Paine v Carter Holt Harvey Ltd - [2019] NZHC 1614

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-001143

[2019] NZHC 1614

UNDER
the Consumer Guarantees Act 1993, Fair Trading Act 1996 and

High Court Rule 4.24

BETWEEN

DAVID ERIC PAINE and LYNDA CAROLINE BOWERS

First Plaintiffs

…/Plaintiffs cont over

AND

AND

CARTER HOLT HARVEY LIMITED

Defendant

AUCKLAND COUNCIL and ORS

First to Twenty-Ninth Third Parties

Hearing: 24 June and 1 July 2019

Counsel:

AS Ross QC and RA Havelock for Plaintiffs

JG Miles QC, M Heard and ED Nilsson for Defendant FP Divich for Second to Eight, Tenth, Thirteenth,

Seventeenth to Nineteenth, Twenty-First to Twenty-Third, Twenty-Fifth, Twenty-Seventh and Twenty-Ninth Third Parties (granted leave to withdraw, abides decision of the Court)

Judgment:

11 July 2019

JUDGMENT OF DOWNS J

This judgment was delivered by me on Thursday, 11 July 2019 at 3 pm
pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:
Lee Salmon Long, Auckland. AS Ross QC, Auckland.
JG Miles QC, Auckland. Heaney and Partners, Auckland.

PAINE v CARTER HOLT HARVEY LTD [2019] NZHC 1614 [11 July 2019]

KEVIN BRYAN START and FLORENCE ELIZABETH START
Second Plaintiffs

DONALD BRAMWELL JACKSON and HEATHER MAY PROCTOR JACKSON, and DONALD BRAMWELL JACKSON, HEATH MAY PROCTOR JACKSON and HOLLAND BECKETT TRUSTEE
No. 11 LIMITED as Trustees of the Jackson Family Trust 2011
Third Plaintiffs

STEPHEN MATHEW DEVCICH, JESSIE DIANA DEVCHICH and JOHNNY CHARLES AUGUST as
Trustees of the Devcich Family Trust Fourth Plaintiffs

Table of contents

The issues [1]

Abuse of process application

Did the plaintiffs require permission to bring their claim?  [5] Wrongful encouragement of meritless claims by misleading information? [22] Comparisons with the Crown’s claim  [30]
Other means of redress  [37]
About the value of the claim  [43]
Many meritless claims?  [55]
The funding agreement  [61]
Carter Holt’s submission  [67]
Analysis  [68]
Discovery  [84]
Do the statements to the National Business Review amount to an abuse of process?      [88]

Permission to appeal in relation to particulars and an associated stay [95]

Principle  [97]
Arguable errors of significant importance to Carter Holt?  [98]
Issues of wider significance or precedential value?  [113]
A stay pending appeal?  [117]

Directions in relation to the plaintiffs’ application for case management [120]

Costs [123]

The issues

[1] Shadowclad is a form of external cladding. It is made, supplied and promoted by Carter Holt Harvey Ltd.1 The plaintiffs have Shadowclad on their homes. On 13 June 2018, the plaintiffs filed a claim against Carter Holt, alleging Shadowclad is inherently defective. The claim is representative. And, funded by a litigation funder.

[2] On 7 June 2019, Carter Holt filed an application to stay or dismiss the claim. Carter Holt contends it is an abuse of process. Carter Holt submits the claim has been brought without the Court’s (necessary) permission; the plaintiffs’ solicitor made misleading statements in promoting the claim; and funding arrangements are objectionable. Taken together, Carter Holt contends an exceptional remedy is justified.

1 Carter Holt.

[3] The plaintiffs refute Carter Holt’s analysis 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: [2019] NZHC 1614
Decision Date: 11 July 2019

CaseChat Overview and Summary

This case involves a claim brought by multiple plaintiffs against Carter Holt Harvey Ltd, alleging that the company's Shadowclad product is inherently defective. The defendant argues that the claim should be dismissed or stayed due to an alleged abuse of process, as well as concerns about the funding agreement and misleading statements made by the plaintiffs' solicitor. The High Court of New Zealand dismissed the abuse of process application, finding that the plaintiffs did not require permission to bring their claim, the solicitor's statements were not misleading, and the funding agreement did not constitute an abuse of process. The Court also declined permission for an appeal and a stay pending appeal, and granted timetable directions in relation to the plaintiffs' application for case management, including staged trials. Costs were awarded to the plaintiffs.

The court found that the plaintiffs did not need to seek permission to bring their representative claim, as those represented had agreed to the proceeding. The court rejected Carter Holt's argument that funded representative proceedings require close supervision by the courts, and held that the funding agreement did not assign the causes of action to the funder or constitute an abuse of process. The court also found that the solicitor's statements, while some were misleading, did not amount to an abuse of process. The court granted timetable directions for the plaintiffs' application for case management, including staged trials, and declined permission for an appeal and a stay pending appeal. Costs were awarded to the plaintiffs.

Orders