Simons & Ors v ANZ Bank New Zealand Limited & Anor - [2024] NZCA 330
Date of Judgment
19 July 2024
Decision
Simons & Ors v ANZ Bank New Zealand Limited & Anor (PDF 688 KB)
Summary
Practice and procedure - Class action - Representative Proceedings - Jurisdiction - Common fund order
The appellants' appeal is allowed in part, insofar as it relates to the High Court's decision to decline to grant a CFO. The remaining grounds of appeal are dismissed.
The cross-appeals of the first and second respondents are dismissed.
We make the CFOs on the terms sought by the appellants, set out at [99]-[100], and direct that they are to commence immediately.
The respondents together must pay the appellants one set of costs, in respect of the appeal and two cross-appeals, for a complex appeal on a band A basis and usual disbursements. We certify for second counsel.
Between 30 May 2015 and 28 May 2016, ANZ Bank NZ Ltd (ANZ), the first respondent, sent loan-variation letters to customers who had a home or personal loan with ANZ and made an agreed change to their loan in this period. ANZ accepted that its variation notices breached s 9C(2)(a)(iii) or the Credit Contracts and Consumers Finance Act 2003 (CCCFA). The second appellants took out a home loan with ANZ on 7 August 2015.
In September 2019, ASB Bank Ltd (ASB), the second respondent, notified the Commerce Commission that between 6 June 2015 and 18 June 2019 it had not consistently provided clients with disclosure information required by the CCCFA. The affected ASB customers fell into two categories: Cohort A and B. ASB accepted it had breached s 9C(2)(a)(iii) of the CCCFA. The first and third to fifth appellants (the ASB appellants) were members of either Cohort A or B.
The High Court granted the ASB appellants leave to bring a proceeding against ASB on behalf of themselves and other affected customers; granted the second appellants leave to bring a proceeding against ANZ on behalf of themselves and affected customers who entered into loans between 6 June 2015 and 28 May 2016; ruled that the representative proceedings be brought on an opt-out rather than opt-in basis; and concluded the High Court has jurisdiction to make a common fund order (CFO), but declined the appellants' application to make an order at that stage of proceedings.
The appeal and cross-appeals raise issues about the scope of representative actions and the High Court's jurisdiction to make a CFO in representative proceedings.
Issue I: Did the High Court err in making the representative order made in respect of the ASB appellants? Held: No.
First. the making of a representative order under r 4.34 of the High Court Rules 2016 was justified, as all members of the class held loans with ASB which were required to be the subject of variation notices during the relevant period; and share a common interest in resolving the meaning of s 22 of the CCCFA. Second, the grant of the representative order supports access to justice. Third, ASB will not suffer injustice nor be denied a viable defence. Finally, the nature of this proceeding is such that it is just and convenient to allow the claim to continue on a representative basis.
Issue 2: Did the High Court err in declining to extend the ANZ representative class to affected customers whose loans commenced before 6 June 2015? Held: No.
The High Court was correct to limit the ANZ representative order. No ANZ customers whose loans commenced before 6 June have been added as plaintiffs to the proceeding. If a pre-6-June-2015 ANZ plaintiff was added to the proceeding, ANZ would move to strike out the claim on limitation grounds. Extending the ANZ representative class to customers whose loans commenced before 6 June 2015 would deprive ANZ of a valid defence.
Issue 3: In the event the ASB representative order was not made in error, should it have been made on an opt-in rather than opt-out basis? Held: No.
The ASB representative order was correctly made on an opt-out basis. An opt-in order would have the effect of frustrating access to justice by placing unnecessary hurdles in front of those who are entitled to be members of the representative class. Class members can confirm their loans were credit contracts at stage two of the proceedings. Neither would an opt-out order hinder the court and parties in addressing issues needed to advance the litigation.
Issue 4: Did the High Court err in finding that the High Court has jurisdiction to make CFOs in representative proceedings? Held: No.
The considerations that govern the making of a CFO involved mixed issues of procedure and substantive law. The High Court Rules permit the making of a CFO. Rule 4.24, interpreted in light of s 146(4) of the Senior Courts Act 2016, and rr 1.2 and 1.6 of the High Court Rules, is broad enough to enable the High Court to issue an order that ensures the benefits of a successful representative proceeding is shared fairly between the representative plaintiff and all class members. Further, as a court of equity, the High Court has jurisdiction to do justice as between the plaintiff and those who benefit through the success of the plaintiff's proceedings.
Issue 5: If the High Court does have jurisdiction to make CFOs, did it err in declining to make the CFOs sought by the plaintiffs at this stage of the proceeding? Held: Yes.
There is no clear benefit in deferring making a CFO at an early stage of this proceeding. The Court therefore allows the aspect of the appellants' appeal relating to the High Court's decision to decline to grant a CFO at that stage.
The appellants' appeal is allowed in part, insofar as it relates to the High Court's decision to decline to grant a CFO. The remaining grounds of appeal are dismissed.
The cross-appeals of the first and second respondents are dismissed.
We make the CFOs on the terms sought by the appellants, set out at [99]-[100], and direct that they are to commence immediately.
The respondents together must pay the appellants one set of costs, in respect of the appeal and two cross-appeals, for a complex appeal on a band A basis and usual disbursements. We certify for second counsel.
Between 30 May 2015 and 28 May 2016, ANZ Bank NZ Ltd (ANZ), the first respondent, sent loan-variation letters to customers who had a home or personal loan with ANZ and made an agreed change to their loan in this period. ANZ accepted that its variation notices breached s 9C(2)(a)(iii) or the Credit Contracts and Consumers Finance Act 2003 (CCCFA). The second appellants took out a home loan with ANZ on 7 August 2015.
In September 2019, ASB Bank Ltd (ASB), the second respondent, notified the Commerce Commission that between 6 June 2015 and 18 June 2019 it had not consistently provided clients with disclosure information required by the CCCFA. The affected ASB customers fell into two categories: Cohort A and B. ASB accepted it had breached s 9C(2)(a)(iii) of the CCCFA. The first and third to fifth appellants (the ASB appellants) were members of either Cohort A or B.
The High Court granted the ASB appellants leave to bring a proceeding against ASB on behalf of themselves and other affected customers; granted the second appellants leave to bring a proceeding against ANZ on behalf of themselves and affected customers who entered into loans between 6 June 2015 and 28 May 2016; ruled that the representative proceedings be brought on an opt-out rather than opt-in basis; and concluded the High Court has jurisdiction to make a common fund order (CFO), but declined the appellants' application to make an order at that stage of proceedings.
The appeal and cross-appeals raise issues about the scope of representative actions and the High Court's jurisdiction to make a CFO in representative proceedings.
Issue I: Did the High Court err in making the representative order made in respect of the ASB appellants? Held: No.
First. the making of a representative order under r 4.34 of the High Court Rules 2016 was justified, as all members of the class held loans with ASB which were required to be the subject of variation notices during the relevant period; and share a common interest in resolving the meaning of s 22 of the CCCFA. Second, the grant of the representative order supports access to justice. Third, ASB will not suffer injustice nor be denied a viable defence. Finally, the nature of this proceeding is such that it is just and convenient to allow the claim to continue on a representative basis.
Issue 2: Did the High Court err in declining to extend the ANZ representative class to affected customers whose loans commenced before 6 June 2015? Held: No.
The High Court was correct to limit the ANZ representative order. No ANZ customers whose loans commenced before 6 June have been added as plaintiffs to the proceeding. If a pre-6-June-2015 ANZ plaintiff was added to the proceeding, ANZ would move to strike out the claim on limitation grounds. Extending the ANZ representative class to customers whose loans commenced before 6 June 2015 would deprive ANZ of a valid defence.
Issue 3: In the event the ASB representative order was not made in error, should it have been made on an opt-in rather than opt-out basis? Held: No.
The ASB representative order was correctly made on an opt-out basis. An opt-in order would have the effect of frustrating access to justice by placing unnecessary hurdles in front of those who are entitled to be members of the representative class. Class members can confirm their loans were credit contracts at stage two of the proceedings. Neither would an opt-out order hinder the court and parties in addressing issues needed to advance the litigation.
Issue 4: Did the High Court err in finding that the High Court has jurisdiction to make CFOs in representative proceedings? Held: No.
The considerations that govern the making of a CFO involved mixed issues of procedure and substantive law. The High Court Rules permit the making of a CFO. Rule 4.24, interpreted in light of s 146(4) of the Senior Courts Act 2016, and rr 1.2 and 1.6 of the High Court Rules, is broad enough to enable the High Court to issue an order that ensures the benefits of a successful representative proceeding is shared fairly between the representative plaintiff and all class members. Further, as a court of equity, the High Court has jurisdiction to do justice as between the plaintiff and those who benefit through the success of the plaintiff's proceedings.
Issue 5: If the High Court does have jurisdiction to make CFOs, did it err in declining to make the CFOs sought by the plaintiffs at this stage of the proceeding? Held: Yes.
There is no clear benefit in deferring making a CFO at an early stage of this proceeding. The Court therefore allows the aspect of the appellants' appeal relating to the High Court's decision to decline to grant a CFO at that stage.