Residual Health Management Unit v Downie CA147/01 [2001] NZCA 466; [2005] NZAR 298 (11 December 2001)

Last Updated: 12 June 2023

IN THE COURT OF APPEAL OF NEW ZEALAND CA 147/01

BETWEEN RESIDUAL HEALTH

MANAGEMENT UNIT

Appellant

AND GEORGE WATT DOWNIE

Respondent

Hearing: 22 November 2001

Coram: Gault J Heron J Gendall J

Appearances: P A McCarthy for Appellant

K G Davenport for Respondent

Judgment: 11 December 2001

JUDGMENT OF THE COURT DELIVERED BY GENDALL J

[1] This is an appeal against an order of the High Court at Auckland granting leave to the respondent (“the plaintiff”) under s4(7) Limitation Act 1950 to commence proceedings for damages against the appellant.

[2] The appellant was sued as being responsible for the liabilities of North Shore Hospital. The plaintiff was admitted as an in-patient of that hospital on 5 February 1993, suffering from severe abdominal pain and rectal bleeding. He had a serious gastro/intestinal disease and likely infection. An initial diagnosis of a superficial duodenal ulcer with inflammatory bowel disease was made. Because a gastroscopy carried out on 9 February 1993 produced normal findings, he was then discharged

home to await a further procedure, a colonoscopy, which was to be carried out on 18 February 1993.

[3] The plaintiff claims his discharge should not have occurred. He remained very unwell and two days later on 11 February 1993 he was urgently admitted to a private hospital for surgery. This disclosed an infected abscess in the rectal/abdominal area. Logically this had either developed over the past two days, or had been earlier present in its developing state but had not been diagnosed.

[4] The plaintiff was later readmitted to North Shore Hospital on 22 February 1993, extremely ill, and underwent major abdominal surgery on 11 March 1993. He also was subjected to a number of surgical procedures and had a corrugated rubber drain inserted in his pelvic area so as to drain a surgical wound. On 15 July 1993 it was discovered that a residual portion of the corrugated drain had inadvertently not been removed when it should have been.

[5] The plaintiff’s case is that the hospital was negligent, first, in its treatment of him through prematurely discharging him home; second, that it acted in breach of a statutory duty owed to him as a patient pursuant to the Health and Disability Services Act 1993. Thirdly, exemplary damages of $40,000 are sought arising out of the failure to remove the pelvic drain. In respect of the first two causes of action general damages of $40,000 are sought for “humiliation, distress and grief” together with special damages relating to the costs of medical treatment at the private hospital and incidental costs totalling $19,921.51.

[6] The plaintiff claimed compensation under the Accident Compensation legislation and although cover was accepted in relation to the unremoved surgical drain, such clearly being medical misadventure, claims related to the earlier events surrounding the discharge on 9 February 1993 were declined on the ground that no medical error was established.

[7] The allegations of negligence and breach of statutory duty under the Health and Disability Services Act 1993, are presented, broadly speaking, on the basis that the hospital failed in its duty to the plaintiff to provide adequate staffing and

sufficient in-patient beds so as to ensure that patients were not prematurely discharged; failed to provide sufficient and adequate written instructions to the plaintiff to manage his condition after his discharge; and generally failed to inform and instruct him regarding his illness and its management.

[8] In support of the claim for exemplary damages the plaintiff pleads negligence and reckless disregard by the hospital for his rights through failing to have practices or protocols in place to regulate the handling of surgical items or instruments.

[9] The plaintiff sought leave to bring the proceedings pursuant to s4(7) of the Limitation Act 1950, because if this was an action is in respect of bodily injury, the two year period had expired. That application came before the High Court in Auckland and this appeal concerns the outcome of that application.

[10] The events in question occurred between February and July 1993 and on that basis, in the absence of other considerations, an application for leave had to be made no later than 15 July 1999. The plaintiff did not bring his claim until 1 August 2000. On the face of those facts, no jurisdiction to grant leave existed. The interim judgment of Priestley J dated 5 February 2001 records that counsel submitted that the causes of action had, however, arisen in September 1995 and

“the physical consequences of the defendant’s negligence continued until that date and that a link between those physical consequences and “psychiatric injury” were not discovered by the plaintiff until that date”.

[11] If such be correct then the application for leave was within the time prescribed in the proviso to s4(7). For its part the hospital had submitted that damage or concerns of the plaintiff were reasonably discoverable on the day of his discharge from hospital, namely 9 February 1993, or at the latest on the date that the drain which had been inserted in his body was removed, namely on 16 July 1993, rather than on that later date of September 1995.

[12] In an interim decision Priestley J indicated that he proposed to adopt the approach described in W v Attorney General [1999] 2 NZLR 709, namely that where there is doubt as to the date of accrual of the cause of action, leave should be granted

on a without prejudice basis so that all limitation issues can be determined at trial. But Priestley J said that both the Court and the hospital were entitled to a reasonably specific detailed statement of claim that set out the proposed causes of action, and requested that affidavit evidence be filed which at least established that an arguable case on the question of limitation could be made out. He directed that the plaintiff file an amended statement of claim to include all alleged breaches upon which the plaintiff relied, as well as supporting affidavits on which to support an argument that because of a recognised psychiatric illness, or for some other reason, the causes of action accrued at some date after 1 August 1994, that is, within the six year period preceding the filing of the plaintiff’s application under s4(7) of the Limitation Act 1950.

[13] Consequently, an amended statement of claim was filed by the plaintiff together with affidavit evidence from a specialist psychologist to the effect that the appellant did not appreciate the fact that he had a major depressive illness arising out of the consequences of his hospitalisation and surgery in February/March 1993 until September 1995. The evidence was, generally, that the linking of the surgical events in 1993 and the plaintiff’s later physical and mental health did not occur until September 1995. As a result Priestley J delivered a reserved judgment on 23 May 2001 in which leave was granted to the plaintiff to commence proceedings without prejudice to the hospital’s right to raise defences available to it under the Limitation Act 1950. It is that judgment which is the subject of this appeal.

[14] The judgment under appeal adopts much of what Priestley J had earlier said in his interim judgment, but the Judge observed that in its re-pleaded form the plaintiff’s causes of action faced some difficulties. That is because the first two causes of action alleging negligence and breach of statutory duty, could not possibly succeed if what the plaintiff had suffered was personal injury covered by the Accident Compensation legislation. The Judge expressed the view that the undoubted negligence in failing to remove the surgical drain could not be classified as anything other than misadventure and no argument arises over that. Accident Compensation cover was provided and, in respect of that event, exemplary damages only are sought. The Judge commented that it was difficult to see how the exemplary damages claim could succeed if solely arising out of the failure to remove

the abdominal drain. Further the Judge said that it was difficult to see how the decision to discharge the plaintiff from North Shore Hospital (an element of the first two causes of action) could, if negligent, be classified as anything other than medical misadventure. Priestley J concluded, however, that those were issues that he did not need to decide because he considered the plaintiff’s three causes of action were, he said, “arguable”. He concluded that on the authority of W v Attorney General (supra) leave to commence proceedings should only be refused if the intended claim was beyond doubt statute barred.

[15] Whilst expressing considerable reservations about the strength of the plaintiff’s claims, the Judge nevertheless concluded that despite the causes of action being not strong, it would be wrong for him to determine in advance limitation issues and accordingly leave was granted. He said that it was unnecessary for him to speculate on the problems the plaintiff might confront at trial and that as matters concerning the date of accrual of the causes of action were “surrounded by doubt” leave to commence proceedings should be granted. The Judge went on to say:

“The plaintiff’s three causes of action are arguable. They may fly in the face of current authority. However, I rather suspect that at some future date Courts will be tempted to provide remedies for victims of medical misadventure and systemic failures in hospitals over and above the benefits and support currently available under the Accident Compensation legislation.

For all sorts of complex social, fiscal, and legislative reasons the compensation entitlements of the victims of negligence have fallen far short of the much trumpeted recommendations of the 1967 Woodhouse Commission Report. Such a perception may well lead to the Courts providing remedies which are not currently available in the same way that in recent times common law remedies have been extended to include victims of historic sexual abuse. It is never beyond the wit of judges to expand the common law in an innovative way without violence to its principles and precedent.”

Arguments on this Appeal

[16] The appellant contended that first, the claim for compensatory damages arising out of the first two causes of action, was a claim arising from medical misadventure and therefore barred by s14 of the Accident Rehabilitation Compensation Insurance Act 1992 as continued by s394 Accident Insurance Act

1998. Second, it was argued that the claim for exemplary damages, arising out of the failure to remove the surgical drain in sufficient time, could not provide a basis for exemplary damages, having no prospect of success based upon current authority. As a consequence counsel for the appellant submitted that despite questions of limitation arising for later determination at trial, the Judge erred in the exercise of his discretion by ignoring the reality that all claims under each cause of action were bound to fail, and in the exercise of his discretion leave to commence the proceedings should have been refused.

[17] The plaintiff’s position was that the Judge’s exercise of his discretion under s4(7) of the Limitation Act 1950 should not be disturbed because, despite reservations about the strength of the plaintiff’s case, his decision correctly applied the approach required by W v Attorney General (supra). It was said to be carefully reasoned and included a review of all relevant considerations including the reasons for delay in issuing proceedings, the plaintiff’s alleged disability, the arguable strengths or weakness of the substance of the plaintiff’s case. So, it was argued, this Court should not interfere with the exercise of that discretion.

[18] Counsel for the plaintiff specifically disavowed that a claim was made for physical consequences arising out of wrongful acts. She submitted that no claim was made for “bodily injury” but that the plaintiff had a disease or illness when initially admitted to hospital and it remained there to the same extent when he was discharged. Thus, counsel argued, nothing was done by the hospital or the medical professionals that could amount to personal injury by accident, as the disease did not worsen. The plaintiff’s case, as argued, was that the foundation for the claim was not about diagnosis or misdiagnosis, but about mental injury arising out of the discharge for wrongful administrative reasons. As pleaded, the general damages are claimed not for physical injuries, but for grief, humiliation and distress – that is, emotional upset or stress, arising out of administrative, not medical, error.

[19] The plaintiff’s case for exemplary damages is based upon a cause of action involving gross negligence through the hospital failing to ensure that proper procedures were in place to ensure that surgical drains were removed and that a objective analysis of the hospital’s action would lead to the conclusion that it must

have subjectively been aware of such risk so as to expose patients to danger arising out of such conduct.

Issue

[20] The issue is whether the Judge in the High Court erred in the exercise of his discretion to grant leave under s4(7) of the Limitation Act 1950. The appellant must show the Judge acted on a wrong principle or failed to take into account some relevant matter, or that he took account of some irrelevant matter or that he was plainly wrong; May v May [1982] 1 NZFLR 165.

[21] Jurisdiction to grant leave arose once the Judge found, in terms of W v Attorney General [1999] 2 NZLR 709, that affidavit evidence disclosed a prima facie case that causes of action accrued under the “reasonable discoverability” test within the six year period prescribed in the proviso to s4(7). However, once the jurisdiction is found to exist there still remains the discretion whether or not to grant leave. Matters relevant to such an inquiry include the length of and reasons for delay; prejudice to a defendant; and whether a reasonable or tenable cause of action exists and whether overall justice requires that leave be granted.

[22] The crux of this appeal is whether on any of the causes of action the plaintiff had any tenable prospects of success.

The plaintiff’s claims for compensation based on negligence and breach of statutory duty

[23] If the plaintiff suffered personal injury and his claim arises out of that personal injury then his claim for compensatory damages is barred and he cannot succeed on the first two causes of action. Section 14 of the Accident Rehabilitation and Compensation Insurance Act 1992, as continued by s394 of the Accident Insurance Act 1998, provides:

“(1) No proceedings for damages arising directly or indirectly out of personal injury covered by this Act or personal injury by accident covered by the Accident Compensation Act 1972 of the Accident Compensation Act

1982 that is suffered by any person shall be brought in any Court in New Zealand independently of this Act, whether by that person or any other person, and whether under any rule of law or any enactment.”

[24] Personal injury is defined in s4(1) as:

“For the purposes of this Act, “personal injury” means the death of, or physical injuries to, a person, and any mental injuries suffered by that person which is an outcome of those physical injuries to that person, ....”

[25] Personal injury caused “wholly or substantially by gradual process, disease or infection” is not covered by the Act unless it is personal injury that is medical misadventure. Under the 1992 Act cover was extended to personal injury which was medical misadventure as defined by s5. Medical misadventure means personal injury resulting from medical error or medical mishap but does not include a failure to diagnose correctly or a failure to provide treatment unless the failure is negligent. Medical error means the failure of a registered health professional to observe a reasonable standard of care and skill.

[26] Clearly, if in the present case there was negligence on the part of a doctor or other health professional in the diagnosis, treatment or discharge of the plaintiff, which was causatively linked to adverse physical consequences, or mental injury as an outcome of those physical consequences, then Accident Compensation cover would exist and a claim in the Court would be barred. But the plaintiff’s counsel says the claim is framed not to allege medical misadventure but rather alleges administrative error or negligence, as well as breach of statutory duty, on the part of the hospital in creating or allowing a situation said to be inadequate staffing and beds, insufficient protocols laid down by management and failure to provide information to patients. Further, the plaintiff’s case is said to be presented on the basis that damages are not sought for physical injury, nor for any mental injury arising out of, or being an outcome of physical injury, but rather for stress, humiliation, grief and mental injury (amounting to recognisable psychiatric injury) caused by the hospital’s administrative shortcomings but not derivative of any physical injury.

[27] Claims that the actions in negligence and breach of statutory duty are based on administrative action are faced with the obvious difficulty that the starting point of the causes of action, so far as the plaintiff is concerned, is his discharge from North Shore Hospital. The affidavit evidence before the High Court was that a discharge is a clinical, medical decision made by a doctor (in this case a House Surgeon). A patient is never released from hospital without such a decision being made by a doctor except in cases where patients may, against medical advice, discharge themselves. Although hospitals, in a corporate sense, provide facilities, beds, equipment and the like for patients, those who attend to the patients’ health needs are doctors and nurses. They make diagnoses and decisions as to treatment. They perform medical procedures, prescribe medication and make therapeutic decisions, which include decisions to admit a patient to hospital rather than treat them as an out-patient, as well as to discharge them from hospital. If the decision to discharge is made by a registered medical practitioner based upon his or her assessment of the patient’s condition, but nevertheless taking into account facilities of the hospital, then if that decision is negligent or made for the wrong reason and without proper regard for the patient’s condition so that injury arises in terms of the Act, then it is medical misadventure. If the resulting physical injury is the progression of a disease or infection then it is medical misadventure within the Accident Compensation Scheme. So too if the consequence is mental injury as an outcome of that physical injury. Attempts to separate out acts of the hospital for alleging “administrative” error, or in breach of statutory duty, and the actions of doctor’s who diagnose, treat and manage patients at that hospital face the difficulty described in Childs v Hillock [1994] 2 NZLR 65 per Hardie Boys J delivering the judgment of the Court of Appeal (at p73):

“With respect, and thus separating the acts or omissions of the Crown from those of the doctor, the Master has overlooked the very point on which he held that the claim against the Crown was one of medical misadventure. To succeed in a damages claim against the Crown, the plaintiff must establish a causal connection through the doctor. Ms Giles accepts as she must that the Master was right to hold that however it be described she suffered personal injury by accident as a result of his intervention. Yet it is that upon which she must rely in her claim against the Crown. The fact that the doctor is no longer to be a party to that proceeding, and that no fault is alleged against him, does not alter the fact that the starting point of her claim is the accidental injury she sustained. The Master here fell into the error of looking

at responsibility rather than at the true nature of the claim. It is a claim for personal injury by accident. Whoever was responsible; even if no one was responsible.”

[28] The bar to Court proceedings cannot be avoided simply by a plaintiff disclaiming any allegation of medical misadventure or through pleadings of administrative error or breach of statutory duty because the true nature of the claim must be assessed and judged from the point of the view of the victim, and in relation to the definition of medical misadventure contained in the Act. If on analysis what has happened to a claimant is clearly medical misadventure, then proceedings are barred however the pleadings claiming damages for such injury may be framed; Green v Mathieson [1989] NZCA 195; [1989] 3 NZLR 564 (CA). Although Green v Mathieson which was concerned with personal injury by accident under the 1982 Act, which included “medical misadventure”, but did not define the expression, the Court’s judgment on this point still remains apt. In delivering the Court’s judgment Cooke P said at p572, when referring to “medical misadventure”:

“The description applies naturally whether the cause of action be trespass to the person, breach of fiduciary duty or negligence, and whether the failure alleged be in insufficient or wrong treatment, failure to inform, misdiagnosis, misrepresentation (innocent or fraudulent) or administrative shortcomings. It all arose from the way in which he was dealt with as a medical case.”

[29] In Attorney General v McVeagh [1995] 1 NZLR 558 (CA) this Court agreed that those words applied despite that the plaintiff had not alleged medical misadventure. There Hardie Boys J, who delivered the Court’s judgment said at p565:

“But it must be pointed out that if what is alleged in fact amounts to [medical misadventure] that is enough to bring the case within the statute. Here damages are sought for the social, emotional and financial consequences of Mr McVeagh’s detention in the security institution and elsewhere. Those arose directly or indirectly out of alleged medical misadventure, namely the alleged misdiagnosis of him as a case requiring that form of detention or indeed any detention at all.”

[30] In the present case the plaintiff’s claim arises from the way in which he was discharged and treated as a medical case. Whether he chooses to plead negligence on the part of the hospital calling it administrative negligence and/or breach of

statutory duty any physical injury (or mental injury as an outcome of such physical injury) that he suffered from the way in which he was discharged by a House Surgeon after diagnosis and a diagnostic investigation undertaken, can only amount to medical misadventure within the statute.

[31] Counsel for the plaintiff submitted that, in any event, the plaintiff did not suffer personal injury in the sense of physical injury but only mental or psychological injury which is not claimed to be an outcome of any physical injuries. It was submitted that the plaintiff had an intestinal condition when admitted which remained unchanged when he was discharged so that nothing medically was done that amounted to personal injury by accident because, it was argued, the disease did not worsen. Counsel’s argument was that the issue was not one of diagnosis by a doctor but rather administrative discharge.

[32] The distinction is subtle but flawed. The argument is mounted so as to align the present case with that of Residual Health Management Unit v R (High Court, Wellington Registry, AP289/96, Gallen, Neazor JJ) where the Court upheld a decision not to strike out a statement of claim seeking damages for failure to diagnose, treat or monitor the plaintiff’s mental disorder. In that case the plaintiff was mentally disordered and the allegation was that it was neither diagnosed nor treated and that nothing had happened to him whilst in the care of the hospital. Thus no physical or mental effect could be discerned from such care, he having a disorder at the start of treatment, having it at the end and nothing was done about it. The Court observed that none of the cases (such as Childs v Hillock, McVeagh, and L v M [1979] NZCA 59; [1979] 2 NZLR 519) disposed of the question whether there can be personal injury by accident in circumstances when the physical or mental condition of a claimant has been unchanged by virtue of what happened to him. The Judges expressed the view that medical misadventure must have some “new accidental physical consequence” before the claimant has a right to compensation. That decision was made under the 1982 Act which did not provide a definition of “medical misadventure” but treated it merely as a sub-set of personal injury. The decision was based upon a psychiatric condition that remained unchanged from start to finish of hospital care, and not the creation of a mental condition resulting from alleged withholding of treatment or medical intervention. That is a very different situation from that of the present case

in which there is alleged to have been negligent failure correctly to diagnose or treat a physical condition so that it continued or worsened when it should have been alleviated. We are satisfied that must constitute medical misadventure attracting cover under the 1992 Act.

[33] Counsel further argued that the mental injury for which compensation is sought did not arise out of physical injuries. If that be correct then, at least for the first two causes of action, the plaintiff did not need to bring an application for leave because they were not an actions “in respect of death or bodily injury to any person”. But the plaintiff’s case is in fact presented on the basis that the mental injury arose after the alleged wrongful discharge arising, either because of a misdiagnosis of the plaintiff’s true condition, or a “missed” diagnosis of the infected abscess which required surgery two days later. So, too, the plaintiff bases his claim on the allegation that his condition deteriorated to such an extent that admission to a private hospital and surgery was required on 11 February 1993 and the mental anguish and suffering that he suffered in the meantime, and subsequently, was deserving of compensation. The very reason for the emergency surgery was the change and worsening in the plaintiff’s condition through the developing infected abscess in the rectal area. It is significant that the plaintiff claims special damages for what clearly are losses or expenses arising from physical injury, they being cost of treatment at the private hospital and special damages in relation to clothing, bedding and the like. This Court said in Brownlie & Ors v Good Health Wanganui Limited & Ors (CA64/97, 10 December 1998) the mental shock and anxiety consequences arising after knowledge of a medical misdiagnosis, once an initial period of being in a state of uncertainty as to the accuracy of the diagnosis came to an end then:

“It seems unarguable that the medical consequences which flowed thereafter arose at least indirectly from the physical injury, even if it could be said that they were not the outcome of physical injury. There is undoubted causal connection. The damages claimed therefore arose from medical misadventure which cover is given by the Act. Section 14(1) accordingly operates as a bar to common law claims for those damages. The fact that the cover does not extend to the particular kind of injury for which compensation is sought does not assist.”

[34] It is beyond doubt, and not reasonably capable of contrary argument, that the compensatory damages claim by the plaintiff in his first two causes of action are for

mental injuries which are an outcome of the progression of his intestinal disease which, he claims, was inadequately diagnosed and treated so as to lead to his negligent discharge from hospital.

[35] The pleading of a cause of action for breach of statutory duty does not alter the position. We received submissions as to whether the Health and Disability Services Act 1993 to the appellant or its predecessor the Area Health Boards Act 1983, applied at the relevant time but it is of no moment. The primary objective of the hospital Area Health Boards at the relevant time was to promote, protect and conserve the public health and provide health services, and an Area Health Boards had a statutory duty generally to promote and protect the health of the residents in its district. We are not faced with the issue of whether statements of purposes or objectives can give rise to a breach of statutory duty at the suit of individual patient because howsoever the plaintiff’s mental injuries arose, whether by negligence and breach of statutory duty or otherwise, the damages claimed arose from medical misadventure.

The claim for exemplary damages

[36] This is based on the allegation of negligence against the hospital contending that it failed to have in place proper protocols for the management of surgical devices and that the practices or protocols in place at the hospital “recognised the real risk of a surgical implement being missed”. No breach of statutory duty is alleged.

[37] Principles covering the award of exemplary damages are well settled. The authorities are reviewed by this Court in Bottrill v A [2001] 3 NZLR 622 (CA). There the Court referred to earlier decisions concerning the exercise of a Judge’s discretion in such situations; Ellison v L [1998] 1 NZLR 416 (CA) and Harris v McIntosh [2001] 3 NZLR 721 (CA). In those cases the Court assumed that in some cases of negligence exemplary damages may be awarded but those cases would be rare. Although Bottrill was delivered after the decision under appeal it was nevertheless clear that exemplary damages were awarded to punish defendants for high-handed disregard of the rights of a plaintiff or for acting in bad faith or abusing

a public position. Negligences implicter would never suffice. There had to be conduct of a kind that amounted to an affront to the community. Bottrill affirmed the principle that exemplary damages in negligence cases would be available only where a defendant is subjectively aware of the risk to which his or her conduct exposed the plaintiff and acts deliberately or recklessly in taking that risk. The inquiry involves an objective assessment of whether the defendant’s conduct amounted to deliberate or reckless risk taking and so whether in that latter situation he or she was subjectively reckless. The test will be satisfied where on an objective assessment a defendant has an actual appreciation of the risk or was recklessly indifferent to the consequences and must be taken to have been content for the consequence to happen as they did. Where the particular risk was obvious but there is an absence of evidence as to the defendant’s actual state of mind, the circumstances may justify the inference that he or she was aware of it and accepted that the risk could well happen.

[38] In the present case it is abundantly clear that the error or oversight by medical staff in failing to remove the remaining portion of the pelvic drain earlier was negligent. An allegation of failure by the hospital to have in place protocols or systems, assuming that to be the case, adds very little to the allegation of negligence, or its degree. It is clear from the operation notes that the fact that the drain is inserted is recorded and medical staff read, or ought to read clinical notes. If there was some oversight then it is they who are negligent. It is a far cry from saying that such amounts to reckless acts, indifferent to any risk to the plaintiff, or that such oversight or carelessness falls into that rare category deserving of exemplary damages. We have no doubt that this case falls squarely into the category described by this Court in Harris v McIntosh where a fragment of a dental instrument was erroneously left in a patient’s body and not discovered and the Court said (para [27] of judgment):

“That may have been negligence but not of a kind that would attract exemplary damages. Failure by a medical or dental caregiver to investigate a suspected cause of persistent pain or discomfort, though negligent, would be likely to attract an award of exemplary damages only where shown to have been accompanied by improper motive, reckless disregard for the patient’s health or safety or some special flagrancy reflecting conduct of a kind that

amounts to an affront to the community. It is not enough to allege simply that the caregiver is high-handed.”

[39] The present case is no different and involves allegations of negligence, well capable of being proved, are not being capable of being categorised as subjectively reckless so as to be one of those rare cases where exemplary damages might be awarded.

[40] There is no tenable or arguable case to allow for an award of exemplary damages in the present case. The Judge said that he found it difficult to see how a failure to remove the drain could justify an award of exemplary damages. It was not sufficient for him therefore to say that the cause of action was arguable, despite being inconsistent with current authority. To grant leave on the speculative basis that some Court might ignore the law and grant to the plaintiff the relief he sought was wrong.

Conclusions

[41] It follows that the plaintiff’s claims for compensatory and special damages under the first two causes of action are barred by the Accident Compensation legislation and could not possibly succeed. Likewise the plaintiff’s claim for exemplary damages under the third cause of action is not capable of serious argument and was bound to fail. Consequently, despite finding an arguable case as to the time at which the plaintiff’s cause of action in negligence may have arisen, the Judge was wrong in the exercise of his discretion to grant leave given that the substantive proceedings were futile and bound to fail. In those circumstances this Court is required to substitute its discretion for that of the Judge.

[42] Accordingly the appeal is allowed and leave to commence proceedings is declined.

[43] As the plaintiff is legally aided there is no order as to costs.

Solicitors:

Crown Law Office, Wellington for Appellant

B Knowles, Solicitor, Auckland for Respondent