Lamb v Attorney-General
[2015] NZHC 2066
•28 August 2015
IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY
CIV-2014-454-121 [2015] NZHC 2066
UNDER The New Zealand Public Health and
Disability Act 2000
BETWEEN
TANIA JOY LAMB Plaintiff
AND
THE ATTORNEY-GENERAL Defendant
Hearing: 23 July 2015 and 20 August 2015 Counsel:
T J Lamb in person
S J Leslie for the DefendantJudgment:
28 August 2015
JUDGMENT OF ASSOCIATE JUDGE SMITH
[1] The defendant applies to strike out Ms Lamb’s amended statement of claim.
Background
[2] On 2 July 1977, Ms Lamb and her family were involved in a serious motor vehicle accident. Ms Lamb, who was then eleven years of age, suffered serious head injuries.
[3] Ms Lamb was admitted to the Palmerston North Public Hospital, where she remained for approximately three and a half months. In that period, she says that she developed paralysis on the left side of her body, to the point where she was not able to open her left hand. Her left hand and elbow were flexed upright, and her left foot so tight the heel would not touch the floor.
[4] Ms Lamb says that it was not until 6-9 days after the 1977 accident that she started to slowly develop the paralysis on the left side of her body. She alleges that
TANIA JOY LAMB v THE ATTORNEY-GENERAL [2015] NZHC 2066 [28 August 2015]
the development of the paralysis could have been avoided if she had received proper care immediately after the accident. She contends in particular that the hospital records from the time show that she had symptoms of intracranial pressure, but no (or no sufficient) action was taken to prevent or alleviate the intracranial pressure in her brain. No neurosurgical assessments were undertaken in what she says was the critical period of six days before the onset of the paralysis, or indeed in the three and a half months she spent in hospital. There were no CAT scans, nor any telephone consultations with the neurosurgeons who would have been available for consultation at the main hospitals in New Zealand. A burr drilled in the side of her head to relieve intracranial pressure is said to have been inadequate, either as a diagnostic tool or as a form of treatment.
[5] Ms Lamb says that the failure to diagnose the extent of her head injuries sustained on 2 July 1977 was negligent. She contends that she lost the chance to undergo treatment which may have prevented some or all of the injuries she sustained.
[6] In 1979, at the age of thirteen, Ms Lamb wrote to a number of neurosurgeons to see whether anything could be done to rectify the tightness in her arm and correct an uneven gait. She saw a Wellington neurosurgeon that year, and various neurological assessments were made.
[7] Ms Lamb commenced her Court proceeding on 29 September 2014. In her statement of claim, she named the Mid-Central District Health Board as the defendant, on the basis that it was the entity with legal responsibility for the acts or omissions of the medical staff at Palmerston North Hospital in July 1977. She claimed exemplary damages of $370,000, being $10,000 for each year that had elapsed since the July 1977 accident.
[8] The Mid-Central District Health Board took the view that it was not the correct defendant, and that any liability for the acts or omissions of those involved in Ms Lamb’s treatment in 1977 rested with the Crown. Ms Lamb accepted that view, and on 19 February 2015 I made an order removing Mid-Central District Health Board as defendant and substituting as defendant the Attorney-General, sued in
respect of the Ministry of Health. Ms Lamb filed an amended statement of claim on
26 February 2015, naming the Attorney-General as the sole defendant.
[9] There were some irregularities with the hearing of this case. These are dealt with in my minutes dated 27 July 2015 and 17 August 2015 and I do not propose to deal with them any further in this judgment.
Ms Lamb’s amended statement of claim
[10] Ms Lamb pleads first that there was a contract between herself and the hospital, on terms set out in the Code of Health and Disability Services Consumers’ Rights. The Crown is said to be vicariously liable for the actions of the staff employed at the hospital at the time, and so liable to her for any breach of that contract.
[11] Ms Lamb says that there were express or implied terms of the contract under which the hospital staff were obliged (among other things) to act with reasonable care and skill, give treatment consistent with Ms Lamb’s needs, assess the full extent of her injuries, and treat the injuries competently.
[12] Ms Lamb then pleads that the Crown (through the hospital’s doctors and nurses) owed to her both a fiduciary duty and a duty of care. She says that both duties were “based on trust and confidence”.
[13] Ms Lamb alleges that the duties were breached. She says that it was the hospital’s responsibility to appoint a competent doctor and check the doctor’s experience. If a competent doctor was not appointed and there was a relevant omission in the assessment or treatment of her injuries, the hospital was negligent. She specifically pleads that the Crown, through the hospital, was grossly negligent by not having a neurosurgeon assess the extent of her head injuries. The head injuries included a subdural haematoma, which required a craniotomy to remove clotted blood. A subdural haematoma cannot be diagnosed without a CAT or MRI scan, but those diagnostic aids were not used. While the equipment required to carry out CAT scans and MRI scans was not available at Palmerston North Hospital at the time, Ms Lamb says that the hospital could have arranged to have her flown to a
major hospital where the scans could have been performed. She says that it was negligent in failing to do so. No craniotomy was performed, and the burr hole drilled in her skull is said to have been an inadequate response to the symptoms with which Ms Lamb presented.
[14] Ms Lamb says in her claim that there was an assumption of responsibility by the Crown through the hospital, to ensure she would be assessed by a competent neurosurgeon and appropriately treated, and that that was her legitimate expectation.
[15] By way of particulars of the circumstances which are said to justify an award of exemplary damages, Ms Lamb says that the hospital systems in place in Palmerston North in 1977 were outrageously inefficient, and that the staff were grossly negligent in not ensuring she received a proper neurological assessment. She contends that while exemplary damages have been awarded to punish defendants, they are also available to compensate claimants who are not covered under the accident compensation regime, or have been inadequately compensated under that regime.
[16] Her claim for exemplary damages is said to be for the “hurt, humiliation, grief, loss of enjoyment and loss of potential earning capacity” she experienced as a result of the alleged gross negligence.
The defendant’s case
[17] The defendant contends that that there was no contract between Ms Lamb and the defendant, as the relevant Code of Health and Disabilities Services Consumers Rights was not in force at the time (and could not in any event have given rise to a contract). He also contends that Ms Lamb’s claims are statute-barred under the Limitation Act 1950 (the Act).
[18] The Attorney-General further submits that exemplary damages are not available for negligence, or for breach of fiduciary duty, unless the defendant deliberately and outrageously ran a consciously-appreciated risk of causing personal injury to the plaintiff. No such circumstances are pleaded by Ms Lamb in her amended statement of claim. The Attorney-General argues that exemplary damages
are not available for breach of contract, and that no other relief is available to Ms
Lamb.
Principles applicable to strike-out applications
[19] Rule 15.1 of the High Court Rules provides that the Court may strike out all or part of a pleading if it discloses no reasonably arguable cause of action.
[20] The principles on which the Court exercises its strike-out jurisdiction are well settled. In Attorney-General v Prince and Gardner, the Court of Appeal said:1
A striking-out application proceeds on the assumption that the facts pleaded in the statement of claim are true. That is so even although they are not or may not be admitted. It is well settled that before the Court may strike out proceedings the causes of action must be so clearly untenable that they cannot possibly succeed (R Lucas & Son (Nelson Mail) Ltd v O’Brien [1978]
2 NZLR 289 at pp 294-295; Takaro Properties Ltd (in receivership) v
Rowling [1978] 2 NZLR 314 at pp 316-317); the jurisdiction is one to be exercised sparingly, and only in a clear case where the Court is satisfied it
has the requisite material (Gartside v Sheffield, Young & Ellis [1983] NZLR
37 at p 45; Electricity Corporation Ltd v Geotherm Energy Ltd [1992] 2
NZLR 641); but the fact that applications to strike out raise difficult questions of law, and require extensive argument does not exclude
jurisdiction (Gartside v Sheffield, Young & Ellis).
[21] In Couch v Attorney General (on appeal from Hobson v Attorney-General), three judges of the Supreme Court held that it is inappropriate to strike out a claim summarily unless the Court can be certain that the claim cannot succeed. The case must be “so certainly or clearly bad” that it should be precluded from going forward.
Particular care is required in areas where the law is confused or developing.2
[22] The principles applicable to striking out claims which are alleged to be out of time under the Limitation Act 1950 were considered by the Supreme Court in Murray v Morel & Co Ltd.3 In that case, the Court said:
[33] In order to succeed in striking out a cause of action as statute-barred the Defendant must satisfy the Court that the Plaintiff’s cause of action is so clearly statute-barred that the plaintiff’s claim can properly be regarded as frivolous, vexatious, or an abuse of process. If the Defendant demonstrates that the Plaintiff’s proceeding was commenced after the period allowed for
1 Attorney–General v Prince and Gardener [1998] 1 NZLR 262 at 267.
2 Couch v Attorney-General (on appeal from Hobson v Attorney-General) [2008] NZSC 45, [2008] 3 NZLR 725 at [33].
3 Murray v Morel & Co Ltd [2007] NZSC 27, [2007] 3 NZLR 721.
the particular cause of action by [the Act], the Defendant will be entitled to an order striking out that cause of action unless the plaintiff shows that there is an arguable case for an extension or postponement which would bring the claim back within time…
The issues to be determined
[23] The following issues accordingly fall to be determined:
(1) Is Ms Lamb’s claim clearly statute-barred under the Act?
(2)On the facts pleaded in her amended statement of claim, is it reasonably arguable that Ms Lamb might be entitled to exemplary damages?
[24] I consider each issue in turn.
Issue (1) - Is Ms Lamb’s claim clearly statute-barred under the Act?
[25] The Act applies to any cause of action, or right of action, based on an act or omission before 1 January 2011.4
[26] Section 4 materially provides:
4Limitation of actions of contract and tort, and certain other actions
(1) … The following actions shall not be brought after the expiration of
6 years from the date on which the cause of action accrued, that is to say,
(a) actions founded on simple contract or tort:
…
(7) An action in respect of the bodily injury to any person shall not be brought after the expiration of 2 years from the date on which the cause of action accrued unless the action is brought with the consent of the intended defendant before the expiration of 6 years from that date:
Provided that if the intended defendant does not consent, application may be made to the Court, after notice to the intended defendant, for leave to bring such an action at any time within 6 years from the date
4 Limitation Act 2010, s 59.
on which the cause of action accrued; and the Court may, if it thinks it is just to do so, grant leave accordingly, subject to such conditions (if any) as it thinks it is just to impose, where it considers that the delay in bringing the action was occasioned by mistake of fact or mistake of any matter of law other than the provisions of this subsection or by any other reasonable cause or that the intended defendant was not materially prejudiced in his defence or otherwise by the delay.
…
(9) This section shall not apply to any claim for specific performance of a contract or for an injunction or for other equitable relief, except in so far as any provision thereof may be applied by the Court by analogy in like manner as the corresponding enactment repealed or amended by this Act, or ceasing to have effect by virtue of this Act, has heretofore been applied.
[27] Under sections 24 and 2(2) of the Act, a cause of action for bodily injury accrues on a plaintiff reaching his or her majority if the plaintiff was a minor at the time the cause of action would otherwise have accrued.
[28] In claims for damages for bodily injury, the Court of Appeal has held that the cause of action “accrues” when the plaintiff is reasonably able to discover that a relevant act or omission has occurred, that the plaintiff has been injured, and that the act or omission caused the injury.5 Once the cause of action has “accrued” in accordance with that test, the plaintiff has the two year period prescribed by s 4(7) of the Limitation Act 1950 within which to bring a Court proceeding.
[29] Under the proviso to ss (7), the Court may grant leave to bring such an action at any time within six years from the date of accrual if the Court thinks it just to do so and the circumstances described in the latter part of the proviso apply. No formal application for leave has been made in this case, but Ms Lamb did make an oral application for leave at the resumed hearing on 20 August 2015.
The defendant’s submissions
[30] Ms Leslie submits that there was no contract between Ms Lamb and the defendant, but even if there had been, the time limit for making a claim in contract
5 GD Searle & Co v Gunn [1996] 2 NZLR 129 (CA) at 132-133, and the authorities referred to in Stephen Todd (ed) The Law of Torts in New Zealand (6th ed) Thomson Reuters, Wellington, 2013 at [26.5.06(4)].
has expired. In breach of contract claims, time runs from the date of the breach
(extended in this case by s 24 of the Act to the date Ms Lamb turned 20).6
[31] To the extent the claim is made in the tort of negligence (and not in contract), the defendant accepts for the purposes of this application that it would not be reasonable to hold that any cause of action accrued before Ms Lamb had had sufficient opportunity to obtain records, discover any omission, and conclude that it had contributed to her injuries. But the defendant says Ms Lamb had that opportunity long before October or November 2008, when she submits that the cause of action accrued. Relevant records could have been obtained under the provisions of the Official Information Act 1982 and/or the Privacy Act 1993.
[32] In any event, Ms Leslie submits that the negligence claim is time-barred even if the cause of action did arise in October or November of 2008. Under s 4(7) of the Act, any claim had to be filed by October/November 2010 at the latest – within two years after the time when the cause of action is said to have accrued.7 Ms Lamb did not seek the defendant’s consent to bring the present claim within six years of the accrual date under the introductory part of s 4(7), and nor did she seek the Court’s
leave under the proviso in that subsection. Time stopped running for a claim against the defendant when he was substituted as defendant on 19 February 2015, but by then the six year period which may have been allowed under the proviso had already expired. The Court has no discretion to grant leave to bring the claim if an application under s 4(7) is not made within six years from the date the cause of
action accrued.8
[33] Ms Leslie accordingly submits that Ms Lamb’s negligence cause of action
should be struck out on limitation grounds.
[34] In respect of the claim for breaches of fiduciary duty, Ms Leslie notes that claims for breach of an alleged fiduciary duty are based in equity, and as such are not
subject to the time limits for commencing claims set out in the Act, except where the
6 Age of Majority Act 1970, s 4.
7 GD Searle & Co v Gunn, above n 5.
8 Reekie v Attorney-General [2009] NZAR 304 at [56]-[57]; A v D (1996) 10 PRNZ 68 at [70].
claim is analogous to some common law cause of action (e.g. breach of contract or negligence).9
[35] Ms Leslie accepts that, even where the most natural (and time-barred) cause of action is one in tort, an equitable claim may not be limited by analogy. That occurs where the breach is a breach of a fiduciary duty as well as being a tortious act, rather than being a breach of a duty of care owed by a fiduciary.10 As an example, Ms Leslie refers to a claim for breach of fiduciary duty arising from an inappropriate sexual relationship between doctor and patient being allowed to proceed, notwithstanding that a tort claim would have been time-barred.11 But where all the allegations can be encompassed within a tort claim (in this case negligence), Ms Leslie submits that any claim for breach of fiduciary duty will be limited by analogy under s 4(9) of the Act.
[36] Ms Leslie submits that medical misadventure of the type alleged in this case is a quintessential case of negligence, and that there are no facts pleaded that would give rise to a separate breach of duty that is not also a duty owed in tort. For those reasons, the cause of action based on alleged breach of a fiduciary duty is also time- barred.
Ms Lamb’s submissions
[37] Ms Lamb says that it was not until November 2008 that she first realised that there had been a window of opportunity to help prevent the paralysis that developed
7-9 days after the accident. She says that in October/November 2008 she accidentally discovered medical records showing that when she arrived at the hospital on 2 July 1977 both her arms and legs were strong and moving. She submits that it was not until that time that the cause of action accrued. Prior to that time, Ms Lamb says that she had assumed that the paralysis had occurred immediately after the initial head injury had been sustained. It was only when she
read her medical records in October/November 2008 that she became aware that
9 See s 4(9) of the Act.
10 Citing M(K) v M(H) [1992] 3 SCR 6 and Norberg v Wynrib (1992) 92 DLR (4th ) 449 (SCC).
11 Citing Simpson v Elliott HC Auckland CP 54-99, 14 March 2001.
there would have been an opportunity to “salvage the paralysis that had started to develop 7-9 days after the initial motor vehicle accident”.
[38] Ms Lamb submits her claim is not a claim for damages for personal injury, but a claim seeking only exemplary damages for what she describes as the gross negligence of the defendant. She says she is not seeking “compensation for personal injury”.
[39] In answer to the defendant’s reliance on s 4(7) of the Act, Ms Lamb submits that the subsection has no application where the cause of action is based in negligence. Addressing the specific words of the subsection, she denies that the claim is a claim “in respect of the bodily injury” to any person.
[40] Ms Lamb submits that her cause of action is based on the failure of the hospital medical staff to assess, and therefore treat, the injury to her brain, that failure leading to a secondary head injury developed 7-9 days after she arrived at the hospital. She describes the alleged failure as a “systemic” failure.
[41] Ms Lamb relies on Invercargill City Council v Hamlin in support of her contention that “the usual six year limitation period” did not begin to run until the October/November 2008 period.12
[42] She invites the Court to find that her case accrued when she accidentally discovered in October/November 2008 that on arrival at the hospital on 2 July 1977 both her arms and legs were strong and moving.
Discussion and conclusions on issue (1) - limitation
[43] There is no issue over the fact that a plaintiff who has suffered personal injury for which cover is available under the Accident Compensation legislation may, in an appropriate case, also file a claim in the courts for an award of exemplary damages. The possibility of such claims being brought is expressly preserved in the
current legislation by s 319 of the Accident Compensation Act 2001, which provides:
12 Invercargill City Council v Hamlin [1996] 1 NZLR 513, [1996] 1 All ER 756.
319 Exemplary damages
(1) Nothing in this Act, and no rule of law, prevents any person from bringing proceedings in any court in New Zealand for exemplary damages for conduct by the defendant that has resulted in—
(a) personal injury covered by this Act; or
(b) personal injury covered by the former Acts.
[44] As the Supreme Court held in Couch (No. 2), exemplary damages should not be available in cases of negligence causing personal injury unless the defendant consciously appreciated the risk the conduct in question posed to the safety of the plaintiff and proceeded deliberately and outrageously to run that risk and thereby
cause the harm suffered by the plaintiff.13
[45] That passage from Couch describes the kinds of factors which a plaintiff must prove to entitle him or her a particular form of relief. Before getting to that stage, however, the plaintiff must show that he or she has a good cause of action (e.g. breach of contract, negligence, battery, or breach of fiduciary obligations), and that the claim has been filed in time under any relevant limitation legislation.
[46] It is the cause of action which must be filed in time, and it is not clear from Ms Lamb’s submissions that she has appreciated that point. To the extent that her claims are based in the tort of negligence, the addition of descriptors such as “gross”, or “outrageous” add nothing for limitation purposes: the cause of action remains a cause of action in negligence, which was subject to the time limits set out in s 4 of the Act. The Couch test for exemplary damages will only be relevant if a plaintiff has already made out the various elements of the tort of negligence, and the Court is considering whether the defendant’s conduct is sufficiently outrageous that an award of punitive damages should be made (in addition to any compensatory damages to which the plaintiff may be entitled).
[47] In this case, Ms Lamb has three separate causes of action: breach of contract, negligence, and breach of fiduciary duty.
13 Couch v Attorney-General (No. 2), [2010] NZSC 27, [2010] 3 NZLR 149 per Tipping J at [110], [150]-[151], see also Blanchard J at [60] and Wilson J at [259].
[48] In respect of the breach of contract claim, it is not necessary to decide whether there was a contract, express or implied, entered into between herself or her mother and the hospital authority. Whether there was or was not, any claim based in contract is clearly statute-barred. It is a long-established rule that time starts running for limitation purposes in a breach of contract case from the date of the breach. That long-standing rule has not been abrogated or affected by the decisions in the
Court of Appeal in two cases referred to by Ms Leslie, namely S v G,14 and G D
Searle & Co,15 which were not breach of contract cases.
[49] In this case, the alleged breaches occurred in 1977, and any breach of contract cause of action would have accrued when Ms Lamb became an adult.16
[50] On the best case for Ms Lamb, then, any cause of action accrued when she turned 20, which would have been in or about 1986. The time limits prescribed by s
4(1) and (7) of the Act began to run then, and at latest time would have expired in or about 1992. The breach of contract claim is therefore well out of time.
[51] The next cause of action is the cause of action in negligence. To establish a claim in negligence, a plaintiff has to show (i) that the defendant owed him or her a duty of care, (ii) that the defendant breached that duty of care, and (iii) that the breach of duty caused the plaintiff to suffer loss or damage.
[52] Assuming (without deciding) that the defendant owed Ms Lamb a duty of care in respect of the period when she was in hospital in 1977, and that the defendant breached that duty of care, it is plain that damage was also suffered in 1977 (with the event Ms Lamb describes as the secondary head injury, and the consequent onset of the paralysis). On one view of it, all of the elements of the tort of negligence were then present, and the six year time limit under s 4(1) of the Act would have begun running against Ms Lamb from the date she ceased to be under a disability (on her
20th birthday).
14 S v G [1995] 3 NZLR 681 (CA).
15 G D Searle & Co, above n 5.
16 Section 24 of the Act provides that a right of action in a claim for bodily injury is deemed to have accrued on the date when the plaintiff ceased to be under a disability. Under s 2(2) of the Act, a person is deemed to be under a disability while he or she is a minor.
[53] However in S v G, a case concerned with allegations of sexual abuse causing psychological harm, the Court of Appeal held that the cause of action did not accrue unless and until the plaintiff realised, or ought reasonably to have realised, that the harm from which she was suffering was caused by the defendant’s conduct.17
[54] In GD Searle & Co, the plaintiff had suffered pelvic inflammatory disease as a result of the insertion and removal of an intrauterine device. She had also suffered a number of ectopic pregnancies and become infertile. The Court of Appeal held that, for the purposes of sections 4 and 7 of the Act, a cause of action accrues when bodily injury of the kind complained of is discovered or is reasonably discoverable
as having been caused by the acts or omissions of the defendant.18
[55] Whether S v G or GD Searle & Co would apply in the present situation is not clear – in Murray v Morel & Co, the majority of the Supreme Court declined to adopt any general principle of “reasonable discoverability” as the starting point for limitation periods under the Act. But it is not necessary to decide that point, as Ms Lamb acknowledges that her negligence cause of action had accrued by October or at latest November of 2008, and I am satisfied that s 4(7) of the Act applied to the claim.
[56] Under s 4(7), any claim had to be brought within two years of the date of the accrual of the cause of action (on the best case for Ms Lamb, by October/November
2010), unless the claim was brought with the consent of the defendant before the expiration of the six year period commencing October/November 2008 or Ms Lamb applied within that six year period for leave to bring the proceeding and that leave was granted. In this case, there has been no consent from the defendant, and Ms Lamb did not apply for leave to bring her case within the period of six years after November 2008. She did make an oral application for leave at the hearing on 20
August 2015, but by then it was too late – following the decisions of Andrews J in
Reekie v Attorney-General,19 and A v D,20 the application for leave had to be brought
17 S v G, above n 14, as explained by Tipping J in Murray v Morel & Co [2007] 3 NZLR 721; [2007] NZSC 27, at [48].
18 GD Searle & Co, above n 5.
19 Reekie v Attorney-General, above n 8.
20 A v D, above n 8, at 70.
within the six year time limit. The fact that the proceeding itself may have been filed within the six year period does not assist a plaintiff if the application for leave is not made within the six year period.
[57] It does not matter whether a claim for bodily injury arises out of a contract or as the result of a tortious act – s 4(7) will apply.21
[58] I do not apprehend Ms Lamb to be contending that the events complained of did not cause her “bodily injury”. She refers in her own submissions to a “secondary injury” to her head. But in any event I do not think that there could be any doubt that the secondary head injury and consequent paralysis come within the “bodily injury” concept. In Maxwell, Roper J referred to the definition of that expression proposed by Williams J in Deeble v Nott, where the Judge held that the expressions “bodily injury”, “personal injury”, and “injury” have been used indiscriminately to cover all cases where a person suffers a physiological injury or change as a result of
the happening of the event insured against.22 In Maxwell, Roper J accepted that
definition, adding that “a pre-existing physiological injury or change which has been exacerbated or needlessly perpetuated” by the event complained of would also constitute “bodily injury”.23
[59] In this case, Ms Lamb had a pre-existing physiological injury which she says was exacerbated or needlessly perpetuated by the events complained of (the doctors’ alleged failure to assess her head injuries and provide appropriate care in accordance with the assessment). If she cannot prove that the secondary injury and the resultant paralysis occurred, her claim against the defendant will fail (i.e. the nature and extent of her personal injuries is an essential ingredient in the proof of her claim against the
defendant).
21 Maxwell v North Canterbury Hospital Board [1977] 2 NZLR 118, citing Gabolinscy v Hamilton City Corporation [1975] 1 NZLR 150. In Maxwell, Roper J held that the six year limitation in s 4(1) of the Act is imposed by reference to a cause of action, but the two year limitation in s 4(7) is imposed by reference to the class of damage (bodily injury) for which relief is claimed, at 123.
22 Deeble v Nott (1941) 65 CLR 104.
23 In Maxwell, the alleged “bodily injury” was the suffering of inconvenience and mental anxiety.
It appears to have been accepted that the claim for mental anxiety would be one within s 4(7) of the Act as an action in respect of bodily injury. In Gabolinscy, Moller J considered that a claim of $1,000 in general damages for “considerable inconvenience and worry”, was a claim for “bodily injury” to which s 4(7) applied.
[60] I conclude accordingly that Ms Lamb’s negligence claim (and any contract
claim she might have brought), are claims in respect of bodily injury to her.
[61] Specifically referring to the meaning of the words “in respect of” in s 4(7), Roper J referred in Maxwell v North Canterbury Hospital Board to the judgment of Boreham J in Paterson v Chadwick,24 where the learned Judge noted that the words “in respect of” are of difficult definition but have the widest possible meaning of any expression intended to convey some connection or relation between the two subject- matters to which the words refer. Boreham J concluded that words “in respect of” convey some connection or relation between the plaintiff’s claim and the personal injuries sustained. In that case, the relevant claim was a claim brought by the
plaintiff against her solicitors, based in contract, for allowing a claim for negligent medical treatment to be barred by effluction of time. Boreham J considered that the appropriate question to ask was whether in the proceedings brought by the plaintiff against her solicitors there was a connection or relationship between her claim and her personal injuries. The learned Judge found that there was a sufficient connection or relation, because the nature and extent of the plaintiff’s personal injuries formed an essential ingredient in the proof of her claim. Unless she could prove the injuries,
her claim would fail.25
[62] In Maxwell, Roper J applied the approach adopted by Boreham J in Paterson v Chadwick, asking whether there was a “connection or relation between the…claim and the personal injuries”. If there was, the proceeding would be “an action in respect of…bodily injury”.26
[63] In this case, the damage suffered by Ms Lamb is an essential element of her negligence cause of action – unless she proves that damage, and that it was caused by negligence on the part of hospital staff, her claim would fail. There is therefore a sufficient connection or relation between her injuries and her claim that her claim must be regarded as a claim “in respect of” the bodily injury.
[64] The negligence claim is accordingly caught by s 4(7), and is out of time.
24 Paterson v Chadwick [1974] 1 WLR 890; [1974] 2 All ER 772.
25 At 775.
26 At 125.
[65] It remains to consider the effect of the Act on Ms Lamb’s claim for breach of fiduciary obligation. For the purposes of the strike-out application, the defendant accepted that it is arguable that the medical professionals may have owed Ms Lamb a fiduciary duty. However, Ms Leslie submits that there are no facts pleaded in this case that would give rise to a breach of a fiduciary duty that would not already be a breach of a duty owed to Ms Lamb in tort. She submits that the cause of action based on an alleged breach of fiduciary duty is therefore analogous to Ms Lamb’s cause of action based in negligence, and that the statutory time limits applicable to that cause of action are equally applicable to the breach of fiduciary duty cause of action.
[66] Ms Leslie submits that section 4(9) applies where the entire claim can be neatly encapsulated within a common law claim. If so, it will be limited by analogy.
[67] In Matai Industries Ltd v Jensen, Tipping J adopted the following statement from Spry on Equitable Remedies:27
…the principles that govern cases of this kind are that if there is a sufficiently close similarity between the exclusive equitable right in question and legal rights to which the statutory provision applies a Court of equity will ordinarily act upon it by analogy but that it will so act only if there is nothing in the particular circumstances of the case that renders it unjust to do so. What is regarded by Courts of equity as a sufficiently close similarity for this purpose involves a question of degree, and reference must be made to the relevant authorities. The basis of these principles is that, in the absence of special circumstances rendering this position unjust, the relevant equitable rules should accord with comparable legal rules.
[68] And in McLachlan & Ors v MEL Network Ltd & Ors, Potter J noted in respect of the limitation period for a claim based on breach of fiduciary duty that there is no statutory time limit, but that the Courts of equity impose limitations on their remedies analogous to those set by the statute.28
[69] In Simpson v Elliott the plaintiff sought exemplary damages against a psychiatrist who she alleged had subjected her to inappropriate psychotherapy and to
sexual, physical, verbal and emotional abuse. The case came before
27 Matai Industries Ltd v Jensen [1989] 1 NZLR 525 at 544.
28 McLachlan & Ors v MEL Network Ltd & Ors, HC Auckland CIV-1998-404-253, 9 December
2004.
Master Kennedy-Grant on a strike-out application, and the Master accepted that there could be a separate and sustainable cause of action for breach of fiduciary duty in such a case. He determined that there was not a sufficient similarity between the plaintiff’s claim in equity and the possible common law claim based in tort to warrant the application of s 4(9) of the Act. That was because the claim as pleaded went beyond allegations of assault/trespass and negligence. The Master declined to strike out the claim.
[70] The defendant applied to have the Master’s decision reviewed, arguing that the plaintiff’s allegations were more accurately allegations of either assault or trespass to the person, or negligence. He submitted that the characterisation of the defendant’s conduct could not have any bearing on whether the pleaded breaches of fiduciary duty remained in essence acts of assault or trespass on the one hand, or of negligence on the other.
[71] On review, Paterson J referred to the Canadian decision of Norberg v Wynrib.29 In that case, the defendant physician had obtained sexual favours in return for prescribing drugs. Some of the Judges in the Supreme Court of Canada did not accept that the case gave rise to a claim based in fiduciary duty and found for the plaintiff on causes of action based in tort and contract. McLachlin J, however, considered that the doctrines of tort and contract did not capture the essential nature of the wrong done to the patient in the case. The important issue was the nature and scope of the fiduciary duty which all judges agreed existed. McLachlin J noted that while tort and contract can provide a remedy for a physician’s failure to provide
adequate treatment, it is only with considerable difficulty that those doctrines can be bent to accommodate the wrong of a physician abusing his or her position to obtain sexual favours from a patient. McLachlin J stated:30
These examples underline the importance of treating the consequences of this relationship on the footing of what it is – a fiduciary relationship – rather than forcing it into the ill-fitting moulds of contract and tort. Contrary to the conclusion of the Court below, characterising the duty as fiduciary does add something; indeed, without doing so the wrong done to the plaintiff can neither be fully comprehended in law nor adequately compensated in damages.
29 Norberg v Wynrib (1992) 92 DLR (4th) 449 (SCC).
30 At 500.
[72] Paterson J considered that if McLachlin J’s views were to be adopted as the law in New Zealand, a case such as the case before him, based on fiduciary duty, was a case different from a claim based in tort. Whether the plaintiff was entitled to bring such a claim in equity could not be determined on a strike-out application.
[73] Is the conduct alleged against the defendant in this case analogous to the conduct which is said to constitute the negligence?31 I think it is, and that s 4(9) therefore applies.
[74] The contract and tort allegations alleged by Ms Lamb are essentially that the defendant breached contractual and tortious duties by omitting (through the medical staff at Palmerston North Hospital) to have Ms Lamb’s injuries properly assessed and treated. There is nothing alleged as a breach of a fiduciary obligation owed to Ms Lamb which appears to call for consideration of any different or additional facts from those which are relied upon in her negligence cause of action. The facts relied upon in the fiduciary duty cause of action do fit into an “acceptable tortious
framework”.32
[75] In this case, all of the relevant causes of action seek damages in respect of bodily injury suffered by Ms Lamb, including the claim based in breach of fiduciary duty. In those circumstances, s 4(7) of the Act applies either directly or by analogy, so that any claim had to be brought within two years of the cause of action accruing (in October/November 2008 at latest), unless Ms Lamb obtained either the consent of the defendant or the leave of the Court within the periods prescribed by s 4(7). She did not obtain the defendant’s consent, and she did not apply for leave within the prescribed period. I accordingly conclude that the defendant has satisfied the test for striking out on limitation grounds set by the Supreme Court in Murray v Morel &
Co.33 There will be orders striking out the statement of claim accordingly.
[76] For completeness, I add that even if s 4(7) of the Act did not apply to
Ms Lamb’s claims, the claims would still be outside the six year limitation period prescribed by s 4(1) of the Act for claims in contract and tort and (by analogy with
31 The question posed by Paterson J in Simpson v Elliott, above n 11 at [20].
32 Adopting the language of Paterson J in Simpson v Elliott, above n 11 at [21].
33 Murray v Morel & Co, above n 3, set out at para [22] of this judgment.
the tort claim in this case, the claim based on breach of fiduciary obligation). The defendant did not become a party in this proceeding until 19 February 2015, when I made the order substituting him as defendant. As Potter J noted in McLachlan, an application for joinder does not have the effect of making the party who is the subject of the application a defendant. That requires a Court order, and until that order is made time continues running in relation to potential causes of action against
a proposed defendant.34
Issue (2) – On the facts pleaded in her amended statement of claim, is it reasonably arguable that Ms Lamb might be entitled to exemplary damages?
[77] On the view to which I have come on the limitation issues, it is not strictly necessary for me to answer this question. But if I had been required to answer the question I would have held that Ms Lamb’s amended statement of claim is also deficient under this heading.
[78] In Xi & Ors v Howick Baptist Healthcare Ltd & Waitemata District Health Board, Associate Judge Bell dealt with an application by the second defendant for summary judgment and to strike out claims by the plaintiffs for substantial damages for emotional trauma and by way of a punitive award, following an accident suffered by Ms Xi when she was at home recovering from a stroke, allegedly in the care of an employee of the first defendant.35 Addressing the claim for exemplary damages, the Associate Judge noted that the plaintiffs had not set out anything in their statement of claim to suggest that the District Health Board had engaged in
intentional misconduct or acted with subjective recklessness. The allegations against the District Health Board related to the quality of services provided by the caregivers; there was nothing showing a conscious appreciation that personal injury would or might be caused to Ms Xi. The Associate Judge said:
[26] It is important to appreciate that allegations of outrageous conduct against a defendant are not to be made lightly and give rise to special pleading responsibilities. That is especially so when the allegation is for fraud or dishonesty. Similarly, when it is alleged that a defendant has acted deliberately or recklessly so as to harm a plaintiff, such an allegation should not be advanced unless there is a sound foundation for it. In cases where
34 McLachlan & Ors v MEL Network Ltd & Ors, above n 28, [60].
35 Xi & Ors v Howick Baptist Healthcare Ltd & Waitemata District Health Board [2014] NZHC
1058.
fraud is alleged, the plaintiff is normally required to substantiate the pleading by showing a prima facie case. In a similar way, it is incumbent on the plaintiffs to show that there is something in the case which requires the Court to take the allegations of outrageous conduct seriously. There is nothing in the circumstances of this case that I can see that would suggest that the Court should take seriously the proposition that there is some need to punish the District Health Board on account of intentional misconduct or subjective recklessness in allowing harm to [Ms Xi]…
[79] So in this case, there is nothing in Ms Lamb’s pleading which in my view sufficiently alleges intentional misconduct or subjective recklessness in allowing harm to befall Ms Lamb.
[80] Applying the test in Couch, Ms Lamb would have to have alleged that there was a conscious appreciation of the risks that the acts or omissions (including any alleged systemic failures) allegedly posed to her safety, and that the medical staff (or possibly managerial staff to the extent that systemic failures were relied upon) deliberately and outrageously proceeded to run those risks.
[81] The allegations in the amended statement of claim do not sufficiently allege outrageous conduct of that sort. There is no specific pleading that any particular doctor or nurse was aware of any risks which might arise if Ms Lamb was not referred to a neurosurgeon, and no sufficient particulars of any systemic failure (such as allegations of deficiencies in the system used for recruiting appropriately qualified medical and nursing staff).
Result
[82] I make the following orders:
(1)Ms Lamb’s amended statement of claim dated 26 February 2015 is struck out.
(2)The defendant has asked for costs, and I see no reason why costs should not follow the event in the ordinary way, in accordance with the r 14.2(a) of the High Court Rules. I accordingly award costs to the defendant on scale 2B, (including two half days for the hearings
on 23 July 2015 and 20 August 2015), plus disbursements as fixed by the registrar.
Associate Judge Smith
Solicitors:
T J Lamb, Palmerston North in person
Crown Law, Wellington for the defendant
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