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

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-000361

[2018] NZHC 3288

BETWEEN
BRENDAN MILES ROSS and COLLEEN ANNE ROSS

Plaintiffs

AND

SOUTHERN RESPONSE EARTHQUAKE SERVICES LIMITED

Defendant

Hearing: 12 & 13 November 2018

Appearances:

P G Skelton QC and C Pearce for Plaintiffs

T C Weston QC, K Paterson and O Gascoigne for Defendant

Judgment:

13 December 2018

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

Judgment 1: Terms of representation order and Direction on opt-out / opt-in

Introduction

[1] The plaintiffs, Mr and Mrs Ross, sue the defendant, Southern Response Earthquake Services Limited (Southern Response) on four causes of action arising from the settlement of their insurance claim for damage to their house in the Canterbury earthquakes between 2010 and 2012. They say that by certain actions in the period leading up to that settlement Southern Response breached the Fair Trading Act 1986, made misrepresentations, and breached an implied duty of good faith in their insurance contract. They also say that they were influenced in entering their settlement agreement by certain mistakes on factual matters.

[2] This judgment determines Mr and Mrs Ross’s application to bring this proceeding as representatives of a group of other policy holders with Southern

ROSS v SOUTHERN RESPONSE EARTHQUAKE SERVICES LTD [2018] NZHC 3288 [13 December 2018]

Response who are also said to have settled claims in similar circumstances, and who have the same rights against Southern Response as a result.

[3]Rule 4.24 of the High Court Rules 2016 provides:

Persons having same interest

One or more persons may sue or be sued on behalf of, or for the benefit of, all persons with the same interest in the subject matter of a proceeding –

(a)with the consent of the other persons who have the same interest; or

(b)as directed by the court on an application made by a party or intending party to the proceeding.

[4] As consent has not been sought, Mr and Mrs Ross require leave of the Court under r 4.24 to proceed with a representative action.

[5] Evidence before the Court indicates that if leave is granted for a representative action on the basis sought by Mr and Mrs Ross, the likely number of persons whom they would represent is approximately 3,000.

[6] Southern Response does not oppose Mr and Mrs Ross proceeding by way of a representative action for others with a similar interest in the subject matter of this case, but differs from them on key aspects of the orders they seek from the Court.

Overview of the basis of the claim

[7] Mr and Mrs Ross insured the house that was damaged in the earthquakes under a “Premier House Cover” policy with AMI Insurance Ltd (AMI) a number of years before the earthquake sequence. The policy was renewed annually on 30 June each year and was current at the time of the Canterbury earthquakes. They say that the policy provided that if the house was damaged “beyond economic repair”…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2018] NZHC 3288
Decision Date: 13 December 2018

CaseChat Overview and Summary

The plaintiffs, Mr and Mrs Ross, sue Southern Response Earthquake Services Limited on four causes of action arising from the settlement of their insurance claim for damage to their house in the Canterbury earthquakes between 2010 and 2012. They say that by certain actions in the period leading up to that settlement Southern Response breached the Fair Trading Act 1986, made misrepresentations, and breached an implied duty of good faith in their insurance contract. They also say that they were influenced in entering their settlement agreement by certain mistakes on factual matters. This judgment determines Mr and Mrs Ross’s application to bring this proceeding as representatives of a group of other policy holders with Southern Response who are also said to have settled claims in similar circumstances, and who have the same rights against Southern Response as a result. The Court has before it the terms of the representative order that should be made, and whether membership of the class should be determined on an opt-out or opt-in basis. The Court finds that the proposed representative order should be limited to those who elected the “buy another house” settlement option under the policy, and that the class should be limited to those whose houses were damaged beyond economic repair. The Court finds that membership of the class should be determined on an opt-in basis. The Court makes the following orders: 1. The plaintiffs are granted leave pursuant to High Court Rule 4.24(b) to bring this proceeding against the defendant on behalf of all persons who have the same interest in the subject matter of the proceeding, namely: (a) They own or owned a residential dwelling in Canterbury that was insured with the defendant under a “Premier House Cover” or “Premier Rental Property Cover” policy (Policy); (b) They lodged a claim or claims with the defendant under the Policy for damage suffered to their dwelling as a result of the 2010 – 2012 Canterbury earthquakes (Claim); (c) Their residential dwelling the subject of the Claim was damaged beyond economic repair; (d) They received a DRA from the defendant that did not include the Office Use section; (e) They did not receive a DRA from the defendant that included the Office Use section; (f) They entered into a settlement agreement with the defendant prior to 1 October 2014 in settlement and discharge of their Claim; and (g) They are not persons for whom the defendant managed the repair of their home, or rebuilt their home. 2. A class member may elect to opt into the proceeding by completing an opt- in election form approved by the Court for that purpose and sending it to the Registrar of the High Court in Christchurch on or before a date to be fixed. 3. This order is to take effect from 25 May 2018. 4. Costs are reserved.

Orders