Mai Chen: The importance of settling cases early

File photo / Martin Sykes

Timing is vitally important in the law, and sometimes the consequences of going too early can be just as bad as going too late, as leaky home sufferers the Osborne family, Auckland Council and the Electoral Commission all discovered last week.

If you are going to settle a case, do it early. It is too late to try to avoid the reputational and other flow-on impacts of an adverse court judgment by making a deal after a bad hearing.

Last week the Supreme Court held in Osborne v Auckland Council that it will release a judgment in a case if it considers it is in the public interest to do so, even if (after the hearing) the parties have settled the case between themselves. This is the case even in a situation where the Osbornes had negotiated a settlement of their leaky homes claim with Auckland Council after the case was heard, at which point it must have become clear to the council that it was going to lose.

The settlement was conditional on the court not releasing a judgment, which the court has a discretion not to do where the case has settled. Here, the Supreme Court held that "...the public interest factors in favour of releasing the judgment outweigh the advantages to the Osbornes of allowing the settlement to become unconditional".

The court went further and said that in the particular circumstances of the Osborne case, it would have released a judgment even if the case had been settled and formally abandoned after the hearing.

Cases can only be appealed to the Supreme Court if they involve a matter of general or public importance, or relate to a substantial miscarriage of justice, or involve a matter of general commercial importance under the Supreme Court Act. So if a case goes to the Supreme Court, there is likely to be a public interest in releasing a judgment.

The Osborne case turned on whether they were entitled to make a claim against the Auckland Council under the Weathertight Homes Resolution Services Act 2006, or whether their claim was out of time and barred by statute.

After careful consideration of the weathertight homes legislation, and the aligned provisions in the Building Act, the Supreme Court concluded that the Osbornes' claim was not time-barred and that they could proceed with their claim against the council.

So the Osbornes are back to square one - they can proceed with their original claim against the council but they don't have a settlement - and the council is left with a judgment which may well expose it (and by extension Auckland ratepayers) to further claims under the watertight homes legislation. The substantive case might still settle, but it is a salutary lesson in the importance of settling cases early where possible.

Also last week the Electoral Commission released its decision on broadcasting time and funding allocations for the 2014 election. Under the Broadcasting Act 1989, the Commission must allocate funding and broadcasting time on TVNZ and Radio New Zealand to political parties for use on election programmes.

But given that John Banks has now resigned from Parliament, leaving Act without any MPs, did the Commission make its decision too early, such that it is flawed and vulnerable to challenge?

* Mai Chen is a partner at Chen Palmer, public and employment law specialists.