Chip N Repair Limited v IAG New Zealand Limited
[2022] NZHC 2047
•18 August 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-004-1415
[2022] NZHC 2047
BETWEEN CHIP N REPAIR LIMITED
Plaintiff
AND
IAG NEW ZEALAND LIMITED
Defendant
Hearing: 11 July 2022 Appearances:
G Shand for the Plaintiff
D J Friar and S R Hiebendaal for the Defendant
Judgment:
18 August 2022
JUDGMENT OF HARVEY J
This judgment is delivered by me on 18 August 2022 at 4.30pm pursuant to r 11.5 of the High Court Rules.
.....................................................
Registrar / Deputy Registrar
Solicitors:
Grant Shand, Barristers & Solicitors, Auckland Bell Gully, Auckland
CHIP N REPAIR LIMITED v IAG NEW ZEALAND LIMITED [2022] NZHC 2047 [18 August 2022]
Introduction
[1] Chip N Repair Limited provides a windscreen repair service. It alleges that in August 2021, IAG New Zealand Limited, trading under various subsidiary entities, breached s 13(i) the Fair Trading Act 1986.1 CNR alleges that IAG did so by misrepresenting during a phone call to a policy holder, Amren Tuhoro, that his windscreen repair had to be completed by IAG’s preferred repairers (which CNR is not), when the practice is that policy holders can choose any service provider.
[2]CNR claims that, as a result of that misrepresentation, it has suffered a loss of
$1,098.25 from Mr Tuhoro. CNR also alleges generalised losses, a further estimated
$24,674 from other clients affected by similar misrepresentations based on an estimate of two repairs and one replacement per month, but has not provided particulars identifying the misrepresentations nor an amended statement of claim.
[3] IAG is the parent company for State Insurance and other insurance companies operating in New Zealand. IAG denies the claim and instead seeks summary judgment against CNR, arguing that the cause of action cannot succeed as the representation alleged was never made to Mr Tuhoro. Even if it had been, which is denied, it was not misleading. IAG also submits that there was no reliance by the policy holder, Mr Tuhoro, on the representation and so there was no loss suffered as a result. They have provided a full transcript and audio recording of the phone call at issue in support of their application for summary judgment.
Procedural history
[4] CNR commenced the proceeding on 31 August 2021, seeking a declaration that IAG is in breach of s 13 of the Fair Trading Act, and compensation for what it claimed are consequential losses. On 30 September 2021, CNR also applied under r 4.24 of the High Court Rules 2016 to sue as a representative of similarly affected independent repairers who do not have the resources to bring claims themselves.
1 Referred to for convenience as CNR and IAG respectively.
[5] On 29 November 2021, IAG filed both their notice of opposition and an application for summary judgment, and the next day filed an application to transfer the proceedings from the District Court to this Court. The latter application was not opposed by CNR. Accordingly, by minute dated 16 February 2022, the proceedings were transferred to this Court.2
[6] In that same minute, Wylie J directed that the application to bring representative proceedings should be heard after the determination of the summary judgment application, recording that he was “not persuaded that the issues are identical or even that the merits of the matter are likely to have any great bearing on either application”.3 Accordingly, the summary judgment application was scheduled for a one-day hearing on 16 May 2022.
[7] However, COVID related delays on the morning of the hearing meant that, as Powell J recorded in a minute on 16 May 2022, there was no choice but to adjourn the fixture to 11 July 2022.
Background
[8] As foreshadowed, IAG is the parent company behind State Insurance (inter alia) and, it is said, is New Zealand’s largest insurer. Ms Cooper, an executive manager of IAG, stated in her affidavit of 29 November 2021 that, among other services, IAG operates call centres where customers can make claims under the respective policies. Under the State Insurance brand, IAG provides car, house, contents, travel, business and insurance under 900,000 policies for more than 400,000 customers.
[9] CNR is a small company which carries out motor vehicle glass repair services. In his affidavit of September 2021, Okesene Ale, the sole director and shareholder of the company, confirmed that CNR was a trade name he used specialising in motor vehicle glass repairs. He incorporated the plaintiff company in 2020 under the same name. Mr Ale stated that about 95 per cent of his business is for customers that have motor vehicle policies with windscreen insurance cover. He further stated that dealing
2 IAG New Zealand Ltd v Chip N Repair Ltd HC Auckland CIV-2021-404-002372, 16 February 2022 (Minute of Wylie J).
3 At [8].
with IAG via its brands State, AMI and Lumley is different to other insurance providers, as IAG is averse to insured persons using services other than its preferred suppliers, which CNR is not, despite their promotional material stating that customers have the right to select their repairer.
[10] IAG accepted that in 2006 it was subject to criminal proceedings brought by the Commerce Commission under s 13(i) of the Fair Trading Act after IAG had misled customers about their right to choose a windscreen repairer. The circumstances of this appear to be that State Insurance brochures confirmed that policy holders could choose any company to carry out repairs but contact centre staff were telling customers that they had to use Smith and Smith. IAG pleaded guilty to the 30 charges and was convicted and sentenced by Judge A-M J Bouchier on 31 August 2006.4
The evidence for IAG
Smith’s insurance policy
[11] As Ms Cooper in her affidavit, and attaches as an exhibit, the standard policy wording provides that:
What you get if we accept your claim … Repairable
If the car is economic to repair in our opinion, we have the option to:
1. arrange for the car to be repaired as near as possible to the condition it was in before the loss happened, using parts and practice appropriate in the New Zealand repair industry, or
2. pay you the cost of repairs as estimated by our assessor. (emphasis added)
[12] Ms Cooper confirmed that under this policy, State has an option either to arrange for a windscreen repair to be done by a repairer that State chooses, or to pay the customer to get the windscreen repaired themselves. As a matter of practice, she says, State offers customers the choice as to where they will have their windscreen
4 Commerce Commission v IAG New Zealand Ltd DC Auckland CRI-2006-004-013973, 31 August 2006.
repaired. Under option 1, if the customer is happy to go with a repairer in State’s approved repairer network, then the customer will be directed to that repairer. Under option 2, if the customer would prefer to select their own repairer, Ms Cooper stated their practice is to allow them to do so, although State will request a quote for the work in advance to ensure that the cost is reasonable.
[13] State has an approved repairer network for claims under its car insurance policies. If repairs are carried out by an approved repairer, then there are benefits under the policy including a streamlined process (i.e. not requiring a quote being given to State for the work) and a repair quality guarantee from State for the work done for the time the policy holder is insured by State.
[14]State’s website states:
How do I get my windscreen fixed?
If you've got a chip or crack that you need fixed, you can lodge a claim directly with one of our preferred supplier. Phone 0800 80 24 24 and follow the prompts to 'windscreen claim' - you will be connected directly with a preferred supplier. You can also say 'windscreen' to Sam our ChatBot and he can help lodge your claim for you.
[15]On a page headed “Understating the Motor claim repair process and timing”:
3. Select a repairer
If we accept your claim, we’ll provide a list of preferred repairers to assess the damage to your vehicle and provide a quote
… When selecting your repairer, we’ll provide suggestions of our local preferred repairers for you to choose from. Ultimately, it’s up to you to decide where to get your repairs done and you don’t have to use one from the list. However, there are great benefits to having your repair carried out by one of our preferred repairers, like lifetime guarantees on repairs and workmanship.
4. Repairer assesses damage
Once you’ve selected your repairer and taken (or towed) your vehicle to them, they’ll assess the damage. If you’ve chosen one of our preferred repairers, they’ll be in touch to schedule your repair.
If you’ve chosen a non-preferred repairer, they’ll send us a quote for our assessors to look over and we’ll let you know if the repair costs are accepted. Once accepted you will be able to discuss scheduling in your car to be fixed with the repairer.
If your car is not repairable, we’ll be in touch to discuss the total loss settlement.
[16] Smith & Smith and Novus are among State’s approved repairers for windscreen damage. CNR is not an approved repairer.
The call with Mr Tuhoro and Mr van Komen
[17] At the centre of the dispute, and the context in which the alleged misrepresentation was made, is a phone call on 23 August 2021, between Mr Tuhoro and a State representative, named Lucky, regarding repair of Mr Tuhoro’s windscreen under his State insurance policy. For the majority of the call a Mr van Komen spoke as Mr Tuhoro’s authorised representative. CNR submitted that in the course of the phone call Lucky misrepresented to Mr van Komen, and thus to Mr Tuhoro, that he only had two options to repair his windscreen: Smith & Smith or Novus.
[18] IAG has provided a transcript of the call in support of its application, as well as an audio file, which had been recorded as is standard practice for calls to the call centre. Ms Cooper stated that Mr Tuhoro had not personally raised any complaint or issue with IAG regarding his claim.
[19] Mr Tuhoro is a customer of State who had a “Car Comprehensive” insurance policy, which was taken out on 16 April 2021, insuring a 2010 Mitsubishi RVR Wagon and which included windscreen cover. Ms Cooper also provided evidence about Mr Tuhoro’s policy, which was on the standard State insurance policy wording. This, she confirmed, showed that State had the option to arrange for the windscreen to be repaired or instead to pay for the cost of repairs, with an additional guarantee for repairs performed by State’s approved repair network.
[20] In the call at issue, Mr van Komen, apparently Mr Tuhoro’s cousin, began by explaining that he was calling to make a claim after a stone cracked his windscreen. He stated that his cousin, Mr Tuhoro had added him on his policy. Lucky explained to Mr van Komen that as the policy holder, Mr Tuhoro will have to call Mr van Komen to give him authority to make the claim. Mr Tuhoro eventually joined the call and gave the authority.
[21]Relevant for this claim, Lucky stated to Mr Tuhoro when he joins that call that:
Lucky: I don’t have any issue of sending your – I’ll fill in the form to Novus in the area to get them to contact you for repair of the windscreen damage for you.
Mr Tuhoro: That’s fine. Yes.
Lucky: Ok. No issue at all. I will … Because you do have windscreen extension cover, no excess on that so I don’t need to lodge any claim for you.
Mr Tuhoro: Ok. Thank you.
Lucky: Right. Ok. So what I’m going to do to fill I the form to send to Novus or Smith & Smith in the area and they will contact you as soon as the lockdown is over.
Mr Tuhoro: Yes, that’s fine.
[22] Mr Tuhoro then left the call while Lucky attempted to locate a Novus branch in the area. Mr Komen stated that Mr Tuhoro had to leave for a work call and that he could complete the discussion for him. Lucky confirmed that there was no difficulty with that. The conversation then continues:
Lucky: Ok. There’s a Novus Plus in – the closest one to you is 15 Palm Gove, [inaudible] Tauranga.
Mr van Komen: Ok. That’s good. Lucky: Yes. Yes. Ok. Right.
Mr van Komen: That’s my only two options. Smith & Smith or Novus. That’s ok if that’s my only two options. That’s ok. If that’s close.
Lucky: We may have other options as well. Mr van Komen: Oh, ok.
Lucky: But you think they are close enough. So just use them.
Mr van Komen: I can use them but if that’s my two … what other option I have?
Lucky: Let me see. We have Tauranga Windscreen Atlas.
Mr van Komen: Ok. Ok. So only those three. I can only use those ones. Lucky: Yes.
Mr van Komen: Ok. Only those options. Yes.
Lucky: So should I send the form to Novus now for you? Mr van Komen: Yes. Please. Yes.
[23] Mr van Komen then thanked Lucky. Lucky asked if there was anything else State could help Mr van Komen with. The call continued:
Mr van Komen: I saw on Facebook – that’s why I called my cousin and we do the windscreen because there’s a Facebook app. A Facebook app.
Lucky: Yes.
Mr van Komen: A business was saying – you know – they do the windscreen for you and so that’s why I call in. Can I use that business or do I have to use these ones.
Lucky: What other business? What’s their name?
Mr van Komen: It’s – let me look at the page. Hold on – one second let me look at the Facebook. That’s why I call – I want to use them but it’s ok if I don’t. Let me see real quick, Chip. It’s C-H-I-P … Chip N Repair.
Lucky: Ok, Chip N Repair Windscreen. I think that the one Novus. Hold on. We can look for you – I think they advertising for Novus people.
Mr van Komen: No it’s a Chip N Repair Facebook app [inaudible]. If you want to fix it but I’m not sure if I can use them or not.
Lucky: Komen what I can advise you is that they can do but they need to send a quote to us first. So it may take more time for you to get a repair, than for me to send directly to Novus right now.
Mr van Komen: Oh ok.
Lucky: because for any other, ah, not approved repairer from us they have to send a quote to us first. And then you need to wait for us to approve and then they will contact you after that to get your windscreen repaired or replaced.
So for the Novus here they are a big company. So one will contact you right now if they have the staff working at the same time as well. The Novus staff will contact you to overnight [inaudible] time and they overnight everything. So when the Covid is down to level 2 they will organise that for you to come in and just replace or repair for you right away so you don’t have to wait.
Mr van Komen: Ok.
Lucky: So that is the advantage of for people like Novus or Smith &Smith in the area of Tauranga [inaudible] They work with IAG so they do it quicker for you.
Mr van Komen: That’s nice.
Lucky: Yes. Alright? So I’ll fill in the form and send to Novus right now for you? Alright?
Mr van Komen: Yes. Thank you.
[24]Following the call, Mr Tuhoro sent a text to CNR stating:
Hey Junior [Mr Ale],
Just got off the phone with the state claims agent and she’s sent through my claim off to the closes [sic] Novice or Smith and Smith in my area. Sorry but unable to use you.
Enjoy your day and stay safe through this level 4 lock down. Cheers
The evidence for CNP
Affidavit of Amren Tuhoro
[25] Mr Tuhoro stated in a brief affidavit dated 19 January 2022 that, after the phone call with IAG, he was under the impression and understanding that Smith &Smith, Novus or Tauranga Windscreens were the only effective options he could use. Accordingly, he confirmed that he went with Novus to fix his windscreen but stated that if he had known that he could use CNR he would have done so.
[26]Mr Ale stated that, as a result, he lost Mr Tuhoro as a new customer worth
$1,098.25 including GST.
Alleged loss of other customers
[27] Regarding the other claimed losses, which are alleged but not particularised in the statement of claim, Mr Ale has provided affidavit evidence of several instances.
[28] Mr Ale stated that on 5 June 2020, Marguerite Toy, who was onsite at a Caltex Station in Hamilton where CNR was operating, agreed to have her windscreen chip repaired. On calling State while still onsite at the Caltex, a claims consultant told Ms Toy that IAG cannot use CNR because they could not guarantee their workmanship as they are not one of their approved repairers.
[29] Later that day, Mr Ale emailed IAG’s area manager to notify them of the issue. He noted in his email that “we later found out that the customer did NOT have glass coverage” (which Ms Cooper has also noted in her affidavit) and was happy to pay cash. Ms Adlam, team leader of the Customer Claims, responded on 16 June 2020:
I have made clear to the consultant the conversation they had with your technician was not acceptable … I have provided the claims consultant with appropriate feedback and customer conversations to use when taking a call from a non-aligned repairer and out customer. I have outlined and referred to training material to further highlight it’s the customer’s choice as to who they wish to use for their repairs and in the instance where the customer is already with the non-aligned repairer, the customer has made their choice and we simply must confirm policy coverage and advise no guarantee or repair and continue with no further discussion about the repairer necessary.
…
Further to this I also felt this was an opportune time to remind out claim lodgement teams about the conversations they have with our customers when discussing suppliers/repairers and they must “offer” our preferred supplier/repairer network to the customer not “recommend” … I will be taking this up with my colleagues to reinforce within their own team.
[30] On 28 July 2021, Mr Ale deposed that he called State to make a claim after having been given authorisation by a Ms Heather to act on her behalf. The agent asked him if he would like to go with “NOVUS or Smith and Smith?”. When he asked if those were his only two options, she responded “Yeah”. Mr Ale has provided a truncated transcript of the call.
[31] On 3 September 2021, Mr Ale stated that a Ms Heatherington reached out to him due to a promotional advertisement that CNR put on Facebook. Mr Ale attached a text from her which explained that she was told that she could not go with CNR:
I came across the Facebook post from chip n repair as I’d just got a chip it was perfect timing…made contact with them and got a reply within minutes and by the next day a phone call from them to confirm and connect woth [sic] my insurance company which is bnz [an insurance company also connected to IAG] to get the details…I gave them chip n repairs name and phone number and the bnz person said they couldn’t find it and it’s possibly not a real company and I should go woth one of their repairers being smith and Smith or novas..I believed chip n repair must be fake and I must go with Smith and Smith or novas if I want 6he [sic] chip fixed.it was very confusing for me and if I hadn’t been for chip n repair calling me back I would have been left thinking I was lucky to not be scamed [sic].
[32]Mr Ale claimed he lost a new customer worth $739.45 and $200 in advertising.
[33] Finally, Mr Ale stated that on 3 September 2021, an Amber Brown similarly reached out to CNR due to the Facebook ad, but was told when making a claim that she could only use them if Smith & Smith or Novus do not have the right windscreen. He attached a transcript of an audio recording which reads:
Amber: Um ASB [an insurance company linked to IAG] is saying that I can’t go through you. They’re saying that you’re not an authorised umm dealer of theirs and so unless Smith & Smith or Novus don’t have the windscreen then that’s the only time that I can go through you.
Mr Ale: No no no uhhhhh…so…man this is funny. This happens to us all the time.
[34] Mr Ale stated that other repairers face similar issues, and attaches a letter from Astrofix in Queenstown, another windscreen repair business, which claimed it has similar issues.
Affidavit of Daniel Gerard
[35] Daniel Gerard, who operates Astrofix, filed an affidavit in opposition to summary judgment dated 18 January 2022. Referring to exhibits attached to Mr Ale’s original affidavit, Mr Gerard pointed to two text messages from potential customers he lost who were told by their insurers they had to use Novus and Smith & Smith respectively. He also has had his MP write a letter to the Minister of Commerce which he attached identifying issues about IAG affecting his business, which is similarly attached. Mr Gerard stated that he estimated that he lost two jobs per month by reason of IAG incorrectly telling customers that they have to use Smith and Smith or Novus.
[36] In an affidavit in reply to Ms Cooper’s affidavit, dated 18 January 2022, Mr Ale states that he called State to make a claim for his car which is insured with them. He attached a transcript of the call, dated 17 January 2021, between himself and the customer representative, Roy, which relevantly reads:
Roy: …I’ll put you through to Novus this time. They’re pretty quick. And they’ll give you a call ASAP. Hopefully today. And book a time with you and fix your windscreen.
Mr Ale: Is novus and smith and smith the only two options I have?
Roy: No we have Instant Windscreens. We have Instant Windscreens, Smith and Smith and novus.
Mr Ali: Ok so those are the three options I can use aye? Roy: Yup.
Mr Ale: Ok I’ll use uhhh … I guess if those are the only three options, I guess I’ll use Novus.
Roy: So they’re like our preferred ones. So things will be pretty quick. Mr Ale: Ok.
[37]Mr Ale stated that he would suffer a loss of $138 for that job.
Legal framework and principles
[38]Rule r 12.2(2) of the High Court Rules 2016 provides that:
(2) The court may give judgment against the plaintiff if the defendant satisfies the court that none of the causes of action in the plaintiff’s statement of claim can succeed.
[39] The law applicable to the summary judgment application is well settled. The Court of Appeal in Stephens v Barron5 confirmed the approach to summary judgment as set out by Elias CJ in Westpac Banking Corp v M M Kembla New Zealand Ltd:6
(a)The defendant has the onus of proving on the balance of probabilities that the plaintiff cannot succeed. Usually this will arise where the defendant can offer evidence which is a complete defence to the plaintiff’s claim.
(b)An application for summary judgment will be inappropriate where there are disputed issues of material fact or where material facts need to be ascertained by the Court and cannot confidently be concluded from affidavits. It may also be inappropriate where ultimate determination turns on a judgment able to be properly arrived at only after a full hearing of the evidence.
(c)The Court must be satisfied that none of the claims can succeed. It is not enough that they are shown to have weaknesses. The assessment is not to be arrived at on a fine balance of the available evidence as would be appropriate at a trial.
(d)The residual discretion of the Court to refuse summary judgment would be properly invoked to avoid the oppression which would otherwise result if an application by a defendant for summary judgment would pre-empt a plaintiff exercising the right to amend the pleadings.
(e)Summary judgment should not be applied for unless the substantive merits of the case are clear and capable of summary disposal.
(footnotes omitted)
[40] As the Court of Appeal highlighted, a defendant seeking summary judgment has a considerable burden to discharge.7
[41]Section 13(i) of the Fair Trading Act 1986 provides that:
13 False or misleading representations
No person shall, in trade, in connection with the supply or possible supply of goods or services or with the promotion by any means of the supply or use of goods or services,—
5 Stephens v Barron [2014] NZCA 82 at [9].
6 Westpac Banking Corp v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA).
7 Stephens v Barron, above n 5, at [9].
…
(i) make a false or misleading representation concerning the existence, exclusion, or effect of any condition, warranty, guarantee, right, or remedy, including (to avoid doubt) in relation to any guarantee, right, or remedy available under the Consumer Guarantees Act 1993; or
[42] Accordingly, the Court must be satisfied that CNR’s claim under this section, even if amended, cannot succeed.
CNR’s submissions
[43] Mr Shand, for CNR, submitted that this is not a case where all claims are clearly hopeless, and that amendment can cure all issues. It is, he contended, too early in the process to summarily dismiss the proceeding, particularly given the effect of issue estoppel.
[44] Mr Shand stated that CNR is a small independent windscreen repairer. At this stage in proceedings, he submitted that CNR has identified and provided some evidence about IAG misleading policy holders about their ability to choose their windscreen repairer and that there will be much more evidence on the completion of discovery.
[45] Mr Shand argued that in its promotional material, public statements, and in house training manual, IAG states that it is the customer’s choice as to who they wish to use for their repairs. He stated that a further email from 16 June 2020 from the IAG team leader affirmed that it is the customer’s choice as to their repairer.
[46] Mr Shand submitted that contrary to those representations, IAG has (to CNR’s current knowledge and on their current evidence) on seven occasions from 2017 to 2022, told individuals that they had to deal with only Smith and Smith or Novus or Tauranga Windscreens.
[47] Mr Shand further contended that in 2006, IAG pleaded guilty to 30 breaches of s 13(i) of the FTA after the District Court found that IAG had misled customers about their right to choose a windscreen repairer when making an insurance claim. In that case, IAG material represented to customers that they were able to choose their
windscreen repairer, while IAG call centre staff had told a number of customers that they had to use Smith &Smith for the work. This, Mr Shand says, is very similar conduct to that evidenced in this present case.
[48] Mr Shand argued that IAG’s assertions that it has the right to choose the policy holder’s repairer cannot be reconciled with its statements that it is the customer’s choice as to who they choose to carry out repairs. IAG’s position also cannot be reconciled with the District Court decision in 2006.
[49] In any event, Mr Shand submitted, IAG only considers the alleged representations made to Mr Tuhoro contained in the statement of claim. Mr Shand argued that there is a conflict in evidence: Mr Tuhoro says he understood that he could not use CNR and so did not do so because of what IAG told him. At the very least, Mr Shand says, IAG dissuaded Mr Tuhoro from using CNR. The matter is accordingly not appropriate for summary judgment.
[50] Finally, Mr Shand argued that IAG does not comment substantively on the other alleged representations to other customers. The claim is capable of amendment, if required, and Mr Gerard could be added as a plaintiff, if required.
IAG’s submissions
[51] Mr Friar, counsel for IAG, submitted that the cause of action cannot succeed. He suggested, drawing on Tipping J’s comments in Marcol Manufacturers Ltd v Commerce Commission, that to establish a breach of s 13(i), CNR must prove that:8
(a)IAG made a representation;
(b)in trade;
(c)in connection with the supply of services;
(d)about the existence, exclusion or effect of a right, and
8 Marcol Manufacturers Ltd v Commerce Commission [1991] 2 NZLR 502 at 505 and 507.
(e)the representation was objectively false or misleading to a reasonable person in the position of the recipient, applying a reasonable degree of common sense.
[52] Citing Godfrey Hirst NZ Ltd v Cavalier Bremworth, Mr Friar submitted that where there have been several representations, the “dominant message” or “general thrust” of those representations is of “crucial importance” to determining whether they are misleading.9 Related representations cannot be isolated and analysed separately, he contended. Mr Friar accepted that IAG was acting in trade in connection with the supply of services. However, IAG did not make a false or misleading representation about Mr Tuhoro’s rights under the Policy and did not cause loss to CNR.
[53] Mr Friar submitted that the central issue is whether IAG correctly represented Mr Tuhoro’s rights under the Policy during the telephone call on 23 August 2021 to Mr Tuhoro and his authorised representative Mr Komen van Komen. He contended that the evidence demonstrated that IAG did not make the alleged representation, nor did they make any false or misleading representations. Lucky (IAG’s representative) explicitly said that Mr Tuhoro could use windscreen repairers other than Smith & Smith and Novus, and confirmed that Mr Tuhoro could use CNR, provided a quote was approved in advance. Mr Tuhoro’s affidavit where he stated that he was under the impression that “Smith & Smith, Novus or Tauranga Windscreens were the only effective options I could use” is irrelevant. The test under s 13 is objective and cannot withstand a reading of the call’s transcript. His text sent after the phone call stating that he was unable to use CNR did not reflect what he and Mr van Komen had been told.
[54] Mr Friar further submitted that even if IAG had made the alleged representation (which it did not), that representation would not have been misleading as, under their Policy, IAG was entitled to choose who repaired the windscreen. So the alleged representation, even if made, would have accurately reflected Mr Tuhoro’s rights. Under the Policy, IAG had the ability to choose whether to arrange for an authorised repairer to complete the work or to pay for the reasonable cost of a repair carried out by another repairer. IAG arranged for Novus to do so after confirming that
9 Godfrey Hirst NZ Ltd v Cavalier Bremworth [2014] NZCA 418, [2014] 3 NZLR 611 at [59].
it would be convenient and acceptable to both Mr Tuhoro and Mr van Komen. IAG had also said that the repair could be carried out by CNR if a quote was provided in advance and IAG approved. So, according to counsel, all representations were accurate as to Mr Tuhoro’s and IAG’s respective rights under the policy.
[55] Further, IAG’s conduct has not, Mr Friar argued, caused CNR to suffer loss. Section 43 of the Fair Trading Act requires, as set out in Red Eagle Corporation Ltd v Ellis, that the recipient of the misrepresentation was actually misled and that it was an effective or operating cause of loss.10 Counsel submitted that Mr van Komen decided, for Mr Tuhoro, to use a windscreen repairer other than CNR because it was more convenient. That decision was not made on the basis of the alleged misrepresentation, so there is no causal link to the loss claimed. Moreover, he cannot have been misled as there was no misrepresentation as to Mr Tuhoro’s rights under the Policy.
[56] Finally, on the basis of the estimated additional $24,674 claimed from other clients that were diverted by misrepresentation(s) by IAG, Mr Friar contended that nothing further is pleaded other than a vague assertion that cannot succeed.
[57] After the hearing, Mr Friar filed a memorandum on 15 July 2022 in response to discussion at the hearing on the point of issue estoppel. He emphasised that if summary judgment is granted, an issue estoppel would arise in relation to the alleged misrepresentations made to Mr Tuhoro only. An issue estoppel would not arise for any other customer. Entering summary judgment would not result in an issue estoppel preventing separate proceedings from being brought for alleged misrepresentations to other customers. IAG would defend any such claim if it did arise.
Discussion
[58] In an application for summary judgment on the part of the defendant, as set out above in r 12.2(2), the Court may give judgment against a plaintiff if the defendant satisfies the Court that none of the causes of action in the plaintiff’s statement of claim can succeed. The pleadings as set out in the statement of claim must be the focus, although noting any scope for amendment.
10 Red Eagle Corporation Ltd v Ellis [2010] NZSC 20 at [29].
[59] The case that CNP submitted at the hearing and in submissions and the cause of action as set out in the statement of claim are different. At the hearing, Mr Shand redirected the focus away from the phone call and the representation made to Mr Tuhoro to a more general claim that IAG was engaging in a pattern of behaviour generally and speaking to evidence of other alleged misrepresentations. Although some affidavit evidence has been provided in support, those are, however, not relevant to the current statement of claim.
[60] Without commenting on the availability of those claims generally, such arguments go beyond the scope of the pleading in the statement of claim. It records a single cause of action under s 13(i) of the Fair Trading Act, based on a single misrepresentation made and relied upon:
15.On about 23 August 2021 Lucky orally represented to Mr Tuhoro that the windscreen repair had to be carried out by Smith & Smith or Novus for State to cover the damage.
16.It was reasonable for Mr Tuhoro to rely on the representation(s) in paragraph 15 above.
[61] This is the sole alleged misrepresentation in the statement of claim, for which CNR says they suffered a loss of $1,098.25. The only reference to any additional misrepresentations made is at para 21 where the statement of claims reads:
The plaintiff estimates that it has lost a further $24,674 from other clients that were diverted by misrepresentation(s) by the defendant …
[62] That estimation is unsupported by any particulars and does not tie any specific misrepresentations to the generalised loss estimate. While some affidavit evidence has been provided in support of this more generalised claim, there has been no amendment of the statement of claim despite ample time to do so prior to the hearing.
[63] As noted in Westpac Banking Corp v M M Kembla New Zealand Ltd, a defendant will usually be granted summary judgment where they provide evidence which is a complete defence to the plaintiff’s claim.11 IAG has provided the transcript of the phone call containing the alleged misrepresentation. There is no suggestion that
11 Westpac Banking Corp v M M Kembla New Zealand Ltd, above n 6.
the call is not credible. The transcript confirmed that Lucky told Mr Tuhoro’s representative that he could use CNR:
Komen what I can advise you is that they [Chip n Repair] can do but they need to send a quote to us first. So it may take more time for you to get a repair, than for me to send directly to Novus right now.
[64] After Lucky explained that the advantage of Novus and Smith & Smith is that they work directly with IAG, with the result that the repair would be completed more quickly, Mr Tuhoro’s representative Mr van Komen replied “that’s nice” and apparently agreed to use Novus on that basis.
[65] I consider that the misrepresentation alleged in the statement of claim was not made. So, as limited to the present statement of claim, IAG has provided a complete defence to CNR’s cause of action based on the claimed misrepresentation made to Mr Tuhoro on 23 August 2021. The merits are clear and the case is capable of summary disposal.
[66] For completeness, as Mr Friar clarified, CNR’s concerns regarding issue estoppel are also misplaced. The summary judgment relates only to the alleged misrepresentation made to Mr Tuhoro on 23 August 2021. In the event that other customers have been affected, as Mr Friar has stated, summary judgment in this case will not prevent CNR from pursuing claims in relation to those matters.
Decision
[67]The defendant’s application for summary judgment is granted.
[68] Without having heard from counsel, my inclination is that costs should lie. However, if counsel take a different view, memoranda can be exchanged a month after the issue of this judgment.
Harvey J
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