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Accident Compensation Cases

Knight v Crown Health Financing Agency (HC, 16/11/07)

Judgment Text

Gendall J
Mr Knight was a patient at a psychiatric hospital, known as Ngawhatu, near Nelson between August 1967 and February 1982. He claims General Damages of $200,000, and exemplary damages of $50,000, for abuse that he says occurred to him at the hospital during that time. 
He says that two named nurses (Mr H and Mr T) performed acts of sodomy on him from the late 1960s until the mid-1970s. Initially the plaintiff pleaded (and gave evidence to support this), that he was required, or permitted, to witness sexual acts and other indecencies by nursing staff on other patients. This aspect of the claim was not pursued by counsel in his closing. 
The causes of action pleaded are breach of fiduciary duty; negligence (whether through direct or vicarious liability); and assault and battery (through vicarious liability). 
The defendant accepts it acquired the assets and liabilities of the Department of Health and Nelson Hospital Board, which exercised the control of Ngawhatu Hospital during the relevant period, so as to be responsible for any liability of the Hospital. 
Issues for determination 
The issues involved in this case are: 
Has the plaintiff proved on the balance of probabilities that he was the subject of indecent assaults and of sexual violations whilst at Ngawhatu Hospital? 
If such is proved, is the defendant vicariously liable, whether for compensatory or exemplary damages, for the acts of staff at Ngawhatu, in the torts of: 
assault and battery; and/or 
Did the Agency controlling Ngawhatu owe a non-delegable duty to the plaintiff? If so: 
of what nature?; and 
was it negligent in acting (or omitting to act) in breach of such duty? 
Did the Agency controlling Ngawhatu Hospital have a fiduciary duty to the plaintiff? And if so, did it act or fail to act in such a way as to breach that fiduciary duty? 
If the plaintiff establishes liability, what is the proper measure of compensatory and/or exemplary damages? 
Further issues, which arise from the defence point of view, are whether the plaintiff's claim fails because of: 
Mental Health legislation immunity; 
Limitation Act time bar; 
The Accident Compensation Bar for general compensatory damages (but not exemplary damages). 
The defendant was born in February 1952 into a large family in Marlborough. At a very early age he was placed with foster parents who subsequently adopted him in September 1953, when he was 18 months old. By the time he commenced primary school it had become apparent that he had learning difficulties and some intellectual shortcomings. From about the age of five he attended a children's health clinic in Christchurch. When aged seven he was enrolled at Marylands School, a residential school in Christchurch. It was run by the Catholic Order of Saint John of God. He remained there for seven years until aged 14. 
He says he was repeatedly sexually abused by one of the Catholic priests at that institution, as a consequence of which he became traumatised. He visited his parents in Picton but did not complain to them or others, he said, because he thought that he would not be believed. 
When aged about 14 he absconded from Marylands School and shot a nearby farmer with a shotgun in an unprovoked incident of extreme violence. He has said this was because of his feelings of anger, although there is also reference to him saying he wanted to see what it felt like to shoot someone. He displayed no remorse or insight. Whatever the explanation, the act was irrational and inexplicable. As a consequence, he became the subject of a reception order to Sunnyside Psychiatric Hospital. 
Thereafter he was transferred to Ngawhatu in August 1967 when aged 15. He was assessed as having an IQ of between 65 and 70, a diagnosis of mild mental retardation. He could not read or write. That remains the case today. He was prescribed anti-psychotic and other medication whilst at Ngawhatu. 
His evidence was that two nurses abused him sexually from about the age of 18 until his early 20s. Such acts involved sodomy when the nurses separately came into his room at night whilst he was asleep. He says that those acts occurred when each of the named nurses were on night duty, and that one of those nurses also committed sodomy on him in a plantation area near the hospital when out on a “walking party”. He says that this happened on frequent occasions. He said that he was warned not to tell anyone about it. 
The plaintiff says that he asked for a transfer out of the particular villa or unit but nothing came of that. He says that in 1970 he complained to the Charge Nurse that he had been interfered with and named one nurse (Mr H) as the offender. The Charge Nurse and the Head Nurse interviewed the plaintiff, and he was taken to the hospital Superintendent. The Superintendent called the nurse about whom the allegations had been made and, in the presence of the plaintiff, put the allegations to him. These were denied. Later the plaintiff was confronted with the fact that another male patient had complained that he had been sexually assaulted by the plaintiff. The plaintiff's evidence is that the Superintendent said he did not believe the complaint the plaintiff had made about the nurse. The clinical notes record that the plaintiff retracted his complaint, although he denied this when giving evidence. 
Despite the complaint, the plaintiff says that sexual acts continued to be forced upon him by that, and another, nurse for several months. 
The plaintiff says that he did not complain to other staff because he thought it would be dismissed and he was scared of what could happen. He says that he was aware that, as an informal patient, he could leave Ngawhatu at any time and wanted to depart but had nowhere else to go. 
The plaintiff said that on a number of occasions, whilst on walking parties in the nearby plantation and surrounds, he observed a nurse sodomise another patient but did not feel able to complain about it or to do anything to prevent it. He referred to observing male nurses — whose names are unknown — indecently touching patients in the main bathroom. 
The plaintiff says that on one occasion he observed another nurse performing sodomy on another patient in a single room in a villa at the hospital. He says that he followed the nurse on several occasions and on each occasion witnessed acts of sodomy upon that patient. He says that he did not report the events because he was scared of the consequences of the Charge Nurse not believing him. 
The claim in respect of the allegations of witnessed acts is not pursued. 
At about that time, the plaintiff (according to his evidence) was performing sexual acts with a number of other named patients, including sexual touching and sodomy. He says that he learnt such behaviour from the nurses and other patients, and that he believed then that such behaviour was permissible. He said he understands now that it is not, although in 2005 he was convicted of sexual violation, a crime he committed in Nelson in 1999. 
The plaintiff discharged himself from Ngawhatu in about February 1982. He was readmitted on a number of occasions as an informal patient. This was partly due to his, at times, erratic behaviour and the difficulties he experienced in managing which arose from his low IQ and inability to read and write. But it was also because, apart from the earlier shooting of the stranger with a shotgun, he amassed a number of criminal convictions. These occurred between 1993 and 2005 and include: 
robbery (1993); 
aggravated robbery (1997); 
possession of a weapon in a public place (1997); 
attempted arson (1998); 
arson, threatening to kill and shoplifting (1999); 
shoplifting (2000); 
assaulting the Police (2000); and 
unlawful sexual connection with a male (2005) for the sexual violation of a disabled man in a public toilet in Nelson in 1999. 
In March 2001 the plaintiff undertook counselling whilst living in Wellington. In September 2002 he was referred to another counsellor and an accident compensation claim was submitted in respect of the alleged abuse at Marylands. Cover was granted in December 2002. 
After receiving the ACC funded counselling in 2002, the plaintiff received a payment of $65,000 made voluntarily by the Order of Saint John of God in 2003. This was as a consequence of the plaintiff and others having counselling or joining together in approaching that Order with similar allegations. 
At about that time the plaintiff was also receiving ACC funded counselling treatment for his Ngawhatu allegations. Some counselling notes refer to assisting him: 
“to process current issues in regard to Police complaints, Maryland and Ngawatu [sic]. ”
and with regard to rehabilitation/treatment requirements: 
“Police complaints Ngawatu [sic] class action are also happening (27-2-03). ”
Between August 2003 and March 2004 the plaintiff had further counselling in Nelson. He was convicted of the sexual violation crime in February 2005. The Court had a psychiatric assessment dated 2 December 2004 which records the sexual history, as given by the plaintiff, including the events at Marylands between ages 11 and 14, but there is no reference to any alleged events at Ngawhatu. The plaintiff was placed under a Compulsory Care Order for three years. 
In mid-2005 the plaintiff commenced attending group sessions as well as individual meetings, at a group known as “Male Survivors of Sexual Abuse Trust”, operated by Mr Clearwater. 
These proceedings were issued in December 2005. The plaintiff contends that he was unable to issue them earlier because he had been suffering under a disability through his intellectual incapacity and was unable to earlier discover the link between the acts about which he complained and the mental and psychological conditions or damage which followed. He says that even if his claim is out of time, leave to proceed should be given because, at worst, his disability did not cease until September 2002 (when he first disclosed his Ngawhatu allegations to a counsellor) in which case his claim is only 15 months out of time. Leave to proceed should be given as no prejudice has arisen to the defendant during those 15 months. 
The plaintiff contends that he has suffered, and continues to suffer, humiliation, loss of dignity, embarrassment and distress. He alleges that actions of nurses at Ngawhatu have resulted in him having post-traumatic stress disorder with significant behavioural and psychological dysfunction, and personality disturbance. This is characterised by a history of sexual and other offending; alcohol abuse; an inability to relate to others and to live alone; and a dependence on welfare agencies. He pleads that he was in continual conflict with others because of aggressive behaviour, and that he repeatedly carried out or attempted to carry out sexual assaults on vulnerable persons. He said that he realised he had homosexual preferences from about the age of 14 and is currently comfortable with his homosexuality. 
The defendant's position 
The defendant contends that the allegations of sexual abuse made by Mr Knight against Mr H and Mr T are false and that his evidence in that regard is manufactured. The complaint made about Mr H in 1970 was retracted by the plaintiff because it was false and its repetition in the evidence given to the Court did not add to its strength. 
Apart from disputing the factual allegations, the defendant advances three legal defences: 
The plaintiff's proceedings are barred under the Limitation Act 1950 having not been brought within two years from the date on which the cause of action accrued, and leave has not been sought before the expiration of six years from that date. Although, for the purpose of the Limitation Act, the plaintiff was under a disability until his release from compulsory detention on 8 February 1982, thereafter he was not of unsound mind within the provisions of the Act. Time then commenced to run in respect of his cause of action, which is based upon intentional assault without his consent, and does not involve any concept of “reasonable discoverability”. Although in an action for negligence time runs from when the link between damage and the causing event is discovered, or ought reasonably to have been discovered by the plaintiff, counsel did not contend that this assisted the plaintiff but rather that he could not earlier have brought proceedings because he was under a disability. 
The six year limitation period for the assault and battery cause of action expired in August 1988. Alternatively, at the very latest, time commenced to run when the plaintiff knew he could claim, and when he had the capacity to pursue litigation, in the mid-1990s. In that case the period expired well before the proceedings were issued in December 2005, and there is no jurisdiction to grant leave. 
A claim for compensatory damages is barred by s 317 of the Injury Prevention, Rehabilitation, and Compensation Act 2001 (it is accepted that exemplary damages are not barred). Although the alleged acts occurred well before the commencement of the Accident Compensation Scheme on 1 April 1974, if mental injury is caused by one of the crimes described in Schedule 3 of the Act (which includes sexual violation) cover exists for such mental injury. That is because the Act provides that the deemed date for the “suffering of that mental injury” is the date a victim first receives treatment for that injury as a known condition. Mr Knight first received treatment in September 2002 when he began counselling with an ACC counsellor. Accordingly, he has cover for ACC treatment compensation (apart from exemplary damages), and his claim in this Court is barred. 
The Mental Health Acts between 1911 and 1992 provide immunity to the defendant. Under s 124 of the Mental Health Act 1969, neither the Crown nor any person who does an act in pursuance or intended pursuance of any of the provisions of the legislation is under any civil or criminal liability unless they act in bad faith or without reasonable care. Proceedings for such alleged acts cannot be brought except by leave. Any application for leave must be brought within six months of the acts complained of, or after any injury or damage has ceased. For the purpose of estimating the six month period no account is taken of the time the person is detained as a mental patient or when ignorant of the facts that constitute the cause of action. The defendant says time commenced, for this purpose, in February 1982 and leave to issue proceedings has not been sought. The defendant (apart from allegations of sexual violation) has statutory immunity. 
Evidence Act 2006 issues 
There was no contest or dispute between counsel as to the admission, or admissibility, of a large measure of hearsay evidence. But it is proper to record the approach the Court takes in this case to hearsay evidence contained in documentary evidence including clinical and nursing notes, Police reports, counsellors' notes and other records. In addition, the relevance of “propensity” and “veracity” evidence as dealt with in the Evidence Act 2006 requires short mention, as those topics are relevant to the evidence I heard. 
Hearsay evidence 
Hearsay is admissible if the circumstances provide reasonable assurance that it is reliable and, either, the maker is unavailable or the Court considers undue expense or delay would be caused if the maker of the statement were required to be a witness. The hearsay contained in business records is admissible in terms of s 19. I am satisfied that the hospital notes, records, and clinical and nursing notes that were produced in the common bundle, and referred to in the course of evidence, are admissible. Many were made years ago, most of the makers are dead and in any event could not reasonably be expected to recollect the matters dealt with in the records. The same comments apply to Court, Welfare, psychological and other reports obtained, and made, in respect of Mr Knight's criminal convictions and history, and his time at Marylands School. The record of the statements he made to the Police at various times are also admissible, not on the basis of hearsay but on the basis of being his own statements, which generally he has acknowledged making. 
The position concerning recent counselling records or reports for the purpose of Accident Compensation is not quite so clear. No argument was made by the defence as to the admissibility of those records and I have received them. They are evidence that certain statements have been made. Nevertheless, opinions expressed in those post-2002 counselling reports, if not given by the counsellors (or others) in evidence in Court, whilst admitted in the common bundle, are treated with some reservation or care where they record hearsay matters. 
Previous consistent statements 
Under s 35(1) of the Evidence Act prior consistent statements are inadmissible except in certain circumstances. But I am satisfied that the previous statement of Mr Knight in the form of the 1970 complaint evidence is admissible — and the defendant has not disputed that. This is because the defence position is that the plaintiff's evidence is invented, whether recently or earlier. Further, the statement if accurately recorded in the clinical notes, is a mixture of consistency and inconsistency. It records a retraction of the complaint. When giving evidence Mr Knight denied he made any retraction. I bear in mind, nevertheless, the general law in relation to what was formerly known as complaint evidence. The fact that a complainant has said that something happened, is not of itself proof that it in fact occurred. If Mr Knight was wrong about it then, he is still wrong about it now. The relevance of the evidence is that what he then said and did might assist a fact finder in assessing his credibility, if his acts then were consistent with what he said in evidence. 
Counsel for Mr Knight submitted that the fact a complaint was made assists in determining credibility or reliability in respect of that which Mr Knight now says, and supports his evidence. 
Veracity evidence 
The veracity rules in s 37 of the Evidence Act 2006 apply. I have received evidence, in a general way, said by the defence to support the veracity of the two nurses concerned and other persons involved at Ngawhatu (Chaplains, official visitors). In addition, evidence contained in the clinical notes, if accurate, may relate to the veracity of the plaintiff or some of his witnesses. 
Veracity refers to the disposition of a person to refrain from lying whether generally or in the proceeding. Such evidence appears to be limited to evidence about lies. In the process of my assessment of the veracity or credibility or reliability of a witness, I consider whether he/she has been convicted of one or more offences that would indicate a propensity for dishonesty; any previous inconsistent statements made by the witness; and any bias or motive on the part of the witness to be untruthful. To some extent a propensity to lie may come within the propensity rule in s 40 of the Evidence Act 2006, although this may overlap with considerations of veracity. 
Propensity evidence includes the evidence of the plaintiff about other alleged unlawful sexual acts of one or other of the nurses about whom he complains. Whilst, technically, in terms of s 40(4) evidence, it is solely or mainly relevant to veracity as given by the veracity rules, a general propensity to lie, whether or not under a legal obligation to tell the truth, may be among the matters a Judge may consider in terms of s 37(3). 
“Propensity evidence” is evidence that tends to show a person's propensity to act in a particular way or to have a particular state of mind, being evidence of acts, omissions, events, or circumstances with which a person is alleged to have been involved. 
In these proceedings I have received propensity evidence, in the sense of good character evidence, relating to the two nurses against whom allegations are made. That is evidence of general good character which is primarily relevant to credibility. However, where criminal or morally reprehensible acts are alleged, it may be relevant in assessing whether a person of that character is likely to have so acted. 
Of course having previous good character is not itself a defence to allegations. Logically people can offend for the first time. 
I received evidence in relation to the plaintiff, and his character, of a “disposition not to refrain from lying” (that is a tendency to lie) and there is reference in the clinical and nursing notes of his, then, being a “compulsive liar”. In evidence, the plaintiff agreed that he used to lie but said he has refrained from doing so in the past decade. Inconsistencies in his evidence are not, alone, evidence of lying. They may relate more to reliability. 
Mr Chapman submitted that the inconsistencies in the plaintiff's accounts to psychiatrists and others, and in evidence, were only to be expected given his low IQ. In assessing his credibility when giving evidence, I have had regard for the plaintiff's character and propensity by keeping squarely in mind his low IQ, lifetime personality and intellectual difficulties, and the problems stemming from his time at Marylands. 
He has three convictions for dishonesty offences which may be considered in terms of s 37(3) of the Evidence Act. But for reasons that I have given, he is not to be judged too harshly and allowances are to be made for his history and current state. In the end, it comes down to whether the Court believes the evidence of the plaintiff, or rather is satisfied on the balance of probabilities that it is correct. This requires a measured assessment of his evidence, and of all evidence presented by both plaintiff and defence, relevant to the allegations and overall circumstances that existed and are said to have taken place at Ngawhatu between 30 and 40 years ago. 
Standard of proof 
Obviously the burden of proving his case rests upon the plaintiff. It being a civil case, the standard is the balance of probabilities. Because the essential allegations of the plaintiff are those of sexual violation, regard has to be had to the gravity of those allegations and to their consequences. The test is as described in Managh v Wallington [1998] 3 NZLR 546 at 550-551 by Tipping J in delivering the judgment of the Court of Appeal: 
“In all cases [civil], the standard of proof is the same — the balance of probabilities consistent with the gravity of the allegation. 
The degree of gravity will obviously be influenced by the potential consequences for all concerned of the allegation being found proven. This is why the civil standard of proof is flexible and depends on what is at stake, as Lord Scarman put it in Khawaja v Secretary of State for the Home Department [1984] AC 74. But a flexible standard of proof, depending in large part on consequences, does not mean that there are two civil standards of proof …  
… ”
The ordinary civil standard of proof is that which is stated in Honda New Zealand Limited v New Zealand Boilermakers' etc, Union [1991] 1 NZLR 392. Hardie-Boys J, in referring to the standard of proof appropriate in a civil case where what is at issue is the alleged commission of a crime, said at p 395: 
“ … what has been said extends beyond that kind of issue and provides a general principle applicable to all kinds of allegation. It calls for flexibility, according to the nature of the particular allegation. The matter was recently touched upon in this Court by Somers J in Budget Rent-a-Car Limited v Auckland Regional Authority [1985] 2 NZLR 414, when he said at p 425: 
‘ … although this is a civil case to which the civil standard of persuasion applies the very gravity of what is alleged makes the probability of its occurrence more remote or unlikely and hence the more difficult to establish. The difference between the civil and criminal standards diminishes with the seriousness, and in this case the criminality, of the issue. ’”
Whether or not relative unlikelihood is its sole rationale, the principle is now so well-established that it is really unnecessary to refer to further authority. 
Factual findings 
What follows is my assessment of the relevant evidence and whether, viewed in totality, it reaches the standard of proof so as to satisfy the burden that rests upon the plaintiff. Assessments of credibility, and reliability, will obviously be vital to the outcome. 
The plaintiff's case really stands or falls upon his evidence. If he cannot satisfy the Court on the balance of probabilities that he was the victim of sexual abuse by the two named nurses, he cannot establish liability under any of the causes of action that were finally pursued. 
Two of the plaintiff's witnesses were former patients at Ngawhatu (Mr M and Mr B). In my view their evidence does not provide much (if any) assistance to the plaintiff. 
Mr B's evidence was somewhat peripheral, being to the effect that, when a patient at Ngawhatu on occasions between 1966 and 1980, he made a complaint of an assault (physical not sexual) by a Nurse RS (not the subject of any complaint of the plaintiff) to the Head Nurse but it was “treated as a joke” and dismissed. He said that he was later threatened with shock treatment and transferred to Lake Alice by an unnamed male nurse. He said he remembers Mr Knight. The plaintiff says this evidence supports the claim that his complaint in 1970 was lightly treated and improperly dismissed. It is marginal but if the plaintiff's complaint was genuine then it must follow that its dismissal — for whatever reason — was wrong. Mr Chapman contended that if it had been thoroughly investigated it may have been upheld. That is speculative. The allegation, if the notes are correct, was retracted, and it is hard to envisage what more could have been done in that case. 
Further, counsel argued that the evidence of both these witnesses supported the plaintiff's contention that he feared retribution for making complaints and the general climate meant that patients were expected to be silent about many matters. That is to be contrasted with records in the clinical and nursing notes of multiple complaints made by the plaintiff to nurses, though mostly of somatic or hypochondriacal symptoms. There are references to: 
“Always complaining and each week it is a different complaint” (21 November 1970). 
“Comes up with a new complaint about every week and gets upset when told there was nothing wrong” (2 February 1971). 
The witness Mr M, gave evidence of acts upon him of sexual assault by nursing staff (male and female), not being the two nurses about whom the plaintiff makes his allegations. He gave evidence that he was handcuffed, threatened with shock treatment, and regularly saw nurses touching patients' genitals in the shower block (although he was “not sure” whether that was abuse). He described trying to intervene when another patient was being sodomised but was then restrained, held down by five staff and administered an injection. He said that he observed oral sex between a patient named F and an unnamed nurse in a cupboard at Dunnoon Villa. 
The witness was in Ngawhatu in 1970-71 with a diagnosis of “borderline mental retardation” because he had indecently assaulted a girl aged 10. He is now serving a sentence of preventive detention for the crime of rape using a weapon. He has 30 previous convictions for offences of dishonesty. He agreed that whilst in Sterling Villa at Ngawhatu he was violently hostile. It is likely that he engaged in some form of sexual activity with other patients (male and female) at Ngawhatu, and he claims to have had consensual sex with female staff. 
Mr M has filed a separate civil claim under CIV-2006-485-2006. He names multiple hospitals and other institutions as being responsible for abuse on him. The only allegations pleaded in respect of Ngawhatu are: 
That he was a patient from 31 December 1969 (when aged 17) until 2 March 1971. 
He had sexual intercourse in a laundry cupboard with a female staff member, who was also a cleaner (Ms L), an unnamed female nurse fondled his genitals when he was put to bed; staff members, the names of whom he could not recall, fondled his genitals when they dried them after having a shower and would kiss and cuddle him. 
The only other matters alleged against Ngawhatu as being “traumatic incidents” were that when he was at a hospital dance, staff whose names he cannot recall told him and others to go and give a female patient “a bit”; and that a patient lay dead in a bed for two days with the plaintiff being told that he/she was just sleeping. 

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