SNEESBY v SOUTHERN RESPONSE EARTHQUAKE SERVICES LIMITED [2022] NZHC 2100 [23 August 2022]

SNEESBY v SOUTHERN RESPONSE EARTHQUAKE SERVICES LIMITED [2022] NZHC 2100[23 August 2022]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2021-009-1694[2022] NZHC 2100BETWEEN JOHN ARTHUR SNEESBYPlaintiffAND SOUTHERN RESPONSE EARTHQUAKESERVICES LIMITEDDefendantHearing: 19 August 2022Appearances: G D R Shand for PlaintiffT C Weston QC and K M Paterson for DefendantJudgment: 23 August 2022JUDGMENT OF ASSOCIATE JUDGE LESTER(Application for leave to appeal)[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 suitablerepresentative plaintiff as his claim was plainly meritless.2[3] My conclusion that Mr Sneesby's claim was meritless was based onMr Sneesby having entered a full and final settlement agreement with SouthernResponse Earthquake Services Limited (Southern Response) in 2017. I do not repeatthe analysis of that agreement, but I concluded the 2017 settlement agreement waswidely drawn and intended to be in full and final settlement of all Mr Sneesby'sclaims, known or unknown, that he had against Southern Response. I said:3That the 2017 Settlement Agreement was intended to be [an] absolutesettlement between the parties is emphasised by cl 14 which permits SouthernResponse to plead the 2017 Settlement Agreement as an absolute bar to anyfurther or other claim arising directly or indirectly out of the earthquakes (theEvents), the Claim, the Dispute and/or the Proceeding.(The claim being Mr Sneesby's claim for earthquake damage to his property and theproceedings being those issued by Mr Sneesby against EQC and Southern Responsein 2016 in (CIV-2016-409-1009)).[4] While that was the basis of the decision, given the extensive submissions ofcounsel, I went on to make brief observations about the remaining matters addressedby counsel. Those obiter observations were not a basis of my decision and as suchthose observations are not relevant to the question of leave. Mr Sneesby would not beappealing against those obiter comments as they are not the basis of the decisiondeclining 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 findingor ruling by the Court which amounts to the determination of an issue. A mere1 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 possiblecourse of action will not satisfy the requirement and thus will not besusceptible to an appeal.(emphasis added)Applicable principles[6] Mr Shand, counsel for Mr Sneesby, submits that in substance the effect of myFebruary judgment was to finally conclude Mr Sneesby's claim and Mr Shand referredto s 56(4) of the Senior Courts Act 2016 which provides:(4) Any party to any proceedings may appeal without leave to the Courtof 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, whereI described Mr Sneesby's claim as "meritless", was akin to the language of a strike-outor summary judgment and as such Mr Shand submitted that leave was not in factrequired. In support of this proportion Mr Shand referred to McGechan at[SC56.06(2)] under the heading "Exceptions to leave requirement" which, referring tos 56(4), says leave is not required " because such orders or decisions have the effectof finally resolving the High Court proceeding (my emphasis)."6[8] Mr Shand's submission was that because my conclusion that the 2017settlement agreement was a bar to Mr Sneesby's claim, it had the effect of finallyresolving Mr Sneesby's High Court proceeding, leave was not required. I do notaccept that submission. Mr Weston QC, counsel for Southern Response, is correct thatthe High Court proceeding remains intact. Mr Weston also submitted that whethers 56(4) applied was a matter for the Court of Appeal and not for me to rule on. IfMr Shand is correct, Mr Weston said Mr Sneesby can file his appeal with the Court ofAppeal 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 HighCourt in Finewood Upholstery Ltd v Vaughan succinctly outlined the purpose of s 56of the Act as:8[13] The requirement for leave to appeal should serve as a "filteringmechanism", to ensure that unmeritorious appeals of interlocutory orders, orappeals of interlocutory orders of no great significance to either the partiesor more generally, do not unnecessarily delay the proceedings in which theorders 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 aninterlocutory order will need to stand back and assess, in a pragmatic andrealistic way, whether the interests of justice are served by granting leaveto appeal.(emphasis added)[11] Mr Sneesby's application for leave to appeal is on the grounds there was anarguable error of fact or law as set out in the draft notice of appeal attached to theapplication.[12] In respect of the issue upon which my February judgment is based, the draftnotice of appeal says my decision was wrong because "The Court was wrong to findat paragraph [45] that the [applicant's] claim was 'plainly meritless'."[13] Mr Shand's submissions filed in support of the application for leave to appealexpanded 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 misleadingconduct by Southern Response about "out of scope" when hesigned the 2017 agreement;(3) The 2016 court proceedings underlying the agreement soughtno relief for the "out of scope" claim.[14] As counsel for the respondent notes, these propositions are not elaborated onfurther 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 agreementwas 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 outof the FTA or rather, to settle any claim he might have under the FTA, as he wasnot aware in 2017 of the FTA claim he now advances in this proceeding. The issue ofcontracting out of the FTA does not arise here as the issue is whether Mr Sneesbysettled a claim he says he had under the FTA in 2017.[16] Mr Shand relied on Gendall J's judgment in Dodds v Southern ResponseEarthquake Services Ltd where his Honour held the settlement agreement relied onby Southern Response in that case: " cannot limit liability for misleading ordeceptive conduct".9[17] Clause 7 of the 2017 settlement agreement provides:The Discontinuance and Costs Settlement are accepted by Southern Responsein full and final settlement and discharge of any claims the Plaintiff andSouthern Response have or might have against the other arising directly orindirectly out of, or in connection with the Events, Discontinuance,Proceeding and/or the Policies and/or the loss or damage to the InsuredProperty, whether such claims arise under contract, statute, common law, orequity; are in existence now or may arise sometime in the future; are knownor unknown; and/or are in the contemplation of the Parties or otherwise; and/orarise following a subsequent Court decision that states the law in a waydifferent to the understanding of one or more parties to this Agreement.[18] Gendall J's decision is not authority for the propositions advanced byMr Shand. Gendall J decided in Dodds that the terms of the settlement agreementrelied on by Southern Response in that case did not bar the Dodds claim. His Honourdiscussed in detail a party's ability to settle claims including those of which they wereunaware.10 I referred to some of his Honour's discussion of the law in my Februaryjudgment.11 I then applied those principles to the 2017 settlement agreement.12Mr Shand did not, in support of this application, analyse how my application of thoseprinciples to the 2017 settlement agreement was incorrect. In short, the 20179 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 wasbefore Gendall J.[19] It is not clear to me how cl 7 could be made wider than it is. This is not an areawhere the legal principles applying to when a settlement agreement is binding or howit 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 myapplication of the principles in my February judgment was wrong. In short, Mr Shanddid not explain how cl 7 should be read down or interpreted so as to not coverMr Sneesby's FTA claim, other than to submit that a party may only settle a claimunder the FTA if they are aware of it. That is not the law and no authority for thatproposition was advanced by Mr Shand.[20] The 2017 settlement agreement does not exclude Southern Response's liabilityunder the FTA – it settled any liability it may have had. On Mr Sneesby's case, he wasmisled by Southern Response when it settled his out of scope claim by not making anallowance 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 hehad, whether he knew about them or not. Again, the words are clear.[21] Mr Shand submits the 2017 settlement agreement was not intended to settleout of scope items. There is, however, no attempt to explain how a claim relating toout of scope damage caused by the Canterbury Earthquakes, is not a claim Mr Sneesbybrings against Southern Response arising directly or indirectly out of the CanterburyEarthquakes, defined in the 2017 settlement agreement as "the Events". Thesettlement agreement records the parties agreed to resolve all issues arising directly orindirectly out of the earthquakes and/or the dispute about the scope of Mr Sneesby'scover, among others.[22] Accordingly, I agree with counsel for Southern Response that the proposednotice of appeal and Mr Shand's submissions do not identify an arguable error of factor law in my February judgment.13[23] Mr Shand referred to a decision of Venning J in Simons v ANZ BankNew Zealand Ltd, as support for the proposition that there is a low threshold to be metbefore leave to bring a representative claim will be given and such should influencewhether leave to appeal the dismissal of such an application is granted.14 Mr Shandemphasised Venning J's reference to the Court of Appeal authority that in anapplication to bring a representative claim the Court should take a liberal and flexibleapproach when determining whether there is a common interest and that the requisitecommonality of interest is not a high threshold. In particular, he relied on [108] ofSimons where Venning J said:15The Court should be wary of looking for impediments to the representativeaction rather than being facilitative of it.[24] Mr Shand also referred to [133] of Simons where Venning J accepted the timefor consideration of the merits is at stage one of the proceedings rather than at thepreliminary leave stage. Venning J said:To resolve the arguments raised by the defendants will require a more detailedconsideration and analysis of the arguments than is appropriate at this stage ofthe proceeding.[25] Venning J then went on to say:16It cannot be said at this stage that the claims are so plainly without merit (asthey were in the case of Sneesby v Southern Response EarthquakeServices Ltd) that the representative orders sought should not be granted.[26] Accordingly, I do not read Venning J's decision in Simons as modifying theapproach I took in my February judgment being that while the leave application shouldnot be turned into a mini trial, if a claim is plainly meritless then it is not an appropriateone 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 grantedleave to appeal after it was declined by the High Court.17 That case does not alter theprinciples 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 circumstancesafter leave was considered in this Court. I do not see Harris as advancing the presentapplication.[28] Accordingly, I decline the application for leave to appeal as I do not consideran arguable error in my February judgment has been identified. Again, my Februaryjudgment is based on the conclusion the full and final settlement agreement renderedMr Sneesby an inappropriate plaintiff to be granted leave to conduct a representativeaction.[29] I do not address Mr Shand's comments about the observations I made in myFebruary Judgment for the reasons already given.Costs[30] The plaintiff is to pay costs to the defendant on a 2B basis together withdisbursements as fixed by the Registrar._______________________________Associate Judge LesterGrant 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.