Smith v Claims Resolution Service Ltd - [2021] NZHC 1708

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-000643

[2021] NZHC 1708

BETWEEN
KARLIE MARGARET SMITH

Plaintiff

AND

CLAIMS RESOLUTION SERVICE LIMITED

First Defendant

AND

GRANT SHAND BARRISTERS AND SOLICITORS

Second Defendant

Hearing: 29 June 2021

Appearances:

M Smith for Plaintiff

A Barker QC and G Davis for First Defendant A Darroch for Second Defendant

Judgment:

8 July 2021

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 8 July 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 1708 [8 July 2021]

The application

[1] The plaintiff brings this proceeding as a representative action.1 She seeks orders and/or directions:

(a)approving the content of a draft opt-in consent form; and

(b)approving the content of a draft letter to eligible opt-in group members whose contact details have been provided by the first defendant, Claims Resolution Service Ltd (CRS), to counsel for the plaintiff;

(c)approving the content of a draft social media post;

(d)that CRS:

(i)remove material from two Facebook pages it says CRS controls and have the potential to mislead eligible opt-in group members about the proceeding and/or the consequences of opting-in to the proceeding; or

(ii)that CRS be required to publish a statement on both Facebook pages correcting such material as is found to have the potential to mislead eligible opt-in group members about the proceeding and/or about the consequences of opting into the proceeding; and

(e)that all parties are required to seek the Court’s prior approval to any public statements they intend to publish during the opt-in period about the proceeding and/or about the consequences of opting-in to the proceeding.

[2] CRS and the second defendant, Grant Shand Barristers and Solicitors (Shand), have, separately, filed notices in opposition to the application.

1 Smith v Claims Resolution Service Ltd [2019] NZHC 127 [Leave Judgment] and Claims Resolution Service Ltd v Smith [2020] NZCA 664.

Preliminary matter

[3] The plaintiff no longer wishes to continue as the representative plaintiff. A replacement is being identified. Counsel agree I should decide this application as that is happening. As the opt-in period is in its last month, and some matters arising should be dealt with quickly, I have agreed to proceed in that manner.

[4] This change of circumstances will need to be reflected in the opt-in consent form when it is approved.

Opt-in consent form

[5] The plaintiff was required to submit for prior approval of the Court a draft opt- in consent form.2 A draft is attached to the application. The plaintiff has proposed changes to the draft to accommodate matters raised by CRS and Shand. There are still unresolved issues.

GCA existing or new website

[6] Shand argues the form should not provide links to the plaintiff’s lawyers’ website (GCA Lawyers). It wants a website created for all relevant documents. Its concern is that potential participants receive only necessary and accurate information to…

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: [2021] NZHC 1708
Decision Date: 8 July 2021

CaseChat Overview and Summary

In Smith v Claims Resolution Service Ltd [2021] NZHC 1708, the plaintiff sought various orders and directions in relation to a representative proceeding against Claims Resolution Service Ltd and Grant Shand Barristers and Solicitors. The plaintiff sought approval for a draft opt-in consent form, a draft letter to eligible opt-in group members, and a draft social media advertisement. The plaintiff also sought orders requiring Claims Resolution Service Ltd to remove certain material from its Facebook pages and to correct misleading posts. The court held that the draft opt-in consent form required amendments to address concerns about the form providing legal advice, the treatment of damages, and the costs of the proceeding. The court also held that the draft social media advertisement should not be approved as there was no evidence that further advertising was necessary. The court ordered that certain posts on Claims Resolution Service Ltd's Facebook page be removed as they had the potential to mislead eligible claimants about the proceeding and the consequences of opting in. The court declined to make an order requiring all parties to seek the court's prior approval of public statements about the proceeding during the opt-in period.

The court identified several issues with the draft opt-in consent form. The form required amendments to address concerns about the form providing legal advice and the treatment of damages. The form also required clarification on the issue of costs, stating that generally party-party costs are the responsibility of the representative plaintiff but may be dependent upon factors including the funding arrangement secured and its terms. The court also held that the draft social media advertisement should not be approved as there was no evidence that further advertising was necessary. The court found that certain posts on Claims Resolution Service Ltd's Facebook page had the potential to mislead eligible claimants about the proceeding and the consequences of opting in, and ordered that those posts be removed. The court declined to make an order requiring all parties to seek the court's prior approval of public statements about the proceeding during the opt-in period.

Orders