Sneesby v Southern Response Earthquake Services Ltd

[2022] NZHC 2100

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-009-1694

[2022] NZHC 2100

BETWEEN

JOHN ARTHUR SNEESBY

Plaintiff

AND

SOUTHERN RESPONSE EARTHQUAKE SERVICES LIMITED

Defendant

Hearing:

19 August 2022

Appearances:

G D R Shand for Plaintiff

T C Weston QC and K M Paterson for Defendant

Judgment:

23 August 2022

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Application for leave to appeal)

SNEESBY v SOUTHERN RESPONSE EARTHQUAKE SERVICES LIMITED [2022] NZHC 2100

[23 August 2022]

[1]    Mr Sneesby, applies for leave to appeal my decision of 23 February 2022, re-issued on 3 March 2022 (my February judgment).1

[2]    The basis of that decision was that Mr Sneesby was not a suitable representative plaintiff as his claim was plainly meritless.2

[3]    My  conclusion  that  Mr Sneesby’s  claim  was  meritless  was  based  on   Mr Sneesby having entered a full and final settlement agreement with Southern Response Earthquake Services Limited (Southern Response) in 2017. I do not repeat the analysis of that agreement, but I concluded the 2017 settlement agreement was widely drawn and intended to be in full and final settlement of all Mr Sneesby’s claims, known or unknown, that he had against Southern Response. I said:3

That the 2017 Settlement Agreement was intended to be [an] absolute settlement between the parties is emphasised by cl 14 which permits Southern Response to plead the 2017 Settlement Agreement as an absolute bar to any further or other claim arising directly or indirectly out of the earthquakes (the Events), the Claim, the Dispute and/or the Proceeding.

(The claim being Mr Sneesby’s claim for earthquake damage to his property and the proceedings being those issued by Mr Sneesby against EQC and Southern Response in 2016 in (CIV-2016-409-1009)).

[4]    While that was the basis of the decision, given the extensive submissions of counsel, I went on to make brief observations about the remaining matters addressed by counsel. Those obiter observations were not a basis of my decision and as such those observations are not relevant to the question of leave. Mr Sneesby would not be appealing against those obiter comments as they are not the basis of the decision declining his application.4

[5]The Court of Appeal has previously stated that:5

… in order to qualify as a judgment, decree or order, there must be a finding or ruling by the Court which amounts to the determination of an issue. A mere

1      Sneesby v Southern Response Earthquake Services Ltd [2022] NZHC 262.

2      Sneesby v Southern Response Earthquake Services Ltd, above n 1, at [45].

3      Sneesby v Southern Response Earthquake Services Ltd, above n 1, at [40].

4      See Amalgamated Builders Ltd v Nile Holdings Ltd (2000) 14 PRNZ 652 (CA) at [24].

5      Re Siemer [2020] NZCA 393 at [23].

expression of view short of a conclusion or a suggestion as to a possible course of action will not satisfy the requirement and thus will not be susceptible to an appeal.

(emphasis added)

Applicable principles

[6]    Mr Shand, counsel for Mr Sneesby, submits that in substance the effect of my February judgment was to finally conclude Mr Sneesby’s claim and Mr Shand referred to s 56(4) of the Senior Courts Act 2016 which provides:

(4)Any party to any proceedings may appeal without leave to the Court of Appeal against any order or decision of the High Court—

(a)striking out or dismissing the whole or part of a proceeding, claim, or defence; or

(b)granting summary judgment.

[7]    Mr Shand submitted  that  the  language  of  my  February  judgment,  where I described Mr Sneesby’s claim as “meritless”, was akin to the language of a strike-out or summary judgment and as such Mr Shand submitted that leave was not in fact required. In support of this proportion Mr Shand referred to McGechan at [SC56.06(2)] under the heading “Exceptions to leave requirement” which, referring to s 56(4), says leave is not required “… because such orders or decisions have the effect of finally resolving the High Court proceeding (my emphasis).”6

[8]    Mr Shand’s submission was that because my conclusion that the 2017 settlement agreement was a bar to Mr Sneesby’s claim, it had the effect of finally resolving Mr Sneesby’s High Court proceeding, leave was not required. I do not accept that submission. Mr Weston QC, counsel for Southern Response, is correct that the High Court proceeding remains intact.  Mr Weston  also submitted that whether   s 56(4) applied was a matter for the Court of Appeal and not for me to rule on.  If  Mr Shand is correct, Mr Weston said Mr Sneesby can file his appeal with the Court of Appeal without reference to this Court.

[9]Both counsel acknowledge that leave is intended to be a filtering mechanism.

6      Robert Osborne (ed) McGechan on Procedure (online ed, Thomson Reuters) at [SC56.06(2)].

[10]   A high threshold exists for the granting of leave under the Act.7 The High Court in Finewood Upholstery Ltd v Vaughan succinctly outlined the purpose of s 56 of the Act as:8

[13]      The requirement for leave to appeal should serve as a “filtering mechanism”, to ensure that unmeritorious appeals of interlocutory orders, or appeals of interlocutory orders of no great significance to  either the parties or more generally, do not unnecessarily delay the proceedings in which the orders were made.

[14] Ultimately, and taking into account those considerations set out at [9] above, the court hearing an application for leave to appeal from an interlocutory order will need to stand back and assess, in a pragmatic and realistic way, whether the interests of justice are served by granting leave to appeal.

(emphasis added)

[11]   Mr Sneesby’s application for leave to appeal is on the grounds there was an arguable error of fact or law as set out in the draft notice of appeal attached to the application.

[12]   In respect of the issue upon which my February judgment is based, the draft notice of appeal says my decision was wrong because “The Court was wrong to find at paragraph [45] that the [applicant’s] claim was ‘plainly meritless’.”

[13]   Mr Shand’s submissions filed in support of the application for leave to appeal expanded on that point with Mr Shand submitting:

The Court was wrong to find that the 2017 agreement barred the claim when:

(1)The agreement expressly excluded “out of scope”;

(2)Mr Sneesby did not know he had a claim for misleading conduct by Southern Response about “out of scope” when he signed the 2017 agreement;

(3)The 2016 court proceedings underlying the agreement sought no relief for the “out of scope” claim.

[14]   As counsel for the respondent notes, these propositions are not elaborated on further in Mr Shand’s written submission.

7      Greendrake v District Court of New Zealand [2020] NZCA 122 at [6](a) and [16].

8      Finewood Upholstery Ltd v Vaughan [2017] NZHC 1679.

[15]   Mr Shand, in oral submissions, submitted that the 2017 settlement agreement was incapable of settling Mr Sneesby’s present claim under the Fair Trading Act 1986 (FTA). This was on the basis that it was not possible for Mr Sneesby to contract out of the FTA or rather, to settle any claim he might have under the FTA,  as he was   not aware in 2017 of the FTA claim he now advances in this proceeding. The issue of contracting out of the FTA does not arise here as the issue is whether Mr Sneesby settled a claim he says he had under the FTA in 2017.

[16]   Mr Shand relied on Gendall J’s judgment in Dodds v Southern Response Earthquake Services Ltd where his Honour held the settlement agreement relied on by Southern Response in that case: “… cannot limit liability for misleading or deceptive conduct”.9

[17]Clause 7 of the 2017 settlement agreement provides:

The Discontinuance and Costs Settlement are accepted by Southern Response in full and final settlement and discharge of any claims the Plaintiff and Southern Response have or might have against the other arising directly or indirectly out of, or in connection with the Events, Discontinuance, Proceeding and/or the Policies and/or the loss or damage to the Insured Property, whether such claims arise under contract, statute, common law, or equity; are in existence now or may arise sometime in the future; are known or unknown; and/or are in the contemplation of the Parties or otherwise; and/or arise following a subsequent Court decision that states the law in a way different to the understanding of one or more parties to this Agreement.

[18]   Gendall J’s decision  is  not  authority  for  the  propositions  advanced  by  Mr Shand. Gendall J decided in Dodds that the terms of the settlement agreement relied on by Southern Response in that case did not bar the Dodds claim. His Honour discussed in detail a party’s ability to settle claims including those of which they were unaware.10 I referred to some of his Honour’s discussion of the law in my February judgment.11  I  then applied  those  principles to the  2017 settlement agreement.12   Mr Shand did not, in support of this application, analyse how my application of those principles to the 2017 settlement agreement was incorrect. In short, the 2017

9      Dodds v Southern Response Earthquake Services Ltd [2019] NZHC 2016, [2019] 3 NZLR 826.

10     At [171]-[178].

11     Sneesby v Southern Response Earthquake Services Ltd, above n 1, at [36]-[38].

12     At [40]-[46].

settlement agreement is a very different creature to the settlement agreement that was before Gendall J.

[19]   It is not clear to me how cl 7 could be made wider than it is. This is not an area where the legal principles applying to when a settlement agreement is binding or how it is to be construed are in dispute such that it might be said an appeal was called for. Such do not need to be clarified. Nor, as I have said, did Mr Shand explain how my application of the principles in my February judgment was wrong. In short, Mr Shand did  not  explain how cl 7 should be read down or  interpreted  so  as to not  cover  Mr Sneesby’s FTA claim, other than to submit that a party may only settle a claim under the FTA if they are aware of it. That is not the law and no authority for that proposition was advanced by Mr Shand.

[20]   The 2017 settlement agreement does not exclude Southern Response’s liability under the FTA – it settled any liability it may have had. On Mr Sneesby’s case, he was misled by Southern Response when it settled his out of scope claim by not making an allowance for contingency, professional and design fees, and preliminary and general, in the sum it paid. If Mr Sneesby’s claim is correct, his FTA claim existed at that time. Mr Sneesby says he did not know that. However, by cl 7 of the settlement agreement, Mr Sneesby, with the benefit of legal advice, agreed to settle all statutory claims he had, whether he knew about them or not. Again, the words are clear.

[21]   Mr Shand submits the 2017 settlement agreement was not intended to settle out of scope items. There is, however, no attempt to explain how a claim relating to out of scope damage caused by the Canterbury Earthquakes, is not a claim Mr Sneesby brings against Southern Response arising directly or indirectly out of the Canterbury Earthquakes, defined in the 2017 settlement agreement as “the Events”. The settlement agreement records the parties agreed to resolve all issues arising directly or indirectly out of the earthquakes and/or the dispute about the scope of Mr Sneesby’s cover, among others.

[22]   Accordingly, I agree with counsel for Southern Response that the proposed notice of appeal and Mr Shand’s submissions do not identify an arguable error of fact or law in my February judgment.13

[23]   Mr Shand referred to a decision of  Venning  J  in  Simons  v  ANZ  Bank  New Zealand Ltd, as support for the proposition that there is a low threshold to be met before leave to bring a representative claim will be given and such should influence whether leave to appeal the dismissal of such an application is granted.14 Mr Shand emphasised Venning J’s reference to the Court of Appeal authority that in an application to bring a representative claim the Court should take a liberal and flexible approach when determining whether there is a common interest and that the requisite commonality of interest is not a high threshold. In particular, he relied on [108] of Simons where Venning J said:15

The Court should be wary of looking for impediments to the representative action rather than being facilitative of it.

[24]   Mr Shand also referred to [133] of Simons where Venning J accepted the time for consideration of the merits is at stage one of the proceedings rather than at the preliminary leave stage. Venning J said:

To resolve the arguments raised by the defendants will require a more detailed consideration and analysis of the arguments than is appropriate at this stage of the proceeding.

[25]Venning J then went on to say:16

It cannot be said at this stage that the claims are so plainly without merit (as they were in the case of Sneesby v  Southern  Response  Earthquake  Services Ltd) that the representative orders sought should not be granted.

[26]   Accordingly, I do not read Venning J’s decision in Simons as modifying the approach I took in my February judgment being that while the leave application should not be turned into a mini trial, if a claim is plainly meritless then it is not an appropriate one to support a representative claim.

13     Finewood Upholstery Ltd v Vaughan, above n 8, at [9].

14     Simons v ANZ Bank New Zealand Ltd [2022] NZHC 1836.

15     Simons v ANZ Bank New Zealand Ltd, above n 14, at [108].

16     Simons v ANZ Bank New Zealand Ltd, above n 14, at [133] (footnotes omitted).

[27]   Mr Shand also referred to Harris v Smith, where the Court of Appeal granted leave to appeal after it was declined by the High Court.17 That case does not alter the principles  applying  to  whether  leave  shall  be  granted.  As  Mr Weston  noted, the decision to grant leave in that case was influenced by a change in circumstances after leave was considered in this Court. I do not see Harris as advancing the present application.

[28]   Accordingly, I decline the application for leave to appeal as I do not consider an arguable error in my February judgment has been identified. Again, my February judgment is based on the conclusion the full and final settlement agreement rendered Mr Sneesby an inappropriate plaintiff to be granted leave to conduct a representative action.

[29]   I do not address Mr Shand’s comments about the observations I made in my February Judgment for the reasons already given.

Costs

[30]   The plaintiff is to pay costs to the defendant on a 2B basis together with disbursements as fixed by the Registrar.

Associate Judge Lester

Grant Shand, Auckland (for Plaintiff)

Buddle Findlay, Christchurch (for Defendant) Copy to counsel:

T C Weston QC, Barrister, Christchurch (for Defendant)

17     Harris v Smith [2022] NZCA 313.