Rules for default judgments clarified

By Andrew Beck*

Following a number of cases identifying the lack of any proper procedure for formal proof hearings in the High Court, the Rules Committee developed a proposal to clarify and update the rules relating to obtaining judgment by default.

The default judgment rules had not been overhauled when the High Court Rules were introduced in 1986 or when the rules were revised in 2009.

While the rules regarding liquidated demands had given little difficulty over the years, there was almost no guidance regarding default judgments in other situations. It was to a large extent left to individual judges to decide how to proceed, and the extent to which the court would become involved in ensuring that default judgment would be appropriate in the circumstances.

The initial proposal by the Rules Committee was to have one track for liquidated demands and another for all other applications for default judgments. The matter would be required to be heard before a judge, and the plaintiff would be required to have all its witnesses available for questioning by the court.

Substantial submissions were made to the Rules Committee by the New Zealand Law Society, with assistance from its Civil Litigation and Tribunals Committee.

As a result of these submissions, a number of changes were made to the proposed rules. In particular, the default position will be that the plaintiff’s witnesses will not be required to attend as a matter of course. The ability to obtain default judgment without a hearing has been retained in relation to undefended claims for delivery of land or chattels.

The new regime will only come into effect when the next High Court Amendment Rules are brought into force. It will provide for judgment in respect of liquidated demands to be granted by the Registrar as at present. “Liquidated demand” is now defined in the rules, in essentially the same terms as in Paterson v Wellington Free Kindergarten Association Inc [1966] NZLR 75 (CA). The Registrar will also be able to grant judgment for delivery of land or chattels.

In all other cases – where the claim is unliquidated or seeks other forms of relief – the matter will be listed for a formal proof hearing before the court. The plaintiff will then have to file affidavit evidence to support its claim.

Either before or at the formal proof hearing, the court may advise the plaintiff that some or all of its witnesses will have to attend for questioning by the court.

Once the matter has been listed for formal proof, no statement of defence may be filed without the leave of the court. If a defendant wishes to contest the claim on any basis, either as to liability or quantum, it will be necessary to obtain leave to defend on the grounds that there would otherwise be a substantial miscarriage of justice.

* Andrew Beck is the convenor of the New Zealand Law Society’s Civil Litigation and Tribunals Committee.

This article was published in LawTalk 795, 11 May 2012, page 17.