It should not be confused with New Zealand's "old" Supreme Court, which was a superior court that was established in 1841 and continued in 1980 as the High Court of New Zealand. The name was changed in anticipation of the eventual creation of a final court of appeal for New Zealand that would be called the "Supreme Court".
The inaugural bench (with the exception of the Chief Justice, who had automatic appointment) were the most senior judges of the New Zealand Court of Appeal at the time. Their appointment to the new Court was said to have been based on seniority and merit. The maximum bench under statute is six judges.
Several acting Judges have also been appointed to sit whenever a permanent judge was unable to do so due to illness or a conflict of interest. These judges were appointed from the retired judges of the Court of Appeal and including Justices Sir John Henry, Sir Ted Thomas, former President of the Court of Appeal Sir Ivor Richardson and former Chief Justice Sir Thomas Eichelbaum. Acting judges only sit on substantive appeals, and not applications for leave, due to the requirement for appeals to be heard en banc by five judges.
On 4 May 2005, Attorney General Michael Cullen announced the appointment of Justice Sir John McGrath of the Court of Appeal to the Supreme Court bench as its sixth permanent judge. On 21 February 2006, the Honourable Sir Noel Anderson (at the time President of the Court of Appeal) was appointed to the Supreme Court. Thus the promotion of the most senior Court of Appeal member has continued. This practice was broken with the appointment of Justice Bill Wilson in December 2007 after having served less than a year as a judge of the Court of Appeal.
While the suggestion of ending appeals to the Privy Council had been around since the Statute of Westminster Adoption Act 1947, proposals to end appeals to the Privy Council began in the late 1970s, when a Royal Commission on the judiciary canvassed arguments for replacing the Privy Council. In the early 1980s, Minister of Justice Jim McLay suggested their abolition. Proposals for an indigenous final appellate court can be traced back to 1985. In 1996, Paul East, Attorney-General of the Bolger government, proposed to end the status of the Privy Council as the country's highest court of appeal. The proposal got as far as a Bill being introduced into Parliament. However, this Bill met with little support from within the National Party, and the Bill was not carried over by the next Parliament following the 1996 general election.