Much of Northland was without power for three days when a maintenance crew removed the nuts from the pylon base. Photo / Michael Craig
The High Court has rejected an attempt to bring a class action against Transpower and its maintenance contractor Omexom on behalf of thousands of Northland businesses affected by the collapse of a transmission tower in June 2024.
The action, brought by two Northland businesses, could have covered as many as
24,000 businesses seeking compensation for losses caused by the widespread power outage.
However, Justice Victoria Heine, sitting in the High Court in Wellington, found the businesses’ circumstances and the types of losses they suffered were too varied for the proposed opt-out class action to proceed.
The ruling, dated October 21, does not determine whether Transpower or Omexom was negligent or liable for the losses. The judge also left open the possibility that the plaintiffs could bring a differently structured claim.
The proceedings followed the collapse of Tower 130 on June 20, 2024.
The defendants accept that an Omexom maintenance crew removed the nuts securing three of the tower’s four legs to its baseplates at the same time, causing it to lift off the baseplates and fall.
Power was partially restored that evening, but full restoration was not achieved until the afternoon of June 23.
Authority review
An Electricity Authority review, carried out at the energy minister’s request and chaired independently by Sarah Sinclair, found in September 2024 that Transpower had relied too heavily on its contractors and that its assurance processes were inadequate.
It also found that a senior Transpower engineer warned in 2021 of gaps in maintenance crews’ training for baseplate work, and that this was not acted on.
However, the authority withdrew a formal complaint against Transpower in May 2026 after receiving the grid operator’s expert evidence.
It said it no longer considered that Transpower had breached good electricity practice in its assurance processes and oversight of Omexom.
Omexom had earlier refused to release its own investigation into the collapse to the authority, claiming legal privilege because the report was prepared in anticipation of litigation.
Skibo, a paint and specialist coatings business, brought the proposed class action claiming $5,355 in lost gross profit, and Hold Group, which operates the Delish ice cream business in Russell, claimed about $1,400 for spoiled stock.
Hold Group was formally joined as a plaintiff in the ruling.
They alleged Transpower and Omexom owed duties of care to Northland businesses and breached those duties through inadequate training, supervision and oversight of the maintenance work.
The plaintiffs sought to represent affected businesses on an opt-out basis, meaning eligible businesses would automatically be included unless they chose to withdraw.
Transpower and Omexom opposed the application, arguing the circumstances of individual businesses were too different for the key questions of liability to be determined collectively.
Justice Heine agreed there were common issues surrounding the collapse, the maintenance work and the resulting outage.
However, she found that whether the defendants owed a duty of care to individual businesses could depend on the nature of their losses, their contractual arrangements and the steps they could reasonably have taken to protect themselves against power interruptions, such as insurance or back-up generators.
Transpower provided evidence that it had received compensation claims from what appeared to be large industrial or semi-industrial users – about $420,000 in one case and almost $900,000 in another.
Omexom identified six categories of loss among potential claimants.
These ranged from physical damage, such as spoiled stock, to lost sales without any physical damage, and knock-on effects for businesses that never lost power.
The judge said there was a risk that deciding the case using only the circumstances of the two named plaintiffs would produce findings of limited relevance to other businesses.
Not representative
There was also a risk that an adverse decision on whether a duty of care existed could bind businesses whose individual claims might be stronger.
“I am not persuaded that the plaintiffs are sufficiently representative of the full range of 24,000 businesses on whose behalf they seek to claim,” Justice Heine said.
She rejected the defendants’ argument that the claims lacked merit, finding they were at least arguable.
“I am not satisfied on the basis of the evidence presently before me that there is no arguable case,” she said.
Justice Heine said she could not reach a view on whether Transpower had followed good industry practice because the relevant expert reports were not before her and the plaintiffs had yet to file their expert evidence.
The judge also rejected the defendants’ reliance on a 2018 High Court decision, Vector v Utilities Disputes Commissioner, which they said showed electricity network businesses did not owe a duty of care to prevent economic loss from power outages.
“I do not consider that Vector can be simply cited as authority for the proposition that electricity network providers in general cannot owe a duty of care,” she said.
Justice Heine accepted that access to justice and deterrence favoured the orders sought.
Northland kuia Dame Naida Glavish and kaumātua Harry Burkhardt said in an affidavit that many small Māori-owned businesses, often in remote areas, would miss out if the claim could proceed only on an opt-in basis.
The judge noted both defendants were “sophisticated and well resourced” and the plaintiffs’ litigation funder had indicated it would meet any adverse costs award.
However, she said the possibility that the case would not proceed at all without opt-out orders could not overcome the lack of commonality on key aspects of the claim.
She declined the application but said the plaintiffs and their funder could consider restructuring the claim, proceeding on an opt-in basis or using a test-case procedure suggested by Omexom.
The matter is scheduled for a court teleconference on December 14 to consider next steps.
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