IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-1813 [2015] NZHC 1651

BETWEEN	WILLIAM VICTOR GEORGE CONWAY
Plaintiff	

AND	
THE ATTORNEY-GENERAL Defendant	

Hearing:	3 July 2015	

Appearances:	
Mr Banbrook for Plaintiff
Ms Todd for Defendant	

Judgment:	
15 July 2015	

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on
15.07.15 at 4 pm, pursuant to
Rule 11.5  of the High Court Rules.

Registrar/Deputy Registrar

Date……………

CONWAY v THE ATTORNEY-GENERAL [2015] NZHC 1651 [15 July 2015]

Introduction

[1]        The defendants have applied to the Court for an order for security for costs in the sum of $21,000 against the plaintiff.  If successful, the defendants seek stay of proceedings until security has been paid. The plaintiff opposes the application on the grounds that he is impecunious and his impecuniosity is a direct result of the conduct of the defendants.

Background

[2]       In December 2009, Mr Conway was sentenced to a term of imprisonment in the District Court for environmental offences.   He appealed against his sentence, which was heard and dismissed in the Court of Appeal on 24 September 2013.  He filed an application for leave to appeal which was dismissed on 24 October 2013.

[3]       An associated application for bail was also filed.  The Supreme Court noted that the Court of Appeal’s order that the applicant, on 27 September 2013, is to surrender himself to the Registrar of the District Court at Auckland to commence his sentence had not yet been complied with and that it continued in force.

[4]       A warrant for the plaintiff’s arrest was issued in the District Court and, some months later, on 23 January 2014, he was arrested in Orewa.  He was then processed at a police station, taken to the District Court of the North Shore and, from there he was taken to the Mt Eden Correctional Facility (“MECF”).  He arrived at MECF at approximately 7.30 pm and “routine health checks”, as the Crown described, were completed.

[5]       The plaintiff said that during his arrest, he requested the police officers to let him return to his home address to uplift prescription medication that he was taking. This was to treat his hypertension.   He alleged in his statement of claim, which I shall describe in more detail below, that they declined to allow him to do that and instead took him directly into custody.

[6]       The plaintiff said that when he arrived at MECF, he advised the corrections officers that he suffered from a series of serious medical conditions and that he required daily medication to control those conditions.   He said he was told that MECF would be in contact with his GP and would acquire the required information to enable the prescription of medication to control his conditions.  He said that he stayed at MECF for approximately six days.  On 29 January 2014, he was transferred to the Northland Regional Correctional Facility (“NRCF”).  Mr Conway said that no medication was provided to him during the week that he remained at MECF.

[7]       Documents which have been obtained by his lawyers indicate that it was not until  30  January  2014  that  the  staff  at  NRCF  sought  the  medical  records  for Mr Conway from his GP, noting that their request was “urgent”.  In the documents before the Court are medical diary notes.  Included was an entry on 29 January 2014 that Mr Conway “was not able to be seen prior to escort due to “lock down” and time constrailnts [sic] with escort”.  The notes also record the request (presumably of the staff at NRCF, where he was about to be sent) to obtain details of his hypertensive medication.

[8]       On 30 January 2014, the medical notes record that:

Registered ASO to ask for his previous medical documents.  ASO faxed the request on an urgent basis.

[9]       By 30 January 2014, Mr Conway arrived at the NRCF.

[10]     It seems that, on 30 January 2014, the medical records from the GP had been obtained (although, I note, the medical diary is not entirely conclusive about that, recording that “previous medical document [were] received”).   There was also reference to an appointment to be set for him to see the medical officer at the first available date.   The medical records also show that, on 31 January 2014, he was booked for “MO for INA but MO too busy with emergency PPS to see today”.  MO refers to a medical practitioner, I am advised.   He had still not been seen by a medical practitioner by 5 February 2014, when his blood pressure was taken with the reading of 136–86.    On  11  February 2014,  there was  reference to  still  another booking to see the “MO” and the file was noted “16% high risk”.

[11]     To summarise, it would seem that, at least as late as 11 February 2014, Mr Conway had not been seen by the medical officer at NRCF.  A medical officer, the   Crown   said,   reviewed   the   information   that   had   been   obtained   from the plaintiff’s GP on 31 January 2014 and without examining the plaintiff issued a new prescription for medication to be obtained locally at Kaikohe in Northland.  The Crown also said that the plaintiff began taking that medication on 1 February 2014.

[12]     On 12 February 2014, the plaintiff suffered a stroke at NRCF and was taken to Whangarei Hospital.  He returned to NRCF on 5 March 2014.  He was released from that facility on 30 April 2014, presumably on the expiry of his sentence.

[13]     Another point of relevance from the medical background is that the Crown alleges, that by 12 February 2014, when the stroke occurred, the “medication had reached therapeutic levels”. That fact is disputed by the plaintiff.

[14]     That the plaintiff received his medications, at all, at NRCF is also disputed by Mr Conway.   He said that he would not have received medications without first having been seen by a doctor.   On the other hand, the Crown claimed that the evidence in the form of the prison records show that he began taking his medication from 1 February 2014.

[15]   As a result of the events summarised above, the plaintiff has brought proceedings which are accurately summarised in the memorandum of submissions which Ms Todd, for the defendants, filed, as follows:

10.       In Paragraph 1.15 of the plaintiff’s statement of claim avers that the cause of the plaintiff’s stroke was directly attributable to the following incidents:

(a)        The failure on the part of the arresting officers to afford the plaintiff the reasonable opportunity to secure his daily required medication for his various health conditions prior to his incarceration; and

(b)        The failure on the part of Corrections officers, both at MECF and NRCF to take any reasonable steps to obtain required medication for the plaintiff in respect of his documented various medical conditions in respect of which he was required to take daily medication.

11.        The plaintiff pleads that the Police officers breached the duty they owed to the plaintiff to see that he was afforded a reasonable opportunity to recover medication he was required to take on a daily basis. He says this amounted to recklessness and gross negligence and has caused the plaintiff severe physical and mental impairment, resulting in a severe loss of income-earning capacity and increased health and care expenses for the rest of his life.  The plaintiff seeks
$750,000 in exemplary damages from the Police.

12.       The plaintiff also pleads that the Corrections officers breached the duty they owed to the plaintiff to take reasonable steps to ensure he was provided with appropriate medication. He says that this was a flagrant breach of the duty they owed and was reckless and grossly negligent   given   they   were   aware   of   the   plaintiff’s   medical conditions.  He also claims that no steps have been taken to provide rehabilitation or compensation and he is likely to suffer long term impairment as a result of these actions, including severe loss of income-earning capacity and increased medical and care costs. He seeks $750,000 in exemplary damages from the Department of Corrections.

[16]     At the hearing before me, Mr Banbrook, for the plaintiff, said that $750,000 worth of damages was the entirety of the claim and his client was seeking that against both defendants jointly.

The law

[17]     Ms Todd correctly stated the law relating to applications for security for costs orders.     She pointed out that applications for security for costs are governed by r 5.45 of the High Court Rules (Rules). That rule  relevantly provides:

5.45	Order for security of costs

(1)        Subclause (2) applies if a Judge is satisfied, on the application of a defendant,—

…

(b)        that there is reason to believe that a plaintiff will be unable to pay the costs of the defendant if the plaintiff is unsuccessful in the plaintiff's proceeding.

(2)         A Judge may, if the Judge thinks it is just in all the circumstances, order the giving of security for costs.

[18]     Further, she submitted that the Court’s consideration of an application for security for costs generally follows these steps:1

(a)	Has the applicant satisfied the court of the threshold under r 5.45(1)? (b)	How should the court exercise its discretion under r 5.45(2)?
(c)	What amount should security for costs be fixed at? (d)	Should a stay be ordered?
[19]     As well, once the threshold question is satisfied, whether security is ordered, and the quantum, is a matter for the Court’s discretion, after consideration of all the circumstances.   That discretion is not to be fettered by overriding “principles” distilled from the facts of previous cases.2

[20]     Further,  the  Court  is  to  balance  the  interests  of  the  plaintiff  and  the defendant:3

The rule itself contemplates an order for security where the plaintiff will be unable to meet an adverse award of costs.   That must be taken as contemplating  also  that  an  order  for  substantial  security  may,  in  effect, prevent the plaintiff from pursuing the claim.  An order having that effect should be made only after careful consideration and in a case in which the claim has  little  chance  of  success.   Access  to  the  courts  for  a  genuine plaintiff is not lightly to be denied.

Of course, the interests of defendants must also be weighed.  They must be protected against being drawn into unjustified litigation, particularly where it is over-complicated and unnecessarily protracted.

[21]     The security for costs inquiry is to include an assessment of the merits of the claim, but there is a need to keep in mind the importance of access to justice and not
to prevent impecunious plaintiffs from bringing claims which may have some merit.4

1	Busch v Zion Wildlife Gardens Ltd (in rec and in liq) [2012] NZHC 17.
2	AS McLachlan Ltd v MEL Network Ltd (2002) 16 PRNZ 747 (CA) at [13].
3	AS McLachlan Ltd, above n 2, at [15]–[16].
4	Highgate on Broadway Ltd v Devine [2012] NZHC 2288 at [23].

[22]     Finally, Ms Todd submitted, security for costs is available in favour of the Crown.5   In  such  cases,  the unfairness  is  to  the public purse,  but  is  still  a real detriment.6

[23]     Mr Banbrook did not disagree with the approach set out above.

Analysis

[24]     The plaintiff‘s position is that both defendants were in breach of the duty of care that they owed to him.  He claims that, as a result of the breach of duty of care, he suffered damage in the form of a stroke and, consequently, he suffered financial loss.  However, at the hearing before me, Mr Banbrook accepted that compensatory
damages are not available because of the Accident Compensation Act 2001.7    The

plaintiff’s claim must be restricted to exemplary damages.

[25]     In broad overview, the position that Mr Banbrook took for the plaintiff was that his client had been treated in a reckless way, in that, even though employees of the defendants knew that there were danger signs present, such as the fact that the plaintiff’s blood pressure was “sky high”, they did not have him medically examined by a doctor and they did not take urgent steps for him to resume taking his medication.

[26]     For the purposes of the present application, Ms Todd was prepared to assume that it was at least arguable that there was a duty of care and that there had been a breach of that duty.  However, in her submission, the case for the plaintiff was bound to fail, first, because there was a lack of proof of a causal link between the deficiencies in the care which the plaintiff received and the stroke that he suffered and, secondly, because this was not a case where the high threshold, necessary for
the imposition of exemplary damages, had been reached.

5	Goston v Jamieson (2001) 15 PRNZ 325 (HC).
6	Siemer v Judicial Conduct Commissioner [2014] NZHC 596.
7	Section 317.

Exemplary damages

[27]     Ms Todd submitted that in Couch v Attorney-General, the Supreme Court authoritatively stated the law in New Zealand regarding exemplary damages.8    In Couch the Court held that the decision of the Privy Council in Bottrill v A should be overruled9  and that exemplary damages should be awarded, in accordance with the test laid down by the Court of Appeal in Bottrill v A.10    Tipping J, with whom the majority of the Court agreed, said:11

Exemplary damages should be confined to torts which are committed intentionally or with subjective recklessness, which is the close moral equivalent of intention.

Applying that principle to the case of negligently caused personal injury (that is, injury caused through breach of a duty of care), exemplary damages may be awarded if, but only if, the defendant deliberately and outrageously ran a consciously appreciated risk of causing personal injury to the plaintiff. Whether running such a risk should be regarded as outrageous will depend on the degree of risk that was appreciated and the seriousness of the personal injury that was foreseen as likely to ensue if the risk materialised.

[28]     It was the submission for the defendants that Tipping J confirmed the key points that support the approach set out by the Court of Appeal in Bottrill v A. Tipping J rejected the argument that requiring subjective recklessness would make it too difficult for plaintiffs to obtain exemplary damages from large organisations, such as a department of state or major corporation, on the basis that a number of different people may have combined to produce an outrageous outcome but no one
individual could be shown to have been subjectively reckless as to that outcome.12

This argument was not of sufficient force to outweigh the combined strength of the arguments which support the necessity for subjective recklessness.

[29]     Further,  Ms Todd  also  submitted, and  correctly,  in  my view,  that  Couch

established the following propositions:

8	Couch v Attorney-General [2010] NZSC 27, [2010] 3 NZLR 149.
9	Bottril v A [2002] UKPC 44, [2003] 2 NZLR 721.
10	Bottril v A [2001] 3 NZLR 622 (CA).
11	Above n 4, at [179]–[179].
12	Couch, above n 8, at [157].

37.       In sum, exemplary damages may not be awarded for negligence, even if capable of being described as “gross”, or for objective recklessness, even if capable of being described as “outrageous”.13

38.       An  award  of  exemplary  damages  may  only  be  made  where  a defendant is guilty of outrageous misconduct, and either (i) acts deliberately and with the intention of harming the plaintiff or (ii) acts with a conscious appreciation of the risk of causing harm and deliberately runs that risk and causes harm. The latter case may be described as subjective recklessness of an outrageous kind.

[30]     Ms Todd submitted that, in this case, none of the individual employees who were under a responsibility to Mr Conway behaved in a way that could be described as knowingly reckless or deliberate so as to cause harm to him.  She said that it was essential  to  view the actions  of the individual employees  separately.   That  was because imposition of exemplary damages was a type of civil fine, for which liability could not be imposed by a process of fixing vicarious liability to a person, such as an employer, who would have responsibility for the cumulative or overall effect of the conduct of the various employees involved.   This proposition would appear to be supported  by  the  majority  judgment  in  Couch,  where  the  following  statement appears:

[158]    The law recognises two ways in which one person may be liable for the conduct of another. The first is by means of vicarious liability; the second is by attribution. Vicarious liability is imposed largely as a matter of policy. When one person is acting on behalf of another, the wrong is seen for the purposes of compensation as having been committed both by that person and by the other. But the policy behind awarding compensatory damages  against a person  on the basis of vicarious liability does not mean that exemplary damages should be similarly awarded. There is no policy basis for punishing someone for the conduct of another unless the first person‘s conduct itself also qualifies for punishment. People should not be vicariously liable for punishment on account of the conduct of someone else just because that conduct renders them liable to compensate the plaintiff.

[31]     Mr Banbrook did not dispute the accuracy of the principles that govern the award of exemplary damages.

13	At [166].

Overall assessment of merits

[32]     It is not the function of the Court, determining an application for security for costs, to carry out a detailed assessment of the merits of the claim but, as the authorities referred to earlier indicate, it is important to keep in mind access to justice considerations and not to prevent impecunious plaintiffs from bringing claims that may have some merit.

[33]     The first point that needs to be considered is the question of whether there was a breach of duty on the part of the defendants, in the course of their managing the plaintiff, as a person in custody.  The plaintiff said the second defendant breached their duty of care to him by declining to allow him to get his medication.  There is a dispute of fact between the second defendant and the plaintiff as to whether the plaintiff ever requested the police officers to take him back to his residence so that he could uplift his medication before being taken into custody.  No more can be done at this stage than to note the different accounts because it is not possible to come to even a provisional view as to which account is correct.

[34]     The second phase of Mr Conway’s incarceration, by which time he had left police custody, was managed by the first defendant.   Consideration of the facts relating to this phase of the case is assisted by contemporaneous documents, in the form of prison reports, which the first defendant maintained.  It would seem to be correct that, for a period of in excess of approximately eight days, the plaintiff did not have access to his hypertension medication.   Further, correction officers were aware of the fact that the plaintiff was on medication because there is reference in the  records  that,  at  least  by  29  January  2014,  details  were  required  of  his hypertension medication.  In any event, even if the plaintiff had not told them that he was suffering from hypertension, had they carried out an appropriate medical examination of him, presumably, it would seem likely that fact would have been revealed.

[35]     But it would seem that he was not medically examined.  The first defendant explained this omission on the grounds of operating exigencies at the prison. Questions will no doubt surface at trial as to whether the events that supposedly

justified postponement of the medical examination were in fact genuine and/or exceptional, rather than based on a lack of organisation or resources or for some other reason on the part of the  first defendant.   There are indications from the evidence that there may have been a breach of a duty owed to the plaintiff to ensure that his medical condition was attended to.  Because of the vulnerable position that a prisoner is in, prison staff obviously have an obligation to ensure that proper medical care is arranged for prisoners such as the plaintiff.  Failure to do so is unlikely to be excused, except in the presence of compelling circumstances.

[36]     The next issue concerns whether the stroke and consequent harm that the plaintiff undoubtedly suffered was  caused  as a result of the breach of the duty pleaded.  It may be that there is no causal link between the deprivation of medication which persisted for a week and the occurrence of a stroke approximately 11 days after medication  was  resumed (which the first  defendant  said  commenced on  1
February 2014).  No doubt, expert medical evidence at trial would consider whether the interruption to medication was more likely than not to have contributed to the plaintiff suffering a stroke, or whether the timing of that event, in relation to the absence of medication, was coincidental with the stroke being explained by other factors.   For example, it may be that other environmental effects consequent upon the plaintiff’s incarceration can be pointed to as precipitating events leading to the stroke.  Indeed, it would have been very stressful for the plaintiff to be arrested and held in prison, and the effects of that experience in the period of approximately two and a half weeks before the stroke took place may be of significance.

[37]     The question of when medication was resumed is therefore linked to the critical question of whether, as asserted by the first defendant, that notwithstanding the interruption to taking medication, the medication was at the effective levels prior to the point when the stroke occurred.

[38]     The last issue is whether the case would be an appropriate one for an award of exemplary damages.  Mr Banbrook submitted that the employees, particularly of the first defendant, knew that the plaintiff was unwell.   They knew that his blood pressure was “skyhigh”.   Because they were too busy, they did not expedite his medication.  That amounts to what Mr Banbrook described as conscious risk-taking,

which ought to be punished by an award of exemplary damages.  Ms Todd, on the other hand, said that each of the persons whose actions were noted in the medical records took whatever steps they could to ensure that the plaintiff’s medical notes were obtained in order to ascertain the state of health of the plaintiff and to obtain a prescription for medication, even though it was accepted that no examination by a doctor took place.

[39]     In Mr Banbrook’s submission, there are grounds for concern that appropriate steps were not taken promptly and with the degree of priority required, in light of the plaintiff’s state of health, as evidenced by his blood pressure readings and his statement that he was on hypertension treatment medication.  Further justification for prompt action was to be found on reading of the notes of the GP, once that came to hand on 31 January 2014.  Even at that point, however, no medical examination was carried  out  and  it  was  another two  days  until  medication  was  arranged  for the plaintiff.

[40]     It will be a matter for findings of fact at any trial that might take place whether the individual medical staff and any administrative staff, who had the job of scheduling and  prioritising medical  examinations, ought,  as  individuals, to  have appreciated the delays in taking the various steps discussed in this judgment and that that carried an unacceptable level of risk for the health of the plaintiff.  There will also be questions about whether, even if they knew of the risk, they thought that the steps they took would result in appropriate medical intervention.   It may be, for example, that having noted concerns on the file and requested an examination of the plaintiff, the staff concerned were justified in believing that that would take place. The intentions might have been overtaken by failure of the institution in which they worked to take appropriate steps.  If, as Couch requires, attention is confined to the specific responses of individual employees, and if it is inadmissible to look at the response of the institution as a whole, then there may be difficulties in the way of the plaintiff establishing recklessness or the type of conscious risk-taking, which appear to be prerequisites to an imposition of exemplary damages.

[41]     While culpability is to be assessed on a subjective basis, it is in no doubt the

Court could derive guidance from information about what doctors and nurses are

trained to do in situations of this kind.  Such information could provide guidance for the fact-finder in attempting to assess how medical staff in the position of those here might realistically have been expected to measure the risks inherent in delaying medical intervention.  I understand that neither side has yet obtained expert medical evidence because it was apprehended that those steps could be deferred until after the completion of the hearing of the application for security for costs.  In my view, that seems to be a reasonable position to have taken in the circumstances.

[42]     My overall conclusion is that while there is a high barrier in the path of a party seeking to obtain an award of exemplary damages, it is not beyond contemplation that the plaintiff might be able to persuade the Court that, on at least the part of one staff member, there was a conscious running of high risks that, if prompt steps were not taken to arrange examination of the plaintiff,  an adverse health event, such as a stroke, might occur.

Impecuniousness

[43]     There is no doubt that the plaintiff is impecunious.  The required element is therefore proved.  However, that factor is of little or no weight where the actions of the defendant which are in question were the cause of the impecuniousness.

[44]     The  position  that  the  Crown  took  was  that  the  plaintiff  was  already impecunious before the stroke occurred and that his impecuniousness had not come about, Ms Todd submitted, as a result of his not being able to work because of the stroke.  That proposition is supported by the fact that the plaintiff had been a welfare beneficiary for seven years prior to being taken into custody.   In my view, this submission is correct.  The background to the plaintiff’s impecuniosity is a matter that the Court can take into account and give weight to when exercising its discretion as to whether or not to order security for costs.

[45]     However, I also consider that particular weight ought to be attached to the importance of not allowing security for costs provisions to bar access to justice for deserving plaintiffs.

[46]     A case of this  kind  is not  limited in its  scope to  the immediate private interests of the plaintiff and defendants because it involves public interest considerations.  These last considerations are engaged by the fact that the need to provide proper care and supervision for persons in state custody is a matter of public importance.  It is to be accepted that the state is entitled to be protected from legal expenses  which  it  cannot  recover  from  an  impecunious  litigants  just  as  private citizens are.  It is more likely though that public interest considerations will arise in cases where the state is the litigant.     I consider that in this case there are proper areas for an enquiry by the Court.   If security for costs is ordered, that enquiry is unlikely to proceed.  There are public interest factors present which are additional to the usual element that the Court has regard to when considering an application for security for costs.

[47]     To summarise, this may be a case that raises issues of public interest which are not measurable in economic terms.14    Although Reekie was concerned with an appeal, and there may be some differences between an appeal and a hearing at first instance, that is not to say that public interest considerations are of no relevance at first instance.

[48]     The next point is that although there may be other ways in which the plaintiff is entitled to seek an assessment of the reasonableness of the conduct of the prison authorities, such as to the Human Rights Tribunal, that does not mean he should abandon his claim for common law damages.  He has a choice in the matter.  While it may be that there is a good answer to the various allegations that the plaintiff raises, because the allegations that he makes relate to the management of public prisons, then, assuming for the purposes of argument that the allegations are true, they touch upon matters of public interest.

[49]     If the plaintiff is required to provide security for costs, there is a distinct risk that his claim will not be able to proceed.  In the circumstances of this case, I do not
consider that would be a desirable outcome.

14 Reekie v Attorney-General [2014] NZSC 63, [2014] 1 NZLR 737 at [4].

Conclusion

[50]     For all of those reasons, I conclude that the application for security for costs ought to be declined.

[51]     The parties are to confer on the question of costs relating to the application and  if  they  are  unable  to  agree  on  that  issue,  they  are  to  file  memoranda  not exceeding  four pages  on  each  side  within  10  working days  of the date of this
judgment.

J.P. Doogue
Associate Judge