Couch v The Attorney-General

• Jurisdiction: New Zealand
• Judge: Elias CJ,Blanchard J,Tipping J,McGrath J,Wilson J
• Judgment Date: 24 March 2010
• Neutral Citation: [2010] NZSC 27
• Court: Supreme Court
• Docket Number: SC 49/2006
• Date: 24 March 2010

Between

Susan Couch

Appellant

and

The Attorney-General

Respondent

[2010] NZSC 27

Court:

Elias CJ, Blanchard, Tipping, McGrath and Wilson JJ

SC 49/2006

IN THE SUPREME COURT OF NEW ZEALAND

Appeal against a Court of Appeal decision striking out exemplary damages claim by Couch, a victim of serious crime — whether claim was barred under the Accident Compensation Act 2001 — whether there was a relationship of sufficient proximity to establish a duty of care between the Probation Service and Couch — consideration of the test of exemplary damages — whether the test for negligence and exemplary damages under Bottrill v A should be retained

Counsel:

B P Henry for Appellant

D B Collins QC Solicitor-General, J C Pike and R Kirkness for Respondent

A The appeal is allowed for the reasons given in this judgment and that of 13 June 2008.

B The order of the Court of Appeal is set aside and the proceedings are remitted to the High Court for hearing.

C The respondent is to pay to the appellant costs of $27,500 together with reasonable disbursements as fixed by the Registrar. Costs in the lower Courts are to be fixed by those Courts in the light of this Court's judgment.

JUDGMENT OF THE COURT

REASONS

	Para No
Elias CJ	[1]
Blanchard J	[45]
Tipping J	[73]
McGrath J	[181]
Wilson J	[248]

Elias CJ

1 In 2002 the Privy Council in Bottrill v A held: 1

[U]nder the common law of New Zealand the Court's jurisdiction to award exemplary damages in cases of negligence is not rigidly confined to cases where the defendant intended to cause the harm or was consciously reckless as to the risks involved.

In the present appeal the Supreme Court overrules that decision and reinstates the view of the Court of Appeal in Bottrill. 2 I dissent from the conclusion. It re-introduces a “cause of action” condition for exemplary damages despite earlier rejection in New Zealand, Australia, and Canada of similar attempts in the United Kingdom at such restrictions as unprincipled and arbitrary. It requires construction of a “species of negligence” 3 in which intention or conscious recklessness is an element, in order to exclude a remedy of otherwise general application once liability in tort is established. The restriction is justified on the basis that exemplary damages are “anomalous”. Such assessment rests in part on the erroneous but persistent view that making an example of the defendant is not a proper function of the law of torts. That view has been accurately characterised as question-begging. 4 It is unhistorical 5 and was rejected in New Zealand by all members of the Court of Appeal in Taylor v Beere. 6 There, by rejecting confinement of exemplary damages to categories, the Court of Appeal affirmed that they are awarded under a principle of general application.

2 All members of this Court are in agreement that exemplary damages are available in negligence and are not confined to the intentional torts, rejecting the

high ground on which the Attorney-General sought to justify strike out of the proceedings. The majority imposes however the precondition of subjective recklessness proposed by the majority in the Court of Appeal in Bottrill but rejected by the Privy Council. This “species of negligence” arises where the defendant consciously appreciates the risk of causing harm and deliberately runs that risk. 7 Such subjective recklessness was described by Tipping J in his concurring opinion in the Court of Appeal Bottrill as achieving “a policy synthesis with the intentional tort approach”, 8 at least for personal injury cases. 9

3 The arguments for and against the position now adopted in this Court were rehearsed at length in the judgments in the Court of Appeal and the Privy Council in Bottrill. I am in agreement with the reasons given by Thomas J, dissenting in the Court of Appeal, and by Lord Nicholls, delivering the majority judgment of the Privy Council. It would be superfluous to repeat them. I concentrate, rather, on the reasons why I am unable to agree with the revision undertaken by the other members of this Court, both in terms of the substance of the argument and in terms of the occasion for departing from a recent decision of high authority.

4 In summary, I would decline to impose as a matter of law a precondition for the award of exemplary damages that the defendant must consciously run the risk of harm to the plaintiff. Such precondition restricts the general exemplary jurisdiction to mark society's condemnation of outrageous behaviour by the defendant which is insufficiently addressed by other remedy, and is contrary to the general application of the exemplary principle recognised in Taylor v Beere. It treats the occasion for exemplary damages in negligence as depending on conscious appreciation of the harm likely to be suffered by the plaintiff rather than as arising more broadly out of the conduct of the tortfeasor and despite foreseeability of harm not being an element of the cause of action in negligence. It saps the vitality of the exemplary principle in meeting the needs of modern New Zealand society, and turns on the creation of a subcategory of the tort of negligence on no sound basis. These points are addressed in what follows under headings which reflect this summary. I deal first however

with suggestions that Bottrill represents a deviation and is out of step with other Commonwealth jurisdictions

5 In addition, I consider there is no sufficient basis on which to depart from New Zealand decisions of recent and high authority in Taylor v Beere and Bottrill. No occasion to reassess the decision of the Privy Council in Bottrill arises on the basis of any misunderstanding about the operation of New Zealand's accident compensation system 10 because the statutory scheme operates outside the exemplary principle, as was made clear in Donselaar v Donselaar. 11 Since the requirement of subjective recklessness imposed by other members of this Court is not confined to cases of personal injury, reliance upon the New Zealand accident compensation system as justifying the restriction 12 is perhaps surprising. “Floodgates” concerns 13 are not substantiated and seem inconsistent with legislative endorsement of the exemplary principle. 14

6 Moreover, the preliminary hearing in the present case was not appropriate for reconsideration of the approach in Bottrill. 15 This case concerns a more complex setting of statutory responsibilities and vicarious liability, against a background of incomplete pleadings, and without factual context. The dangers are illustrated by statements which bear on the question of vicarious liability, 16 on which we heard no argument and which (because of the admission of vicarious liability) is not in issue. I develop the view that the appeal is not suitable for reconsideration of Bottrill notwithstanding that the point is effectively overtaken by the judgment of the majority on the substantive point, because of the importance of consideration of the circumstances in which it is proper for this Court to decline to follow a decision of its own or of the Privy Council on appeal from New Zealand. The claim for exemplary damages should in my view be allowed to proceed. Any questions of law that remain in contention after trial will then be considered after the facts have been found. Since the plaintiff has indicated that she will plead conscious recklessness, the course here adopted by the Court will not save the parties the expense of trial.

7 I write separately only on the Bottrill point. I agree with the reasons given by Tipping J for holding that s 3 17 of the Accident Compensation Act 200117 is no bar to a claim for exemplary damages for personal injury. And I agree with the reasons he gives for holding that no immunity for the Crown can be derived from s 86 of the State Sector Act 1988, a most unlikely source for such sweeping immunity which would clash not only with the purpose of s 6(1) of the Crown Proceedings Act 1950 but also with s 27(3) of the New Zealand Bill of Rights Act 1990. I agree with Tipping J that the immunity s 86 confers is in respect of internal responsibilities within the Executive, reorganised under the State Sector Act, and does not provide an immunity for government employees from primary tortious liability.

Background

8 Susan Couch was the victim of a serious attack by a parolee under the supervision of the Probation Service. She brings a claim in the High Court against the Attorney-General seeking exemplary damages for failure by the Service to exercise reasonable care in the parolee's supervision. The proceedings were struck out in the Court of Appeal on the grounds that the claim in negligence could not succeed because no duty of care was owed by the Probation Service to Ms Couch. 18 That result was reversed by this Court in its judgment of 13 June 2008. 19 We held that a duty of care cannot confidently be excluded as a matter of law on a preliminary basis and will turn on the facts found at trial. An alternative ground for strike-out, that exemplary damages are not available for a claim in negligence for personal injury in New Zealand (a ground that the Court of Appeal did not have to consider because of the view it took that there was no duty of care), was not reached at the earlier hearing in this Court. The appeal was accordingly adjourned for further argument, and the claim was not formally reinstated pending determination of the alternative ground.

9 The parties were invited by the judgment of 13 June 2008 to reconsider whether they wished to pursue the additional basis for strike-out ahead of trial, in the

light of the discussion in the judgment of the principles upon which strike-out is available. At a directions hearing to consider whether the availability of exemplary damage was suitable for determination as a point of law before trial, counsel for the...