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Accident Compensation Cases

Brittain v Telecom Corporation of New Zealand Ltd (EMC, 14/08/00)

Judgment Text

SHAW J (reserved):
The defendants have made interlocutory applications for orders deciding two questions before the substantive hearing is commenced. 
There have been a number of interlocutory applications already in these matters. Issues such as consolidation and representative actions remain to be finally resolved. These are procedural matters and an indication of the potential complexities ahead for the Court and the parties. 
The claims 
While there are some differences of facts relating to each, in essence all the claims in these proceedings have the following factors in common: the plaintiffs were all employed by one or other of the Telecom group of companies named as defendants. The terms of their employment were governed either by the 1992 or 1993 Telecom Employees Collective Employment Contract. They were all employed in jobs which required them to use computers and their employment was detrimentally affected by occupational overuse syndrome injury (“OOS”). The plaintiffs have all sued in contract alleging breaches of implied and express terms of their employment contracts. The alleged implied terms are that the defendants are to provide for their employees a safe place of work and a safe system of working as well as the usual term of fair and reasonable treatment of employees. The express term is that the defendants are to adequately protect their employees from any safety and health hazards arising in the workplace. Causes of action alleged by the plaintiffs include: 
Failure to adequately protect the plaintiffs from safety and health hazards arising in the workplace and failure to maintain a safe working environment and a safe system of working. 
Wrongful dismissal. 
Breaches of implied term of fair and reasonable treatment and fair dealing. 
Breach of confidence and trust causing prejudice to future employment prospects. 
Remedies 
In all cases the plaintiffs suffered an OOS injury. The pleadings allege that as a result of those injuries the plaintiffs have variously suffered prejudice to their future employment prospects, and harassment at work causing loss and damage. 
The remedies sought vary as between the plaintiffs but include (in WEC62/99, Simpson and others) an application for: 
“A declaration that there is no bar under the ARCI Act against the recovery of compensating damages for the breach by the defendants. ”
As well, these and other plaintiffs variously claim damages, in summary, for loss of earnings, loss of a chance to be paid redundancy compensation, special damages for loss of contractual benefits, medical costs, general damages for humiliation, anxiety and stress, loss of amenity etc, and exemplary damages. 
This hearing 
From the pleadings as they stand at the present time it has become clear that there are two questions for determination and the answers to these may result in barring some or all of the plaintiffs from pursuing their claims. Although the Court is reluctant to encourage a plethora of litigation it has become apparent that this is a case where having these questions decided separately before trial would be advantageous to all parties. 
The questions are: 
(1)
Accident Rehabilitation and Compensation Insurance Act 1992 (“the ARCI Act”
If the plaintiffs' claims against the defendants for general and special damages arise directly or indirectly out of personal injuries does the proviso in s 14(3) of the ARCI Act apply to allow the plaintiffs' proceedings for breach of contract to be brought? 
(2)
Limitation Act 1950 
Does s 4(7) of the Limitation Act 1950 bar the plaintiffs' claims against the defendants, where the plaintiffs' causes of action accrued more than 2 years before the filing of the statement of claim? 
 
(1)
ARCI Act 
It is agreed by all counsel that this is an appropriate occasion to invoke the exceptional course of stating a case for the Court of Appeal under s 122 of the Employment Contracts Act 1991. 
The reason for this is that this Court considered a similar question in Hurst v Prudential Assurance Co NZ Ltd [1999] 2 ERNZ 62. It was held in Hurst that s 14(3)(b) of the ARCI Act allows for proceedings to be brought seeking damages for personal injury as long as the cause of action arises from an express term of any contract or agreement. A notice of appeal was filed against that judgment but a year has elapsed since then and the appeal has not yet been prosecuted. Inquiries by counsel for the defendants and the Court show that there is no prospect of that appeal being pursued to a hearing in the foreseeable future. 
In the absence of a determination by the Court of Appeal this Court is faced with the prospect of hearing argument on the same point of law in this case, and of having to reach a decision to either adopt or reject the reasoning in Hurst. In either event, counsel have indicated that the Court's decision would be appealed. 
This is purely a question of law which requires no preliminary findings of fact. The stating of a case directly to the Court of Appeal will save the parties the time and expense of arguing it at two levels. 
In these unusual circumstances I propose to state a case for the Court of Appeal on this matter. 
The questions and the form of the case will be determined in a Chambers hearing at a date to be set by the Registrar. 
(2)
Limitation Act 1950 
Preliminary issues 
Section 4(7) of the Limitation Act 1950 provides: 
“(7) An action in respect of the bodily injury to any person shall not be brought after the expiration of 2 years from the date on which the cause of action accrued unless the action is brought with the consent of the intended defendant before the expiration of 6 years from that date: 
Provided that if the intended defendant does not consent, application may be made to the Court, after notice to the intended defendant, for leave to bring such an action at any time within 6 years from the date on which the cause of action accrued; and the Court may, if it thinks it is just to do so, grant leave accordingly, subject to such conditions (if any) as it thinks it is just to impose, where it considers that the delay in bringing the action was occasioned by mistake of fact or mistake of any matter of law other than the provisions of this subsection or by any other reasonable cause or that the intended defendant was not materially prejudiced in his defence or otherwise by the delay. ”
It was proposed by Ms Haultain that this matter should be dealt with in two parts. The first is to determine whether the actions brought by the plaintiffs are actions “in respect of the bodily injury to any person” and are subject to the 2-year limitation period. As this question is a question of law based on the pleadings, no evidence is required. She argued that it is necessary for this question to be decided at an early stage so that the plaintiffs will have an opportunity, if necessary, to apply to the Court for leave to bring an action within 6 years pursuant to the proviso in s 4(7). Such applications would, in all likelihood, need to be supported by some evidence either in person or by affidavit. This obviously will require some considerable preparation. Ms Haultain submitted that it would be sensible to determine the initial question first so that the unaffected plaintiffs would be spared the necessity of preparing for such an application. 
Ms Haultain's submissions were supported by Mr Cunningham but not by Mr Haigh for the defendants. I agree with Ms Haultain that it makes sense to determine the first part of the Limitation Act 1950 question. The plaintiffs will then be in a position to know which, if any, claims are statute barred and to take steps to make applications where appropriate. Whether these applications would be heard separately or as part of the eventual substantive hearing is a matter yet to be determined. 
Are these claims in respect of bodily injury? 
Mr Haigh produced two lists of claims which he submitted are affected by the Limitation Act 1950. Appendix C sets out those claims which he says are barred by the 6-year limitation period. In his submission the plaintiffs have not addressed these claims at all and therefore appear to accept they are outside the limitation period, even if it were to be extended from 2 years. This submission was not directly answered by counsel for the plaintiffs but as the question is not related to particular claims a decision is not called for at this stage. 
Appendix D lists those claims where the cause of action arose 2 years or more before the filing of the claims. He submits that as these claims arise directly or indirectly from OOS and OOS-related injuries they are therefore in respect of “bodily injury” within s 4(7) of the Limitation Act 1950. 
The plaintiffs argue that the claims are for breaches of contract, do not relate to claims for bodily injury, and therefore do not fall within the 2-year limitation period. This submission was founded on a line of judicial reasoning which the plaintiffs say supports their case. The defendants rely on different authorities which, it was submitted, are more persuasive than those relied on by the plaintiffs. 
Defendants' submissions 
Mr Haigh referred in particular to Maxwell v North Canterbury Hospital Board [1977] 2 NZLR 118. He says that even if the injuries allegedly sustained by the plaintiffs are mental injuries the claim still arises from physical causes, namely the physical effect of OOS. 
Mr Haigh also referred to H v H [1997] 2 NZLR 700; (1997) 10 PRNZ 458. Eichelbaum CJ held at p 711; p 469: 
“The expression ‘in respect of’ in s 4(7) (‘action in respect of the bodily injury to any person’) connotes a wide linkage between the respective subject-matters … if there is a connection or relation between the claim and the personal injuries, then it is an action ‘in respect of … bodily injury’. ”
In relying on Maxwell, it was submitted for the defendant that the 2-year limitation in s 4(7) is based on the class of damage for which relief is sought rather than the type of action which is brought. 
Finally, Mr Haigh canvassed the policy behind the imposition of statutory time limits. He submitted that: 
(a)
Long dormant claims have more of cruelty than justice in them. 
(b)
That a defendant might have lost the evidence to disprove a stale claim. 
(c)
That persons with good causes of action should pursue them with reasonable diligence. 
These three points were sourced from Laws of New Zealand, Wellington, Butterworths, 1992. 
Plaintiffs' submissions 
In opening, Mr Cunningham submitted: 
“If one asks what is the present action all about, the answer is that it is about alleged breaches of contract claiming, inter alia, that one or both of the defendants breached the implied term of their contracts with the plaintiffs in failing to provide them with a safe place of work and a safe system of working and breached the express terms of particular contracts in failing to adequately protect them from any safety and health hazards arising in the workplace. ”
Mr Cunningham and Ms Haultain both cited a proposition expressed in Bint v Capital Decorative Concrete Ltd [1999] 1 ERNZ 809 by Goddard CJ at p 817: 
“The consequences of a breach of contract is that the guilty party is liable for all the adverse consequences that may reasonably be thought to flow naturally and directly from the breach. ”
Both counsel relied heavily on the decision in Baker v Beasley [1965] NZLR 1031 which dealt with a similar question on the application of s 4(7) of the Limitation Act 1950 to a bodily injury claim. Baker was a case where the plaintiff successfully sued a defendant doctor for breach of the defendant's contractual duty to exercise reasonable care and skill in treating the injury suffered by the plaintiff in a motor accident. It was held at p 1034 that “the bodily injury is not part of the cause of action”
Mr Cunningham sought to limit the meaning of “bodily injury” to the definition in Blacks Law Dictionary (7th ed), St Paul, West Group, 1999 which he said defines it as “physical pain, illness, or any impairment of physical condition” and that as such has a more restrictive meaning than the words “personal injury” and certainly does not include emotional suffering or mental distress although he accepted that it may cover psychiatric conditions and identifiable trauma. 
He submitted that none of the remedies sought in the proceeding constitutes bodily injury or for mental injury. Rather, he says, the “relief is sought for emotional harm falling short of a clinically significant behavioural, psychological, or cognitive dysfunction, in terms of the ARCIA definition of ‘mental injury’, or … ‘impairment’
Accordingly he says that the logic in Baker is compelling and applicable to this case where the plaintiffs allege breaches of contractual duty and do not seek relief for bodily injury as such. As bodily injury is not part of the cause of action it does not fall within the definition of s 4(7) of the Limitation Act 1950. 
Mr Cunningham also made extensive submissions on the meaning of the phrase “in respect of”. He submitted that this phrase has a narrower meaning than “related to” or “connected with”. He cited a large number of authorities from a wide range of jurisdictions in an attempt to limit the ambit of the words “in respect of”. In summary Mr Cunningham said: 
“The present proceeding is not an action in respect of the bodily injury to any person. The fact that the plaintiffs may have suffered bodily injury has no relevance to the nature of the proceeding or to the remedies sought, none of which, with the possible exception of loss of amenity, is for, or in respect of, bodily injury, nor in relation to or connected with bodily injury. ”
Ms Haultain supported these comprehensive submissions and emphasised that the Court should focus on the contractual terms which bound the parties in this matter and ask were they breached and what were the consequences of the breaches. She said that the plaintiffs were entitled to recover damages as a consequence of the breaches regardless of any physical injuries which they may have suffered as well. She said that the terms of the contracts relied on are intended to limit or reduce the prospect of harm to other employees. She said that the proceedings should be seen as an attempt to enforce the contracts in question particularly in relation to the defendants' alleged failure to provide training, equipment, and protection against interference with the freedom of association of the plaintiffs. She says that this Court should follow the authority of Baker
Decision 
As the brief summary of these causes of action and remedies sought at the beginning of this judgment indicates, the claims allege breaches of contract. All of the plaintiffs allege that they have suffered from OOS as a result of which they allege that they have been caused various forms of distress and anxiety as well as prejudice to or loss of their employment. Whichever way the claims are worded the allegation of suffering from OOS remains a fundamental part of them. 
Section 4(7) of the Limitation Act 1950 should be read in the context of s 4, the material parts of which state: 
“(1) Except as otherwise provided in this Act, the following actions shall not be brought after the expiration of 6 years from the date on which the cause of action accrued, that is to say,— 
(a)
Actions founded on simple contract or on tort: 
(b)
(c)
(d)
(7) An action in respect of the bodily injury to any person shall not be brought after the expiration of 2 years from the date on which the cause of action accrued unless the action is brought with the consent of the intended defendant before the expiration of 6 years from that date: …  ”
Whereas the actions listed in subs (1) are specific, subs (7) is not. The reference to an action in subs (7) is modified by the words “in respect of the bodily injury”. This indicates that it is not the cause of action which is important for the purposes of subs (7). The focus of that subsection is the question of the bodily injury. 
It is this feature of subs (7) which McGregor J rejected in Baker. At first sight his reasoning has a lot to commend it. However, with respect, it is his concentration on the cause of action pleaded rather than the subject-matter of the cause of action which has led to his decision not being followed by other Judges of the High Court. His focus on the cause of action is demonstrated by his reference to Bagot v Stevens Scanlan & Co [1966] 1 QB 197; [1964] 3 All ER 577 in which Diplock LJ had to determine whether the action was in contract or tort in order to decide if a claim brought against a firm of architects was limited to 6 years. In reliance on this approach McGregor J saw the action he was dealing with as an action in contract based on the alleged failure of the defendant to exercise reasonable care and skill. He said at p 1034 that any bodily injury suffered as a consequence of such a failure is not part of the cause of action. 
In spite of the submissions by counsel for the plaintiffs I am in agreement with the conclusion of Roper J in Maxwell. He followed a decision of Boreham J in Paterson v Chadwick [1974] 1 WLR 890; [1974] 2 All ER 772 who said at p 894; p 775 that when deciding if a proceeding was in respect of personal injuries the question to be asked was: 
“is there in the proceedings brought by the plaintiff against her solicitors a connection or relation between her claim and her personal injuries? ”
In that case he found that her personal injuries formed an essential ingredient in the proof of her claim whatever her cause of action might be. 
In H v H Eichelbaum CJ discussed the same point and found that even where damages claimed are not for bodily injury if the cause of action is dependent on proof of bodily injury then the action is in respect of bodily injury. He adopted Roper J's statement in Maxwell (p 711; p 469), “if there is a connection or relation between the claim and the personal injuries, then it is an action ‘in respect … of bodily injury’. This interpretation is supported by Mann CJ in the Supreme Court of Victoria in Trustees Executors & Agency Co Ltd v Reilly [1941] VLR 110, 111: 
“The words ‘in respect of’ are difficult of definition, but they have the widest possible meaning of any expression intended to convey some connection or relation between the two subject-matters to which the words refer. ”
I conclude on the basis of these authorities that Baker should not be followed in this Court. 
If any of the plaintiffs' causes of action in these proceedings accrued more than 2 years before the filing of the statement of claim, those claims against the defendant/s are statute barred under s 4(7) of the Limitation Act 1950. 
If those plaintiffs affected by this ruling wish to pursue their claims they have the option of filing an application under the proviso to s 4(7) noting however that such leave may only be granted upon the grounds set out in that proviso and that a precondition is that if leave is granted the action must be within 6 years from the date on which the cause of action accrued. 
Costs 
Costs are reserved. 
Appendix C
Claims Outside the Six Year Bar
PLAINTIFF 
DATE OF INJURY 
DATE OF CLAIM 
Brigitte Jones (WEC62/99) 
February 1991 
18 June 1999 
Joan Belcher (WEC62/99) 
June 1992 
18 June 1999 
Pauline Irvine (WEC62/99) 
May 1992 
18 June 1999 
Judith Rudolph (WEC62/99) 
5 October 1991 
18 June 1999 
Sandra Redshaw (WEC28/00) 
September 1993 
12 May 2000 
Karen Newborn (WEC28/00) 
13 February 1994 
12 May 2000 
C McCormick-Watkins (WEC31/00) 
30 March 1994 
18 May 2000 
Appendix D
Claims Outside the Two Year Bar
Plaintiff 
Date of Injury 
Date of Claim 
Jeffrey Simpson (WEC62/99) 
March 1995 
18 June 1999 
Anita Brunt (WEC62/99) 
October 1995 
18 June 1999 
Ann Smith (WEC62/99) 
5 September 1996 
18 June 1999 
Shirley Cronin (WEC62/99) 
4 June 1996 
18 June 1999 
Linda Hillegers (WEC62/99) 
April 1996 
18 June 1999 
Waiatua Hikuwai (WEC62/99) 
23 November 1993 
18 June 1999 
Brigitte Jones (WEC62/99) 
February 1991 
18 June 1999 
Nicola Foster (WEC62/99) 
9 September 1996 
18 June 1999 
Tina Millsteed (WEC62/99) 
2 July 1996 
18 June 1999 
Joan Belcher (WEC62/99) 
June 1992 
18 June 1999 
Joan Kett (WEC62/99) 
July 1996 
18 June 1999 
Barbara Teen (WEC62/99) 
11 October 1996 
18 June 1999 
Pauline Irvine (WEC62/99) 
May 1992 
18 June 1999 
Judith Rudolph (WEC62/99) 
5 October 1991 
18 June 1999 
Donna Tansley (WEC62/99) 
29 December 1996 
18 June 1999 
Sandra Redshaw (WEC28/00) 
September 1993 
12 May 2000 
Karen Newborn (WEC28./00) 
13 February 1994 
12 May 2000 
Helen Lowish (WEC28/00) 
1 August 1995 
12 May 2000 
Christine Hocken (WEC28/00) 
December 1996 
12 May 2000 
C McCormick-Watkins (WEC31/00) 
30 March 1994 
18 May 2000 
M Brittain (WEC53/98) 
12 April 1994 
25 May 1998 
J Thomson (WEC33/00) 
3 November 1997 
19 April 2000 

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