LITTLETON v SERCO NEW ZEALAND LIMITED [2017] NZHC 1579

LITTLETON v SERCO NEW ZEALAND LIMITED [2017] NZHC 1579 [7 July 2017]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2016-404-000019[2017] NZHC 1579BETWEEN ALEXANDA KEREI REKENELITTLETONPlaintiffAND SERCO NEW ZEALAND LIMITEDDefendantHearing: 21 June 2017Appearances: J H Waugh and J Gilbert for PlaintiffL Clark for DefendantJudgment: 7 July 2017JUDGMENT OF WYLIE JThis judgment was delivered by Justice WylieOn 7 July 2017 at 4.30pmPursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Solicitors/counsel:Stephen Ross/J H Waugh, WhanganuiKensington Swan, WellingtonIntroduction[1] The plaintiff, Mr Littleton, has brought proceedings against the defendant,Serco New Zealand Limited ("Serco"), alleging that Serco was negligent and inbreach of duties of care it owed to him. The cause of action is alleged to have accrued whilst Mr Littleton was an inmate in the Mt Eden Corrections Facility, which Serco then managed and controlled.[2] There are two interlocutory applications before the Court:(a) an application by Serco for security for costs. This is opposed by Mr Littleton; and(b) an application by Mr Littleton seeking further discovery of particular documents. This is opposed by Serco.The pleadings[3] Mr Littleton asserts that he was assaulted by three other inmates on two separate occasions, both on 2 February 2015, whilst he was an inmate at the Mt Eden Corrections Facility. Mr Littleton says that he had access to a contraband cellphone, that he was asked to arrange for other contraband to be smuggled into the prison, that he refused to do so, and that he was assaulted as a result.[4] The statement of claim focuses on the second assault. Mr Littleton says that he was punched, kicked and stomped on by the three inmates during the secondassault, and that one of the inmates produced "a shank" and threatened to stab him.He says that he escaped onto an upper floor landing, but then fell from the landing after one of his attackers pushed him over a balustrade. He says that he fell to thefloor below and that he then managed to make his way to a guard's office at the endof the unit. He says that he banged on the window to get the guard's attention butthat he was further attacked by one of his fellow inmates in the process.[5] Mr Littleton says that as a result of these assaults and the fall, he suffered fractures to both of his legs, a broken nose and head trauma. He asserts that the injuries to his left leg required reconstructive surgery.[6] Mr Littleton then says that he was discharged from hospital on the basis that Serco would provide him with 24-hour care, and that upon his return to the prison, he was admitted to the Mt Eden Corrections Facility Medical Unit. He says that he was unable to move, manage his own medication, or go to the shower or toilet unassisted. He says that, despite this, he was not given 24-hour care; rather, he was given assistance to use a bathroom, but only once a day, in the morning. He says that as a result, he was forced to defecate in his bed. He also says that he was not given sufficient pain medication and was regularly in severe pain.[7] Mr Littleton claims that Serco as the prison manager owed him duties of care to:(a) treat him with humanity and with respect for his inherent dignity;(b) not subject him to, or allow him to be subjected to, cruel or degrading treatment;(c) protect him from violence, blackmail and other physical harm; and(d) provide him with proper medical care and assistance after he suffered injury.[8] Mr Littleton alleges that Serco breached the duties it owed to him by:(a) allowing a dominant culture of violence to take effect at the Mt Eden Corrections Facility;(b) failing to provide adequate or sufficient supervision of prisoners to ensure that the prisoner-on-prisoner violence did not occur;(c) failing to conduct unlock periods in a manner that allowed prisoners to be easily supervised;(d) failing to implement an appropriate CCTV network so that in-cell activity could be monitored;(e) failing to implement an effective search plan so that prisoners did not have access to contraband;(f) failing to implement a number of planned policies and strategies aimed at reducing prisoner violence;(g) failing to effectively manage the influence of criminal gangs operating within the prison;(h) failing to effectively manage his treatment in rehabilitation following the assault; and by(i) threatening him with adverse consequences if he did not consent to Serco discussing his affairs in the media.[9] Mr Littleton seeks exemplary damages of $500,000 for Serco's breach ofthese various duties.[10] In its statement of defence, Serco accepts that it was managing the Mt Eden Corrections Facility at all relevant times up until 24 July 2015, and that it had duties as set out in the Corrections Act 2004, the Corrections Regulations 2005, the United Nations Standard Minimum Rules for the Treatment of Prisoners in accordance with s 5(1)(b) of the Corrections Act, and s 23(5) of the New Zealand Bill of Rights Act 1990. It denies owing any other duties. It accepts some of the factual matters pleaded by Mr Littleton but denies others; some it accepts in part only. It denies breaching any duty owed to Mr Littleton, and denies the allegation that it was aware that the failure to abide by the alleged duties would create a significant and obviousrisk to Mr Littleton. It says that Mr Littleton's claimed injuries were not sustained as a result of organised fighting within the prison and that any breach of duty by it (which is denied) was not causative of any injury suffered by Mr Littleton. It alsosays that Mr Littleton's allegations that it failed to provide adequate supervision or to manage the influence of gangs in the prison, even if made out, had no causative connection with the attacks on him.Relevant procedural steps taken to date[11] Serco filed an affidavit of documents by way of discovery on 16 September 2016. It did so on the basis of the original statement of claim, dated 28 April 2015, filed by Mr Littleton. That statement of claim was considerably briefer than the present amended statement of claim filed on 3 May 2017. Serco was requested in writing to provide further documents relevant to the expanded allegations made in the amended statement of claim. It declined to do so. As a result, Mr Littleton filed his interlocutory application seeking orders for particular discovery.[12] On 10 March 2017, Serco filed its interlocutory application seeking an order for security for costs against Mr Littleton.Security for costs[13] Relevantly, r 5.45 of the High Court Rules provides as follows:Order for security of costs(1) Subclause (2) applies if a Judge is satisfied, on the application of a defendant,—(a) that a plaintiff—(i) is resident out of New Zealand; or(ii) is a corporation incorporated outside New Zealand; or(iii) is a subsidiary (within the meaning of section 5 of the Companies Act 1993) of a corporation incorporated outside New Zealand; or(b) that there is reason to believe that a plaintiff will be unable to pay the costs of the defendant if the plaintiff isunsuccessful 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.(3) An order under subclause (2)—(a) requires the plaintiff or plaintiffs against whom the order is made to give security for costs as directed for a sum that the Judge considers sufficient—(i) by paying that sum into court; or(ii) by giving, to the satisfaction of the Judge or the Registrar, security for that sum; and(b) may stay the proceeding until the sum is paid or the security given.[14] There is no dispute that Mr Littleton is unlikely to be able to pay Serco'scosts if he is unsuccessful with his proceedings, and that the threshold to the making of an order is satisfied. The enquiry is accordingly whether, in the circumstances of this case, the Court should exercise its discretion to order security under r 5.45(2), and, if so, in what amount.[15] Balancing the interests of the plaintiff and the defendant is the overriding consideration,1 and defendants are entitled to be protected against unjustified litigation, particularly where it is over-complicated and unnecessarily protracted.2The less apparently meritorious a case is, then the more likely it is that security will be ordered.3[16] Here Serco points to the likely costs to it if the matter proceeds to trial, andargues that Mr Littleton's claim is unmeritorious. Mr Littleton says that his claimhas merit and that, if he is ordered to pay security, it is unlikely that he will be able to pursue his claim.[17] Ms Clark, appearing for Serco, argued that Mr Littleton has provided no medical evidence to support his claim of severe and permanent harm. She asserted that Mr Littleton has discovered an application he made to ACC for a lump sum payment and for an independence allowance, and other evidence about his health, the most recent of which was dated 23 April 2016, but that none of this material substantiates the injuries alleged. She properly accepted that s 317 of the AccidentCompensation Act 2001 is no bar to Mr Littleton's claim, but pointed out that hisclaim is limited by s 319 of the Accident Compensation Act to a claim for exemplary damages only. She submitted that the test for establishing a claim to exemplary1 Highgate on Broadway Ltd v Devine [2012] NZHC 2288, [2013] NZAR 1017 at [24(c)].2 At [22(e)].3 At [22(c)]damages is high,4 and that such damages, which are intended to punish a defendant, are appropriate in only a limited number of cases.5 She referred briefly to the materials discovered by Mr Littleton, and submitted that they fall well short of establishing any intentional, deliberate or outrageous conduct on the part of Serco or its staff sufficient to lead to an award of exemplary damages.[18] Mr Gilbert, on behalf of Mr Littleton, pointed to numerous authorities which suggest that a duty of care can arise when one person is detained in the custody of another,6 and that the control vested in a prison authority can form the basis for a special relationship which creates a duty to take reasonable care to prevent harm stemming from the unlawful activities of third parties.7[19] The materials before me are limited and it is not appropriate to predeterminethe merits of Mr Littleton's claim, or to form anything more than an impression as tohis chances of success.[20] Some things are clear. Mr Littleton was lawfully detained at Mt Eden Corrections Facility, as were the individuals who assaulted him. The Corrections Facility was managed by Serco, and it was at all material times responsible for exercising control over both Mr Littleton and his assailants. There was an assault or assaults – although responsibility for the events that occurred and their consequences is in dispute. On the authorities cited by Mr Gilbert, it is arguable Serco was under a duty to take reasonable care to ensure the safety of Mr Littleton, and to ensure that he was not harmed by the unlawful acts of others. The authorities suggest that a lack of proper supervision of prisoners can constitute a breach of the duty of care owed by a prison authority.8[21] Support is lent to Mr Littleton's claims that Serco breached the duties it owedhim from a report prepared by the Chief Inspector of Corrections into aspects ofSerco's management of the Mt Eden Corrections Facility.9 That report was prepared4 Bottrill v A [2001] 3 NZLR 622 (CA) at [174].5 Couch v Attorney-General [2010] NZSC 27, [2010] 3 NZLR 149 at [178].6 R v Deputy Governor of Parkhurst Prison Ex p Hague [1992] 1 AC 58 (HL).7 New South Wales v Napier [2002] NSWCA 402 at [75]; Ellis v Home Office [1953] 2 ALL ER 149 (CA) at 154; Bujdoso v New South Wales [2004] NSWCA 307 at [45].8 Ellis v Home Office, above n 7, at 154 and 160.9 Department of Corrections Chief Inspector's Report into the Circumstances surroundingin 2016. It deals specifically with organised fighting which occurred within the prison between 18 June 2015 and 13 July 2015. The assaults alleged by Mr Littleton in his statement of claim are said to have occurred in February 2015, but there are a number of observations in the report which prima facia appear to be relevant to MrLittleton's claims. For example:(a) The Chief Inspector considered that adequate staffing and supervision was required to prevent organised fighting.10(b) The report is critical of aspects of Serco's supervision of prisoners.Relevantly, it notes that CCTV cameras did not operate in cells, and that cells were not locked behind prisoners when they were out of their cells.11(c) Not infrequently, unit "pods" did not have a staff member present when the cells were unlocked, and that staffing arrangements were not sufficient to ensure that each unit pod was adequately supervised when prisoners were out of their cells.12(d) Even when staff were present, the Chief Inspector indentified incidents when prison staff were not actively supervising prisoners.13(e) The Chief Inspector expressed the view that Serco had not deployedsufficient staff to meet prisoners' unlock entitlements while ensuringtheir safety.14(f) The Chief Inspector found that cell and unit searches were being conducted less frequently than was required,15 that contraband was likely to have been easily obtainable,16 that staff were likely to haveorganised prisoner on prisoner fighting (Fight Club) and access to cellphones and contraband at Mt Eden Corrections Facility (MECF) (Department of Corrections, 2016).10 At [154].11 At [154].12 At 87.13 At [159]-[173].14 At 48, fn 70.15 At 88.16 At 88.been a primary source of contraband,17 and that Serco had in 2013 dispensed with the searching of incoming staff members in favour of random searches.18(g) The report suggests that Serco had notice of difficulties arising from its staffing policies well in advance of the assaults on Mr Littleton. The report refers to various prisoner-on-prisoner assaults, and in some cases, the Chief Inspector found that a lack of staff contributed to the situations giving rise to the assaults.19(h) The report also notes that the Chief Executive of Corrections wrote to Serco requesting it to urgently put in place a plan to address the significant periods of time when there were no staff working in unlocked pods, and that the Department of Corrections in October 2014 issued a performance notice recording that Serco had failed to control and supervise the activities of prisoners to ensure their safety, and the safety of other persons present at the prison.20(i) The Chief Inspector also found no evidence that there were any strategies or specific actions put in place by Serco to minimise access to, and the use of, cellphones.21[22] Given the Chief Inspector's report, Mr Littleton's claims cannot be dismissedas being unmeritorious. Nor can it be said that his proceedings are unjustified or over-complicated.[23] There has been public interest in Mr Littleton's proceedings and extensive media coverage of Serco's performance as the manager of the Mt Eden CorrectionsFacility generally. The proper care and supervision of persons in state custody is a matter of public importance.17 At 88.18 At 88.19 At [116]-[158].20 At [132].21 At [244].[24] The imposition of an order for security of costs in the present case would prevent Mr Littleton from pursuing his case. Mr Littleton is a genuine plaintiff and in my view, access to the Courts in a case such as this is not lightly to be denied. Access to justice is an essential human right and the Courts should be slow to make an order for security that would stifle a bona fide claim.22 An order for security which would have the effect of preventing the claim from being pursued should only be made after careful consideration, and only in a case in which the claim has little chance of success.23 That is not the case here.[25] I am not persuaded that it is appropriate to make an order for security of costsin the present case. Serco's application in this regard is declined.Further and better discovery[26] The plaintiff seeks access to all of the various documents listed in the ChiefInspector's report.[27] Rule 8.19 of the High Court Rules provides as follows:Order for particular discovery against party after proceeding commencedIf at any stage of the proceeding it appears to a Judge, from evidence or from the nature or circumstances of the case or from any document filed in the proceeding, that there are grounds for believing that a party has not discovered 1 or more documents or a group of documents that should have been discovered, the Judge may order that party—(a) to file an affidavit stating—(i) whether the documents are or have been in the party'scontrol; and(ii) if they have been but are no longer in the party's control, the party's best knowledge and belief as to when the documents ceased to be in the party's control and who now has controlof them; and(b) to serve the affidavit on the other party or parties; and22 Highgate on Broadway Ltd v Devine, above n 1, at [23(b)]; Reekie v Attorney-General [2014] NZSC 63, [2014] 1 NZLR 737 at [3]; AS McLachlan v MEL Network Ltd (2002) 16 PRNZ 747 (CA) at [15].23 AS McLachlan v MEL Network Ltd, above n 22, at [15].(c) if the documents are in the person's control, to make those documents available for inspection, in accordance with rule 8.27, to the other party or parties.[28] The relevant principles are clear. Parties are required to discover only those documents which are relevant to a matter in question in the proceedings. Thedocuments must be relevant in the sense of being capable of advancing a party's caseor of damaging the case of that party's adversary. Relevance is determined by thepleadings, and an order should not to be made unless the Court is satisfied that it is reasonably necessary.24[29] Here Serco discovered in response to the initial statement of claim filed by Mr Littleton. It has taken no steps, however, to discover further after the expanded statement of claim was filed.[30] A party's obligation to discover does not end with the filing of an affidavit ofdocuments. There is an ongoing obligation to give discovery and offer inspection at all stages of a proceeding.25[31] As I have noted, in his amended statement of claim, Mr Littleton seeks exemplary damages in respect of injuries he claims to have suffered as a result of Serco breaching duties of care he says were owed to him in its capacity as his custodian. I have summarised his allegations in [7] and [8] above.[32] Notwithstanding the width of the pleadings, Serco did not discover the ChiefInspector's report – although that document is in the public domain. Further, Serco has not discovered any of the source documents cited by the Chief Inspector in his report.[33] Serco opposes further discovery. Through its counsel it says that further discovery would be oppressive. It asserts that the application seeks hundreds of documents, many of which it says are no longer in its control. It also says that the scope and scale of discovery sought is disproportionately wide and generalised, that accessing the documents will require assistance from the Department of Corrections,24 New Zealand Rail Ltd v Port Marlborough New Zealand Ltd [1993] 2 NZLR 641 (CA) at 644.25 High Court Rules, r 8.18.and that retrieval, review and compilation of the documents will require a significant amount of time, and the associated costs will be large.[34] The difficulty from Serco's perspective is that none of these factualallegations are borne out in any affidavit of evidence filed on its behalf. Rather, itsimply filed a notice of opposition and no more. I cannot give counsel's unsupportedassertions much weight.[35] I start by considering whether the documents sought are relevant to the matters in question in these proceedings. The case of the party seeking discovery must be assumed to be true, and not that of the party from whom discovery is sought.26[36] Here, I am satisfied that the majority of the documents sought are relevant in terms of the current pleadings. I do have some reservations, as follows:(a) Mr Littleton already has access to the final report from the Chief Inspector. It should have been discovered by Serco in the first place, but no order is now necessary in this regard.(b) Mr Littleton seeks an incident report relating to a prisoner who received facial bruising on 13 May 2015, and a follow up report prepared on 14 May 2015 in relation to that incident. He also seeks incident reports for all of 2015. It seems to me that incident reports which post-date the assaults on Mr Littleton are irrelevant. I would limit the discovery to the period ended 31 March 2015.(c) Mr Littleton seeks that Serco should discover all operating policies, standards and procedures in force at the time of the assault on Mr Littleton. This request is too wide. In my judgment, any order should relate only to operating policies, standards and procedures in force relating to:(i) staffing;26 Rapid Metal Developments NZ Ltd v Access One Scaffolding Ltd [2017] NZHC 204 at [5].(ii) searching for contraband;(iii) the use of CCTV monitoring in cells and within the prison generally;(iv) the practices to be followed during unlock periods;(v) the practices for locking cells behind prisoners when they were out of their cells;(vi) the supervision of prisoners by staff;(vii) the steps intended to manage gangs within the prison;(viii) the step designed to deal with prisoner-on-prisoner violence; and(ix) the practices in place for the operation and staffing of the Prison Medical Facility.(d) Mr Littleton seeks the records of all prisoner complaints for 2015. Again, this is too wide. It should be limited to records of complaints up to 31 March 2015.(e) An incident report that is sought, dated 26 June 2015, falls well outside the period of the assaults on Mr Littleton.(f) Mr Littleton seeks quarterly reports after March 2015, log book records of cell searches after March 2015, and an electronic register of cell searches after March 2015. Again, it seems to me that this material will be irrelevant because the reports cover events after the assaults on Mr Littleton.[37] Subject to these reservations, I accept the submissions of Mr Gilbert on behalf of Mr Littleton that the materials sought are relevant.[38] Further, the discovery of this material is necessary. In the absence of thesource material underpinning the findings in the Chief Inspector's report, MrLittleton and the Court will likely be disadvantaged. Mr Littleton seeks exemplary damages from Serco. To succeed, he will need to show that Serco deliberately ran a consciously appreciated risk that he might be injured as a result of breaches of the duties it owed to him. While the Chief Inspector has drawn certain conclusions about what Serco knew and what risks it must have appreciated, the most reliableevidence of Serco's knowledge and of the risks it consciously ran is likely to comefrom its internal records. The documents sought by Mr Littleton are both relevant and necessary for a proper determination of this issue.[39] Serco has failed to discover the various documents sought. They are referredto in the Chief Inspector's report. They must have emanated from or been sent toSerco, and at some stage been in its control.[40] Ms Clark submitted that discovery should be limited to documents relating to the unit in which Mr Littleton was held – Delta Unit. I am not persuaded that this is appropriate. Documents dealing with the prison generally could well be relevant toSerco's knowledge and appreciation of risk and therefore important to the claim for exemplary damages.[41] Accordingly, I order Serco, within 21 days of this judgment, to file and serve an affidavit stating which of the documents detailed in Annexure A are or have been in its control, and if they have been but are no longer in its control, stating to the best of its knowledge and belief when the documents ceased to be in its control and whonow has control of them. If the documents are in Serco's control, it is to make those documents available for inspection, in accordance with r 8.27.Costs[42] Mr Littleton as the successful party is entitled to his costs and to reimbursement of his reasonable disbursements.[43] I make the following directions:(a) any memorandum seeking costs is to be filed within 10 working days of the date of this judgment;(b) any memorandum in response is to be filed within a further 10 working days; and(c) memoranda are to be limited to five pages.I will then deal with the issue of costs on the papers unless I require the assistance of counsel.__________________________Wylie JAnnexure "A"[1] The draft report of Corrections' Special Monitors on organised fighting asprovided to the MECF Prison Director in May 2015.[2] All incident reports concerning serious prisoner assaults in 2014 and up to 31 March 2015.[3] All Serco operating policies, standards and procedures in force at the time of the assault on Mr Littleton which relate to:(a) staffing;(b) searching for contraband;(c) the use of CCTV monitoring in cells and within the prison generally;(d) the practices to be followed during unlock periods;(e) the practices for locking cells behind prisoners when they were out of their cells;(f) the supervision of prisoners by staff;(g) the steps intended to manage gangs within the prison;(h) the step designed to deal with prisoner on prisoner violence; and(i) the practices in place for the operation and staffing of the Prison Medical Facility.[4] All records of prisoner complaints in relation to assaults, contraband or gang activity in 2014 and up to 31 March 2015.[5] Minutes of Serco meeting on 30 March 2015 relating to organised fighting.[6] Minutes of Intel meeting on 2 April 2015 relating to organised fighting.[7] Email to MECF Prison Director and Deputy Director regarding telephone reference to contender fighting on 15 June 2015.[8] Security Information Report dated 24 June 2015 and covering email to Serco dated 25 June 2015.[9] Notes from prisoner interviews, as provided to Serco by Corrections, in relation to the Chief Inspector's report on organised fighting and contraband.[10] The 2013 inspectorate report into the serious assault on a prisoner in the Hotel Unit Yard.[11] Serco's 2013 Operational Review of Violence.[12] The 2013 hazard report by CANZ delegate as to staffing, and Serco's adviceto Corrections regarding the same.[13] The 2014 Deloitte Review of staffing at MECF.[14] The 5 February 2014 communication between the Relationship Manager andSerco's Prison Director.[15] Monitors' notes of 7 February 2014 and 28 February 2014.[16] All Monitors' Quarterly Reports from 2014 to 31 March 2015.[17] Chief Executive's letter to Serco of 2 October 2014 requesting a plan forSerco to address the significant periods of time during which there were no staff working in unlocked pods.[18] Performance Notice 42.[19] All material relating to Performance Notice 42, including Serco's finalresponse to Performance Notice 42 dated 17 October 2014, and all material relatingto the formalising of Corrections' position on PN42.[20] The MECF 2014/2015 Search Plan.[21] Log book records for Delta Unit for 2014 and up to 31 March 2015 regarding cell searches.[22] Serco's electronic register of cell searches for 2014 and up to 31 March 2015.[23] All Serco responses to drafts of the Chief Inspector's report.[24] Serco's response to the Chief Inspector's final report.[25] Staff rosters for Delta Unit from December 2014 through to 31 March 2015.