Couch v The Attorney-General

JurisdictionNew Zealand
CourtSupreme Court
JudgeElias CJ,Blanchard J,Tipping J,McGrath J,Wilson J
Judgment Date24 March 2010
Neutral Citation[2010] NZSC 27
Date24 March 2010
Docket NumberSC 49/2006

[2010] NZSC 27

IN THE SUPREME COURT OF NEW ZEALAND

Court:

Elias CJ, Blanchard, Tipping, McGrath and Wilson JJ

SC 49/2006

Between
Susan Couch
Appellant
and
The Attorney-General
Respondent
Counsel:

B P Henry for Appellant

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

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

Held: Section 317 ACA did not bar a claim for exemplary damages for personal injury. Damages under s317 only referred to compensatory damages, exemplary damages may be awarded despite the Court's inability award compensatory damages. Section 86 SSA did not grant the Crown immunity, such sweeping immunity would clash with the purpose of s6(1) CPA and s27(3) New Zealand Bill of Rights Act 1990. Section 86 conferred immunity in respect of internal responsibilities with the Executive and did not provide immunity for government employees from primary tortious liability.

Exemplary damages were available for negligence and were not confined to intentional torts as argued by the A-G. The majority of the Court imposed the precondition of subjective recklessness proposed by the majority in the Court of Appeal in Bottrill but rejected by the Privy Council. This type of negligence arises where the defendant consciously appreciates the risk of causing harm and deliberately runs that risk.

It was wrong to use the strike-out application as an opportunity to overrule Bottrill, it was not desirable that such a significant revision occur on preliminary argument and without the context of findings of fact. The background of statutory duties and powers was an important point of distinction with Bottrill, the A-G was being sued in respect of institutional failings in a government department and the present case concerned vicarious liability. Whether some fault on the part of the person vicariously liable was required for an award of exemplary damages raised issues of policy which were inappropriate to determine on a preliminary argument.

The claim for exemplary damages was tenable. The conduct of the defendant may be outrageous and deserving of denunciation through exemplary damages for the following reasons; not because it entailed an advertent appreciation of risk but because it should have, because even though the risk to the plaintiff was not foreseen, the conduct of the defendant was outrageously high-handed or cruel or contemptuous. Although such cases would be rare it would be wrong to renounce the general jurisdiction to award exemplary damages wherever the conduct of the defendant, although outrageous, was not consciously reckless as to risk. Appeal allowed. Application for strike-out dismissed. The order of the Court of Appeal was set aside and the proceeding remitted back to the High Court for hearing.

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...

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