The High Court recently blocked an attempted class action in relation to the 2024 Northland power outage (Skibo Limited v Transpower New Zealand Limited [2026] NZHC 3275).
The case highlights an emerging trend of courts carefully scrutinising the alignment of interests in attempted class actions, and asking whether a class action is the most efficient way to proceed.
Background on the Northland outage class action
On 20 June 2024, a suspension tower supplying electricity to the Northland Region of New Zealand accidentally fell as a result of work carried out by a maintenance crew. The resulting electricity outage lasted days and affected a number of Northland homes and businesses.
Two Northland businesses, Skibo and Delish, sought to bring a claim in negligence against Transpower (which operates the national grid) and Transpower’s maintenance contractor, Electrix. The claim is that Transpower and Electrix:
owed all Northland businesses a duty of care when undertaking maintenance work; and
breached that duty, causing significant economic and physical damage.
Skibo and Delish sought to represent all affected Northland businesses, and to do so on an “opt-out” basis, i.e., any business that fit the description of a class member would be part of the class, unless and until they chose to remove themselves (opt out). To act in that representative capacity, Skibo and Delish needed leave of the Court under rule 4.24(b) of the High Court Rules. That rule, which is the gateway for class actions to proceed in New Zealand, requires that a representative plaintiff must have “the same interest” as class members in the subject matter of a proceeding.
The result
On 21 October 2026, the High Court declined to make opt-out representative orders under rule 4.24 because of “the lack of a clear commonality of issues on key aspects of the claim”.1 The alleged common interest was the duty of care said to be owed by Transpower and Electrix to the class members in carrying out the maintenance work. However, the Court observed that whether such a duty was owed turned on issues like foreseeability of loss as a result of the defendants’ acts or omissions, the proximity of the parties, and policy considerations raised by a novel duty of care in tort (all elements of a negligence claim). The Court held that these elements may differ between the class members. Specifically:
The nature of class members’ losses varied greatly, making foreseeability unsuitable as a common issue. For example, losses varied from businesses that suffered physical damage (e.g., a catering company whose food spoiled in a refrigerator) to businesses that suffered loss consequential on physical damage (e.g., the catering company unable to fulfil specific contracts due to spoiled food and therefore suffering lost income, or being unable to sell food to customers more generally).
The proximity analysis is intensely factual and may differ between small commercial users, large commercial users and industrial users. The contractual arrangements for power supply are also likely to differ between those users.
The protective steps which each business might take against power loss, such as insurance or backup generators, will also differ.
If the Court considered the policy assessment only by reference to Skibo and Delish, it would fail to account for likely differences between class members.
In short, the Court held that a duty in tort may not be common to the class as a whole, but rather sensitive to each class member’s situation and loss type. To proceed as a class action therefore risked “inefficiency, confusion and unanticipated outcomes”2 (the opposite of what a class action is designed to achieve). The Court also rejected an argument that class orders could be granted now and any differences addressed through case management, noting that resolving material differences later was “the antithesis of the efficiency which the representative orders process is intended to achieve”.3
It remains open to the plaintiffs to seek to proceed in a different way. The plaintiffs have signalled they will appeal the High Court’s judgment.
An emerging line for class actions?
A trend appears to be emerging in the types of class actions that New Zealand courts allow to proceed. Despite the seemingly low threshold for bringing an opt-out representative action established in Southern Response Earthquake Services Ltd v Ross4 and Cridge v Studorp Ltd,5 the courts appear wary of approving claims involving important differences in the position of class members, citing the inefficiency inherent in trying to manage those different interests in a single proceeding. The Court in Skibo relied on the judgment of the Court of Appeal in Body Corporate Number DPS 91535 v 3A Composites GmbH,6 where the Court declined opt-out representative orders on the basis that, although there were some common issues across the group, a class action would not be an efficient use of court resources in circumstances where the key matters in issue were specific to each building, such there were important variables in the situation of individual claimants.
In contrast to Skibo and 3A Composites, the courts appear more willing to approve opt-out proceedings in cases where the loss claimed is a uniform amount per customer or the result of the same formula that applies across the claimant group. An example is the class action against ANZ and ASB in relation to errors in loan disclosure letters. There the Court granted class orders in relation to claims under the Credit Contracts and Consumer Finance Act for a per-customer refund of interest costs.7 More recently, in a class action against Johnson & Johnson in relation to the efficacy of cold and flu medication, the Court granted class orders in relation to claims under the Consumer Guarantees Act for a per-customer refund of the purchase price. However, it declined the same orders under the Fair Trading Act because those claims require proving reliance and that is something which would inevitably vary between class members.8
All of this suggests a possible demarcation is developing between the types of claims the courts will allow to proceed on a representative opt-out basis. If Skibo survives on appeal, it may be more challenging for novel negligence claims to meet the ‘same interest’ threshold under rule 4.24.
For further information about class actions in New Zealand, please see our Big Picture: Class Actions publication or contact your usual Bell Gully adviser
1 Skibo Limited v Transpower New Zealand Limited [2026] NZHC 3275 at [68].
2 At [69].
3 At [77].
4 Southern Response Earthquake Services Ltd v Ross [2020] NZSC 126, [2021] 1 NZLR 117.
5 Cridge v Studorp Ltd [2017] NZCA 376.
6 Body Corporate Number DPS 91535 v 3A Composites GmbH [2023] NZCA 648, [2023] NZCCLR 27.
7 Simons v ANZ Bank NZ Ltd [2022] NZHC 1836, [2022] NZCCLR 30.
8 Gielen v Johnson & Johnson (New Zealand) Ltd [2026] NZHC 758.
Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.
