Smith v Claims Resolution Service Ltd - [2019] NZHC 1013

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-000643

[2019] NZHC 1013

BETWEEN
KARLIE MARGARET SMITH

Plaintiff

AND

CLAIMS RESOLUTION SERVICE LIMITED

First Defendant

GRANT SHAND BARRISTERS AND SOLICITORS

Second Defendant

Hearing: 10 April 2019

Appearances:

M S Smith for Plaintiff

ARB Barker QC for First Defendant A B Darroch for Second Defendant

Judgment:

9 May 2019

JUDGMENT OF GENDALL J

SMITH v CLAIMS RESOLUTION SERVICE LIMITED [2019] NZHC 1013 [9 May 2019]

Introduction

[1] On 12 February 2019 I gave judgment in this proceeding granting leave to the plaintiff (Ms Smith) under r 4.24 of the High Court Rules for this proceeding to proceed as a representative action. In doing so, I declared in my judgment that this matter was to operate as an “opt in” proceeding and potential group members for the representative action were to have a period of four months to be informed about it and to decide whether to join.

[2] At para [49] of that 12 February 2019 judgment I indicated that the starting point for the “opt in” period and the effective date from which the orders I had made, together with further directions for the conduct of this proceeding as a representative action, were to be determined in a subsequent judgment I was to issue following the provision of memoranda from counsel for the various parties.

[3] At para [50] of that judgment I set out directions concerning the filing and service of those memoranda to address those specific matters.

[4] Memoranda of submissions on these issues have now been filed by counsel for the plaintiff (Ms Smith), counsel for the first defendant Claims Resolution Service Limited (CRS), and counsel for Grant Shand Barristers Solicitors (Shand Solicitors). In addition, at counsel’s request, a face to face hearing before me regarding the further directions required took place on 10 April 2019.

[5] I have now had an opportunity to consider all those written and oral submissions and give my decision concerning the further conduct of this proceeding and the matters related thereto.

[6] But before doing so, it is appropriate here to repeat some brief factual background to this whole matter so a full understanding of what is proposed may appear clearer.

Factual background

[7] Ms Smith, as a former client of CRS and Shand Solicitors sues the defendants in this action (leave for which has been granted to proceed as a representative proceeding) both on her behalf and on behalf of a group of other similar former clients (potential group members). As the owner of a home damaged in the 2010/2011 Canterbury earthquake sequence, Ms Smith engaged CRS to pursue her unresolved earthquake claim against her insurer. Her position is that CRS in turn engaged Shand Solicitors as her lawyers for the claim. She maintains that CRS, Shand Solicitors and other closely held companies related to CRS and its principal, Mr Bryan Douglas Staples (Mr Staples), had an undisclosed joint venture agreement. Ms…

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: [2019] NZHC 1013
Decision Date: 9 May 2019

CaseChat Overview and Summary

In the High Court of New Zealand, Karlie Margaret Smith filed a lawsuit against Claims Resolution Service Limited and Grant Shand Barristers and Solicitors. Smith, a former client, alleged that the defendants breached fiduciary duties and engaged in unconscionable bargain through an undisclosed joint venture agreement. The case was allowed to proceed as a representative action, allowing similar claims from other clients to be addressed collectively. The court considered various issues, including the form of written communication to potential group members, the mechanics for distribution of notices, security for costs, and broader case management issues. The court approved a form of notice that included essential information about the proceeding and the claims being made. It directed that the notice be published in relevant newspapers and on the plaintiff's lawyers' website. The court also set a deadline for potential group members to opt-in to the proceeding and outlined the process for handling security for costs and outstanding debts. An in-person case management conference was scheduled to address further issues, including discovery, security for costs, and the progression of the proceeding. The court awarded costs on the representative proceeding application, determining the appropriate scale and disbursements.

The court's decision provided clear directions for the further conduct of the proceeding, ensuring that potential group members were adequately informed and that the case progressed efficiently. The directions aimed to balance the needs of all parties while facilitating the resolution of the collective claims.

Orders