Glasson v Earthquake Commission

[2017] NZHC 2749

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2016-409-000343 [2017] NZHC 2749

BETWEEN

PETER LLOYD GLASSON AND ANNE

MARJORIE GLASSON AND DRL TRUSTEES LIMITED AS TRUSTEES OF THE PETER AND ANNE GLASSON FAMILY TRUST

Plaintiffs

AND

THE EARTHQUAKE COMMISSION First Defendant

AND

SOUTHERN RESPONSE EARTHQUAKE SERVICES LIMITED Second Defendant

Hearing:	8 November 2017 via telephone conference
Counsel:	D J C Russ for the Plaintiff No appearance for the First Defendant A R Tosh and A L Holloway for the Second Defendant
Date:	9 November 2017

JUDGMENT OF NATION J

[1]      I convened this hearing to deal with an application by the plaintiffs (the

Glassons) for particular discovery and for leave to make the application.

[2]      These proceedings relate to an earthquake damage claim which is to proceed to trial on 13 November 2017.  For various reasons, referred to in earlier minutes, the

parties, particularly the second defendant (Southern Response) and their experts, have

GLASSON & ORS v SOUTHERN RESPONSE [2017] NZHC 2749 [9 November 2017]

been under intense pressure to ensure all parties will be ready to proceed at that time. The Glassons have however recently discontinued their claim against EQC.

[3]      The close of pleadings date for this proceeding was 22 September 2017.

[4]      On 22 September 2017, the Glassons filed a first amended statement of claim. It pleaded, for the first time, an election by Southern Response to cash settle its claim. An amended statement of defence to the amended statement of claim was served on

17 October 2017.  In it, Southern Response denies it made such an election.

[5]      In their application for further discovery, the Glassons say Southern Response made the claimed election through a Southern Response Press Release from their Chief Executive dated 7 October 2016, an announcement made by Southern Response at an annual public meeting on 7 October 2016 and in a publication of a statement by Southern Response on its website (and in a printed booklet “A Guide to Receiving Your Settlement”).

[6]      They say that, in response to queries, Southern Response has said that, since 1

December 2016, they have received 295 notifications of claims which have gone over- cap.  Of those 295 claims, 28 claims have been cash settled.

[7]      In their application, the Glassons sought discovery within two days of:

(a)       all documents relating to those 28 claims which had been cash settled;

(b)      all documents relating to the 267 claims notified as being over-cap;

(c)      all documents relating to the booklet referred to, including but not limited to Board meetings,  meeting minutes,  agendas  and  internal correspondence; and

(d)all documents relating to Southern Response’s decision to alter its website so as to remove references to Southern Response’s position on the  cash  settlement  of  claims  notified  as  being  over-cap  from  1

December 2016, including but not limited to Board meetings, meeting minutes, agendas and internal correspondence.

[8]      The Glassons say these documents are relevant to the issue of whether there was the claimed election, are part of the factual matrix which has to be considered. They also said Southern Response has put its subsequent conduct in issue through referring to the 28 customers having asked to be paid in cash and the way a claims manager for Southern Response has, in a brief of evidence, referred to the way they are dealing with claims from other customers.

[9]      Southern Response oppose the making of the orders on the basis of:

(a)      the unfair burden such discovery would place on Southern Response when they are under considerable pressure in preparing for the trial;

(b)Southern  Response  made  an  election  to  repair  in  2015  when  it undertook $270,000 of repairs to the property and that election is irrevocable;

(c)      the Glassons and Southern Response have been on notice that Southern Response was facing an over-claim since May 2016 when the Glassons sued Southern Response and provided documents suggesting the repair costs would be $1,919,000 and rebuild costs of $1,855,000;

(d)the test as to whether an insurer has elected is an objective one requiring the Court to examine the conduct between the parties from the perspective of a reasonably bystander. Necessarily, that focus is on the nature of the communications between the insurer and the insured. They said this did not require discovery of commercially confidential and/or private communications in settlement documents between Southern Response or other customers or access to internal documents that were never communicated or intended to be communicated to the Glassons; and

(e)      Southern Response said that it had responded to queries from the Glassons as to post-7 October 2016 claims out of courtesy but considered the information was not relevant to the issue over whether there had been an election as between the Glassons and Southern Response. To the extent there had been a reference to such information

in briefs of evidence, they were willing to remove those portions of the evidence.

[10]     I  heard  from  Mr  Russ  and  Mr  Holloway  further  during  the  telephone conference.  Both confirmed they wanted me to deal with the application through the conference and that their respective positions had been adequately set out in the memoranda they had provided.

[11]    At the conclusion of that discussion, I indicated I had considered their memoranda and what they had said to me, and had concluded Southern Response should not have to make the discovery which has been sought.  I said I would give reasons for that decision the next day.  I now do so.

[12]     As was also accepted by Mr Russ for the Glassons, the test as to whether and what election Southern Response made is an objective one.  I agree the focus must be on the communications between Southern Response and the Glassons in the whole of the context in which those occurred.  It is apparent from counsel’s memorandum that the Glassons are relying on statements made publicly by Southern Response around October 2016.  Whether or not those statements meant there had been an election as between the Southern Response and the Glassons has to be considered in the context of the particular relationship between the Glassons and Southern Response.   That context must include all that had happened with regard to their claim previously and the positions which the parties had adopted in the proceedings that had been started in the High Court before then.

[13]     How Southern Response may have communicated with other claimants is unlikely to be of any probative weight in proving what communications there had been as between Southern Response and the Glassons, particularly so where it was not suggested through counsels’ memoranda that there is any dispute as to just what those communications were.

[14]     Because the test is an objective one, documents or information as to what the Southern Response Board, managers or other personnel may have thought or intended with regard to the desirability or possibility of cash settling other claims is likely to be of no relevance to the issues as to election which the Court is being asked to determine.

[15]     The prospect of the documents being sought becoming relevant is further reduced by reason of the Glassons relying on statements made publicly as to claims which were “notified and passed over to [Southern Response] as being over-cap  aft er

1 December 2016”.1     It is apparent that the Glassons’ claim had been notified to

Southern Response before 1 December 2016.

[16]     Because this application is being made after the close of pleadings date, it can be made only with leave.  To obtain such leave, the Glassons need to show that this would be in the interests of justice, would not significantly prejudice other parties, or cause significant delay.2

[17]     Given the constraints Southern Response are under in preparing for the trial, I consider requiring them to discover all the documents sought would place an unfair burden on them.  Discovery of the documents sought is unlikely to assist either the parties or the Court in determining what is at issue in the proceedings.  Discovery as sought would be likely to require Southern Response to disclose documents as to their dealings with other parties in respect of which those other parties would be entitled to have their privacy respected.  The material, such as Board minutes, meeting minutes, agendas and internal correspondence, is likely to be commercially sensitive.  That alone would not be a reason for refusing discovery of at least parts of those documents but is a further reason not to require discovery where, on the information that is before the Court, it appears that such documents are likely to be of little, if any, relevance or probative value as to the issues which the Court will have to deal with at trial.

[18]     For all these reasons, the Glassons’ application for leave to  seek  further discovery is declined.

1      This quote is from Mr Russ’ memorandum supporting the application.

2      Elders Pastoral v Marr [1987] 2 PRNZ 383.

Solicitors:

Fletcher Vautier Moore Lawyers, Nelson
Chapman Tripp, Wellington

DLA Piper, Auckland