Taylor v Chief Executive of the Department of Corrections
[2020] NZHC 747
•15 April 2020
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2017-485-119
[2020] NZHC 747
BETWEEN HAYDEN JOSEPH TAYLOR
First Plaintiff
WILLIAM MOKORAKA
Second PlaintiffALLAN BRIAN MILLER
Third PlaintiffGAIL DENISE MANEY
Fourth PlaintiffAND
CHIEF EXECUTIVE OF THE DEPARTMENT OF CORRECTIONS
First Defendant
SERCO NEW ZEALAND LIMITED
Second Defendant
Hearing: 18-21 September 2019
24 September and 4 October 2019 – final submissions from plaintiff and first defendant received
Appearances:
A L Hill and K F Alexander for the Plaintiffs
A F Todd and H T N Fong for the First Defendant L Clark and B A Mathers for the Second Defendant
Judgment:
15 April 2020
JUDGMENT OF CULL J
Contents
History of the proceeding........................................................................................... [5]
Background facts..................................................................................................... [14]
RtW circulars........................................................................................................ [18]
Mr Taylor.............................................................................................................. [22]
Mr Mokoraka and Mr Miller................................................................................... [27]
Ms Maney.............................................................................................................. [30]
TAYLOR v CHIEF EXECUTIVE OF THE DEPARTMENT OF CORRECTIONS [2020] NZHC 747 [15 April 2020].
The issue for determination...................................................................................... [31]
The plaintiffs’ position in summary.......................................................................... [34]
The statutory framework......................................................................................... [37]
Private law claims against a public body.................................................................... 17]
Foreseeability........................................................................................................... [53]
Proximity................................................................................................................. [57]
Duty from statute?.................................................................................................. [61]
A situational duty of care?...................................................................................... [70]
Conclusion............................................................................................................ [75]
What are the relevant policy considerations?............................................................ 26]
Conclusion................................................................................................................ [82]
[1] This decision concerns a private law claim in negligence against a public body. The preliminary question for this Court’s determination is whether a duty of care was owed by the Chief Executive of the Department of Corrections (Corrections) to four prisoners (the plaintiffs) on Release to Work programmes (RtW), when their employment agreements with third parties were terminated by Corrections. The plaintiffs allege that, under s 62 of the Corrections Act 2004 (the Act), Corrections owed them a duty of care to act in a fair and reasonable manner in making decisions that may affect their employment so as not to cause them economic loss.
[2] Following the escape of Mr Philip Smith to South America in 2014 while he was on temporary release from prison, Corrections terminated the plaintiffs’ participation in temporary release or RtW programmes and related employment agreements. The plaintiffs claim that in doing so, Corrections acted in breach of its duty of care to act in accordance with ss 5, 6 and 62 of the Act and related regulations,1 in accordance with s 27 of the New Zealand Bill of Rights Act 1990 (NZBORA), and to act fairly and reasonably. The plaintiffs say that as a direct result of this breach and as a reasonably foreseeable consequence, they have suffered financial loss, for which they claim together with interest and costs. In addition, the plaintiffs seek public law damages for the alleged breach of s 27 of the NZBORA of $20,000 payable to each plaintiff, plus interest and costs. The claims are based on vicarious liability for acts done by employees of Corrections.
1 Corrections Regulations 2005, reg 26; and Corrections Act 2004, s 196.
[3] Corrections and Serco New Zealand Ltd (Serco) (the defendants) resist the imposition of a duty of care in these circumstances and deny any duty of care was owed or that there is any claimable loss resulting.
[4] All the parties to this proceeding agreed to a limited hearing under r 10.15 of the High Court Rules 2016 to determine the preliminary issue of whether a duty of care arises in these circumstances. Any issues of breach or quantum will be determined at a later date, depending on the outcome of this proceeding.
History of the proceeding
[5] The four plaintiffs brought their claims against Corrections and, initially, the first and second plaintiffs (Mr Taylor and Mr Mokoraka) also brought the same claim against Serco. The plaintiffs’ proceeding was delayed pending the determination of a joint judicial review by Mr Philip Smith and Mr Taylor, which challenged the lawfulness of specific temporary release and RtW circulars issued by Corrections, in the wake of Mr Smith’s escape.2 That proceeding was heard by Fitzgerald J, who held that the issuing of the circulars was an unlawful act of dictation and a fetter on discretion,3 because the directive in the circulars that RtW applications of a certain class “must not be approved” was inconsistent with the Act and related regulations (the Smith decision).4
[6] However, the Judge held that the unlawfulness of the circulars did not render the individual decisions on temporary release and RtW applications unlawful.5 In the case of Mr Taylor who challenged Corrections’ decision to decline his RtW application after the issue of the circulars, the Judge found that Corrections took a tailored, individual and lawful approach to his application and dismissed the review.6
[7] Following the Smith decision, the parties sought a preliminary hearing under r 10.15 of High Court Rules for the Court’s determination on agreed questions. The
2 Smith v Attorney-General [2019] NZHC 835.
3 At [74] and [95(b)].
4 At [67]-[74].
5 At [81].
6 At [129].
parties agreed on a statement of facts to assist the Court. The two agreed questions for the Court to determine were:
(a)Did any personnel of the Department of Corrections owe a duty of care to the plaintiffs to make decisions about temporary release for the purposes of employment (RtW) under s 62 of the Corrections Act 2004 with reasonable care, so as not to cause the plaintiffs economic loss?
(b)Did Serco New Zealand Ltd owe a duty of care to the first and second plaintiffs (Mr Taylor and Mr Mokoraka) to make decisions about RtW under s 62 of the Act with reasonable care, so as not to cause the plaintiffs economic loss?
[8] During the course of the hearing, Ms Hill for the plaintiffs refined the ambit of the proposed duty of care. Ms Hill submitted that the duty of care arose, not just out of the statutory power to approve RtW applications, but when the prisoners entered into an employment agreement with third parties. She submitted that the trigger point for the imposition of the duty of care was the entering into the employment contract by the prisoner with the employer.
[9] Once the duty was limited in this way, the first and second plaintiffs’ action against Serco fell away, because neither of the plaintiffs were under Serco’s management or control at the time they were withdrawn from their RtW programmes. The two plaintiffs lost their employment prior to their transfer to Serco’s prisons. On the narrow articulation of the duty of care, Serco was no longer liable on the plaintiffs’ claim as framed.
[10] At the close of the hearing, Ms Hill confirmed the plaintiffs’ position and accepted that proceeding against Serco was no longer viable or responsible. The first and second plaintiffs withdrew their claims against Serco and discontinued that part of the plaintiffs’ proceeding. No determination is therefore required in respect of the agreed question relating to the liability of Serco.
[11] Although the plaintiffs discontinued their claim against Serco, Ms Clark for Serco asked that Serco’s submissions be taken into account in the determination of an imposition of a duty of care. All parties’ submissions in relation to the issues raised by these proceedings have been taken into account in the reasoning of this decision.
[12] Following the hearing, Ms Hill re-defined the question and the alleged duty of care, as follows:
(a)A duty of care arose from the plaintiffs’ entry into employment agreements with third parties subsequent to their approval for temporary release for the purposes of employment under s 62 of the Corrections Act 2004.
(b)The duty of care required the personnel of Corrections to take account of the plaintiffs’ personal circumstances, including their rehabilitation and reintegrative needs, and act in a fair and reasonable manner in making decisions that may affect their employment, so as not to cause the plaintiffs economic loss.
[13] Given the re-formulation of the duty alleged by the plaintiffs and the confinement of the duty to Corrections only, I deal in this judgment with the relevant submissions of the parties in relation to the re-formulated allegation of the duty of care.
Background facts
[14] The plaintiffs were, at the relevant time, serving indeterminate prison sentences:
(i)Mr Taylor was held at Spring Hill Correctional Facility (Spring Hill) and on 12 February 2016 was transferred to Auckland South Correctional Facility (Auckland South) which is managed by Serco.
(ii)Mr Mokoraka was a prisoner held at Spring Hill and in June 2015 was transferred to Auckland South until his release in September 2016.
(iii)Mr Miller is a prisoner held at Spring Hill.
(iv)Ms Maney was held at Auckland Regional Women’s Corrections Facility (Auckland Women’s Prison) until her release in June 2016.
[15] The first defendant is the Chief Executive of Corrections, who exercises the relevant powers under the Act for the temporary release of certain prisoners. RtW is a form of temporary release, which authorises certain prisoners to be temporarily released from prison in order to carry out paid employment in the community.7
[16] Prior to 21 November 2014, the plaintiffs were all approved for and were participating in RtW. They were employed by third parties under individual employment agreements. Each plaintiff earned wages from their employment which were treated in accordance with ss 67 and 68 of the Act. Accordingly, each had a portion of their wages deposited into a trust account to the credit of the plaintiff and deductions were made in favour of Corrections.
[17] On 6 November 2014, Mr Smith escaped lawful custody while on temporary release from Spring Hill and fled the country. Mr Smith was not participating in RtW at the time of his escape.
RtW circulars
[18] On 11 November 2014, following the escape of Mr Smith, the Chief Executive directed that all temporary release of prisoners would cease with RtW programmes, with certain exceptions, pending a comprehensive review of temporary release processes and policies. One such exception to the suspension related to prisoners involved in RtW programmes.8
[19] On 12 November 2014, the National Commissioner issued guidelines under s 196 of the Act, in the form of a circular, which set out the interim procedures to be followed by Corrections staff when considering the temporary release of prisoners.9
7 Corrections Act 2004, s 62.
8 For the full text of the direction, see Smith v Attorney-General, above n 2, at [17].
9 Circular 2014/02A; for extracts of the circular, see Smith v Attorney-General, above n 2, at [19].
On 14 November 2014 and 3 February 2015, further circulars were issued. These “temporary release circulars” had the effect of restricting who was entitled to be considered for temporary release compared with the temporary release scheme in force before Mr Smith’s escape. On 21 November and 1 December, the National Commissioner issued further circulars relating specifically to RtW procedures (the RtW circulars).10
[20] As noted, Mr Smith brought judicial review proceedings challenging the lawfulness of the 11 November decision, the temporary release circulars and the RtW circulars. The Court found that the RtW circulars directed that if there were any concerns that a prisoner still poses a risk to the community, his or her RtW application “must not be approved”. This directive was held to be an unlawful act of dictation because it removed the evaluative task of assessing RtW applications on an individual basis, balancing all mandatory relevant considerations set out in s 62(3) of the Act.11 In the context of the circulars as a whole, it is reasonable to interpret the eligibility criteria as meaning that the listed classes of offenders “must not be approved” for RtW. The Court held that this was an unlawful fetter on discretion, and inconsistent with the Act and related regulations.12 However, as noted above, the Court found that the unlawfulness of the RtW circulars did not of itself impugn the lawfulness of individual decisions that were subsequently made about prisoners and their eligibility for RtW.13
[21] Following the release of these circulars, high risk prisoners at Spring Hill who were on the RtW programme were reviewed. This included Mr Taylor, Mr Mokoraka and Mr Miller who were all serving indeterminate sentences for violent or sexual offending. An Advisory Panel was set up at Spring Hill to consider recommendations about RtW, among other things. On various dates after 21 November 2014, the Chief Executive, by his staff, decided that the plaintiffs would be withdrawn from RtW.
10 Circular 2014/03 and 2014/03A; see Smith v Attorney-General, above n 2, at [20].
11 Smith v Attorney-General, above n 2, at [70].
12 At [74] and [95(b)].
13 At [81]; and see [6] of this decision.
Mr Taylor
[22] Initially (on around 19 or 20 November 2014), Mr Lightbown, the Prison Director at Spring Hill where Mr Taylor was serving his sentence, decided Mr Taylor should remain on RtW. Following the RtW circular issued on 21 November, however, he reviewed the position in relation to prisoners serving indeterminate sentences, including Mr Taylor. Without forming a final view, Mr Lightbown temporarily suspended Mr Taylor’s RtW pending completion of the review. A number of steps were then taken by Mr Lightbown and input on his decision-making concerning Mr Taylor’s RtW application was sought.
[23] On 4 December, and after hearing from the Advisory Panel, Mr Lightbown deferred a decision about Mr Taylor’s RtW application until 11 December 2014. Mr Taylor remained suspended from RtW and did not go to work. Mr Taylor appeared before the Parole Board in the meantime (on 10 December) and was declined parole.
[24] The Advisory Panel met again on 11 December. Most of those who attended on 4 December were present, including two RtW brokers and the regional psychologist. The Panel discussed each prisoner, with each panel-member providing input from their particular area of expertise or responsibility. In relation to Mr Taylor’s RtW application, this Court recorded in the Smith decision that Mr Lightbown stated that:14
(a)The RtW brokers would have communicated the good feedback from Mr Taylor’s employer and that GPS was available at his place of work;
(b)Details of Mr Taylor’s offending and sentencing would have been provided;
(c)An update on the outcome of the Parole Board hearing would have been provided, and Mr Lightbown recalled the Parole Board did not support reintegration and had concerns about Mr Taylor’s sexual deviancy, but the full reasons were not then available;
14 Smith v Attorney-General, above n 2, at [117].
(d)Information was presented from the regional psychologist. Although Mr Lightbown could not recall exactly what the psychologist said, it was highly unlikely she would have departed from what was said in the most recent psychological report from October 2014 prepared for the Parole Board, namely that:
(i)Mr Taylor was estimated to be at moderate risk of general and violent reoffending and at a medium-low risk of sexual offending within the five years following his release from prison;
(ii)His safety plan could be made more robust with the inclusion of sexually-related risk management strategies; and
(iii)Further interventions focusing on sexual violence should occur.
[25] After the Advisory Panel meeting, and having considered the above information, Mr Lightbown declined Mr Taylor from continuing with RtW. Among other things, his reasons were the very serious nature of Mr Taylor’s offending and sentence; the advice that Mr Taylor should have further treatment for sexual violence, which meant that he posed a risk to the community; and as parole had been declined, there was no immediate need for Mr Taylor to be reintegrated into the community.15
[26] Mr Taylor sought judicial review of the RtW decision dated 11 December 2014 made by Mr Lightbown. This proceeding was heard together with Mr Smith’s proceeding, in which Fitzgerald J dismissed Mr Taylor’s application for judicial review. Among other things, the Judge found that Mr Lightbown’s decision about Mr Taylor’s RtW decision was made on an individual basis, unfettered by any direction (from the RtW circulars or otherwise) that Mr Taylor was ineligible for consideration.16 Mr Lightbown proceeded on the basis that it was open to him to
15 Smith v Attorney-General, above n 2, at [119].
16 At [132].
approve Mr Taylor for RtW,17 and Fitzgerald J found the decision declining Mr Taylor’s RtW application was lawfully made.18
Mr Mokoraka and Mr Miller
[27] The relevant RtW decisions relating to Mr Mokoraka and Mr Miller were also made by Mr Lightbown while they were at Spring Hill.
[28]The relevant facts in relation to Mr Mokoraka are:
(a)between 18 November 2014 and 3 December 2014 or thereabouts, Mr Mokoraka was taken off RtW in order to be fitted with a GPS bracelet, in response to a RtW circular which required a review of whether prisoners on RtW should be fitted with GPS;
(b)Mr Mokoraka was then permitted to return to RtW;
(c)Mr Mokoraka was removed from RtW again on or about 5 December 2014;
(d)at the Advisory Panel meeting on 11 December 2014, the Minutes record that Mr Mokoraka had difficulties with other prisoners but the reports from his employer were positive. The Panel Minutes recorded that Mr Mokoraka was “not approved outside the wire”; and
(e)Mr Mokoraka was withdrawn from RtW on 11 December 2014.
[29]The relevant facts in relation to Mr Miller are:
(a)a psychological report on Mr Miller dated 20 October 2014 was prepared for the consideration of the New Zealand Parole Board;
17 At [133].
18 At [152].
(b)at the Advisory Panel meeting on 11 December 2014, the Minutes record that Mr Miller required further treatment and there were risk situations in the workplace; and
(c)Mr Miller was withdrawn from RtW on 11 December 2014.
Ms Maney
[30]The relevant facts in relation to Ms Maney are:
(a)Ms Maney was at Auckland Women’s Prison and on 24 November 2014, Ms Maney was held back from RtW to be fitted with GPS;
(b)on or about 27 November 2014, Ms Maney was returned to RtW;
(c)On 23 April 2015, Ms Maney was withdrawn from RtW until further notice; and
(d)On 15 February 2016 Ms Maney recommenced RtW.
The issue for determination
[31] Following the articulation of the plaintiffs’ re-formulated allegation of the duty of care, the issue for determination for this Court is:
Did Corrections owe a duty of care to the plaintiffs, upon their entry into employment agreements with third parties subsequent to their approval for temporary release for the purposes of employment under s 62 of the Corrections Act 2004, to take into account the plaintiffs’ personal circumstances, including their rehabilitation and reintegrative needs, and act in a fair and reasonable manner in making decisions that may affect the plaintiffs’ employment, so as not to cause them economic loss?
[32]I will answer this question by dealing with the following considerations:
(a)the plaintiffs’ position in summary;
(b)the statutory framework;
(c)private law claims against a public body;
(d)foreseeability;
(e)proximity; and
(f)the relevant policy considerations.
[33]I start with the plaintiffs’ position as amended.
The plaintiffs’ position in summary
[34] The plaintiffs’ case, as re-formulated, is that a duty of care arose on Corrections once the plaintiffs entered into their employment agreements with third parties under the RtW programme. Any decisions made by Corrections affecting their employment, they claim, required Corrections to take account of their personal circumstances, including their rehabilitation and reintegrative needs, and to act fairly and reasonably so as not to cause the plaintiffs economic loss.
[35] As a direct result of Corrections’ breach of that duty, and as a reasonably foreseeable consequence of that breach, the plaintiffs claim they have suffered loss and seek damages for that loss, plus interest and costs. In addition, they seek public law damages for the alleged breach of s 27 of NZBORA of $20,000 payable to each plaintiff, plus interest and costs.
[36] The plaintiffs say that Corrections owed them a duty of care in the circumstances because:
(a)Corrections is vicariously liable for the actions of its personnel who made decisions about RtW;
(b)decisions made pursuant to a statutory power should be made fairly and reasonably;
(c)the requirements of proximity and foreseeability are met;
(d)the imposition of a duty of care is supported by relevant policy factors, including the fact that the prisoners were approved to enter into employment agreements with third parties;
(e)a duty of care to make decisions fairly and reasonably does not cut across the statutory framework;
(f)the plaintiffs were vulnerable as they were prisoners subject to the power and control of Corrections;
(g)while Corrections had the power to withdraw the plaintiffs from RtW, if the decision was made negligently they are not immune from compensating the plaintiffs for the loss arising from the negligent decision; and
(h)it is just and reasonable that a duty is imposed.
The statutory framework
[37] The starting point is s 5 of the Act, which sets out the purpose of the corrections system. Its broad purpose is to “improve public safety and contribute to the maintenance of a just society” by four means, as follows:
5Purpose of corrections system
(1)The purpose of the corrections system is to improve public safety and contribute to the maintenance of a just society by–
(a)ensuring that the community-based sentences, sentences of home detention, and custodial sentences and related orders that are imposed by the courts and the New Zealand Parole Board are administered in a safe, secure, humane, and effective manner; and
(b)providing for corrections facilities to be operated in accordance with rules set out in this Act and regulations made under this Act that are based, amongst other matters, on the United Nations Standards Minimum Rules for the Treatment of Prisoners; and
(c)assisting in the rehabilitation of offenders and their reintegration into the community, where appropriate, and so far as is reasonable and practicable in the circumstances and within the resources available, through the provision of programmes and other interventions; and
(d)providing information to the courts and the New Zealand Parole Board to assist them in decision-making.
[38] Of relevance to the plaintiffs’ case is s 5(1)(c), namely, the purpose of assisting in the rehabilitation and reintegration of offenders into the community.
[39] Section 6 then contains the principles that guide the corrections system, and of particular relevance to this hearing are subs (a), (g), and (h):
6Principles guiding corrections system
(1)The principles that guide the operation of the corrections system are that–
(a)the maintenance of public safety is the paramount consideration in decisions about the management of persons under control or supervision:
…
(g)sentences and orders must not be administered more restrictively than is reasonably necessary to ensure the maintenance of the law and the safety of the public, corrections staff, and persons under control or supervision:
(h)offenders must, so far as is reasonable and practicable in the circumstances within the resources available, be given access to activities that may contribute to their rehabilitation and reintegration into the community:
…
[40] Section 6(2) provides that in exercising any power or duty under the Act or related regulations, the decision-maker must take into account the applicable principles that guide the operation of the corrections system as set out under s 6(1).
[41] In addition to the purposes and principles of the Act, s 62 lies at the heart of the plaintiffs’ claim in this case. Section 62(1) empowers the Chief Executive to authorise the temporary release of a prisoner who is a member of a class of prisoners
to whom the section applies. Under s 62(2), the Chief Executive may authorise a prisoner’s temporary release from custody for a number of purposes:
62 Temporary release from custody or temporary removal from prison
…
(2)The chief executive may give authority for the temporary release from custody or temporary removal from prison of a prisoner to whom this section applies–
(a)for any purpose specified in regulations made under this Act that the chief executive considers will facilitate the achievement of 1 or more of the following objectives:
(i)the rehabilitation of the prisoner and his or her successful reintegration into the community (whether through release to work (including self-employment), to attend programmes, or otherwise):
(ii)the compassionate or humane treatment of the prisoner or his or her family:
(iii)furthering the interests of justice; or
(b)in any circumstances that, in the opinion of the chief executive, are exceptional and that will facilitate the achievement of 1 or more of the objectives described in paragraph (a).
[42] When the Chief Executive exercises the powers under subs (2), as well as taking into account any applicable guiding principles he must take into account the following mandatory considerations under s 62(3):
(a)whether the release or removal of the prisoner might pose an undue risk to the safety of the community while the prisoner is outside the prison:
(b)the extent to which the prisoner should be supervised or monitored while outside the prison:
(c)the benefits to the prisoner and the community of removal or release in facilitating the reintegration of the prisoner into the community:
(d)whether removal or release would undermine the integrity of any sentence being served by the prisoner.
[43] The power of the Chief Executive to make decisions relating to temporary release or removal under s 62 can be, and was in fact, delegated to appropriate
individuals within Corrections. They included, at various times, the National Commissioner, Regional Commissioner, Prison Manager and Custodial Systems Manager.
[44] Section 63 then contains the conditions for a temporary release from custody. Section 63(1) enables the Chief Executive to fix the period of the temporary release and impose conditions on such release.
[45] At the relevant time, regs 26 and 27 of the Corrections Regulations 2005 (the Regulations) provided for the classes of prisoners who were eligible for consideration for temporary release and the specified purposes for which eligible prisoners may be temporarily released, as referred to at s 62(2)(a) of the Act.19 Those relevant purposes include:
(a)to visit the prisoner’s family:
(b)to undertake paid employment (including self-employment):
(c)to seek employment (whether directly with a prospective employer or through an agency) or to receive vocational or other training:
(d)to attend any agency for assessment or treatment of the prisoner’s rehabilitative or reintegrative needs:
(e)if the prisoner’s release is imminent, to visit a department of State or other agency to make arrangements for the prisoner’s release:
(f)to visit a community facility for educational, cultural, or recreational purposes:
…
(r) to be involved in a community project or other reintegrative activity in association with staff or members of service clubs, religious or cultural groups, or other community organisations:
…
[46] Finally, ss 66 to 68 of the Act relate to dealing with prisoners’ earnings. Section 67(1) provides that earnings from the prisoner’s RtW under s 62 “must be paid to the chief executive by the prisoner’s employer … to the credit of the prisoner.” Section
19 Regulation 27 of the Corrections Regulations 2005 applied at the time of the plaintiffs’ RtW and when the relevant guidelines were issued. Regulation 27 has now been re-enacted as regulation 29: Corrections Amendment Regulations (No 2) 2017.
68 provides that such earnings “must be applied by the chief executive, in any proportions that the chief executive considers appropriate,” in payment of all or any of the expenses or costs itemised under s 68, including the cost of the prisoner’s detention for each week during which he or she is allowed to engage in employment outside the prison,20 any judgment debts owing by the prisoner,21 or any fine or reparation that the prisoner has been ordered to pay on conviction for any offence.22
Private law claims against a public body
[47] This is a private law claim against a public body. The starting principles of such claims are accepted by the parties. Private law claims for damages in tort, by way of breach of statutory duty or by way of an action for negligence, are frequently brought against public bodies which either negligently perform or fail to perform a statutory duty or negligently exercise a statutory power.23 However, the existence of a statutory duty or power does not in itself create a common law duty of care, and nor does the careless performance of the statutory obligation or power necessarily give rise to liability in negligence.24
[48] In Crimmins v Stevedoring Industry Finance Committee, McHugh J held the negligent exercise of a statutory power is not immune from liability simply because it was within power, nor is it actionable in negligence simply because it is ultra vires.25 Lord Scott in Gorringe v Calderdale Metropolitan Council explained further that a duty arises only if, pursuant to the statutory power, the defendant has done acts, entered in relationships or undertaken responsibilities in circumstances where, on ordinary principles of negligence, a duty would arise.26
[49] The approach to determining whether a duty of care arises in a public law context was canvassed by the Court of Appeal in Attorney-General v Body Corporate
20 Section 68(b).
21 Section 68(f).
22 Section 68(e).
23 Stephen Todd and others Todd on Torts (8th ed, Thomson Reuters, Wellington, 2019) at 349.
24 Todd on Torts, above n 23, at 349; Gorringe v Calderdale Metropolitan Borough Council [2004] UKHL 15, [2004] 1 WLR 1057 at [71]; and Wool Board Disestablishment Co Ltd v Saxmere Co Ltd [2010] NZCA 513, [2011] 2 NZLR 442 at [197].
25 Crimmins v Stevedoring Industry Finance Committee [1999] HCA 59, [1999] 200 CLR 1 at [82].
26 Gorringe v Calderdale Metropolitan Borough Council, above n 24, at [70]-[77].
200200 (Sacramento).27 The Court reinforced that the ultimate question for the court in determining whether a duty of care arises is whether it is just and reasonable that such a duty be imposed.28 In those circumstances, the courts should look to the proximity or relationship between the parties and to any wider policy considerations that bear on whether a duty of care should be imposed.29
[50] The Court of Appeal cautioned that statutory functions that were subject to judicial review tend to impose quasi-judicial or quasi-legislative powers which were “off limits” in terms of the imposition of a duty of care.30 The Court also confirmed that the exercise of a statutory power is not actionable in negligence simply because it is ultra vires.31 Such ultra vires decisions will rarely be found negligent or sufficient to ground a duty of care.
[51] The leading New Zealand authority on novel duties of care, such as this, is North Shore City Council v Attorney-General (The Grange), where the Supreme Court, after canvassing the approaches in other common law jurisdictions, adopted a three-stage approach:32
(a)whether the asserted loss was a reasonably foreseeable consequence of the defendant’s act or omission;
(b)whether the foreseeable loss occurred within a relationship that was sufficiently proximate; and
(c)if there is a proximate relationship, whether there are external policy factors that point against the existence of a duty of care, such that it would not be fair, just and reasonable to impose a duty.
27 Attorney-General v Body Corporate 200200 (Sacremento) [2007] 1 NZLR 95 (CA).
28 At [36].
29 At [36].
30 At [41] and [48].
31 At [49], citing McHugh J in Crimmins v Stevedoring Industry Finance Committee, above n 25, at [82].
32 North Shore City Council v Attorney-General (The Grange) [2012] NZSC 49, [2012] 3 NZLR 341 at [151]–[160].
[52] I turn then to look at foreseeability and the proximity among the parties and to the wider policy considerations that bear on whether a duty of care should be imposed.
Foreseeability
[53] Foreseeability is a necessary pre-condition for the imposition of a duty of care.33 The courts have noted, however, that foreseeability will rarely be determinative in such cases.34
[54] In this case, the plaintiffs submit there is clearly a strong nexus between Corrections’ decisions about whether a prisoner can leave the grounds to attend RtW and the plaintiffs’ ability to earn a wage. Therefore, the plaintiffs submit that it was entirely foreseeable that the withdrawal of the plaintiffs from the RtW programme would cause them lost wages.
[55] In novel cases, foreseeability is at best a screening mechanism, to exclude claims which must obviously fail because no reasonable person in the shoes of the defendant would have foreseen the loss.35 Here, I find the withdrawal of the plaintiffs from their RtW employment and the resulting economic loss to them of their wages was plainly a reasonably foreseeable consequence of Correction’s action.
[56] However, the inquiry does not end with the establishment of foreseeability. I must then address the more difficult question of whether the foreseeable loss occurred within a relationship that was sufficiently proximate.36
Proximity
[57] The conclusion that the harm was foreseeable does not in itself warrant the conclusion that there is sufficient proximity to justify the imposition of a duty of care.
[58]The plaintiffs rely on the proximity assessment factors canvassed in
Sacramento and on Strathboss Kiwifruit Ltd v Attorney-General to say that duties of
33 Sacramento, above n 27, at [37].
34 The Grange, above n 32, at [157].
35 The Grange, above n 32, at [157].
36 The Grange, above n 32, at [158].
care have been imposed in analogous situations and that recognising the duty of care sought in this situation is not inconsistent with the purpose of the Act.37 In Strathboss, the High Court held that although the Biosecurity Act 1993 has broad scope and responsibilities aimed at the general public good, that did not exclude a private law duty.38 It depended on whether circumstances had arisen which gave rise to proximity between the Ministry of Agriculture and Fisheries’ actions or inactions and an individual or identifiable and sufficiently delineated class.39 I note that the Court of Appeal has just overturned the High Court decision, holding that the Crown had statutory immunity from the alleged negligent acts and omissions.40 The Court of Appeal also held that while the Biosecurity Act did not exclude a duty of care, policy considerations such as indeterminate liability would have led the Court to conclude that the imposition of such a duty would not be fair, just or reasonable in the circumstances.41
[59] The plaintiffs further submit the vulnerability of the prisoners supports the imposition of a duty of care.42 Prisoners have long been considered vulnerable and in this situation, the plaintiffs say, they had no ability to take steps to avoid or minimise the relevant risk. In terms of the nature of the risk, the plaintiffs submit this claim relates to specific decisions about specific people. They say it relates directly to the decision to withdraw the plaintiffs from the RtW programme on the basis of the RtW circulars which were unlawful. It is submitted the class of people affected is small.
[60] Overall, the plaintiffs submit that a duty of care which is consistent with the statutory obligation to make decisions fairly and reasonably can be imposed on the defendant. I turn then to examine the statutory scheme to determine whether there was the requisite proximity.
37 Sacramento, above n 27, at [37]; and Strathboss Kiwifruit Ltd v Attorney-General [2018] NZHC 1559.
38 At [373].
39 At [373].
40 Attorney-General v Strathboss Kiwifruit Ltd [2020] NZCA 98.
41 At [411]-[417].
42 Smith v Bush [1990] 1 AC 831 (HL).
Duty from statute?
[61] In addressing the same question in The Grange, the Supreme Court’s starting point was the relevant Act. Similarly, here the statutory scheme is the obvious starting point for a consideration of the proximity of the relationship between Corrections personnel and the plaintiffs, when deciding on the plaintiffs’ access to RtW schemes. The Supreme Court reinforced that a duty of care on the part of a public authority must stem from a consideration of its functions and responsibilities.43 Professor Todd in Todd on Torts frames the question as whether any duty of care would be consistent with what the statute requires or empowers a public body to do.44
[62] Although there is clearly a relationship between Corrections and the prisoners in that Corrections has control over and approves the licence for the plaintiffs to enter RtW, the statutory functions and responsibilities of Corrections under the Act are focussed on the public interest and public safety. The employment of prisoners serves a greater public good and each of the mandatory considerations under s 62(3) of the Act reflects the public interest dimension. Corrections must consider a number of factors in deciding whether to authorise temporary release, such as whether release of the prisoner would impose an undue risk “to the safety of the community”, the extent to which the prisoner should be monitored or supervised while on release, the benefits “to the community” in releasing the prisoner and whether the release will undermine “the integrity” of the prisoner’s sentence.
[63] Similarly, the purpose of the corrections system under s 5(1) of the Act is to improve public safety and contribute to the maintenance of a just society. Although s 5(1)(c) includes the purpose of assisting in prisoners’ rehabilitation and reintegration, it is conditional on being “so far as is reasonable and practicable in the circumstances”. Under s 6, the first principle that guides the operation of the corrections system is the maintenance of public safety, which is the “paramount consideration in decisions about the management of persons under control or supervision.”45
43 The Grange, above n 32, at [170], citing Fleming v Securities Commission [1995] 2 NZLR 514 (CA) at 532.
44 Todd on Torts, above n 23, at 374.
45 Corrections Act 2004, s 6(1)(a).
[64] In this instance, it was proper that the prisoners were able to take up employment opportunities to assist with or contribute to their rehabilitation and reintegration into the community, provided it was reasonable and practicable in the circumstances. However, the circumstances changed dramatically on Mr Smith’s escape overseas and the statutory imperative of public safety came into play. Thus, in assessing proximity in this case, the closeness of the connection between the parties requires a balancing of the plaintiffs’ claim for avoidable economic loss and Correction’s statutory requirement to maintain and improve public safety.
[65] In Takaro Properties Ltd v Rowling, the plaintiff brought a claim in negligence against the Minister of Finance on the basis that the Minister owed them a duty of care not to make a mistake about the matters he was entitled to take into account.46 Although not determinative of the issue, the Privy Council discussed the circumstances in which a duty of care might arise against a public body. Lord Keith observed it is likely to be “very rare indeed” that an error of law by a public authority can be properly categorised as negligent.47
[66] Although the plaintiffs claim that proximity is made out because it is Corrections who grants applications to participate in RtW and it was foreseeable that the withdrawal of the plaintiffs from the programme would cause them lost wages, mere determination of applications or the mistaken exercise of the statutory power does not create proximity. Thus, the Privy Council in Takaro did not find a duty of care was owed, even though it had been held that the Minister misunderstood the extent of his powers and considered irrelevant matters in determining the plaintiff’s application for consent, to the extent that the decision was later quashed.48
[67] In Bella Vista Resort Ltd v Western Bay of Plenty District Council, the Council granted the plaintiff’s application to vary a resource consent on a non-notified basis to carry out a commercial development.49 The decision was quashed on judicial review and the plaintiff sued the Council for negligence for the way in which it dealt with the
46 Takaro Properties Ltd v Rowling [1987] 2 NZLR 700 (PC).
47 At 710.
48 At 711.
49 Bella Vista Resort Ltd v Western Bay of Plenty District Council [2007] NZCA 33, [2007] 3 NZLR 429.
consent process. The plaintiff in that case alleged that the Council owed a duty of care to ensure that the applications for consent and variation were dealt with in accordance with the Resource Management Act 1991 and validly issued under that Act. The Court of Appeal confirmed the High Court’s finding that there was a lack of proximity because the “purpose of the resource consent is the effective management and protection of resources and the environment and not the protection of subsequent owners’ economic interests”.50
[68] I accept Corrections’ submission that there is a similar disconnect between the role of Corrections in determining whether to authorise a prisoner for RtW under s 62 of the Act and a proximate relationship between the prisoner and Corrections for a duty of care to be imposed. The statutory purpose of public safety and maintenance of a just society is distinctly different to a prisoner’s financial gain as a result of attending the programme. In other words, the statutory context does not provide a framework for the imposition of a duty of care, to ensure there is no economic loss to the prisoners. The RtW approval and any consequent employment relationship with a third party was not intended to and cannot create a proximate relationship, such that Corrections was appropriately placed to take care to avoid any economic loss to the plaintiffs.51 That the RtW circulars have been found to be unlawful does nothing to change that position.
[69] A similar finding was reached in the English decision of McCreaner v Ministry of Justice, where the prison authority had miscalculated the plaintiff’s eligibility for early release on home detention curfew.52 The plaintiff claimed that as a result, he spent almost four months in prison longer than he should have. The miscalculation was based on the adoption of a government policy which was later found to be unlawful by the United Kingdom Supreme Court.53 The plaintiff claimed that the Ministry of Justice owed him a duty to take reasonable care in the administration of his sentence and his release from prison, particularly where the Ministry formulated the relevant policy incorrectly.54 Cranston J rejected the plaintiff’s claim, holding that
50 At [50].
51 The Grange, above n 32, at [158].
52 McCreaner v Ministry of Justice [2014] EWHC 569 (QB), [2015] 1 WLR 354.
53 Noone [2010] UKSC 30, [2010] 1 WLR 1743.
54 McCreaner v Ministry of Justice, above n 52, at [36].
there was no duty owed by the Ministry in formulating and adopting the unlawful policy:
[38] In no way can the Ministry of Justice be regarded as assuming a responsibility to the claimant individually in respect of its policy development and adoption. Rather, it was acting in the public interest. In terms of the Caparo approach, the claimant was not in a sufficiently proximate relationship with the Ministry of Justice as regards the formulation and adoption of its policies.
A situational duty of care?
[70] In this case, the plaintiffs have reformulated the duty to be one that is owed only to prisoners who had an employment agreement in place at the time of Corrections’ decision to withdraw those prisoners from RtW. They say that following the decision under s 62 to release the prisoners on RtW, once a third party has entered into an employment contract with the prisoner, Corrections owes that prisoner a specific duty.
[71] The reformulated duty is framed as a “situational duty”, as identified in the Sacramento decision, where the Court of Appeal described such a duty as “closely focused on particular circumstances of risk which are said to have existed.”55 The Court of Appeal advised that in dealing with a claim involving a situational duty, a court should:56
(a)be careful to ensure, during the proximity phase of the enquiry, that the narrow duty alleged can credibly be regarded as discrete from a broad (and untenable) duty of care in relation to the relevant statutory functions; and
(b)in assessing policy considerations, analyse carefully the implications, in terms of the scheme and structure of the relevant statute, of recognising even a situational duty.
55 Sacramento, above n 27, at [46].
56 At [46].
[72] Corrections submits that the reformulated duty is not a situational duty but a narrowing of the duty of care under s 62 to prisoners with employment agreements in place. I accept its submission that the reformulated duty cannot be divorced from a general requirement on the part of Corrections to make decisions under s 62 in accordance with the objects of the Act. The danger with this alleged situational duty is that, apart from approving the licence to work, the duty on Corrections, if imposed, is generated by an agreement between the plaintiffs and a third party, and would override the statutory purpose and paramount considerations of public safety under the Act.
[73] In short, the reformulation does not obviate the problem for the plaintiffs that the exercise of the power by Corrections under s 62 of the Act is an exercise of a statutory power of discretion which must be discharged in accordance with the statutory framework of the Act. As already addressed above, the drivers of public safety and public interest are markedly divergent from the economic interests of the prisoners.
[74] For these reasons, I consider there is not sufficient proximity in the relationship between Corrections and the prisoners in this statutory context, such that Corrections was appropriately placed to avoid economic loss to the plaintiffs.
Conclusion
[75] I find that there is no proximate relationship between Corrections’ personnel and the plaintiffs for the imposition of a duty of care. There is a fundamental disconnect between the purpose of s 62, which is to facilitate the “rehabilitation of the prisoner”, and the claimed duty, which relates to the prisoner’s private income. The statutory power is to be exercised by Corrections in the public interest, with public safety being the “paramount consideration”. The exercise of the power is not aimed at private economic interest and no proximate relationship arises such that Corrections has a duty of care to avoid economic loss to the plaintiffs.
What are the relevant policy considerations?
[76] Notwithstanding I have found that there is no proximate relationship between the plaintiffs and Corrections for the imposition of a duty of care, for completeness I turn to consider the third stage of the inquiry and that is whether it is fair, just and reasonable to impose the claimed duty of care on Corrections.
[77] Corrections submits policy considerations point heavily against the imposition of the alleged duty. In particular, it submits the alleged duty subverts the doctrine of separation of powers by requiring the Court to take over the functions of the relevant statutory decision-maker, and undermines the tort of misfeasance, which requires a deliberate and dishonest abuse of power by a public officer. This has not occurred here. Corrections further submits the alleged duty is inconsistent with the public law framework of accountability both under the Act and generally, may create conflicting interests and skew the balancing exercise under s 62 towards a prisoner’s financial interests over public safety, imposes disproportionate liability on the Department, and will open the floodgates of liability.
[78] In this case, the primary policy issue to be addressed is whether the imposition of a duty of care would be consistent with the terms and policies of the statute which governs Corrections’ functions. As the Court of Appeal emphasised, a duty of care will not be imposed if the effect would be inconsistent with the scheme and policy of the Act.57 The more policy-oriented and less operational the power in question is, the less likely a duty is to be imposed.58
[79] I have already considered the scheme and policy of the Act in the proximity stage of this inquiry. The paramountcy of public safety policy governs the operation of the corrections system under the Act. On that consideration alone, it is unreasonable and inappropriate to impose a duty, albeit a restricted one, on Corrections to avoid economic loss to RtW prisoners with employment contracts.
57 Sacramento, above n 27, at [39].
58 At [42].
[80] Further, the plaintiffs’ grievances about the correctness or otherwise of the impugned RtW decisions are of a public law nature, which are able to be pursued by way of judicial review, declaratory judgment or claims for misfeasance in public office. Errors of law in public decision-making of this kind do not generally sound in damages. Finally, here the claimed loss is for lost wages and is therefore a claim for economic loss. Although the nature of the loss is not determinative, “the Courts have been less willing to impose a duty of care in cases of economic loss than where there is physical damage to property.”59
[81] Although the Act provides that Corrections must assist in the rehabilitation and reintegration of offenders and that the corrections system must ensure the fair treatment of prisoners, with decisions made about them in a “fair and reasonable way”,60 the access to available resources and activities is subject to what is reasonable and practicable.61 This is consistent with the statutory override that the maintenance of public safety is paramount. In my view, the policy considerations in this case support the conclusion that it is not appropriate to impose a duty of care on Corrections in these circumstances.
Conclusion
[82] It is clear that Corrections took immediate steps to withdraw the plaintiffs from their RtW schemes when Mr Smith escaped. It was a significant breach of security and Corrections was under a statutory duty to restore public confidence and safety. While the particular RtW circulars have been held unlawful, the imposition of a duty of care in negligence is not appropriate in the circumstances. I consider that it is not fair, just or reasonable to impose a duty of care, even the reformulated narrower duty, on Corrections in these circumstances.
Cull J
59 Rolls-Royce New Zealand Ltd v Carter Holt Harvey [2005] 1 NZLR 325 (CA) at [63].
60 Corrections Act 2004, ss 5(1)(c) and 6(1)(f).
61 Section 6(1)h.
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