Ross v Southern Response Earthquake Services Ltd

JurisdictionNew Zealand
CourtHigh Court
JudgeOsborne J
Judgment Date20 September 2021
Neutral Citation[2021] NZHC 2453
Docket NumberCIV-2018-409-000361

[2021] NZHC 2453

IN THE HIGH COURT OF NEW ZEALAND

CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA

ŌTAUTAHI ROHE

Osborne J

CIV-2018-409-000361

Between
Brendan Miles Ross and Colleen Anne Ross
Plaintiffs
and
Southern Response Earthquake Services Limited
Defendant
Appearances:

P G Skelton QC, K M Quinn and C B Pearce for Plaintiffs

T C Weston QC, K M Paterson and E D Peers for Defendant

S M Grieve and G D R Shand for B & L Vickers and others (Intervening)

Civil Procedure — application by the defendant for directions which would permit it and its legal advisors to communicate directly with individual potential class action members — representative proceeding — content of communications — the standard to be observed — Court's supervisory powers in relation to representative proceedings High Court Rules 2016

The issue was whether Southern Cross should be precluded from communicating with class members during the opt out period and whether the Court should require any amendment to Southern Response's proposed forms, contents and methods of communication.

The Court held that the Court's supervisory powers in relation to representative proceedings attached to communications between a defendant and members of the class. Southern Response was not precluded from communicating with class members. Southern Response's communications were not to be misleading, coercive or similarly unacceptable. The scope Southern Response had to promote to claimants a settlement package must be reasonably tempered as they would l be communicating the availability of the Settlement Package around the same time as the class members notice was issued. That ensures there was a balance between the information provided in the class members notice and that which class members would receive around the same time in relation to Southern Response's Package

The communication should contain repeated advice to take legal advice for more information regarding the representative proceeding. The use of “independent legal advice” was permitted as it simply represented Southern Response's recommendation. Southern Response should not be precluded from communicating its Package during the opt out period. Given the entitlement of class members to make their decisions on an informed basis, close timing between each stage of the two sets of communications was appropriate.

The communications were approved with amendments.

JUDGMENT OF Osborne J

(Defendant's communications application)

This judgment was delivered by me on 20 September 2021 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

TABLE OF CONTENTS

Introduction

[1]

Previous findings in relation to defendant's communications

[3]

The substantive litigation and interlocutory applications and appeals

[8]

Directions now sought by Southern Response

[14]

The Rosses' opposition

[18]

Matters previously determined

[19]

Communications during the opt out period

[22]

Content of Southern Response's communications — the standard to be observed

[25]

Content of Southern Response's communications — discussion

[31]

Appendices 1–5

[31]

Appendix 1: Webpage content

[34]

CP1 “Background to the Package”

[36]

CP2 “The Pre-October 2014 Payment Package is based on the Dodds case”

[38]

CP3 “The Pre-October 2014 Payment Package is based on the Dodds case”

[39]

CP4 “Relationship between pre-October 2014 Payment Package and the Ross class action”

[44]

CP5 “Your options if you cash-settled with Southern Response prior to 1 October 2014”

[54]

CP6 “Recommendation to seek independent legal advice”

[57]

CP7 “What is the Independent Oversight Committee (IOC)?”

[61]

CP8 “EXPLANATIONS ABOUT THE DODDS CASE: Background”

[62]

CP9 “EXPLANATION ABOUT THE DODDS CASE: Dodds Court Decision”

[64]

CP10 “INDEPENDENT OVERSIGHT COMMITTEE”

[69]

Appendix 2: Registration form

[70]

CP11 First draft email

[71]

CP12 Second draft email

[74]

Appendix 3: Marketing material

[75]

Appendix 4: Direct communication with customers (Phase 2 or where a customer requests written information)

[76]

CP13 “Relationship between Pre-October 2014 Payment Package and the Ross Class Action”

[76]

CP13 “Your options if you cash-settled with Southern Response prior to 1 October 2014”

[77]

CP15 “Recommendation to seek independent legal advice”

[78]

Appendix 5: Letterbox drop to Canterbury households (Phase 3 — if required)

[80]

CP16 “Am I eligible for a payment?”

[80]

Content of Southern Response's communications — approved forms

[82]

Timing of Southern Response's communications

[84]

Leave reserved

[91]

Orders

[92]

Communications

[92]

Initial Communications

[92]

Further Communications

[92]

Liberty to negotiate and/or settle claims

[92]

Timing

[92]

Leave reserved

[92]

Costs and disbursements

[92]

Introduction
1

In this proceeding Brendan and Colleen Ross 1 bring (by leave under r 4.24 High Court Rules 2016) a representative claim against Southern Response Earthquake Services Ltd (Southern Response). 2

2

An issue arose as to communications which Southern Response proposed to initiate with individual potential members of the class represented by the Rosses. I heard Southern Response's application for directions which would permit it and its legal advisors to communicate directly with individual potential class members in relation to the settlement of their claims.

Previous findings in relation to defendant's communications
3

I first issued a Result Judgment by which the directions sought by Southern Response were refused. 3 I have today issued my Reasons Judgment. 4

4

By the Result Judgment I refused the directions sought by Southern Response. 5 The (limited) findings which led to the Result Judgment may be summarised as follows: 6

I directed that, in the event Southern Response wished to communicate with the class members, it was to file either an amended or fresh notice of application for approval of communications in draft form. 7

  • (a) the Court's supervisory powers in relation to representative proceedings attach to communications between a defendant (and its legal representatives) and members of the class as they do to a plaintiff (and their legal representatives) and members of the class;

  • (b) in relation to both situations, the Court's powers extend to all aspects of any communication including form, content and timing; and

  • (c) in appropriate cases, the Court may require a party to seek from the Court prior approval in relation to its proposed communication/s.

5

In the Reasons Judgment, I reviewed overseas case law and legislative requirements and issues raised by the Rosses as to ethical considerations. 8

6

I found that overseas practice upheld Southern Response's freedom of communication but subject, extraordinarily, to intervention by the Court. I stated:

[170] Practice in those overseas jurisdictions recognises the general freedom of a defendant to communicate settlement offers directly to claimants (other than the representative plaintiff), but with the Court prepared to intervene where the defendant's conduct is misleading, coercive or similarly unacceptable. The jurisdiction to intervene is exercised protectively, but otherwise recognising the defendant's freedom of action. Circumstances in particular cases may mean that a prudent defendant will provide its settlement offer to the solicitor acting for the representative plaintiff in advance, to enable that party to seek directions from the Court in the event there is an unacceptable aspect. Extra-ordinarily, the Court may prohibit a defendant's communications other than in a form and manner approved in advance by the Court.

7

I then explained the appropriateness of supervisory intervention in Southern Response's communications in this case:

[172] The authorities to which I have referred … indicate that at least in some overseas jurisdiction the Court's supervisory jurisdiction will in appropriate cases be exercised in relation to the content of communications between the defendant in a class action and class members who have not retained the plaintiff's lawyers to represent them. The most frequent example of such supervision either being exercised or considered relates to situations where the defendant's conduct is misleading, coercive or similarly unacceptable. The categories of conduct which may attract the Court's intervention, however, are not closed.

[173] Here, the proposed communication of the defendant (and/or its lawyers) with unrepresented members of the class comes at the very time the plaintiffs are awaiting the hearing of their application for notification orders. The outcome of that will be to determine the information which is to be

provided by direct notice and by newspaper advertisement to class members, setting out details as to the proceeding, class membership, the right to stay in or opt out of the representative proceeding and the consequences of each of those options. It happens that the plaintiffs are able to seek notification orders only now, almost three years after commencing this proceeding, because of the interlocutory steps and appeals which have occurred in the meantime.

[174] It also happens that in that intervening period there has become available to Southern Response, through the Dodds litigation, legal outcomes which have led Southern Response to formulate the Package which it wishes to put to policyholders including class members. 9 The form of directions sought by Southern Response did not identify the content of any communication which Southern Response would (at least initially) have with class members. In its evidence, Mr Hurren...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT