Contents

Chapter 13
Jurisdiction of the courts

High Court and District Court jurisdiction

RECOMMENDATION

R40 The new Trusts Act should provide that:
(1) The High Court has jurisdiction to hear any matter and make any order under the proposed new Trusts Act. It should have exclusive jurisdiction to determine any proceeding under the new Act where the amount claimed, or the value of the property claimed or in issue, is more than the upper limit of the equitable jurisdiction of the District Court specified in section 34(1) of the District Courts Act 1947 (currently $200,000) or any replacement provision.
(2) The District Court should have jurisdiction under the new Act (concurrent with the High Court) to determine any proceeding where the amount claimed or the value of the property claimed or in issue is not more than the upper limit of the equitable jurisdiction of the District Court (currently $200,000).
(3) The District Court should also have jurisdiction (concurrent with the High Court) to determine any proceedings or applications (such as an application to appoint or remove a trustee) that does not involve any claim for money or property.
(4) Where the District Court and High Court have concurrent jurisdiction the person who commences proceedings (the applicant) may decide whether to commence the proceedings in the District Court or High Court.
(5) Section 43 of the District Courts Act 1947 should apply to the transfer of proceedings commenced in the District Court. The effect of this would be that:
(a) where the proceedings involve a claim for money, relief or property with a value that exceeds the amount specified in section 43 (currently $50,000) a defendant may object to the proceeding being determined in the District Court and have the proceeding transferred (as of right) to the High Court; and  
(b) where the proceedings do not include a claim for money, relief or property with a value that exceeds the amount specified in section 43 a defendant wishing to transfer the proceedings must apply to the District Court for an order removing the proceedings to the High Court. Proceedings that do not include any claim for money, relief or property fall within this category under section 43.
Notes
(1) The Government has announced, in response to the Law Commission Report Review of the Judicature Act 1908: Towards a New Courts Act that new courts legislation soon to be introduced will increase the upper financial limit of the District Court's equitable jurisdiction from $200,000 to $350,000 and will increase the threshold specified in section 43 over which claims may be transferred as of right to the High Court from $50,000 to $90,000.
(2) Section 237 of Te Ture Whenua Maori Act 1993 will apply to give the Māori Land Court all of the powers of the High Court under the proposed new Trusts Act in respect of trusts to which Te Ture Whenua Maori Act 1993 applies.

Concurrent jurisdiction for the High Court and District Court

13.3Civil jurisdiction is divided between the High Court and District Court primarily on the basis of the monetary value of the matter in dispute. The District Court, like the High Court, has a broad civil and equitable jurisdiction. Over the years, since the Trustee Act 1956 came into force, the District Court’s jurisdiction has expanded in equity, as well as in other areas. Parliament gave the District Court its current broad equitable jurisdiction in 1992. Under section 34(1)(a) of the District Courts Act 1947, the District Court now has the same general equitable jurisdiction as the High Court providing the amount claimed or the value of the property in issue does not exceed the monetary threshold set.

13.4Conceptually, we consider that it makes little sense for the District Court to have the same general equitable jurisdiction as the High Court but not to have jurisdiction to exercise powers under a new Trusts Act. We consequently recommend that the District Court should have all the tools that are necessary to exercise its equitable jurisdiction effectively in respect of trusts and thus should have concurrent jurisdiction with the High Court for matters under a new Trusts Act. This is consistent with the District Court now being a court of general civil jurisdiction.

13.5Submissions on the Preferred Approach Paper largely opposed the proposal that the District Court should have jurisdiction under the new Act. Some did acknowledge that conceptually the proposal made good sense given the respective civil functions of the two courts. However, submitters from within the legal profession were concerned that the District Court does not currently have the capacity to adequately handle potentially complex trust litigation. Many of these submissions consequently argued that the High Court should retain exclusive jurisdiction. We have considered these submissions but have not been persuaded by them.

13.6We do not think that a special case can be made for trust law on the basis that it is inherently more complex than other areas of equity. Some trust cases do certainly involve complex issues, but so do other civil cases. In any event, many matters that will come before the courts under the proposed new Act will be straightforward and routine in nature. Many applications, such as approving the replacement of a retiring trustee or issuing a vesting order, will only rarely involve difficult legal questions.

13.7We accept that some matters do raise complex legal issues and are consequently better brought in the High Court. However, it is not necessary to reserve jurisdiction exclusively to the High Court on all matters just to deal with this group of proceedings. Our view is that, provided the High Court retains concurrent jurisdiction, and there are appropriate powers of transfer, this is sufficient to deal with the needs of complex trust cases.

13.8There are significant differences between the civil processes used in the District Court and High Court. Some submitters expressed concern over the suitability of the current District Court civil process for trust claims. They consider that the standard capsule procedure is poorly suited to the identification of legal issues and their prompt and efficient resolution. These submitters argued that the High Court originating application process is much better suited to trust disputes and that the High Court Part 18 procedure should be adopted as part of the District Court Rules if the District Court is to have jurisdiction.283

13.9Submitters also questioned whether there would be any real cost advantage for litigants bringing proceedings in the District Court rather than the High Court. Some suggested that the cost differences are not significant. Our position is that irrespective of the comparative costs involved for litigants, concurrent jurisdiction still increases the range of options litigants will have, and in that sense at least, must improve access to justice. We think that for appropriate cases, the District Court should be available to provide a lower level dispute resolution option. While this matter does not come within our review, there has been significant concern expressed by the profession over aspects of the District Court procedure. Those matters are for the Rules Committee to address.

13.10Our recommendation allows litigants to elect to file their claims in the High Court rather than the District Court if they consider that the High Court should hear the case, even if the amount in dispute is within the District Court’s jurisdiction. Below we discuss our recommendations for transfer to the High Court where a party objects to the matter being determined in the District Court.

The jurisdiction of the District Court

13.11Currently section 34(1)(a) of the District Courts Act grants the District Court “the same equitable jurisdiction as the High Court”, so long as “the amount claimed or the value of the property claimed or in issue” is no more than $200,000. The upper limit of $200,000 set for the court’s equitable jurisdiction is the same as the upper limit set by the Act for all civil claims. Where proceedings do not involve a claim or dispute over money or property the District Court has the same equitable jurisdiction as the High Court.

13.12Relevant here is the Government’s recent announcement in response to the Commission’s Report Review of the Judicature Act 1908: Towards a New Courts Act.284 The Government intends to introduce new courts legislation implementing the majority of the recommendations in that Report. It is proposed that new courts legislation will increase the upper financial limit of the District Court's civil jurisdiction to $350,000.285 In our view this should apply to trusts cases.

13.13The District Court should also have jurisdiction, concurrent with the High Court, to determine any proceedings (such as those to appoint or remove a trustee) that do not involve any claim for money or any claim or issue over property. This means that irrespective of the value of the assets in the trust, that court could determine any proceeding or application under the new Act that does not involve any claim for money or property.

13.14There should also be an ability to transfer proceedings to the High Court where proceedings are commenced in the District Court. After considering whether any special arrangements for transfer are needed, we have determined that section 43 of the District Courts Act, which covers the transfer of civil proceedings to the High Court, should apply to proceedings under the new Trusts Act. Under section 43 a defendant in a proceeding may give notice objecting to the proceeding being determined in the District Court. A defendant has the right to have the proceeding transferred to the High Court where the sum sought, or the value of property or relief claimed, exceeds $50,000. The Government’s proposed new courts legislation will increase this threshold from $50,000 to $90,000.286

13.15Where the proceeding does not include any claim for money, relief or property, or the claim falls below the threshold for transfer as of right, section 43 provides that any transfer of the proceeding will be at the discretion of the District Court. The Court may order that the proceeding be transferred if it is satisfied that some important question of law or fact is likely to arise.

13.16Our recommendation is that section 43 (or its replacement) should apply to proceedings under the proposed Trusts Act.

Jurisdiction of the Māori Land Court will continue unchanged

13.17For completeness, we also note that nothing we recommend here alters the current jurisdiction of the Māori Land Court. Under section 237 of Te Ture Whenua Maori Act 1993 the Māori Land Court has, in relation to trusts to which that Act applies, the same powers and authorities as the High Court, including those conferred by statute. Jurisdiction under the new Trusts Act will therefore consequently flow through to the Māori Land Court which will retain its current jurisdiction.

283High Court Rules, pt 18.
284Cabinet Social Policy Committee Government response to the Law Commission’s report: Review of the Judicature Act 1908: towards a new Courts Act (Ministry of Justice, April 2013).
285At [68].
286At [70].