When a client or customer refuses to pay, it’s more than a headache – it can threaten the health of your business. Most business owners start with polite reminders, but when weeks drag into months it’s important to recognise where negotiation ends and formal debt recovery begins.
“Currently, disputes around $30,000 often move from the Disputes Tribunal into the District Court,” explains Ritvik Roop, Litigation Solicitor at Corban Revell Lawyers.
“However, the Tribunal’s jurisdiction is set to increase to $60,000, so soon this threshold may change. Above that, or if the matter is especially complex, you may even be in the High Court. Knowing these thresholds early helps you decide your next move.”
Understanding the New Zealand Landscape
New Zealand offers several forums for recovering a debt, each with different rules and costs:
- Disputes Tribunal: handles claims up to $30,000. Lawyers cannot represent you at the hearing, but legal advice beforehand strengthens your case.
- ⚠️ Recent Legislative Update: As noted, Disputes Tribunal’s financial jurisdiction is set to increase from $30,000 to $60,000. The bill has passed its first reading in New Zealand Parliament. This means more disputes will be handled faster and more affordably, helping protect business cash flow.
- District Court: for claims above the Disputes Tribunal limit (currently $30,000, set to rise to $60,000). Lawyers can act for you and seek costs.
- High Court: for claims over $350,000 or matters involving complex commercial issues, multiple parties, or urgent injunctions.
The right forum isn’t just about the dollar figure. Urgency, the debtor’s location, the strength of your contract, and the type of relief you need (like asset freezing or liquidation proceedings) all play a role.
Before You Take Legal Action
Even when court action is possible, judges expect you to show that you tried to resolve the dispute. That means:
- Clear documentation – contracts, invoices, emails and payment terms proving the debt exists.
- Formal demand – a professionally drafted letter or statutory demand for companies, setting a deadline and warning of legal action.
- Negotiation or mediation – a structured conversation or mediation session can sometimes bring faster payment than litigation.
“A well-crafted demand letter often succeeds where repeated phone calls fail,” says Ritvik. “It signals that you’re serious and gives the debtor a final chance to settle before costs escalate.”
Recoverable Costs
Successful claimants can usually recover:
- Principal debt
- Interest (if your contract allows or under the Interest on Money Claims Act)
- Legal costs awarded at the court’s discretion
Accurate contracts make a difference. Clear payment terms and clauses about interest or costs strengthen your position.
Why Legal Guidance Matters
Court processes are technical, with strict filing deadlines, service rules, evidence requirements, and enforcement options. Corban Revell’s Litigation team helps you:
- Prepare airtight demand letters and statements of claim
- Choose the right forum and strategy for your debt size and complexity
- Enforce judgments using charging orders, garnishee orders, or company liquidation
“Many clients come to us after trying to do it alone and hitting roadblocks,” Ritvik notes. “Getting advice early often saves both time and money.”
Keeping Your Business Protected
Strong contracts, clear credit terms, and regular credit checks reduce future risk. Corban Revell can review your agreements through our Commercial Law team and help build procedures that protect cashflow long before a payment is missed.
But even with these measures in place, overdue payments can still occur. When they do, our Litigation team can:
- Advise on the best forum: Disputes Tribunal, District Court, or High Court
- Draft demand letters that prompt settlement
- Represent you in court and enforce judgments
- Review contracts to strengthen future protection
Contact our team or reach out directly to Ritvik Roop for a tailored debt recovery strategy.