P v E HC Auckland CP78/96

[2002] NZHC 319

IN THE HIGH COURT OF NEW ZEALAND
WELLINGTON REGISTRY CP78/96

BETWEEN P
Plaintiff

AND E
Defendant

Date of hearing: 14 March 2002

Counsel: J E Bryson for Plaintiff
N Levy for Defendant

Judgment date: 12 April 2002

JUDGMENT OF MASTER J C A THOMSON

Solicitors:
Bryson & Co, Raumati Beach for Plaintiff
Greig Davidson Gallagher & Co, Wellington for Defendant

[1] This is a Rule 426A application for leave to proceed further on the grounds that 12 months has elapsed since the last step was taken. The Master had directed that a Rule 426A application was necessary because the plaintiff on 12 October 2001 had filed a praecipe seeking a unilateral fixture, and it appeared from the file that the last step in the proceeding had taken place in 1997.

[2] The plaintiff seeks exemplary damages for acts of indecency committed on him by the defendant in November 1988. At that time the plaintiff was 10and the defendant 16. It appears some eight years after the events, the plaintiff complained to the police. The defendant was charged, and in his Statement of Defence, says that he pleaded guilty to a representative charge covering various acts over the period 1 June 1988 to 31 December 1988.

[3] In his Statement of Claim the plaintiff pleads that the sexual acts which took place between the plaintiff and defendant amounted to trespass to his person. The defendant admits in his defence some of the acts alleged but denies the acts of masturbation and sodomy pleaded. The proceeding was issued in 1996. The R 426A application was filed in February 2002 but no affidavit in support was lodged until the day before the hearing of the application. The affidavit is by Mr Foster, a solicitor in the plaintiff’s law firm. He sets out a chronology, which shows that a praecipe was sent to the defendant for signature on 3 September 2001. It was not returned. I think that action might well constitute a step in the proceeding. More debatable is whether the settlement correspondence between May 2001 and July 2001 could be classified as a step in the proceeding, bearing in mind that credit is not given to a plaintiff for time taken up with settlement negotiations at least in strike out applications. However given those matters it may have been arguable that an application for leave was not in fact necessary. It is against that background that I consider the application.

Rule 426A application

[4] Rule 426A of the High Court Rules provides:

“(1) Where a proceeding has not been set down for trial and at least 12 months have elapsed since the last step was taken in that proceeding, no further steps shall be taken in that proceeding without the leave of the Court.

(2) Leave shall not be given under subclause (1) unless the Court is satisfied that there is a proper issue to be tried in the proceedings.”

[5] In McEvoy v Dallison [1997]3 NZLR 11 at page 18 the Court of Appeal said on the question of whether a “proper issue to be tried” existed.

“For the most part, it will not be difficult to perceive whether or not a proceeding gives rise to a proper issue to be tried. Certainly, there can be no cause, as has been suggested, to equate the phrase “proper issue to be tried” with the test adopted in determining applications for interlocutory injunctions, viz, “serious issue to be tried”. . . The applicant under R 426A is required, as a threshold requirement, to do no more than demonstrate that the issue is one which is sufficient to warrant resolution by the Court. It cannot be thought that such a rule envisages an examination by the Courts of the merits, whether of the facts or law. Indeed, it is difficult to conceive that evidence relevant to the merits of the case would ever be required. Matters of fact or questions of law, if they are to be more closely examined at an interlocutory stage, are better examined in the context of rules which as RR 477 and 478. For the purposes of R 426A it should be sufficient to identify the issue or issues for which the applicant proposes to contend and to determine whether those issues are proper issues to be tried.”

[6] That Court held that if it is found that there is a proper issue to be tried the Court then asks itself whether it should exercise its discretion and grant leave. At page 19 it said:

“We also accept that, because of the wide variety of circumstances which are likely to arise, it is inappropriate to seek to delineate all the relevant factors which may need to be taken into account in exercising that discretion. What is certain, however, is that the discretion should be exercised in accordance with the purpose or underlying policy of the rule, and we are of the clear view that this purpose or policy is to promote the objective of case management.”

Proper issue to be tried?

[7] The plaintiff seeks exemplary damages against the defendant for gross indecencies and acts amounting to tortious wrongs, namely trespass to the person and battery.

[8] Prior to the introduction of section 396 of the Accident Insurance Act in 1998 the plaintiff’s claim in order to succeed needed to establish that exemplary damages were payable because certain of the plaintiff’s allegations had not been, and would not be, subject to criminal sanction.

[9] However Section 396 of the Accident Insurance Act 1998 (“s 396”) (revoked as from 1 April 2002 but replaced with s 319 of the Injury, Prevention, Rehabilitation and Compensation Act 2001) widened the plaintiff’s claim by providing that:

“396. Exemplary damages -

(1) Nothing in this Act, and no rule of law, prevents any person from bringing proceedings in any court in New Zealand for exemplary damages for conduct by the defendant that has resulted in -

(a) Personal injury covered by this Act; or

(b) Personal injury covered by the former Acts.

(2) The court may make an award of exemplary damages for conduct of the kind described in subsection (1) even though

-

(a) The defendant has been charged with, and acquitted or convicted of, an offence involving the conduct concerned in the claim for exemplary damages; or

. . .”

[10] On the facts pleaded here I find there is clearly a proper issue to be tried, subject to the defendant’s particular argument that the award of exemplary damages being discretionary goes to that issue, and which I will deal with shortly.

Exercise of discretion

Delay

[11] The plaintiff accepts there has been delay in this case. It is claimed that much of the delay can be attributed to waiting for the Privy Council decision in W v W [1999] 2 NZLR 1 which dealt with the legal issue of double jeopardy and was one which initially went to the heart of these proceedings. The Privy Council decision was not available until 19 January 1999, prior to which the amended legislation had been passed and which resolved the double jeopardy issue. The case however went back to the Court of Appeal for determination of other issues including that of whether or not s 396 had retrospective application. Its decision which was favourable to the plaintiff’s case was not delivered until 7 March 2000.

[12] However part of the delay apart from W v W, the plaintiff accepts, has been caused by the plaintiff’s solicitors who could have pursued this case much more vigorously than they have.

Prejudice

[13] The plaintiff submits that granting leave to proceed will not prejudice the defendant. While there is a dispute over whether or not certain indecencies occurred, there are sufficient agreed facts, the plaintiff says, to constitute tortious wrongs (assuming of course that the plaintiff will discharge his onus to show emotional and physical distress). This means that on the agreed facts the argument will largely be on legal issues. In such circumstances the plaintiff says the defendant will not be prejudiced. In addition (I think he rightly says) the nature of the incidents alleged are such that the defendant is unlikely to have any greater trouble recalling such events now, than he would have, had a legitimate step in the proceedings been taken at the appropriate time.

Defendant’s argument

Proper issue to be tried?

[14] The defendant submits it is clear from section 396 that an award of exemplary damages in the circumstances alleged by the plaintiff is discretionary. If the plaintiff’s claim proceeds the defendant says live issues will be:

(a) Consent;

(b) The discretion in Section 396(3) of the Accident Insurance Act 1998, which provides that:

“In determining whether to award exemplary damages and if they are to be awarded, the amount of them, the Court may have regard to -

(a) Whether a penalty has been imposed on the defendant for an offence involving the conduct concerned in the claim for exemplary damages; and

(b) If so, the nature of the penalty”; and

(c) Whether the youth of the defendant at the time of the alleged conduct counts against an award of exemplary damages.

[15] The defendant argues that the discretionary nature of issues (b) and (c) and the fact that the conduct complained of has been dealt with in the criminal jurisdiction of the District Court, are relevant to this Court’s determination of whether those issues are proper issues to be tried. The parties’ ages at the time of the conduct the subject of the claim (10 and 16 respectively) would also be relevant the defendant says.

[16] The defendant says it is not suggested that a claim involving the exercise of a discretion by the Court is necessarily of less importance than a different sort of claim. However, it is submitted that the Court is entitled, when weighing the issues to be tried, and the delay by the plaintiff, to bear in mind that the plaintiff seeks the exercise of a discretion (rather than the enforcement of a right imposed) not to reward or compensate the plaintiff, but to punish the defendant. As noted in Todd on Torts, “as the amount is paid to the victim, however, there is a windfall for the person who suffers at the hands of a particularly egregious tort feasor” (page 1190). The plaintiff, the defendant says is suing for society, for it is society’s condemnation of conduct that requires exemplary damages to be awarded in appropriate cases. But from society’s point of view, the conduct complained of by the plaintiff has been the subject of criminal proceedings, and the defendant has been punished. To that extent there has been both a resolution of the differences between the parties, and a resolution of the matter on behalf of society. The defendant submits that the present plaintiff is seeking to enforce a windfall in respect of behaviour already dealt with by the Court in another jurisdiction, rather than achieve justice in respect of a matter not yet aired in Court. Despite the defendant’s submission, in my view whether or not a Court will in the circumstances of this case award exemplary damages is one “sufficient to warrant resolution by the Court”. That is to say it is a “proper issue” to be tried. I think the arguments of the defendant are properly to be considered when determining whether or not the Court should exercise the general discretion of the Court to grant leave or not, pursuant to the rule.

Defendant’s argument as to the exercise of the Court’s general discretion under R 426A

[17] As to the Court’s discretion, the defendant relies on a passage in McEvoy v Dallison at page 19 line 26 where the Court of Appeal said:

“the focus will be on the prior history of the proceeding, the delay, including the length of delay which has occurred since the last step was taken, and the applicant’s explanation or justification for that delay. Consideration of these factors is likely to lead to the most appropriate decision from the point of view of promoting the goal of case management and ensuring that proceedings are disposed of in a fair, timely and efficient manner.”

[18] The last applicable step in this proceeding the defendant says was taken in August 1997 when discovery documents were provided by the defendant. It is accepted that delay from that date until 19 January 1999 cannot be complained of, as the parties were awaiting the decision of first the Court of Appeal, and then the Privy Council on a directly relevant question of law. Nevertheless, there having been such a delay, it was incumbent on the plaintiff it is submitted to proceed with due haste once the decision of the Privy Council was known in January 1999.

[19] It is not accepted by the defendant that any part of the plaintiff’s subsequent delay was related to section 396 and whether or not that section had retrospective application. There is no evidence, he says, of any correspondence between the parties indicating that progress of the proceedings would await the Court of Appeal’s judgment on that issue, or that the parties were aware that the issue had any application to the present proceedings.

[20] The defendant says that it is relevant when evaluating the significance of the long delay in this matter to have regard to the relative ages of the parties at the time of the incidents complained of, and further says the subject matter of the proceedings must be relevant to assessing the significance of delay. Where, as here, the subject matter is personal rather than commercial, and involves the actions of children, long periods of delay should be viewed more seriously than when less personal, and more commercial matters, are being litigated between adults about their actions as adults.

[21] The defendant submits that the delay of legal advisers which is relied on is not accepted as an excuse in respect of a strike out application (R 478) and it should not be accepted here. The defendant submits that in all the circumstances this is a case where the Court’s discretion should be exercised against granting the application.

Conclusion

[22] There is no question that R 426A is a case management rule and the primary issue is whether there is a ‘proper’ issue to be tried. I have already decided that in favour of the plaintiff. As to the exercise of the Court’s general discretion to grant leave under the Rule, Ms Levy points out that here, the Court will be required at a substantive hearing to exercise a discretion as to whether to award exemplary damages against a defendant for acts which took place some 14 years ago, when the participants were 10 and 16 respectively and she submits it is unlikely to do so. The Master seriously reflected on that submission, and whether or not the factual situation as pleaded was indeed one where a Court would not award exemplary damages even if the pleaded facts were proved, and therefore whether I should exercise my discretion against the plaintiff and refuse leave. In the end, however, I conclude that as I have found there is a proper issue to be tried, that it would be wrong on a R 426A application to attempt to come to a finite view as to the facts without hearing evidence.

[23] The question then remains one for the exercise of the discretion of the Court considering all the circumstances. In that context I take notice of two matters, first that the defendant does not claim prejudice as to his ability to conduct his defence caused by the delay.

[24] Secondly I note that on 26 of February 1998 the defendant wrote and said he would apply to strike out unless the claim was discontinued. However he took no step thereafter to formally apply to have the proceeding struck out. Also he did not respond when a praecipe was sent for signature. All in all, I think the plaintiff is entitled to an order pursuant to R 426A, particularly as the plaintiff, being under a disability when the events took place would, it appears, still in any event be within time to bring fresh proceedings. I do say however it is clearly in everyone’s interests to have these proceedings settled and avoid the pressures and cost of trial. If the parties cannot settle themselves I direct the case be set down for a judicial settlement conference pursuant to R 442. Counsel are to consult the Registrar for a settlement fixture if necessary. Costs reserved.