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Naysmith And Naysmith V Acc breach of statutory duty WIN

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Posted 02 August 2005 - 10:25 PM

488-627 [20 June 2005]
Hearing: 10 December 2004 and 20 May 2005
Counsel: N C R Perry for Appellants
D K L Tuiqereqere for Respondent
Judgment: 20 June 2005
Henderson Reeves Connell Rishworth, Whangarei for Appellants
Legal Services, Accident Compensation Corporation, Wellington for Respondent
Mr D K L Tuiqereqere, Auckland
Table of Contents
Para no.
Introduction [1]
The claim [6]
The contentions [11]
The Corporation [11]
The appellants [14]
Perspective [16]
The facts [17]
The advice by the rehabilitation officer [17]
The Corporation learns of the head injury [19]
The orthopaedic surgeon advises the Corporation to refer the
head injury to the General Surgeon; the advice is not heeded [20]
The Corporation provides weekly compensation but no response
to the head injury [21]
Payment of lump sum compensation (s 79) but again no response
to the head injury [24]
Closure of the Kaitaia office without reference to the head injury [29]
May 1995 Mr Naysmith’s doctor refers to the head injury but still
no treatment of it. Corporation memo discerns lack of follow up [30]
1 October 1995 Mr Peters provides orthopaedic assessment
under s 78 and again recommends that head injury be formally
assessed but no response [34]
Section 78 award of $5,610. Mr Wallace’s surprise at
Mr Naysmith’s return to heavy work. But still no response to
head injury [36]
Reference to Ms Quarrie of Far North Counselling [37]
Report from Dr Mearns [40]
February 1999 report from Dr Fernando, neuropsychologist
and clinical psychologist. Diagnosis of incomplete recovery from
head injury and relatively permanent brain impairment [41]
The claim of breach of statutory duty [42]
Section 36 [42]
The principles governing breach of statutory duty [43]
The statutory context: ss 18-20, 63, 89-91 and 97 of the 1992 Act [45]
The authorities [46]
Discussion [48]
The negligence claim [61]
Vires [61]
Causation [65]
Assumption and breach of responsibility as a tort [68]
Decision [85]
[1] Mr and Mrs Naysmith appeal against a decision of Judge Sharp striking out
their proceedings which allege against the Accident Compensation Corporation
(“the Corporation”) negligence, breach of statutory duty and abuse of public office.
They claim that the Corporation wrongly failed to undertake or advise the appellants
of the need for them to undertake remedial treatment in relation to his head injuries,
as a result of which he has permanent symptoms.
[2] On 30 December 1989 Mr Naysmith was grievously injured in a motor
accident caused by the intoxicated driver of another car. His four year old son died;
another son and a nephew were injured. His injuries were compensable by the
accident compensation scheme of which a prime element is rehabilitation. While
Mr Naysmith was in a coma following the accident his wife was assured by a
Corporation representative that it would look after her husband. On 11 January 1990
the Corporation advised Mr Naysmith that it had accepted his claim for
compensation and assistance.
[3] At the hearing on 10 December 2004 the appellants sought and were granted
leave to amend their pleading. An amended statement of claim was filed on
4 February 2005. On 15 March 2005 the Corporation filed an affidavit challenging
various of the facts alleged. Mrs Naysmith replied on 29 April 2005. At the hearing
on 20 May 2005 Mr Perry without objection from Mr Tuiqereqere made further
amendments to the appellants’ pleading.
[4] In response to a time limitation plea, the appellants assert that their
knowledge of the essential facts was delayed because of the trauma of the accident
and its consequences, and the lack of information discovered. It was only on later
discovery of the Corporation’s file that the appellants had the essential facts
necessary to issue proceedings. The argument did not extend to this limitation plea
which can be resolved only at trial.
[5] The appeal, like the Corporation’s successful application, is to be approached
on the basis that all allegations of fact made by the appellant can be proved, save
insofar as there is incontrovertible evidence to the contrary: Attorney-General v
Prince and Gardner [1998] 1 NZLR 262, 267; Attorney-General v McVeagh [1995]
1 NZLR 558, 566. Where the law is uncertain and developing it is not normally
appropriate to strike out; development of the law should be on the basis of actual
facts found at trial rather than on a factual hypothesis that may turn out to be wrong:
Sew Hoy & Sons Ltd v Coopers & Lybrand Ltd [1996] 1 NZLR 392, 407 per
Thomas J; Barrett v Enfield London Borough Council [2001] 2 AC 550, 558 per
Lord Browne-Wilkinson.
The claim
[6] Mr and Mrs Naysmith allege effectively three causes of action:
a) Breach of statutory duty imposed on it by s 36 of the Accident
Compensation Act 1982 and the equivalent provisions in the 1992 and
2001 Acts;
B) Common law negligence; and
c) Abuse of public office.
A claim for exemplary damages is separately pleaded, no doubt as potentially
surviving a strike-out of other claims. In the event it does not require discussion.
[7] The Corporation does not seek to strike out the third cause of action.
[8] The appellants contend that the Corporation, which described Mr Naysmith
as its “client”, assumed the responsibility to obtain the medical reports and arrange
the treatment necessary for his recovery and rehabilitation. In respect of his
orthopaedic injuries that was done. But although the Corporation was aware that
Mr Naysmith had sustained head injury and was exhibiting concerning symptoms, it
made no response to a report from its orthopaedic surgeon on 7 December 1990
which in addition to dealing with orthopaedic injuries stated that the head injury
should be the subject of expert consideration. Nor did the Corporation inform the
appellants of the head injury or of Mr Peters’ advice or suggest that they should
arrange for the necessary report to be obtained. So while orthopaedic assistance was
furnished, weekly compensation was paid and a lump sum payment of $10,000 in
relation to the orthopaedic injuries was provided, the head injury symptoms received
no attention. To the later great surprise of a neurologist who belatedly examined
Mr Naysmith in March 1997 he returned to work on his farm. In 1992 the Kaitaia
office of the Corporation which had been handling the matter was closed. It was not
until a second accident on 25 April 1995 that Mr Naysmith’s medical condition was
reconsidered by the Corporation which in ultimately February 1999 obtained a
neurological report. It revealed Mr Naysmith’s incomplete recovery from his head
[9] Mr Naysmith claims that in breach of its undertaking, of a common law duty
of care and of an alleged statutory duty, from the time of his recovery of
consciousness in about February 1990 until 28 May 1999 the Corporation took no
effective steps to rehabilitate him or assist him to recover his former mental
resourcefulness to successfully resume his work on the dairy farm. As a result of the
delay in providing appropriate neurological therapy and vocational training
Mr Naysmith lost the opportunity to recover the whole of his former mental ability
which would have been restored had the Corporation provided timely treatment and
care to him after the accident. He has therefore been left with a determinate
cognitive deficiency in his mental health for which he claims damages.
[10] Mrs Naysmith claims damages for her stress, anguish and financial loss as a
result of what has happened to her husband.
The contentions
The Corporation
[11] The Corporation contends that the claim is fundamentally flawed.
The functions and powers of the Corporation conferred by the legislation do not
extend to giving advice to claimants or to assuming the obligations on which the
appellants rely. It denies both duty of care and jurisdiction in the District Court and
this Court to consider the claim.
[12] It further contends that the claim relating to symptoms of the head injury is,
self-evidently, a:
…proceeding… for damages arising directly or indirectly out of personal
injury [caused by accident].
[13] More generally it contends that the scheme of the legislation is simply
inconsistent with the claim alleged which was properly struck out.
The appellants
[14] In response to the Corporation’s submission that the claim is barred by s 14
of the Accident Compensation Act 1992 (which refers to injury covered by the 1982
and 1992 Acts) and its equivalent in later statutes, Mr and Mrs Naysmith submit that
the claim is not a:
…proceeding… for damages arising directly or indirectly out of personal
injury [caused by accident].
[15] They claim that had the Corporation performed its undertaking the head
injury and its symptoms would have been cured completely. It follows that the
whole of the continuing injury and its symptoms were caused by the Corporation’s
breach of duty in relation to which it is liable in accordance with settled principles of
the common law. Accordingly the claims should be permitted to go to trial to
determine whether that can be established factually.
[16] The arguments require appraisal of the scope, purpose and limits of the
accident compensation legislation and its interface with the common law. Under the
legislative scheme that removed New Zealanders’ entitlement to claim damages for
compensation for personal injury Mr Naysmith was entitled to the assistance
afforded by the Accident Compensation Act 1982 and its successor statutes the
Accident Rehabilitation and Compensation Insurance Act 1992, the Accident
Insurance Act 1998 and the Injury Prevention, Rehabilitation, and Compensation Act
2001. As the Woodhouse Report, the titles to the 1992 and 2001 statutes and
specific provisions in each piece of legislation all record, rehabilitation is a policy of
importance. Section 36 of the 1982 Act which was in force at the time of the
accident required the Corporation to provide rehabilitation. The true construction
and effect of that provision is central to the appellants’ argument that the case should
be permitted to go to trial.
The facts
The advice by the rehabilitation officer
[17] Mr Naysmith alleges that on or about 3 January 1990 a rehabilitation officer,
Mr Page, contacted Mrs Naysmith and assured her that the Corporation would look
after her husband “to ensure he received all of the assistance he needed to recover
from his injuries”.
[18] On 11 January 1990 the Corporation advised Mr Naysmith that it had
accepted his claim for compensation and assistance.
The Corporation learns of the head injury
[19] The Corporation knew of Mr Naysmith’s head injury at latest a month after
the accident. By letter dated 30 January 1990 the Corporation was informed by a
surgical house surgeon at Kaitaia Hospital that in addition to multiple injuries
Mr Naysmith had suffered “A moderately severe head injury.” On 16 October 1990
the Corporation’s rehabilitation co-ordinator saw Mr Naysmith and noted that he had
sustained a head injury. She recorded:
In relation to his head injury he reports headaches, decreased concentration,
decreased memory and irritability but I am sure there is more, his retrograde
amnesia was from the date of the accident to March 1990.
The orthopaedic surgeon advises the Corporation to refer the head injury to the
General Surgeon; the advice is not heeded
[20] On 8 November 1990 the rehabilitation co-ordinator wrote to Ian Peters,
orthopaedic surgeon, referring to her seeing Mr Naysmith on 16 October and stating:
At the time I saw him Ross had returned to his farming but was still
suffering from his injuries, particularly his head injury. I will be
maintaining regular contact, especially as I am concerned [with] the lack of
facilities in Kaitaia that will assist him to deal with their problems at
Mr Peters replied on 7 December 1990, reporting as to orthopaedic injuries and
The query regarding his head injury should be addressed to the General
But that was not done. Nor was Mr Peters’ advice conveyed to Mr and
Mrs Naysmith.
The Corporation provides weekly compensation but no response to the head injury
[21] The Corporation paid weekly compensation in the amount of $180 per week
and responded to invoices for accommodation, travel, telephone and food expenses.
[22] In the meantime the rehabilitation co-ordinator had noted that Mr Naysmith’s
doctor had certified him fit for duties and stated:
But after some discussion with Ross and his wife Judy it is apparent that this
is not so and that the doctor needs to get some more information from Ross
so that he can make a better decision on this.
[23] She said that there was little she could do for Mr Naysmith as “he continues
to improve and has a lot of community and family support”. She noted:
I will however continue to see them as they are involved in setting up a
victim support group and have asked for my input in this… I have already
volunteered my assistance in setting up a Head Injury Support Group in
Kaitaia and I would anticipate that I would also have further contact with
them through that.
But the failure to heed Mr Peters’ advice concerning the head injury was not picked
up and acted upon.
Payment of lump sum compensation (s 79) but again no response to the head injury
[24] On 4 December 1990 Dr Young prepared a medical certificate recording that
Mr Naysmith had tried to return to full duties from 1 October but was able to work at
only 30% of his normal capacity.
[25] On 4 February 1991 Mr Naysmith was advised of his entitlement under s 79
to the maximum lump sum payment of $10,000 and that a decision as to the s 78
award had been deferred.
[26] On 18 March 1991 the rehabilitation officer called into the Naysmith’s
residence and recorded that he “is progressing well and things seem to be a lot more
settled in this household”.
[27] During 1991 surgery was performed on Mr Naysmith to remove a plate.
The Corporation later enquired whether Mr Naysmith had returned to work and
whether he was considering a permanent disability claim. He responded that he was
back at work but could not deal with the permanent disability matter as he was to
have another operation early in 1992.
[28] In 1992 there was correspondence about Mr Naysmith’s entitlement to
earnings relating to compensation and an approval of private hospital treatment for
further surgery. But the head injury went unremarked.
Closure of the Kaitaia office without reference to the head injury
[29] On the closure of the Kaitaia office the files were sent to Whangarei but still
the head injury received no attention.
May 1995 Mr Naysmith’s doctor refers to the head injury but still no treatment of it.
Corporation memo discerns lack of follow up
[30] There is nothing else recorded on the Corporation file until May 1995 when
Mr Naysmith’s doctor recorded that Mr and Mrs Naysmith were suffering intense
grief and enquired whether the Corporation could contribute towards the farm and
counselling for the grief. The doctor advised “This man… had a head injury… and
was obviously very badly smashed up.” The Corporation replied that the legislation
did not provide for contribution towards replacement labour costs but provided a
form for claiming contribution towards extra farm help and for counselling. Still
there was no investigation of the need to respond to the head injury.
[31] From 10 May 1995 the Corporation arranged for payment to Mr Naysmith of
weekly compensation and the reimbursement of travel costs. An internal
Corporation memo stated:
It is obvious there has been lack of follow through by branch staff in this
particular case, and not only does this indicate a need for training but also
suggests the potential for performance issues.
[32] On 1 June 1995 Mr Naysmith’s doctor certified him fit for selected or
alternative work.
[33] On 7 September 1995 the Corporation approved a request to reimburse the
cost of twenty hours of counselling.
1 October 1995 Mr Peters provides orthopaedic assessment under s 78 and again
recommends that head injury be formally assessed but no response
[34] On 1 October Mr Peters provided an orthopaedic assessment of permanent
loss of bodily function assessed under s 78 as 33% and said:
Regarding his head injury it is my opinion that this should be formally
But still that was not done.
[35] The Northland Area Health Board orthopaedic notes for 9 May 1996 record
Mr Naysmith’s condition and state:
His main concern in fact seems to be with ACC. Certainly I think he would
justify a disability assessment. However this opportunity may now have
expired and he needs to clarify this with his client officer.
Section 78 award of $5,610. Mr Wallace’s surprise at Mr Naysmith’s return to
heavy work. But still no response to head injury
[36] On 9 January 1997 the Corporation advised Mr Naysmith of his entitlement
under s 78 to a 33% award of $5,610. It later arranged for Mr Naysmith to be
examined by Mr William Wallis, neurologist. His report of 6 March 1997 recorded
that for some reason Mr Naysmith had never received his s 78 payment which was
later paid. The report recorded Mr Naysmith’s physical and neurological injuries
and continued:
One unusual aspect of his injuries is that this man managed, somehow, to
return back to doing heavy work on his farm. In my experience, it would be
exceptional for people with injuries of this sort to manage this type of
achievement. It is clear, however, that this has been done at considerable
expense physically and emotionally to him and his family.

In most individuals, injuries of this sort would have led to permanent loss of
work capacity and indefinite support by the ACC. The corporation should
take this into account when making the award.
Reference to Ms Quarrie of Far North Counselling
[37] In February 1998 two ACC officers visited Mr and Mrs Naysmith to discuss
Mr Naysmith’s entitlement. They discussed such matters such as weekly
compensation and counselling and agreed to seek a report from Ms Quarrie of
Far North Counselling.
[38] On 13 March 1998 Ms Quarrie wrote to the Corporation:
Ross Naysmith was referred to me by a Dr Tom Young in June 1995. Ross
showed symptoms consistent with Post Traumatic Stress Disorder. I saw
Ross for counselling, initially on a weekly basis, then fortnightly, from
16 June 1995 until 14 December 1995. I saw Ross again on 29 December
and 3 October 1996 as he was again experiencing difficulty…
Effects of accident
When Ross first attended counselling with me, my assessment of the
emotional effects of the accident were as follows:
• Flashbacks
• Difficulty controlling anger/rage
• Cows were hit [by Mr Naysmith], a number of animals had to be
• Short term memory impairment
• Poor concentration
• Emotional isolation
• Low self-esteem
• Occluded memories
• Tiredness
• Lack of energy
• Feelings of bitterness, aloneness, isolation
• Intrusive thoughts
• Dissociation
• Loss of enjoyment of life
• Uncommunicative
The focus of counselling with Ross were to address management of the
above effects, to look at alternative strategies for dealing with his anger and
other emotions. Ross had not attended the funeral of his child and has
missed out on a great deal of the mourning with his family. This and issues
surrounding this had to be revisited and addressed.
Ross also had to do a great deal of work on addressing his role and
relationships with his wife and children. Without question, the effects from
the accident, and the aftermath of Ross’s return home, affected his recovery
His single-minded and unrelenting drive to work the farm, without
assistance (other than that of his father in law in the early stages of Ross’s
return home) in spite of the physical and emotional state, has cost Ross and
his family dearly. This is due to Ross being advised by the Kaitaia ACC
office that he was not eligible for any assistance that would enable him to
take the time to heal properly. He could not afford to lose his farm, so he
worked his farm regardless.
During counselling with Ross, I checked whether he had been assisted by
ACC with weekly compensation or assistance with running the farm. I was
appalled to discover that Ross (and his wife) had not been given proper
advice about their entitlements by ACC at the time of the accident and the
months following – in fact, as mentioned previously, they had been advised
by the Kaitaia ACC office they were not entitled to any assistance other than
medical! I suggested at that point they seek further advice about this.
[39] Ms Quarrie found that Mr Naysmith was still experiencing most of the
original symptoms and was experiencing relationship difficulties with his wife and
children. She said:
I am aware that Ross has found it stressful dealing with ACC and in my
opinion the stress of wrangling with ACC over money exacerbates the other
effects he lives with.
Report from Dr Mearns
[40] On 27 October 1998 the Corporation obtained from a general practitioner,
Dr Mearns, an assessment which included the summary:
Although he made a remarkable recover[y] from these complex injuries he
has been left with physical and mental disability. His general personality has
altered. His ability to make decisions has been affected, his cognitive ability
has also decreased. He has also had a possible depression following the
accident which has not responded particularly well to anti-depressants and
may represent an affect of his head injury which was undoubtedly severe…
February 1999 report from Dr Fernando, neuropsychologist and clinical
psychologist. Diagnosis of incomplete recovery from head injury and relatively
permanent brain impairment
[41] Eventually on 21 February 1999 the Corporation obtained a report from
Dr Fernando, neuropsychologist and clinical psychologist:
…cognitively Ross is not functioning at his pre-accident level… He is
experiencing significant problems in terms of the rate with which he can
process information, processing and manipulating information in short-term
memory, speed of psychomotor responding and the rate to which he can
commit new verbal and visual information to memory. Ross also has
problems carrying out more than one task at a time, becomes easily
distracted and has difficulty sustaining his attention on tasks of longer
Ross has made an incomplete recovery from his head injury which is not
unexpected given the severity. He has suffered some degree of brain
impairment which will be relatively permanent but this does not mean that
he cannot make gains in terms of his everyday functioning. Given what the
family has been through since the accident, it is credit to them that they have
managed to retain the farm and are still an intact family unit… The family
would benefit from additional assistance on the farm from July to October.
I am unsure whether more funding is available from ACC for this purpose
and the family should approach ACC to discuss this matter.
There followed a reference of Mr Naysmith to Burtons Healthcare Ltd for
rehabilitation assistance.
The claim of breach of statutory duty
Section 36
[42] The section relied upon by the appellants provides:
36. Corporation to promote rehabilitation
(1) The Corporation shall place great stress upon rehabilitation and shall
take all practicable steps to promote a well co-ordinated and vigorous
programme for the medical and vocational rehabilitation of persons who
have cover and who become incapacitated as a result of personal injury by
accident and are for the time being in New Zealand.
(2) The rehabilitation programme in relation to those persons shall have
as its objectives–
(a) Their restoration as speedily as possible to the fullest
physical, mental, and social fitness of which they are capable, having
regard to their incapacity; and
(B) Where applicable, their restoration to the fullest vocational
and economic usefulness of which they are capable; and
© Where applicable, their reinstatement or placement in
The principles governing breach of statutory duty
[43] I do not accept Mr Perry’s submission that simple breach of s 36 gives rise to
a claim for breach of statutory duty. It is difficult to identify the principles by which
a generally expressed obligation on the part of a statutory body will be treated as
[44] One example of such formula is in the sphere of education where:
[103] …the line of English authorities, commencing with R v Inner
London Educational Authority [1992] Admin LR 822, … construed the
generally expressed duty imposed by s 8 of the Education Act 1944 as a
“target” duty, designed to make general provision for those classes of people
intended by Parliament to be its beneficiaries but not the subject of
mandamus to compel tailor made provision for one with special needs: see
RP v Further Education Funding Council [1996] EWJ No 1479 18 October
1996 per Jowitt J… The French system, with its Law of 27 July 1998
guaranteeing “effective access of all to the fundamental rights in the spheres
of work, housing, health, education…”, which is to be balanced against the
constitutional responsibility to control public spending, is to similar effect:
see Cabrillac and others Libertés et Droits Fundamentaux (7th ed) pages 722-
3, 732, 757-9…
(Daniels v Attorney-General HC AK M1616-SW99 3 April 2002 which was
substantially revised on appeal at [2003] 2 NZLR 742. The Court of Appeal decision
in Daniels, that no actionable statutory duty existed, turned on a comprehensive
analysis of the legislation. In Carty v Croydon LBC [2005] 2 All ER 517 the
English Court of Appeal has held that in that jurisdiction an actionable duty may
[43] …where an education officer, in the performance of his or her
statutory functions, enters into relationships with or assumes responsibilities
towards a child, then he or she may owe a duty of care to that child.)
The statutory context: ss 18-20, 63, 89-91 and 97 of the 1992 Act
[45] Section 36 is to be read within its statutory context. That altered over the
nine years between the Corporation’s learning of the head injury and giving its
assurance and eventually giving attention to it. The 1982 Act contained its own
exclusion of damages claims (s 27). But the Corporation’s argument focussed on the
provisions of the 1992 Act of which the finance provisions came into effect on
1 April and the remainder on 1 July 1992. Both because that was the way the
Corporation ran its case and since those dates were less a third of the way during the
period when Mr Naysmith received no treatment for his head injury it is sensible to
concentrate on the following provisions of the 1992 Act. Emphasis has been added:
14. Application of Act excludes other rights
(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 or 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.
(2) For the avoidance of doubt, it is hereby declared that nothing in this
section shall be affected by–
(a) The failure or refusal of any person to lodge a claim for any
treatment, service, rehabilitation, related transport, compensation,
grant, or allowance under this Act or those Acts; or
(B) Any purported denial or surrender by any person of any
rights under this Act or those Acts; or
© The fact that a person who has suffered personal injury
covered by this Act or personal injury by accident covered by the
Accident Compensation Act 1972 or the Accident Compensation
Act 1982 is not entitled to any treatment, service, rehabilitation,
related transport, compensation, grant, or allowance under this Act.

18. Right to rehabilitation
Every person who has suffered personal injury for which the person has
cover under this Act is responsible for his or her own rehabilitation to the
extent possible having regard to the person’s condition and is entitled to the
extent provided by this Act to rehabilitation necessary to enable the person to
lead as normal a life as possible, having regard to the consequences of his or
her personal injury.
19. Provision of rehabilitation
(1) Except as provided in subsection (2) of this section, the Corporation
shall not provide or meet the costs of rehabilitation for persons who have
cover under this Act unless that rehabilitation is provided under an
approved individual rehabilitation programme.
(2) The Corporation may provide rehabilitation within the first 13 weeks
following the personal injury in the absence of an approved individual
rehabilitation programme.
20. Individual rehabilitation programme
(1) Every individual rehabilitation programme referred to in subsection
(2) of this section shall be designed to identify the person’s entitlement to
rehabilitation as described in section 18 of this Act; and shall include
identification and facilitation of such other rehabilitation services as may be
appropriate to further the rehabilitation of the person. Such identification
and facilitation of other rehabilitation services shall not impose any
responsibility on the Corporation to provide or fund rehabilitation beyond
that otherwise imposed by this Act or regulations made under this Act.
(2) Each individual rehabilitation programme shall consist of those
elements of social and vocational rehabilitation as are appropriate to the
individual and shall be prepared in compliance with this Act and any
regulations made under this Act.
(3) Notwithstanding that the person is responsible for his or her own
rehabilitation, the Corporation shall engage suitably qualified persons or
organisations (in this Part referred to as “case managers”) to–
(a) Assist in the preparation and costing of individual
rehabilitation programmes; and
(B) Provide a service to link the person and the services
available to help ensure implementation of the individual
rehabilitation programme; and
© Ensure the full participation of the person, any registered
health professional providing treatment to that person, and any
employer or potential employer of that person to the extent that those
persons are willing and able to participate in the preparation and
costing of the programme.
63. Claims
(1) Every claimant for cover under this Act shall lodge a claim in the
prescribed form.
(2) Except as provided in subsection (2A) of this section, no claimant
shall be entitled to any payment in respect of personal injury unless that
claimant lodges a claim for cover within 12 months after the date on which
the personal injury is suffered.
(2A) A failure to lodge a claim in respect of personal injury within the
time specified in subsection (2) of this section shall not be a bar to payment
in respect of that personal injury if the Corporation is of the opinion that the
Corporation has not been prejudiced in determining cover or payments in
respect of that personal injury by the failure to lodge the claim within the
time specified.

(4) The Corporation shall not make any payment in respect of any
rehabilitation, compensation, grant, or allowance for which an itemised
written application has not been made.

89. Application for review
(1) Any claimant (or the representative of any deceased claimant) who is
dissatisfied with a decision of the Corporation or exempt employer in respect
of his or her claim or entitlement under this Act may apply to the
Corporation or exempt employer, as the case may be, for a review of that

90. Reviews
(1) The Corporation or exempt employer, as the case may be, shall
appoint a person to hear each review; and that person shall act independently
in hearing the review.

91. Right of appeal
(1) An appeal shall lie to a District Court against any decision under
section 90 of this Act.

97. Appeal to High Court
(1) Where any party is dissatisfied with any decision of a District Court
under this Act as being erroneous in point of law, that party may, with the
leave of that District Court, appeal to the High Court.

The authorities
[46] According to the highest authority:
The question whether an enactment gives rise to a cause of action for breach
of statutory duty is a question of ascertaining the intent of the Legislature:
R v Deputy Governor of Parkhurst Prison ex parte Hague [1992] 1 AC 58,
159 per Lord Bridge.
But what does that mean? The House of Lords has recently reaffirmed:
The task of the Court is to interpret the provision which Parliament has
enacted and not to give effect to an inferred intention of Parliament not fairly
to be derived from the language of the statute: R v Z [2005] UKHL 35
para 16 per Lord Bingham.
To similar effect is X (Minors) v Bedfordshire County Council [1995] 2 AC 633, 730
per Lord Browne-Wilkinson.
[47] The law as to breach of statutory duty is in an unsatisfactory state. Todd
The Law of Torts in New Zealand (3rd ed) states at para 7.2.5:
This is one of the law’s less certain areas… If the words of the statute are
unhelpful, a point is rapidly reached where it is difficult to disentangle how
much has been objectively gleaned from the statute and the circumstances
surrounding its passing, and how much is attributable to judicial policy.
[48] I consider that the confusion arises from failure to distinguish between
legislation that on its proper construction has the purpose of itself providing a cause
of action to a plaintiff and legislation that does not have that purpose. While
construction is often difficult it is an every day responsibility of the courts. Absent
such purpose, there is no actionable statutory duty, even if the legislation may be
relevant to a claim at common law.
[49] Here the competing submissions are for the appellants that s 36 gives rise to a
statutory duty on the part of the Corporation on which the appellants can sue and for
the Corporation that in the absence of abuse of public office the legislation excludes
any claim for damages.
[50] Section 36 must be read not only with ss 14, 19, 20, 63, 89, 91 and 97, which
establish a statutory code dealing with rehabilitation, but with s 7 (para [61] below)
which concerns funding and to which it is necessary to return. This Court has twice
held that s 36 is not actionable. In Pearce v ACC (1991) 5 PRNZ Penlington J relied
upon Jones v Department of Employment [1988] 1 All ER 725 where the English
Court of Appeal struck out a claim by a plaintiff alleging that the department had
been negligent in disallowing his claim for a benefit. A section of the
Social Security Act 1975 contained a system of rights of review and appeal
comparable to those contained in the ACC legislation. Section 117(1) provided:
Subject to the provisions of this part of this act… [concerning appeal on a
point of law] the decision of any claim or question in accordance with this
act shall be final.
[51] Glidewell LJ stated at p 734:
The present action, if it were to proceed, would necessarily involve a
challenge to the correctness of the adjudication officer’s decision. That
would be a challenge to its finality, by a route other than that provided by the
statutory provisions themselves.
[52] On the broader question whether it was just and reasonable that the
adjudication officer should enter a duty of care at common law to the claimant he
Having regard to the non-judicial nature of the adjudication officer’s
responsibilities, and in particular to the fact that the statutory framework
provides a right of appeal which, if a point of law arises, can eventually
bring the matter to this court, it is my view that the adjudication officer is not
under any common law duty of care… unless it be shown that he is guilty of
Applying that statement of principle Penlington J struck out the claim.
[53] To similar effect is the decision of John Hansen J in Chalecki v The Accident
Rehabilitation and Compensation Corporation HC GRY AP28/01 10 October 2001
where the plaintiff sought damages from the Corporation for failure to take
reasonable care in his rehabilitation. The Judge stated:
[24] It seems to me that s 14 is a complete bar to these proceedings.
On any assessment of the pleadings, it is clear that the damages sought by
Mr Chalecki arise directly, or indirectly, from his original personal injury.
If he had not been personally injured, the would not have come within the
aegis of ACC or the relevant statutory provision. The alleged damages arise
from efforts made by ACC to rehabilitate Mr Chalecki within the terms of
the Act. The loss alleged must, therefore, arise directly, or indirectly, from a
personal injury covered by the Act.
[54] Even if I considered the decisions arguably as distinct from clearly wrong
I would follow them as a matter of comity, leaving error correction to the Court of
Appeal. But in my respectful opinion they were right.
[55] There is no evidence of legislative purpose in this measure to establish a right
of action for damages in respect of breach of s 18. Its raison d’être was to set up an
elaborate alternative to the damages regime which it has very largely superseded.
The legislative scheme is of an exclusion of recourse to the common law proceeding
for damages. It was replaced by a legislative no fault scheme providing for weekly
and lump sum compensation together with inter alia the costs of rehabilitation
provided for in ss 18-20. The elements of that scheme include its funding (s 7,
especially subsections (1)© and (4) which refer to funding payment of claims made
under s 63 and s 9(2)(B) which empowers the Corporation to pay for “rehabilitation
assistance in accordance with this Act”), the expression of the right to rehabilitation
(s 18 which limits rehabilitation “to the extent provided by this Act”, s 19 which
after the first 13 weeks imposes limitation on payment to “rehabilitation provided
under an “approved individual programme” specified in s 20). As Mr Tuiqereqere
submitted, s 63(4) specifically prohibits the Corporation from making any payment
in respect of rehabilitation for which an itemised written application has not been
made. Such claims are inconsistent with the statutory scheme and plainly barred by
s 14. And the method of challenging decisions (or failures to make decisions) under
the scheme is confined to the statutory procedures (ss 89, 90, 91, 97). The Court’s
role on judicial review is limited to ensuring due performance of those procedures.
[56] Mr Perry contended that for s 36 to be construed so as not to confer a cause
of action would infringe Article 12(1) of the International Covenant on Civil and
Political Rights to which New Zealand is party:
The States Parties to the present Covenant recognize the right of everyone to
the enjoyment of the highest attainable standard of physical and mental
[57] Para 34 of General Comment no 5 in an article issued by the UN Committee
on Economic, Social and Cultural Rights records an obligation on member states to:
…ensure the provision of rehabilitation services to persons with disabilities
in order for them to reach and sustain their optimum level of independence
and functioning.
[58] But provision of health and rehabilitation can be effected otherwise than via a
cause of action for damages. In England where the common law regime for damages
for personal injury remains, the House of Lords has had little difficulty in upholding
a statutory policy to exclude a right to claim damages where an alternative scheme of
compensation by way of pension had been established. In Matthews v Ministry of
Defence [2003] 1 AC 1163, where the Crown Proceedings Act 1947 had exempted
the Crown from liability in tort for injuries suffered by members of the armed forces,
the plaintiff claimed infringement of article 6(1) of the European Convention for the
Protection of Human Rights. That provides that:
In the determination of his civil rights… everyone is entitled to a fair and
public hearing… by an independent tribunal established by law.
(Cf to like effect s 25(a) New Zealand Bill of Rights Act 1990 which however, like
art 14 of the International Covenant on Civil and Political Rights, deals with criminal
proceedings. Civil proceedings are embraced by the common law presumption of
access to the courts: Legislation Advisory Committee Guidelines Chapter 3
[59] The plaintiff argued that a finding that he had no such right was incompatible
with the article. In rejecting his claim Lord Hoffmann stated:
25 …Article 6 is concerned with standards of justice, the separation of
powers and the rule of law. It would seem to have little to do with
whether or not one should have an action in tort. That is a matter of
national policy. Some countries, like New Zealand, do not believe
in actions in tort for personal injuries. Some have more restricted
no-fault schemes… The question whether a common law action for
damages is the most sensible way of providing compensation for
accident is controversial and Professor Atiyah’s The Damages
Lottery (1977) demonstrates that the existing system is expensive
and in many respects unfair.
26 I start, therefore, with a predisposition to think that whether the
appellant should have an action in tort or a no-fault entitlement has
nothing to do with human rights.
[60] It is simply impossible to infer the statutory purpose for which the appellants
contend. I am satisfied that the learned Judge was right to strike out the first cause of
The negligence claim
[61] As a threshold response to the negligence claim the Corporation submits that
it lacks power to give the undertaking relied upon by the appellants and accordingly
insofar as it is proved to have been given by the rehabilitation officer he acted
without authority. The relevant sections of the 1982 Act provide:
4. Accident Compensation Corporation
(1) There shall continue to be a body corporate called the Accident
Compensation Corporation which shall be the same body corporate as that
existing under the same name immediately prior to the commencement of
this Act.

(9) The Corporation shall be a body corporate with perpetual succession
and a common seal and, subject to this Act, is capable of acquiring, holding,
and disposing of real and personal property, and of suing and being sued,
and of doing and suffering all other acts and things that bodies corporate
may do and suffer.

7. Recommendations as to levies and compensation
(1) The Corporation shall in each financial year review, and make
recommendations to the Minister regarding the adjustments (if any) that
should be made in relation to,–
(a) The rates of levies to be paid by employers and
self-employed persons and by owners of motor vehicles and the
scales and classifications in relation to those levies:
(B) The imposing of levies under section 49 of this Act on
drivers of motor vehicles, and, if levies are so imposed, the rate of
those levies and the scales and classifications in relation thereto:
© The respective prescribed amounts for the purposes of
sections 39, 59, 60, 61, 62, and 63 of this Act.
(2) In making its recommendations as to levies, the Corporation shall
make recommendations designed to ensure that the levies are sufficient to
meet its liabilities over such period or periods as it may determine, and shall,
in its annual report to the Minister, specify the period or periods it has
determined and state whether or not, in its opinion, the levies being credited
are sufficient for this purpose.

(4) In making its recommendations in respect of the respective
prescribed amount for the purposes of sections 39, 59, 60, 61, 62, and 63 of
this Act, the Corporation shall provide that any adjustment it recommends
shall, after taking into account past relevant adjustments, reflect any
movement in earnings that has occurred since its last recommendations.
(5) The Corporation shall base its assessment as to the extent of any
movement in those earnings on its own financial records, whether of
earnings on which levies are paid, or of the amount derived from levies in
respect of earners, or of the average weekly rate of earnings related
compensation paid to earners, or of a combination of all or any of them, but
the provisions of this subsection shall not prevent the Corporation from
having regard to other relevant data and indices. In selecting the basis to be
adopted, the Corporation shall have regard to–
(a) The importance of adopting a basis which will reflect the
movement of earnings by earners having cover under this Act; and
(B) The desirability of completing its review and making its
recommendations as soon as practicable in the financial year in
which it is required to make recommendations.
(6) The Corporation shall, at intervals not exceeding 5 years, continue to
arrange for the Government Actuary or another independent actuary
approved by him to make a report to the Minister regarding the matters on
which the Corporation is required to make recommendations to the Minister
under this section. The actuary shall send to the Corporation a copy of his
report to the Minister. On receipt of any such copy of a report, the
Corporation shall, as soon as practicable, advise the Minister of any
comments it may wish to make thereon.
8. Administrative functions and powers
(1) The Corporation shall have such functions and powers in relation to
the administration of this Act as are conferred upon it by this Act, and shall
also have such further powers, not inconsistent with this Act, as are
reasonably necessary for the effective performance of its functions.

(5) No member, officer, or employee of the Corporation shall be
personally liable for any liability of the Corporation, or for any act done or
omitted by the Corporation or by any member, officer, or employee thereof
in good faith in pursuance or intended pursuance of the functions or powers
of the Corporation.
9. Financial functions and powers
(1) The Corporation shall have such functions and powers in relation to
financial matters as are conferred upon it by this Act, and shall also have
such further powers, not inconsistent with this Act, as are reasonably
necessary for the effective performance of its functions.
(2) Without limiting the generality of subsection (1) of this section, it is
hereby declared that the functions and powers of the Corporation shall
(a) Payment of all compensation, costs, and rehabilitation
assistance in accordance with this Act:

(7) In any financial year the Corporation may expend for purposes not
authorised by this or any other Act any sum or sums not amounting in the
aggregate to more than $5,000.

13. Officers and employees
(1) The Corporation may from time to time appoint such officers and
employees, including acting or temporary or casual officers and employees,
as it thinks necessary for the efficient exercise of its functions and powers,
and may at any time remove any officer or employee from his office or

[62] I accept Mr Tuiqereqere’s submission that there is no plenary authority on the
part of the Commission adding to its specific powers in relation to rehabilitation
assistance. But its power under s 36 to provide rehabilitation is expressed widely
and is not to be construed narrowly. As the Court of Appeal observed when
summarising its effect in ACC v Broadbelt [1990] 3 NZLR 169, 171:
Rehabilitation is a primary function of the Corporation. Section 36(1)
requires it to place great stress upon rehabilitation and to take all practicable
steps to promote a well co-ordinated and vigorous programme for the
medical and vocational rehabilitation of persons who have cover and who
become incapacitated as a result of personal injury by accident and are for
the time being in New Zealand. The subsection thus requires the Corporation
as a matter of statutory obligation to discharge that rehabilitative function in
the case of incapacitated persons with cover…”.
[63] Section 36 is one of a number of provisions aimed at responding effectively
to personal injuries on a large scale and of every conceivable kind. The functions
and powers of the Corporation, to be carried out by its officers and employees
appointed under s 13, include discharging the s 36 obligation. The language of the
section is emphatic; its proper operation is in the common interest of those injured,
their dependants, and society at large. There is not and cannot sensibly be any
narrow stipulation of how rehabilitation officers are to go about their business.
Some of the injured will have sustained gross intellectual disability. While s 63(4)
states that:
the Corporation shall not make any payment in respect of any
rehabilitation… for which an itemised written application has not been made
it does not state that the application must be made by the person in need of
rehabilitation. There is nothing to prevent its being made by a Corporation officer
on behalf of an injured person. Rather it is consistent with the restorative purpose of
s 36 and the legislation as a whole that a Corporation officer should have power to
assure a badly injured person that it will look after whatever formalities are to be
complied with in relation to necessary applications for assistance.
[64] The present case affords an example. The undertaking by the rehabilitation
officer was not an ultra vires frolic of his own but was given in the discharge of the
Corporation’s s 36 obligation. A man who is comatose has no capacity to fill out
forms. Someone must do it on his behalf. He may have a doctor or wife able and
willing to do it. But it is well arguable that there can be no vires reason for the
Corporation to be unable to say “this man is grossly disabled; he lacks the
knowledge and means to fill out the relevant forms; they are needed for his
rehabilitation; our task is to promote rehabilitation; so we will facilitate that
rehabilitation by lifting that responsibility from him”. If it were necessary I would
so decide; but for present purposes it is enough to decide that the issue warrants full
argument within a matrix of actual fact.
[65] A second response to the negligence claim is based on the s 14 bar of any:
…proceeding… for damages arising directly or indirectly out of personal
injury [caused by accident].
[66] Hart and Honoré Causation in the Law (2nd ed) state at p 69:
…if we look into the past of any given event, there is an infinite number of
events, each of which is a necessary condition of the given event and so, as
much as any other, is its cause.
I accept that on one argument the proceeding is:
…for damages arising directly or indirectly out of personal injury caused by
But for the accident there would have been no head injury and no symptoms and no
proceeding. However the “but for” test of causation has proved simplistic and
inadequate in many contexts. As Hart and Honoré observe at p 103:
[the answer to the question whether there is] liability is to be found by
asking what the purpose or scope of the statute is.
And at p 110:
[A] major advance secured by modern criticism we shall call the bifurcation
of causal questions. The single question typically confronted by courts:
‘Was this harm (Y) the consequence of this act or omission (X)?’: is divided
into two questions. First: ‘Would Y have occurred if X had not occurred?’
Second: ‘Is there any principle which precludes the treatment of Y as the
consequence of X for legal purposes?’ The utility and clarifying force of
this bifurcation of casual questions also has its limitations …, but, in a wide
range of cases, it has solid merits.
At p 30 Hart and Honoré give the example of Rocca v Stanley Jones & Co (1914) 7
BWCC 101 where:
… a doctor’s failure to attend to an injured workman and not the original
injury was treated as the cause of the subsequent disability…
Likewise Todd at p 204 cites Farwell v Keaton 240 NW 2d 217 (1976):
The defendant’s friend was beaten up by a group of assailants, but instead of
taking him to hospital the defendant drove around for several hours and
eventually left him asleep in the back of his car outside his grandparents’
house. The friend died three days later of an epidural haematoma.
The defendant was held liable, for he had assumed responsibility for his
friend’s welfare yet had done nothing to get him medical attention.
In each of these cases the law’s policy was to treat the earlier causation as
superseded by the later, treating it in the well-known legal expression as novus actus
[67] It is plainly open to the Court to treat the Corporation’s assumption of
responsibility and failure to discharge it as novus actus interveniens, described as:
[a] conscious act of human origin intervening between a negligent act or
omission of a defendant and the occurrence by which the plaintiff suffers
Goodyear Tire and Rubber Co of Canada Ltd v MacDonald (1974) 51 DLR
(3d) 623
It means conduct that in law supersedes the initial causation. The present question is
whether it should do so. That raises questions: of what purpose is to be attributed to
s 14 in this context and how far it should be treated as extending. Relevant to that is
how the law should treat the consequences of the Corporation’s assumption of
responsibility by the act of the rehabilitation officer.
Assumption and breach of responsibility as a tort
[68] The appellants’ claim is not for performance or even breach of its statutory
duty. It is by undertaking, as it had power but was not obliged to do, that it would
look after Mr Naysmith to ensure that he received all of the statutory assistance
properly required to recover from his injuries and then failing to discharge that
undertaking the Corporation lulled Mr and Mrs Naysmith into a false sense of
security and caused their loss. Had they been told that they must seek their own
medical advice or indeed had nothing been said, no obligation would have been
assumed by the Corporation. What is asserted is that the assumption of specific
responsibility (as contrasted with assumption of general responsibility, as to which
the law is less clear) and the failure to discharge that responsibility takes the claim
outside the statutory procedures which therefore afford no defence to it. The
appellants’ argument may be put in terms of a “special relationship” (R M Turton &
Co (in liquidation) v Kerslake and Partners [2000] 3 NZLR 406 para 76 – that it was
reasonable for them to rely on what the Corporation said.) It is in my opinion a
classic claim within the genus of which Hedley Byrne v Heller [1964] AC 465 is one
species, Spring v Guardian Assurance Plc [1995] 2 AC 296 a second and X (Minors)
v Bedfordshire County Council a third.
[69] In a perceptive essay Cause-in-Fact and the Scope of Liability for
Consequences (2003) 119 LQR 388, 416 Professor Stapleton offers an example of
how the law’s policy of protecting the vulnerable should apply in a closely
analogous case:
Assume C[laimant] is an elderly Ethiopian recluse who lives in a remote
farm. C’s only substantive human contact is with the local doctor,
D[efendant], who happens to speak C’s language. Say C and D meet on the
road and C asks D if C should do anything about the fact that C’s leg has
turned green and is very painful. D volunteers the careless advice that it is
nothing to worry about. C later loses the leg to gangrene. In my view,
courts will, rightly, focus on C’s vulnerability and exclusive dependence on
D and will impose a duty of care on the doctor (at least once he began to
give advice) for his negligent misstatement.
[70] In Attorney-General v Prince in the field of welfare, the Court of Appeal
declined to strike out an allegation of negligence relating to the treatment of a child
within the care of the Department of Social Welfare. The case was one where the
Department had assumed the care of the child. The Court of Appeal emphasised the
importance of the statutory scheme in considering whether it was just and reasonable
to superimpose a common law duty of care on the department in relation to the poor
performance of its statutory responsibilities for the treatment and care of children
and young persons. But it concluded that given that the element of proximity was
satisfied the statutory framework within which the department and social workers act
is consistent with an imposition of a common law duty of care which could not be
said to cut across the statutory scheme.

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Posted 03 August 2005 - 12:04 AM

:o WHO WON????

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Posted 03 August 2005 - 12:57 AM

[71] In Barrett v Enfield London Borough Council the House of Lords took a
broadly similar approach. The fact that children had been taken into care, so that
there was assumption of responsibility, was emphasised. There was no justification
for displacing the public policy consideration which will generally have first claim
on the loyalty of the law: that wrongs should be remedied. The authorities are
discussed by Lord Bingham (dissenting) in D v East Berkshire Community Health
NHS Trust [2005] 2 WLR 993, 1005.
[72] In W v Essex County Council [2001] 2 AC 592 a claim was made by children
who had been abused and by their parents. The parents had fostered a child on the
assurance that he was not a known sexual abuser when, to the knowledge of the local
authority, he was. The House of Lords held that the claim should proceed to trial.
As in this case, the defendant had made a representation on which the plaintiffs had
relied to their detriment.
[73] The topic of liability for assumption of responsibility is dynamic. Some
authorities have treated assumption of merely general responsibility as sufficient to
give rise to a legal duty. The topic is discussed by Cane and Trindade The Law of
Torts in Australia (3rd ed Oxford 2001) p 382:
The concept of general reliance has not been well received in England… At
the same time English courts have recognised that there are cases in which
recovery for economic loss ought to be allowed even in the absence of
specific reliance…
[74] In the sphere of pure economic loss, decisions of courts of appeal in
New Zealand in Rolls-Royce New Zealand Ltd v Carter Holt Harvey [2005] 1 NZLR
324 and in England in Customs & Excise Commissioners v Barclays Bank Plc (2004)
EWCA CIV1555 have been the subject of learned essays by Professor Coote
Assumption of Responsibility and Pure Economic Loss in New Zealand [2005]
NZLRev 1 and by P and C Mitchell Negligence Liability for Pure Economic Loss
(2005) 121 LQR 194 and Capper Tort Liability for Breaching Asset Freezing
Injunctions (2005) CLJ 26. The importance of actual assumption of responsibility is
a general theme.
[75] New Zealand law has maintained the two stage test of liability in negligence
devised by Lord Wilberforce in Anns v Merton London Borough Council [1978] AC
728, 751-2: see Connell v Odlum [1993] 2 NZLR 257, 265. As Professor Coote
observes at p 3:
…it is clear that the concept of assumption of responsibility…remain[s]
relevant to New Zealand law.
[76] In Rolls-Royce New Zealand Ltd v Carter Holt Harvey the Court of Appeal
…in cases where the defendant is found to have undertaken to exercise
reasonable care in circumstances which are analogous to, but short of
contract, and it is foreseeable that the plaintiff will rely on that
undertaking… then, subject to any countervailing policy factors, a duty of
care will arise.
That observation provides substantial support for the present claim.
[77] In England there exists what in McLoughlin v Jones [2002] QB 1312 para 28
Brooke LJ has described as a battery of tests:
…which the House of Lords has taught us to use:… the “purpose” test
(Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC
191, 211-212); the “assumption of responsibility” test (Henderson v Merrett
Syndicates Ltd [1995] 2 AC 145, 180-181); the “principles of distributive
justice” test (Frost v Chief Constable of South Yorkshire Police [1999] 2 AC
455, 503-504); and the “three-pronged” test (Caparo Industries plc v
Dickman [1990] 2 AC 605, 617-619)…
The second of these is closely in point. In Australia the High Court originally
applied the principle of general reliance: Sutherland Shire Council v Heyman (1985)
157 CLR 424, 464 per Mason J but later rejected it: Pyrenees Shire Council v Day
(1998) 192 CLR 330; Crimmins v Stevedoring Industry Finance Committee (2000)
200 CLR 1, 80 per Kirby J. But specific reliance is another matter. Canada like
New Zealand maintains the two stage Anns test: City of Kamloops v Nielsen [1984] 2
SCR 2. In Hercules Managements Ltd v Ernest & Young [1997] 2 SCR 165 para 24
La Forest J applied to a claim for economic loss a broad test of reliance:
…if “proximity” is meant to distinguish the cases where the defendant has a
responsibility to take reasonable care of the plaintiff from those where he or
she has no such responsibility, then in negligent misrepresentation cases, it
must pertain to some aspect of the relationship of reliance. To my mind,
proximity can be seen to inhere between a defendant-representator and a
plaintiff-representee when two criteria relating to reliance may be said to
exist on the facts: (a) the defendant ought reasonably to foresee that the
plaintiff will rely on his or her representation; and (B) reliance by the
plaintiff would, in the particular circumstances of the case, be reasonable.
To use the term employed by my colleague, Iacobucci J, in Cognos, supra, at
p 110, the plaintiff and the defendant can be said to be in a “special
relationship” whenever these two factors inhere.
Cognos [[1993] 1 SCR 87]
As to personal injury, Justice Linden in the seventh edition of his Canadian Tort Law
(2001) endorses at p 292 the English decision Mercer v South Eastern Railway Co.
[1922] 2 KB 549:
where the defendants had made a practice of keeping a wicket gate locked to
pedestrians when a train was passing. This practice was known to the
plaintiff who was injured by a passing train when, owing to carelessness of
the defendant’s servant, the gate was left unlocked. The defendants were
held liable. Lush J felt that:
to those who knew of the practice that was a “tacit invitation” to
cross the line… It may seem a hardship on a railway company to
hold them responsible for the omission to do something which they
were under no legal obligation to do, and which they only did for the
protection of the public. They ought, however, to have contemplated
that if a self-imposed duty is ordinarily performed, those who know
of it will draw an inference if on a given occasion it is not
performed. If they wish to protect themselves against the inference
being drawn they should do so by giving notice, and they did not do
so in this case.
[78] In each jurisdiction assumption of responsibility rates high among the
indicators of negligence liability; and especially so in the case of specific reliance.
That in my view is a vital aspect of this case.
[79] Use of the test of specific reliance in my view meets the criticism of Hart and
Honoré at p 118 that:
The courts have not used the conception of the scope and purpose of legal
rules to avoid [the] causal question as frequently as might be expected.
[80] While most of the discussion has been in the sphere of economic loss, the law
has always afforded the highest protection to the physical integrity of the person;
a lower protection to property rights; and still less protection to economic interests.
That is why the common law applied the thin skull test to claims for personal injury
(Smith v Leech Brain [1962] 2 QB 405, the simple loss of value test to damage
to goods (The London [1935] P 70), and a more exacting test for economic loss
(Hadley v Baxendale (1854) 9 Exch 341). The fact that New Zealand has adopted a
no fault accident compensation scheme does not alter those basics. Entitlement to
relief in the case of economic loss resulting from specific assumption of obligation
and its breach must exist a fortiori in the case of personal injury.
[81] On the questions whether the cause of action is inconsistent with a policy of
the legislation or whether the assumption and breach of responsibility should be
treated as novus actus interveniens, in Queenstown Lakes District Council v Palmer
[1999] 1 NZLR 549, 555 line 37 Thomas J stated:
…the purpose of the provision barring common law claims is to prevent
persons who suffer personal injury being compensated twice over, once
under the statute and then at common law. The bar is not designed to prevent
them recovering any compensation at all.
Such a view is in accordance with the traditional principle, which enjoys
fundamental constitutional status in our free and democratic society, that
citizens are not to be denied access to the Courts, save in rare and
appropriate circumstances, and then only pursuant to explicit statutory
language. The right to seek damages at common law for personal injury
suffered because of the fault or negligence of another was removed by the
legislation, but the quid pro quo was the right to compensation under the
statutory scheme. (See Stephen Todd, “Accident Compensation and the
Common Law”, in S Todd (gen ed) The Law of Torts in New Zealand (1997,
2nd ed) at p 63). The design of restricting the right of access to the Courts
by, as it were, a sidewind; that is, by simply withdrawing or curtailing the
scope of the cover under the Act without at the same time addressing the
fundamental principle of access to the Courts, should not be imputed to
[82] Since on the facts pleaded the losses would never have occurred had the
Corporation not given and then breached its undertaking, in a very real sense that
conduct was the effective cause of the loss. It is in my opinion well arguable that
the legislative policy of s 14, excluding claims for personal injury by accident, does
not touch a claim for injury caused not by the accident but by negligent breach of an
assumed obligation.
[83] Whether such argument should be accepted will entail considerations of
policy which are ultimately the province of appellate courts. But the principle that
wrongs should be remedied, which led Lord Bingham to dissent in D v East
Berkshire, applies with stronger force in this case where the nexus between the
wrongful act of the defendant and the injury to the plaintiffs is much closer.
[84] While the appellants must recognise that the ultimate policy decision may go
against them, given the strength of the argument they advance I consider that the
case should be allowed to go to trial to provide a proper evidentiary basis for the
ultimate policy judgment.
[85] The appeal is accordingly allowed in relation to the negligence cause of
[86] The case is remitted to the District Court for it to resume the conduct of this
proceeding. The appellants should promptly file a further amended statement of
claim reflecting the decisions in this judgment. They must decide whether the
allegations recorded in Ms Quarrie’s letter of 13 March 1998 about advice to
Mr Naysmith by the Kaitaia ACC are relied upon or not. They must be either
abandoned or properly particularised as grounds of claim.
[87] Costs submissions may be made by memoranda from the appellants within
14 days and from the Corporation within a further 14 days.
W D Baragwanath J

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Posted 03 August 2005 - 11:54 AM

Has this opened up a "Can of Worms" ?

#5 User is offline   Paradigm Shift 

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Posted 03 August 2005 - 12:28 PM

No there has always been an open can of worms!

But now there is a High Court decision guiding the district courts.

This case demonstrates that the ACC to have a duty of care and that there is liability, accountability etc.

I am yet to read the High Court ruling properly but I think this will open up many remedies in regards to misfeasance by ACC case managers.

#6 User is offline   MG 

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Posted 03 August 2005 - 12:36 PM

I don't think this case is much help at all. The cause of action for breach of statutory duty has been excluded, in spite of section 260(1)(a) of the 2001 Act, which provides that ACC is capable of being sued.
Breach of statutory is a valuable legal remedy which now seems to be totally off limits to ACC claimants. I think it is outrageous.
Justice Baragwanath also cautioned that the action for negligent misrepresentation may fail, on "policy grounds" - ie the Court could well defer to the Executive.

#7 User is offline   magnacarta 

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Posted 03 August 2005 - 08:14 PM

MG, I've spoken to two lawyers in different firms and a barrister sole and all of them have said this case is very good for claimants in various areas of law.

#8 User is offline   tonyj 

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Posted 09 August 2005 - 07:32 AM

to quote MG
I don't think this case is much help at all. The cause of action for breach of statutory duty has been excluded, in spite of section 260(1)(a) of the 2001 Act, which provides that ACC is capable of being sued.
Breach of statutory is a valuable legal remedy which now seems to be totally off limits to ACC claimants. I think it is outrageous.


outrageous is an understatement ...

To me the aspects of the positive outcomes were obviuose and evident and were so clear they should have been remedied by the ACC long before it got to litergation , but to have the breach of statutory duty excluded and the reasons for the decision concerns me.


#9 User is offline   greg 

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Posted 04 July 2006 - 08:56 AM

I have just been reading up about this again and the similarities of my TBI.,1991,
about case closure 1999,before follow up was done. While I had claim under another injury WCAP forms 1993, filled in at the times indentified the same TBI., symptoms , as with the IP. in this court case.

Am waiting for flies to arrive that were requested in writing back in Nov.05,
but were not release due to being held in the legal dept. according to phone op..

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