On 14 June 2012 the latest District Court Rule changes came into effect. They see the return of the summary judgment procedure for all claims in the District Court and expand the circumstances in which a plaintiff can seek default judgment. These changes will be welcomed by credit institutions in particular, as they will allow them to obtain judgment faster and with lower legal costs in a straightforward debt recovery action.
These changes remove an anomaly between the High Court and the District Court. In the High Court summary judgment is generally available as of right. In the District Court, from 2009, it had only been available in limited circumstances. The High Court has jurisdiction for claims over $200,000; while the District Court deals with claims below this threshold.
Prior to 2009, where the defendant had no reasonably arguable defence to the claim, a plaintiff in the District Court could apply for summary judgment at the time of filing a claim (or later with leave of the Court). It was also available to a defendant where the District Court was satisfied that none of the causes of action in the claim could succeed, although it was used less often in that context. Under these rules, summary judgment was a cost effective and efficient process to obtaining judgment in the face of an unmeritorious claim or defence, without the need to proceed to a full trial.
The District Court Rules were amended in 2009 and substantially narrowed the availability of procedures relating to summary judgment. Claims were allocated a "short trial", "simplified trial" or "full trial" depending on the complexity of the claim. Summary judgment was no longer available for a claim allocated to a short trial. While the summary judgment process was still available for claims allocated to a simplified trial or a full trial, it was only available at a much later stage in the proceeding. In particular, the parties had to proceed to serve Information Capsules and attend a judicial settlement conference before a party could apply for summary judgment. As a result, a plaintiff would incur significant legal costs and would be six months into the proceeding before it could make the application. In practice, this meant many defended debt recovery proceedings ran to a full (short) trial, incurring greater legal costs than under the "old" summary judgment procedure.
Last week's amendments to the District Court Rules make summary judgment available for all claims and at a much earlier stage in the proceeding.
A party can now apply for summary judgment within 20 working days after the date by which the defendant is required to serve its response.1 Once the party has filed an application for summary judgment, the proceeding "stands still" until the summary judgment application has been determined by the Court. This means that the parties are not required to serve Information Capsules unless the summary judgment application is unsuccessful. If the application is successful, judgment will be given and the proceeding concluded.
The circumstances in which a plaintiff can seek default judgment have also been expanded. Previously, default judgment was only available if the defendant did not serve the plaintiff with either its response or its information capsule within the requisite period. Default judgment can now be sought where the defendant's response does not disclose any defence to the claim or contains an admission of the facts which are the subject of the claim.
These rule changes will make litigating in the District Court in the face of an unmeritorious or spurious claim or defence significantly less onerous for parties.