Smith v Claims Resolution Service Ltd

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-643

[2021] NZHC 3424

BETWEEN

KARLIE MARGARET SMITH

Plaintiff/First Counterclaim Defendant

AND

CLAIMS RESOLUTION SERVICE LTD

First Defendant/Counterclaim Plaintiff

AND

GRANT SHAND BARRISTERS AND SOLICITORS

Second Defendant

AND

SHARON MARGARET SMITH

Second Counterclaim Defendant

Hearing:

9 December 2021

Appearances:

K M Smith (Plaintiff//Counterclaim defendant) in person R J Lynn (assisting)

G P Davis and S L Austin for First Defendant/Counterclaim Plaintiff
(A B Darroch for Second Defendant excused)

Judgment:

13 December 2021

JUDGMENT OF OSBORNE J

(freezing order)

This judgment was delivered by me on 13 December 2021 at 4.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

SMITH v CLAIMS RESOLUTION SERVICE LTD [2021] NZHC 3424 [13 December 2021]

Introduction

[1]        Claims Resolution Service Ltd (CRS) is the first defendant and counterclaim plaintiff in this proceeding.

[2]        CRS applied without notice last month for a freezing order restraining the plaintiff/first counterclaim defendant, Karlie Smith, from dealing with her residential property or, alternatively, a portion of the proceeds of sale.

[3]Orders were made.1

[4]CRS’s interlocutory application was then adjourned for this on-notice hearing.

This proceeding

[5]        The background which follows substantially reproduces the pertinent section of the previous judgment.

[6]        Ms Smith’s claim relates back to damage suffered by Ms Smith’s home in the Canterbury Earthquake Sequence. She entered into contracts with CRS for claims resolution funding and advocacy services and with the second defendant for legal representation in relation to a civil proceeding against her insurer.

[7]        Ms Smith asserts she settled her insurance claim for a sum significantly less than the defendants had identified and advocated to be the full and true value of that claim. She alleges breaches of fiduciary duty by both CRS and the second defendant. She also asserts her contract with CRS was an unconscionable bargain. She seeks declarations to that effect. She also seeks declarations that the contracts are void and/or that it would be inequitable for the defendants to recover money under those contracts.

[8]        The defendants each filed statements of defence. CRS included a counterclaim for monies it alleged are due and owing under its contract with the plaintiff, Ms Smith, (and the second counterclaim defendant, Sharon Smith).

1      Smith v Claims Resolution Service Ltd [2021] NZHC 3106.

[9] The counterclaim defendants deny liability by reason of the matters referred to at [7] above.

[10]      In February 2019, Ms Smith was granted leave for this proceeding to proceed as a representative claim on an opt-in basis.2

[11]      Subsequently, steps have been taken to advance procedural matters concerning the opt-in process, culminating in the Court’s approval of the opt-in consent notice in July this year.

[12]      At that time, it became apparent that Ms Smith no longer wished to continue the proceeding as representative plaintiff. To date no one has been substituted as plaintiff (an opposed application in that regard has been heard, with the decision reserved).

[13]      On…