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Accident Compensation Cases

Sinclair v Invercargill City Council (HC, 27/03/87)

Judgment Text

JUDGMENT OF TIPPING, J 
TIPPING, J
These two matters were heard together by consent as they raise points of similarity. 
The plaintiff Sinclair sues the Invercargill City Council in respect of the actions of three traffic officers of whom the Council was the employer. 
In his amended statement of claim dated 20 November 1986 Sinclair sets up what appear to be three different causes of action against the defendant Council. 
First, it is claimed that the plaintiff was wrongfully arrested. Secondly, it is said that the traffic officers in question unlawfully restrained the plaintiff's freedom of movement. Thirdly, it is claimed that the plaintiff was falsely imprisoned at the Invercargill Police Station for nine hours. 
It is not immediately clear whether the first and second matters in fact raise distinctly separate causes of action but obviously the concepts of wrongful arrest and false imprisonment are alleged as separate torts. 
The resolution of the matter before the Court is not assisted by the fact that the plaintiff has failed to observe the provisions of Rule 114 which requires that a statement of claim which includes two or more causes of action shall specify separately the relief or remedy sought by the plaintiff on each cause of action. 
Paragraph (7) of Sinclair's amended statement of claim reads:— 
“7. By reason of the matters aforesaid the plaintiff was deprived of his liberty and has suffered discomfort and inconvenience, indignity, mental distress, loss of reputation, legal expenses, loss of wages and damage ”
(sic).
The statement of claim also signals the fact that the plaintiff claims exemplary damages of $10,000.00 in addition to general damages of $10,000.00. The statement of claim particularises the facts and matters upon which the plaintiff relies to support his claim for exemplary damages. 
In his case the plaintiff Haberfield sues the Attorney General on behalf of the Police in respect of the actions of Constable de Kwant and his police dog. It is alleged that the Constable brought the dog on to the plaintiff's property at 44 Renfrew Street, Invercargill and that without lawful justification the Constable ordered or encouraged the dog to attack the plaintiff on two occasions. It is claimed in the alternative that the Constable without lawful justification stood by and allowed the dog to attack the plaintiff on two occasions. It is further alleged that the Constable punched the plaintiff three times in the face and smashed a pane of glass in the plaintiff's door with his foot. It is then claimed that the dog bit the plaintiff on his chest and arm and that the plaintiff was the subject of a further assault by the Constable who is said to have stomped several times on the plaintiff's chest with his boot. 
Paragraph 14 of Haberfield's statement of claim dated 20 November 1986 alleges:— 
“14. By reason of the matters aforesaid the plaintiff was assaulted, deprived of his freedom of movement in distressing circumstances and suffered severe mental distress, indignity, humiliation, insult and hurt to his personal feelings. ”
In addition to certain particularised special damages the plaintiff Haberfield claims general, aggravated and exemplary damages and particularises the matters relied on in support of the claims for aggravated and exemplary damages. General and aggravated damages are sought globally in the sum of $20,000.00 plus exemplary damages of $17,500.00. 
Haberfield's cause of action, or causes of action, if it is intended that the suggestion of deprivation of freedom of movement is an additional cause of action. (Rule 114 again not being complied with), seem to be firstly, assault and secondly, the tort, if there be one, of deprivation of freedom of movement. Clearly the primary cause of action is assault both by the Constable personally and it is alleged that the Constable and through him the Attorney General is responsible for the actions of the dog. 
In each case the defendant has applied to this Court for a stay of proceedings and for an order that the question as to whether, on the allegations contained in the amended statements of claim, the two plaintiffs have suffered personal injury by accident, be referred to the Accident Compensation Corporation for determination in terms of s 27(4) of the Accident Compensation Act 1982. 
It was in essence the submission of Mr Noble who appeared for each defendant, that a question arose in each case as to whether the plaintiffs had suffered personal injury by accident and that this question ought, in terms of s 27(4) of the Accident Compensation Act 1982, to be referred to the Corporation. 
Mr Noble indicated that he did not challenge the right of each plaintiff to claim exemplary damages and he accepted that if the claim had been confined in each case solely to exemplary damages the present application could not have succeeded. He did however submit that the claims in each case for mental distress (Sinclair) and severe mental distress (Haberfield), in so far as they were pleaded in support of the claims for general or aggravated damages, were within the definition of personal injury by accident set out in s 2 of the Act and accordingly the Corporation had exclusive jurisdiction to determine those claims. 
The Sinclair events are alleged to have occurred on 17 February 1985 and those pertaining to Haberfield on 20 February 1986 and thus the 1982 Act applies in each case. 
Mr Noble referred me to s 26 of the Act and specifically to s 26(1)(c) which provides that the purposes of the Act are inter alia “to make provision for the compensation of persons who suffer personal injury by accident and certain dependants of those persons where death results from injury.” 
Section 26(2) is material and provides:— 
“(2)
Subject to this section,— 
(a)
All persons who suffer personal injury by accident in New Zealand; and 
(b)
To the extent specified in sections 30, 31 and 32 of this Act, all persons who suffer personal injury by accident outside New Zealand,— 
shall have cover under this Act if the accident occurred on or after the 1st day of April 1983. ”
Certain parts of s 27 are also directly relevant to the present matter and for the sake of completeness I will set out here s 27 in its entirety:— 
“27. Act to be a code — 
(1)
Subject to this section, where any person suffers personal injury by accident in New Zealand or dies as a result of personal injury so suffered, or where any person suffers outside New Zealand personal injury by accident in respect of which he has cover under this Act or dies as a result of personal injury so suffered, no proceedings for damages arising directly or indirectly out of the injury or death 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)
Nothing in this section shall affect— 
(a)
Any action which lies in accordance with section 86 of this Act; or 
(b)
Any action for damages by the injured person or his administrator or any other person for breach of a contract of insurance; or 
(c)
Any proceedings for damages rising out of personal injury by accident or death resulting thereform, if the accident occurred before the 1st day of April 1983. 
(3)
Subject to this Act, the Corporation shall have exclusive jurisdiction to determine whether or not any person has suffered personal injury by accident in the circumstances specified in section 26(2) of this Act or has died as a result of personal injury so suffered, and its decisions shall be conclusive. 
(4)
Where, in any proceedings before a Court, a question arises as to whether or not any person has suffered personal injury by accident in the circumstances specified in section 26(2) of this Act, or has died as a result of personal injury so suffered, the Court shall refer the question to the Corporation for determination. 
(5)
The Corporation may, on the application of any person who is a party to any proceedings or contemplated proceedings before a Court, determine any such question. ”
Mr Noble next proceeded in support of his primary submission to the definition of the expression “personal injury by accident” in s 2 of the Act. 
This provides so far as is relevant for present purposes:— 
‘Personal injury by accident’— 
(a)
Includes— 
(i)
The physical and mental consequences of any such injury or of the accident: ”
One should note that the definition is not exhaustive as indicated by the word “includes” and also that the mental consequences of any injury or of the accident fall within the composite expression. Although the composite expression “personal injury by accident” is used, it seems to me that there are really two elements: firstly, the personal injury and secondly, the accident. 
Personal injury means an injury to the person and in this respect the person includes both mind and body. There is no separate definition of the word “accident” but a number of decisions have demonstrated that one must focus on the effect on the victim of what is said to be an accident: see Donselaar (Infra)) at page 104 line 34 per Cooke, J. 
If from the victim's point of view the event alleged to have been an accident is an unexpected and unintended mishap and has the necessary physical or mental consequences or both then prima facie what has occurred will be an accident: see Fenton v. Thorley & Co Ltd [1903] AC 443
Mr Noble submitted that in each case what had occurred involved an accident to the victim or at least that a question arose in terms of s 27(4) and that as the Corporation had exclusive jurisdiction to determine that question the Court should refer the matter to the Corporation. 
In terms of the decision of the Court of Appeal of Donselaar [1982] 1 NZLR 97 compensatory damages for assault (whether in the technical sense or in the sense of battery) cannot now be awarded at common law in New Zealand. 
I refer to compensatory damages as opposed to exemplary or as they are sometimes called, punitive damages. Following an assault the person injured must find his remedy, if at all, in the accident compensation system. 
At page 107 lines 29 ff Cooke P said:— 
“The present case is also an example, in my opinion, of a claim for exemplary damages that should not be entertained. The way in which the first plaintiff's case was pleaded and his evidence led at the trial suggests that, despite the use of the words ‘exemplary or punitive’ in the prayer for relief, in substance what were being sought were damages for physical injury and injured feelings. The reamended statement of claim refers to being rendered unconscious, pain, suffering, indignity, mental suffering, disgrace and humiliation. John's evidence-in-chief was directed to supporting these allegations. Quilliam J was right in holding that an action for any sort of damages for such consequences cannot be brought since the Accident Compensation Act. ”
Mr Justice Richardson at page 109 lines 29 ff said this:— 
“It is well settled that ordinary damages (including aggravated damages) and exemplary damages serve essetially different purposes: the former are compensatory: the object of the latter is to punish and deter (see the discussion in our contemporaneous judgments in Taylor v. Beere [1982] 1 NZLR 81). Accordingly, it cannot in my view be said that exemplary damages in battery arise out of injury sustained by the plaintiff. The damages are not compensatory at all. They are not directed to the loss sustained by the plaintiff. They are awarded against the defendant because of the outrageous manner in which he has conducted himself in the course of committing the tort. In a strict sense such damages do not ‘arise’ at all. In a looser sense it may be said that they arise out of the acts of the defendant. It does not follow that their source is the personal injury sustained by the plaintiff. In determining liability for exemplary damages, it is the quality of the defendant's conduct which is in question not whether the plaintiff has suffered a particular type of harm. ”
Mr Justice Somers at page 117 lines 2 ff said:— 
“The particulars of damage given and the circumstances evidenced are all within the concept of compensatory and aggravated damages as expounded in Broome v. Cassell & Co Ltd [1972] AC 1027; [1972] 1 All ER 801 by Lord Hailsham of St Marylebone LC and accepted as applicable in New Zealand in Taylor v. Beere and nothing pleaded or evidenced as to the acts of the defendant is sufficient to take the case out of that area. Indeed without some additional feature as for example an abuse of power or the invasion of other rights of the plaintiff, it is not easy to envisage a case of personal injury which would not have been met by compensatory or aggravated compensatory damages the recovery of which is barred by the Accident Compensation Corporation Act. ”
Reference in this connection should also be made to the recent, as yet unreported, decision of the Court of Appeal in Auckland City Council v. Blundell CA 182/85 Judgment 2/10/86 per Cooke P at page 10 where His Honour said:— 
“As to the prayer by each plaintiff for damages for unlawful asssault, that decision was clearly inconsistent with Donselaar as regards general or aggravated damages. The prayers for those two heads of damages must be struck out. General or aggravated damages cannot now be claimed for personal injury by accident in New Zealand. They are both forms of compensatory damages. As pointed out in Donselaar at 104, approving G. v. Auckland Hospital Board [1976] 1 NZLR 638, an intentional assault is an accident from the point of view of the victim, and as such it is clearly within the scope of the Accident Compensation Act. ”
In so far therefore as the plaintiff Haberfield seeks compensatory damages (either general or aggravated) for assault his claim is clearly barred in terms of s 27 of the Accident Compensation Act 1982 and the decision in Donselaar and must be stayed in that respect and referred to the Corporation. 
It was submitted by Mr Noble that the torts of false imprisonment and wrongful arrest and unlawful restraint of movement (if indeed that latter allegation has any substance different from the first two) were all to be treated as akin to assault and accordingly barred to the extent that the consequences fell within the expression “personal injury by accident.” 
The consequence of false imprisonment or wrongful arrest to the victim could be physical and mental or indeed just mental but this does not in my view matter because as has already been noted personal injury by accident includes the mental consequences of the injury or of the accident. 
In the Blundell case at page 14 of the judgment of the Court Cooke, P said this:— 
“We think it very arguable — no more need be said for present purposes — that a claim for what Mr Temm described as the emotional effects of an injury or accident falls within the first part of the non-exhaustive definition of ‘Personal injury by accident’ in s 2(1) of the 1982 Act. That is to say, within paragraph (a) such consequences may well be ‘mental’ consequences if they are not physical ones. The words ‘The mental and physical consequences of any such injury or of the accident’ may have been intended by the legislature as a comprehensive expression covering all consequences to the victim's person. Whether or when false imprisonment or arrest is an accident within the meaning of the Act is perhaps a more difficult question. ”
If false imprisonment or wrongful arrest can properly be characterised as an accident then the fact that the consequences of those happenings to the victim are solely mental does not prevent the whole sequence of events, i.e. false imprisonment plus mental consequences, from being within the composite expression personal injury by accident. The question then becomes whether false imprisonment and wrongful arrest, and like torts, if any, can be regarded as accidents within the meaning of the expression “personal injury by accident.” 
In contending for an affirmative answer to that question Mr Noble placed reliance on the Blundell case both on the passage from page 14 which I have already mentioned and the further passage in the judgment of the Court at page 13 where Cooke, P said:— 
“The claims for damages for false imprisonment and arrest were in their initial form in a more arguable category. It could be contended that they were claims arising directly or indirectly out of personal injury by accident: see L. v. M. [1979] 2 NZLR 519, 527-8; Stowers v. Auckland City Council (CA 67/82: judgment 2 September 1983). In the instant case particulars furnished in answer to a request by the defendant relating to paragraphs 13 and 35 of the statement of claim state that the means by which the plaintiffs were arrested and imprisoned were ‘By being taken into the blood alcohol suite and being kept there until given into charge of the police’. These particulars were not requested to relate and do not relate to what occurred at the Auckland Central Police Station, for which the plaintiffs also seek to make the defendant liable, but no separate point was made about this at the hearing of the appeal. 
If compensatory damages were being claimed for the alleged false imprisonment and arrest, either in the City Council building or in the police station, it may be that a question would have arisen whether or not that was a claim for damages arising directly or indirectly out of personal injury by accident. Such a question might then have had to be referred to the Accident Compensation Corporation under s.27(3) and (4), although counsel voiced some skepticism about the practical value and the expedition of a reference in this kind of case. ”
It is clear that one must focus on an event or happening, when deciding whether it is an accident, from the point of view of the victim. 
Although the torts of false imprisonment and wrongful arrest would not at first sight strike one as accidents in normal parlance, nevetheless it is arguable as the Blundell case recognised that from the point of view of the victim if he suffers injury of a mental kind as a result of such happenings that injury is just as much personal injury by accident as an injury suffered in a case of assault. 
I have reminded myself of what was said by Cooke, P in the Court of Appeal in L. v. M. [1979] 2 NZLR 519 at page 527 line 50. His Honour said:— 
“Again, to take a simple example, an action is brought for damages for alleged false imprisonment by the police. The plaintiff does not allege in terms that he has suffered any personal injury by accident or otherwise. But as imprisonment affects the person it might be argued that it is a personal injury: and further that there was an accident within the meaning in G. v. Auckland Hospital Board. If the defendant pleads that the action is precluded by s 5(1) or if a doubt occurs to the Judge, must he refer the question to the Commission? The elucidation or development of the common law in such areas, which will be necessary as part of the process of deciding whether the action does fall within the barring words in s 5(1) seems naturally a function of the Courts. 
During the time when our judgment in this case has been reserved the issues which it touches have been tragically illustrated. If proceedings were brought in the New Zealand Supreme Court arising out of deaths in an aircraft accident, the issue whether they were barred by s 5(1) might arise. It would have to be considered first whether a person had died as a result of personal injury suffered by the accident. Secondly it might have to be considered whether the accident happened in New Zealand, which turns on the definition of ‘New Zealand’ introduced by the Accident Compensation Amendment Act 1978, s.2. These points might not be difficult, but if there were any doubt the Supreme Court itself would have to determine them, I think, and not refer them to the Commission. If necessary the Court would have to hear evidence before making any final determination, but it might well be possible to proceed on an agreed statement of facts or on the assumption that the allegations in the statement of claim were true. 
If it was admitted or determined by the Court that there had been a death by accident and that the accident had occurred outside New Zealand, the proceedings would not automatically be barred. The next question would then be whether the person killed had cover under the Act in respect of the injury. That question, and that question only, would have to be referred to the Commission. It would depend on whether the earners' scheme gave cover to that person and on the provisions of ss 55, 60, 61 and 63 regarding the scope of that scheme. Once that question had been determined by the Commission or on appeal therefrom, the Court would be able to decide whether or not the action could be brought. If the accident happened outside New Zealand and the person was decided by the Commission not to be covered, the action would not be prohibited. The ultimate decision as to whether or not such an action lies must, as I see it, rest with the Court. And so it is, I think, with the present case. ”
It should however be recalled that these words were written in respect of the Accident Compensation Act 1972 before the amendments imported by the 1982 Act. Whereas under s 5(4) of the 1972 Act the focus was on cover for an injury suffered; under s 27(4) of the present 1982 Act the focus is on the suffering of personal injury by accident. The difference is important. 
In short the submission made by Mr Noble was that from the point of view of the victims the occurences which they have alleged in their respective statements of claim were accidents or at least a question arose in that respect. Secondly he submitted that because of the plea in support of compensatory damages that as a result of those occurences they have suffered in the one case mental distress and in the other case severe mental distress, the whole sequence of events becomes personal injury by accident or again at the least a question arose as to whether or not these plaintiffs have suffered personal injury by accident. 
The matter before the Court can be further refined into saying that the present question in a sense is whether there is a question in terms of s 27(4). 
For the plaintiffs Miss French submitted that what was alleged was so clearly not personal injury by accident that no question could be said to arise. It was submitted that because the mental consequences of the events for each plaintiff were transient and, so it was claimed, did not lead to any medically identifiable state, they were not mental consequences within the relevant expression “includes the physical and mental consequences of any such injury or of the accident.” 
The two amended statements of claim simply refer to mental distress in one case and severe mental distress in the other and two other forms of what might be categorised as mental consequences such as hurt feelings and indignity. Thus on the face of the pleadings it is not possible to say what form or degrees of mental consequences flowed from the events alleged. 
It was further submitted that neither unlawful arrest or false imprisonment could be regarded as accidents within “the true and ordinary meaning of that word” and that commonsense required that some limits should be placed on the meaning of that word in the expression “personal injury by accident.” 
It was suggested that if torts such as unlawful arrest or false imprisonment could be regarded as accidents then it would follow that lawful arrest and imprisonment would also fall to be categorised as accidents. 
I very much doubt whether that is right but for present purposes it is sufficient to say that there would of course be no common law claim to be barred under s 27 of the Act for a lawful arrest or imprisonment so the point at best is entirely academic. 
It was then submitted that the cases where general damages have been given for breach of contract could not be reconciled with the defendants' submissions because in those cases the plaintiffs suffering the mental distress, anxiety, upset or worry as a result of the breach of contract would ipso facto have suffered personal injury by accident and would be barred from recovery. It was also contended that by parity of reasoning a plaintiff in a defamation case would be barred. 
Again I do not consider that these consequences would flow from a finding that the mental consequences of false imprisonment for example, brought the case within the ambit of the expression “personal injury by accident.” 
The second broad submission made by Miss French was that the action of the two plaintiffs was not barred under s 27 and no question arose under s 27(4) because it could be posited with certainty that the plaintiffs were not covered under the Accident Compensation Act 1982. The argument proceeded on the basis that in terms of s 27(4) not only must a question arise as to whether or not the relevant person has suffered personal injury by accident but also that personal injury by accident must have occurred in the circumstances specified in s 26(2). For ease of reference I will repeat s 26(2) which reads: 
“(2)
Subject to this section,— 
(a)
All persons who suffer personal injury by accident in New Zealand; and 
(b)
To the extent specified in sections 30, 31 and 32 of this Act, all persons who suffer personal injury by accident outside New Zealand,— 
shall have cover under this Act if the accident occurred on or after the 1st day of April 1983. ”
I was referred in this context to the unreported decision of Heron, J in Wise v. Finn & Others A33/84 Wanganui Registry judgment 10/9/86. It should be noted that this decision was delivered after Blundell's case had been heard at first instance but before the decision of the Court of Appeal in Blundell
At the foot of page 6 of his judgment Heron, J said:— 
“The use of the words ‘subject to this section’ seems to me to emphasise the importance of the word ‘cover’ as defined. Those words of limitation seem to suggest that the section stops short of saying all persons who suffer personal injury by accident in New Zealand shall have cover under this Act. The only explanation for that state of affairs can be found in the word ‘cover’, which is defined as being the entitlement to rehabilitation, assistance and compensation under this Act following personal injury by accident. So it seems to me when under 27(4) the Court is inquiring into a question arising as to whether or not a person has suffered personal injury by accident in the circumstances specified in Section 26(2) it must be able to be shown that the person has an entitlement to rehabilitation, assistance and compensation under the Act. But when one looks at the provisions for compensation under the Act, going as they do to loss of earnings (Part V) and other compensation (Part VI). there is simply no entitlement to compensation for an experience described as embarrassment and deprivation of liberty. Section 79 is the closest to it, where a lump sum provision is made for pain and mental suffering, including nervous shock and neurosis (Section 79(1)(b)). That is attended by the proviso that no such compensation shall be payable in respect of that loss, pain or suffering, unless, in the opinion of the Corporation, the loss, pain or suffering, having regard to its nature, intensity, duration and any other relevant circumstances, has been or may become of a sufficient degree to justify payment of compensation under this subsection. I think there is something in the point also that cover is now defined in terms of actual entitlement, rather than in the less precise way it was defined in the 1972 Act. In L. v. M. 1979 2 NZLR 519 the joint judgment of Woodhouse and Richardson JJ at p.523 it was said: 
‘It is important to appreciate that the word “cover” which is defined in Section 2 is used in the sense of eligibility for assessment of a benefit under one or more of the three statutory schemes and not in the subsequent sense of entitlement to a benefit following upon the assessment. The assessment of course might produce no benefit whatever although the applicant clearly had cover under the Act. ’
So a contrast is to be made between eligibility and entitlement. Vautier J in Blundell & Thompson v. Auckland City Council took this distinction as the basis for allowing claims for compensatory damage and needed to go further than I do in the circumstances here. Vautier J felt, and I do as well, that if one puts the emphasis on entitlement, as contrasted with possible eligibility, one is more readily able to hold that a question does not arise in the plain circumstances alleged here. I think, for those reasons, that the Court can take a somewhat bolder view of its entitlement to exercise its jurisdiction having regard to the fact it has to be satisfied that a question arises. ”
In essence Heron, J regarded the circumstancees specified in s 26(2) as being both territorial i.e. the occurrance of the accident in New Zealand or elsewhere in the limited cases provided for in ss. 30, 31 and 32 and as an additional circumstance the existence of cover i.e. entitlement. 
Cover is defined in s 2 thus:— 
“Cover in relation to any person means the entitlement which he or his dependants would have to rehabilitation assistance and compensation under this Act if he suffers personal injury by accident or dies as a result of the injury so suffered. ”
Founding her submission on Heron, J's decision in Wise Miss French submitted that only if a plaintiff actually has an entitlement under the Act is his common law remedy for damages taken away. It was then submitted that the type of mental suffering suffered by the two plaintiffs in this case did not come within the ambit of the relevant compensation section, namely s 79. 
Whether that is so depends in my view on the discretionary assessment of the Corporation, if the matter gets that far, and until one examines the factual matters relevant to the degree and extent of the mental consequences here alleged one cannot assume what the Corporation's view will be. In any event the assessment as to whether or not compensation should be awarded under s 79(1)(b) is a matter for the Corporation and not for the Court. 
With great respect to the reasoning which appealed to Heron, J I have difficulty accepting that the existence or otherwise of cover under the Act is one of the circumstances specified in s 26(2). I note Heron, J's reference to the words which introduce s 26(2) i.e. “subject to this section” but in my view they do not lead to the consequence contended for by Miss French. The circumstances specified in s 26(2) seem to me to be the necessary territorial qualifications. Once those qualifications are established the subsection provides that the person in question shall have cover. I cannot construe s 26(2) as suggesting that the existence or otherwise of cover is a circumstance. It seems to me to be a consequence of the existence or otherwise of the territorial qualification. 

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