Ross v Southern Response Earthquake Services Ltd
[2021] NZHC 2452
•20 September 2021
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2018-409-000361
[2021] NZHC 2452
BETWEEN BRENDAN MILES ROSS and COLLEEN ANNE ROSS
Plaintiffs
AND
SOUTHERN RESPONSE EARTHQUAKE SERVICES LIMITED
Defendant
Hearing: 12 April 2021 Appearances:
P G Skelton QC, K M Quinn and C B Pearce for Plaintiffs
T C Weston QC, K M Paterson and E D Peers for Defendant S M Grieve and G D R Shand for B & L Vickers & others (Intervening)
Judgment:
20 September 2021
JUDGMENT OF OSBORNE J
[notification application]
This judgment was delivered by me on 20 September 2021 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
ROSS v SOUTHERN RESPONSE EARTHQUAKE SERVICES LIMITED [2021] NZHC 2452 [20 September 2021]
TABLE OF CONTENTS
Introduction [1]
“Representative proceedings”/ “Representative claims” [3]
The litigation to date [4]
The plaintiffs’ litigation funding [11]
The complication of the (Southern Response) settlement Package [12]
Notification orders [17]
The need for notification orders — the role of the Court [17]
Comparative jurisdictions [20]
Purpose of the class members notice [23]
“Ownership” of the class members notice [27]
Delivery of the class members notice economically and efficiently [30]
Style of the class members notice [33]
Content of the class members notice [37]
The class members notice — the parties’ positions [44]
Subject-matter on which the parties agree [44]
Other subject-matter sought by the Rosses [47]
1. Rosses’ opposed proposals [47]
2. Detail of funding arrangements between Claims Funding Australia Pty Ltd
and plaintiffs/class members liability for costs [49]
Other subject-matter sought by Southern Response [55]
The format of the class members notice [57]
Content of the class members notice [60]
The heading (“Ownership” of the class members notice) [60]
Introductory comment [63]
Banner explanation [64]
Section 1 — Why is this notice important? [65]
Section 2 — What is a representative proceeding? [67]
Section 3 — What is this representative proceeding about? [70]
Section 4 — Are you a class member? [73]
Section 5 — What is “opt out?” [74]
Sections 6 and 7: [75]
Section 6 — How is the representative proceeding being funded? [75]
Section 7 — Common fund order or costs equalisation order will be sought? [75]
Sections 8, 9 and 10: [109]
Section 8 — Liability for legal costs [109]
Section 9 — What will happen if you choose to stay in the proceeding? [109]
Section 10 — What will happen if you opt out? [109]
Section 11 — Southern Response Settlement Package [121]
Section 12 — What class members need to do? [134]
Section 13 — Where can you obtain copies of relevant documents? [139]
The approved form of the class members notice [141]
Opting out [143]
The opt out form [143]
The opt out deadline [145]
Timing of the class members notice and communication of the Package [155]
Communication of the class members notice [158] Advertisement of the class members notice through newspapers [158] Advertisement of the class members notice through additional media [162] Delivery and emailing of the class members notice [172]
The initial costs of the class members notice [178]
Leave reserved [195]
Orders [196]
Introduction
[1] In this proceeding, Brendan and Colleen Ross1 bring (by leave under r 4.24 High Court Rules 2016) a representative claim against Southern Response Earthquake Service Ltd (Southern Response).2 This judgment, one of four interlocutory judgments issuing today, deals with the Rosses’ amended application for “notification orders”. Notification orders will define the content of information to be sent to members of the class the Rosses represent (which I will refer to as the “class members notice”); the methods of communicating that information; and the form of the opt out notice by which a class member may opt out of the representative proceeding.
[2] Mr and Mrs Ross’s claim relates to a settlement agreement they entered into with Southern Response in relation to their insurance claim for damage to their house caused in the Canterbury Earthquake Sequence. They say that Southern Response provided them with incomplete or misrepresented information about the cost of remedying earthquake damage to their home. As a result they cash settled on a less favourable basis than they otherwise would have.
“Representative proceedings”/ “Representative claims”
[3] In this judgment, I will generally be referring to “representative proceedings” or “representative claims”, as arguably a more useful descriptor than the traditional (and still often-used especially in other jurisdictions) “class action”. I note this approach accords with that taken by Goddard J in delivering the judgment of the Court of Appeal in Ross v Southern Response Earthquake Services Ltd (Ross CA)3 — there his Honour generally preferred the term “representative proceeding” in the New Zealand context, using the term “class action” for his discussion of overseas
1Mr and Mrs Ross are trustees of two family trusts which each owned an undivided half share of their residential property. Mr and Mrs Ross sue in their capacity as trustees.
2Mr and Mrs Ross were insured with AMI Insurance Ltd. AMI could not meet its obligations to policyholders after the second major earthquake in Canterbury on 22 February 2011. AMI’s name was changed to Southern Response Earthquake Services Ltd, now a Crown-owned company. It deals with claims by AMI customers for damage resulting from the Canterbury earthquakes.
3Ross v Southern Response Earthquake Services Ltd [2019] NZCA 431, (2019) 25 PRNZ 33 [Ross CA] at [39].
jurisprudence. I will adopt the same preference in this judgment and in relation to the forms I approve.4
The litigation to date
[4] A two-and-a-half year period following the commencement of this proceeding was taken up with interlocutory issues over the basis (do class members opt in or opt out?) upon which Mr and Mrs Ross would have leave to pursue a representative claim.
[5] It has been common ground between parties that, if this representative proceeding was to be conducted on an opt out basis, it would need to be heard in two stages.5 Those stages were described in Ross CA thus:6
…Stage 1 would deal with the common issues, i.e. the issues that arise in the claim by Mr and Mrs Ross, and in the claims of other class members. Mr Skelton QC, counsel for Mr and Mrs Ross, indicated that Mr and Mrs Ross would also seek to have the other issues raised by their own claim heard at that hearing. So the stage 1 hearing would deal with the common issues, and the question of the relief (if any) to which Mr and Mrs Ross are entitled. If the claims are unsuccessful, that will bring the proceedings to an end for all claimants. If the claims are wholly or partly successful, on the other hand, then there would need to be a stage 2 at which questions of relief are addressed in relation to the other claimants.
[6] This approach involving stage 1 and stage 2 hearings is commonly adopted in Australia. Although the precise manner in which each trial is conducted is ultimately a matter for the trial judge, there have been numerous instances of an initial trial on the common questions in the proceeding, with any non-common questions raised by the plaintiff’s personal claim (such as their individual claim for damages) being deferred until a later trial.7
4There is an advantage to the Court’s adopting a uniform terminology which comes to be known and preferably understood by members of the public — in the form of notification most recently approved for representative proceedings, the proceedings were identified as “representative” rather than as a “class action”: See Smith v Claims Resolution Service Ltd [2021] NZHC 1708 [Smith 2] (approved forms set out in Minute dated 15 July 2021).
5Ross CA, above n 3, at [30]. Southern Response Earthquake Services Ltd v Ross [2020] NZSC 126 [Ross SC] at [9].
6 Ross CA, above n 3, at [30].
7See the commentary in Damian Grave, Ken Adams and Jason Betts Class Actions in Australia (2nd ed, Thomson Reuters, Pyrmont (NSW), 2012) at [12.210].
[7] Initially (13 December 2018), the Rosses were granted leave to pursue a representative claim but on an opt in basis.8 The Court of Appeal (on 16 September 2019) allowed Mr and Mrs Ross’s appeal, substituting (at stage 1) an opt out procedure for the opt in procedure.9 The Supreme Court (on 17 November 2020) dismissed Southern Response’s appeal against the opt out procedure.10 It has been common ground between the parties that, if this proceeding were to reach stage 2, and a represented claimant wanted to obtain compensation, they would need to opt in at that stage.11
[8] In the meantime, a Mr and Mrs Dodds had been pursuing their own proceeding against Southern Response, commenced in 2018 (the Dodds litigation). The Dodds’ claim was based on similar circumstances to those of the Rosses, having cash settled with Southern Response. The Dodds did not bring their claim representatively. Following a trial in March 2019, the Dodds obtained a High Court judgment largely in line with their claim.12 Southern Response unsuccessfully (except as to a relatively minor item of damages) appealed the High Court judgment, the Court of Appeal delivering its judgment in September 2020.13 Southern Response has not appealed the Court of Appeal judgment and has in fact paid the judgment sum (as determined by the Court of Appeal) to Mr and Mrs Dodds.
[9] During the period of the appeals in this proceeding, the hearings of other interlocutory applications of Mr and Mrs Ross were necessarily deferred. In their original interlocutory application to bring this proceeding as a representative action, Mr and Mrs Ross had sought ancillary orders. The first were notification orders, now the subject of this judgment. The second was a common fund order (CFO) (that is, an order entitling Mr and Mrs Ross to be reimbursed their costs and expenses incurred in the proceeding out of any resolution sum received from Southern Response).
[10] The (amended) application for notification orders was one of three interlocutory applications heard by me on 12–14 April 2021. The parties have agreed
8 Ross v Southern Response Earthquake Services Ltd [2018] NZHC 3288 [Ross HC].
9 Ross CA, above n 3.
10 Ross SC, above n 5.
11 Ross CA, above n 3, at [35]; and Ross SC, above n 5, at [10].
12 Dodds v Southern Response Earthquake Services Ltd [2019] NZHC 2016, [2019] 3 NZLR 826.
13 Southern Response Earthquake Services Ltd v Dodds [2020] NZCA 395, [2020] 3 NZLR 383.
that it remains premature to allocate a hearing date for the application for the common fund order. The remaining two applications heard in April 2021 were:
(a)Southern Response’s (amended) application for directions as to offering a settlement Package (Communications Judgment (No 2));14 and
(b)the Rosses’ application for an order setting aside part of any settlement funds received through settlements between Southern Response and any class members (Setting Aside Judgment).15
The plaintiffs’ litigation funding
[11] The Rosses have obtained litigation funding. In April 2019 they entered into an arrangement with Claims Funding Australia Pty Ltd (CFA). To date an additional (approximately) 300 class members have entered into funding agreements with CFA, obliging those “funded” class members to contribute to the costs of the representative proceeding out of any damages or compensation they receive from Southern Response if the proceeding succeeds. The unfunded class members have no such contractual obligation to CFA.
The complication of the (Southern Response) settlement Package
[12] In September 2019, the Crown (as Southern Response’s shareholder) announced that (subject to obtaining clarity by way of appeal to the Court of Appeal in the Dodds litigation), Southern Response would respond to other policyholders who are in similar situations to Mr and Mrs Dodds with a proactive solution based on the outcome of the Dodds litigation.
14The subject of the judgment delivered today in Ross v Southern Response Earthquake Services Ltd [2021] NZHC 2453 [Communications Judgment (No 2)]. A previous application in Southern Response for directions was declined: Ross v Southern Response Earthquake Services Ltd [2021] NZHC 253 [Result Judgment]; and Ross v Southern Response Earthquake Services Ltd [2021] NZHC 2451 [Reasons Judgment].
15The subject of the judgment delivered today in Ross v Southern Response Earthquake Services Ltd [2021] NZHC 2454 [Setting Aside Judgment].
[13] Following the Court of Appeal’s judgment in the Dodds litigation, Southern Response (with the Crown’s support) then wished to advertise and communicate with policyholders affected by the decisions. Southern Response says it proposes to put affected policyholders who cash settled before October 2014 effectively in the same position as those who settled after that date, with additional allowances (the Package). The Rosses objected to either Southern Response or its legal advisors having direct communication with class members concerning the Package. This led to Southern Response earlier this year making an opposed interlocutory application for directions which would have permitted it and its legal advisors to communicate directly with individual potential class members in relation to the settlement of their claims. On 23 February 2021, I issued a Result Judgment by which the directions sought by Southern Response were refused.16 The Reasons Judgment relating to that decision is being released today along with the judgments of two further applications heard in April 2021, as referred to at [9] above.17
[14] One of those two further applications was Southern Response’s amended application for directions as to offering its Package. The two-and-a-half year period taken up with the interlocutory application and appeals concerning the opt out basis of the Rosses’ representative claim was sufficient to see the Dodds’ parallel claim litigated through to a final outcome before the Rosses were in a position to have their application for notification orders heard. The Rosses had been unable to have a class members notice issued relatively soon after commencing their claim (as would normally occur on an opt out representative proceeding).
[15] As a consequence of there having been two parallel proceedings, two applications are being considered at the same time. The Court is considering the terms of the class members notice. And the Court is considering Southern Response’s proposed communication of its Package (formulated after the liability outcome of the Dodds litigation).
[16] It was common ground at the hearing that liability findings on common issues (which would have been necessary failing settlement in this proceeding) will no longer
16 Result Judgment, above n 14.
17 Reasons Judgment, above n 14.
be required (by reason of the Dodds litigation outcome). The class members notice in this proceeding will therefore be distributed in the unusual circumstance that liability is no longer in issue — a stage 1 hearing will not be required in this proceeding. There is disagreement as to what information should or should not appear in the class members notice and, in relation to the (Southern Response) Package, whether Southern Response should be able to communicate that Package to class members at this time; and if so whether directly or indirectly, and in any event in what terms.
Notification orders
The need for notification orders — the role of the Court
[17] Before a representative claim can be taken to hearing, it will generally be necessary for orders to be made as to the class members notice, advising them of the proceeding and of the process for opting out of the proceeding (or staying in).18 The Court’s approach in the provision of such class members notices derives from its supervisory role in relation to representative proceedings generally. The Court of Appeal, in its judgment in Ross v Southern Response Earthquake Services Ltd (Ross CA) accepted that a class members notice would be needed in this case.19 The Supreme Court expressed the same conclusion in relation to a proceeding such as this which is not a “universal proceeding”.20 I therefore need not here examine the question (which is answered in varying ways under the statutory and regulatory regimes in other jurisdictions) of whether a class members notice should be mandatory in every case.21
[18] In Southern Response Earthquake Services Ltd v Ross (Ross SC), the Supreme Court settled a degree of uncertainty in relation to the Court’s involvement in supervising the class members notice. The Court confirmed that this Court has a supervisory role in relation to class members notices. These particular observations were in relation to opt in proceedings but apply also to this opt out proceeding:22
18 Ross CA, above n 3, at [33], Ross SC, above n 5, at [57].
19 Ross CA, above n 3, at [98] and [103].
20Ross SC, above n 5, at [56]–[57] and [100]: “A “universal” proceeding is one in which proceedings are brought on behalf of a defined class without their prior consent, and without opt in or opt out orders being made: Ross CA, above n 3, at [82], citing Duke of Bedford v Ellis [1901] AC 1 (HL).
21 Rachael Mulheron The Class Action in Common Law Legal Systems: A Comparative Perspective
(Hart Publishing, Oxford, 2004) at 339 Table 9.2.
22 Ross SC, above n 5.
[57] On the question of notice, we do not agree with Southern Response that the High Court23 and the Court of Appeal24 to date have disavowed any role in approving notices in opt in proceedings. In the first of the cases relied on, Cooper v ANZ Bank New Zealand Ltd, the High Court did in fact “review and comment” on the plaintiffs’ notice, albeit reserving the position as to whether or not this was an appropriate course.25 What the Court was not prepared to do was to “check the content of the notice for accuracy as to matters such as the funding arrangements” in place.26 That was seen as something for which the plaintiffs’ legal advisers were responsible. In Southern Response Earthquake Services Ltd v Southern Response Unresolved Claims Group, the Court of Appeal’s disavowal of a role in “approving” materials was directed to marketing materials and funding arrangements.27 Finally, in the Houghton litigation, the High Court reviewed the draft opt in notice.28
[19] This Court has recently dealt with an application for approval of notification orders in relation to a representative proceeding conducted on an opt in basis in Smith v Claims Resolution Service Ltd.29 In that case, the Court in granting leave to the plaintiffs to bring the proceeding as a representative action considered it appropriate that the Court approve the form and content of notification.30
Comparative jurisdictions
[20] Unlike New Zealand, the common law jurisdictions with which we might compare ourselves (what Professor Rachael Mulheron calls her “focus jurisdictions”) have statutory or regulatory codes dealing with representative claims. Reference may be made to:
(a)the Australian Federal Class Action regime under Pt IVA, Federal Court of Australia Act 1976 (Cth) (Federal Court Act);
(b)the Ontario (Provincial) regime, under the Class Proceedings SO Act 1992 c 6, (CPA (Ont)); and
23 Cooper v ANZ Bank New Zealand Ltd [2013] NZHC 3116.
24 Southern Response Earthquake Services Ltd v Southern Response Unresolved Claims Group
[2017] NZCA 489, [2018] 2 NZLR 312 [the Unresolved Claims case].
25 Cooper, above n 23, at [15].
26 At [16].
27 The Unresolved Claims case, above n 24, at [79].
28 Houghton v Saunders HC Christchurch CIV-2008-409-348, 19 May 2010 at [25]–[73].
29 Smith 2, above n 4, pursuant to orders made in Smith v Claims Resolution Service Ltd [2019] NZHC 1013 [Smith 1] at [23]. The form of notice approved was attached to a Minute of Associate Judge Paulsen dated 15 July 2021.
30 Smith 1, above n 29, at [13].
(c)the United States Federal Class Action Rules, as they relate to damages class actions, under the Federal Rules of Civil Procedure, r 23 (FRCP 23 (US)).31
[21] These rules in the focus jurisdictions provide in varying detail for representative proceeding (or class action) regimes. Each of the three jurisdictions has a requirement that class members notices be judicially approved in advance.32 For our purposes, they helpfully identify subject-matter which the various rule-makers have found require consideration and/or inclusion. In some cases they provide sample notices.
Purpose of the class members notice
[22] The principal purpose of the class members notice required under s 33X Federal Court Act, in Australia, was explained by the Full Court of the Federal Court of Australia in King v GIO Australia Holdings Ltd (King 2):33
…The principal purpose of the notice given under ss 33X(1)(a) and 33Y(2) is to ensure that group members can make an informed decision concerning their rights. We do not think it is an answer, as Mr Burnside QC … suggested it was, that a group member who is misled by the form of notice approved by the Court could apply for and expect to receive an extension of the period during which he or she can opt out of the representative proceeding: s 33J(3). The represented group is large and group members are likely to have widely varying degrees of understanding of the claims made on their behalf and the possible outcomes of representative proceedings. It is important that any decision they make concerning opting out of the proceedings not be based on a notice that is apt to mislead them.
[23] At first instance in King v GIO Australia Holdings Ltd (King 1), Moore J had further broken down the information to be imparted, explaining:34
[4] The central purpose of the notice presently under consideration is to inform group members of the right to opt out conferred by s 33J, when that right must be exercised and [there are] consequences of exercising or not exercising the right. A necessary incident of satisfying that purpose would be to inform group members of the nature of the proceedings. However while the terms of the notice must be readily comprehensible and clear, it is important,
31 United States Federal Rules of Civil Procedure, r 23 [FRCP 23 (US)].
32 Mulheron, above n 21, at 354.
33 King v GIO Australia Holdings Ltd [2001] FCA 270 [King 2] at [15] (citations omitted). See also
Courtney v Medtel Pty Ltd [2001] FCA 1037 [Courtney 1] at [8]–[9].
34 King v GIO Australia Holdings Ltd [2000] FCA 1869 [King 1].
in my opinion, to ensure that the central purpose is not obscured by matters of detail.
[24] What is required to be achieved through a class members notice has been progressively developed in the Federal Court of Australia through its practice notes and sample opt out notices. The current Class Actions Practice Note (FCA Practice Note) was issued on 20 December 2019.35 It explains the purpose of the class members notice:
12.2 The applicant’s lawyers should ensure that the opt out notice:
(a)uses plain language and gives a balanced, succinct description of the claims and defences in the proceeding;
(b)clearly describes the consequences of remaining a class member or alternatively opting out of the proceeding, including a succinct explanation of how a judgment or settlement in the proceeding will or may preclude class members from relying on the same or related claims or defences in other proceedings;
(c)alerts class members to the fact and consequences of any costs agreement or litigation funding agreement made or intended for the proceeding;
(d)is sent, published or broadcast via media which are best calculated to achieve the effective dissemination of the notices among class members in the most cost-effective way.
…
[25] A list of requirements in the US federal courts is set out in the current version of FRCP 23 (US) which states:36
The notice must clearly and concisely state in plain, easily understood language:
(i)the nature of the action;
(ii)the definition of the class certified;
(iii)the class claims, issues, or defenses;
(iv)that a class member may enter an appearance through an attorney if the member so desires;
35Federal Court of Australia “Class Actions Practice Note (GPN-CA)” (December 2019) [FCA Practice Note]; Sample Opt Out Notice Schedule A to the Practice Note.
36 FRCP 23 (US) (c)(2)(B).
(v)that the court will exclude from the class any member who requests exclusion;
(vi)the time and manner for requesting exclusion; and
(vii)the binding effect of a class judgment on members under Rule 23(c)(3).
[26] The purpose of the notice is thus to inform, not to recruit. In the decision of the Ontario Court (General Division) (now the Ontario Superior Court of Justice), in Smith v Canadian Tire Acceptance Ltd, Winkler J observed:37
There is no provision in the [Class Proceedings] Act for the recruitment of class members, and the notice of certification is not intended for this purpose.
“Ownership” of the class members notice
[27] The plaintiffs here propose that a notice, entitled “Class Action Notice” be issued under the Coat of Arms of the High Court and in the name of this Court (“HIGH COURT OF NEW ZEALAND”). This partly follows the approach taken in the Federal Court of Australia in its sample opt out notice (FCA sample opt out notice) attached to the FCA Practice Note.38 (That which in the Federal Court is referred to as an “opt out notice” is what I am referring to in this judgment as the “class members notice”).
[28] This approach — making the notice that of the Court — is consistent with the form of class members notice prepared by Lee J in Lenthall v Westpac Banking (No 2) (Lenthall (No 2).39 That said, the notice as approved by Lee J did not bear the Court’s seal (representing a coat of arms) — that only appeared on the sealed order.
[29] Southern Response opposes this approach, submitting that the notice should not issue as a notice of the Court.
37 Smith v Canadian Tire Acceptance Ltd (1995) 22 OR (3d) 433 (ON Gen Div) at [38].
38 FCA Practice Note, sch A.
39 Lenthall v Westpac Banking (No 2) [2020] FCA 423 [Lenthall (No 2)].
Delivery of the class members notice economically and efficiently
[30] As stated by the Full Court of the Federal Court of Australia in Femcare Ltd v Bright, the objective in giving notice is:40
…to find the most economical means of ensuring that the group members are informed of the proceeding and their rights.
[31] There is an associated objective of efficient communication, as identified by Hedigan J in the decision of the Supreme Court of Victoria in Gagarimabu v The Broken Hill Pty Co Ltd involves:41
…striking a balance between the impracticability of formulating over-detailed methods of giving notice to group members and the seeking out of an effective procedure.
[32] These observations are relevant not only to the means of delivering the notice but also to the form of the notice.
Style of the class members notice
[33] Essential elements of the class members notice, if it is to have its intended effect, are clarity and simplicity.42 From these, it follows that the notice must be readily comprehensible by non-lawyers.43 These requirements are reflected both in the FCA Practice Note (quoted above at [24]) which requires that a notice uses plain language and gives a balanced, succinct description of the claims and defences in the proceeding44 and in the FRCP 23 (US) which requires that “the notice must concisely and clearly state in plain, easily understood language”.45
[34] The corollary of these requirements is that the notice must not be apt to mislead.46 It is recognised that the inclusion of unnecessary information has the potential to obscure, confuse or intimidate the persons to whom the notices are
40Femcare Ltd v Bright [2000] FCA 512, (2000) 100 FCR 331 at [74]. See also Courtney 1, above n 33, at [9]; and Lenthall (No 2), above n 39, at [41].
41 Gagarimabu v The Broken Hill Pty Co Ltd [2001] VSC 304 at [19].
42 King 2, above n 33, at [16].
43King 1, above n 34, at [4]; and Smith 1, above n 29, at [13]. See also Mulheron, above n 21, at 355.
44 FCA Practice Note, above n 35, at [12.2(a)].
45 FCRP 23 (US), above n 31.
46 Gagarimabu, above n 41, at [15]. See also, Grave, Adams and Betts, above n 7 at 290.
addressed.47 As indicated by Moore J in King 1, the inclusion of unnecessary details may obscure the central purpose of informing the class members of the right to opt out.48 These needs were addressed by Flick J in Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 4) (Pharm-a-Care (No 4)) where his Honour concluded:49
It is, accordingly, of importance to ensure that a notice does not contain unnecessary information which may simply have the potential to either confuse or intimidate the persons to whom it is addressed. The nature of the information being communicated may well depend upon the issues being advanced for resolution in the representative proceeding itself – the more complex a proceeding may be, the greater may be the need to include more rather than less information. Inevitably a balance may have to be struck when approval is sought in respect to each individual proceeding.
[35] The content and wording of the notice needs to take account of the level of literacy and sophistication (and in appropriate cases the native language) of the range of class members.50
[36] The court will be alert to the possibility that in certain types of proceeding (personal injury claims in overseas jurisdictions being a prime example) sensitivity is required in relation to the content which is being communicated to persons at risk of harm.51
Content of the class members notice
[37] The Australian legislature has not provided a mandatory form of class members notice, leaving that for court approval.52 In this regard, there is therefore a similarity with the situation before this court in this case, with the court required to consider the content of the notice in the absence of governing rules.
47Courtney 1, above n 33, at [11]; and King 1, above n 34, at [4]. See also Mulheron, above n 21, at 355–356. Professor Mulheron refers to some commentary as suggesting that defendants have an incentive to make notices complex, confusing and unnecessarily long in order to deter class member participation.
48 King 1, above n 34, at [4].
49Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 4) [2010] FCA 749 [Pharm-a-Care (No 4)] at [20].
50 Lenthall (No 2), above n 39, at [45]–[50]; and Gagarimabu, above n 41, at [15].
51 Courtney 1, above n 33, at [11]; and Hoy v Medtronic Inc 2002 BCSC 96 at [20].
52 Federal Court Act, s 33Y(2).
[38] Professor Mulheron has commented on the divergence in Australia between some judicial reluctance to set out in generic terms what a notice must state and the expressed view of Federal Court practitioners that they would be assisted by court- published guidelines concerning the form and content of notices.53 The Federal Court justices, in their submissions to the (Australian) Law Commission, suggested that it is a matter which may best be left for decision on a case-by-case basis.54
[39] The Ontario regime contains a lengthy list of matters which the notice must state unless the Court orders otherwise.55 FRCP 23 (US) contains some detailed requirements, as listed at [25] above.
[40] New Zealand does not have the history of representative proceedings conducted on an opt out basis for this court to draw on so as to confidently determine a comprehensive set of appropriate requirements or guidelines. The Australian Federal Court justices’ stated preference (in their submission to the Law Commission) for a case-by-case approach would suggest that the New Zealand courts might appropriately adopt a similar approach. Indeed, the Court of Appeal in Ross CA appears to have anticipated precisely that:56
[106] The courts will need to grapple with a range of procedural issues that arise in relation to opt out claims, addressing these on a case by case basis. These issues should be approached in a liberal and flexible manner, seeking to achieve a balance between efficiency and fairness. We do not consider that any additional scrutiny that may be required in the opt out context is beyond the capacity of the court, or so significant that it weighs against the adoption of an opt out approach.
[41] Development of guidance is likely to be best achieved incrementally. The unusual circumstances arising from the overlap between this and the Dodds litigation give rise to considerations which are likely to recur only rarely if at all. My specific conclusions as to what is appropriate in these unusual circumstances may not be appropriate for application in proceedings which have not been so affected by
53 Mulheron, above n 21, at 357, citing Gagarimabu, above n 41, at [9] per Hedigan J: “I do not favour the process whereby a court attempts to definitively describe the contents of opt-out notices”; and Australian Law Reform Commission Managing Justice: A review of the Federal Civil Justice System (ALRC R89, 1999) at [7.104], n 287.
54 See submission of Federal Court Justices noted in Managing Justice: A review of the Federal Civil Justice System, above n 53, at [7.104] n 288.
55 Class Proceedings Act SO 1992 c 6.
56 Ross CA, above n 3 (footnotes omitted).
interlocutory issues and appeals, consequential delay and the resolution of issues in the Dodds litigation.
[42] Against that background, I will first identify the form and content of the class members notice proposed by the parties under three headings:
(a)subject-matter on which the parties agree;
(b)other subject-matter sought by the Rosses; and
(c)other subject-matter sought by Southern Response,
and I will then consider the submissions of counsel as to those matters leading to my conclusion on the appropriate form and content of the class members notice.
[43] I will next consider the content of the notification orders themselves, being those which will direct the mode of notification, the opt out period, any special orders in relation to the payment of the expenses of such notification, and the form and content of the class members notice and the opt out notice.
The class members notice — the parties’ positions
Subject-matter on which the parties agree
[44] The proposed subject-matter which the parties agree should be included covers:
(a)an explanation as to the nature of this representative proceeding including the fact that the plaintiffs’ costs of bringing the action are funded by CFA;
(b)a description of the proceeding and the relief sought by the plaintiffs;
(c)the Court of Appeal’s orders defining the class description;
(d)the class members’ options (to opt out or stay in) and the consequences of exercising each option (including the binding effect of the representative proceeding judgment and the possibly full and final effect of a settlement);
(e)the opt out date; and
(f)the opt out method.
[45] The parties also agree that the class members notice should contain further explanatory material, covering:
(a)by way of introduction, an explanation of the particular importance of the notice and the need to obtain legal advice in relation to any matter not understood; and
(b)by way of a conclusion, whence to obtain copies of the pleadings and judgments in the proceeding, and how to contact the plaintiffs’ lawyers.
[46] The terms on which the Court will order notification essentially adopt these measures of agreement between the parties.
Other subject-matter sought by the Rosses
Rosses’ opposed proposals
[47] Subject-matter which the Rosses propose to have included in the class members notice but which Southern Response opposes covers:
(a)more detail as to the funding arrangements between CFA and the plaintiffs;
(b)the circumstances in which class members who stay in the class will or will not be liable for costs;
(c)information as to the limitation period — the likelihood that it may have already expired or will shortly do so; and
(d)the clarification of the potential value of class members claims and/or facilitation of settlement through class members registering.
[48] Further explanatory material proposed by the Rosses but opposed by Southern Response involves a statement (in the context of the consequences of opting out) that “opting out is a serious step and you should not do it unless you understand what it means”.
2. Detail of funding arrangements between Claims Funding Australia Pty Ltd and
plaintiffs/class members liability for costs
[49] It is common ground between the parties that the opt out notice should include at least these two sentences:
The class action is being run by GCA Lawyers, who are the solicitors for Mr and Mrs Ross. The costs of bringing the class action are being funded by Claims Funding Australia.
[50]The Rosses propose to add this further explanation in the same paragraph:
That means that all the up front costs of bringing the class action are being paid by Claims Funding Australia. Claims Funding Australia are also providing “adverse costs” protection to Mr and Mrs Ross, in case the class action is unsuccessful. Class members will not have to pay any costs out of their own pocket under any circumstances. However, if the class action is successful in obtaining compensation for class members, some of the costs of bringing the class action may be deducted out of that compensation, but first subject to approval by the High Court.
[51] Southern Response objects to that entire passage. It proposes to replace it with the words: “[c]osts and funding are discussed further below” (a reference to its proposed paragraph 6A, set out below at [54]).
[52] The Rosses’ proposed draft notice also refers to the litigation funding arrangements in a section headed “Will you have to pay legal costs if you stay in the class action?” That proposed section would commence:
8. Will you have to pay legal costs if you stay in the class action?
You will not become liable to pay any out of pocket costs just by staying in the class action.
If the class action is successful and Southern Response is required to pay money to the class, the Plaintiffs will seek to recover the costs and expenses of bringing the class action, including litigation funding costs. If the Court grants that request, the costs and expenses would either be deducted from the judgment sum obtained for the class and/or be paid separately by Southern Response.
…
If the class action is unsuccessful, you will not have to pay any costs. As part of funding the class action, Claims Funding Australia has agreed to take the risk of having to pay any costs to Southern Response if the class action fails.
[53] Southern Response opposes the inclusion of any part of that paragraph, submitting that it should be replaced with a new section headed “[l]itigation Funding and your liability for legal costs” as set out below at [54].
[54] The additional section which Southern Response proposes for the notice would read as follows:
6A Litigation Funding and your liability for legal costs
In the absence of a successful resolution or judgment you will not become liable to pay any out of pocket costs just by staying in the class action.
The Plaintiffs have entered into a Litigation Funding Agreement with Claims Funding Australia Pty Limited (CFA) a litigation funding company based in Australia. CFA will meet the costs of the class action in the first instance.
If you do not opt-out of the class action, you can choose to sign a Litigation Funding Agreement with CFA, but you do not have to do so.
You will not become liable for any legal costs simply by remaining as a class member for the determination of the common questions (Stage 1). Whether or not you sign a Litigation Funding Agreement with CFA, CFA will meet the costs of Stage l of the class action in the first instance. If the class action is successful the Plaintiffs and those class members who have signed the Litigation Funding Agreement (“funded class members”) have agreed that: [Redacted due to confidential nature of funding terms.]
(Here Southern Response proposes that the specific funding terms are set out, but these were redacted in Southern Response’s notice of opposition due to their confidential nature.)
Other subject-matter sought by Southern Response
[55] Subject-matter which Southern Response proposes be included in the class members notice but which the Rosses oppose covers:
(a)a repeated explanation of what it means to be “bound” by the outcome of the representative proceeding;
(b)the way in which the representative proceeding will proceed in two stages:
(i)stage 1: common issues; and
(ii)stage 2: individual claims;
(c)the terms of the litigation funding agreement between CFA and the plaintiffs relating to costs and the costs consequences for a member who stays in the representative proceeding (as already discussed above at [54]);
(d)the plaintiffs’ intended application for a common fund order (CFO) or fee equalisation order (FEO) and an explanation and comparison of CFOs and FEOs;
(e)more detail of the consequences of staying in the representative proceeding, particularly at stage 2, including an explanation that Southern Response might pursue a counterclaim against class members at stage 2;
(f)in relation to the consequences of opting out a statement that:
Alternatively you will be at liberty to participate in any alternative settlement process outside of the class action
and;
(g)a new paragraph referring to the existence of the (Southern Response) Package in these terms:
Southern Response Settlement Package
Southern Response and the Government have recently announced a settlement package that may be available to class members in this proceeding. If you are eligible for the package and Southern Response offers you a settlement, you will be required to opt out of this proceeding if you wish to accept the offer. The Government’s press release about the settlement package is available here: Proactive package for Southern Response Claimants/Beehive.govt.nz. You should obtain legal advice about your rights under the settlement package.
[56] Further explanatory material proposed by Southern Response but opposed by the Rosses would involve:
(a)an introductory statement that:
This notice refers to complex issues. You may be able to obtain free, independent legal advice from Community Law Canterbury … or the Greater Christchurch Claims Resolution Service …
(b)an additional statement in the concluding paragraph of the notice which reads:
You may be able to obtain free, independent legal advice from Community Law Canterbury … or the Greater Christchurch Claims Resolution Service ….
and
(c)in relation to the explanation of the nature of a representative proceeding, a warning to take legal advice about the binding effects of the representative proceeding if the class member has claims based on individual circumstances or otherwise additional to the claims described in the representative proceeding and a further explanation of when class members are “bound” by the outcome of the proceeding.
The format of the class members notice
[57] In submitting a draft class members notice for approval, counsel for the Rosses closely followed the format of the sample opt out notice provided with the FCA Practice Note.57 Mr Skelton QC, for the Rosses, also expressly had regard to recent notices issued in relation to the Federal Court of Australia proceedings in Cantor v Audi Australia Pty Ltd (No 2) (Cantor (No 2)),58 Kuterba v Sirtex Medical Ltd (Sirtex),59 and Lenthall (No 2).60
[58] Counsel for Southern Response, in submitting that there should be changes to the draft notice, substantially adopted the Rosses’ drafted format — the major changes proposed by Southern Response would involve a number of deletions and some additional explanations as set out at [47]–[56] above.
[59] The format of notice which I will approve departs from the ordering proposed in the draft notices. I see value in closely following the formatting of the FCA sample opt out notice, which has been developed and updated over a number of years so as to meet the requirements of an opt out notice under the FCA Practice Note. The sample opt out notice provides a logical ordering of information in a way that serves to avoid internal repetition and complexity.
Content of the class members notice
The heading (“Ownership” of the class members notice)
[60]The first issue is how the class members notice should be headed.
[61] In my view, the notice should issue as a notice of the High Court. While reference is generally made to the Court “approving” a form of notice, the reality is that the Court achieves that by making an order. It is appropriate in those circumstances that the published notification reflects that status by identifying the document as issued out of the Court. This accords with the practice regularly followed
57 FCA Practice Note, above n 35.
58 Cantor v Audi Australia Pty Ltd (No 2) [2017] FCA 1042 [Cantor (No 2)].
59 Kuterba v Sirtex Medical Ltd [2018] FCA 1467 [Sirtex].
60 Lenthall (No 2), above n 39.
in relation to other notices such as in relation to winding up under the Companies Act 1993 and enforcement processes under Pt 17 High Court Rules.
[62] The inclusion of the Coat of Arms (as proposed for the Rosses) would be unusual. Provided the heading prominently includes “HIGH COURT OF NEW ZEALAND”, the Coat of Arms adds nothing to the information. At most, it might attract attention to the published notice, giving it some apparent additional importance. In my view, a clear reference to the High Court at the top of the document will be sufficient. The heading which I approve closely follows that approved by Foster J in Cantor (No 2).61 I approve the sub-heading of “Notice of Opt Out Rights”. Although in this legal discussion the description of “class members notice” is apt, the heading proposed is the succinct, explanatory heading which will alert class members to the significance of the notice. It is commonly adopted in Australian notices.
Introductory comment
[63] The parties agree that there should be an introductory comment to draw the attention of AMI policyholders who suffered earthquake damage to the notice. That is clearly appropriate. The approved notice will also contain a further introductory comment which will provide context (along the lines of an introduction to the Lenthall (No 2) notice). An additional comment or introductory statement proposed by Southern Response as to obtaining legal advice (above at [56(a)]) is unnecessary as that matter will be covered elsewhere in the notice.62
Banner explanation
[64] In Lenthall (No 2), the form approved by Lee J adopted the technique of having a prominent banner on the first page of the class members notice. Its effect is to briefly summarise what the reader needs to do in response to the notice. Given the necessary length of what is to follow, the banner serves a most useful purpose in drawing attention to the central aspect of the information which follows. The notice as I approve it is to include such a banner. The banner in effect replaces a shorter version proposed by the Rosses under a heading “What are your options if you are a class
61 Cantor (No 2), above n 58, Annexure “A”.
62 Lenthall (No 2), above n 39.
member?” It is appropriate that immediately below the banner there appears a bold statement of the opt out deadline, which would otherwise appear after Section 1.
Section 1 — Why is this notice important?
[65] The parties agree on the proposed Section 1 content. My only amendment to their proposal will be to embolden the reference to not directing questions to the Court and to place that reference immediately after the words “Please read this notice carefully”. (This brings the content into line with the FCA sample opt out notice and, for instance, the notice approved in Cantor (No 2)).63
[66] I am also adding to Section 1, based on the Cantor (No 2) notice, a concluding explanation as to why the notice is important, relating that to the opt out deadline date and with that date highlighted. That addition serves to answer more clearly the question “Why is this notice important?” than has been done in the draft provided.
Section 2 — What is a representative proceeding?
[67]The parties again substantially agree on the contents of the proposed Section
2. Southern Response would add two sets of comments (identified at [55(a)] and [56(c)] above).
[68] The plaintiffs’ proposal closely follows the equivalent section in the FCA sample opt out notice (and notices approved in cases such as Cantor (No 2)). It is in this section that explanation is usually provided as to how class members become bound by the results of the proceeding. In the Federal Court of Australia (including under the sample opt out notice), that involves distinct summaries of the consequences of resolution by judgment and by settlement. That discussion would normally be necessary and appropriate where the class members notice is issuing at a relatively early stage of the proceeding. Here, where it is common ground that the liability findings (or negotiated outcome) which would have been necessary in this proceeding but for the Dodds litigation are no longer required, the usual distinction in the Section 2 discussion between resolution by judgment and resolution by settlement would be
63 FCA Practice Note, sch A; and Cantor (No 2), above n 58.
apt to confuse rather than to clarify. It is accordingly appropriately handled in the proposed draft by the truncated explanation — “a binding result can happen in two ways: either a Judgment issued by the Court, or a Settlement negotiated out of court”.
[69] I do not consider that either of the additions to Section 2 proposed by Southern Response would serve the purposes of clarity and simplicity. The further explanation of the consequences of not opting out will be dealt with in a later section (Section 9).
Section 3 — What is this representative proceeding about?
[70] There is again a large measure of agreement between the parties on the plaintiffs’ proposed Section 3 — “What is this representative proceeding about?”. In line with the equivalent section in the FCA sample opt out notice, the draft notice explains briefly the allegations in the statement of claim and Southern Response’s defence.
[71] The plaintiffs would then include in Section 3 a discussion of the funding of the representative proceeding by CFA. For Southern Response, it is submitted that that discussion should more appropriately be contained in later sections dealing with funding and legal costs. In my view, Sections 6–8 are the more appropriate place for such discussion — the funding arrangement does not logically belong to a discussion of what the representative proceeding is about.
[72] The addition which Southern Response would make to Section 3 would involve an explanation (see [55(b)] above) of the division of the proceeding into stage 1 and stage 2 hearings, as foreshadowed by the Court of Appeal (see [5] above). I am not persuaded that specific reference in the notice for this proceeding to “stage 1” and “stage 2” hearings will achieve the purposes of clarity and simplicity. Such a discussion may instead serve to confuse, by providing unnecessary detail. The FCA sample opt out notice deals with the distinction between the determination of the common questions and the finalisation of personal claims in Section 6 (“Will you be liable for legal costs if you remain a class member?”) in a more concise, less legalistic, fashion. The sample is nonetheless readily comprehensible and the relevance of the stages of hearing (in relation to liability for costs) is logically dealt with under that heading. The form of notice I approve will adopt that approach.
Section 4 — Are you a class member?
[73] The proposed discussion of class membership, incorporating reference to the Court of Appeal’s definition, is appropriate and will be approved as it stands.
Section 5 — What is “opt out?”
[74] The concept of “opting out” is at the heart of the class members notice. Such is recognised in the FCA sample opt out notice and in the notice approved in Cantor (No 2) by the use of a stand-alone section entitled “What is opt out?”.64 The advantage of such a distinct passage is that it clearly identifies for the reader the nature and importance of “opting out” in a way that avoids the reader having to find that information under another heading in the document. It links well to the overall heading “NOTICE OF OPT OUT RIGHTS”. In this case the plaintiffs’ proposed discussion, although very similar to that in the FCA sample opt out notice, has been transferred to become part of the discussion under “What is a representative proceeding?” In my view, the approach in the FCA sample opt out notice is preferable for the reader as it identifies the concept of “opting out”. That then leads the reader logically into the subsequent discussion of the consequences of staying in or opting out.
Sections 6 and 7:
Section 6 — How is the representative proceeding being funded?
Section 7 — Common fund order or costs equalisation order will be sought?
[75] The next subject matter dealt with in the FCA sample opt out notice is dealt with under two headings:
(a)Will you be liable for legal costs if you remain a class member?
– this dealing with liability for legal costs; and
64 FCA Practice Note, sch A at [4].
(b)What will happen if you choose to remain a class member?
– this dealing with the binding effect of judgments or settlements.
[76] The notice approved by Foster J in Cantor (No 2) essentially adopts the sample headings and approach. Here, the plaintiffs, in their draft notice, have chosen to adopt a different order for the discussion, being:
(a)What will happen if you stay in the class action?
– dealing with the binding nature of the outcome;
(b)What will happen if you opt out?
– identifying the lack of entitlement to share in the benefits of the proceeding but the right to claim separately (subject to time limits); and
(c)Will you have to pay legal costs if you stay in the class action?
– dealing with liability to pay or contribute to costs.
[77] As drafted, the plaintiffs’ notice would not deal in these sections with the CFA funding of the proceeding or the potential recovery of costs from class members but would instead deal with it in Section 3 (What this class action is about?).
[78] For its part, Southern Response proposes an amplified discussion in relation to costs (the proposed addition set out at [54] above) and a lengthy explanation of the plaintiffs’ intended application for a CFO or FEO, with an explanation in comparison of the CFOs and FEOs (see [55(d)] above).
[79] For the Rosses, Mr Skelton submitted that the plaintiffs’ draft notice would adequately advise class members of the involvement of CFA as a funder, the class members’ non-liability for adverse costs, and the possibility that if the action is successful then the costs and expenses of bringing the proceeding “would either be deducted from the judgment sum obtained for the class and/or be paid separately by
Southern Response”. Mr Skelton submitted that any attempt to offer a greater level of relevant detail of the funding arrangement risks descending into speculative or hedging comments with numerous reservations, which would render the notice complex and confusing.
[80] Mr Skelton submitted that all that can be said with confidence now is that, if the proceeding were to settle immediately, the Rosses would seek a CFO (or a funding equalisation order) for cost sharing across the whole class, as well as a rate of commission significantly lower than that specified in the funding agreement. Mr Skelton submitted that, in the event of a delayed resolution, the level of commission which the Court might ultimately approve would naturally tend to increase but not to the level specified in CFA’s funding agreement.
[81] Mr Skelton submitted that in any event the level of funding commission which CFA might ultimately seek is of limited relevance given the uncertainty as to whether and at what level a CFO would be made and what costs and disbursements will be payable, rendering any statement about costs and expenses purely speculative.
[82] Mr Skelton invoked the wording of the notice approved by the Federal Court in the representative proceeding in Sirtex.65 There, Murphy J approved the form and content of a class members notice including in relation to its explanation that the proceeding was being funded (by IMF Bentham Ltd (IMF)). Mr Skelton referred in particular to one paragraph in the Sirtex notice under the heading “Funding of this Class Action” in which (having referred to the fact that a CFO had been made entitling IMF, if the action were successful, to a commission) it is stated:
The amount of this commission will be determined by the Court at a later stage in the proceeding, likely at settlement approval (for a settlement sum) or at trial (for a damages award). The Court has ordered that the percentage will be no more than 28 per cent. The Court will set it at a level that it considers to be reasonable and the amount sought may vary depending on the circumstances surrounding any settlement or award of damages.
[83] The CFO in Sirtex was made at a time when the practice of the court allowed CFOs to be made early in a proceeding, a practice no longer accepted since the
65 Sirtex, above n 59.
decision of the High Court of Australia in BMW Australia Ltd v Brewster.66 Mr Skelton observed that, in this case as in Sirtex, it is the Court that ultimately determines the level of costs and expenses to be borne by members of the class in a manner calculated to achieve justice between them.
[84] For a class members notice approved in the post-Brewster era, Mr Skelton referred to the brief form of notice prepared by Lee J in Lenthall (No 2).67 That form of notice did not expressly refer to the prospect of a CFO. It dealt with possible costs sharing at the end of the proceeding in the following way:68
If the class action is successful (that is, if money compensation is recovered), the Court might be asked to distribute the legal and funding expenses among all persons who have benefitted from the class action (although Westpac disputes the power to make such an order). But the effect of any such order, if made, would be that all class members who benefit will contribute to the costs and pay reasonable litigation funding charges. That means even Registered Unfunded Group Members who do not sign up to a funding agreement might have to contribute out of their share.
[85] Mr Skelton submitted that the plaintiffs’ draft references to the funding arrangements accord with the approach taken in the Australian decisions.
[86] Mr Skelton referred also to the order of Lee J, approving a class members notice mentioned in Bartlett v Commonwealth of Australia (No 2) (Bartlett (No 2)).69 Southern Response had relied on Bartlett (No 2) in its notice of opposition in proposing substantial additions to the draft notice in relation to litigation funding and CFOs/FEOs.
[87] Mr Skelton distinguished Bartlett (No 2) as a case in which the funder (IMF) “evidently felt able to state with certainty what level of funding commission would be sought”. Here, Mr Skelton says, it is not possible for the Rosses to know at this point what level of funding will ultimately be sought. In that regard he likened the Rosses’
66 BMW Australia Ltd v Brewster [2019] HCA 45, (2019) 374 ALR 627.
67 Lenthall (No 2), above n 39.
68 At [52].
69Bartlett v Commonwealth of Australia (No 2) [2019] FCA 800 [Bartlett (No 2)]; the order of Lee J dated 23 April 2019 approving the group members notice does not appear to have been the subject of a separate judgment but is referred to in Bartlett (No 2).
proposed notice to those in Cantor (No 2), Sirtex, and Lenthall (No 2). In none of those was reference made to a likely level of funding commission.
[88] For Southern Response, Mr Weston QC identified as the key point of difference between the parties on the class members notice the extent to which a notice should disclose the terms of funding and the possible impact on class members. Hence the expanded discussion proposed by Southern Response.
[89] In Mr Weston’s submission, the draft notice should identify the possibility of costs sharing between class members in the context of a discussion focused on the costs of the proceeding. In the plaintiffs’ draft there is (as Mr Weston describes it) an oblique reference to litigation funding costs but with no information as to what such costs might be or how they would be applied. In particular the draft notice does not identify that costs and funding commission may potentially be deducted from all the class members’ recoveries in the event of a settlement. (That is what the plaintiffs seek in their CFO application).
[90] Mr Weston submits that for each class member (or their legal advisor) the potential for costs sharing will be most important to a decision whether to remain in the class or not.
[91] For those reasons, the Southern Response amendments would include the additional information as to CFA’s potential recovery and an explanation of the nature and effects of CFOs and FEOs when there is a successful resolution of the proceeding.
[92] Mr Weston noted that the Federal Court of Australia recognises the importance of providing information about any costs agreements and litigation funding agreements to class members. In particular in the FCA Practice Note, as set out at [24] above, the Federal Court requires the plaintiff’s lawyer to ensure that the opt out notice alerts class members to the fact and consequences of any costs agreement or litigation funding agreement made or intended for the proceeding.70
70 FCA Practice Note, above n 35, at [12.2(c)].
[93] The Full Court of the Federal Court of Australia, assembled in Money Max Int Pty Ltd v QBE Insurance Group Ltd (Money Max), recognised the importance of class members being properly informed of the litigation funding arrangements and potential cost sharing if they are subsequently affected by a CFO.71
[94] In Money Max, the Full Court (pre-Brewster) decided that it would make a CFO, but with the precise form of orders to be determined on further submissions.72 That preparedness was based on a number of safeguards, including in relation to notification to class members, as shown below:73
… we contemplate that before class members are required to choose whether or not to opt out, they will be informed of the proposed orders and the fact that they will have deducted from any settlement or judgment a reasonable funding commission at a Court-approved rate. If class members are concerned about an obligation to pay a reasonable Court-approved funding commission, they can opt out of the proceeding and bring their own case (either individually or collectively) with or without funding arrangements.
[95] Later in the judgment the Full Court explained why fairness required that class members be informed in some detail prior to opt out of funding arrangements and their consequences:
4.The benefit of disclosing the obligation to pay a funding commission before class members decide whether to opt out
[109] Another benefit of the proposed orders is that before class members are required to decide whether or not to opt out of the proceeding they will be informed that a Court-approved funding commission rate will be deducted from any settlement or judgment that is achieved. Class members who are concerned about an obligation to pay a reasonable Court-approved funding commission and a share of reasonable Court-approved legal costs will be properly informed and have adequate time before they must decide whether to opt out.
[110] In the case of unfunded class members, disclosing such a possibility sooner rather than later is fairer than informing them as part of settlement approval. Unfunded class members may have made a different decision in relation to opt out had they been aware of a proposal to make a substantial deduction from any settlement or judgment they obtain.
[111] For example, the common fund order in Farey was made before opt out and Jacobson J said (at [16]):
71 Money Max Int Pty Ltd v QBE Insurance Group Ltd [2016] FCAFC 148, (2016) 245 FCR 191.
72 At [206].
73 At [13].
What seems to me to be critical is that all of the current and potential group members be properly informed of their rights and the potential impact on those rights by means of notices approved by the court.
We take the same view.
[112] Having said this, equally we accept that it would be possible to inform class members, prior to opt out, that there was a prospect that at the settlement approval stage the Court would make a funding equalisation order requiring the deduction of an amount equivalent to the funding commission from any settlement or judgment.
[96] Mr Weston noted that Southern Response’s proposed amendments to the plaintiffs’ draft notice were prepared principally in reliance upon the notice approved in Bartlett (No 2). The notice referred to in Bartlett (No 2) identified that any CFO made would allow recovery of a funding commission that the Court considers to be fair and reasonable but went on to record the commission rates that would be sought under the funding agreement in place.
[97] In a subsequent costs judgment, in explaining the orders he had previously made, Lee J observed:74
… I considered that adequate details of the common fund order, including a proposed rate, be provided in the opt-out notice to ensure that group members can make an informed decision as to whether or not they wish to opt-out. With respect to the careful and compelling evidence which was filed on behalf of the application, and the highly experienced legal practitioners acting for the applicant, it remains surprising to me that the applicant initially resisted the notion of giving specificity to the common fund order, and moreover, on the hearing of the application, resisted the course of the Court getting the limited and relatively inexpensive assistance [of Court appointed amicus] suggested, in order to allow me to be satisfied that the Court’s protective function had been discharged properly.
[98] Mr Weston responded to Mr Skelton’s submission that Bartlett (No 2) is distinguishable because the plaintiffs in Bartlett (No 2) must have known what level of funding would be sought whereas in this case the plaintiffs do not know the proposed level, only that it will be substantially below what is provided under the funding agreement. Mr Weston noted that the Federal Court of Australia, to meet the uncertainty attaching to the ultimate level of approved commission, has frequently
74 Bartlett (No 2), above n 69, at [6].
adopted a formulation which identifies that the funding agreement commission as a maximum which is subject to Court variation.75
[99] Mr Weston observed that the uncertainty as to CFA’s recovery of commission here starts with the failure of CFA to state the rate it now intends to seek. CFA could have indicated, having regard to the outcome already achieved through the Dodds litigation, maximum percentage rate it would seek. The fact that the plaintiffs’ “setting aside” application (determined in a separate judgment delivered today76) would have 15 per cent of settlement payments made by Southern Response put aside might be taken to foreshadow on the part of the plaintiffs and CFA a potential abandonment of much higher rates but does not constitute a commitment on the part of the plaintiffs or CFA.
[100] Mr Weston rejected Mr Skelton’s proposition that Southern Response, through its proposed amendments, is seeking to “alarm and intimidate” and that its objections are “self-interested”. He observed that the net cost to Southern Response and the Crown, whether potential class members stay in the proceeding and/or are required to contribute a portion of their settlement to a funder, is the same. Southern Response’s concern, he states, is to ensure class members make a decision based on full information. The concern is for the affected class members, not Southern Response itself.
[101] Mr Weston submitted that, by contrast, there is an interest (through financial benefit) for the plaintiffs in having a larger class (through class members staying in). Mr Weston submitted that any attempt to exclude a reasonable degree of information about funding arrangements and costs sharing tends to serve the interests of those running the representative proceeding (and the Rosses themselves) rather than the interests of the class members as a whole. This is inconsistent with the protective
75Referring to Sirtex above n 59, Schedule A: “The amount of this commission will be determined by the Court at a later stage in the proceeding, likely at settlement approval (for a settlement sum) or at trial (for a damages award). The Court has ordered that the percentage will be no more than 28 per cent. The Court will set it at a level that it considers to be reasonable and the amount sought may vary depending on the circumstances surrounding any settlement or award of damages.” See also Fisher (trustee for the Tramik Super Fund Trust) v Vocus Group Ltd [2019] FCA 712, annexure B at [31]; and Bradgate (Trustee) v Ashley Services Group Ltd [2017] FCA 1591, Schedule B.
76 Setting Aside Judgment, above n 15.
focus of the Court’s supervisory jurisdiction which is upon the interests of unrepresented class members, not those running the representative proceeding.77
[102] Mr Weston called in aid a recent (Australian) Parliamentary Joint Committee report on litigation funding which identified the undesirability of excessive sums being diverted from class members to litigation funders.78
[103] Mr Weston concluded this part of his submission by recognising that the inclusion of additional financial information in the class members notice increases the complexity of the notice. But, in his submission, the additional information proposed by Southern Response is such as will properly inform the class members’ decisions on whether to stay in or opt out of the class, and is presented in a manner which is digestible by potential class members of varying demographics. An experienced Full Court of the Federal Court of Australia agreed with that in Bartlett (No 2).79
[104] In my view the class members notice in this case requires a distinct reference to and explanation of the litigation funding arrangements and the potential for recovery of legal costs and/or funding commission through a CFO or FEO. I reach that conclusion essentially for the same fundamental reason as that identified by Lee J in relation to the class members notice approved in Bartlett (No 2). That is that adequate details of the CFO, including any proposed rate, need to be included in such a notice to ensure that group members can make an informed decision as to whether or not they wish to opt out — for this purpose, “giving specificity to the common fund order” is required.80
[105] I recognise that it may be simplistic to view Southern Response as having a completely neutral interest (in financial terms) in whether class members stay in or opt out. At the very least there are likely to be administrative and reputational advantages for Southern Response and/or the Crown through class members opting out of this
77 See Reasons Judgment, above n 14, at [83], referring to Capic v Ford Motor Co of Australia Ltd
[2016] FCA 1020 at [21].
78Parliamentary Joint Committee on Corporations and Financial Services Litigation Funding and the Regulation of the Class Action Industry (Commonwealth of Australia, December 2020) at [11.53]–[11.57]).
79 Bartlett (No 2), above n 69, at [6].
80 At [6].
proceeding and concluding a settlement directly with Southern Response. But the theme of Southern Response’s position — as to the need for more information about funding and costs recovery to be included in order to properly inform class members
— is valid. The key here is the provision of proper information to the class members, with the potential disadvantage or advantage to a party (or funder) necessarily a secondary consideration in the assessment.
[106] On the other hand, it is inescapable that a primary concern that the Rosses have with the degree of information which Southern Response proposes be provided is that its inclusion may serve to encourage class members to opt out. For the reasons explored by Mr Skelton in his submissions, class members could be prompted to opt out of the proceeding based on indications of commission rates which are “purely speculative”.
[107] In my judgement, any such impact on decisions to opt out or stay in cannot cut across the appropriateness of class members receiving fair, intelligible detail of the funding arrangements and the extent to which, should they stay in, their damages or compensation may be reduced through a costs recovery. While uncertainty as to the level of that recovery remains, that needs to be dealt with through appropriate wording in the class members notice (as seen in notices approved by the Federal Court of Australia). It cannot be achieved by the elimination of an appropriate level of detail from the notice.
[108] Accordingly, in the form of notice I will be approving I will include passages in Sections 6 and 7 under the headings “How is the representative proceeding being funded?” and “Common fund order or funding equalisation order will be sought”, in line with the notice approved by Lee J in Bartlett (No 2). The precise terms of the summary (in line with the Bartlett (No 2) summary) will be for the Rosses’ solicitors to finalise, as recognised by the Supreme Court in Ross SC (above at [18]). At the same time, I will require the discussion (in Section 7) of CFOs and FEOs to be simplified so as to avoid (through the inclusion of relatively detailed information) the risk of introducing an unnecessarily complex and potentially overwhelming amount of information.
Sections 8, 9 and 10:
Section 8 — Liability for legal costs
Section 9 — What will happen if you choose to stay in the proceeding? Section 10 — What will happen if you opt out?
[109] Both the Rosses and Southern Response accept that there should be a distinct discussion of the consequences of class members staying in or opting out of the proceeding (as in the FCA sample opt out notice).81 The Rosses’ draft notice does not use the heading in the FCA sample opt out notice — “Will you be liable for legal costs if you remain a class member?” Instead, that discussion is relocated to become part of the discussion under the heading “What will happen if you stay in the representative proceeding?” (which under the sample opt out notice deals only with the consequences in terms of the class members being entitled to share in benefits but being bound by unsuccessful outcomes.)
[110] The FCA sample opt out notice approach is to be preferred in the way it separates the subject-matter. The form of notice I approve will follow that approach.
[111] The major alteration Southern Response proposes to the discussion “What will happen if you stay in the class action?” is the addition of a lengthy explanation of the way in which common issues and individual claims would be dealt with respectively at stage 1 and stage 2, with detail of the consequences of staying in the representative proceeding, particularly at stage 2, including an explanation that Southern Response might pursue a counterclaim against class members at stage 2.
[112] Mr Skelton, for the Rosses, observed that the proposed notice will already refer to the potential need to prove individual claims in due course. He submits that that is a sufficient explanation of the further step involved in stage 2.
[113] Mr Skelton submitted that the need for all class members to front up with the documents relevant to their claim arises whether class members opt out or stay in.
81 FCA Practice Note, sch A at [7].
[114] Apart from the appropriateness of a brief identification of the fact that there will remain (under staying in) the need to provide the relevant individual information, the need for stage 2 involvement is therefore irrelevant to the opt out decision. Mr Skelton observed that the Court of Appeal in Ross CA recognised that an attraction of the opt out approach in this proceeding is that a class member’s election to participate in the proceeding can be deferred until after stage 1, at which point the potential advantages and any disadvantages of doing so will be clearer and more immediate, rendering class members better placed to make that choice.82
[115] Mr Weston (in supporting a more detailed explanation of stage 1 and stage 2) referred to the judgment of a Full Court of the Federal Court of Australia in King 2.83 In King 2, it was common ground (as here) that the representative proceeding would be conducted in two stages.84 The Full Court allowed GIO’s appeal against the primary Judge’s approval of a class members notice on the basis that it was capable of creating a misleading impression. It was held that the notice wrongly conveyed the impression that the plaintiff’s solicitors will act on behalf of a class member to establish the individual elements of their cause of action.85 In fact that would occur in King 2, as in this case, only if the class member entered into a fee and retainer agreement with the plaintiff’s solicitors.86 The Full Court acknowledged the requirements of clarity and simplicity and the difficulties associated with providing detailed information. However, it still held that class members needed to be informed that, unless the proceedings were settled, the plaintiff’s solicitors would not represent them to the point of judgment unless they assume a responsibility for their own legal fees.87 The amended form of notice required by the Full Court therefore included the words:88
“Unless the proceedings are settled, you will need to prove that you have individually suffered loss or damage because of the respondents’ conduct. To do this you are likely to need legal representation. If you want Maurice Blackburn Cashman to act on your behalf for this purpose you will have to
82 Ross CA, above 3, at [118]. See also Ross SC, above n 5, at [108].
[194] There will accordingly be orders in relation to costs of the nature sought by the plaintiffs.
Leave reserved
[195] Leave will be reserved to the parties to apply at short notice to alter, amend or add to the approved communications and associated directions as may be required by changing circumstances. This leave does not constitute a licence to any party to attempt to relitigate matters which have been determined by this judgment or which could have appropriately been the subject of submissions at the hearing of this application. It is a precautionary leave to ensure that the process ahead does not break down due to some changed circumstance.
Orders
[196]I order:
(a)the time and date before which a class member may opt out of this proceeding is fixed as 5.00 pm, 20 December 2021;
(b)the class members notice to be issued in this proceeding shall take the form of the document at Annexure “A” to this judgment, with the plaintiff forthwith to complete in Section 6 the summary of funding terms as in Bartlett (No 2),112 and is so approved;
(c)the opt out form to appear at the foot of the class members notice shall be in the form attached to this judgment as Annexure “B”, save that on the first page provision shall be included above the space for “Date” the words “Insured address” followed by a space;
(d)the advertisement of this proceeding through newspapers and Facebook shall be in the form attached to this judgment as Annexure “C”;
(e)promptly upon the sealing of these orders, the plaintiffs shall provide to the Managers of Community Law Canterbury and the Greater Christchurch Claims Resolution Service a copy of this judgment and the sealed orders under cover of a letter explaining that the Court has
112 Bartlett (No 2), above n 69.
directed those documents to be provided to those organisations, drawing particular attention to paragraphs [162]–[171] of this Judgment;
(f)the plaintiffs shall cause the proceeding to be advertised in terms of Annexure “C” to this judgment once in the Public Notice section of each of four newspapers, namely The Press, the New Zealand Herald, the Dominion Post and the Otago Daily Times, such advertisements to appear in the Saturday edition no later than three weeks after the date of these orders;
(g)GCA Lawyers shall promptly cause to appear on its Facebook page and to remain there until 5.00 pm, 20 December 2021 a notice in the form of Annexure “C”;
(h)the defendant shall cause the class members notice (incorporating the opt out form) to be sent to class members as follows:
(i)by sending a printed copy of the class members notice by tracked delivery to the last-known postal or physical address (if any) that the defendant has on file for each class member;
(ii)sending an electronic copy of the class members notice by email to the last-known email address (if any) that the defendant has on file for each class member, together with an electronic read receipt request;
(iii)to do so as soon as reasonably practicable but in any event no later than three weeks from the date of these orders
(i)the defendant shall within five weeks after the date of these orders file and serve an affidavit describing the steps it has taken in relation to posting and emailing the class members notice, and appending a list of the names of the persons to whom the notice has been sent, identifying
in relation to each such person whether the tracked courier mail was delivered or returned to sender, and whether there was any acknowledgment of receipt of the email or any bounce-back non- delivery message, following which the Court may require further information from the defendant;
(j)leave is reserved to the parties within three working days after the filing and service of such affidavit to seek further directions as to posting and/or emailing of the class members notice;
(k)leave is reserved to the parties, in the event the implementation of these orders becomes impracticable, to apply for further directions by way of alteration or addition to these orders or amendment of the same;
(l)the costs and disbursements of the posting and emailing by the defendant (and thereafter filing affidavit evidence) shall in the first instance be borne by the defendant but in the ultimate determination of costs and disbursements shall be costs in the cause. For costs and disbursements purposes, the defendant shall cause to be kept detailed records of any time attendances for which recovery may ultimately be sought;
(m)the costs and disbursements incurred by the plaintiffs in relation to the implementation of these orders shall in the first instance be borne by the plaintiffs but shall be costs in the cause; and
(n)except to the extent expressly dealt with in these orders, the costs and disbursements of the plaintiffs’ application for notification orders and the defendant’s opposition are reserved.
Osborne J
Solicitors:
GCA Lawyers, Christchurch for Plaintiff
Counsel: P G Skelton QC, Auckland
Buddle Findlay, Christchurch for DefendantCounsel: T C Weston QC, Christchurch
G D R Shand, Christchurch
Counsel: S M Grieve, Barrister, Christchurch
ABOUT THIS NOTICE
1. Why is this notice important?
# representative proceeding has been commenced in the High Court of New Zealand against Southern Response Eanhquake Services Ltd (formerly AMI Insurance).
The High Court has ordered that this notice be sent to anyone who might be a "class member“ on whose behalf the representative proceeding is brought.
You have been identified as someone who may be a class member. Please read this notice carefully. Any questions you have concerning the matters contained in this flDtice should NOT be directed to the court. If there is anything in it that you do not understand, you should seek legal advice. The contact details for the representative plaintiffs‘ lawyers are at the end of this notice.
The representative proceeding is about the way that Southern Response settled insurance claims for homes damaged in the Canterbury Earthquakes. It is alleged that Southern Response misled AMI policyholders into settling their claims for less money than they were entitled to under their insurance policies. The represenEafive proceeding is seeking compensation (money) for people who settled their insurance claims with Southern Response before 1 October 2014.
This notice contains important information about the background to the representative proceeding and your rights as an affected policyholder. In particular, it tells you about your right to opt out of the litigation. You will find this Information in Section 5 of this notice.
2. What is a representative proceeding?
A representative proceeding is a lawsuit brought by one or more people I"Plaintiffs”) on behalf of themselves and other people (“class members”) who have similar claims against someone thaI is alleged to have affected their legal rights {the "Oefendant"). In this case Brendan and Colleen Ross are the Plaintiffs and Southern Response is the Defendant.
Class members in a representative proceeding do not have to pay any of the costs of bringing the representative proceeding. In a representative proceeding, only the Plaintiffs are responsible for those costs.
Class members who do not opt out will be bound by the results of the representative proceeding. A binding result can happen in two ways: either a Judgment issued by the Court, ar a SetF/ement negotiated out of court. That means that:
(ajif the representative proceeding is successful, those class members will get to share in the benefits, including any money that the Defendant iS required to pay; and
(b)if the representative proceeding is unsuccessful, class members will not be able to pursue the same claims again, but will not have to pay any of the costs.
INFORMATION ABOUT THE REPRESENTATIVE PROCEEDING AND OPT OUT RIGHTS
3. What is this representative proceeding about?
This representative proceeding is brought by the Plaintiffs, Brgndan and Colleen Ross, on their own behalf and on behalf of all persons who are “class members" as defined by orders made by the Court of Appeal (see Section 4 Are you a class member? below).
The Plaintiffs allege in the statement of claim that:
(a)Southern Response misled and deceived policyholders in the way that it setEled insurance claims for earthquake damage prior to 1 October 2014;
(b)Southern Respo nse did this by withholding the full version of the “Detailed
Repair/Rebuild Analysis" (DRA) prepared for each poIicyho)deLs home, and only sending each policyholder an abridged version of the DRA;
(c)the full DRA contained a schedule of estimated costs to rebuild or repair the policyholder’s home, some of which were loca ted in an "Office Use" section, and ietotded Southern Response's estimate of the total deg ciil Web uild cost;
(d)the abridged DRA did noE include the "Office Use" section, and therefore recorded a lower repair/ rebuild cost;
(e)Southern Response did not provide policyholders with their full DRA, or tell them about the full DRA, or te)) them The abridged DRA was only an abridged version;
(f)Southern Response told policyholders that the sum set out in the abridged DRA was Southern Response’s estimate of the total cost to rebuild or repair the policyholder’s home, when that was not true; and
as a result of the above conduct, Southern Response misled or deceived policyholders into settling their insurance claims with Southern Response for substantially less money than they were entitled to under the insurance policy.
The Plaintiffs are seeking “damages” (compensation) from Southern Response on behalf of all class members, based on the difference between the amount each policyholder settled thefr insurance claim with Southern Response for, and the full repair/rebuild cost estima te contained in the full DRA. In Mr and Mre Ross’s case, tnat difference is $t41,06t, but the amount will be different for each class member. Mr and Mrs Ross are also seeking interest for all class members, and $25,000 per class member for stress and inconvenience.
Southern Response, as the Defendant, does not admit the claims made against it and is defending the representative proceeding.
The representative proceeding is being run by GCA Lawyers, who are the solicitors for Mr and Mrs Ross. The costs of bringing the representative proceeding are being funded by Claims Funding Australia Pty Ltd (Claims Funding Australia). Casts and funding are discussed further below in Section 8.
4. Are you a class member?
You are a class member if you:
(a)own or owned a residential dwelling in Canterbury that was insured with Southern Response (formerly AMI Insurance) under a "Premier House Cover" or "Premier Rental ProperEy Cover" policy;
(b)lodged a claim or cla inns with 5outhern Response under the policy for damage su ffered
to the dwelling as a result of the 2010—2012 Canterbury Earthquakes;
( I received a DRA from Southern Response Ehat did not include an "Office Use” sectio n;
(d)did not receive a DRA that included the "Office Use” section;
(e)entered into a settlement agreement with Southern Response prior to 1 October 2014 in settlement and discharge of their insurance claim; and
(f)are not a person for whom Southern Response managed Ehe repair of their home, or rebuilt their house.
The Court of Appeal orders on these matters are at paragraph 130 of the Court of Appeal’s judgment (dated 16 September 2019) in Ross v Southern Response [2019] NZCA 431. The judgment can be found online at http //nzlii org/nz/cases/NZCA/2019/431.html.
If you are unsure whether or not you are a class member, you should contact GCA Lawyers on 03 365 1347 or email [email protected] or seek your own legal advice without delay.
The plaintiff in a representative proceeding does not need to seek the consent of class members to commence the proceeding on their behalf or to identify a specific class member. However, class members may cease to be part of the representative proceeding if Ehey want. This is called ”opting out”
An explanation of how class members are able to opt out is found below in Section 12(B) "How can you opt out of the representative proceeding?'“. An explanation of whaE happens if you do opt out is found below in Section 10 "What will happen if you opt out?”.
6. How is the representative proceeding being funded?
Group members in a representative proceeding are not individually responsible for the legal costs associated with bringing the representative claim. In a representative proceeding, only the Plaintiffs are responsible for the costs.
The Plaintiffs and a number of other class members (”Client Group Members") have entered into funding agreements with Claims Funding Australia, a litigation funding company, which provide for Claims Funding Australia to pay the Plaintiffs’ legal costs of the proceeding, to indemnify the Plaintiffs in respect of any adverse costs orders which may be made against the Plaintiffs in the proceeding, and to provide any security for adverse costs in the proceeding (that is, any amount the Plaintiffs would have to pay to Southern Response if the representative proceeding were lost).
If you do not opt out of the representative proceeding, you can c!naose to sign a litigation funding agreement with Claims Funding Australia but you do not have to do so.
In exchange for the litigation funding provided by C1aims Funding Australia, tne Plaintiffs and Client Group Members have agreed that in the event there is a successful outcome to the proceedings: {Funding terms to be idenEified as in Bartlett v Cammonwealth af Australia (Na 2) {2019] FCA 800].
7.Common fund order or fund equalisatlon order will be sought
Class members who have not signed a funding agreement (“Non-Client Group Members") do not at present have any obligation to pay Claims Funding Australia a contribution towards the legal costs or a funding commission from any judgment or settlement in exchange for Claims Funding Australia’s funding this proceeding. However, as Claims Funding Australia is funding this proceeding on behalf of class members, the Plaintiffs intend to seek either a common fund order (CFO) or a Fee Equalization O°der (FEO) in the event there is a successful resolution of the proceeding. The effect of a CFO or FEO order would be Ehat if there is a successful resolution of the oroceeding (whether by settlement or judgment), all unfunded class members may have to pay out of any amounts they recover:
(a) a share of the total casts and disbursements incurred in running the proceeding *or the benefit of class members, in such amount as the Court considers to be fair and reasonable; and
(b) a funding commission that the Court considers to be fair and reasonable.
Liability for legal costs
If you do not opt out of the representative proceeding, you will be one of the class members on whose behalf the Plaintiffs are conducting the proceeding. GCA Lawyers are representing the Plaintiffs in the proceeding. you will not be liable for their legal fees merely by remaining a class member. That Ts subject to the qualification tnat the court might Face power Eo order that the costs reasanaoly incurred by the Plaintiffs in pursuing the claim, to the extent that they exceed the costs recoverable by them from Southern Response, be paid to the Plaintiffs out of any fund recovered by class members in the proceeding. The Plaintiffs’ intention to seek such an order is explained above in Section 7.
Unless tne proceeding is settled, you will need to prove that you have individually suffered loss or damage because of Southern Response’s conduct. To do this you can engage GCA Lawyers or other IawYers to do the necessary work for you.
You will not become liable for legal costs simply by remaining as a class memoer for the determination of the common issues. However:
(a) if the preparation or finalisation of your personal claim requires work to be done in relation to issues that are specific to your claim, you can engage GCA La•vers or other lawyers to do tnat work fOF you. A cDpy of the terms on which GCA Lawyers are acting in tne representative proceeding may be obtained frum them through the contact points shown below; and
(bj if any compensation becomes payable to you as a result of any order, judgment or settlement in the class proceeding, the Court may make an order that some of that compensation be used to help pay a share of the costs incurred by the plaintiffs in running the representative proceeding bu t which are not able to be recovered from Southern Response.
9.What will happen if you choose to stay in the representative proceeding?
Unless you opt out, you will be bound by any settlement or judgment of the representative proceeding. If the representative proceeding is successful you will be entitled to share in the benefit of any order, judgment, or settlement in favour of tfie Plaintiffs and class members. Howeve r, you may have to satisfy certain conditions before your individual entitlement arises. If the proceeding is unsuccessful or noE as successful as you might have wished, you will not be able to pursue the same claims against Southern Response in other legal proceedings.
10.What will happen if you opt out?
II you opE out, you will not be bound by, or entitled to share in the benefit of, any judgment or settlement in the representative proceeding. This means you would not receive any money from the representative proceeding if it is successful.
II you opt out, you will be entitled to bring your own separate lawsuit against Southern Response, provided that you file legal proceedings within any time limit (known as a "limitation period") that may apply to your claim. If you wish to bring your own claim against Southern Response, you show Id seek lepal advice about your claim and the applicable time limit before optinp out.
Southern Response Settlement Package
Southern Response and the Government have recently announced a settlement package that may be available to class members in this proceeding. If you are eligible for the package and Southern Response offers you a se ttlemenE, you will be required to opt out of this proceeding if you wish to accept the offer under that package. The Government’s press release about the settlement package is available here: package-so uthern-response-claimants. You should obtain legal advice about your rights under the settlemenE package.
1z. What class members need to do
(A) How you can remain a class member?
If you wish to remain a class member Ehere is nothing you need to do at the prese nI time. The Plain tills will continue to bring the proceeding on your behalf, up to the point where the Court gives a judgmen r determining the common issues or there is a settlement.
However, you are invited to contact the Plaintiffs’ lawyers, GCA Lawyers, on the number below and register as a class member so that future notices about the class action can be sent to your preferred address.
(B) How you can opt out of the representative proceeding?
If you do not wish to remain a class member you must opt out of the representative proceeding. If you wish to opt out of the proceeding, you must do so by completing the ”Opt Out form” in the form shown below, then returning it to the Registrar of the High Court at Christchurch at tfie address on the form.
IMPORTANT: the Notice must reach the Registrar no later than 5.00 pm, 20 December 202\,
otherwise iE will not be effective.
You should submit the opt out form (completed) if you qualify as a class member and you wish to opt out of the representative proceeding.
Each class member seeking to opt ouI should fill out a separate form. If you are opting out on behalf of a company or business please provide your name, the name of the company or business and your position witfiin the company or business (e.g. director or partner).
13.Where can you obtain copies of relevant documents?
Copies of relevant documents, including the statement of claim, the statement of defence, and the court judgments issued in the case so far, may be obtained by:
(a) downloading them from the representative proceeding website at htEps://www snutheriJresponseclassaction.co.nz/; or
(b) inspecting them between 8.00 am and 5.00 pm weekdays at the offices of GCA lawyers, contact details for which are available from or by calling 03 365 1347; or
(c) contacting the Christchurch Registry of the High Court at [email protected].
Please consider the above matters carefully. If there is anything of which you are unsure, you should contact GCA Lawyers on 03 365 1347 or by email aI srcca @gcalawyers com. or seek your own separate lega] advice. You should not delay in making your decision.
Class Member details
Telephone:
Emnil:
Adcress:
If you are signing as the solicitor or representative of the Class Member:
Name:
Capacity in which you are signing:
Telephone:
Address:
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