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Ross v Southern Response - Opt-Out Claim Allowed

CA150/2019 [2019] NZCA 431




A The appeal is allowed.

B The orders made by the High Court on 13 December 2018 are amended in the manner set out at [135] to [138].

C The respondent must pay costs to the appellants for a standard appeal on a band B basis together with usual disbursements. We certify for second counsel.


(Given by Goddard J)


[1] The main issue before us is whether this representative claim can proceed on an opt out basis. We conclude that it can, and should.

[2] In May 2018, Mr and Mrs Ross began these proceedings against Southern Response. The claim relates to the settlement agreement that Mr and Mrs Ross entered into with Southern Response in relation to their insurance claim for damage to their house caused by the Canterbury earthquakes (the settlement agreement). In short, they say that Southern Response provided them with incomplete information about the cost of remedying earthquake damage to their home. As a result, they settled on a less favourable basis than they otherwise would have.

[3] Mr and Mrs Ross say that many policyholders settled claims in similar circumstances, and as a result have the same claims against Southern Response. Mr and Mrs Ross applied to the High Court for leave to bring the proceedings as representatives of the class of around 3,000 policyholders who entered into settlement agreements in these circumstances.

[4] Mr and Mrs Ross sought leave to bring the representative claim on an opt out basis: that means they would bring the claim on behalf of every member of the group as defined, apart from any members who expressly chose to opt out of the proceeding. Southern Response did not oppose Mr and Mrs Ross bringing a representative claim, but said it should be brought on an opt in basis: a member of the affected group would need to complete an opt in election form and send it to the High Court by a date fixed by the Court in order to be included in the claim. Southern Response also objected to the definition of the group of claimants, saying it was too broad in a number of respects.

[5] The application for leave to bring a representative proceeding was heard in the High Court in November 2018. In a judgment delivered on 13 December 2018 (the High Court decision) Associate Judge Matthews held that the claim should be brought on an opt in basis, and resolved a number of issues about the membership of the represented group.

[6] Mr and Mrs Ross obtained leave to appeal to this Court. They say that:
(a) the representative claim should be brought on an opt out basis, rather than an opt in basis; and
(b) the Associate Judge incorrectly limited membership of the class to rebuild customers. Repair customers who entered into settlements in similar circumstances should be included in the class.

[7] We allow the appeal on both issues.

[Full judgment: 2019NZCA431_Southern_Response.pdf]

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