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CL12 Limitation Acts

Limitation Acts
The Limitation Act 2010 came into force on 1 January 2011 but the Limitation Act 1950 still applies to causes of actions based on acts or omissions before 1 January 2011.
The new Limitation Act has a six year period to bring a claim and a final longstop provision of 15 years from the date of the act or omission. This is also incorporated into the old Act. However, there is discretion to extend this period for sexual abuse and gradual process disease or infection injuries beyond that longstop period. See s 23A-23D added to the Limitation Act 1950 by the Limitation Act 2010.
Unlike the usual six year limitation period for claims in tort and contract, there is a two year limitation period for personal injury claims which runs from the date the cause of action arose, unless:
The defendant consents to the later proceedings;
The Court grants leave to bring proceedings within a six year period; or
At the date the cause of action accrued, the plaintiff was under a disability, or the right of action was concealed by fraud. If this is the case, the two year period begins to run when the plaintiff ceases to be under a disability or dies, or, in the case of fraud, discovers it, or could have with reasonable diligence discovered it.
Because the Act actually speaks of bodily injury, it could be argued that a mental trauma claim is not within this phrase and has the normal six year limitation period. However, the term “bodily injury” has been used interchangeably with “personal injury” in the cases. In Gabolinscy v Hamilton CC [1975] 1 NZLR 150, a claim for inconvenience and worry was said to be a claim for personal injury. See also Maxwell v North Canterbury Hospital Board [1977] 2 NZLR 118, A v D 13/5/96, Master Thomson, HC Wellington CP90/95, and H v R [1996] 1 NZLR 299; [1996] NZFLR 224. However, in Otter v Residual Health Management Unit 28/4/98, Master Kennedy-Grant, HC Auckland CP204/96 the defendants conceded that a claim for grief and distress without more is not a claim for bodily injury within s 4(7) Limitation Act 1950. The cause of action was still struck out as the Master considered that only a claim for a recognised psychiatric illness was recognised at law.
Date at which injury was reasonably discoverable: the law in New Zealand
In G D Searle & Co v G [1996] 2 NZLR 129; (1996) 9 PRNZ 271 (CA) the Court of Appeal decided that for the purposes of s 4(7) Limitation Act 1950 a cause of action in a personal injury claim accrues when “bodily injury of the kind complained of was discovered or was reasonably discoverable as having been caused by the acts or omissions of the defendant”. The respondent had an intra-uterine device inserted and, because it was painful, also removed in 1981. Following the insertion and removal she suffered pelvic inflammatory disease and other complications which rendered her infertile. However, it was not until 1991 that she became aware that the disease and the complications which followed were or may have been caused by her use of the device. Proceedings were filed in 1992. The Court of Appeal considered she had a sustainable cause of action. The only question for determination would be when the link between the insertion of the device and the physical consequences was reasonably discoverable. Although the respondent had only discovered the link in 1991, nevertheless time would have started to run before then if others in her position would reasonably have discovered the link at that earlier stage.
In S v G [1995] 3 NZLR 681; (1995) 8 PRNZ 465; 2 HRNZ 11 (CA), the respondent had sought leave to bring an action in negligence, assault and battery, and breach of fiduciary duty against a medical practitioner for sexual and physical abuse commencing in 1978. The respondent argued that her cause of action did not arise until she came to realise during a course of counselling therapy that her emotional and psychological damage was linked to the medical practitioner’s conduct. Support for this approach can be found in the decision of the Supreme Court of Canada in K M v H M (1992) 96 DLR (4d) 289 (SCC).
The Court of Appeal was prepared to accept this view in the negligence action where damage was an essential element of the cause of action. Therefore, a sexual abuse victim who has not linked serious psychological and emotional damage with the original abuse does not have the limitation period run until the damage is or should have been reasonably linked to the abuse. This is not a wholly subjective test but one based on reasonable discoverability. Where damage is not an element of the cause of action such as assault and battery, the Court of Appeal decided the reasonable discoverability approach could also be applied to the recognition of the lack of true consent to the conduct which is an element of those causes of action.
In S v G (above) the Court of Appeal also confirmed that s 28 Limitation Act 1950 could have application in cases of sexual abuse against children who are deceived as to the true nature of the acts involved. That section provides that the limitation period does not run if the defendant’s fraud has concealed the right of action. The limitation period only begins to run when the plaintiff discovers the fraud or could, with reasonable diligence, have done so.
As for the claim for breach of fiduciary duty, the respondent argued that this was not barred because of the provisions of s 4(9) Limitation Act 1950 which exclude claims for equitable relief from the limitation period. The Court of Appeal decided that where the pleaded claims were really alternatives for the same conduct, as was the case here, equity followed the law. Thus, if the negligence claim was barred so too would the claim for breach of fiduciary duty. The Court indicated the same result could also be achieved by the equitable doctrine of laches.
However, leave to proceed with the action was refused by the Court of Appeal because, even allowing that the cause of action commenced from discoverability, the respondent was still over the 2-year time limit for personal injury claims and thus required the leave of the Court to proceed. This was refused as the prejudice to the appellant doctor outweighed the desirability of permitting the respondent to bring the action because the conduct took place in the Centrepoint community where such sexual practices were an integral part of the residents’ life. The Court also noted that there would be an element of double punishment involved, the appellant already having been convicted for his sexual abuse.
Applications for leave to bring proceedings after 2 years: s 4(7)
Leave under s 4(7) Limitation Act 1950 to bring a claim after the expiration of the 2-year period was refused in Ellison v L [1998] 1 NZLR 416; (1997) 11 PRNZ 401 (CA). Leave was also refused by the High Court in Nelson Marlborough District Health Board v Davis 28/3/03, Wild J, HC Nelson M17/02 where the Court categorised delays of some 19 months which were unexplained, together with prejudice to the defendant, as disentitling the Court to grant leave. Noting that the proposed claim was for $150,000 exemplary damages, the Court also referred to the Court of Appeal decision in Ellison v L suggesting that only modest exemplary damages (in the vicinity of $15,000) are likely to be awarded to punish outrageous behaviour.
In A v D (1996) 10 PRNZ 68, the Court noted that the application for leave under s 4(7) had to be filed within the 6-year period even if it was not decided within that time. Filing the substantive proceedings within the 6-year period without seeking leave was not sufficient.
In H v H (1997) 10 PRNZ 458, leave was refused to commence proceedings 4 years after the accrual of the cause of action.
In Wilson v Nightingale Trading Ltd 4/8/99, Durie J, HC Wellington CP88/99, it was accepted that a mistaken belief that the accident compensation legislation prevented an action for exemplary damages constituted a good reason for the delay and a late claim under s 97(4) Maritime Transport Act 1994 was allowed to proceed.
In T v H [1995] 3 NZLR 37 (CA), leave was refused to commence proceedings against a deceased tortfeasor because s 3 Law Reform Act 1936 prescribed its own limitation period and prevented an extension through disability under s 24 Limitation Act 1950.
In P v T [1997] 2 NZLR 688 and on appeal P v T [1998] 1 NZLR 257 (CA), leave was refused in an action for assault and battery. The plaintiff sought exemplary damages from the defendant for sexual violation some 17 years earlier when she was 20 years old. The plaintiff contended that her cause of action did not accrue until February 1995 when she reasonably discovered all the facts making up her cause of action. The High Court and the Court of Appeal confirmed that the cause of action in battery accrued when force was applied to the plaintiff’s body without her consent. From her evidence the Court concluded that both elements were satisfied when the incident occurred. The Court of Appeal considered that the question of reasonable discoverability did not arise and said (at p 5), “it is inapt to speak of later discovering what she had known at the outset”.
In Harris v McIntosh (1998) 12 PRNZ 528, leave was refused for an action for $250,000 exemplary damages against a dentist for treatment in 1984 some 14 years earlier. During the treatment part of an instrument had lodged in the plaintiff's root canal. It was not removed until 1996. The reasons for the refusal were the delay and the fact that there was no prospect of a claim for exemplary damages succeeding. The decision was upheld on appeal: Harris v McIntosh 30/9/99, CA279/98.
In H v B HC Wellington CP7/97, 4 September 1998 leave was refused for an action for $250,000 general damages and $200,000 exemplary damages. One of the causes of action was assault and battery to the plaintiff while she was a child. The ingredients of the tort do not require damage but do require a lack of consent. In the case of a child, unlike adults, the reasonable discoverability test applies to the lack of consent in that the cause of action does not arise until the plaintiff knew or should have reasonably discovered that she did not consent to the acts of trespass. The Judge reviewed the affidavit evidence and concluded there were many occasions from the actual event onwards where the plaintiff must have realised that she had not consented, the latest being 1979, well outside the limitation period.
Sexual abuse claims: discoverability test
In B v C 7/5/99, Master Venning, HC Christchurch CP117/97 the plaintiff sought exemplary damages for sexual abuse by her uncle when she was 15. The Master held that in 1989 when she was 25 she must have recognised that she had been abused by the defendant without her consent. Proceedings were not issued until 1997, some 2 years after the 6-year period expired in 1995. Her claim was therefore struck out.
However, the Court of Appeal had one day earlier (on 6 May 1999) delivered a judgment which took a completely different approach to the discoverability test in situations of childhood sexual abuse. In W v A-G [1999] 2 NZLR 709; (1999) 18 FRNZ 91; 16 CRNZ 458 (CA), the appellant was sexually abused by a foster parent as a child. She sought to issue proceedings against the Department of Social Welfare for placing her in that situation and ignoring her complaints.
In 1997 she filed an application for leave to bring proceedings but the High Court refused leave on the basis that reasonable discoverability happened at least 6 years previously in 1991.
In the Court of Appeal, Thomas J delivered the main judgment. He criticised the approach of equating the situation of a sexually abused woman and whether she made the connection between her sexual abuse and adult behavior, or ought to have discovered that connection, as if it were an exercise akin to that of discovering cracks in a house foundation.
He considered that such an approach by the Courts did not demonstrate any great understanding of the subject or sensitivity to the psychological and emotional problems suffered by a woman in the plaintiff’s position. After reviewing past cases and lamenting the inadequacies of past judicial practice in this area Thomas J said (at paras 72, 73):
“[72] To my mind therefore it must be accepted that the exercise of determining when a sexually abused woman made the causal link between the abusive activity and her later psychological and emotional injuries necessitates an essentially subjective approach. There is little or no scope for the concept of reasonableness and the objectification of the characteristics of the sexually abused woman.
“[73] Adopting an essentially subjective approach does not mean that the Courts cannot reserve a residual power to hold that the cause of action occurred at an earlier date than that claimed by the intended plaintiff. It is to be stressed that, in almost all cases, the question will be one of fact; did the intended plaintiff on the evidence before the Court make the connection between the abuse and her behavior at an earlier date than she claims? If it is proper to find that she did, then, subject to the possibility of leave under s 4(7), that will be an end to the matter. Where it is found as a matter of fact that the woman did not make the connection until the time she claims to have made it, that finding would, on an essentially subjective approach, usually also be the end of the matter.”
Tipping J (at para 108) considered that:
“reasonable discoverability is to be determined against what is reasonable from the point of view of the intending plaintiff, not from the point of view of a reasonable person `in the position of’ the intending plaintiff.”
He noted (at para 109) that:
“The test is not wholly subjective. An external standard of reasonableness is applied to the individual intending plaintiff, but in the light of such characteristics, problems and difficulties which affect that plaintiff. The correct approach can be captured by asking whether it was reasonable for this plaintiff alleging sexual abuse and its various consequences, not to have made the link between the abuse and the harm earlier.”
Salmon J considered (at para 126) that the correct test was:
“to measure objectively the reasonableness of the victim’s actions but the victim must be taken as he or she is. It is only in that way that the measure can properly take into account the particular disjunction from which the victim suffers.”
Tipping J considered (at para 115) that:
“if the date of accrual of the cause of action, or any other aspect of limitation is doubtful, leave should be granted, if otherwise appropriate, and all limitation issues determined at trial.”
In W v A-G 3/10/02, Smellie J, HC Wellington CP42/97 the plaintiff sought compensatory and exemplary damages against the defendant Department of Social Welfare, for sexual abuse suffered in foster homes, based on the following causes of action:
Breach of fiduciary duty owed by the superintendent and his successors;
Breach of statutory duty owed by the superintendent, his successors and agents;
Negligence by the superintendent and those acting for him, whether directly or vicariously;
Assault and battery by an agent of the superintendent;
Negligence (vicarious liability), the superintendent being vicariously liable for the conduct of the foster parents.
The Court found that the plaintiff did not discover the link and surmount her disability so that she could apply for leave to commence the action in the High Court, until after interviews with her doctor in 1996. Accordingly the plaintiff had cleared the limitation barrier and was able to pursue her action. However, the plaintiff’s claim for personal injury based on sexual abuse was statute-barred. Further, even if general damages for personal injury had been available in respect of any of the causes of action advanced, those damages would have been substantially reduced on account of the plaintiff’s failure to mitigate her loss. The Court went on to hold that the conduct of the case workers did not call for condemnation by way of exemplary damages. Such damages were not warranted on a vicarious basis for unknown wrongdoing.
“Under a disability”
In P v T [1997] 2 NZLR 688 and P v T [1998] 1 NZLR 257 (CA), it was argued that the plaintiff suffered a disability within the provisions of s 24 Limitation Act l950 due to post-traumatic stress disorder. Under s 24 the cause of action accrues when the person is no longer under the disability. The Court confirmed the two requirements set out in T v H [1995] 3 NZLR 37, 61:
“first that the alleged unsoundness of mind pertains to a part or facet of the mind relevant to and sufficiently inhibiting the capaciity to sue; and second that the alleged unsoundness results from a demonstrable and recognised mental illness or disability rather than being just an inability to face up to the process of suing.”
The Court did not accept that the evidence showed that the plaintiff had been so prevented.
In H v B HC Wellington CP7/97, 4 September 1998, leave was refused for an action for $250,000 general damages and $200,000 exemplary damages. Gendall J found that the plaintiff should have known of the cause of action in 1979, well outside the limitation period. However, he then turned to ascertain if the plaintiff was under a disability. She was a minor until 1966 but that was still well outside the limitation period. He then considered whether the post traumatic stress disorder she claimed to have suffered would be a disability for the purposes of the Act. He considered that it would, but that it was not shown to have existed beyond 1988 which again was outside the limitation period. Leave was accordingly refused.
In W v A-G [1999] 2 NZLR 709; (1999) 18 FRNZ 91; 16 CRNZ 458 (CA), Thomas J questioned why infancy and unsoundness of mind were the only circumstances usually considered to be covered by a disability. He noted that the wording of the Act did not require that construction. Speaking about a woman who had been sexually abused in childhood he said (at para 91):
“It would seem to me that once it is accepted that a woman who is incapable of instructing a solicitor and commencing proceedings is under a disability, it should not be necessary to go further and compress her psychological condition into unsoundness of mind.”

From Personal Injury in NZ

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