Claims Resolution Service Ltd v Pfisterer - [2021] NZHC 1088

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-649

[2021] NZHC 1088

BETWEEN CLAIMS RESOLUTION SERVICE LIMITED
Plaintiff

AND

LUCIA RENATE PFISTERER

First Defendant

AND

GRANT SHAND BARRISTERS AND SOLICITORS

Second Defendant

Hearing: 5 to 9 October 2020

Appearances:

A Barker QC and G Davis for the Plaintiff

M Smith and J Tocher for the First Defendant
A Darroch and J Thomson for the Second Defendant

Judgment:

21 May 2021

JUDGMENT OF HINTON J

This judgment was delivered by me on 21 May 2021 at 4:45 pm pursuant to Rule 11.5 of the High Court Rules

…………………………………………………………………… Registrar/Deputy Registrar

Solicitors/Counsel:
Andrew Barker QC, Auckland Canterbury Legal, Christchurch GCA Lawyers, Christchurch
Thorndon Chambers, Wellington Darroch Forrest Lawyers, Wellington

CLAIMS RESOLUTION SERVICE LTD v PFISTERER [2021] NZHC 1088 [21 May 2021]

TABLE OF CONTENTS

Background [2]

Factual findings [60]

Issues [65]

Misleading conduct by CRSL by misrepresenting that it would provide

ongoing funding “in a timely manner”  [68]
Unconscionable bargain by CRSL  [82]
Breach of contract by CRSL  [99]
Independent quantity surveyor and lawyer  [102]
Requirement to seek instructions before issuing proceedings  [107]
No right to cancel or to damages  [113]

Breach of fiduciary duty by GSBS [120]

Failure to obtain informed consent to act with conflicts of interest [124] Failure to advise on fee information and funding arrangements [142] Failure to advise on commencement of litigation [150] Failure to obtain and follow informed instructions on settlement [153] Disclosure of confidential information [157]

Breach of fiduciary duty by CRSL [159]

Breach of duty of loyalty  [165]
Causing/assisting breaches of fiduciary duty by GSBS  [171]
Conclusion  [172]

[1] This proceeding arises out of the Canterbury earthquakes. It involves a claim by Claims Resolution Services Limited (CRSL) against Lucia Pfisterer for fees in the sum of $93,744.95. There is no dispute over the quantum of the fees but Mrs Pfisterer raises affirmative defences and counterclaims for misleading and deceptive conduct, unconscionable bargain, breach of contract by CRSL and breach of fiduciary duty by both CRSL and Grant Shand Barristers and Solicitors (GSBS). Mrs Pfisterer says that as a consequence no money is owing and she seeks damages against CRSL and GSBS.

Background

[2] As is well known, the Canterbury earthquakes of 2010-2011 caused significant destruction to property and buildings throughout the Canterbury region. Mrs Pfisterer owned and lived in a property in Opawa that suffered major damage. She had purchased the property in May 2009 for $351,500.00.

[3] Mrs Pfisterer had home insurance with AMI Insurance, whose liabilities were subsequently taken over by Southern Response Earthquake Services Ltd (Southern Response).

[4] Like many others in the wake of the Canterbury earthquakes Mrs Pfisterer faced difficulties processing her insurance claim.1 For over two years she dealt with the Earthquake Commission (EQC) and Southern Response trying to get coverage for her claim. She regularly called EQC asking for help and for them to accurately record all the damage to her house. Mould grew throughout her house and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NZHC 1088
Decision Date: 21 May 2021

CaseChat Overview and Summary

The High Court was asked to determine whether Claims Resolution Services Limited (CRSL) was liable for fees claimed against Lucia Pfisterer, following an earthquake insurance claim. Pfisterer raised affirmative defences and counterclaims against CRSL and Grant Shand Barristers and Solicitors (GSBS), alleging misleading and deceptive conduct, unconscionable bargain, breach of contract by CRSL, and breach of fiduciary duty by both CRSL and GSBS. Pfisterer also sought damages against CRSL and GSBS. The court found against Pfisterer on all counts, including Pfisterer’s claims against CRSL for misleading conduct, unconscionable bargain, and breach of contract. The court also found against Pfisterer on her claims against GSBS for breach of fiduciary duty. The court found that GSBS breached its fiduciary duty of loyalty and good faith to Pfisterer in continuing to negotiate the terms of settlement and filing a memorandum in court after their instructions had terminated. However, the court found against Pfisterer on the remedies sought and otherwise found against her affirmative defences and counterclaim. Judgment was entered for CRSL in the sum of $93,744.95.

Orders