How could COVID-19 affect court proceedings?

Wednesday, March 18, 2020

Preparations for dealing with COVID-19 are underway in businesses across New Zealand. But what happens to any court proceedings that are currently underway, or are about to be?

Existing proceedings?

At present, there is no change to existing procedures. All courts are operating normally. The courts have asked all people who are scheduled to appear at court not to attend if they are feeling unwell. They will try to arrange phone appearances for anyone who is unable to attend in person.

The courts will also consider whether any additional changes may be necessary in the future, such as options for remote hearings, and relaxed or modified filing deadlines.

About to issue proceedings?

For most claims you have six years from when something happened to file proceedings in court. This time frame is governed by the Limitation Act 2010, and the courts have no jurisdiction to extend this.

If you have a claim that is almost six years old, you should consider either issuing proceedings as soon as possible, or asking the other party if they will enter into a standstill agreement. A standstill agreement can stop time from running for limitation purposes, and allow additional time for the parties to try to resolve the claim before proceeding are issued.

Dealing with a statutory demand

Statutory demands have very strict time frames, requiring a company to file and serve an application to set aside the demand within 10 working days, or to pay the demand within 15 working days. These time frames are set by the Companies Act 1993, and as such, the courts have no jurisdiction to allow additional time.

Be aware that failing to pay a statutory demand is an act of insolvency. Even if you pay that debt later, it may be grounds for other businesses that you deal with to cancel your contract.

If you are served with a statutory demand, contact your lawyer as soon as possible. In the event that an office is closed and lawyers are self-isolating, those who are not ill will be working remotely, and will be able to assist you.

What if the court is closed when you need to file something?

If the court is required to close as a result of COVID-19, the statutory time periods do not stop running. However, if the time for filing documents runs out while the court is closed, usually any documents can be filed on the day that the court reopens.

When the time frames for filing documents are governed by the courts’ rules, the courts have the freedom to extend these times at their discretion. This will include the time frames for filing defences to claims, and procedural steps leading up to a hearing.

Where, as above, time frames are set by legislation, the court does not have the jurisdiction to unilaterally extend time.

The Interpretation Act 1999 extends a limitation period which expires on a non-working day to the next working day, however the definition of working days is specific, and does not exclude additional days on which the court is ordered to close.

In the High Court Rules, court registries must be open every day that is not a court holiday. Court holidays include any days on which the court and registries are closed under an order relating to epidemics and emergencies, and therefore if the court is closed because of COVID-19 it will be considered to be a court holiday. The rules then provide that “when the time for doing any act at a registry of the court expires on a day on which that registry is closed, so that that act cannot be done on that day, the act is in time if done on the next day on which that registry is open.”

This means that if a statutory time limit expires while the court is closed because of COVID-19, the documents will be filed in time if they are filed on the first working day after the court reopens.

If you have any questions or concerns about your court proceedings, please contact a member of our litigation and dispute resolution team.

 

Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.‚Äč