Ross v Southern Response Earthquake Services Limited

[2021] NZHC 684

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-000361

[2021] NZHC 684

BETWEEN

BRENDAN MILES ROSS and COLLEEN ANNE ROSS

Plaintiffs

AND

SOUTHERN RESPONSE EARTHQUAKE SERVICES LIMITED

Defendant

Hearing:

30 March 2021

Appearances:

P G Skelton QC, K M Quinn and C B Pearce for Plaintiffs T C Weston QC and K-M M Paterson for Defendant

J S Cooper QC and J K Goodall for Claims Funding Australia Pty Ltd
S M Grieve for B & L Vickers and others

Judgment:

30 March 2021

JUDGMENT OF OSBORNE J

(on intervention applications (2)) (Result)

This judgment was delivered by me on 30 March 2021 at 4.45 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

ROSS v SOUTHERN RESPONSE EARTHQUAKE SERVICES LIMITED [2021] NZHC 684 [30 March 2021]

[1]                 This hearing was urgently convened to determine two interlocutory applications for leave to intervene in identified interlocutory aspects of the proceeding. The Court has scheduled for hearing on 12–14 April three applications of the parties:

(a)the plaintiffs’ application for notification orders;

(b)the defendant’s (amended) application for directions as to offering a settlement Package; and

(c)the plaintiffs’ application for a setting aside order.

Background

[2]                 In an earlier Result Judgment on previous intervention applications, I set out the background to the litigation which I now repeat in the following six paragraphs.1

[3]                 The plaintiffs, Brendan and Colleen Ross, by this proceeding are bringing a representative claim against Southern Response Earthquake Services Ltd (Southern Response). The claim relates to the settlement agreement that Mr and Mrs Ross entered into within Southern Response in relation to their insurance claim for damage to their house caused by the Canterbury earthquakes. They say that Southern Response provided them with incomplete information about the cost of remedying earthquake damage to their home. As a result they settled on a less favourable basis than they otherwise would have.

[4]                 Mr and Mrs Ross have been granted leave to bring a representative proceeding. Through Claims Funding Australia Pty Ltd and the Claims Funding Australia Discretionary Trust (collectively “CFA”), the Rosses have a litigation funder’s support for the proceeding.

[5]                 Initially, leave was granted by this Court on an opt in basis.2 The Court of Appeal allowed the Rosses’ appeal, substituting an opt out procedure for the opt in

1      Ross v Southern Response Earthquake Services Ltd [2021] NZHC 142 at [2]–[7] .

2      Ross v Southern Response Earthquake Services Ltd [2018] NZHC 3288.

procedure.3 The Supreme Court subsequently dismissed Southern Response’s appeal against the opt out procedure.4

[6]                 The judgment of the Supreme Court was delivered on 17 November 2020. Upon the request of counsel for both parties, this Court then made directions for the plaintiffs’ applications for notification orders and for a common fund order. In the meantime, Southern Response also filed an application for directions in relation to its communications with individual potential class members (“the communication application”).

[7]Hearing dates were subsequently allocated as follows:

(a)communication application — 15 February 2021 (one day allocated);

(b)notification order application — 22 March 2021 (two days allocated).

[8]The common fund order application has yet to be allocated a hearing date.

[9]                 The directions sought by Southern Response in its communication application became the subject of the scheduled hearing on 15 February 2021 and were refused.5 That led to Southern Response amending its application for directions concerning a settlement package, which is now one of the applications to be heard at the hearing commencing 12 April 2021.

The plaintiffs’ setting aside application

[10]              The main focus of the present intervention applications is upon the plaintiffs’ application for an order setting aside part of any settlement reached between Southern Response and class members after 12 March 2021, so as to ensure that if the Court subsequently makes a Common Fund Order or any other form of cost-sharing order, funds will be available to give effect to the Court’s order.

3      Ross v Southern Response Earthquake Services Ltd [2019] NZCA 431, (2019) 25 PRNZ 33.

4      Southern Response Earthquake Services Ltd v Ross [2020] NZSC 126.

5      Ross v Southern Response Earthquake Services Ltd [2021] NZHC 253.

CFA’s application to intervene

[11]              On 22 March 2021, CFA filed an interlocutory application for leave to intervene in the plaintiffs’ setting aside application. It applied for leave on identified grounds which Ms Cooper QC has appropriately summarised as falling into two categories:

(a)the assistance which CFA can provide to the Court through its specialist litigation funding knowledge and background both in Australia and New Zealand, the novelty of the legal issues involved meaning that this further perspective will be valuable to the Court; and

(b)the requirements of fairness and justice, given that CFA will be directly and substantially affected by the outcome of the setting aside application. CFA’s position is that it and the plaintiffs have different interests to protect. There will be little or no prejudice to the parties in having CFA intervene.

[12]              Of the parties, Southern Response has opposed CFA’s application, on articulated grounds. Those grounds may be broadly summarised as encompassing the following propositions:

(a)there is no reason to conclude that CFA and its counsel will bring a valid additional perspective, beyond that introduced by and argued for the plaintiffs;

(b)CFA’s interest in the setting aside application is purely commercial or financial, with CFA’s interest appropriately protected through the Funding Agreement between the plaintiffs and CFA; and

(c)were leave granted to CFA, with its evidence and submissions yet to be filed, prejudice would be caused to Southern Response in preparing any response evidence and submissions, and preparing for the hearing of all applications ahead of the scheduled dates.

Result on CFA application

[13]I dismiss CFA’s application for leave to intervene in this proceeding.

[14]              Costs must follow the event. I direct as between CFA and the defendant that CFA pay to the defendant the costs and disbursements of the application (without a certificate for junior counsel). In the event of disagreement as to quantum, the matter will be determined on the papers, with the defendant’s submissions to be filed first, to be followed by CFA’s submissions within 10 working days thereafter (four page limit in each case). I do not anticipate that either CFA or the plaintiff, as between them, would regard a costs order as appropriate, but reserve their positions in that regard.

Application of Brandon and Leonie Vickers and others for leave to intervene (the Vickers’ application)

[15]              On 25 March 2021, an application was filed by Grant Shand, Barristers and Solicitors, for leave to be granted to eight sets of named policyholders to intervene in the 12–14 April 2021 applications, as well as on behalf of “all policyholders in the class that are not parties to any agreements with GCA Lawyers and/or CFA”. All of the named parties have expressed in writing a decision to opt out of the plaintiffs’ representative proceeding (in advance of the outcome of the plaintiffs’ notification application).

[16]              In response to this intervention application, the plaintiffs through counsel have formally recorded that they will exclude certain classes of policyholders from any application for costs-spreading and/or contribution orders. Those excluded would encompass those Mr Shand has represented in proceedings issued before 12 March 2021. The excluded classes would not include Mr and Mrs Vickers.

[17]              Southern Response did not oppose the grant of leave. Mr Weston QC nevertheless observed that the Court in considering the position of the applicants for leave needed to be conscious of the fact that the plaintiffs’ election to treat any particular “opt out notices” as binding does not preclude a later finding by the Court that there has in fact been no effective opting out.

[18]              Of the parties, the plaintiffs took a position to some extent opposed to this intervention application. In particular, the plaintiffs opposed leave being granted to intervene on the part of unnamed policyholders for whom Mr Shand does not act. Otherwise the focus of the plaintiffs’ notice of “partial opposition” was focused on the terms to be fixed by the Court in relation to intervention.

Result on the Vickers’ application

[19]              I grant leave to the policyholders numbered [1]–[8] in the Schedule to the application for leave dated 25 March 2021 to intervene in the applications for hearing on 12–14 April 2021 on the following terms:

(a)the intervenors have leave to file and serve any supplementary evidence, any such evidence to be filed and served by 4 pm, Thursday, 1 April 2021;

(b)counsel for the intervenors is to file and serve written submissions (10 page limit) by noon, Thursday, 8 April 2021;

(c)in relation to their intervention and the hearing, the intervenors will neither be eligible for any order of costs or disbursements nor liable to any order for costs and disbursements; and

(d)the intervenors will have no right of appeal from the outcome of the applications scheduled for hearing.

Leave reserved

[20]              This judgment, as discussed with counsel at the hearing, has necessarily been limited to stating a result. I reserve leave to the parties to request written reasons. If

requested, the delivery of the reasons would necessarily take time due to scheduled commitments.

Osborne J

Solicitors:

GCA Lawyers, Christchurch for Plaintiff

Counsel: P G Skelton QC, Auckland
Buddle Findlay, Christchurch for Defendant

Counsel: T C Weston QC, Christchurch Wilson Harle, Auckland

Counsel: J S Cooper QC and J K Goodall, Barrister, Auckland for Claims Funding Australia Pty Ltd Grant Shand, Christchurch

Counsel: S M Grieve, Barrister, Christchurch for B & L Vickers and others