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This case concerns the test to be applied in a claim for exemplary damages for negligence resulting in personal injury and the applicability of that test to a determination of whether new evidence warrants the granting of a new trial under High Court Rule 494.
Between 1990 and 1996 the appellant, Dr Bottrill, misread cervical smear slides taken from the respondent, Mrs A. As a result, Mrs A’s condition required significant and invasive treatment amounting to personal injury under accident compensation legislation. After being compensated for that injury, Mrs A brought a claim against Dr Bottrill for exemplary damages for negligence. The High Court dismissed the claim, holding that Dr Bottrill’s negligence did not reach the high standard necessary for an award of exemplary damages. Re-examination of a large number of slides allowed a recalculation of Dr Bottrill’s error rate. On the basis that evidence was now available which disclosed the possibility of a miscarriage of justice meriting a new trial, an application for re-trial was granted under High Court Rule 494(3)(e).
May it please the Court, the submissions for the appellant are the following:
1. That the award of exemplary damages for negligence requires subjective awareness that the conduct creates a risk of harm, and deliberate action in reckless disregard of that risk.
2. That, on an application of the true test for exemplary damages, the new evidence does not merit a new trial.
Section 396 of the Accident Insurance Act 1998 provides that exemplary damages may be claimed for personal injury arising from accident. The section confirms the decision in Donselaar v Donselaar that exemplary damages will be available for purely punitive purposes[1] in which the focus is on the quality of the conduct causing harm, not the harm suffered.[2] As the harm suffered is adequately compensated by the statutory scheme, issues of compensation are not to be considered in claims for exemplary damages arising from personal injury. [3]
Exemplary damages are to be awarded only in rare cases where the conduct amounts to high-handed infringement of the plaintiff’s rights.[4] The application of the remedy to cases of negligence must be based on a careful assessment of the principles by which exemplary damages are normally awarded for intentional torts, including the purpose of the remedy and the level of conduct meriting an award.[5]
The primary purpose of exemplary damages in New Zealand tort law is punishment.[6] Punishment’s primacy is also recognised by the Australian Courts[7] and by Law Reform Commissions in the United Kingdom[8] and Ontario.[9] The primacy reflects a lack of separation between the law of intentional torts and the criminal law.[10] An underlying justification for the application of punitive measures in each area is the need to condemn and deter deliberate behaviour which harms another person or group.[11]
In criminal law, culpability may be based on intention or subjective recklessness, the conscious taking of a risk.[12] An objective assessment of the facts has to find that the defendant “must” rather than “ought to” have known of the risk.[13] It is submitted that by analogy with crime and intentional torts, awards of exemplary damages in negligence require conscious and deliberate risk-taking which goes beyond simple negligence[14] or inadvertence.
The burden in criminal prosecutions is for proof beyond reasonable doubt. The lower burden of balance of probabilities required in civil cases reinforces the need for a high threshold test for the award of exemplary damages in civil cases.[15]
The level of negligence required before the threshold for an award of exemplary damages is met has been established in McLaren Transport Ltd v Somerville as:
[A] level of negligence ... so high that it amounts to an outrageous and flagrant disregard for the plaintiff’s safety, meriting condemnation and punishment.[16]
Australian authority emphasises that any action undertaken in contumelious disregard of the rights of the plaintiff or persons in the position of the plaintiff must be engaged in consciously.[17] The McLaren formulation omitted consciousness, but held that the defendant employee knew that his behaviour risked harm.[18] The description of the conduct as outrageous and flagrant implied both subjective recklessness and deliberation. As the fact of knowledge was relied on in the decision, the ratio therefore omitted an important material element.
The test of gross negligence was considered to provide too simplistic a test since it did not incorporate the ingredients necessary to make up the totality of the criteria.[19] It is submitted that McLaren’s facts reveal the necessary elements to be subjective awareness of risk and a decision to disregard the risk. The requirement for disregard of the plaintiff’s safety implies disregard of a known risk, rather than ignorance of that risk. Both subjective awareness of risk and a decision to continue with the conduct regardless of risk must combine for the conduct to become so outrageous as to merit punishment.
The requirement of subjective recklessness contended for finds support in the United Kingdom Law Commission’s Report on Aggravated, Exemplary and Restitutionary Damages, which states that the minimum threshold is the subjective recklessness of the defendant.[20]
It is submitted that the McLaren formulation omits an essential element. The true test for the award of exemplary damages for personal injury is the punishment of behaviour consciously undertaken in outrageous and flagrant disregard of the plaintiff’s safety.
In order to meet the requirement in Rule 494 that there has been a miscarriage of justice meriting a new trial,[21] new evidence must be shown to be capable of having an important influence on the trial.[22]
Any new trial must apply the correct test for the award of exemplary damages for negligence. In order to have an important influence on the trial, the evidence must demonstrate that Dr Bottrill was subjectively aware that his conduct risked the plaintiff harm, and that he continued in reckless disregard of that risk.
The new evidence is relevant only to Dr Bottrill’s level of accuracy. It contributes nothing to an assessment of his subjective awareness and does not disclose that he was at any point put on notice of his inadequacy. As procedures that might have put Dr Bottrill on notice were not in place, there can be no assumption that he was at any point put on notice. The question is not what Dr Bottrill “ought” to have known but what he “must” have known, by objective assessment of his subjective state.[23]
An objective assessment of Dr Bottrill’s level of awareness was made by the Ministerial Inquiry,[24] which found him to be unaware that his practice entailed risk for his patients. In the absence of subjective awareness, his continuation in practice did not constitute reckless or high-handed disregard for the safety of his patients.[25]
Should the evidence in fact disclose subjective awareness, it is clear that exemplary damages are awarded only where the conduct complained of can be punished in no other way.[26] The appropriate punishment has been applied by the Medical Council’s disciplinary body, making further punishment unwarranted.
It is acknowledged that exemplary damages can perform secondary functions of education and deterrence.[27] Dr Bottrill’s retirement obviates the need for personal deterrence, while provision for education and deterrence for other professionals has been met by publicity surrounding the trial and Ministerial Inquiry.
On application of the correct test, the evidence now available would not have an important influence on a new trial.
In conclusion, for the appellant it is respectfully submitted that:
1. The award of exemplary damages for negligence requires subjective awareness of a risk of harm, and deliberate action in reckless disregard of that risk. This requirement recognises that the punitive role of exemplary damages will be reserved for rare cases where the negligence complained of amounts to outrageous and flagrant disregard for the rights of the plaintiff. The imposition of punishment only where the defendant is subjectively aware of the risk of reflects the need to ensure that a high threshold test balances the lower burden of proof in civil cases and is consistent with the remedy’s origins in intentional torts.
2. On an application of the true test for exemplary damages, the new evidence does not merit a new trial. The evidence can only have an important influence if it discloses that Dr Bottrill was aware that his conduct risked harm. There is no such evidence. Secondary functions which might support an award of exemplary damages have been served and no principled purpose would be served by re-litigation.
The appellant respectfully submits that the High Court Judge’s order for a new trial be quashed.
May it please the Court, that concludes the submissions for the appellant.
[*] BA (Cantuar), DipTeach, LLB honours student, winner of the 2003 McCaw Lewis Chapman Advocacy Contest. The competitors in the Contest were required to stand in the shoes of either counsel for the appellant or counsel for the respondent, and present an argument as at the date of the hearing in the Court of Appeal.
[1] Donselaar v Donselaar [1982] NZCA 13; [1982] 1 NZLR 97, 107, per Cooke J.
[2] Ibid, 109, per Richardson J.
[3] McLaren Transport Ltd v Somerville [1996] NZHC 1601; [1996] 3 NZLR 424, 433.
[4] Ellison v L [1998] 1 NZLR 416, 419.
[5] Supra note 3.
[6] Ibid. See also Taylor v Beere [1982] NZCA 15; [1982] 1 NZLR 81, 89; Donselaar supra note 1, at 109.
[7] Gray v Motor Accident Commission [1998] HCA 70; (1998) 196 CLR 1, 9.
[8] Aggravated, Exemplary and Restitutionary Damages United Kingdom Law Commission Report No 247.
[9] Report on Exemplary Damages Ontario Law Reform Commission (1991) 38-39.
[10] Daniels v Thompson [1998] NZCA 3; [1998] 3 NZLR 22, 28.
[11] Garrett v Attorney-General [1996] NZCA 430; [1997] 2 NZLR 332, 349
[12] R v Harney [1987] NZCA 86; [1987] 2 NZLR 576, 581.
[13] R v Dixon [1979] 1 NZLR641, 647.
[14] Supra note 4.
[15] W v W [1999] 2 NZLR 1, 3.
[16] Supra note 3, at 434.
[17] Supra note 7, at 9, adopting Whitfeld v De Lauret and Co Ltd [1920] HCA 75; (1920) 29 CLR 71, 77.
[18] Supra note 3, at 435.
[19] Supra note 3, at 434.
[20] Supra note 8, paragraph 5.47.
[21] High Court Rules No 494(3)(e).
[22] Ladd v Marshall [1954] EWCA Civ 1; [1954] 3 All ER 745, 748.
[23] Supra note 12.
[24] Report of the Ministerial Inquiry into the Under-Reporting of Cervical Abnormalities in the Gisborne Region (April 2001).
[25] Supra note 4.
[26] Cable v Robertson unreported, Court of Appeal, 10 May 1996 (CA125/95) Richardson P, Keith and Blanchard JJ, adopted in Dunlea v Attorney-General [2000] NZCA 84; [2000] 3 NZLR 136, 148.
[27] Supra note 10, at 68, per Thomas J.
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URL: http://www.nzlii.org/nz/journals/WkoLawRw/2003/8.html