Xi v Howick Baptist Healthcare Limited t/a Auckland Home Healthcare

[2014] NZHC 1058

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-090-557 [2014] NZHC 1058

BETWEEN

HUA XI

First Plaintiff

NAI ZUO TAO Second Plaintiff

AN LI TAO Third Plaintiff

AND

HOWICK BAPTIST HEALTHCARE LIMITED trading as AUCKLAND HOME HEALTHCARE

First Defendant

WAITEMATA DISTRICT HEALTH BOARD

Second Defendant

Hearing:

19 May 2014

Appearances:

Plaintiffs in person (An Li Tao speaking for them) W J Robertson for First Defendant

P N White for Second Defendant

Judgment:

19 May 2014

ORAL JUDGMENT OF ASSOCIATE JUDGE BELL

Solicitors:

Robertsons (W J Robertson/H Twomey) Auckland, for First Defendant

Amanda Mark, Legal Services, Waitemata District Health Board, Auckland, for Second Defendant

XI v HOWICK BAPTIST HEALTHCARE LIMITED trading as AUCKLAND HOME HEALTHCARE [2014] NZHC 1058 [19 May 2014]

Second defendant’s summary judgment application

[1]      The second defendant applies for summary judgment and to strike out the claims by the plaintiffs.

[2]      The first plaintiff, Hua Xi, is a stroke survivor.  She has ongoing disabilities as  a result  of her stroke.   The Waitemata District  Health  Board  carried  out  an assessment and decided that she should receive home care.  Home care was provided by Howick Baptist Healthcare Ltd which carries on business under the name Auckland Home Healthcare.

[3]      On 11 April 2013 Mrs Xi suffered a fall at home.  Her daughter, An Li Tao, described the fall in a letter she wrote to both defendants on 21 April 2013.   The person assigned by Howick Baptist Healthcare was with Mrs Xi at the time.   She was meant to be helping Mrs Xi to walk.  Apparently the caregiver’s mind was on other matters and through her inattention Mrs Xi had a fall. She is said to have suffered external head injuries and bleeding, concussion, and internal brain bleeding. She required admission to hospital.  She was released after 15 days.

[4]      The plaintiffs are not only Hua Xi but also her husband, Nai Zuo Tao, and An Li Tao.  The letter An Li Tao wrote on 21 April 2013 indicates that she and her father were present when her mother had the fall.  They are close by relationship and they were close in time and place.   In this proceeding they seek a written formal apology and $100,000, as damages for emotional trauma and also by way of punitive damages.    They  have  described  their  losses  as:  “serious  devastating  emotional trauma including shock, sorrow, worry and anger etc, which are not covered by ACC as “personal injuries” which all three plaintiffs have suffered.”  They also say that they have been put to additional expenses in dealing with the injuries and ensuing difficulties in looking after Hua Xi.  In submissions Ms Tao said that her mother’s quality of life had worsened.

[5]      The plaintiffs claim against both Howick Baptist Healthcare, which employed the caregiver alleged to be responsible for the fall, and the District Health Board. The District Health Board says that the plaintiffs do not have a sound claim against

it.   It says that that can be decided now and that the claim against it ought not to continue. That is why it applies for strike out or summary judgment.

[6]      The  case  started  in  the  Waitakere  District  Court,  but  Howick  Baptist Healthcare Ltd, gave notice that as the claim was for more than $50,000 it should be moved into this court.1   The proceeding was started by a notice of claim in the form used in the District Court.  The plaintiffs are not legally qualified  and have not been represented by lawyers.  However, Ms An Li Tao has done her best to get to grips with the law.   The parents do not have a good command of English but she has spoken on their behalf.

[7]      I have to take into account the difficulties that the plaintiffs are under because they do not have legal qualifications or expertise. There are complexities to this case so that the legal issues are not straightforward.

[8]      The second defendant has provided an affidavit by the District Health Board funding manager, which provides useful background information.   It explains that the District Health Board is responsible for the bulk of the public-funded healthcare services within the North Shore and Waitakere districts.   Those public healthcare services   include   hospitals,   community   services   such   as   dentistry,   general practitioners, pharmacy services, and residential care for elderly and disabled people. The District Health Board divides its tasks between a provider and a funding arm.

[9]      So  far  as  this  case  is  concerned,  there  is  one  aspect  where  the  board’s provider arm was engaged.   It carried out an assessment of Hua Xi, in which it apparently concluded that she was in need of disability support.  That finding led to Howick Baptist Healthcare Ltd being engaged to provide home care.

[10]     The funding manager makes the point that the District Health Board funds home healthcare to approximately 5,300 older people within its district.   The manager’s affidavit says (at paragraphs 7 and 8):

Waitemata  DHB  has  only  high  level  control  over  the  actual  services provided by any community service provider that it funds.  There is an

1      Under the District Courts Act 1947, s 43(1).

ability under the contracts to audit providers against accepted New Zealand Standards, which is done at routine intervals through external auditors, and potentially if any issue is brought to the DHB’s attention that warrants a more immediate directed audit.  By the nature of any audit, it is simply an audit of some of the functions.   It would not necessarily detect any individualised  concern  about  any  provider  or  the  care  provided  to  a particular individual.   Given the number of funding contracts it would be impossible for the DHB to have any closer involvement.

The  DHB  ordinarily  has  no  role  in  who  a  funded  provider  employs  to perform  its  functions.    The  only  potential  involvement  the  DHB  has regarding a provider’s employment situation is if an audit revealed the recruitment practices of a provider were not up to standard, or numerous deficiencies were detected in an audit that suggested the training of staff or enforcement of policies was deficient.  Those types of issues may cause the DHB to require the provider to complete a corrective action plan, or if the breaches of contact were serious and persistent, terminate the provider’s contract.

[11]     Attached to the affidavit is a copy of the contract between the District Health Board and Howick Baptist Healthcare Ltd.  The contract has gone through a number of variations.   The current  arrangements  were  said  to  be subject  to  a variation agreement in August 2012.

[12]     The funding manager says that the District Health Board does not select the home healthcare provider for the person requiring treatment.  Instead she says that the client is given a list of eight potential providers and it is left to the client whom they may choose.  Ms Tao puts the matter differently.  She says that she was not able to  have direct  contact  with  any selected  home  healthcare provider and  that  the engagement was made through the DHB itself.

The tests for strike out and summary judgment

[13]     The District Health Board applied for strike out while this proceeding was still in the District Court.  Now that the proceeding has been moved to this court, the strike-out application is heard under r 15.1 of the High Court Rules and also under the court’s inherent jurisdiction.

[14]     It is necessary to distinguish two of the grounds for strike out.  One ground is that the pleading does not disclose a reasonably arguable cause of action.  Another

ground is that the defendant has some form of watertight defence which would be an

irrefutable answer to the plaintiffs’ claim. This application raises both grounds.

[15]     For the first, the District Health Board says that the plaintiffs do not have a reasonably arguable cause of action.  That requires an enquiry whether the matters pleaded by the plaintiffs do give rise to a cause of action recognised at law.  For the second, the District Health Board says that there is a statutory bar under the Accident Compensation Act 2001, at least to the first plaintiff’s claim.

[16]     For strike-out where there is no reasonably arguable cause of action, the test is laid down by the Court of Appeal in Attorney-General v Prince2  and by the Supreme Court in Couch v Attorney-General:3

(a)       Pleaded facts, whether or not admitted, are assumed to be true.

This does not extend to pleaded allegations which are entirely speculative and without foundation.

(b)The cause of action or defence must be clearly untenable.  It is inappropriate to strike out a claim summarily unless the court can be certain that it cannot succeed.

(c)      The jurisdiction is to be exercised sparingly and only in clear cases.  This reflects the court’s reluctance to terminate a claim or defence short of trial.

(d)The jurisdiction is not excluded by the need to decide difficult questions of law, requiring extensive argument.

(e)      The court should be particularly slow to strike out a claim in any developing area of the law, perhaps particularly where a duty of care is alleged in a new situation.

[17]     In a case where the defendant says that there is a bar to the proceeding, the court does not strike out because of the absence of a reasonably arguable cause of action.  Instead, it does so on the basis that the proceeding is vexatious or an abuse of process.  In those cases, a defendant has to satisfy the court that it is clear that its affirmative defence must succeed.   In other words, the defendant has the onus of establishing the watertight defence.  If the plaintiff can show an arguable basis for

overcoming that defence, a strike out cannot be ordered on the basis of its alleged defence.

[18]     The courts have recognised that affidavit evidence may be used on strike-out applications.4   It is important, however, to recognise that the court must not attempt to resolve genuinely disputed questions of fact and therefore the evidence must be limited to what is undisputed.   I also note that because strike out has such drastic consequences, the court will be alert to see whether the plaintiff’s claim can be saved by amending the pleading.

Test for defendants’ summary judgment application

[19]     Under r 12.2(2) of the High Court Rules, a court may give judgment against a plaintiff if the defendant satisfies the court that none of the causes of action in the plaintiff’s statement of claim can succeed.  The plaintiffs have not pleaded their case in causes of action required for a statement of claim under the High Court Rules, but I will consider the matter as if they had pleaded the matters fully.

[20]     The leading decision on a defendant’s application for summary judgment is that of the Court of Appeal in Westpac Banking Corporation v M M Kembla New Zealand Ltd:5

[59]     Since R 136(2) permits summary judgment only where a defendant satisfies the Court that the plaintiff cannot succeed on any of its causes of action, the procedure is not directly equivalent to the plaintiff's summary judgment provided by R 136(1).

[60]      Where a claim is untenable on the pleadings as a matter of law, it will not usually be necessary to have recourse to the summary judgment procedure because a defendant can apply to strike out the claim under R 186. Rather R 136(2) permits a defendant who has a clear answer to the plaintiff which cannot be contradicted to put up the evidence which constitutes the answer so that the proceedings can be summarily dismissed. The difference between an application to strike out the claim and summary judgment is that strike-out is usually  determined  on  the  pleadings  alone  whereas  summary

judgment requires evidence. Summary judgment is a judgment between the parties on the dispute which operates as issue estoppel, whereas if a pleading is struck out as untenable as a matter of law the plaintiff is not precluded from bringing a further properly constituted claim.

[61]      The   defendant   has   the   onus   of   proving   on   the   balance   of probabilities that the plaintiff cannot succeed. Usually summary judgment for a defendant will arise where the defendant can offer evidence which is a complete defence to the plaintiff's claim. Examples, cited in McGechan on Procedure at HR 136.09A, are where the wrong party has proceeded or where the claim is clearly met by qualified privilege.

[62]      Application for summary judgment will be inappropriate where there are disputed issues of material fact or where material facts need to be ascertained by the Court and cannot confidently be concluded from affidavits. It may also be inappropriate where ultimate determination turns on a judgment only able to be properly arrived at after a full hearing of the evidence. Summary judgment is suitable for cases where abbreviated procedure and affidavit evidence will sufficiently expose the facts and the legal issues. Although a legal point may be as well decided on summary judgment application as at trial if sufficiently clear (Pemberton v Chappell [1987] 1 NZLR 1), novel or developing points of law may require the context provided by trial to provide the Court with sufficient perspective.

[63]      Except in clear cases, such as a claim upon a simple debt where it is reasonable to expect proof to be immediately available, it will not be appropriate to decide by summary procedure the sufficiency of the proof of the plaintiff's claim. That would permit a defendant, perhaps more  in  possession  of  the  facts  than  the  plaintiff  (as  is  not uncommon where a plaintiff is the victim of deceit), to force on the plaintiff's case prematurely before completion of discovery or other interlocutory steps and before the plaintiff's evidence can reasonably be assembled.

[64]      The defendant bears the onus of satisfying the Court that none of the claims can succeed. It is not necessary for the plaintiff to put up evidence at all although, if the defendant supplies evidence which would satisfy the Court that the claim cannot succeed, a plaintiff will usually have to respond with credible evidence of its own. Even then it is perhaps unhelpful to describe the effect as one where an onus is transferred. At the end of the day, the Court must be satisfied that none of the claims can succeed. It is not enough that they are shown to have weaknesses. The assessment made by the Court on interlocutory application is not one to be arrived at on a fine balance of the available evidence, such as is appropriate at trial.

All later decisions have followed that approach.

Hua Xi’s claim

[21]     It is necessary to separate the claim of Hua Xi from the claims made by her husband and her daughter.  Different legal considerations apply to her claim.  That is because she is the person Howick Baptist Healthcare Ltd was to care for and she is the one who suffered physical injuries. Those aspects have legal consequences.

Does Hua Xi have a claim in this court under the Code of Health and Disability

Services Consumers’ Rights?

[22]     For her mother, An Li Tao has relied primarily on the Code of Health and Disability Services Consumers’ Rights.  That is the code under s 74(1) of the Health and Disability Commissioner Act 1994.   The Code confers a number of rights on consumers of health and disability services, and it imposes corresponding duties upon providers.  The Code contains definitions of “providers” and of “consumers.” These broadly match the definitions of those words in the Health and Disability Commissioner Act 1994.  For this proceeding, Hua Xi is undoubtedly a “consumer”. Howick Baptist Healthcare Ltd is undoubtedly a “provider”.

[23]     I find also that Waitemata District Health Board was a provider at the time that it carried out the needs assessment, but it was not relevantly a provider in the circumstances of this case – that is, it was not a “provider” at the time of the fall in Hua Xi’s home in April 2013.  Equally, I also find that Nai Zuo Tao and An Li Tao cannot be consumers under the Code.

[24]     An Li Tao has relied on a number of the rights contained within the Code, some substantive, others more procedural.  The important one is right 4, which has substantive effect:

Right to services of an appropriate standard

(1) Every consumer has the right to have services provided with reasonable care and skill.

(2) Every consumer has the right to have services provided that comply with legal, professional, ethical, and other relevant standards.

(3) Every consumer has the right to have services provided in a manner consistent

with his or her needs.

(4)  Every  consumer  has  the  right  to  have  services  provided  in  a  manner  that minimises the potential harm to, and optimises the quality of life of, that consumer.

(5) Every consumer has the right to co-operation among providers to ensure quality

and continuity of services.

[25]     Ms Tao submits that there was clearly a breach of that right in this case.  I apply the presumption in strike-out applications that the plaintiffs will be able to prove a breach.   It is also necessary to make the point that clause 6 of the Code makes it clear that other rights are not affected.  That means that a person may have claims for breach of a right under the Code but that will not stand in the way of them making other claims under other heads of law.

[26]     It is important to understand the place of the Code within the Health and Disability Commissioner Act.  The Code provides a bundle of rights and obligations. When there is a claim that any of these rights have been breached, that may be the subject of a complaint to the Commissioner.  The Act sets out a number of steps that may be followed by the Health and Disability Commissioner.   He may make preliminary assessments; he may carry out investigations; ultimately a complaint can lead to proceedings brought by the Director of Proceedings in the Human Rights Review Tribunal.   Moreover, in certain circumstances, the aggrieved person may also bring a proceeding before the Tribunal.   The Tribunal has the power to give relief if it is satisfied that any action on the part of a defendant is in breach of the Code.    Potential  awards  include  an  award  of  damages  under  the  Health  and Disability Commissioner Act.  The right to an award of damages does not extend to damages for compensation for personal injuries.  But other heads of loss may be the subject of a damages award.   Potentially, damages awarded under the act could extend to humiliation, loss of dignity and injury to feelings of the aggrieved person.

[27]     The Code on which the plaintiffs rely allows only for remedies under the Health  and  Disability  Commissioner Act.    The Act  does  not  give  a  consumer, aggrieved at treatment by a health professional, the right to sue in general courts of civil  jurisdiction  for  breaches  of  the  Code.    The  rights  given  by the  Code  are governed by the Health and Disability Commissioner Act.  That means that Hua Xi, who is the consumer here, cannot bring a claim in this court for breach of the Code. If she is to bring a claim in this court, it has to be for some other right outside the

Code.   That brings me back to clause 6 of the Code, which recognises that other rights may exist concurrently with those set out in the Code.

[28]     As a secondary point, under the Code, the claim for breach can be made only against the relevant provider.  In the circumstances of this case the only entity who could be the provider is Howick Baptist Healthcare Ltd, not the District Health Board.

Does Hua Xi have a claim at common law?

[29]     Mr White addressed the matter in terms of potential liability of the District Health Board for the actions of Howick Baptist Healthcare Ltd or its employee.  The employee who is said to have been responsible for the fall was meant to carry out her job using the skill and care expected of a reasonably competent home healthcare worker.  I assume that Hua Xi would be able to prove that that required standard of care was not applied.  For that, the employee would bear personal responsibility.  It is uncontroversial that her employer is vicariously liable for any breaches of the duty of care owed by the worker.

[30]     The next question is to see whether Hua Xi would have a claim against the District Health Board.  The home care worker was not an employee of the District Health Board.  She was an employee only of Howick Baptist Healthcare Ltd.  The rule that employers are vicariously liable for the wrongs of their employees cannot be applied in this case to make Waitemata District Health Board liable.

[31]     The District Health Board submits that apart from carrying out the needs assessment, it was only a funder.  It relies on the principle that a person who employs an  independent  contractor  is  generally  not  liable  for  the  negligence  of  the independent contractor.   It cites Cashfield House Ltd v David & Heather Sinclair Ltd.6

[32]     I accept that the District Health Board was the funder of Howick Baptist

Healthcare Ltd providing the care services for Hua Xi.  In that context, the argument

6      Cashfield House Ltd v David and Heather Sinclair Ltd [1995] 1 NZLR 452 (HC), in particular the principles summarised by Tipping J at 465-466.

as to independent contractor may be applied.   The District Health Board may be further removed than the ordinary principal engaging an independent contractor. Normally a principal engages an independent contractor to carry out services to benefit the principal.   Here, the District Health Board funded Howick Baptist Healthcare Ltd to provide services intended to benefit Hua Xi.  The normal principle that principals do not carry liability for torts committed by their independent contractors applies in this case.   The District Health Board cannot be vicariously liable for the actions of the allegedly negligent employee of Howick Baptist Healthcare Ltd.

Does the District Health Board owe a duty of care to Hua Xi directly?

[33]     As the principles set out by Tipping J in the Cashfield House case indicate, that leads to another question, whether the District Health Board itself owed a duty of care directly to Hua Xi.

[34]     Mr White made submissions along the lines that it would be undesirable to impose a duty of care on Health Boards to ensure that providers funded by them deliver an appropriate level of care so as to prevent people such as Hua Xi suffering harm.  While he did not use the expression, it was in the nature of a “floodgates” argument.  He argued against applying an indeterminate liability.

[35]     Mr White accepted that there could be some circumstances where a duty of care might be found.  He did that in the light of the third principle stated by Tipping J in the Cashfield case:7

3.The principal may well also owe a primary duty of care to those who could foreseeably be damaged by the acts or omissions of the independent contractor. That duty may include a duty to select, instruct and sometimes to supervise the independent contractor with reasonable care. The greater the expertise of the independent contractor and the more specialised the task the less call there may well be for the involvement of the principal beyond selection and instruction. If the principal has selected and instructed the independent contractor with the skill and care appropriate to the occasion, the principal should generally be entitled to leave the task to the independent contractor without further supervision. If the principal does so there will be no liability unless, of course, the

7      At 466.

principal owes a non-delegable primary duty to those damaged by

the independent contractor’s negligence.

[36]     Given  that  statement,  it  would  be  risky  to  try  to  set  out  any  general propositions as to the extent of a duty of care owed by District Health Boards to consumers who do not receive services that are funded but not provided by the District Health Board.  No case exactly on point was cited.  There are cases that may be imagined where the facts might suggest that the District Health Board would come under a duty of care – such as the circumstances contemplated by Tipping J in Cashfield. Equally, there would be other circumstances where the matter would be far removed from imposing a duty of care.

It requires a factual assessment of a particular case as to whether a duty of care could arise.  Because of this, it can be risky to make findings as to absence of duty of care ahead of a full hearing.   That was the point at which I understand Elias CJ and Anderson J were making in Couch v Attorney-General when they said that particular care is required in areas where the law is confused or developing, especially in cases where a duty of care is alleged in a new situation.

[37]     For these reasons, I decline to decide the duty of care question in this case.  If the matter were to turn on that point, I would require the case to go to a full hearing. Because I am not able to propound whether a duty of care applies or not, it follows that I cannot address the question of breach of any duty of care as well. The question of a claim in negligence remains open.

[38]     That,  however,  does  not  determine  the  matter  conclusively.    It  is  now necessary to look at the question of the bar on claims under the Accident Compensation Act 2001.

The bar under the Accident Compensation Act

[39]     The District Health Board says that it has an affirmative defence under s 317 of the Accident Compensation Act.  Subs (1) says:

No person may bring proceedings independently of this Act, whether under any rule of law or any enactment, in any court in New Zealand, for damages arising directly or indirectly out of-

(a)       personal injury covered by this Act;  or

(b)       personal injury covered by the former Acts.

The section goes on to contain a number of exceptions.  I note that under subs (4) a person is not prevented from bringing proceedings under ss 50 and 51 of the Health and Disability Commissioner Act 1994.

[40]     These provisions of the Accident Compensation Act clearly apply to Hua Xi. She had an accident as defined by the Act.   She suffered personal injury in that accident.8   In particular, she suffered physical injuries which, it is alleged led also to mental  injury.    That  is  enough  to  give  her  cover  under  s  20  of  the Accident Compensation Act.  Indeed, while it was not dealt with in the oral argument, it is my understanding  that  the  family  were  able  to  make  a  claim  under  the  Accident

Compensation Act and did receive some form of assistance under that legislation.

[41]     Because she had cover under the Act, she is unable to make a claim in this court for compensatory damages, either for physical injuries or for mental injuries. Accordingly I find that the part of the claim in which she seeks damages for trauma, shock and the like is excluded under s 317 of the Accident Compensation Act.

Exemplary damages

[42]     The exclusion under s 317 is only for compensatory damages.   It is well- established  under  case  law  that  the  accident  compensation  legislation  does  not exclude claims for exemplary damages.  In Couch v Attorney-General the Supreme Court9  upheld the approach taken in earlier decisions such as Donselaar v Donselaar10 where claims for exemplary damages could be brought notwithstanding

the bar under the accident compensation legislation.  It held that exemplary damages

were normally only available for intentional torts.  It did recognise that claims for

8      Accident Compensation Act 2001, ss 25 and 26.

9      Couch v Attorney-General (No 2) (on appeal from Hobson v Attorney-General) [2010] NZSC

27, [2010] 3 NZLR 149.

10     Donselaar v Donselaar [1982] 1 NZLR 97.

exemplary damages could be made for other torts, but they could only be awarded in cases where the defendant had acted intentionally or with subjective recklessness – that is, the defendant had to have a conscious appreciation of the risk of causing harm, and had run that known risk.

[43]     While the plaintiffs have claimed exemplary damages, they have not set out anything to suggest that the District Health Board - as opposed to Howick Baptist Healthcare Ltd – engaged in intentional misconduct or acted with subjective recklessness.  In submissions, Ms Tao referred to conversations with an officer of the District Health Board as to the quality of services provided by caregivers, but that was no more than a complaint about quality rather than showing that there was a conscious appreciation that personal injury would be caused to Hua Xi.   It is important to appreciate that allegations of outrageous conduct against a defendant are not to be made lightly and give rise to special pleading responsibilities when a plaintiff.   That is especially so when the allegation is for fraud or dishonesty. Similarly, when it is alleged that a defendant has acted deliberately or recklessly so as to harm a plaintiff, such an allegation should not be advanced unless there is a sound foundation for it.   In cases where fraud is alleged, the plaintiff is normally required to substantiate the pleading by showing a prima facie case.   In a similar way, it is incumbent on the plaintiffs to show that there is something in the case which requires the court to take the allegations of outrageous conduct seriously. There is nothing in the circumstances of this case that I can see that would suggest that the court should take seriously the proposition that there is some need to punish the District Health Board on account of intentional misconduct or subjective recklessness  in allowing harm to occur to  Hua Xi.    In short,  I cannot see any reasonable basis on which a claim for exemplary damages can be advanced.  I do not regard this case as coming anywhere near the Supreme Court’s test for exemplary damages in Couch v Attorney-General.

[44]     I have endeavoured to go through all the bases on which a claim can be made by Hua Xi against the District Health Board.   I have considered claims under the Code.  I have considered whether a claim under the common law could be available. I have found that common law claims for compensatory damages are excluded by the  accident  compensation  legislation.    I  cannot  see  any  basis  for  a  claim  for

exemplary damages in this case and I can think of no alternative basis on which the claim could be advanced.  Accordingly, I must grant summary judgment and also strike out the claim.

Claims by Nai Zuo Tao and An Li Tao

[45]     The claims by Nai Zuo Tao and An Li Tao are different because they were not physically injured.  I do not regard them as people who can claim to be “consumers” under the Code.  Their claims are that they have suffered emotional trauma, and they also claim punitive damages.  The statutory bar under the Accident Compensation Act does not apply to them because they have not suffered personal injuries as defined in the Act.   What needs to be examined is whether they have a claim for mental injury alone.

[46]     In  Queenstown  Lakes  District  Council  v  Palmer,11   the  Court  of Appeal recognised that nervous shock from witnessing the death or personal injury of someone else was not covered by the Accident Compensation Act.  It could therefore be the subject of a common law claim for damages.  There are, however, limitations on this right to sue for nervous shock.

[47]     One is a proximity limitation.  I am satisfied that An Li Tao and her father do meet that test because they were close in relationship to Mrs Xi, and close in place and time to the accident.  There is, however, a further limitation which arises under the decision of the Court of Appeal in van Soest v Residual Health Management

Unit.12     In that case, the majority of the Court of Appeal held that a claim for

compensatory damages for mental suffering caused by death or injury of another was not available unless the next-of-kin had suffered a recognisable psychiatric disorder or illness.   It was not enough for a plaintiff to show that mental suffering, as a secondary  victim,  was  a  reasonably  foreseeable  consequence  of  the  defendant’s

negligence towards the primary victim. The judgment of the majority said:13

11     Queenstown Lakes District Council v Palmer [1999] 1 NZLR 549 (CA).

12     van Soest v Residual Health Management Unit [2000] 1 NZLR 179 (CA).

13 At [69].

It does not seem in the best interests of society either to throw the Courts open to everyone caused distress by the negligent injuring of a loved one or to create the great uncertainty which would result from attempting to limit claims for emotional distress falling short of psychiatric injury by resort to vague epithets such as “abnormal grief” or “severe emotional suffering”. Although the shifting boundaries of psychiatric knowledge and the nature of any diagnosis  of  the  workings  of  the  human  mind  may leave  room for uncertainty  in  an  individual  case,  as  of  course  exists  quite  often  in  a diagnosis of physical illness or injury, the Court should in our view deny a damages claim of a secondary victim unless there is proof of a recognisable psychiatric disorder or illness.

[48]     A similar decision is that of the Court of Appeal in Hobson v Attorney- General.14   I refer in particular to paragraphs [140] and [141] of William Young P:

[140]    Mr Hobson is not a primary victim of Bell’s violence. Instead, his claim  is  based  on  emotional  anguish  and  the  loss  of  love  and affection resulting from the death of his wife. His claim founders from the outset because his anguish is not of a kind which the law of tort recognises as warranting a claim for damages. This is apparent from van Soest v Residual Health Management Unit [2000] 1 NZLR

179 at para [65]:

“[65] We are not persuaded that the Courts of this country should depart from the position established in England and also, with isolated dissents, in Australia and Canada, namely that  a  claim  by  a  secondary  victim  for  mental  suffering caused by awareness of death or injury to a primary victim through the negligence of the defendant will not lie unless the  effect   on  the   mind  of  the   secondary  victim  has manifested itself in a recognisable psychiatric disorder or illness.”

[141]    Furthermore, even if a recognised psychiatric disorder or illness had been pleaded, Mr Hobson is not within the scope of recoverability because he was neither present at the time of the crime nor did he arrive on the scene soon afterwards. In White v Chief Constable of the South Yorkshire Police [1999] 1 All ER 1 (HL) at p 41, Lord Hoffmann summarised the position in these terms:

“(1)      The plaintiff must have close ties of love and affection with the victim. Such ties may be presumed in some cases (eg spouses, parent and child) but must otherwise be established by evidence.

(2)       The plaintiff must have been present at the accident or its immediate aftermath.

(3)      The psychiatric injury must have been caused by direct perception of the accident or its immediate aftermath and not upon hearing about it from someone else.”

14     Hobson v Attorney-General [2007] 1 NZLR 374 (CA).

And at [157] of the judgment, Chambers J said:

[157]    There is nothing in the  pleading to  suggest  that  Mr Hobson has suffered a recognised or recognisable psychiatric injury, as for instance Mr Palmer suffered in Queenstown Lakes District Council v Palmer [1999] 1 NZLR 549 (CA) at p 551. Mr Hobson’s “pain and suffering” appears to be the normal grief which the spouse of any murdered person would suffer. It is well established that “mere upset, grief or distress do not give rise to any cause of action” (Todd, para [5.7.03]). Actionable mental injury requires identifiable psychiatric injury (van Soest v Residual Health Management Unit [2000] 1 NZLR 179 (CA) at pp 197 – 199). Such injury has not been pleaded.

[49]     In this case, Nai Zuo Tao and An Li Tao allege they suffered “devastating emotional trauma”.  That seems to be what the majority in the Court of Appeal in van Soest had in mind when they referred to “vague epithets” as to emotional harm. The nature of claim document in the District Court has attached to it medical reports as to the condition of Hua Xi, but there is nothing in it as to the medical condition of Nai Zuo Tao and An Li Tao.  They have not included anything to show that they are suffering any recognisable psychiatric disorder or illness.   If they were suffering anything of that sort I am left with no doubt at all, given the passion with which they presented their case, that they would have put this before the court.  This case is a pleading  of  the  sort  identified  in  van  Soest  and  Hobson,  without  anything  of substance to back it up.  In my view, this claim must be struck down under the van Soest decision.

[50]     Accordingly, I find that there is no basis for Nai Zuo Tao and An Li Tao to claim damages for their upset, sorrow and anger over the accident Hua Xi suffered. It also follows that they cannot make any claim for exemplary damages.  Just as with Hua Xi, they have not shown any proper basis for advancing such a claim.

Outcome

[51]     I am satisfied that none of the plaintiffs has a sound case for a claim either for exemplary damages or for compensatory damages.

[52]     The  plaintiffs  have  also  included  a  claim  for  an  apology.    In  a  civil proceeding in this court, apologies are voluntary and cannot be ordered.

[53]     It follows that  I am satisfied that no useful purpose could be served  by allowing  the  plaintiffs’  claim  against  the  Waitemata  District  Health  Board  to continue.  The plaintiffs are obviously upset at the accident Hua Xi suffered.  They have not, however, made out a claim in law which is worthy of going to trial.  The best thing is to bring the proceeding to an end now.  Accordingly, I strike out the claim against the Waitemata District Health Board and grant it summary judgment against each of the plaintiffs.

Claim against Howick Baptist Healthcare Ltd

[54]     On the claim against Howick Baptist Healthcare Ltd, I direct a face-to-face case management conference to discuss how the plaintiffs’ claim can be run.  It may include directions so that issues can be properly identified for the purpose of the hearing.  I suggest to the plaintiffs that when they get a copy of this decision, they read it carefully to see if it could help them with formulating their claim properly against the first defendant.

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Associate Judge R M Bell