AUSTIN v ROCHE PRODUCTS (NEW ZEALAND) LIMITED & ORS [2018] NZHC 208

AUSTIN v ROCHE PRODUCTS (NEW ZEALAND) LIMITED & ORS [2018] NZHC 208 [21 February 2018]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2016-404-3299[2018] NZHC 208BETWEEN LESLIE NORMAN AUSTINPlaintiffAND ROCHE PRODUCTS (NEW ZEALAND)LIMITEDFirst DefendantF. HOFFMANN-LA ROCHE AGSecond DefendantROCHEThird DefendantHearing: 20 February 2018Appearances: G J Thwaite for Plaintiff/RespondentJ A MacGillivray / S M Jass for First Defendant/ApplicantJudgment: 21 February 2018JUDGMENT OF AJ CHRISTIANSENThis judgment was delivered by me on21.02.18 at 4.00 p.m. pursuant toRule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDate [1] The first defendant's strike out application addresses the pleading of theplaintiff's second amended statement of claim filed on 22 February 2017. It appearsthe second defendant has not been served with the proceeding and it is unclear whetherthe proceeding against the third defendant is to be pursued.The pleading background[2] The claim against the first defendant identifies a single cause of action. Theclaim in negligence seeks various heads of compensatory and exemplary damages.[3] The first defendant is a New Zealand registered company that is apparentlyowned by a Swiss company and is a manufacturer and distributor of pharmaceuticalproducts. For present purposes the defendants will be referred to as the "RocheGroup".[4] In the 1950s the Roche Group developed Roaccutane for use in the treatmentof acne. From about 1985 Roaccutane was distributed in New Zealand. Its primaryuse was for treatment of serious acne.[5] It is pleaded that from 1983 a series of papers questioned the safety ofRoaccutane linking long term use with skeletal abnormalities.[6] In 1985 when he was 33 the plaintiff consulted a dermatologist about his acneand was prescribed Roaccutane. Further and under the medical guidance of two ormore dermatologists the plaintiff used Roaccutane from 1985 to 2005.[7] The plaintiff had been a keen and active golfer for many years and opened abusiness to supply products to golfers. From the early 1990's the plaintiff alleges thathis skill in golfing was being affected by his "physical condition" and that he hadongoing treatment of spinal issues including:• Partially prolapsed disks in 1993;• Stiff neck and back in 1997;• Carpal bossing in 2000;• Cervical problems in 2001;• Surgery to left wrist in 2005;• Osteophytosis in 2011;• Thyroidectomy surgery in 2011;• Dorsal osteophytosis in 2012;• Intra-articular fluoroscopy in 2013;• Lower limb neurogenic claudication and prominent anteriorossification in 2015;• Cervical spinal injury in 2015;• Lumbar spinal surgery in 2016.[8] The plaintiff says on 23 February 2015 he was advised for the first time by hismusculoskeletal specialist that his medical ailments were, or may be, linked to his useof Roaccutane.[9] The plaintiff ceased his use of Roaccutane in 2005 having at that time usedRoaccutane that was prescribed to his sons.[10] On 29 March 2015 the plaintiff lodged a treatment injury claim form with ACCseeking cover for spinal issues caused by Roaccutane.[11] The plaintiff seeks cover for medical treatment and retrospective loss ofincome compensation.[12] On 11 December 2015 ACC granted the plaintiff cover for spinal issues causedby Roaccutane.[13] This proceeding was filed on 23 December 2016.Strike out application[14] The application asserts that the claim is time-barred under s 4 of the LimitationAct 1950 (the Act), or in the alternative, an order is sought striking out the claim forcompensatory damages on the basis that this part of the claim is prevented by thes 317 statutory bar of The Accident Compensation Act 2001 (because claims fordamages cannot be brought when personal injury has occurred).Principles[15] The Court should only strike out a claim if it is clearly unsustainable. Whilepleaded facts are assumed to be true this does not extend to allegations that are purelyspeculative and without foundation.1 While the Court will not attempt to resolvegenuinely disputed issues of fact it can consider evidence that is not disputed.2The claim[16] An assessment of undisputed facts is obtained by reference to other pleadings,and the plaintiffs response to a notice requiring further and better particulars, and fromundisputed or undisputable facts and evidence.[17] That evidence includes:(a) Between 1985 and 2005 the plaintiff took the prescription only drugRoaccutane to treat acne and during the periods of use he took variousdoses from 20mg and up to 60mg per day; the main period of use being1991 to 1996;(b) While the majority of the plaintiff's use was Roaccutane prescribed bydermatologists, he also took some prescribed to his sons;(c) From 1993 the plaintiff suffered a range of medical problems relatingto the ossification (abnormal bone growth) of the spine, and receivedmedical treatments, including surgery for these problems from 1993 to2016;1 A-G v Prince [1998] 1 NZLR 262 (CA).2 A-G v McVeagh [1995] 1 NZLR 558 (CA).(d) On or about 23 February 2015 the plaintiff was advised by amusculoskeletal medicine specialist that his spinal problems, inparticular excessive growth of spinal lesions, were or maybe linked tohis former use of Roaccutane;(e) The plaintiff claims, and for present purposes it is assumed to be correctthat his use of Roaccutane "has activated the growth of bony materialin parts of his body, in particular in his spine". The plaintiff's claimthat Roaccutane has caused his spinal problems relies on the medicalreports he has received.(f) On or about 29 March 2015 the plaintiff made an ACC claim for coverrelating to his spinal problems, which were described in medical termson his claim form as "Cervical Spine DISH (diffuse idiopathic skeletalhyperostosis)". DISH involves the bony hardening or ossification ofligaments in areas which attach to the spine, and cover was sought onthe basis that his spinal problems were a treatment injury caused by hisuse of Roaccutane. The plaintiff sought cover from ACC for the costof treatment and for retrospective loss of earnings;(g) On or about 11 December 2015 ACC granted the plaintiff's claim forcover of diffuse idiopathic skeletal hyperostosis secondary to his use ofRoaccutane. The decision to grant cover noted that there was evidencethat the plaintiff was also suffering from a degenerative condition calledSpondylosis causing issues with his lumbar spine, which was notcovered because it was not caused by the use of Roaccutane.[18] The plaintiff's case is that Roaccutane having being marketed and distributedin New Zealand he is owed a duty of care by the defendants to disclose the risksrelating to Roaccutane or to inform him of recommendations relating to that use, andto arrange the cessation of the distribution of Roaccutane in New Zealand. Theplaintiff says the first defendant breached that duty of care and as a result he tookRoaccutane during the period 1985-2005 and that this caused him to suffer ossificationof the spine which has necessitated medical treatment and has prevented him fromworking.Strike out issues[19] The focus is on whether the plaintiff's claim is time barred under the LimitationAct 1950.[20] The first defendant needs to satisfy the Court the plaintiff's cause of action isclearly statute-barred such that it can be regarded as frivolous, vexatious or an abuseof process.[21] The first defendant asserts the cause of action is based on alleged acts oromissions that took place prior to 1 January 2011. Section 4 of the 1950 Act providesany action in respect of bodily injury must be brought within two years of the causeof action or within six years' subject to the consent of the defendant or with leave ofthe Court.[22] The Court considers Mr MacGillivray has accurately defined the two issues forconsideration, namely:(a) Did the cause of action accrue when the plaintiff first suffered injury asa result of the first defendant's alleged breach of duty, or did it accrueonly when he discovered that his injuries were caused by Roaccutane?(b) If the former, does the plaintiff have an arguable case for postponementor extension of time on the basis of fraudulent concealment of his causeof action by the first plaintiff.[23] The plaintiff's claim was filed on 23 December 2016. A cause of action innegligence accrues when there is an act or omission which breaches a duty of careowed, and there is loss caused thereby.[24] The applicant's case is that the cause of action plainly accrued before 23December 2014 (within two years) and before 23 December 2010 (within six yearswith leave of the Court).[25] The applicant's case is that the alleged breaches of duty took place during theperiod 1985 to 2005 and the plaintiff's case is that he developed spinal problems as aresult of taking Roaccutane and that he sought medical treatment for these from 1993onward.[26] Counsel submits the prevailing principles do not focus upon evidence aboutwhen the plaintiff discovered or could have discovered that his injury was caused bythe acts and omissions of the first defendant.[27] Case authority has indicated a need for caution in cases where it was almostimpossible for a plaintiff to have discovered the connection between injury and breach.[28] The plaintiff sought ongoing treatment for spinal problems from 1993. As MrMacGillivray notes the plaintiffs' medical records would have revealed that he hadtaken Roaccutane since 1985, and, from 1991 to 1996, he was still regularly takingRoaccutane at high dosages and for extended periods.[29] In this case the plaintiff has relied on published medical studies. Indeed theseform the very basis for the pleaded case that skeletal abnormalities were known by thefirst defendant to be a risk associated with taking Roaccutane for extended periods oftime.[30] The plaintiff's claim pleads fraudulent concealment for the purposes of s 28 ofthe Limitation Act 1950, to invite use of the Court's discretion, if required, to extendthe two-year period to six years for filing a claim. To do this the Court must besatisfied there is fraud or equitable fraud on behalf of the first defendant. In this casethat requires proof that the first defendant had a duty to disclose to the plaintiff factsrelevant to the cause of action and that a failure to do so was wilful and therefore itcan be shown the first defendant had actual knowledge of the essential factsconstituting the plaintiff's cause of action.[31] Mr MacGillivray submits there is no basis for suggesting that the firstdefendant had actual knowledge of the facts constituting the plaintiff's claim i.e thatthe plaintiff was taking Roaccutane over an extended period, and therefore there is nobasis on which it can be argued the first defendant wilfully kept facts from the plaintiff.The plaintiffs pleaded case rests on the proposition that there were known andpublished risks associated with Roaccutane. For the first defendant it is submittedthere is no pleaded or evidential foundation for the proposition that the first defendantwas wilfully complicit in concealing the risks of long-term use of Roaccutane fromthe plaintiff or at all. It follows, submits counsel that there is no proper basis forextending the period per s 28, within which the proceeding could have been filed.Considerations[32] Issues focus upon that date from which the limitation period runs in thisproceeding. The plaintiff says he was only told on 23 February 2015 his medical issuesmay be linked to the first defendant's product. He had not used the product for tenyears. For present purposes the Court needs to accept the plaintiff's claim that theproduct has caused his spinal issues. The first defendant's fault, the plaintiff claims,is its failure to disclose the risks of taking its product.[33] When did the cause of action accrue? Was it when he was informed his injurieswere caused by Roaccutane or was it earlier because of a breach of obligation by thefirst defendant to inform users of the risk involved.[34] For the first defendant it is argued that prevailing principles do not focus uponevidence about when the plaintiff discovered or could have discovered his injury. Thefact is, it is argued for the first defendant, that those medical studies to which theplaintiff refers in support of his case, have long since identified the very basis forpleading a connection of skeletal abnormalities associated with taking Roaccutane,and it is irrelevant that those were not known to the plaintiff by his research sinceFebruary 2015, nor were they referred to by medics consulted earlier.[35] Counsel's submissions have reviewed developments affected by decisions ofthe Court of Appeal and Supreme Court in the last 20 years.[36] The plaintiff's case is that the cause of action accrued only upon actual ornotional discovery, and says this occurred within two years but if discovery wasdeemed to have occurred earlier then the Limitation Act fraud exception extends thatperiod to 2010.[37] Both counsel focused attention upon the decisions of the Court of Appeal inG D Searle and Co v Gunn3, and the Supreme Court in Murray v Morley and CoLimited.4[38] In the Searle case the Court found that a negligence claim seeking damages forpersonal injury arising out of use of an intrauterine contraceptive device did not accrueuntil the plaintiff discovered or could have discovered that her bodily injury wascaused by the acts and omissions of the defendant in that case.[39] In Murray v Morley the Supreme Court rejected the general proposition thattime runs from when the cause of action is reasonably discoverable. In the submissionof Mr MacGillivray the Supreme Court's decision in Murray v Morley completelyundermines the reasoning behind the result in Searle, while noting the Supreme Courtdid not overrule the decision. Counsel urges nonetheless that the case needs to beconsidered in light of the Supreme Court's decision, because in the Searle case it wasnear impossible for the plaintiff to have discovered the connection between injury andbreach. Mr MacGillivray submits therefore that the principle of reasonablediscoverability that applied in Searle should not as a general proposition extend to thepresent case because this case cannot be categorised as a case of impossibility.Counsel submits the plaintiff's medical records would have revealed he had takenRoaccutane since 1985 and from 1991 to 1996 and was still regularly takingRoaccutane at high dosages and for extended periods. As the published medicalstudies relied on by the applicant show, and which form the very basis for his pleadedcase, those studies establish that skeletal abnormalities were a known risk associatedwith taking Roaccutane. It would not be appropriate counsel submits to hold that theplaintiff's cause of action would not accrue until he actually discovered the link.3 G D Searle and Co v Gunn [1996] 2 NZLR 129.4 Murray v Morley and Co Limited [2007] NZS C27.[40] The reasonable discoverability principle of Searle was refined by laterdecisions of the Supreme Court including that in Murray v Morley. But, the conceptstill survives and this whole case has its similarity to that. It concerns a medicaltreatment that produced injuries which the patient initially did not understand to beconnected with the treatment. It is noted in Searle on pages 132-133: a cause of action accrues when bodily injury of the kind complained of wasdiscovered or was reasonably discoverable as having been caused by the actsor omission of the defendant.[41] As Mr Thwaite submits there may be a dispute whether the plaintiff could withreasonable diligence have discovered his issues earlier but a fact intensive inquirywould be required before that issue can be resolved.[42] The available evidence indicates the plaintiff only learned of the connection ofhis injuries to Roaccutane in February 2015, and there is no evidence the plaintiff knewof the literature about Roaccutane prior to that date. Arguably the plaintiff was relyingupon a medical product delivered to him by a doctor and hence the defendants may beviewed as part of the fiduciary relationship. The evidence is the plaintiff has sufferedlong-term physical harm, has consulted many medical practitioners for that reason, buthas only recently been told what has caused his issues.[43] Mr MacGillivray is firm in his submission that the principle of reasonablediscovery has little or any remaining force for consideration in cases of this kind. Asmuch as apparent, counsel submits from the decision of the Court of Appeal in Whitev Attorney-General.5 In that case the Court noted that the principle of reasonablediscovery now needs to be considered in light of the Supreme Court's decision inMurray v Morley. The Court's view of that decision noted:But the conclusion that emerges from the judgment is that there is not a generaldoctrine of reasonable discovery applicable to when a cause of action accruesfor the purposes of the Limitation Act (Gault J dissented on this point). Whenall members of the Court declined (for different reasons) to overrule S v G andSearle, it is fair to say that, generally, a cautious approach to extension of thedoctrine is taken.5 White v Attorney-General [2010] NZCA 139.[44] The Court commented that the Searle case, concerning a sexual abuse claim,was not a case of failure to appreciate the connection between the breach of duty andthe consequences of the breach for the plaintiff in that case had no way of knowingthe connection.[45] What appears clear is that there are circumstances for which the principle ofreasonable discoverability may survive. In the present case the Court does not acceptthere is sufficient evidence from which to conclude on a summary basis that theplaintiff's claim could not be sustained. As Mr Thwaite submits the matter should besubject for evidential enquiry in due course.[46] Issues of reasonable discoverability address the probability or lack of suchregarding the availablility of means to provide the knowledge of cause. An objectiveview of the plaintiff's medical history and his treatments is needed. It cannot easilybe accepted that one or more of the plaintiffs earlier consulted doctors should havetold him that which he says he heard for the first time in 2015.[47] Clearly claims of fraudulent concealment relate to allegations that the RocheGroup has continued to market the product whilst aware of significant literaturechallenging the product.[48] Again this is a matter for further enquiry rather than for summary disposition.[49] The remaining issue concerns the plaintiff's claim for compensatory as well asexemplary damages.[50] As earlier noted the plaintiff has received ACC coverage since 11 December2015. Section 317 of the Accident Compensation Act 2001 provides, inter alia, aprohibition against bringing proceedings independently for damages arising directlyor indirectly out of personal injury covered by the Act.[51] That provision does not prevent the claims for exemplary damages which theplaintiff has. But his claim for compensatory damages in connection to those personalinjuries for which he has ACC cover is, Mr MacGillivray submits, barred and providesfurther reason for that part of the claim to be struck out.[52] In the Court's view that should not preclude, by this proceeding, an opportunityby the plaintiff to argue that the injuries he sustained in fact do not fall within the scopeof the ACC regime.[53] Effectively the plaintiff's case is that he wishes to argue that the injuries hesustained do not fall within the provisions of the ACC Act – and rather that what hesuffered was an ordinary consequence of the consumption of Roaccutane.[54] Again in this Court's view that is a matter for further consideration in duecourse and after full evidence has been heard.Conclusion[55] Issues raised by the strike out application are incapable of proper considerationwithout full evidence being heard.Judgment[56] The first defendant's applications are dismissed.[57] The first defendant shall pay the plaintiff's costs on a 2B basis together withdisbursements approved by the Registrar.Further orders[58] The first defendant is directed to file and serve a statement of defence within20 working days of the date of this judgment, such order to be suspended if within 20working days an appeal/review of this judgment is lodged.Associate Judge Christiansen