Applicant made a claim based on damage suffered as a result of the Canterbury earthquakes
The Court of Appeal ruled it was not in the interests of justice to grant permission to appeal the High Court’s refusal of an applicant’s request to act as a representative plaintiff in insurance proceedings concerning earthquake damage.
The case of Ressels v Southern Response Earthquake Services Limited, [2025] NZCA 116, arose from the applicant’s claim arising from damage that his property sustained in the Canterbury earthquakes.
The applicant’s claim concerned items not within the Earthquake Commission’s scope, including paths and driveways. Since the commission did not cover claims for damages to driveways, fences, patios, pavings, and swimming pools, insurers had to manage such out-of-scope claims.
The applicant’s insurance company, Southern Response Earthquake Services, was the respondent in this case. The applicant accepted a cash settlement offer of $16,875.68 from the insurer.
The applicant challenged the offer, mainly based on misrepresentation and breach of the Fair Trading Act 1986. He asked for leave to sue as a representative plaintiff on behalf of those sharing the same interest under r. 4.24 of the High Court Rules 2016.
The applicant argued that the insurer’s offer failed to include allowances for preliminary and general costs, contingency, and professional design fees. He said between 7,500 and 9,500 policyholders were in a similar position as he was.
The insurer offered a compensation package to policyholders in a similar position. The insurer accepted its liability for the preliminary and general costs and contingency, as well as professional fees in certain cases. The insurer raised a limitation defence for preliminary and general costs but waived this defence for contingency, professional fees, and interest.
In November 2023, an associate judge of the High Court denied the applicant’s request for leave to sue as a representative plaintiff. The judge found the applicant unsuitable for the role as he failed to establish a common factual or legal issue for class members.
The judge explained that the issue of whether the allowances were a necessary part of true remedial costs was not a viable common issue since each policyholder’s entitlement to those items would depend on the facts of each individual case.
In August 2024, the High Court refused to grant the applicant permission to appeal the interlocutory decision. This refusal prompted the applicant to seek leave before the appeal court.
The Court of Appeal denied the application for leave to appeal. The court ordered the applicant to pay costs for a standard application on a band A basis and the usual disbursements.
The court held that the applicant was unsuitable as representative plaintiff due to his failure to explain why there would be an obligation to pay the allowances regardless of each policyholder’s personal circumstances.
The court ruled that the applicant failed to raise a reasonably arguable factual or legal error and failed to particularise a common issue as mandated by r 4.24. The court saw no apparent error in the judge’s conclusion that this case lacked issues common enough to justify granting leave.
According to the court, if such an error existed, it would not be generally or publicly important enough to outweigh the lack of precedential value in this case and the delay resulting from an appeal. The court noted that the insurer’s compensation package showed that the public importance of this issue was diminishing.
