Longman v Residual Health Management Unit [2008] NZCA 363; [2009] 2 NZLR 424; (2008) 27 FRNZ 175 (16 September 2008)

Last Updated: 2 February 2018

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA217/06
[2008] NZCA 363

BETWEEN DARREN REX LONGMAN
Appellant

AND RESIDUAL HEALTH MANAGEMENT UNIT
Respondent

Hearing: 9, 10 and 11 June 2008

Court: Glazebrook, Hammond, O'Regan, Robertson and Baragwanath JJ

Counsel: J M Ablett-Kerr QC and M J Phelps for Appellant
U R Jagose and D L Harris for Crown

Judgment: 16 September 2008 at 10 am

JUDGMENT OF THE COURT

A The appeal is dismissed.

2. Costs are reserved. If counsel are unable to agree on that issue, they can file memoranda in the usual way.

REASONS OF THE COURT
(Given by Hammond J)

Introduction

[1] Mr Longman applied for leave to bring proceedings against the Residual Health Management Unit (RHMU), under s 124 of the Mental Health Act 1969 (MHA 1969). His claims allege breach of fiduciary duty and negligence in relation to his treatment at Tokanui Hospital at a time when the MHA 1969 was in force. The appellant seeks compensatory damages in the sum of $250,000, exemplary damages in the sum of $250,000, special damages for pecuniary loss and interest.
[2] In a preliminary hearing, MacKenzie J held that the application for leave to bring proceedings was to be determined prior to any substantive trial: HC WN CIV-2005-485-732 2 September 2005 at [8]. A leave application judgment was subsequently delivered by that Judge, where he refused the appellant leave to bring his claim under the MHA 1969: HC WN CIV-2005-485-732 14 July 2006 at [28]. It is that judgment which is the subject of the present appeal.
[3] The time-bar in s 124(4) is the focus of the appeal, particularly the interpretation of the phrases, “a continuance of injury or damage” and “ignorant of the facts that constitute the cause of action”. A further issue is whether MacKenzie J was right to consider that he was unable to find “substantial grounds” for the appellant’s contention that the acts complained of were done in bad faith or without reasonable care.
[4] Ms Ablett-Kerr QC for the appellant applied for leave to add a further ground of appeal: that leave to bring proceedings under the MHA 1969 was not necessary as a result of the Mental Health (Compulsory Assessment and Treatment) Act 1992 (MHA 1992). The Crown did not oppose the application and we granted the application for that additional ground of appeal at the hearing.
[5] However, for the reasons given on the “retrospectivity” issue in Crown Health Financing Agency v P and B [2008] NZCA 362 (at [167]-[207]), a series of appeals which were heard by the same five judge panel of this Court at the same time as this appeal and which similarly concerned s 124 MHA 1969, this Court has resolved that issue in a way which is against the interests of Mr Longman.

Background

[6] The factual background is conveniently set out by MacKenzie J in his 2 September 2005 judgment (at [4]):

... The plaintiff claims that he received inadequate care and attention from his mother and spent periods of time in foster care before being returned to his mother’s care when he was 10 years old. At this time he was placed under preventive supervision by the Department. Shortly after his return to his mother’s care, and at his mother’s request, a reception order was made by a Magistrate and he was admitted to Tokanui Psychiatric Hospital. His mother had a history of psychiatric difficulties and had herself spent periods of time in Tokanui Hospital. It is alleged that immediately following the reception order and whilst the plaintiff was travelling to the hospital the hospital was contacted by the Magistrate who had made the order and advised the hospital that he was not happy about the order he had just made concerning the plaintiff and that, despite this, the plaintiff was admitted to the hospital for a period of about 10 days. It is alleged that aspects of the plaintiff’s care while he was in the hospital were in breach of fiduciary duty, and negligent. It is proper to record that those allegations are in many respects denied in the statement of defence.

Section 124 of MHA 1969

[7] Section 124(1) of the MHA 1969 provides an immunity against civil or criminal liability in respect of acts done in pursuance or intended pursuance of the Act unless those acts were done by a person acting in bad faith or without reasonable care.
[8] Section 124(2) bars civil or criminal claims in respect of acts done in pursuance or intended pursuance of the Act, unless a High Court judge gives leave to proceed. To grant leave, the judge must be satisfied that there are substantial grounds for the contention that the relevant person acted in bad faith or without reasonable care.
[9] Section 124(4) is central to this appeal, and provides the time limitation within which to bring a leave application:

Leave to bring such proceedings shall not be granted unless application for such leave is made within six months after the act complained of, or, in the case of a continuance of injury or damage, within six months after the ceasing of such injury or damage:

Provided that in estimating the said period of six months no account shall be taken of any time or times during which the person injured was detained, whether lawfully or unlawfully, as a mentally disordered person, or was ignorant of the facts that constitute the cause of action, or of any time or times during which any defendant was out of New Zealand.

[10] As was similarly held in Crown Health Financing Agency v P and B (at [167]-[207]), we reject the argument that the requirement for leave to bring proceedings under s 124 of the MHA 1969 had been repealed and is therefore no longer applicable by virtue of the enactment of MHA 1992.
[11] However, the main issue in this case is whether leave was precluded because the period of six months referred to in s 124(4) of MHA 1969 had expired.

The judgment under appeal

[12] Having found that the time bar in s 124(4) applied (which accords with the reasoning in Crown Health Financing Agency v P and B), MacKenzie J held that in cases of a continuance of injury or damage, leave cannot be given unless application is made “within six months after the ceasing of such injury or damage”. The Judge considered that this provision contemplates a case where the cause of injury or damage is ongoing, not the situation where the cause of damage has ceased but effects of the damage continue (at [8]).
[13] In this particular instance, the Judge found that the acts complained of ended when Mr Longman was discharged from hospital on 3 July 1971. Therefore, the six month time period began then, unless the proviso to s 124(4) applied (at [10]):

On the facts alleged here, the acts complained of all relate to the plaintiff’s treatment and experiences in hospital. Those acts must have ended with his discharge from hospital. The effects of his treatment or experiences might have continued after that time, but that is not sufficient to prevent time running. Accordingly, I hold that this is not a case of continuance of injury or damage, so that leave may not be granted, unless the proviso to s 124(4) applies.

[14] The Judge then considered whether Mr Longman could take the benefit of the extension of the time period in s 124(4), which provides that in estimating the six month period, any time in which the applicant “was ignorant of the facts that constitute the cause of action” does not count.
[15] Based on his affidavit evidence, the Judge found that Mr Longman had been aware for a considerable time of both the treatment that he received, and the psychological problems from which he had suffered (at [11]). Moreover, the Judge considered that it was not sufficient to avoid the operation of the time bar that Mr Longman was allegedly ignorant of the connection between the treatment he received and the harm which he contends has resulted from it (at [13]). Therefore, Mr Longman’s application failed on the facts and s 124(4) operated to preclude the granting of leave (at [15]).
[16] In case he was wrong on the application of the time bar, the Judge went on to consider whether, under s 124(2), there were substantial grounds for the contention that the persons responsible for Mr Longman’s treatment while in Tokanui Hospital acted in bad faith or without reasonable care (at [16]). The Judge was not satisfied that there was evidence of either bad faith (at [17]), or acts being done without reasonable care, there being no evidence as to what the required standard of care was against which to measure the appellant’s allegations (at [18]-[24]).
[17] Additionally, the Judge found no substantial grounds for the proposition that Mr Longman’s care and treatment caused his psychological harm and the other harms he alleges he suffered (at [25]). The Judge regarded that s 124 arguably did not require the establishment of a causative link, albeit it was a relevant matter in the overall exercise of discretion under that section (at [26]).

Is the appellant out of time?

Introduction

[18] Ms Jagose for the Crown submits that MacKenzie J was correct to find that the appellant cannot obtain leave to proceed because of the six month time bar in s 124(4). The acts the appellant complained of ended in July 1971 when he was discharged from hospital and the time bar would have taken effect in January 1972.
[19] To overcome the orthodox operation of the time bar, Ms Ablett-Kerr relies on two factors: first, that the “continuance of injury or damage” for Mr Longman means that he remains within the six month limitation period; and secondly, that Mr Longman’s “ignoran[ce] of the facts that constitute the cause of action” place him within the proviso to s 124(4). We consider each of these aspects in turn.

“Continuance of injury or damage”

[20] We have noted, at [12] above, that the High Court Judge construed the “continuance of injury or damage” formula as applying to cases where the cause of injury or damage is ongoing, not where the cause of the damage has ceased to be operative but the effect of the damage is ongoing.
[21] Ms Ablett-Kerr took issue with the Judge’s construction of the legislation. She suggested that the natural and ordinary meaning of the phrase is that which has been provided in the MHA 1969: that the six month time period starts to run from the cessation of the injury or damage, rather than the cessation of the act causing injury or damage as MacKenzie J implicitly contended. She said this was consistent with the established principle that legislative provisions, particularly procedural ones, which purport to restrict the normal rights of subjects to access the courts should be interpreted strictly. As authority, she relied on Vermeulen v Attorney-General and Whangarei County Council HC WHA A76/85 6 March 1986, where Barker J held that a six month period in a similarly worded provision (s 129(4) of the Health Act 1956) had not begun to run where the damage was still continuing (at 8).
[22] By way of response, before the High Court and this Court, Ms Jagose advanced certain textual arguments and submitted that the substantial weight of authority favours MacKenzie J’s interpretation: that “continuance of injury or damage” refers to situations where the “cause” of injury is ongoing, rather than where the “effect” or ongoing damage continues.
[23] As to the textual argument, the Crown suggests that s 124 can be divided into two parts: a “trigger” to identify when the six month time period begins, and a “postponement”, allowing for particular time periods not to be included in the assessment of the six month time period. Those periods are where a prospective plaintiff is detained as a mentally disordered person or was ignorant of the facts that constitute the cause of action, or where a prospective defendant was out of New Zealand. Ms Jagose argues that the reference in s 124 (4) to “the act complained of” is referable to the act in respect of which the claim is brought in s 124(1) and (2). The Crown submits that the reason for this focus on the act complained of is that s 124 is a preliminary provision where a court must consider the complaint, particularly whether there is evidence for any contention of bad faith or lack of reasonable care. Where the complaint indicates “a continuance of injury or damage”, the “trigger” is the ceasing of the infliction of that injury or damage. Ms Jagose maintains that this analysis is also consistent with the orthodox approach to time periods in limitation statutes which commence to run on the accrual of a cause of action in tort, subject to any relevant “postponement”.
[24] The foregoing textual approach is also consistent with the weight of judicial authority. In considering limitation time bars in a similar form to s 124(4), courts in England and Australia have consistently interpreted “continuance of injury or damage” as meaning that the tortious act (or omission) complained of must be continuing. The Crown, along with MacKenzie J, relied on the following authorities in this respect: Carey v Metropolitan Borough of Bermondsey (1903) 20 TLR 2 (CA); Huyton and Roby Gas Company v Liverpool Corporation [1926] 1 KB 146 (CA); and Cox v Taylor [1966] HCA 16; [1966] 114 CLR 629.
[25] The authority particularly relied upon by MacKenzie J and Ms Jagose was Carey where Earl Halsbury LC held, in relation to s 1 of the Public Authorities Protection Act 1893, that “it was not unreasonable to provide that, if there was a continuance of an act causing a damage, the injured person should have a right to bring an action at any time within six months of the ceasing of the act complained of”. Although Atkin LJ in Huyton expressed some discomfort with the Carey approach, opining that it was “difficult to suppose that the word ‘damage’ means not the harmful effect of the act complained of but the act itself” (at 157), he ultimately deferred to the decision in Carey, where continuance of injury or damage was held to mean the continuance of the act which caused the damage.
[26] That approach is consistent with the recent judgment of Lord Hoffman in A v Hoare [2008] UKHL 6; [2008] 2 WLR 311 at 318 (HL), holding that in the construction of a statute, regard should be had to the way in which a word or phrase has been construed by the courts in earlier statutes.
[27] To the extent that Vermeulen is authority for a more generous analysis than the Carey line of cases, Ms Jagose submits that that case was wrongly decided.
[28] The implications of deferring time running in a limitation period while damage continues rather than commencing time running when the act which causes the damage ceases are immense. This policy concern, which has confronted the drafters of modern limitation statutes and law reformers alike, has given rise to an awareness that “guillotine” or long-stop provisions may be desirable in certain statutory contexts. For instance, the University of Alberta Institute of Law Research and Reform proposed a shorter limitation period based on discoverability together with a longer long-stop period for all situations save for a few specific exceptions: Limitations (Report for Discussion No 4 1986). See also the New Zealand Law Commission Tidying the Limitation Act (NZLC R61 2000), where an ultimate cut-off point ten years after the date on which the cause of action arose was advocated, although it was acknowledged that an “appropriate long-stop date cannot be a matter of exactitude” (at 6 - 7).
[29] The view which MacKenzie J took is in accord with a line of authority which has stood for over a hundred years now. We are not persuaded that we should set that line of authority aside, particularly given that this is an area of the law where policy questions are largely left for resolution in the legislative rather than the judicial arena: see McGee Limitation Periods (5ed 2006) at 21. The Supreme Court of New Zealand has not seen it appropriate to institute such an exercise at the judicial level. In Murray v Morel & Co Ltd [2007] NZSC 27; [2007] 3 NZLR 721, Tipping J held (at [76]):

Piecemeal attempts by the Courts to cure the difficulties with the present outdated legislation have already created their own difficulties and have produced a distinct lack of harmony in the area being addressed. The surgery now required is beyond the proper province of the Courts.

[30] We prefer to determine the meaning to be accorded to a “continuance of injury or damage” by recourse to the text of s 124 and the line of authority headed by Carey, rather than by analogical recourse to the debate around limitation periods. We agree with the Crown’s argument that Mr Longman’s approach to the “trigger” makes a nonsense of the time-bar, and means that time will seemingly never start to run for those who allege permanent mental injury. Thus, we agree with the Crown’s interpretation of a “continuance of injury or damage’, which limits the province of the “trigger” to situations where the cause of damage, rather than ongoing damage, continues.

The facts that constitute the cause of action

[31] MacKenzie J held that the causative connection between the treatment Mr Longman allegedly received at the hospital and the physiological harm that resulted was not a fact that constituted the cause of action, which the appellant could be ignorant of. The Judge held (at [13]):

... the reference to “the facts that constitute the cause of action” is in my view to be read as a reference to the facts which are asserted to support that contention that the hospital authorities have acted in bad faith or without reasonable care. Those facts were known to the plaintiff well before six months prior to the filing of the statement of claim and application for leave.

[32] It is implicit, if not explicit, in his judgment that MacKenzie J was rejecting Mr Longman’s argument that he had not understood, and may never fully understand, the extent of the harm he suffered and the resulting damage.
[33] On appeal, Ms Ablett-Kerr maintains that the s 124(4) proviso requires that the appellant have knowledge of the causal link between the mistreatment and damage suffered. She relies on Durie J’s observation in M v Capital Coast Health Ltd & Ors HC WN CP70/00 25 June 2001, that ignorance of the facts that constitute the cause of action encompasses a causal link, such as “ignorance of the fact that her condition was attributable to her previous hospital experiences” (at [22]).
[34] Dr Gail Ratcliffe’s affidavit is pointed to as evidence that Mr Longman had not acquired full knowledge of the causal link even a year after the filing of proceedings. She deposes:

Darren Longman’s realisation of the link between his time in Tokanui and his adult difficulties appears to have been both gradual and partial. He realised that he was different from other people at the age of seventeen, but appears not to have linked that specifically to his time in Tokanui. He has always been aware that what happened to him in Tokanui was something that made him angry but this is distinct from his awareness of its full consequences and he appears still unaware of the full consequences of his childhood experiences. He feels the long-term effects were to cause difficulties trusting people, difficulties managing his anger and a dependence on marijuana. His doctor and two psychologists who have assessed him would concur with that but see in addition Mr Longman’s chronic pain syndrome, fibromyalgia and chronic depression as consequences.

[35] Ms Jagose contends that the appellant’s approach to the “facts that constitute the cause of action” requires that a potential plaintiff must have a “full” awareness of his or her condition and a sophisticated appreciation of the consequences of all acts complained of, meaning that the six month time bar may never start to run.
[36] In essence, the appellant argues for recognition of an extended form of “reasonable discoverability” so that complete appreciation of the harm alleged and damage suffered is required. Ms Jagose rightly makes the point that personal injury cases predicated on “reasonable discoverability” such as S v G [1995] 3 NZLR 681 (CA) and GD Searle v Gunn [1996] 2 NZLR 129 (CA) do not assist Mr Longman. The Supreme Court in Murray v Morel & Co Ltd has clearly rejected judicial extension of the “reasonable discoverability” concept beyond the existing cases.
[37] The heart of the matter, and the reason this appeal point must also be rejected, is that Mr Longman was not ignorant of the facts that constitute the cause of action until a date after 30 September 2004, six months preceding the filing of his statement of claim on 31 March 2005. What is required is sufficient awareness of facts that would substantiate a negligence claim, if proven. At the end of 2001, Mr Longman had a nervous breakdown and consulted a psychologist. He began to comprehend the link between his experiences as a child at Tokanui Hospital and the difficulties he later faced. Following a recommendation from his doctor, he instructed a lawyer in mid-2002, who received the relevant files in February 2003. Yet proceedings were not filed until over two years later. Because there is no basis to disturb the Judge’s findings under this head, Mr Longman’s claim must be regarded as hopelessly out of time.

No “substantial grounds” for the appellant’s contentions

[38] Given his findings (which this Court has upheld), there was no need for MacKenzie J to consider whether there were “substantial grounds” for Mr Longman’s contention that staff at Tokanui Hospital had acted in bad faith or without reasonable care, so as to permit the High Court to grant leave to proceed to substantive trial. As stated above, the Judge was not satisfied that there was evidence of either bad faith or acts being done without reasonable care.
[39] This issue on appeal does not involve a consideration of the proper legal tests to be utilised but rather concerns the factual matter of whether there was sufficient evidence before the Court to amount to “substantial grounds”. As the Judge held that there was not, we are not disposed to pursue this issue further because it amounts to an appeal against factual issues which are no longer relevant. However, we do note that the appellant would have faced very considerable difficulties in persuading this Court that it should take a different view from that of the High Court Judge.

Conclusion

[40] The appeal is dismissed.
[41] Costs are reserved. If counsel are unable to agree on that issue, they can file memoranda in the usual way.

Solicitors:
Medlicotts, Dunedin for Appellant
Crown Law Office, Wellington