COOK v HOUSING NEW ZEALAND CORPORATION [2017] NZHC 1781

COOK v HOUSING NEW ZEALAND CORPORATION [2017] NZHC 1781 [31 July 2017]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2017-404-000216[2017] NZHC 1781BETWEEN DESMOND WILLIAM COOKAppellantAND HOUSING NEW ZEALANDCORPORATIONRespondentHearing: 5 July 2017Appearances: Appellant in personKR Muirhead for RespondentS Khan as amicus curiaeJudgment: 31 July 2017JUDGMENT OF DOWNS JThis judgment was delivered by me on Monday, 31 July 2017 at 3 pmpursuant to r 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors:Meredith Connell, Auckland.Copy to: AppellantThe case[1] On 17 January 2017 Judge Hinton struck out a civil claim brought by Mr Cook against the Housing New Zealand Corporation, or more easily, Housing New Zealand.1 Mr Cook is a tenant of Housing New Zealand, unhappy with his accommodation. Mr Cook's claim alleged Housing New Zealand owed him: astatutory duty to provide "suitable housing"; and a duty of care to provide "suitablerental accommodation". Judge Hinton concluded neither cause of action wassustainable, and both constituted an abuse of process having regard to circumstance.On appeal to this Court, and again with the benefit of amicus curiae, Mr Cookcontends the Judge erred. He submits the case is fit for and should go to trial.Housing New Zealand contends Judge Hinton was correct to strike out the claim.Background[2] Mr Cook applied to Housing New Zealand for accommodation. It providedhim a one-bedroom property. The parties entered into a residential tenancyagreement on 11 June 2010.[3] Mr Cook has various health problems. In 2012, Mr Cook asked Housing New Zealand to transfer him to a different property as he considered theaccommodation unsuitable:(a) Neighbours were allegedly noisy.(b) Mr Cook did not feel safe.(c) The house was said to be damp and cold.(d) There was no second bedroom. Mr Cook considers he needs acaregiver to live with him because of his health problems.[4] Mr Cook's request for different accommodation was supported by medicalprofessionals. Housing New Zealand has not acceded to Mr Cook's request.1 Cook v Housing New Zealand Corporation [2016] NZDC 676.[5] On 30 October 2015 Mr Cook filed a statement of claim against Housing New Zealand. On 15 July 2016 he filed an amended statement of claim with the help of amicus curiae. The amended claim alleged Housing New Zealand owed Mr Cook a statutory duty to provide "suitable housing" and a duty of care to provide "suitable rental accommodation", both of which had been breached. In respect ofeach, Mr Cook sought general damages of $150,000, exemplary damages of$50,000, and costs.[6] Housing New Zealand applied to strike out the claim. Judge Hinton granted that application.The judgment below[7] Judge Hinton concluded a breach of statutory duty was unsustainable because the enactment said to give rise to the duty, the Housing Corporation Act 1974, was incompatible with a duty of this nature:(a) Welfare legislation of this type is not for the benefit of the affectedindividual, but society more generally.2 The alleged duty would,contrary to legislative intent, frustrate the Crown's social objectives inthis context.(b) Allocation of state housing involves an exercise of discretion incompatible with the creation of private rights of action for breach of statutory duty,3 and better supervised by public law (by way of judicial review).4[8] Moreover:(a) Section 76 of the Housing Restructuring and Tenancy Matters Act1992 excludes any duty on Housing New Zealand to provide anyparticular person with particular housing.52 At [34]–[35].3 At [30]–[33].4 At [30].5 At [44].(b) Housing New Zealand and Mr Cook are landlord and tenant. The Residential Tenancies Act 1986 imposes obligations on landlordsregarding tenanted premises. Mr Cook was effectively allegingHousing New Zealand had breached obligations vis-à-vis theResidential Tenancies Act. Mr Cook's complaints are susceptible todetermination in the Tenancy Tribunal (and already raised there byMr Cook on several occasions). There was no need for a statutoryduty enforceable by a private action in respect of the sameobligations.6[9] In respect of the negligence cause of action, Judge Hinton concluded there was no prospect of a proximate relationship between the parties because:7(a) Mr Cook has a contractual relationship with Housing New Zealand. The alleged duty would undermine the Residential Tenancies Act.(b) The Housing Restructuring and Tenancy Matters Act excludes the alleged duty. That enactment also provides appeal rights in relation to tenant housing eligibility assessments (which Mr Cook has exercised).(c) The Ministry of Social Development—not Housing New Zealand—now determines tenancy eligibility.[10] The Judge also concluded policy considerations told against the imposition ofa duty of care of the type contended for.8[11] Judge Hinton also found Mr Cook's claim constituted an abuse of process:9(a) Mr Cook had previously exercised his appeal rights under the Housing Restructuring and Tenancy Matters Act to challenge HousingNew Zealand's decision to allocate him a one-bedroom home, as wellas seeking to litigate that decision in the Tenancy Tribunal.6 Cook v Housing New Zealand Corporation, above n 1, at [29] and [41].7 At [50].8 At [52]–[53].9 At [54]–[62].(b) Mr Cook had previously brought claims against Housing New Zealand in the Tenancy Tribunal regarding the condition of thepremises.A précis of the respective cases[12] On behalf of Mr Cook, Mr Khan submits the claim should not have beenstruck out. In relation to the first cause of action, Mr Khan contends Judge Hinton'sreliance on the Residential Tenancies Act was misplaced because the claim "relatesto the failure of the respondent to provide [Mr Cook] suitable housing", and is not aclaim "an unsuitable house was provided to him". Mr Khan also submits s 76 of theHousing Restructuring and Tenancy Matters Act has no relevance as that enactmentis concerned with enabling multiple social housing providers, whereas Mr Cook'srelationship is with Housing New Zealand alone. Mr Khan contends both errors alsovitiate the Judge's reasoning in relation to the second cause of action.[13] Ms Muirhead, for Housing New Zealand, supports the Judge's reasoning.She submits the Judge reached the correct legal conclusions, all of which tell against the imposition of a statutory duty and duty of care.Principle[14] The appeal is by way of rehearing. The Supreme Court's decision ofAustin, Nichols & Co v Stichting Lodestar applies.10 If the appeal Court's view isdifferent from that of the Court below, the appeal must be allowed even if theconclusion is one in relation to which reasonable minds may disagree. However, asthe Court of Appeal has recently observed, "it is still axiomatic the appellantbears the onus of persuading the appellate Court to reach a different conclusion"from that below.11[15] Strike out principles are well known, and can be summarised as follows:1210 Austin, Nichols & Co v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.11 Green v Green [2016] NZCA 486, [2017] 2 NZLR 321 at [30].12 See Attorney-General v Prince and Gardner [1998] 1 NZLR 262 (CA) at 267-268 and Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 per Elias CJ and Anderson J at [30]-[40].(a) Pleaded facts, whether or not admitted, are assumed to be true. This does not extend to pleaded allegations which are entirely speculativeand without foundation.(b) The cause of action must be clearly untenable.(c) Strike out is to be exercised sparingly, and only in clear cases.(d) The jurisdiction is not excluded by a need to decide difficult questionsof law or extensive argument.(e) Caution is required in relation to claims involving novel duties of care.(f) Similar caution is required in relation to developing areas of law.AnalysisBreach of statutory duty[16] Whether an enactment gives rise to a cause of action for breach of statutoryduty "is a question of ascertaining the intention of the legislature".13 Professor Todd and others elaborate:14Each statute must be approached individually, and the question askedwhether it was Parliament's intention that a civil right of action should beavailable for breach of it.[17] In the context of a strike out application the question is whether theenactment is capable of being interpreted in a manner consistent with a statutoryduty creating a private law right of the nature contended for, because as observedabove, a claim may be struck out only in the clearest of cases. So, the issue is notwhether there is a statutory duty, but whether the existence of a statutory duty of thenature alleged is reasonable arguable. And so to the legislative landscape, which13 R v Deputy Governor of Parkhurst Prison, ex parte Hague [1992] 1 AC 58 at 159 per Lord Bridge.14 Stephen Todd (ed) The Law of Torts in New Zealand (7th ed, Thomson Reuters, Wellington, 2016) at [8.2.02].comprises the Housing Corporation Act 1974, Housing Restructuring and TenancyMatters Act 1992 and Residential Tenancies Act 1986.[18] First, the Housing Corporation Act. This enactment established HousingNew Zealand as a Crown entity.15 Housing New Zealand has a number of statutoryobjectives:16(a) to give effect to the Crown's social objectives by providing housing,and services related to housing, in a businesslike manner, and to that end to be an organisation that—(i) exhibits a sense of social responsibility by having regard to the interests of the community in which it operates; and(ii) exhibits a sense of environmental responsibility by having regard to the environmental implications of its operations; and(iii) operates with good financial oversight and stewardship, and efficiently and effectively manages its assets and liabilities and theCrown's investment [19] Housing New Zealand's principal function is to achieve these objectives.17Other functions include providing rental housing, principally for those who need itmost;18 providing appropriate accommodation for community organisations;19lending for housing purposes;20 giving those on low or modest incomes who wish toown their own homes help and advice on matters relating to housing or servicesrelating to housing;21 and acquiring and developing land for housing or otherdevelopment and renewal.22[20] Mr Cook's claim was based on Housing New Zealand's stated function toprovide rental housing;23 and its statutory objective to "give effect to the Crown'ssocial objectives by providing housing".24 As will be apparent from [18], the latter is15 Housing Corporation Act 1974, s 3.16 Section 3B.17 Section 18(1)18 Section 18(2)(a).19 Section 18(2)(b).20 Section 18(2)(c).21 Section 18(2)(d).22 Section 18(2)(f).23 Section 18(2)(a).24 Section 3B.a truncation of the more complex (and arguably competing) objectives outlined in s 3B of the Act.[21] To achieve its objectives and functions, Housing New Zealand is reliant onpublic money and rent from tenants. Obviously, its resources are finite. Demandcan exceed supply. Not everyone necessarily gets what they want. HousingNew Zealand must make decisions favouring some tenants over others. Relatedlegislation recognises as much, which leads to the Housing Restructuring andTenancy Matters Act.[22] Section 81 of this Act permits Housing New Zealand to make decisions thatmight otherwise constitute discrimination in terms of the Human Rights Act 1993.Housing New Zealand may make decisions on the basis of marital status, disabilityor absence of disability, age, and family status. Housing New Zealand may alsomake decisions based on whether those affected are ordinarily resident or lawfullyresident in New Zealand, and with regard to the individual's income, property and soon. Decisions in this context include the allocation, reallocation, assignment andreassignment of State housing to a tenant.[23] The Housing Restructuring and Tenancy Matters Act was amended from 14 April 2014 (and so after the dispute between Mr Cook and Housing New Zealandarose) to permit the Ministry of Social Development to assume some of HousingNew Zealand's functions, and to permit other agencies to provide State housing.Consequently, s 129 of the Act allows other agencies to make housing decisions thatmight otherwise contravene the Human Rights Act, and to make decisions in thesame way as Housing New Zealand; see [22].[24] Section 76 forms part of these reforms. It provides:76 Limits on obligations of HNZ25Nothing in this Act requires HNZ to provide any housing or particular housing to a tenant referred or allocated to HNZ by the agency.25 HNZ is short for Housing New Zealand.[25] The Act also provides for market rent and income-related rent.26 Put broadly,a state tenant must pay market rent for the property unless he or she satisfiesHousing New Zealand (and now the Ministry of Social Development) anincome-related rent should be payable. As its name implies, income-related rent isfixed with reference to household income or benefit levels.[26] Unsurprisingly, the Act provides a State tenant with protections. He or she may challenge the calculation of rent or an assessment by Housing New Zealand (oran agency) in relation to:27(a) The eligibility of any tenant to be or continue to be, "allocated social housing".(b) The "housing needs of any tenant".[27] The first review is internal. The tenant may then appeal to the State HousingAppeal Authority and thereafter the District Court. Other protection exists by virtueof the Residential Tenancies Act. And so to it.[28] Section 45 of that enactment requires Housing New Zealand as landlord toprovide premises in a reasonable state of cleanliness, and to provide and maintainthem in a reasonable state of repair having regard to their age and character.28Housing New Zealand must also take all reasonable steps to ensure none of its othertenants cause or permit any interference with the reasonable peace, comfort orprivacy of the tenant.29 Housing New Zealand must also comply with all applicablerequirements in respect of the buildings, health, and safety under any enactmentinsofar as they apply to the premises.3026 And as from April 2014, the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Act 2013.27 Section 62.28 Residential Tenancies Act, s 45(1)(b).29 Section 45(1)(e).30 Section 45(1)(c).[29] The Act governs "every tenancy for residential purposes" except thoseexpressly identified.31 The same enactment provides the Tenancy Tribunal with jurisdiction to determine any dispute between a landlord and tenant in relation to anytenancy governed by the Act. The jurisdiction is exclusive in that "no court or otherbody should have originating jurisdiction in respect of any matter that is within thejurisdiction of the Tribunal".32[30] Standing back, it is clear from the legislative landscape identified above that Parliament did not intend to confer a private civil right of action for alleged breaches of the Housing Corporation Act.[31] First, the scheme created by the Housing Corporation Act—as expanded by the Housing Restructuring and Tenancy Matters Act—is not for the benefit of theaffected individual, but society more generally. Consequently, the alleged dutywould frustrate legislative intent. The House of Lords' decision inO'Rourke v Camden London Borough Council is analogous in both fact and law.33Mr O'Rourke was homeless. He was given temporary accommodation by the localauthority, but then evicted. Mr O'Rourke brought an action against the localauthority alleging a breach of statutory duty in respect of its alleged failure toprovide him further accommodation.[32] Lord Hoffmann described the relevant legislation as "a scheme of socialwelfare, intended to confer benefits at the public expense on grounds of publicpolicy". His Lordship added:34Public money is spent on housing the homeless not merely for the privatebenefit of people who find themselves homeless but on grounds of generalpublic interest.[33] Housing New Zealand's statutory objectives emphasise the communityinterest in the provision of State housing. In providing such housing, Housing NewZealand must exhibit a sense of social responsibility by having regard to the interestsof the community in which it operates. Housing New Zealand must also exhibit a31 Section 4.32 Section 82(1).33 O'Rourke v Camden London Borough Council [1997] 3 All ER 23.34 At 26.sense of environmental responsibility, and operate with good financial oversight andstewardship in acknowledgment of "the Crown's investment". Recognition of aprivate civil right to sue Housing New Zealand for a breach of this enactment would supplant housing according to need with housing by litigation.[34] Second, the existence of a statutory duty is inconsistent with the high level ofdiscretion afforded to Housing New Zealand and the Ministry of SocialDevelopment in the allocation of finite resources. As will be recalled, s 81 of theHousing Restructuring and Tenancy Matters Act permits Housing New Zealand tomake decisions that might otherwise constitute discrimination in terms of the HumanRights Act, and to make decisions based on a host of other statutory criteria. Similarprovision is made for the Ministry of Social Development by virtue of s 129 of thatAct. O'Rourke v Camden London Borough Council is again instructive for theexistence of wide discretions in the same area made it:35 unlikely that Parliament intended errors of judgment to give rise to anobligation to make financial reparation. Control by public law remedies would appear much more appropriate.[35] Third, the Housing Restructuring and Tenancy Matters Act provides for broad public law remedies in relation to the calculation of rent, or assessments by HousingNew Zealand (or an agency) in relation to the eligibility of any tenant to be orcontinue to be, allocated social housing, and the housing needs of any tenant. As thepassage above from O'Rourke v Camden London Borough Council implies,availability of public law relief under a statute makes it unlikely the same statutegives rise to an enforceable private law right in relation to any breach. This factorwas seen as counting against the existence of a statutory duty inWool Board v Saxmere, in which Hammond J expressed the view "the reviewingJudge must be driven to the view that something is necessary to achieve the purposeof the statute, and therefore objectively within the intention of the legislature, yetwas not provided for".3635 O'Rourke v Camden London Borough Council, above n 33, at 27.36 Wool Board Disestablishment Co Ltd v Saxmere Co Ltd [2010] NZCA 513, [2011] 2 NZLR 442 at [188].[36] Fourth, the proposed claim cuts across the law of contract by virtue of thetenancy agreement between Mr Cook and Housing New Zealand, at least in so far asthe claim relates to the condition of rental accommodation. In this respect, theproposed claim also cuts across the exclusive jurisdiction of the Tenancy Tribunal todeal with matters in relation to residential tenancies.37[37] Fifth, these conclusions are supported by s 76 of the Housing Restructuringand Tenancy Matters Act, which expressly provides Housing New Zealand is notunder any obligation "to provide any housing or particular housing to a tenantreferred or allocated to Housing New Zealand by the agency". Extrinsic legislativematerial supports this conclusion too. Section 76 was inserted because the SocialServices Committee considered the provision:38 would make it clear that social housing providers would not be requiredto provide particular housing, and could refer tenants back to the agency.For example, they could do so if there was no suitable house available forthem.[38] Mr Khan's submission that s 76 does not apply in this case does not addressthe point. The question is not whether that Act governs the dispute betweenMr Cook and Housing New Zealand, but rather what that Act says aboutParliamentary intent in this context.Negligence[39] In deciding whether a novel duty of care should be recognised, the question iswhether "in light of all the circumstances of the case, it is just and reasonable thatsuch a duty be imposed".39 On a strike out application, the question is whether theposited circumstances are capable of giving rise to a duty of care of the naturecontended for; not whether a duty actually arises. As noted earlier, caution isrequired in a strike out context in areas of law of novelty or which are developing.37 Residential Tenancies Act 1986, s 82.38 Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill 2013 (116-2) (explanatory note) at 3-4.39 South Pacific Manufacturing Co Ltd v New Zealand Security Consultants and Investigations Ltd[1992] 2 NZLR 282 (CA) [South Pacific] at 305 per Richardson J; Rolls-Royce New Zealand Ltd v Carter Holt Harvey Ltd [2005] 1 NZLR 324 (CA) at [58]. This test has been endorsed by the Supreme Court, including in North Shore City Council v Attorney-General [2012] NZSC 49, [2012] 3 NZLR 341 [The Grange] at [160].[40] Whether a novel duty of care exists is typically analysed with reference totwo concepts: proximity and policy. The former focuses on the factual and policyaspects of the relationship between the parties; the latter on wider considerationsexternal to that relationship.40 When, as here, the relationship between the partiesarises against a statutory and contractual background, the boundary betweenproximity and policy can merge.41 Ultimately, however, what is is important is thatall relevant factors are properly weighed, not the stage at which that occurs.42[41] As with the statutory duty cause of action, Judge Hinton was correct to strike out this one. Similar reasons apply.[42] First, the parties' relationship is not sufficiently proximate so as to be capableof establishing a duty of care. The relationship is contractual, governed by the Residential Tenancies Act and in turn, the Tenancy Tribunal. And, as with other State housing tenants, Mr Cook has public law remedies against Housing New Zealand. Second, policy tells against the imposition of a duty of care of the nature contended for in this setting. State housing is not for the benefit of theaffected individual, but society more generally. A duty of care would interfere withthe administration of the Housing Corporation Act and the Housing Restructuringand Tenancy Matters Act in the provision of State housing. Recognition of a duty ofcare against Housing New Zealand (or the Ministry of Social Development) riskssupplanting housing according to need with housing by litigation. A duty of carerequiring Housing New Zealand to provide rental accommodation of a particulartype or types would also interfere with the administration of the ResidentialTenancies Act and the jurisdiction of the Tenancy Tribunal. Third, the discussedenactments "cover the field".43 Fourth, s 76 of the Housing Restructuring andTenancy Matters Act supports the conclusion the posited circumstances are notcapable of sustaining a duty of care.40 The Grange, above n 39, at [149] per Blanchard, McGrath and William Young JJ and at [231] per Tipping J.41 Rolls-Royce New Zealand Ltd v Carter Holt Harvey, above n 39, at [64].42 Rolls-Royce New Zealand Ltd v Carter Holt Harvey at [64]; South Pacific, above n 39, at 294;Attorney-General v Carter [2003] 2 NZLR 169 at [22] and [30].43 South Pacific at 297–298.Abuse of process[43] Mr Khan did not challenge the Judge's conclusion Mr Cook's claimconstituted an abuse of process.[44] As the Judge observed, the complaints underlying this claim have alreadybeen determined by other courts and tribunals. Mr Cook's concerns relating to noise,safety and dampness have been ventilated in the Tenancy Tribunal.44 He appealed one of those decisions to the District Court45 and High Court,46 and then unsuccessfully sought leave to appeal to Court of Appeal.47 Mr Cook has also sought orders in the Tenancy Tribunal for a two-bedroom house. The Tribunal declined jurisdiction.48 Mr Cook also appealed Housing New Zealand's decision notto allocate a two-bedroom home to the State Housing Appeals Authority.49 The Authority dismissed that appeal in May 2014.[45] Mr Cook has exercised his rights in relation to Housing New Zealand'sallocation decision and his rights as a tenant vis-à-vis the same organisation.50 The proposed claim is an attempt by Mr Cook to revive and recast the same complaints beyond the proper statutory avenues. Or in short, an abuse of process. As Asher J said in Rafiq v Secretary for Department of Internal Affairs of New Zealand:51A party cannot bring a case relating to a certain party, certain sequences of conduct, and a certain timeframe, and then when it fails bring another case raising another similar complaint relating to the same party, the same sequence and the same timeframe. Parties must bring their whole case to the Court so there can be finality of litigation.44 Cook v Housing New Zealand Tenancy Tribunal 12/03115/AK, 7 May 2013;45 Cook v Housing New Zealand Corporation DC Auckland CIV-2013-004-803, 19 December 2013.46 Cook v Housing New Zealand Corporation [2014] NZHC 683.47 Cook v Housing New Zealand Corporation [2014] NZHC 1261; Cook v Housing New Zealand Corporation [2014] NZCA 504.48 Cook v Housing New Zealand Tenancy Tribunal 13/01710/AK, 2 July 2013; Cook v Housing New Zealand Tenancy Tribunal 13/02896/AK, 11 September 2013.49 Cook v Housing New Zealand State Housing Appeals Authority Auckland 10/13, 15 May 2014. The Authority noted its decision would be reviewed if Mr Cook produced evidence establishing he required a fulltime caregiver.50 Cook v Housing New Zealand Corporation, above n 1, at [62].51 Rafiq v Secretary for the Department of Internal Affairs of New Zealand [2014] NZHC 2064 at [21]. See also Henderson v Henderson (1843) 3 Hare 100, 67 ER 313 (Ch).Result[46] The appeal is dismissed.Addendum[47] I acknowledge this result will disappoint Mr Cook, who obviously feelsstrongly about this cause. However, the only issue is whether Mr Cook's claim iscapable of being sustained in law. For the reasons expressed in this judgment, which largely restate those given by Judge Hinton in the court below, Mr Cook's claimagainst Housing New Zealand could not succeed. Consequently, the Judge was correct to strike out the claim...Downs J