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Accident Compensation Cases

O v U (HC, 22/07/96)

Headnote - Criminal Reports of New Zealand

Headnote - Brookers Accident Compensation Reports

Judgment Text

HERON J (reserved):
By minute of 13 March 1996 Hammond J directed that a question of law arising in this case be determined before trial at the same time directing that counsel should settle an agreed statement of facts. The question of law is whether the plaintiff can sue her stepfather the first defendant for exemplary damages, in respect of sexual abuse the subject of the claim, he having served a sentence of imprisonment and been ordered to pay $10,000 by way of reparation in respect of those actions. 
A remaining issue is whether leave should be given to bring proceedings out of time. On the basis of S v G [1995] 3 NZLR 681 it was acknowledged the appropriate course was to leave that question until trial. The agreed facts as required by Hammond J are as follows: 
The plaintiff was born on 20 July 1957. She sues her mother as second defendant and her stepfather as first defendant. 
At all material times from October 1965 the plaintiff lived with her mother and the first defendant. 
The statement of claim sets out particulars of sexual abuse by the first defendant when the plaintiff was aged 8 through to age 12. 
On 25 November 1993 the first defendant pleaded guilty in the District Court at Hamilton to five charges (4 representative), four of which charged that the first defendant did an indecent act upon the plaintiff being a girl under the age of 12 years in four consecutive years. The fifth information alleged that between 20 July 1965 and 20 July 1969 the first defendant induced the plaintiff a girl then aged under 12 years to do an indecent act upon him. 
On 19 May 1994 the first defendant was sentenced by Penlington J to three years and three months imprisonment on each of the charges, all sentences being concurrent. 
The first defendant offered to pay $10,000 by way of reparation to the plaintiff. A reparation order in those terms was made by the judge. 
On 17 October 1995 the plaintiff issued proceedings claiming exemplary damages against the first defendant, after notifying him of her intention to do so on 8 August 1995. 
The plaintiff's counsellor claims ACC on the plaintiff's behalf resulting in her counselling costs being met. No other compensation is available. 
The first defendant has personal net assets in excess of $600,000. ”
The point in issue in this case is a short one and involves a number of philosophical approaches to crime and punishment in our society and generates a keen debate. The plaintiff calls to her aid the undoubted ability in civil proceedings to register condemnation of outrageous conduct beyond compensatory awards by the award of exemplary damages acknowledging that the damages go to the plaintiff to be retained along with any compensatory awards by the award of exemplary damages acknowledging that the damages go to the plaintiff to be retained along with any compensatory damages if such could be awarded. In the context of a defamation action Richardson J in Taylor v Beere [1982] 1 NZLR 81, 89 said
“In any event I am not persuaded that such a change would necessarily be in the public interest. There are arguments both ways. They may be summarised quite shortly. As the various terms ‘punitive damages’, ‘exemplary damages’ and ‘retributory damages’ indicate, an award in this category is intended to punish outrageous conduct; to make an example of the person responsible thereby demonstrating society's disapproval of his behaviour and deterring others in the future; to exact retribution and to make the defendant smart for his conduct; or, as Lord Devlin put it in Rookes v Barnard (p 1227; 411), ‘to teach a wrongdoer that tort does not pay’. Against that it is said: that the award of damages should be confined to compensating the plaintiff for the loss he has suffered; that a plaintiff receiving exemplary damages is unjustly enriched by an award imposed on the defendant for reasons of public policy; that, if the defendant's conduct is considered worthy of punishment, it should be dealt with by the criminal law and under the protection of the criminal law; and that the defendant should not be in double jeopardy and face punishment in civil proceedings as well as under the criminal law. ”
Somers J in the same case said: 
“It is clear that aggravated damages are given to compensate the plaintiff when the injury or harm done to him by the wrongful act of the defendant is aggravated by the manner in which he did the act. They may include sums for ‘loss of reputation, for injured feelings, for outraged morality, and to enable a plaintiff to protect himself against future calumny or outrage of a similar kind’ and ‘indignation … at the injury inflicted on the plaintiff is a perfectly legitimate motive in making a generous rather than a more moderate award to provide an adequate solatium’ — Lord Hailsham in Broome v Cassell at 1077; 829 and 1073; 825-826. This is more strictly to confine exemplary damages to their proper place, not as an expression of vindictiveness, but as a punishment and a deterrent, to show that tortious conduct does not pay. 
This distinction, which in my view forms part of the law in New Zealand, had not before the two English cases been so perceived and articulated. It indicates that many cases which had hitherto been regarded as suitable for the award of exemplary damages are really cases of aggravated compensatory damages. The demarcation itself operates to limit the occasions when exemplary damages are appropriate. 
The second point, which flows from the first, is the insistence that in a case in which exemplary damages are to be considered they should be awarded ‘if, and only if’ the sum of compensatory and aggravated compensatory damages is not of itself sufficient to inflict a proper punishment on the defendant. That too in my view represents the law now in New Zealand. ”
Since accident compensation legislation it is clear that exemplary damages remain available for personal injury by accident. See Donselaar v Donselaar [1982] 1 NZLR 97
In support of the argument that notwithstanding that the wrongdoer has been punished in criminal proceedings in the conventional way, Ms Fisher argued that there were good policy reasons to allow plaintiffs to continue to bring claims for exemplary damages. She said that civil proceedings provided a plaintiff with a measure of control which they are otherwise denied in criminal proceedings. This is a generalisation which in many cases will be true but her further assertion that such proceedings provide plaintiffs with a form of compensation is more difficult to get to grips with. If it is Parliament's intention to continue to contain claims for compensation for personal injury by accident by means of a comprehensive no fault compensation system, then there seems to be little justification for providing a peripheral compensation mechanism in the form of exemplary damages which are designed and awarded not to compensate but to punish. Any attempt to introduce a compensation rationale as a justification for them would be invalid. 
The pragmatic argument is that very little financial support is available to persons who suffer sexual abuse unless it has some immediate impact on their ability to earn an income. The lump sum payment which was available under the accident compensation legislation for losses of a non-economic kind has now gone. Ms Fisher says it would be anomalous if criminal prosecutions barred exemplary damages claims as victims might chose then not to approach the police if it would preclude them from recovering damages. That may be true but it might also be desirable for that same reason, so far as one can, to encourage only one method of recourse to ensure offenders are brought to justice and risk of reoffending is dealt with within the criminal justice system. That might be the greater good rather than allowing civil remedies to usurp that function. If not presumably there is a risk that in return for a damages settlement a complaint will not proceed or evidence would be curtailed or confined. There are a number of undesirable consequences which can be foreseen. Ms Fisher's answer to that is that can happen now and limiting the right to damages after sentence merely punishes those who might have proceeded with civil proceedings at the outset. It might she argues be better to place no restriction on any of the remedies accordingly. There is considerable force in these arguments confined as they are to the existing situation and in the absence of any legislative direction in that regard. 
Ms Fisher said also that the existing right to damages might be dependent on timing with an award available prior to conviction and not available thereafter. Then Ms Fisher questioned whether it would be appropriate to apply the rule if there had been an acquittal or a discharge on technical grounds or a conviction accompanied by a discharge. 
Mr Ingram for the first defendant acknowledged the competing arguments in this way. He said that there were adequate provisions contained in ss 11, 22, and 28 of the Criminal Justice Act 1985 providing for compensation and indeed such a provision has been used in this case. So it was incorrect to state that compensation was not available to persons in New Zealand following criminal conviction and sentence. Mr Ingram conceded that there may be some social utility in allowing a plaintiff to chose a civil remedy rather than criminal proceedings as a working illustration of restorative justice. 
The philosophical arguments that I have briefly reviewed were considered by Blanchard J in G v S unreported, 22 June 1994, HC Auckland CP576/93. On appeal from his judgment the Court came to consider the major point which in my view arises in this case and that is the effect of s 26(2) of the New Zealand Bill of Rights which provides: 
“(2) No one who has been finally acquitted or convicted of or pardoned for an offence shall be tried or punished for it again. ”
Gault J in delivering the judgment of the Court said: 
“It may be said that the appellant has been neither convicted nor punished for having sexual intercourse with the respondent while she was under 16 though note must be taken of the reference to the frequent intercourse that followed the oral sex which was the subject of the sentence. He has been convicted and punished for the other indecent conduct over the relevant period and, in effect, acquitted of sodomy. In the proposed proceeding it is intended that he be ‘punished’ by the award of exemplary damages in respect of the whole range of the alleged conduct. It was submitted that this would contravene his rights under s 26(2) of the Bill of Rights Act, although Mr Hodson accepted that would not be the case in relation to that part of the alleged conduct that constituted sexual intercourse with a girl under 16. That notwithstanding, he argued the Court should decline leave in all the circumstances. 
The issue of double punishment was recognised by Blanchard J as difficult. He concluded that as a matter of policy the opportunity for a victim of abuse to recover exemplary damages in civil proceedings should not be precluded by the criminal conviction of the abuser. Also in this case he considered that because only part of the alleged sexual activity had been punished the matter of double punishment did not warrant refusal of leave. The Judge did not make express reference to the Bill of Rights Act (which was not relied on in argument before him) nor to the provisions of the Criminal Justice Act as to orders for reparation as part of the sentencing process (though in fact not applied when the appellant was sentenced). These matters were in the forefront of argument in this Court. 
Double punishment by the award of exemplary damages after the imposition of a criminal sentence for the same conduct has implications beyond those involved in assessing an application for leave under s 4(7) of the Limitation Act. To permit that would require reading down s 26(2) of the Bill of Rights Act to confine the second punishment to that of a criminal nature. We are not persuaded that we should do that, particularly since the criminal Court is required to consider reparation in all cases. However for the purpose of the present case it is sufficient that the potential for there to be an element of double punishment be taken into account in the overall discretionary assessment of whether the respondent should have leave. 
While we are conscious that the appeal in this respect is against a discretionary decision, we are conscious also that we have material that may not have been before the Judge and have heard additional argument particularly on the Bill of Rights Act. ”
I see some long-term difficulty in allowing civil claims for exemplary damages in this area. I think they have the tendency to complicate and compromise criminal proceedings just as lump sum payments did so in my experience in the past. In those cases a complainant was often criticised for having applied for compensation and in many cases being awarded it prior to the case being heard. It was said that her (I use the female gender because they are the majority of cases) true motive was to obtain the compensation payment and furthermore having received it there was some obligation on her part to therefore pursue the proceedings even though the allegations may not be true. In those cases where such a claim was not made the complainant could be confronted with the suggestion that as no claim had been made for accident compensation, the allegation was therefore not able to be substantiated and in some way had either been rejected or would be rejected by officers of the Accident Compensation Corporation. It was a case of being damned if you do and damned if you do not. The same motive may be attributed to the complainant in criminal proceedings once again without going into the details. 
My own view is that it is better if those considerations are not there in order that the real inquiry can be made as to whether in accordance with the criminal law the accused is guilty or not guilty on the evidence of the complainant unaffected by motives of monetary compensation or otherwise. But that is only one of many arguments in this philosophical debate. It may be as Blanchard J suggests desirable to give this remedy. Certainly it could be justified on a personal injury basis as being in a very special case. However the law precludes such claims. To give compensation indirectly seems to me to run counter to the present legislative climate so far as personal injury by accident is concerned. Nevertheless it will be that compensatory element which will drive plaintiffs in these proceedings. In many cases the defendant will have no resources so this will be far from a common or frequently used remedy. This case can only be decided it seems to me, on whether the statute constitutes a ban on such proceedings. It was plainly the view of the Court of Appeal that it might although it confined its findings to the part such a conclusion should play in the exercise of a discretion. 
The argument for barring such a claim is that exemplary damages are to punish and where there has already been punishment for the same acts, as is the case here, including some financial payment, by way of reparation, the words of the statute must be applied. Further punishment in the form of exemplary damages must be regarded as in breach of the section. To read down as Gault J said s 26(2) to mean criminal punishment only, runs counter to the history of exemplary damages which have their origins in a criminal and civil context. They are undoubtedly a method by which society can record its disapproval of the actions of any individual. 
In R v Wigglesworth (1987) 45 DLR (4th) 235 (SCC) a member of the “Mounties” was charged under an Act governing the regulation of the conduct of the Royal Canadian Mounted Police. He was liable under that Act for a term of imprisonment of up to one year or a fine. He was fined $300 by an Inspector in a service Court. However he was also charged under the general Criminal Code for assault. Discharged at trial on the grounds that the second proceedings were contrary to s 11(h) of the Charter the Crown appealed successfully ultimately concluding in the Supreme Court. 
Section 11(h) of the Charter reads: 
“Any person charged with an offence has the right … (h) if finally acquitted of the offence, not to be tried for it again and, if finally found guilty and punished for the offence, not to be tried or punished for it again. ”
There are a number of passages from the majority decision delivered by Wilson J where reasons are given for not including within s 11(h) the proceedings brought under the Royal Canadian Mounted Police Act RSC 1970. 
“At p 83 in his text on Legal Rights in the Canadian Charter of Rights and Freedoms: a Manual of Issues and Sources (1982), McDonald J states: 
‘ … “offence” may include … offences which may be committed only by persons who are members of certain organisations such as the Armed Forces and the Royal Canadian Mounted Police … the word “offence”, which signifies “a breach of law” or “an infraction of law”, may be so broad as to include conduct which constitutes a ground upon which, by statute, a professional body may impose discipline upon its members, by disqualification, suspension or a fine. ’”
“Another factor which leads me to adopt a somewhat narrow definition of the opening words of s 11 is a concern for the future coherent development of the section if it is made applicable to a wide variety of proceedings. Unless the section is restricted to criminal or penal matters there may be serious difficulty in giving the section a reasonably consistent application. The particular content of the various rights set out in s 11 may well vary according to the type of proceeding if a broader definition is given to the opening words of the section. It is beyond question that those rights are accorded to those charged with criminal offences, to those who face the prosecutorial power of the State and who may well suffer a deprivation of liberty as a result of the exercise of that power. The content of those rights ought not to suffer from a lack of predictability or a lack of clarity because of a universal application of the section. As is obvious from a study of the various rights whose meaning ought to be made crystal clear to the authorities who prosecute the offences falling within the section. For this reasons it is, in my view, preferable to restrict s 11 to the most serious offences known to our law, ie, criminal and penal matters and to leave other ‘offences’ subject to the more flexible criteria of ‘fundamental justice’ in s 7. ”
It is accordingly argued that s 26(2) New Zealand Bill of Rights 1990 which protects rights in terms similar to the Canadian statute should receive a narrow construction also. The case is helpful to the plaintiff in its approach. 
So far as it goes it is high authority that such provisions are not directed to remedies which can truly be described as internal, domestic, or private. It would seem that a private civil suit for exemplary damages would be regarded as outside the provisions of the Canadian code as so construed. 
Further arguments for not extending the scope of the section to other than criminal proceedings are to be found in these cases where the nature and purpose of the section have been reviewed. The argument is that by restating the law as it exists the Act could not have been intended to cast its net further than existing law presently allows. In particular it could hardly be seen as likely to govern a situation such as a private right to exemplary damages. The leading case is undoubtedly Simpson v A-G [Baigent's Case] [1994] 3 NZLR 667; (1994) 1 HRNZ 42 (CA). 
There Gault J said: 
Most of the rights set out in s 25 are protected by the Courts in the control of their own processes. Section 26 is covered by existing principles of criminal law relating to retroactivity, autrefois acquit and autrefois convict. Section 27 largely restates administrative law …  
In my view the preferable approach is to regard the Bill of Rights as part of the law of the country to be read with, and not separate from, the existing law. In this way each can benefit from the other. On this approach the existing law with its broad flexibility can be drawn upon to provide effective remedies for persons whose rights and freedoms are infringed or denied. Where necessary existing remedies may need modification in light of the Act. In some cases new causes of action or new remedies may be called for to validate the presumption that remedies are available. In those cases developments will be by analogy with existing actions in the nature of tort for damages … Other relief might be more effective and more appropriate. The evolution of the past will continue. ”
The latter observation must be seen in the context of a dissenting judgment but with respect a very useful analysis of the approach to a decision in this case. 
As a further argument against an unfavourable construction of s 26(2) are a variety of legislative provisions that expressly preserve the right to civil proceedings. 
Section 28(4) Criminal Justice Act 1985 provides: 
“(4) An award of compensation under this section shall not affect the right of the person entitled to it— 
To receive compensation under the Accident Compensation Act 1982; and 
To recover by civil proceedings damages in excess of the amount recovered under the award. ”
Section 24(f) of the same statute provides: 
The sentence shall not affect any right that the person who suffered the loss or damage has to recover by civil proceedings any damages in excess of the amount recovered under the sentence. ”
Section 405 of the Crimes Act provides: 
405. Civil remedy not suspended—No civil remedy for any act or omission shall be suspended by reason that such act or omission amounts to an offence. ”
This combined with the words of s 26(1) itself and its obvious context of criminal proceedings makes a wider application of s 26(2) more difficult. 
If s 26(2) is illustrative or declaratory of existing law then that law appears to be confined to criminal proceedings. Double jeopardy as it is referred to in the heading of s 26 is dealt with in New Zealand by s 10(4) Crimes Act 1961. That section was considered in R v Moore [1974] NZLR 417, 423 (CA) by McCarthy J. There it was pointed out that the restriction on liability was limited to conviction for the same offence defined in the Act as an act or omission for which anyone can be punished under this Act or under any other enactment whether on conviction or indictment or summarily. 
Autrefois convict and acquit are by virtue of ss 357 to 359 likewise confined to criminal proceedings and do not extend to consequential disciplinary proceedings. See Re a Medical Practitioner [1959] NZLR 784
Three Canadian State Court of Appeal cases have decided the issue in allowing exemplary damages claims. Of most assistance is Glendale v Drozdzik (1993) 77 BCLR (2d) 106, 114 (CA) where following a consideration of the adequacy of a damages claim generally Lambert JA added: 
“The question of the relationship between general damages, aggravated damages, and punitive damages following the decision of the Supreme Court of Canada in Vorvis v Insurance Corp of British Columbia [1989] 1 SCR 1085 [36 BCLR (2d) 273, [1989] 4 WWR 218], was discussed in a per curiam judgment of this Court in Huff v Price (1990) 51 BCLR (2d) 282, at p 300: 
‘Accordingly, the best course is to assess the plaintiff's damages for pecuniary losses first and the plaintiff's damages for non-pecuniary losses second. The damages for non-pecuniary losses may be awarded or augmented on the basis of an assessment of the harm suffered by the plaintiff as a result of the high-handedness, or the wilful or reckless indifference to the plaintiff's rights, of the defendant. If such an award or augmented award is made for non-pecuniary losses then it is correct but not essential to refer to and to classify that award as aggravated damages. 
It is only after those two steps has been taken that consideration should be given to making an award of punitive damages. The reason why punitive damages should be assessed third is that the degree of punishment inflicted on the defendant by having to pay compensatory damages, including pecuniary, non-pecuniary, and aggravated damages, must first be determined before it is possible to consider whether any further penalty, by way of punishment, should be imposed on the defendant, and, if so, the additional amount that is required. So the third step is to consider whether the conduct of the defendant should be punished over and above the requirement that the defendant pay compensatory damages, pecuniary, non-pecuniary and aggravated. An award of punitive damages should take into account the moral culpability of the defendant, the amount he has already had to pay, and the profits, if any, that he has made from his wrongful acts. (He should not be permitted to retain profits from his wrongful acts: see Austin v Rescon Const (1984) Ltd (1989) … 57 DLR (4th) 591 ([BC] CA). The point is also implicit in Horseshoe Bay Retirement Soc v SIF Dev Corp … 66 DLR (4th) 42 (BCSC). The award of punitive damages should not try to do again what has been done by the compensatory damages, including the aggravated damages. But if some measure of further punishment is still required then the amount assessed should be consistent with the concept that it is punishment that is being imposed and not restitution that is being exacted. The award should not be inconsistent with the principles that underlie the imposition of criminal penalties. And, of course, if a criminal penalty has been imposed then that should be taken into consideration. ’

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