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DOING BUSINESS IN NZ: Dispute resolution

01 June 2015

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The structure of New Zealand’s courts

The District Court is the court of first instance for most criminal prosecutions and many civil cases.  In criminal cases, whether the District Court has jurisdiction often depends upon the nature and seriousness of the alleged offence.  In civil cases, the District Court will have jurisdiction if the amount in dispute is NZ$200,000 or less.  Above that amount, the claim must be advanced in the High Court.  The High Court also has exclusive jurisdiction in certain matters as directed by statute, e.g. under the Companies Act 1993.
A judgment of a first instance court may be appealed.4  There is generally one right of appeal – from the District Court to the High Court or from the High Court to the Court of Appeal.  Second appeals require the leave of either the court appealed from or the court appealed to.  All appeals to the Supreme Court require the leave of that court. 
The Supreme Court does not entertain appeals for the sole purpose of error correction, and will generally not grant leave unless:
  • the appeal involves a matter of general or public importance
  • a substantial miscarriage may have occurred, or may occur unless leave is granted5  or
  • the appeal involves a matter of general commercial significance.
The Court of Appeal is therefore the final appellate court for most cases.

Specialist tribunals

Outside the hierarchy of general courts is a range of courts and tribunals with limited jurisdiction6  or, more commonly, jurisdiction over specialist subject-matter.  The specialist courts and tribunals include:
  • the Employment Relations Authority and the Employment Court, which have exclusive jurisdiction in respect of disputes arising out of the employment relationship
  • the Environment Court, which has civil and criminal jurisdiction in relation to environmental matters, under the Resource Management Act 1991
  • the Taxation Review Authority, which has jurisdiction to resolve certain disputes between the Commissioner of Inland Revenue and taxpayers, and
  • the Weathertight Homes Tribunal, which has jurisdiction to adjudicate on claims by private property owners who believe that their residences have been damaged as a consequence of leaky building syndrome.
The decisions of the specialist tribunals may be appealed to, or reviewed by, the generalist courts.  The court having jurisdiction to hear the appeal is prescribed by statute.7  In some cases leave is required in order to appeal,8 and some appeals are restricted to questions of law.9

Criminal prosecutions

With the exception of contempt of Parliament and contempt of court, all criminal offences in New Zealand are prescribed by statute.  The sentencing options available in respect of each statutory offence are also prescribed by legislation (usually the same statute as that which creates the offence in conjunction with the Sentencing Act 2002).
Although many offences may be prosecuted by individuals (referred to as “private prosecutions”), in practice offences are prosecuted by the Crown Solicitor or by the government department or institution having responsibility for the statute which is alleged to have been breached.10
In New Zealand, Prosecution Guidelines do not permit a prosecutor to initiate or to invite a “plea bargain” in any criminal proceeding.  However, it is permissible for a defendant to propose an arrangement whereby the defendant will enter a guilty plea either to some existing or amended charges, on the basis that other charges will be withdrawn or amended.

Rights and obligations imposed on litigants

Individuals are entitled to represent themselves before any court or tribunal, although most choose to be represented by lawyers.11  All lawyers authorised to practise in New Zealand have the right to appear in court. 
It is therefore unnecessary to instruct a lawyer practising solely as a barrister for appearances in court.  If a barrister is instructed, regulations generally require that the instruction be via a solicitor – meaning that the litigant will require a lawyer authorised to practise as a barrister and solicitor to act, in addition to the barrister sole.
In contrast to individuals, bodies corporate must ordinarily be represented by a lawyer.12  Only in exceptional circumstances will the generalist courts permit an unqualified representative (for example, a director) to appear on behalf of a body corporate.

Disclosure of documents

In criminal proceedings, the prosecution is required to disclose relevant documents to the defendant.  There is no corresponding requirement on the defendant.  In civil cases, each party is ordinarily required to disclose relevant documents to the other party or parties.  Disclosure may be required on a general basis or in relation to specific issues only, but in either case each party must disclose both documents which support the party’s case and documents which are adverse to it.
Certain documents are excluded from the disclosure requirement.  The most commonly used exceptions are for communications between the party and his or her legal adviser and between the parties for the purpose of attempting to resolve the dispute.  The existence of such documents must be disclosed, but ordinarily not the documents themselves.
Protections may also be sought for documents which are highly confidential or commercially sensitive.  A common protection directed by the courts is for such documents to be disclosed to the other party’s legal advisers and external experts, but not to the party himself or herself.

Court fees and costs awards

Fees are imposed for certain steps in civil proceedings and are usually payable by the party instigating that step.  For example, the party commencing a proceeding must pay a filing fee (currently a maximum of NZ$1,350.00 in the High Court).  Similarly, the plaintiff must usually pay a fee for each hearing day after the first (currently NZ$1,600.00 per half-day in the High Court).
In New Zealand, the generalist courts have an absolute discretion to award costs and disbursements to any party or parties to an application or proceeding.13  However, costs awards are ordinarily calculated on scales which are set out in the applicable Rules of Court.  Costs awards calculated on this basis often equate to between 25% and 50% of the costs actually incurred by a litigant, with the result that a proportion of the costs incurred are irrecoverable.  Disbursements (including the amount of fees charged by the court) are usually recoverable in their entirety.

Alternative dispute resolution for civil disputes

Civil disputes are often resolved by negotiation directly between the parties or by mediation.  Such resolution may occur at any time, whether before or after judgment in any proceeding, but most often resolution occurs before trial (or, in some cases, shortly after a trial has begun).  The courts encourage resolution of disputes by the parties, and it is a requirement for many civil proceedings in the District Court that the parties first attend a judicial settlement conference before a trial is allocated.14
Civil disputes may also be resolved by private arbitration, pursuant to the Arbitration Act 1996 (which is based on the Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law).  Some contracts provide for arbitration in the event of a dispute,15  but parties may also agree to arbitrate after a dispute has arisen.
Footnotes

4    In certain circumstances, some decisions of the District Court and the High Court may be reviewable by the High Court instead of 
      being appealed.

5    The ground of substantial miscarriage of justice is largely restricted to criminal proceedings.  It would be rare for the Supreme Court 
      to grant leave to appeal on this ground for a civil matter.

6    The Disputes Tribunal, for example, has limited jurisdiction to resolve some civil disputes involving amounts not exceeding 
      NZ$15,000 (or NZ$20,000 with the agreement of all of the parties).

7    Appeals from the Employment Court are to the Court of Appeal.  Appeals from the Environment Court and the Taxation Review 
      Authority are to the High Court.  Appeals from the Weathertight Homes Tribunal are to the District Court or the High Court depending
      upon the amount in issue.

8    For example, decisions of the Employment Court may be appealed to the Court of Appeal.  However, such appeals first require the 
      Court of Appeal to grant leave.

9    Appeals from the Employment Court and the Environment Court are restricted to questions of law, while appeals from the Taxation 
      Review Authority and the Weathertight Homes Tribunal may be on questions of law and/or fact.

10  Some Government institutions, such as the Serious Fraud Office, also have a panel of lawyers in private practice who provide 
      advice to the institution and/or act on behalf of the institution in prosecuting offences.

11  Such representation is permitted in most courts and tribunals, with the main exception being the Disputes Tribunal.  Matters before 
      the Disputes Tribunal tend not to be complex, and parties are generally not permitted to be represented by a lawyer.

12  Except in the Disputes Tribunal

13  Costs awards are to reimburse the party in whose favour the award is made for legal fees incurred, and the award may not exceed 
      the legal fees actually incurred by that party.

14  A judicial settlement conference (JSC) is a negotiation between the parties, facilitated by a judge and held in chambers.  If a JSC 
      does not result in a resolution between the parties, the judge who presided at the JSC is not permitted to preside at any 
      subsequent trial, unless the parties consent or the only matter for resolution at trial is a question of law

15  Such provisions are most common in agreements between commercial parties.  There are some restrictions on imposing 
      requirements to arbitrate in contracts between commercial parties and consumers (see, for example, s 11 of the Arbitration Act 
     1996).