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Ideal Investments Ltd fails to bring representative action against Earthquake Commission

6 Oct 2023

| Author: Fiona Wu

Senior Courts Act 2016 – appeal from interlocutory decision – applications to recall judgment – whether application for representative action interlocutory – abuse of process – judicial bias and recusal

Ideal Investments Ltd v Earthquake Commission [2023] NZCA 388 per Cooper P, Goddard and Katz JJ.


In 2022, Ideal Investments Ltd filed a proceeding on its own behalf against the Earthquake Commission and also applied for leave to bring a representative action on behalf of others in a similar position. The latter application was dismissed in the High Court. Ideal then applied to the High Court for leave to appeal, which was declined, as was its subsequent application to the Court of Appeal for special leave.

Ideal applied to the Court of Appeal seeking recall of the leave decision and an extension of time to appeal the High Court decision. Its grounds were it has a right of appeal because the High Court decision is not interlocutory in nature or because the High Court effectively determined at least part of the proceeding and Ideal is therefore entitled to appeal the decision.


Recall application

The principles of recall applications are well-established in case law and the Court of Appeal referred to a number of authorities in finding that a recall application cannot be:

  • used to relitigate the reasons given in a leave decision;
  • a means of collateral attack on the decision;
  • used to consider a challenge to substantive findings of fact or law;
  • used to allow a party to recast arguments previously made or advance arguments that could have been raised earlier but were not; and
  • an attempt to re-open the merits of the judgment sought to be recalled.

Any application that does the above constitutes an abuse of process and will be dismissed on that basis.

Ideal’s primary submission was that the High Court made factual and legal errors in the leave decision; in other words, it should be recalled because it is wrong.  The Court of Appeal was quick to find that this is impermissible in a recall application.

The only other matter Ideal raised was the allegation that the bench that delivered the leave decision, Goddard and Katz JJ, was biased in favour of the Earthquake Commission because they, two to three decades earlier, had been employees or partners at one or other of the firms that also acted for the Earthquake Commission.

The Court of Appeal traversed the authorities for judicial recusal, noting that a judge is disqualified from sitting if there is real possibility (as opposed to a remote one) that in the eyes of a fair-minded and fully informed lay observer, the judge may not be impartial in reaching a decision. In this case, it found the connection between the judges and their respective employer firms were “entirely historical” and highly remote, and it would be “far-fetched and fanciful” to suggest the connections should give rise to a reasonable apprehension of bias.


Whether High Court decision was interlocutory

The court also rejected the argument that the High Court decision was not interlocutory, noting the application for leave to commence a representative proceeding was intituled “application for an interlocutory order…” and that Ideal had apparently accepted its interlocutory nature until it failed in its leave applications in both the High Court and Court of Appeal.

The effect of the High Court decision was simply to decline Ideal’s application to represent other potential class members, but it did not finally determine the substantive rights or potential claims of  any of those potential class members. Thus, Ideal does have not an appeal as of right.


Applicable principles: grounds for recall of judgments – whether prior employment gives rise to reasonable apprehension of bias – whether application to commence representative proceeding interlocutory in nature – whether there has been final disposal of proceeding.


Held: Application for recall declined. Ideal does not have appeal as of right.


Ideal Investments Ltd v Earthquake Commission [2023] NZCA 388.

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