Roche Products (New Zealand) Ltd v Austin

• Jurisdiction: New Zealand
• Judge: Kos P,Brown,Goddard JJ
• Judgment Date: 18 December 2019
• Neutral Citation: [2019] NZCA 660
• Court: Court of Appeal
• Date: 18 December 2019
• Docket Number: CA505/2018

[2019] NZCA 660

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

Court:

Kos P, Brown and Goddard JJ

CA505/2018

Between

Roche Products (New Zealand) Limited

Appellant

and

Leslie Norman Austin

Respondent

Counsel:

J A MacGillivray for Appellant

G J Thwaite and J Y Kim for Respondent

L M Hansen for Accident Compensation Corporation

Judicial Review, Tort — compensatory damages in respect of self-administration of acne medication — “treatment injury” — Accident Compensation Act 2001

• A The appeal is allowed in part.

• B The claim for compensatory damages is struck out.

• C Leave is reserved for Mr Austin to file an amended pleading seeking compensatory damages in respect of self-administration of Roaccutane (prescribed for other persons) which was not prescribed for him by a registered health professional from whom he sought treatment.

• D Costs lie where they fall.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Brown J)

Introduction

1 For many years the respondent (Mr Austin) took for the treatment of acne the prescription-only drug Roaccutane, distributed in New Zealand by the appellant, Roche Products (New Zealand) Limited (Roche NZ). He claimed that such use caused a range of medical problems relating to the ossification of his spine for which he received medical treatment, including surgery, from 1993 to 2016. On 11 December 2015 the Accident Compensation Corporation (the Corporation) granted his claim for cover for diffuse idiopathic skeletal hyperostosis (DISH) of his cervical spine secondary to his use of Roaccutane. He received payment from the Corporation for 80 per cent of his lost income for two years until turning 65 on 11 January 2017.

2 On 23 December 2016 he commenced a proceeding against Roche NZ alleging negligence in connection with the distribution of Roaccutane in New Zealand and seeking both compensatory and exemplary damages. Application was made to strike out the entire claim as being time barred and, in the alternative, the compensatory damages claim as barred by s 317 of the Accident Compensation Act 2001 (the Act). The strike out application was dismissed in a judgment of Associate Judge Christiansen who considered that the issues raised were incapable of proper consideration without full evidence being heard. 1 Roche NZ's application for review of that decision, transferred to this Court by consent, 2 is the subject of this judgment.

3 The agreed issues for determination are: 3

Because a finding in favour of Roche NZ on the second or third issues would be determinative of the entire claim, we commence with the second issue, but address its two limbs in reverse sequence.

• 1 Did the Associate Judge err in refusing to strike out [Mr Austin's] claim for compensatory damages as barred under s 317 of [the Act] on the basis that [he] has cover under that Act?

• 2 Does the case of G D Searle & Co v Gunn 4 apply on the facts of this case and, if so, should this Court follow that decision or should the claim be struck out as time barred under s 4 of the Limitation Act 1950?

• 3 Is [Mr Austin's] contention that he may be entitled to an extension of time under s 28 of the Limitation Act 1950 clearly untenable?

The status of G D Searle & Co v Gunn

4 Under s 4(7) of the Limitation Act 1950 (the 1950 Act) a claim in respect of bodily injury was required to be brought before the expiration of two years from the date on which the cause of action accrued. 5 The 1950 Act did not define when a cause of action accrued but the “conventional view” was that time began to run as soon as a wrongful act caused personal injury beyond what could be regarded as negligible, whether or not the damage could be discovered. 6

5 The conventional approach was affirmed by the Privy Council in Invercargill City Council v Hamlin. 7 Their Lordships explained that in the case of a latent defect in a building the element of loss or damage necessary to support a claim for economic loss in tort does not arise so long as the defect is unknown, and the market value of the building is unaffected. 8 In latent defect cases knowledge or discoverability affects when the loss occurred. These cases do not represent a departure from the orthodox focus on occurrence of loss rather than on discoverability of a loss which had already occurred. 9

6 However in Searle, which concerned a disease contracted following the insertion and removal of an intrauterine device, this Court endorsed a test of

reasonable discoverability for accrual purposes not only in relation to damage or loss but also in relation to the causation of that damage or loss. 10 The Court reasoned: 11

To hold that a plaintiff who has not discovered that a bodily injury is attributable to the wrongful action of another, and who could not reasonably have discovered that fact, is barred from suit if the injury in fact occurred outside the statutory period is effectively to deny a person the right of action. We do not see that consequence as being required by the legislation. We would therefore hold that for the purposes of s 4(7) of the Limitation Act 1950, a cause of action accrues when bodily injury of the kind complained of was discovered or was reasonably discoverable as having been caused by the acts or omissions of the defendant.

7 Subsequently in Murray v Morel & Co Ltd a majority of the Supreme Court held that there is no general principle that a cause of action does not accrue for limitation purposes until the elements are reasonably discoverable by the plaintiff. 12 As Tipping J explained: 13

[69] In my view the numerous references in the Limitation Act to accrual of a cause of action can only be construed as references to the point of time at which everything has happened entitling the plaintiff to the judgment of the Court on the cause of action asserted. Save when the Limitation Act itself makes knowledge or reasonable discoverability relevant, the plaintiff's state of knowledge has no bearing on limitation issues. Accrual is an occurrence-based, not a knowledge-based, concept. The Limitation Act as a whole is structured around that fundamental starting point. …

8 For Roche NZ Mr MacGillivray contended that the reasoning in Morel undermines Searle which should not be followed or applied simply because it is a longstanding authority. He submitted that this Court in White v Attorney General had held that Searle now needs to be considered in light of Morel. 14

9 However that submission fails to recognise that in Morel the Supreme Court explicitly addressed what Tipping J described as the “status” of Searle: 15

[82] If discoverability issues can, as in Hamlin, be regarded as an ingredient of the cause of action itself, rather than being a facet of when time starts to run, they can properly be brought to account without doing violence to the structure, language and purpose of the Limitation Act. In this case it is not necessary to reach any final conclusion whether the circumstances of Searle and like cases can properly be analysed along those lines. Nor would it be appropriate in this case to come to any final conclusion whether Searle was wrongly decided. All that can be said is that the reasoning employed in it is difficult to reconcile with the general views I have expressed about the place of reasonable discoverability in the limitation field. That is not to say, however, that the actual result in Searle might not be capable of justification on a different process of reasoning.

10 Blanchard J considered that Searle and S v G should not be overruled, and was not comfortable with an attempt to distinguish or “ring-fence” those cases solely on logical grounds. He explained:

[4] … In cases of those kinds, these decisions of the Court of Appeal have been understood for over a decade to state the law of New Zealand. Undoubtedly, they have been relied upon. It is not without moment that Parliament has reformulated the accident compensation scheme in the Injury Prevention, Rehabilitation, and Compensation Act 2001, and relevantly amended it in 2005, so that it now provides cover for persons in the position of the plaintiffs in S v G (in s 21A) and in Searle (in s 20(2), read with s 32), thereby limiting the practical application of those cases for the future. But there has been no legislative overruling of the Court of Appeal's interpretation of the Limitation Act.

(Footnote omitted.)

Mindful of the limited number of plaintiffs who might rely on those decisions, 16 he preferred not to produce an injustice by overturning them. 17

11 We do not consider that it is appropriate to entertain Mr MacGillivray's invitation to overrule Searle. The Supreme Court was afforded the opportunity in

Morel to overrule Searle, but declined to do so. 18 Blanchard J explained why in his view it would not be appropriate to overturn Searle. His reasons, though strictly speaking obiter, are highly persuasive. We agree with his analysis

12 There is a further reason for our declining to reconsider Searle. It follows from Blanchard J's observation concerning the absence at that time of any legislative overruling of Searle. Subsequently when the 1950 Act was repealed by the Limitation Act 2010 (the 2010 Act), Parliament was presented with the opportunity to address this anomaly. However s 59 relating to causes of action based on acts or omissions prior to 1 January 2011 relevantly provided:

(2) The action, cause of action, or right of action must, despite the repeal of the Limitation Act 1950 and unless the parties agree otherwise, be dealt with or continue to be dealt with in accordance with the Limitation Act 1950 as in force at the time of its repeal.

13 While mindful of the reservations that have been expressed about the notion of legislative endorsement, 19 and recognising the possible lack of legislative appetite to revisit principles solely in the context of a...