Chapter 6 - The District Courts

Civil Jurisdiction

Upper limit

As noted in chapter 2, the District Court can generally hear civil claims where the amount in dispute is not more than $200,000,126 although there is provision for a defendant to require a claim for more than $50,000 to be transferred to the High Court.127

The upper limit of the District Courts’ civil jurisdiction has remained unchanged since 1992.128  It has been suggested in preliminary consultation that it is time that the upper limit was revisited. Inflation has significantly reduced the actual value of $200,000 – the value of $200,000 in 1992 is today more than $300,000.129  Accordingly there is an argument that the upper limit of the civil jurisdiction should be significantly increased just to take account of inflation.

Apart from arguments related to inflation, the District Courts are intended to be the “people’s courts” – local, readily accessible, providing justice speedily with a minimum of formality and expense. They are also intended to be the primary courts of first instance. There are valid arguments to be made as to the desirability of allowing a greater number of litigants to choose the manner in which their claims are decided by increasing the jurisdiction of the District Courts. We note that District Courts in the somewhat comparable jurisdictions of New South Wales and Queensland both have jurisdictional limits of A$750,000.

A change to the upper limit of the District Courts’ civil jurisdiction involves substantive issues of policy. Relevant considerations include questions of geographical and financial accessibility. Many ordinary New Zealanders may find themselves involved in disputes involving more than $200,000. It is important that they are able to gain access to the court system.

This in turn requires consideration of the forum in which civil proceedings can be conducted most efficiently and cost-effectively, and the relative workloads of the District Courts and the High Court. If the criminal workload of the District Courts has to be accorded priority, this may affect both the availability of judges and potentially their expertise in civil cases. A significant increase in the upper limit of the District Courts’ civil jurisdiction may also reduce the amount of civil litigation that the High Court hears. All these matters need to be carefully considered and weighed in the balance.

Q17

Should the upper limit of the civil jurisdiction of the District Courts be increased?

Q18

If so, should the upper limit be $300,000 (to take account of inflation), or should the upper limit be increased further?

Specific exclusions and exceptions to the District Courts' civil jurisdiction

Some specific sections of the District Courts Act 1947 have been drawn to our attention as potentially requiring consideration. First, there are some qualitative restrictions on the civil jurisdiction of the District Courts. Section 29(1)(a) of the District Courts Act 1947 limits the courts’ jurisdiction to hear and determine any proceeding for the recovery of land – there is no such jurisdiction except as otherwise provided in the Act. Section 31 of the Act goes on to set out those recovery of land matters in which the District Courts do have jurisdiction – essentially cases in which the rent payable is $62,500 or less, or the land has a value of $500,000 or less; cases in which a tenant has refused to quit the land; or a person is unlawfully in possession of it.

Section 31 predates the passage of the Residential Tenancies Act 1986. Most of the work relating to recovery of land now falls within the exclusive jurisdiction of the Tenancy Tribunal. As with the general civil jurisdiction of the courts, the upper limits of $62,500 and $500,000 have not been amended since 1992, and are now worth significantly less in real terms.

Section 29(1)(b) of the Act provides that the District Courts have no jurisdiction where title to a franchise is in question. The word “franchise” does not bear its modern meaning (a sole right given to a person to engage in a particular business within a defined area) – instead it has a limited and technical meaning: a royal privilege or branch of the Crown prerogative subsisting in the hands of a subject.130 This exclusion was introduced in 1947, having not featured in earlier legislation relating to the District Courts. It has been suggested that the object of the exclusion was to ensure that a particular class of action was reserved for the exclusive jurisdiction of the High Court – namely actions involving the validity of any privilege granted by royal prerogative – and that historically and judicially it is appropriate that such issues should be determined by a superior court.131

We suggest that the language of this section should be clarified to make it clear that it is not intended to exclude ordinary commercial franchises from the jurisdiction of the District Court.

Section 33 of the District Courts Act 1947 specifically gives the District Courts jurisdiction in respect of disputes between Building Societies and their members. This section has been overtaken by the expansion of the civil jurisdiction of the courts, and appears to be redundant.

Equitable jurisdiction

Section 34 of the District Courts Act 1947 provides that District Courts have equitable jurisdiction for claims up to $200,000, except where a statute provides otherwise. Concerns have been expressed to us by some lawyers in the course of this review, and in the Law Commission’s review of the law of trusts, about retaining equity jurisdiction in the District Courts. However, on closer examination those concerns appear to relate to the exercise of the jurisdiction rather than its existence.

In any event, the jurisdiction seems to be practically necessary. If a person brings a claim for specific performance and/or damages where the subject matter of the dispute is around $150,000, it would be Dickensian to have to go off to the High Court just for the specific performance decree.

District Courts Act 1947, ss 29 and 31.

District Courts Act 1947, s 43.

When it was changed by the District Courts Amendment Act (No 2) 1992.

Reserve Bank NZ Inflation Caculator: $200,000 in Q1 1992 = $313,431.43 in Q3 of 2011.

Catalina Video and Distributing Company NZ Ltd v Uncle Alberts Video Ltd [1991] DCR 12.

At 17.