M v Capital Coast Health Limited HC Wellington CP No. 70/00

[2001] NZHC 554

IN THE HIGH COURT OF NEW ZEALAND CP No. 70/00
WELLINGTON REGISTRY

ORDER MADE PROHIBITING PUBLICATION OF THE PLAINTIFF’S NAME OR IDENTIFYING FACTS

BETWEEN M
Plaintiff

AND CAPITAL COAST HEALTH LIMITED
a Hospital and Health Service having its registered office at Wellington
First Defendant

AND RESIDUAL HEALTH MANAGEMENT UNIT
a body corporate, having its registered office at Wellington
Second Defendant

THE ATTORNEY-GENERAL
on behalf of the Ministry of Health
Third Defendant

Date of Hearing: 30 April 2001

Date of Judgment: 25 June 2001

Counsel: MJ Leggatt and MJ Bromley for Plaintiff
PA McCarthy for Defendants

JUDGMENT OF DURIE J

Solicitors:
Rudd Watts &Stone, Wellington for Plaintiff
Crown Law Office, Wellington for Defendants

Introduction

[1] The second and third defendants, Residual Health Management and the Attorney-General, apply for review of a decision of the Master granting leave to the plaintiff, under the Mental Health Act 1911 and the Limitation Act 1950, to commence proceedings. Proceedings against the first defendant, Capital Coast Health, have been discontinued. Leave was required for two reasons. The first, under the Mental Health Act, arises because of the nature of the case - the challenge to acts done to persons who were considered to be mentally defective at the time. The second, under the Limitation Act, arose in this case because of a lapse of time.

[2] The proceeding itself has been filed but should be treated as largely indicative pending interrogatories and discovery processes. The plaintiff proposes actions in negligence, assault and battery, false imprisonment and breach of fiduciary duty arising from her admissions to and confinement at Porirua Mental Hospital between 1954 and 1960.

[3] Critical to this case is the proper process to be adopted when arguably, leave is not required at all but a final determination of that question must substantially depend upon a full hearing of the evidence as a whole. The plaintiff’s position is that leave is not required but is applied for out of caution, the defendants declining to consent.

Background

[4] The plaintiff claims that her admission was improperly arranged and she was wrongly exposed to electro-convulsive treatment and insulin therapy as punishment. She further alleges various forms of physical and mental abuse in an environment of fear and trepidation, including claims that she was beaten around the genitals with a shoe and was occasionally confined for lengthy periods in a room with no light. She deposes that she remained for some 40 years in a parlous condition as a result, with depleted brain and a mere shell of what she had been. More particularly she says she was left traumatised, insecure, vulnerable, unable to cope and unable to take other than menial work. Her evidence is that following discharge she joined a commune where she was unable to defend herself from beatings and sexual advances. Later, upon marriage, she was unable to provide for her children with ordinary support and affection. She claims that from her discharge to today, she has suffered severe emotional problems, recurring nightmares, difficulties in communicating with others and an inability to concentrate or remember. For many years, she deposed, she could not talk of her experiences with others and remained afraid that if she did she might be taken back to the mental home. Gradually however, she learnt to “open up” to others about aspects of her experience.

[5] Based upon the plaintiff’s evidence a chronology is as follows:

1954

Plaintiff admitted to Porirua Mental Hospital pursuant to s 8 Mental Health Act 1911. She had just turned [age]. She was upset about a boy and had overdosed on aspirin. When she woke her head was ringing. Her mother took her to hospital whereafter she was detained in psychiatric care.

1956

Discharged.

1956

Re-admitted to Porirua Hospital on her father’s application, her father stating:

“For about the past month or so she has been remaining in bed all day gets up at night time when we are in bed. She won’t eat her meals in the day time. She turns night into day - she does not go out but sits and reads and writes, but you could not understand what she writes about - it does not make sense. When spoken to she does not answer back - she tells people to mind their own business.”

1960

Final discharge.

1991

Plaintiff first “opened up” about some aspects of her treatment to her sister, a social worker.

1992

Plaintiff applied for ACC cover on a “sensitive claim” for sexual assault suffered when she was beaten around the genitals with a shoe.

1993

After an appeal to the District Court ACC cover was granted.

1994-1995

Plaintiff received ACC funded counselling.

late 1998

Plaintiff attended “growth and moderation” meetings which, she says, finally helped her realise the connection between the abuse she suffered at Porirua and the ongoing emotional and psychological problems she had been suffering from throughout her life.

20.4.2000

Proceedings were filed. Consent to proceed was sought from defendants but without success.

31.7.2000

Application for leave to proceed.

22.8.2000

Above application served.

The Master’s decision

[6] The application came before the Master on 24 November 2000. The following summarises the conclusions in his decision of 21 March 2001.

(1) Mental Health Act

Leave should be granted.

(a) There was sufficient material to say that if the plaintiff proves her allegations there would be substantial ground for concluding that the persons against whom the action is brought acted in bad faith and without reasonable care (see para 19).

The Master traversed the circumstances in which the plaintiff was delivered up for medical examination by her parents, the medical evidence to support a diagnosis of mental defectiveness and the evidence that the electro-convulsive treatment and insulin therapy may have been used as punishment or was otherwise inappropriate. He observed that there would likely be an issue as to whether the reception procedures should be judged by the extent of medical knowledge at the time or as at today, and then with reasonable care having regard to the applicable standards.

(b) The plaintiff remained “ignorant of the facts” owing to disabilities comprehended in law as “deferred discovery” (see paras 54 and 55).

(2) Limitation Act

Leave may not be required at all owing to the same disabilities. Alternatively if leave is required, those disabilities constitute “reasonable cause” for the delay. This outweighs any prejudice to the defendants (which is limited to the period between the expiry of the Limitation period and the filing of the application (see paras 38, 41, 49, 55 and 56).

(3) Accident Compensation Bar

That in exercising a discretion to grant or refuse leave it was not necessary to come to a finite view on whether the plaintiff’s claims for compensatory damages were barred by the Accident Rehabilitation and Compensation Insurance Act 1992 following an award of compensation for the alleged sexual assault in 1992. Section 396 of the current Accident Insurance Act 1998 specifically preserves the right to claim exemplary damages where cover is provided by that Act or is provided by any former Act (see para 23).

(4) Process

Owing to the preliminary state of significant evidence and limitations on interlocutory processes the appropriate course was to grant leave but without prejudice to the defendants’ right to plead all limitation defences available to them, and any defences under the Accident Compensation Act, as affirmative defences (see paras 28, 33, 50 and 57).

Criteria for review

[7] Rule 61C(4) provides that where a Master’s decision follows a defended hearing and is supported by recorded reasons, the review proceeds as an appeal by way of rehearing. The consequential tests were not in dispute and are well established by existing authorities. The defendant must satisfy this Court that the conclusion reached was not open on the evidence, that the Master proceeded on a wrong principle or that the Master was plainly wrong. In the alternative the defendants may succeed upon showing that in the exercise of discretion the Master gave undue weight to some factor or insufficient weight to another. The application of these principles to this relatively new rule has been considered in Mobil Oil NZ Ltd v Ellison & Ors (High Court, Palmerston North, CP 10/98, 17 February 2000, Gendall J), Young v Ross (High Court, Hamilton, CP 4/97, 21 July 2000, Potter J) and Marine Resources (NZ) Ltd v Attorney-General (High Court, Hamilton, CP 213/91, 8 August 2000, Gendall J).

[8] Further, in this case the evidence was entirely in affidavits without cross-examination. I am therefore less constrained than would otherwise be the case in forming an independent view of the facts should that be necessary.

Consideration of the Application for Review

Overall approach

[9] In opening for the defendants, being the applicants for review, Mr McCarthy argued the importance of adopting a correct approach to the leave applications. With respect I do not think he had the order right but I agree with the sentiment expressed. Indeed, the marshalling of issues in an order that gives effect to the statutory intent is crucial to the resolution of applications for leave, in my view, whether under the Mental Health Act 1911 or the Limitation Act 1950. The determination of a correct order is also central to the disposal of this case.

[10] An appropriate order for determining issues will be considered in respect of each of the two Acts mentioned. In addition however, a question of which of the two Acts should be considered first, has also to be resolved for the order shapes the outcome. That question can be answered shortly. By s 33(1) of the Limitation Act that Act does not apply to any action for which a period of limitation is prescribed by any other enactment. That determines precedence. The Mental Health Act being particular to the cure of proceedings involving acts of mental health treatment, the limitation under that Act should be considered first.

[11] Pertinent extracts from the Acts are printed in an appendix.

Leave under the Mental Health Act 1911

[12] For the purposes of this case, s 6 of the Mental Health Act 1935 gives three important determinants for whether a claimant is able to proceed. First it provides statutory immunity for those who do any act “in pursuance or intended pursuance” of the Mental Health Act unless done in bad faith or without reasonable care (s 6(1)). Second, no-one may proceed with an action in respect of acts “in pursuance or intended pursuance” of the Mental Health Act unless the Court is satisfied there is ‘substantial ground’ for contending that the acts were done in bad faith or without reasonable care. Accordingly, leave to proceed is required (s 6(2)). Third, however, no-one can proceed with an action at all unless the action is brought within 6 months of the act complained of, or, in the case of a continuance of injury or damage, within 6 months after the ceasing of such injury or damage. In assessing the period of 6 months, no account is taken of any period in which the claimant was “ignorant of the facts which constitute the cause of action” (s 6(2)).

[13] These things may be noted at this stage.

[14] First, there is no provision for leave to proceed despite any lapse of time. The only question pertinent to time is whether the plaintiff is within or outside the time frame according to the prescriptions in s 6(4). Leave is required only because of the nature of the case - the challenge to acts done to persons who were considered to be mentally defective at the time (s 6(2)).

[15] Second, leave is not required in respect of acts that were not “in pursuance or intended pursuance” of the Mental Health Act. This follows from the wording of s 6(2) and s 6(1).

[16] Third, to obtain leave, the intending plaintiff has only to establish a ‘substantial ground’ to assert that the acts were done in bad faith or without reasonable care (s 6(2)). As a result a final decision on whether acts were done in bad faith or without reasonable care is for the Court that finally hears the matter.

[17] There was no dispute that the section endures for the purposes of this case, notwithstanding its repeal - see Attorney-General v McVeagh [1995] 1 NZLR 558, 565 - 567 (CA).

[18] The foregoing determines the precedence of issues. The first question is whether the plaintiff is in time. The Court cannot begin to consider whether leave should be granted to bring proceedings in respect of mental health treatment unless the plaintiff is in fact within the times prescribed by s 6(4). If the plaintiff is in time then the second question arises - are the acts complained of, acts in pursuance or intended pursuance of the Mental Health Act provisions? If `yes’, the third and final question arises as to whether there is a substantial ground for the plaintiff’s contention.

[19] I will begin with the first question.

Mental Health Act - is the plaintiff in time?

[20] The time allowed is short. It is only 6 months from the act complained of. However, the time is extended in two important respects that could apply to this case. The first is that time does not run during any period in which the plaintiff was ignorant of the facts that constitute the cause of action. Upon reading s 6(4) it is plain that there is also a second respect in which time may be extended that is additional to the first. The second is that in the case of a continuance of the injury or damage, time does not run until after the ceasing of such injury or damage.

[21] Because of the order in which questions were marshalled in the Master’s decision this issue appears not to have been addressed. However, in other contexts the Master referred to the recognition given to the phenomenon of delayed discovery in S v G [1995] 3 NZLR 674 (CA) (especially p 687) and W v Attorney-General [ 1999] 2 NZLR 709. These recognise that persons who suffer some mental disability may be handicapped in linking their disabling symptoms to acts of past mistreatment. The Master then observed the caution in T v H [1985] 3 NZLR 37 (at p 56), S v G (supra at p 690) and W v Attorney-General (supra at paras 84 - 86, 115 - 116 and 130 - 131). To summarise the position, ultimate decisions on cognitive capacity must depend upon a full testing and analysis of all available evidence at trial. Until then, the Court should be wary about deciding the outcome on a mere preliminary skirmish. The Master gave effect to that sound advice by granting leave as an interim measure and preserving all defences.

[22] In this case however, the plaintiff’s own evidence is that the plaintiff made the necessary link in late 1998 following counselling and attending “growth and moderation” meetings. The application was made in 2000. That being so she does not meet the requirement to apply within 6 months from the time that she ceased to be “ignorant of the facts”, that is to say, in this instance, ignorant of the fact that her condition was attributable to her previous hospital experience.

[23] 1 have considered the prospect that the plaintiff’s mental condition may be such that no final determination should be made now. Should it await a final assessment of her condition? In this case I do not think that is at all appropriate. The plaintiff’s own evidence of her awareness in 1998 is simply too clear cut.

[24] The second respect in which time is extended by the statute is in the case of a continuance of the injury or damage. In such a case time does not run until after the ceasing of such injury or damage.

[25] The plaintiff’s position was simple. The plaintiff continues to suffer injury and damage to this day. For the defendants however, Mr McCarthy argued that the extension applies to a continuing tort, and so reflects the orthodox concept of a cause of action finally accruing when the continuing tort ceases. In other words, ‘the damage continues but the tort does not’. That passage is from Tipping J in T v H (supra at p 59) with reference to s 33 of the Limitation Act and s 3(4) of the Law Reform Act 1936. Tipping J compared “the earlier days of a tort causing a broken leg whose effect on the victim might be lifelong”.

[26] This point was not answered in the plaintiff’s submissions. With respect, nor was it considered by the Master. Arguably the interpretation claimed by Mr McCarthy requires words to be imported into the statute and that that should not be done in respect of a statute that limits rights and which must therefore be strictly construed. But I think Mr McCarthy must be correct. The thrust of s 6 is indeed to limit rights in respect of acts taken in pursuance or intended pursuance of the Mental Health Act by limiting the time in which such action may proceed. It does not fit with the legislative intent that cases should drift indefinitely according to ongoing suffering so long as the plaintiff is aware of the facts that constitute the cause of action. In that context the words “in the case of a continuance of injury or damage” must be taken to refer to the normal understanding of tortious liability, that is, to the case where the cause of injury is ongoing.

[27] As I have said, the point was pertinent but was not addressed in the Master’s decision owing to the approach taken. In other words there was a failure to address a necessary matter of principle and this part of the decision is therefore amenable to review on that basis. It follows that there is no need to consider the other respects in which leave under the Mental Health Act might be given. I accept that the first hurdle the plaintiff must leap is a low one but nonetheless, the plaintiff has failed to leap it.

[28] However that does not dispose of all aspects of the case. As already indicated s 6 of the Mental Health Amendment Act 1935 applies only to acts done in pursuance or intended pursuance of the Mental Health Act provisions. The corollary of s 33(1) of the Limitation Act is that the Limitation Act applies to all else. What acts are or are not in pursuance or intended pursuance of the Mental Health Act provisions? I think it was accepted that a sexual assault could not possibly be seen as something done in pursuance or intended pursuance of the Mental Health Act provisions. The same may be said of other alleged assaults, acts of unconscionable confinement or even, the use of electro-convulsive treatment and insulin therapy as punishment. Considerable argument was given on this matter on this application. However, for reasons that I will come to, I think I should express no final view. It is enough that the plaintiff has an arguable case that some matters are outside actions reasonably contemplated by the Mental Health Act and I think that must be so.

[29] That then leads to the application of the Limitation Act.

Leave under the Limitation Act 1950

[30] The Limitation Act 1950 is a general Act prohibiting actions commenced after times prescribed according to the class of case. As already mentioned by s 33(1) it does not apply to any action for which a period of limitation is prescribed by any other enactment. Conversely, it does apply to matters not covered by specific legislation and thus in this case, to acts complained of that were not in pursuance or intended pursuance of the Mental Health Act.

[31] Under this Act, no action shall be brought in respect of “bodily injury” after 2 years from the date on which the cause of action accrued (s 4(7)). However, in the case of a person under disability, the right of action is deemed not to have accrued until the person ceased to be under a disability (ss 3 and 24). In addition, where the 2 year time limit has expired, an intending plaintiff may apply for leave to proceed so long as that application is made within 6 years of the date the cause of action accrued. The Court may grant leave if it thinks it “just to do so” and where it considers that the delay in bringing the action was occasioned by some “reasonable cause”.

[32] On the basis of the foregoing, it seems obvious that the first question under the Limitation Act, as applied to this case, is whether the plaintiff is in fact within the time frame. Only if the answer is ‘no’ does the second question arise, of whether the plaintiff is in time to seek leave to proceed. Then, only if the answer to that is `yes’ does the third question arise, of whether the plaintiff should have leave. Accordingly the first question is whether the plaintiff is in time.

Limitation Act - again, is the plaintiff in time?

[33] There was no dispute that the Master was correct in deciding that on the authorities, persons with disabilities for the purposes of the Act include those whose handicaps prevent them from adequately disclosing the facts and securing proper legal advice or from linking their disabling symptoms to past mistreatment. The plaintiff’s evidence was that she suffered from a disability of that kind. The question then was whether she had ceased to suffer from that disability within the time frame of two years.

[34] The plaintiff relied upon evidence that she remained under such a disability until late 1998 following counselling and attending “growth and moderation” meetings. On that basis Mr Leggatt for the plaintiff submitted that the plaintiff was entitled to bring her proceeding as of right.

[35] The defendants argued that the plaintiff had adequate mental capacity by 1992 when she applied for statutory accident compensation for injuries resulting from an alleged sexual assault in the hospital. If that was so the six years ran from then and the plaintiff was out of time in terms of s 24 and statute barred from even seeking leave in terms of s 4(7). Review was sought on the basis that the Master had not given any or any adequate consideration to that factor.

[36] I think it remains open for the plaintiff to argue, on the evidence as it currently stands, that the 1992 step was no more than a response to a discovery that compensation was available for past sexual abuse. It is evidence of a growing ability to assert a stance but arguably, cognitive redevelopment was still embryonic and immature, incapable of making all the linkages required for a larger case. Similarly, it is open to the plaintiff to argue that the necessary level of cognitive skill had not been reached until a time in late 1998 that was within the two-year period.

[37] Mr McCarthy submitted that there was an insufficient evidential base to so determine. I think the Master more than adequately covered that point. I have already mentioned the Master’s reliance upon Court of Appeal authority to the effect that ultimate decisions on cognitive capacity must depend upon a full testing and analysis of all available evidence at the substantive hearing. Until then the Court must be wary about deciding matters at the preliminary application stages. The logical consequence is that in these situations, the threshold for determining whether leave is required is necessarily low. It is enough that the plaintiff has an arguable case in that respect. The Master so found and in my view it is not established that the Master was wrong.

[38] As I see matters, the proper course was then to determine that on the current state of the evidence the plaintiff has an arguable case that leave is not required as the plaintiff’s case falls within the time frame of 2 years. The Court had then to reserve all defences under the Limitation Act until the whole of the available evidence had been tested at the substantive hearing. The Court to finally decide the matter would then decide whether in the final analysis that was so or whether the plaintiff in fact required leave. If so, then the Court finally disposing of the matter is in an informed position to consider whether leave ought to have been granted having regard to the criteria in the proviso to s 4(7).

[39] Effectively, the Master arranged matters that way. Accordingly, I can find no proper basis on which to disturb the thrust of his conclusion for managing the requirements of the Limitation Act.

[40] In view of that conclusion I need not consider the arguments on whether the plaintiff meets the requirements for seeking leave in terms of s 4(7). Were it necessary to do so then again, matters must depend on the final view to be taken of the evidence after all has been fully laid bare and put to the test.

[41] I now come back to the question of what matters fall outside the Mental Health Act and within the ambit of the Limitation Act. As I have indicated, it is not appropriate to express a view at this stage. The question is entirely for the Court that finally deals with the matter. The only questions to be decided on an application for leave to proceed is whether leave should be given or refused, or, whether leave is in fact required. I think care must be taken in resolving matters on a preliminary application for leave. The result should not constrain the Court of final decision from reaching conclusions based upon a total overview of the whole of the arguments on the facts as ultimately determined.

[42] The same considerations apply to the further contention for the defendants that certain claims are barred by the Accident Compensation Act. Even were it necessary to consider the justice of the case in terms of s 4(7), that could not extend beyond justice in the context of the impact of delay. To hold otherwise would turn leave applications into substantive hearings on a range of matters even ahead of the necessary interrogatory and discovery processes.

[43] I should add that I have given earnest thought to the prospect of material prejudice to the defendants by the delay having regard to the dispersal of witnesses, the loss of evidence, the fact that personal motives are involved and the tricks that time plays on memories. However, as the Master considered, this has also to be weighed with the plaintiff’s access to the law on the basis of a full consideration of all available evidence. In the final analysis the defendants are still able to raise their concerns at the substantive hearing should that be necessary, either directly by maintaining the limitation defence, or indirectly by reference to the reliability of evidence.

Decision

[44] The decision of the Master granting leave to bring proceedings in respect of acts in pursuance or intended pursuance of any of the provisions of the Mental Health Act 1911, is set aside.

[45] All remaining matters are referred back to the Master for re-consideration. In respect of acts not in pursuance or intended pursuance of the Mental Health Act 1911 it appears, for the reasons given, that the plaintiff is able to proceed without leave under the Limitation Act 1950. It appears a finding may be made to that effect without prejudice to the defendants’ right to plead all limitation defences available to them, and any defences under the Accident Compensation Acts, as affirmative defences. It appears that such determination may also be made without prejudice to the plaintiff’s entitlement to plead a right to maintain proceedings at the Court’s discretion, under the proviso to s 4(7) of the Compensation Act 1950, should that be necessary.

[46] In my opinion, each party is unsuccessful in one respect and successful in another so that costs may also be considered further.

Appendix

Section 6 Mental Health Amendment Act 1935:

“Protection from civil or criminal liability of persons acting under authority of principal Act -

(1) A person who does any act in pursuance or intended pursuance of any of the provisions of the principal Act shall not be under any civil or criminal liability in respect thereof, whether on the ground of want of jurisdiction, or mistake of law or fact, or any other ground, unless he has acted in bad faith or without reasonable care.

(2) No proceedings, civil or criminal, shall be brought against any person in any Court in respect of any such act except by leave of a Judge of the Supreme Court, and such leave shall not be given unless the Judge is satisfied that there is substantial ground for the contention that the person against whom it is sought to bring the proceedings has acted in bad faith or without reasonable care.

(3) . . .

(4) Leave to bring such proceedings shall not be granted unless application for such leave is made within six months after the act complained of, or, in the case of a continuance of injury or damage, within six months after the ceasing of such injury or damage:

Provided that in estimating the said period of six months no account shall be taken of any time or times during which the person injured was in confinement, whether lawfully or unlawfully, as a mentally defective person, or was ignorant of the facts which constitute the cause of action, or of any time or times during which the defendant was out of New Zealand.

(5) . . . .

(6) . . . .

(6A) . . . .”

Section 4(7) Limitation Act 1950:

“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 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.”

Section 24 Limitation Act 1950:

“Extension of limitation period in case of disability - If, on the date when any right of action accrued for which a period of limitation is prescribed by or may be prescribed under this Act the person to whom it accrued was under a disability, -

(a) In the case of any action . . . in respect of the death of or bodily injury to any person, or of any action to recover a penalty or forfeiture or sum by way thereof by virtue of any enactment where the action is brought by an aggrieved party, the right of action shall be deemed to have accrued on the date when the person ceased to be under a disability or died, whichever event first occurred; or

(b) In any other case the action may be brought before expiration of 6 years from the date when the person ceased to be under a disability or died, whichever event first occurred,-

notwithstanding that, in any case to which either of the foregoing paragraphs of this section applies, the period of limitation has expired:

. . .”