Naysmith v Accident Compensation Corporation HC Whangarei Civ-2004-488-627
[2005] NZHC 1206
•20 May 2005
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IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
CIV-2004-488-627
BETWEEN EDGAR ROSS NAYSMITH AND JUDITH MARY NAYSMITH Appellants
AND ACCIDENT COMPENSATION CORPORATION
Respondent
Hearing: 10 December 2004 and 20 May 2005
Counsel: N C R Perry for Appellants
D K L Tuiqereqere for Respondent
Judgment: 20 June 2005
JUDGMENT OF BARAGWANATH J
Solicitors:
Henderson Reeves Connell Rishworth, Whangarei for Appellants
Legal Services, Accident Compensation Corporation, Wellington for Respondent
Counsel:
Mr D K L Tuiqereqere, Auckland
NAYSMITH AND NAYSMITH V ACCIDENT COMPENSATION CORPORATION HC WHA CIV-2004-
488-627 [20 June 2005]
Table of Contents
Para no. Introduction [1] The claim [6] The contentions [11]
The Corporation [11] The appellants [14] Perspective [16] The facts [17] The advice by the rehabilitation officer [17]
The Corporation learns of the head injury [19]
The orthopaedic surgeon advises the Corporation to refer the
head injury to the General Surgeon; the advice is not heeded [20]
The Corporation provides weekly compensation but no response
to the head injury [21]
Payment of lump sum compensation (s 79) but again no response
to the head injury [24]
Closure of the Kaitaia office without reference to the head injury [29]
May 1995 Mr Naysmith’s doctor refers to the head injury but still
no treatment of it. Corporation memo discerns lack of follow up [30]
1 October 1995 Mr Peters provides orthopaedic assessment
under s 78 and again recommends that head injury be formally
assessed but no response [34]
Section 78 award of $5,610. Mr Wallace’s surprise at
Mr Naysmith’s return to heavy work. But still no response to
head injury [36] Reference to Ms Quarrie of Far North Counselling [37] Report from Dr Mearns [40] February 1999 report from Dr Fernando, neuropsychologist
and clinical psychologist. Diagnosis of incomplete recovery from
head injury and relatively permanent brain impairment [41]
The claim of breach of statutory duty [42] Section 36 [42] The principles governing breach of statutory duty [43] The statutory context: ss 18-20, 63, 89-91 and 97 of the 1992 Act [45] The authorities [46] Discussion [48]
The negligence claim [61] Vires [61] Causation [65] Assumption and breach of responsibility as a tort [68] Decision [85]
Introduction
[1] Mr and Mrs Naysmith appeal against a decision of Judge Sharp striking out their proceedings which allege against the Accident Compensation Corporation (“the Corporation”) negligence, breach of statutory duty and abuse of public office. They claim that the Corporation wrongly failed to undertake or advise the appellants of the need for them to undertake remedial treatment in relation to his head injuries, as a result of which he has permanent symptoms.
[2] On 30 December 1989 Mr Naysmith was grievously injured in a motor accident caused by the intoxicated driver of another car. His four year old son died; another son and a nephew were injured. His injuries were compensable by the accident compensation scheme of which a prime element is rehabilitation. While Mr Naysmith was in a coma following the accident his wife was assured by a Corporation representative that it would look after her husband. On 11 January 1990 the Corporation advised Mr Naysmith that it had accepted his claim for compensation and assistance.
[3] At the hearing on 10 December 2004 the appellants sought and were granted leave to amend their pleading. An amended statement of claim was filed on
4 February 2005. On 15 March 2005 the Corporation filed an affidavit challenging various of the facts alleged. Mrs Naysmith replied on 29 April 2005. At the hearing on 20 May 2005 Mr Perry without objection from Mr Tuiqereqere made further amendments to the appellants’ pleading.
[4] In response to a time limitation plea, the appellants assert that their knowledge of the essential facts was delayed because of the trauma of the accident and its consequences, and the lack of information discovered. It was only on later discovery of the Corporation’s file that the appellants had the essential facts necessary to issue proceedings. The argument did not extend to this limitation plea which can be resolved only at trial.
[5] The appeal, like the Corporation’s successful application, is to be approached on the basis that all allegations of fact made by the appellant can be proved, save insofar as there is incontrovertible evidence to the contrary: Attorney-General v Prince and Gardner [1998] 1 NZLR 262, 267; Attorney-General v McVeagh [1995]
1 NZLR 558, 566. Where the law is uncertain and developing it is not normally appropriate to strike out; development of the law should be on the basis of actual facts found at trial rather than on a factual hypothesis that may turn out to be wrong: Sew Hoy & Sons Ltd v Coopers & Lybrand Ltd [1996] 1 NZLR 392, 407 per Thomas J; Barrett v Enfield London Borough Council [2001] 2 AC 550, 558 per Lord Browne-Wilkinson.
The claim
[6] Mr and Mrs Naysmith allege effectively three causes of action:
a) Breach of statutory duty imposed on it by s 36 of the Accident
Compensation Act 1982 and the equivalent provisions in the 1992 and
2001 Acts;
b) Common law negligence; and c) Abuse of public office.
A claim for exemplary damages is separately pleaded, no doubt as potentially surviving a strike-out of other claims. In the event it does not require discussion.
[7] The Corporation does not seek to strike out the third cause of action.
[8] The appellants contend that the Corporation, which described Mr Naysmith as its “client”, assumed the responsibility to obtain the medical reports and arrange the treatment necessary for his recovery and rehabilitation. In respect of his orthopaedic injuries that was done. But although the Corporation was aware that Mr Naysmith had sustained head injury and was exhibiting concerning symptoms, it made no response to a report from its orthopaedic surgeon on 7 December 1990
which in addition to dealing with orthopaedic injuries stated that the head injury should be the subject of expert consideration. Nor did the Corporation inform the appellants of the head injury or of Mr Peters’ advice or suggest that they should arrange for the necessary report to be obtained. So while orthopaedic assistance was furnished, weekly compensation was paid and a lump sum payment of $10,000 in relation to the orthopaedic injuries was provided, the head injury symptoms received no attention. To the later great surprise of a neurologist who belatedly examined Mr Naysmith in March 1997 he returned to work on his farm. In 1992 the Kaitaia office of the Corporation which had been handling the matter was closed. It was not until a second accident on 25 April 1995 that Mr Naysmith’s medical condition was reconsidered by the Corporation which in ultimately February 1999 obtained a neurological report. It revealed Mr Naysmith’s incomplete recovery from his head injury.
[9] Mr Naysmith claims that in breach of its undertaking, of a common law duty of care and of an alleged statutory duty, from the time of his recovery of consciousness in about February 1990 until 28 May 1999 the Corporation took no effective steps to rehabilitate him or assist him to recover his former mental resourcefulness to successfully resume his work on the dairy farm. As a result of the delay in providing appropriate neurological therapy and vocational training Mr Naysmith lost the opportunity to recover the whole of his former mental ability which would have been restored had the Corporation provided timely treatment and care to him after the accident. He has therefore been left with a determinate cognitive deficiency in his mental health for which he claims damages.
[10] Mrs Naysmith claims damages for her stress, anguish and financial loss as a result of what has happened to her husband.
The contentions
The Corporation
[11] The Corporation contends that the claim is fundamentally flawed. The functions and powers of the Corporation conferred by the legislation do not extend to giving advice to claimants or to assuming the obligations on which the appellants rely. It denies both duty of care and jurisdiction in the District Court and this Court to consider the claim.
[12] It further contends that the claim relating to symptoms of the head injury is, self-evidently, a:
…proceeding… for damages arising directly or indirectly out of personal injury [caused by accident].
[13] More generally it contends that the scheme of the legislation is simply inconsistent with the claim alleged which was properly struck out.
The appellants
[14] In response to the Corporation’s submission that the claim is barred by s 14 of the Accident Compensation Act 1992 (which refers to injury covered by the 1982 and 1992 Acts) and its equivalent in later statutes, Mr and Mrs Naysmith submit that the claim is not a:
…proceeding… for damages arising directly or indirectly out of personal injury [caused by accident].
[15] They claim that had the Corporation performed its undertaking the head injury and its symptoms would have been cured completely. It follows that the whole of the continuing injury and its symptoms were caused by the Corporation’s breach of duty in relation to which it is liable in accordance with settled principles of
the common law. Accordingly the claims should be permitted to go to trial to determine whether that can be established factually.
Perspective
[16] The arguments require appraisal of the scope, purpose and limits of the accident compensation legislation and its interface with the common law. Under the legislative scheme that removed New Zealanders’ entitlement to claim damages for compensation for personal injury Mr Naysmith was entitled to the assistance afforded by the Accident Compensation Act 1982 and its successor statutes the Accident Rehabilitation and Compensation Insurance Act 1992, the Accident Insurance Act 1998 and the Injury Prevention, Rehabilitation, and Compensation Act
2001. As the Woodhouse Report, the titles to the 1992 and 2001 statutes and specific provisions in each piece of legislation all record, rehabilitation is a policy of importance. Section 36 of the 1982 Act which was in force at the time of the accident required the Corporation to provide rehabilitation. The true construction and effect of that provision is central to the appellants’ argument that the case should be permitted to go to trial.
The facts
The advice by the rehabilitation officer
[17] Mr Naysmith alleges that on or about 3 January 1990 a rehabilitation officer, Mr Page, contacted Mrs Naysmith and assured her that the Corporation would look after her husband “to ensure he received all of the assistance he needed to recover from his injuries”.
[18] On 11 January 1990 the Corporation advised Mr Naysmith that it had accepted his claim for compensation and assistance.
The Corporation learns of the head injury
[19] The Corporation knew of Mr Naysmith’s head injury at latest a month after the accident. By letter dated 30 January 1990 the Corporation was informed by a surgical house surgeon at Kaitaia Hospital that in addition to multiple injuries Mr Naysmith had suffered “A moderately severe head injury.” On 16 October 1990 the Corporation’s rehabilitation co-ordinator saw Mr Naysmith and noted that he had sustained a head injury. She recorded:
In relation to his head injury he reports headaches, decreased concentration, decreased memory and irritability but I am sure there is more, his retrograde amnesia was from the date of the accident to March 1990.
The orthopaedic surgeon advises the Corporation to refer the head injury to the
General Surgeon; the advice is not heeded
[20] On 8 November 1990 the rehabilitation co-ordinator wrote to Ian Peters, orthopaedic surgeon, referring to her seeing Mr Naysmith on 16 October and stating:
At the time I saw him Ross had returned to his farming but was still suffering from his injuries, particularly his head injury. I will be maintaining regular contact, especially as I am concerned [with] the lack of facilities in Kaitaia that will assist him to deal with their problems at present.
Mr Peters replied on 7 December 1990, reporting as to orthopaedic injuries and stating:
The query regarding his head injury should be addressed to the General
Surgeon.
But that was not done. Nor was Mr Peters’ advice conveyed to Mr and
Mrs Naysmith.
The Corporation provides weekly compensation but no response to the head injury
[21] The Corporation paid weekly compensation in the amount of $180 per week and responded to invoices for accommodation, travel, telephone and food expenses.
[22] In the meantime the rehabilitation co-ordinator had noted that Mr Naysmith’s doctor had certified him fit for duties and stated:
But after some discussion with Ross and his wife Judy it is apparent that this is not so and that the doctor needs to get some more information from Ross so that he can make a better decision on this.
[23] She said that there was little she could do for Mr Naysmith as “he continues to improve and has a lot of community and family support”. She noted:
I will however continue to see them as they are involved in setting up a victim support group and have asked for my input in this… I have already volunteered my assistance in setting up a Head Injury Support Group in Kaitaia and I would anticipate that I would also have further contact with them through that.
But the failure to heed Mr Peters’ advice concerning the head injury was not picked up and acted upon.
Payment of lump sum compensation (s 79) but again no response to the head injury
[24] On 4 December 1990 Dr Young prepared a medical certificate recording that Mr Naysmith had tried to return to full duties from 1 October but was able to work at only 30% of his normal capacity.
[25] On 4 February 1991 Mr Naysmith was advised of his entitlement under s 79 to the maximum lump sum payment of $10,000 and that a decision as to the s 78 award had been deferred.
[26] On 18 March 1991 the rehabilitation officer called into the Naysmith’s residence and recorded that he “is progressing well and things seem to be a lot more settled in this household”.
[27] During 1991 surgery was performed on Mr Naysmith to remove a plate. The Corporation later enquired whether Mr Naysmith had returned to work and whether he was considering a permanent disability claim. He responded that he was back at work but could not deal with the permanent disability matter as he was to have another operation early in 1992.
[28] In 1992 there was correspondence about Mr Naysmith’s entitlement to earnings relating to compensation and an approval of private hospital treatment for further surgery. But the head injury went unremarked.
Closure of the Kaitaia office without reference to the head injury
[29] On the closure of the Kaitaia office the files were sent to Whangarei but still the head injury received no attention.
May 1995 Mr Naysmith’s doctor refers to the head injury but still no treatment of it. Corporation memo discerns lack of follow up
[30] There is nothing else recorded on the Corporation file until May 1995 when Mr Naysmith’s doctor recorded that Mr and Mrs Naysmith were suffering intense grief and enquired whether the Corporation could contribute towards the farm and counselling for the grief. The doctor advised “This man… had a head injury… and was obviously very badly smashed up.” The Corporation replied that the legislation did not provide for contribution towards replacement labour costs but provided a form for claiming contribution towards extra farm help and for counselling. Still there was no investigation of the need to respond to the head injury.
[31] From 10 May 1995 the Corporation arranged for payment to Mr Naysmith of weekly compensation and the reimbursement of travel costs. An internal Corporation memo stated:
It is obvious there has been lack of follow through by branch staff in this particular case, and not only does this indicate a need for training but also suggests the potential for performance issues.
[32] On 1 June 1995 Mr Naysmith’s doctor certified him fit for selected or alternative work.
[33] On 7 September 1995 the Corporation approved a request to reimburse the cost of twenty hours of counselling.
1 October 1995 Mr Peters provides orthopaedic assessment under s 78 and again recommends that head injury be formally assessed but no response
[34] On 1 October Mr Peters provided an orthopaedic assessment of permanent loss of bodily function assessed under s 78 as 33% and said:
Regarding his head injury it is my opinion that this should be formally assessed.
But still that was not done.
[35] The Northland Area Health Board orthopaedic notes for 9 May 1996 record
Mr Naysmith’s condition and state:
His main concern in fact seems to be with ACC. Certainly I think he would justify a disability assessment. However this opportunity may now have expired and he needs to clarify this with his client officer.
Section 78 award of $5,610. Mr Wallace’s surprise at Mr Naysmith’s return to heavy work. But still no response to head injury
[36] On 9 January 1997 the Corporation advised Mr Naysmith of his entitlement under s 78 to a 33% award of $5,610. It later arranged for Mr Naysmith to be examined by Mr William Wallis, neurologist. His report of 6 March 1997 recorded that for some reason Mr Naysmith had never received his s 78 payment which was later paid. The report recorded Mr Naysmith’s physical and neurological injuries and continued:
One unusual aspect of his injuries is that this man managed, somehow, to return back to doing heavy work on his farm. In my experience, it would be exceptional for people with injuries of this sort to manage this type of achievement. It is clear, however, that this has been done at considerable expense physically and emotionally to him and his family.
…
In most individuals, injuries of this sort would have led to permanent loss of work capacity and indefinite support by the ACC. The corporation should take this into account when making the award.
Reference to Ms Quarrie of Far North Counselling
[37] In February 1998 two ACC officers visited Mr and Mrs Naysmith to discuss Mr Naysmith’s entitlement. They discussed such matters such as weekly compensation and counselling and agreed to seek a report from Ms Quarrie of Far North Counselling.
[38] On 13 March 1998 Ms Quarrie wrote to the Corporation:
Ross Naysmith was referred to me by a Dr Tom Young in June 1995. Ross showed symptoms consistent with Post Traumatic Stress Disorder. I saw Ross for counselling, initially on a weekly basis, then fortnightly, from
16 June 1995 until 14 December 1995. I saw Ross again on 29 December
and 3 October 1996 as he was again experiencing difficulty…
Effects of accident
When Ross first attended counselling with me, my assessment of the emotional effects of the accident were as follows:
• Flashbacks
• Difficulty controlling anger/rage
•Cows were hit [by Mr Naysmith], a number of animals had to be destroyed
• Short term memory impairment
• Poor concentration
• Emotional isolation
• Low self-esteem
• Occluded memories
• Tiredness
• Lack of energy
• Feelings of bitterness, aloneness, isolation
• Intrusive thoughts
• Dissociation
• Loss of enjoyment of life
• Uncommunicative
The focus of counselling with Ross were to address management of the above effects, to look at alternative strategies for dealing with his anger and other emotions. Ross had not attended the funeral of his child and has missed out on a great deal of the mourning with his family. This and issues surrounding this had to be revisited and addressed.
Ross also had to do a great deal of work on addressing his role and relationships with his wife and children. Without question, the effects from the accident, and the aftermath of Ross’s return home, affected his recovery greatly.
His single-minded and unrelenting drive to work the farm, without assistance (other than that of his father in law in the early stages of Ross’s return home) in spite of the physical and emotional state, has cost Ross and his family dearly. This is due to Ross being advised by the Kaitaia ACC office that he was not eligible for any assistance that would enable him to take the time to heal properly. He could not afford to lose his farm, so he worked his farm regardless.
During counselling with Ross, I checked whether he had been assisted by ACC with weekly compensation or assistance with running the farm. I was appalled to discover that Ross (and his wife) had not been given proper advice about their entitlements by ACC at the time of the accident and the months following – in fact, as mentioned previously, they had been advised by the Kaitaia ACC office they were not entitled to any assistance other than medical! I suggested at that point they seek further advice about this.
[39] Ms Quarrie found that Mr Naysmith was still experiencing most of the original symptoms and was experiencing relationship difficulties with his wife and children. She said:
I am aware that Ross has found it stressful dealing with ACC and in my opinion the stress of wrangling with ACC over money exacerbates the other effects he lives with.
Report from Dr Mearns
[40] On 27 October 1998 the Corporation obtained from a general practitioner, Dr Mearns, an assessment which included the summary:
Although he made a remarkable recover[y] from these complex injuries he has been left with physical and mental disability. His general personality has altered. His ability to make decisions has been affected, his cognitive ability has also decreased. He has also had a possible depression following the accident which has not responded particularly well to anti-depressants and may represent an affect of his head injury which was undoubtedly severe…
February 1999 report from Dr Fernando, neuropsychologist and clinical psychologist. Diagnosis of incomplete recovery from head injury and relatively permanent brain impairment
[41] Eventually on 21 February 1999 the Corporation obtained a report from
Dr Fernando, neuropsychologist and clinical psychologist:
…cognitively Ross is not functioning at his pre-accident level… He is experiencing significant problems in terms of the rate with which he can process information, processing and manipulating information in short-term memory, speed of psychomotor responding and the rate to which he can commit new verbal and visual information to memory. Ross also has problems carrying out more than one task at a time, becomes easily distracted and has difficulty sustaining his attention on tasks of longer duration.
Ross has made an incomplete recovery from his head injury which is not unexpected given the severity. He has suffered some degree of brain impairment which will be relatively permanent but this does not mean that he cannot make gains in terms of his everyday functioning. Given what the family has been through since the accident, it is credit to them that they have managed to retain the farm and are still an intact family unit… The family would benefit from additional assistance on the farm from July to October. I am unsure whether more funding is available from ACC for this purpose and the family should approach ACC to discuss this matter.
There followed a reference of Mr Naysmith to Burtons Healthcare Ltd for rehabilitation assistance.
The claim of breach of statutory duty
Section 36
[42] The section relied upon by the appellants provides:
36. Corporation to promote rehabilitation
(1) The Corporation shall place great stress upon rehabilitation and shall take all practicable steps to promote a well co-ordinated and vigorous programme for the medical and vocational rehabilitation of persons who have cover and who become incapacitated as a result of personal injury by accident and are for the time being in New Zealand.
(2) The rehabilitation programme in relation to those persons shall have as its objectives–
(a) Their restoration as speedily as possible to the fullest physical, mental, and social fitness of which they are capable, having regard to their incapacity; and
(b) Where applicable, their restoration to the fullest vocational and economic usefulness of which they are capable; and
(c) Where applicable, their reinstatement or placement in employment.
The principles governing breach of statutory duty
[43] I do not accept Mr Perry’s submission that simple breach of s 36 gives rise to a claim for breach of statutory duty. It is difficult to identify the principles by which a generally expressed obligation on the part of a statutory body will be treated as actionable.
[44] One example of such formula is in the sphere of education where:
[103] …the line of English authorities, commencing with R v Inner London Educational Authority [1992] Admin LR 822, … construed the generally expressed duty imposed by s 8 of the Education Act 1944 as a “target” duty, designed to make general provision for those classes of people intended by Parliament to be its beneficiaries but not the subject of mandamus to compel tailor made provision for one with special needs: see RP v Further Education Funding Council [1996] EWJ No 1479 18 October
1996 per Jowitt J… The French system, with its Law of 27 July 1998 guaranteeing “effective access of all to the fundamental rights in the spheres of work, housing, health, education…”, which is to be balanced against the constitutional responsibility to control public spending, is to similar effect: see Cabrillac and others Libertés et Droits Fundamentaux (7th ed) pages 722-
3, 732, 757-9…
(Daniels v Attorney-General HC AK M1616-SW99 3 April 2002 which was substantially revised on appeal at [2003] 2 NZLR 742. The Court of Appeal decision
in Daniels, that no actionable statutory duty existed, turned on a comprehensive analysis of the legislation. In Carty v Croydon LBC [2005] 2 All ER 517 the English Court of Appeal has held that in that jurisdiction an actionable duty may exist:
[43] …where an education officer, in the performance of his or her statutory functions, enters into relationships with or assumes responsibilities towards a child, then he or she may owe a duty of care to that child.)
The statutory context: ss 18-20, 63, 89-91 and 97 of the 1992 Act
[45] Section 36 is to be read within its statutory context. That altered over the nine years between the Corporation’s learning of the head injury and giving its assurance and eventually giving attention to it. The 1982 Act contained its own exclusion of damages claims (s 27). But the Corporation’s argument focussed on the provisions of the 1992 Act of which the finance provisions came into effect on
1 April and the remainder on 1 July 1992. Both because that was the way the Corporation ran its case and since those dates were less a third of the way during the period when Mr Naysmith received no treatment for his head injury it is sensible to concentrate on the following provisions of the 1992 Act. Emphasis has been added:
14. Application of Act excludes other rights
(1) No proceedings for damages arising directly or indirectly out of personal injury covered by this Act or personal injury by accident covered by the Accident Compensation Act 1972 or the Accident Compensation Act
1982 that is suffered by any person shall be brought in any Court in
New Zealand independently of this Act, whether by that person or any other person, and whether under any rule of law or any enactment.
(2) For the avoidance of doubt, it is hereby declared that nothing in this section shall be affected by–
(a) The failure or refusal of any person to lodge a claim for any treatment, service, rehabilitation, related transport, compensation, grant, or allowance under this Act or those Acts; or
(b) Any purported denial or surrender by any person of any rights under this Act or those Acts; or
(c) The fact that a person who has suffered personal injury covered by this Act or personal injury by accident covered by the Accident Compensation Act 1972 or the Accident Compensation
Act 1982 is not entitled to any treatment, service, rehabilitation, related transport, compensation, grant, or allowance under this Act.
…
18. Right to rehabilitation
Every person who has suffered personal injury for which the person has cover under this Act is responsible for his or her own rehabilitation to the extent possible having regard to the person’s condition and is entitled to the extent provided by this Act to rehabilitation necessary to enable the person to lead as normal a life as possible, having regard to the consequences of his or her personal injury.
19. Provision of rehabilitation
(1) Except as provided in subsection (2) of this section, the Corporation shall not provide or meet the costs of rehabilitation for persons who have cover under this Act unless that rehabilitation is provided under an approved individual rehabilitation programme.
(2) The Corporation may provide rehabilitation within the first 13 weeks following the personal injury in the absence of an approved individual rehabilitation programme.
20. Individual rehabilitation programme
(1) Every individual rehabilitation programme referred to in subsection (2) of this section shall be designed to identify the person’s entitlement to rehabilitation as described in section 18 of this Act; and shall include identification and facilitation of such other rehabilitation services as may be appropriate to further the rehabilitation of the person. Such identification and facilitation of other rehabilitation services shall not impose any responsibility on the Corporation to provide or fund rehabilitation beyond that otherwise imposed by this Act or regulations made under this Act.
(2) Each individual rehabilitation programme shall consist of those elements of social and vocational rehabilitation as are appropriate to the individual and shall be prepared in compliance with this Act and any regulations made under this Act.
(3) Notwithstanding that the person is responsible for his or her own rehabilitation, the Corporation shall engage suitably qualified persons or organisations (in this Part referred to as “case managers”) to–
(a) Assist in the preparation and costing of individual rehabilitation programmes; and
(b) Provide a service to link the person and the services available to help ensure implementation of the individual rehabilitation programme; and
(c) Ensure the full participation of the person, any registered health professional providing treatment to that person, and any employer or potential employer of that person to the extent that those
persons are willing and able to participate in the preparation and costing of the programme.
63. Claims
(1) Every claimant for cover under this Act shall lodge a claim in the prescribed form.
(2) Except as provided in subsection (2A) of this section, no claimant shall be entitled to any payment in respect of personal injury unless that claimant lodges a claim for cover within 12 months after the date on which the personal injury is suffered.
(2A) A failure to lodge a claim in respect of personal injury within the time specified in subsection (2) of this section shall not be a bar to payment in respect of that personal injury if the Corporation is of the opinion that the Corporation has not been prejudiced in determining cover or payments in respect of that personal injury by the failure to lodge the claim within the time specified.
…
(4) The Corporation shall not make any payment in respect of any rehabilitation, compensation, grant, or allowance for which an itemised written application has not been made.
…
89. Application for review
(1) Any claimant (or the representative of any deceased claimant) who is dissatisfied with a decision of the Corporation or exempt employer in respect of his or her claim or entitlement under this Act may apply to the Corporation or exempt employer, as the case may be, for a review of that decision.
…
90. Reviews
(1) The Corporation or exempt employer, as the case may be, shall appoint a person to hear each review; and that person shall act independently in hearing the review.
…
91. Right of appeal
(1) An appeal shall lie to a District Court against any decision under section 90 of this Act.
…
97. Appeal to High Court
(1) Where any party is dissatisfied with any decision of a District Court under this Act as being erroneous in point of law, that party may, with the leave of that District Court, appeal to the High Court.
…
The authorities
[46] According to the highest authority:
The question whether an enactment gives rise to a cause of action for breach of statutory duty is a question of ascertaining the intent of the Legislature: R v Deputy Governor of Parkhurst Prison ex parte Hague [1992] 1 AC 58,
159 per Lord Bridge.
But what does that mean? The House of Lords has recently reaffirmed:
The task of the Court is to interpret the provision which Parliament has enacted and not to give effect to an inferred intention of Parliament not fairly to be derived from the language of the statute: R v Z [2005] UKHL 35 para 16 per Lord Bingham.
To similar effect is X (Minors) v Bedfordshire County Council [1995] 2 AC 633, 730 per Lord Browne-Wilkinson.
[47] The law as to breach of statutory duty is in an unsatisfactory state. Todd
The Law of Torts in New Zealand (3rd ed) states at para 7.2.5:
This is one of the law’s less certain areas… If the words of the statute are unhelpful, a point is rapidly reached where it is difficult to disentangle how much has been objectively gleaned from the statute and the circumstances surrounding its passing, and how much is attributable to judicial policy.
Discussion
[48] I consider that the confusion arises from failure to distinguish between legislation that on its proper construction has the purpose of itself providing a cause of action to a plaintiff and legislation that does not have that purpose. While construction is often difficult it is an every day responsibility of the courts. Absent such purpose, there is no actionable statutory duty, even if the legislation may be relevant to a claim at common law.
[49] Here the competing submissions are for the appellants that s 36 gives rise to a statutory duty on the part of the Corporation on which the appellants can sue and for the Corporation that in the absence of abuse of public office the legislation excludes any claim for damages.
[50] Section 36 must be read not only with ss 14, 19, 20, 63, 89, 91 and 97, which establish a statutory code dealing with rehabilitation, but with s 7 (para [61] below) which concerns funding and to which it is necessary to return. This Court has twice held that s 36 is not actionable. In Pearce v ACC (1991) 5 PRNZ Penlington J relied upon Jones v Department of Employment [1988] 1 All ER 725 where the English Court of Appeal struck out a claim by a plaintiff alleging that the department had been negligent in disallowing his claim for a benefit. A section of the Social Security Act 1975 contained a system of rights of review and appeal comparable to those contained in the ACC legislation. Section 117(1) provided:
Subject to the provisions of this part of this act… [concerning appeal on a point of law] the decision of any claim or question in accordance with this act shall be final.
[51] Glidewell LJ stated at p 734:
The present action, if it were to proceed, would necessarily involve a challenge to the correctness of the adjudication officer’s decision. That would be a challenge to its finality, by a route other than that provided by the statutory provisions themselves.
[52] On the broader question whether it was just and reasonable that the adjudication officer should enter a duty of care at common law to the claimant he held:
Having regard to the non-judicial nature of the adjudication officer’s responsibilities, and in particular to the fact that the statutory framework provides a right of appeal which, if a point of law arises, can eventually bring the matter to this court, it is my view that the adjudication officer is not under any common law duty of care… unless it be shown that he is guilty of misfeasance.
Applying that statement of principle Penlington J struck out the claim.
[53] To similar effect is the decision of John Hansen J in Chalecki v The Accident
Rehabilitation and Compensation Corporation HC GRY AP28/01 10 October 2001
where the plaintiff sought damages from the Corporation for failure to take reasonable care in his rehabilitation. The Judge stated:
[24] It seems to me that s 14 is a complete bar to these proceedings. On any assessment of the pleadings, it is clear that the damages sought by Mr Chalecki arise directly, or indirectly, from his original personal injury. If he had not been personally injured, the would not have come within the aegis of ACC or the relevant statutory provision. The alleged damages arise from efforts made by ACC to rehabilitate Mr Chalecki within the terms of the Act. The loss alleged must, therefore, arise directly, or indirectly, from a personal injury covered by the Act.
[54] Even if I considered the decisions arguably as distinct from clearly wrong I would follow them as a matter of comity, leaving error correction to the Court of Appeal. But in my respectful opinion they were right.
[55] There is no evidence of legislative purpose in this measure to establish a right of action for damages in respect of breach of s 18. Its raison d’être was to set up an elaborate alternative to the damages regime which it has very largely superseded. The legislative scheme is of an exclusion of recourse to the common law proceeding for damages. It was replaced by a legislative no fault scheme providing for weekly and lump sum compensation together with inter alia the costs of rehabilitation provided for in ss 18-20. The elements of that scheme include its funding (s 7, especially subsections (1)(c) and (4) which refer to funding payment of claims made under s 63 and s 9(2)(b) which empowers the Corporation to pay for “rehabilitation assistance in accordance with this Act”), the expression of the right to rehabilitation (s 18 which limits rehabilitation “to the extent provided by this Act”, s 19 which after the first 13 weeks imposes limitation on payment to “rehabilitation provided under an “approved individual programme” specified in s 20). As Mr Tuiqereqere submitted, s 63(4) specifically prohibits the Corporation from making any payment in respect of rehabilitation for which an itemised written application has not been made. Such claims are inconsistent with the statutory scheme and plainly barred by s 14. And the method of challenging decisions (or failures to make decisions) under the scheme is confined to the statutory procedures (ss 89, 90, 91, 97). The Court’s role on judicial review is limited to ensuring due performance of those procedures.
[56] Mr Perry contended that for s 36 to be construed so as not to confer a cause of action would infringe Article 12(1) of the International Covenant on Civil and Political Rights to which New Zealand is party:
The States Parties to the present Covenant recognize the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.
[57] Para 34 of General Comment no 5 in an article issued by the UN Committee on Economic, Social and Cultural Rights records an obligation on member states to:
…ensure the provision of rehabilitation services to persons with disabilities in order for them to reach and sustain their optimum level of independence and functioning.
[58] But provision of health and rehabilitation can be effected otherwise than via a cause of action for damages. In England where the common law regime for damages for personal injury remains, the House of Lords has had little difficulty in upholding a statutory policy to exclude a right to claim damages where an alternative scheme of compensation by way of pension had been established. In Matthews v Ministry of Defence [2003] 1 AC 1163, where the Crown Proceedings Act 1947 had exempted the Crown from liability in tort for injuries suffered by members of the armed forces, the plaintiff claimed infringement of article 6(1) of the European Convention for the Protection of Human Rights. That provides that:
In the determination of his civil rights… everyone is entitled to a fair and public hearing… by an independent tribunal established by law.
(Cf to like effect s 25(a) New Zealand Bill of Rights Act 1990 which however, like art 14 of the International Covenant on Civil and Political Rights, deals with criminal proceedings. Civil proceedings are embraced by the common law presumption of access to the courts: Legislation Advisory Committee Guidelines Chapter 3
plaintiff argued that a finding that he had no such right was incompatible with the article. In rejecting his claim Lord Hoffmann stated:
25…Article 6 is concerned with standards of justice, the separation of powers and the rule of law. It would seem to have little to do with whether or not one should have an action in tort. That is a matter of
national policy. Some countries, like New Zealand, do not believe in actions in tort for personal injuries. Some have more restricted no-fault schemes… The question whether a common law action for damages is the most sensible way of providing compensation for accident is controversial and Professor Atiyah’s The Damages Lottery (1977) demonstrates that the existing system is expensive and in many respects unfair.
26 I start, therefore, with a predisposition to think that whether the appellant should have an action in tort or a no-fault entitlement has nothing to do with human rights.
[60] It is simply impossible to infer the statutory purpose for which the appellants contend. I am satisfied that the learned Judge was right to strike out the first cause of action.
The negligence claim
Vires
[61] As a threshold response to the negligence claim the Corporation submits that it lacks power to give the undertaking relied upon by the appellants and accordingly insofar as it is proved to have been given by the rehabilitation officer he acted without authority. The relevant sections of the 1982 Act provide:
4. Accident Compensation Corporation
(1) There shall continue to be a body corporate called the Accident Compensation Corporation which shall be the same body corporate as that existing under the same name immediately prior to the commencement of this Act.
…
(9) The Corporation shall be a body corporate with perpetual succession and a common seal and, subject to this Act, is capable of acquiring, holding, and disposing of real and personal property, and of suing and being sued, and of doing and suffering all other acts and things that bodies corporate may do and suffer.
…
7. Recommendations as to levies and compensation
(1) The Corporation shall in each financial year review, and make recommendations to the Minister regarding the adjustments (if any) that should be made in relation to,–
(a) The rates of levies to be paid by employers and self-employed persons and by owners of motor vehicles and the scales and classifications in relation to those levies:
(b) The imposing of levies under section 49 of this Act on drivers of motor vehicles, and, if levies are so imposed, the rate of those levies and the scales and classifications in relation thereto:
(c) The respective prescribed amounts for the purposes of sections 39, 59, 60, 61, 62, and 63 of this Act.
(2) In making its recommendations as to levies, the Corporation shall make recommendations designed to ensure that the levies are sufficient to meet its liabilities over such period or periods as it may determine, and shall, in its annual report to the Minister, specify the period or periods it has determined and state whether or not, in its opinion, the levies being credited are sufficient for this purpose.
…
(4) In making its recommendations in respect of the respective prescribed amount for the purposes of sections 39, 59, 60, 61, 62, and 63 of this Act, the Corporation shall provide that any adjustment it recommends shall, after taking into account past relevant adjustments, reflect any movement in earnings that has occurred since its last recommendations.
(5) The Corporation shall base its assessment as to the extent of any movement in those earnings on its own financial records, whether of earnings on which levies are paid, or of the amount derived from levies in respect of earners, or of the average weekly rate of earnings related compensation paid to earners, or of a combination of all or any of them, but the provisions of this subsection shall not prevent the Corporation from having regard to other relevant data and indices. In selecting the basis to be adopted, the Corporation shall have regard to–
(a) The importance of adopting a basis which will reflect the movement of earnings by earners having cover under this Act; and
(b) The desirability of completing its review and making its recommendations as soon as practicable in the financial year in which it is required to make recommendations.
(6) The Corporation shall, at intervals not exceeding 5 years, continue to arrange for the Government Actuary or another independent actuary approved by him to make a report to the Minister regarding the matters on which the Corporation is required to make recommendations to the Minister under this section. The actuary shall send to the Corporation a copy of his report to the Minister. On receipt of any such copy of a report, the
Corporation shall, as soon as practicable, advise the Minister of any comments it may wish to make thereon.
8. Administrative functions and powers
(1) The Corporation shall have such functions and powers in relation to the administration of this Act as are conferred upon it by this Act, and shall also have such further powers, not inconsistent with this Act, as are reasonably necessary for the effective performance of its functions.
…
(5) No member, officer, or employee of the Corporation shall be personally liable for any liability of the Corporation, or for any act done or omitted by the Corporation or by any member, officer, or employee thereof in good faith in pursuance or intended pursuance of the functions or powers of the Corporation.
9. Financial functions and powers
(1) The Corporation shall have such functions and powers in relation to financial matters as are conferred upon it by this Act, and shall also have such further powers, not inconsistent with this Act, as are reasonably necessary for the effective performance of its functions.
(2) Without limiting the generality of subsection (1) of this section, it is hereby declared that the functions and powers of the Corporation shall include–
(a) Payment of all compensation, costs, and rehabilitation assistance in accordance with this Act:
…
(7) In any financial year the Corporation may expend for purposes not authorised by this or any other Act any sum or sums not amounting in the aggregate to more than $5,000.
…
13. Officers and employees
(1) The Corporation may from time to time appoint such officers and employees, including acting or temporary or casual officers and employees, as it thinks necessary for the efficient exercise of its functions and powers, and may at any time remove any officer or employee from his office or employment:
…
[62] I accept Mr Tuiqereqere’s submission that there is no plenary authority on the part of the Commission adding to its specific powers in relation to rehabilitation assistance. But its power under s 36 to provide rehabilitation is expressed widely
and is not to be construed narrowly. As the Court of Appeal observed when summarising its effect in ACC v Broadbelt [1990] 3 NZLR 169, 171:
Rehabilitation is a primary function of the Corporation. Section 36(1) requires it to place great stress upon rehabilitation and to take all practicable steps to promote a well co-ordinated and vigorous programme for the medical and vocational rehabilitation of persons who have cover and who become incapacitated as a result of personal injury by accident and are for the time being in New Zealand. The subsection thus requires the Corporation as a matter of statutory obligation to discharge that rehabilitative function in the case of incapacitated persons with cover…”.
[63] Section 36 is one of a number of provisions aimed at responding effectively to personal injuries on a large scale and of every conceivable kind. The functions and powers of the Corporation, to be carried out by its officers and employees appointed under s 13, include discharging the s 36 obligation. The language of the section is emphatic; its proper operation is in the common interest of those injured, their dependants, and society at large. There is not and cannot sensibly be any narrow stipulation of how rehabilitation officers are to go about their business. Some of the injured will have sustained gross intellectual disability. While s 63(4) states that:
the Corporation shall not make any payment in respect of any rehabilitation… for which an itemised written application has not been made
it does not state that the application must be made by the person in need of rehabilitation. There is nothing to prevent its being made by a Corporation officer on behalf of an injured person. Rather it is consistent with the restorative purpose of s 36 and the legislation as a whole that a Corporation officer should have power to assure a badly injured person that it will look after whatever formalities are to be complied with in relation to necessary applications for assistance.
[64] The present case affords an example. The undertaking by the rehabilitation officer was not an ultra vires frolic of his own but was given in the discharge of the Corporation’s s 36 obligation. A man who is comatose has no capacity to fill out forms. Someone must do it on his behalf. He may have a doctor or wife able and willing to do it. But it is well arguable that there can be no vires reason for the Corporation to be unable to say “this man is grossly disabled; he lacks the knowledge and means to fill out the relevant forms; they are needed for his
rehabilitation; our task is to promote rehabilitation; so we will facilitate that rehabilitation by lifting that responsibility from him”. If it were necessary I would so decide; but for present purposes it is enough to decide that the issue warrants full argument within a matrix of actual fact.
Causation
[65] A second response to the negligence claim is based on the s 14 bar of any:
…proceeding… for damages arising directly or indirectly out of personal injury [caused by accident].
[66] Hart and Honoré Causation in the Law (2nd ed) state at p 69:
…if we look into the past of any given event, there is an infinite number of events, each of which is a necessary condition of the given event and so, as much as any other, is its cause.
I accept that on one argument the proceeding is:
…for damages arising directly or indirectly out of personal injury caused by accident…
But for the accident there would have been no head injury and no symptoms and no proceeding. However the “but for” test of causation has proved simplistic and inadequate in many contexts. As Hart and Honoré observe at p 103:
[the answer to the question whether there is] liability is to be found by asking what the purpose or scope of the statute is.
And at p 110:
[A] major advance secured by modern criticism we shall call the bifurcation of causal questions. The single question typically confronted by courts:
‘Was this harm (Y) the consequence of this act or omission (X)?’: is divided into two questions. First: ‘Would Y have occurred if X had not occurred?’ Second: ‘Is there any principle which precludes the treatment of Y as the consequence of X for legal purposes?’ The utility and clarifying force of this bifurcation of casual questions also has its limitations …, but, in a wide range of cases, it has solid merits.
At p 30 Hart and Honoré give the example of Rocca v Stanley Jones & Co (1914) 7
BWCC 101 where:
… a doctor’s failure to attend to an injured workman and not the original injury was treated as the cause of the subsequent disability…
Likewise Todd at p 204 cites Farwell v Keaton 240 NW 2d 217 (1976):
The defendant’s friend was beaten up by a group of assailants, but instead of taking him to hospital the defendant drove around for several hours and eventually left him asleep in the back of his car outside his grandparents’ house. The friend died three days later of an epidural haematoma. The defendant was held liable, for he had assumed responsibility for his friend’s welfare yet had done nothing to get him medical attention.
In each of these cases the law’s policy was to treat the earlier causation as superseded by the later, treating it in the well-known legal expression as novus actus interveniens.
[67] It is plainly open to the Court to treat the Corporation’s assumption of responsibility and failure to discharge it as novus actus interveniens, described as:
[a] conscious act of human origin intervening between a negligent act or omission of a defendant and the occurrence by which the plaintiff suffers [injury]:
Goodyear Tire and Rubber Co of Canada Ltd v MacDonald (1974) 51 DLR (3d) 623
It means conduct that in law supersedes the initial causation. The present question is whether it should do so. That raises questions: of what purpose is to be attributed to s 14 in this context and how far it should be treated as extending. Relevant to that is how the law should treat the consequences of the Corporation’s assumption of responsibility by the act of the rehabilitation officer.
Assumption and breach of responsibility as a tort
[68] The appellants’ claim is not for performance or even breach of its statutory duty. It is by undertaking, as it had power but was not obliged to do, that it would look after Mr Naysmith to ensure that he received all of the statutory assistance
properly required to recover from his injuries and then failing to discharge that undertaking the Corporation lulled Mr and Mrs Naysmith into a false sense of security and caused their loss. Had they been told that they must seek their own medical advice or indeed had nothing been said, no obligation would have been assumed by the Corporation. What is asserted is that the assumption of specific responsibility (as contrasted with assumption of general responsibility, as to which the law is less clear) and the failure to discharge that responsibility takes the claim outside the statutory procedures which therefore afford no defence to it. The appellants’ argument may be put in terms of a “special relationship” (R M Turton & Co (in liquidation) v Kerslake and Partners [2000] 3 NZLR 406 para 76 – that it was reasonable for them to rely on what the Corporation said.) It is in my opinion a classic claim within the genus of which Hedley Byrne v Heller [1964] AC 465 is one species, Spring v Guardian Assurance Plc [1995] 2 AC 296 a second and X (Minors) v Bedfordshire County Council a third.
[69] In a perceptive essay Cause-in-Fact and the Scope of Liability for Consequences (2003) 119 LQR 388, 416 Professor Stapleton offers an example of how the law’s policy of protecting the vulnerable should apply in a closely analogous case:
Assume C[laimant] is an elderly Ethiopian recluse who lives in a remote farm. C’s only substantive human contact is with the local doctor, D[efendant], who happens to speak C’s language. Say C and D meet on the road and C asks D if C should do anything about the fact that C’s leg has turned green and is very painful. D volunteers the careless advice that it is nothing to worry about. C later loses the leg to gangrene. In my view, courts will, rightly, focus on C’s vulnerability and exclusive dependence on D and will impose a duty of care on the doctor (at least once he began to give advice) for his negligent misstatement.
[70] In Attorney-General v Prince in the field of welfare, the Court of Appeal declined to strike out an allegation of negligence relating to the treatment of a child within the care of the Department of Social Welfare. The case was one where the Department had assumed the care of the child. The Court of Appeal emphasised the importance of the statutory scheme in considering whether it was just and reasonable to superimpose a common law duty of care on the department in relation to the poor performance of its statutory responsibilities for the treatment and care of children and young persons. But it concluded that given that the element of proximity was
satisfied the statutory framework within which the department and social workers act is consistent with an imposition of a common law duty of care which could not be said to cut across the statutory scheme.
[71] In Barrett v Enfield London Borough Council the House of Lords took a broadly similar approach. The fact that children had been taken into care, so that there was assumption of responsibility, was emphasised. There was no justification for displacing the public policy consideration which will generally have first claim on the loyalty of the law: that wrongs should be remedied. The authorities are discussed by Lord Bingham (dissenting) in D v East Berkshire Community Health NHS Trust [2005] 2 WLR 993, 1005.
[72] In W v Essex County Council [2001] 2 AC 592 a claim was made by children who had been abused and by their parents. The parents had fostered a child on the assurance that he was not a known sexual abuser when, to the knowledge of the local authority, he was. The House of Lords held that the claim should proceed to trial. As in this case, the defendant had made a representation on which the plaintiffs had relied to their detriment.
[73] The topic of liability for assumption of responsibility is dynamic. Some authorities have treated assumption of merely general responsibility as sufficient to give rise to a legal duty. The topic is discussed by Cane and Trindade The Law of Torts in Australia (3rd ed Oxford 2001) p 382:
The concept of general reliance has not been well received in England… At the same time English courts have recognised that there are cases in which recovery for economic loss ought to be allowed even in the absence of specific reliance…
[74] In the sphere of pure economic loss, decisions of courts of appeal in
New Zealand in Rolls-Royce New Zealand Ltd v Carter Holt Harvey [2005] 1 NZLR
324 and in England in Customs & Excise Commissioners v Barclays Bank Plc (2004) EWCA CIV1555 have been the subject of learned essays by Professor Coote Assumption of Responsibility and Pure Economic Loss in New Zealand [2005] NZLRev 1 and by P and C Mitchell Negligence Liability for Pure Economic Loss (2005) 121 LQR 194 and Capper Tort Liability for Breaching Asset Freezing
Injunctions (2005) CLJ 26. The importance of actual assumption of responsibility is a general theme.
[75] New Zealand law has maintained the two stage test of liability in negligence devised by Lord Wilberforce in Anns v Merton London Borough Council [1978] AC
728, 751-2: see Connell v Odlum [1993] 2 NZLR 257, 265. As Professor Coote observes at p 3:
…it is clear that the concept of assumption of responsibility…remain[s]
relevant to New Zealand law.
[76] In Rolls-Royce New Zealand Ltd v Carter Holt Harvey the Court of Appeal said:
…in cases where the defendant is found to have undertaken to exercise reasonable care in circumstances which are analogous to, but short of contract, and it is foreseeable that the plaintiff will rely on that undertaking… then, subject to any countervailing policy factors, a duty of care will arise.
That observation provides substantial support for the present claim.
[77] In England there exists what in McLoughlin v Jones [2002] QB 1312 para 28
Brooke LJ has described as a battery of tests:
…which the House of Lords has taught us to use:… the “purpose” test
(Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC
191, 211-212); the “assumption of responsibility” test (Henderson v Merrett Syndicates Ltd [1995] 2 AC 145, 180-181); the “principles of distributive justice” test (Frost v Chief Constable of South Yorkshire Police [1999] 2 AC
455, 503-504); and the “three-pronged” test (Caparo Industries plc v
Dickman [1990] 2 AC 605, 617-619)…
The second of these is closely in point. In Australia the High Court originally applied the principle of general reliance: Sutherland Shire Council v Heyman (1985)
157 CLR 424, 464 per Mason J but later rejected it: Pyrenees Shire Council v Day
(1998) 192 CLR 330; Crimmins v Stevedoring Industry Finance Committee (2000)
200 CLR 1, 80 per Kirby J. But specific reliance is another matter. Canada like
New Zealand maintains the two stage Anns test: City of Kamloops v Nielsen [1984] 2
SCR 2. In Hercules Managements Ltd v Ernest & Young [1997] 2 SCR 165 para 24
La Forest J applied to a claim for economic loss a broad test of reliance:
…if “proximity” is meant to distinguish the cases where the defendant has a responsibility to take reasonable care of the plaintiff from those where he or she has no such responsibility, then in negligent misrepresentation cases, it must pertain to some aspect of the relationship of reliance. To my mind, proximity can be seen to inhere between a defendant-representator and a plaintiff-representee when two criteria relating to reliance may be said to exist on the facts: (a) the defendant ought reasonably to foresee that the plaintiff will rely on his or her representation; and (b) reliance by the plaintiff would, in the particular circumstances of the case, be reasonable. To use the term employed by my colleague, Iacobucci J, in Cognos, supra, at p 110, the plaintiff and the defendant can be said to be in a “special relationship” whenever these two factors inhere.
Cognos [[1993] 1 SCR 87]
As to personal injury, Justice Linden in the seventh edition of his Canadian Tort Law (2001) endorses at p 292 the English decision Mercer v South Eastern Railway Co. [1922] 2 KB 549:
where the defendants had made a practice of keeping a wicket gate locked to pedestrians when a train was passing. This practice was known to the plaintiff who was injured by a passing train when, owing to carelessness of the defendant’s servant, the gate was left unlocked. The defendants were held liable. Lush J felt that:
to those who knew of the practice that was a “tacit invitation” to cross the line… It may seem a hardship on a railway company to hold them responsible for the omission to do something which they were under no legal obligation to do, and which they only did for the protection of the public. They ought, however, to have contemplated that if a self-imposed duty is ordinarily performed, those who know of it will draw an inference if on a given occasion it is not performed. If they wish to protect themselves against the inference being drawn they should do so by giving notice, and they did not do so in this case.
[78] In each jurisdiction assumption of responsibility rates high among the indicators of negligence liability; and especially so in the case of specific reliance. That in my view is a vital aspect of this case.
[79] Use of the test of specific reliance in my view meets the criticism of Hart and
Honoré at p 118 that:
The courts have not used the conception of the scope and purpose of legal rules to avoid [the] causal question as frequently as might be expected.
[80] While most of the discussion has been in the sphere of economic loss, the law has always afforded the highest protection to the physical integrity of the person; a lower protection to property rights; and still less protection to economic interests. That is why the common law applied the thin skull test to claims for personal injury (Smith v Leech Brain [1962] 2 QB 405, the simple loss of value test to damage to goods (The London [1935] P 70), and a more exacting test for economic loss (Hadley v Baxendale (1854) 9 Exch 341). The fact that New Zealand has adopted a no fault accident compensation scheme does not alter those basics. Entitlement to relief in the case of economic loss resulting from specific assumption of obligation and its breach must exist a fortiori in the case of personal injury.
[81] On the questions whether the cause of action is inconsistent with a policy of the legislation or whether the assumption and breach of responsibility should be treated as novus actus interveniens, in Queenstown Lakes District Council v Palmer [1999] 1 NZLR 549, 555 line 37 Thomas J stated:
…the purpose of the provision barring common law claims is to prevent persons who suffer personal injury being compensated twice over, once under the statute and then at common law. The bar is not designed to prevent them recovering any compensation at all.
Such a view is in accordance with the traditional principle, which enjoys fundamental constitutional status in our free and democratic society, that citizens are not to be denied access to the Courts, save in rare and appropriate circumstances, and then only pursuant to explicit statutory language. The right to seek damages at common law for personal injury suffered because of the fault or negligence of another was removed by the legislation, but the quid pro quo was the right to compensation under the statutory scheme. (See Stephen Todd, “Accident Compensation and the Common Law”, in S Todd (gen ed) The Law of Torts in New Zealand (1997,
2nd ed) at p 63). The design of restricting the right of access to the Courts
by, as it were, a sidewind; that is, by simply withdrawing or curtailing the scope of the cover under the Act without at the same time addressing the fundamental principle of access to the Courts, should not be imputed to Parliament
[82] Since on the facts pleaded the losses would never have occurred had the Corporation not given and then breached its undertaking, in a very real sense that conduct was the effective cause of the loss. It is in my opinion well arguable that the legislative policy of s 14, excluding claims for personal injury by accident, does not touch a claim for injury caused not by the accident but by negligent breach of an assumed obligation.
[83] Whether such argument should be accepted will entail considerations of policy which are ultimately the province of appellate courts. But the principle that wrongs should be remedied, which led Lord Bingham to dissent in D v East Berkshire, applies with stronger force in this case where the nexus between the wrongful act of the defendant and the injury to the plaintiffs is much closer.
[84] While the appellants must recognise that the ultimate policy decision may go against them, given the strength of the argument they advance I consider that the case should be allowed to go to trial to provide a proper evidentiary basis for the ultimate policy judgment.
Decision
[85] The appeal is accordingly allowed in relation to the negligence cause of action.
[86] The case is remitted to the District Court for it to resume the conduct of this proceeding. The appellants should promptly file a further amended statement of claim reflecting the decisions in this judgment. They must decide whether the allegations recorded in Ms Quarrie’s letter of 13 March 1998 about advice to Mr Naysmith by the Kaitaia ACC are relied upon or not. They must be either abandoned or properly particularised as grounds of claim.
[87] Costs submissions may be made by memoranda from the appellants within
14 days and from the Corporation within a further 14 days.
W D Baragwanath J
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