example, the number of District Courts and judges required. We have discussed this with the Ministry of Justice, which agrees there may be resourcing implications from any significant increase to the jurisdiction of the District Court. However, while the Ministry does not have adequate data at this time to ascertain just what these would be, it considers they would likely be relatively minor.

12.20Our recommendation is, therefore, to raise the limit to $500,000, but this can only be provisional until such time as modelling can be done by the Ministry to determine the practical effect of such an increase and whether it is in fact feasible.

12.21Finally, as noted above, it was also suggested to us that, in addition to increasing the civil jurisdiction limit in the District Courts, those Courts should have exclusive jurisdiction up to a certain level.180  Again, though, to take into account the fact that claims of low value may still be complicated, we prefer a concurrent regime, as there is at present, with the ability to transfer a case between the courts where the relevant conditions are met.181

R56 The upper limit of the civil jurisdiction of the District Courts should be increased to $500,000 if this is feasible in terms of judicial and court resources.

173Review of the Judicature Act 1908: Towards a new Courts Act, above n 167, at [6.14]-[6.18].
174Updating these figures, $200,000 in Q1 of 1992 is now $315,049.83 in Q2 of 2012: New Zealand Inflation Calculator <www.rbnz.govt.nz>.
175Indeed, we made the same point back in 1987: see Law Commission The Structure of the Courts (NZLC R7, 1989) at [197].
176District Courts Act 1947, s 43.
177We do expect, though, that if the District Courts’ civil jurisdiction limit is increased then the $50,000 minimum value of the claim before transfer can be effected as of right (s 43(1)) would also need to be increased. It is, at present, one quarter of the civil jurisdiction limit, and we would expect that it would remain at approximately that proportion.
178At the other end of the scale, they consider that the jurisdiction of the Disputes Tribunal should be increased to $50,000. We simply note this, as it is a matter which falls outside our Terms of Reference.
179We note that, since 2000, New Zealand’s CPI (“consumer price index”) inflation has averaged around 2.7%: “Key graphs – inflation” Reserve Bank of New Zealand <www.rbnz.govt.nz>.
180For instance, the District Courts’ Civil Committee suggested that this should be $100,000 (against a civil jurisdiction limit of $500,000).
181District Courts Act 1947, ss 43 to 48.