LESLIE NORMAN AUSTIN v ROCHE PRODUCTS (NEW ZEALAND) LIMITED [2021] NZSC 30

LESLIE NORMAN AUSTIN v ROCHE PRODUCTS (NEW ZEALAND) LIMITED [2021] NZSC 30 [31March 2021]IN THE SUPREME COURT OF NEW ZEALANDI TE KŌTI MANA NUISC 5/2020[2021] NZSC 30BETWEEN LESLIE NORMAN AUSTINAppellantAND ROCHE PRODUCTS (NEW ZEALAND)LIMITEDRespondentHearing:Furthersubmissions:10 September 202024 September 2020Court: Glazebrook, O'Regan, Ellen France, Williams and Arnold JJCounsel: G J Thwaite and Y S Kim for AppellantJ A MacGillivray and S M Jass for RespondentH B Rennie QC and J B Orpin-Dowell for AccidentCompensation Corporation as IntervenerJudgment: 31 March 2021JUDGMENT OF THE COURTA The appeal will be dismissed one month from the date of thisjudgment unless the appellant makes an application unders 135 of the Accident Compensation Act 2001 together withan application to this Court for a stay of this proceedingpending completion of that process.B There is no order as to costs.____________________________________________________________________REASONS(Given by Williams J)Introduction[1] A person who suffers a "treatment injury" has cover under the AccidentCompensation Act 2001. A treatment injury is an injury that is not an "ordinaryconsequence" of treatment. Three issues arose in this appeal: what is treatment; whatis an ordinary consequence of treatment; and who has the jurisdiction to decide thosequestions?Background[2] The background to this case is unusual. The appellant, Mr Austin, suffers fromexcessive bone growth in his spine. It causes him pain and stiffness in his neck andback. Mr Austin claims that these health problems were caused by the prescriptiondrug, Roaccutane,1 which he took at various times between 1984 (when he was 32)and 2005 at the latest.[3] In March 2015, by which time he was 63 years old, Mr Austin claimed coverunder the Accident Compensation Act (the AC Act) for his condition, which cliniciansdescribed as diffuse idiopathic skeletal hyperostosis (DISH), secondary to Roaccutaneuse. The Accident Compensation Corporation (ACC) accepted Mr Austin's claim inDecember 2015. In addition to covering his surgery, physiotherapy and consultationcosts, ACC paid Mr Austin weekly compensation (including back payments) coveringa period of about two years from April 2014. Mr Austin accepted the clinical treatmentand the compensation. He did not pursue any of the review options under the AC Actto challenge ACC's acceptance of his claim. That was unsurprising, because he hadsucceeded in obtaining the entitlements he claimed.[4] In 2016, Mr Austin changed his position on his ACC cover. He commencedproceedings in the High Court against the respondent, Roche Products (New Zealand)Ltd (Roche NZ). Roche NZ is the New Zealand distributor of Roaccutane. Mr Austinclaimed that Roche NZ had negligently provided him with Roaccutane for which he1 Roaccutane is the brand name for isotretinoin.sought compensatory and exemplary damages. He says Roche NZ breached a duty ofcare it owed to him in that it failed to disclose the risks associated with Roaccutane,failed to communicate recommendations about its use, and failed to arrange for thecessation of the distribution of Roaccutane in New Zealand. He says his medicalproblems were caused by these breaches of duty.[5] Roche NZ applied to strike out either the entire claim as time-barred, or, in thealternative, the claim for compensatory damages as barred by the AC Act.2 In the HighCourt, Associate Judge Christiansen dismissed Roche NZ's application on the basisthat the applicability of limitations and the bar under the AC Act could not bedetermined without further inquiry and full evidence.3[6] Roche NZ's subsequent application for review of that decision was removedby consent to the Court of Appeal. The Court of Appeal agreed with the High Courtthat strike-out was not appropriate in respect of limitations,4 but the Court struck outMr Austin's claim for compensatory damages.5 It held the injury suffered was coveredby the AC Act.6Issues[7] This Court granted Mr Austin leave to appeal. The approved question waswhether the Court of Appeal was correct to strike out his claim for compensatorydamages because his injuries were not an ordinary consequence of consumingRoaccutane.7[8] ACC then became involved. By the terms of s 320 of the AC Act, ACC isentitled to be heard whenever proceedings in any court raise an issue of coverage underthe Act. ACC had participated in the Court of Appeal, and after this Court grantedleave to appeal, the Corporation advised it wished to be heard on this appeal also.ACC's concerns related to the meaning of "ordinary consequence" under s 32(1)(c) of2 Accident Compensation Act 2001, s 317.3 Austin v Roche Products (New Zealand) Ltd [2018] NZHC 208 at [45], [48] and [54].4 Roche Products (New Zealand) Ltd v Austin [2019] NZCA 660, (2019) 25 PRNZ 95 (Kós P, Brownand Goddard JJ) [CA judgment] at [16].5 At [54].6 At [50].7 Austin v Roche Products (New Zealand) Ltd [2020] NZSC 49.the AC Act. That issue, however, fell away once the parties filed their writtensubmissions, as they agreed that the Court of Appeal's decision in AccidentCompensation Corporation v Ng set out the correct meaning.8 The only issue waswhether the application of that meaning to Mr Austin's case could be decidedsummarily or required a full trial.[9] ACC raised two new issues that do not appear to have been raised in theCourt of Appeal. The first is whether, once Mr Austin had made his claim under theAC Act, it was permissible for him to (in effect) challenge ACC's decision aboutcoverage by any process other than via the review and appeal pathways provided inthe AC Act, given the ouster clause in s 133(5). The second issue relates to whether,since the Act's definition of treatment includes "failing to obtain" a recipient's priorinformed consent,9 that necessarily meant Mr Austin's injury was a treatment injury.It appears to be common ground that Roche NZ did not advise Mr Austin of thepossible side-effects of using Roaccutane, so his prior informed consent to run thoserisks had not been obtained.10[10] Mr Austin and Roche NZ provided their own supplementary writtensubmissions on these two issues and addressed them further in oral argument.[11] Three issues were therefore addressed at the hearing of the appeal:(a) Does Mr Austin's prior claim to coverage prevent him from bringingthese proceedings, pursuant to s 133(5) of the Act?(b) If not, does Roche NZ's failure to obtain Mr Austin's prior informedconsent to the risks of Roaccutane mean he received treatment when hetook it?(c) If so, is DISH an ordinary consequence of Roaccutane treatment?8 Accident Compensation Corporation v Ng [2020] NZCA 274.9 Accident Compensation Act, s 33(1)(e).10 It is not yet proven whether Roche NZ knew of the risks of taking Roaccutane. If it did not, thereis a separate issue of whether it should have known.[12] If s 133(5) applies, then this Court has no jurisdiction to deal with the otherissues, so we deal with that issue first.11 We have concluded that s 133(5) does apply.12We therefore do not comment on the other issues. It is regrettable that this issue fellto be addressed for the first time in this Court without the benefit of the views of theCourts below, but this cannot now be avoided.Can Mr Austin commence proceedings in the ordinary courts in relation to aninjury for which he has made a claim under the AC Act?[13] Section 133(5) of the AC Act provides as follows:(5) If a person has a claim under this Act, and has a right of review orappeal in relation to that claim, no court, Employment RelationsAuthority, Disputes Tribunal, or other body may consider or grantremedies in relation to that matter if it is covered by this Act, unlessthis Act otherwise provides.[14] It should be read alongside s 317, which provides:317 Proceedings for personal injury(1) No person may bring proceedings independently of this Act, whetherunder any rule of law or any enactment, in any court in New Zealand,for damages arising directly or indirectly out of—(a) personal injury covered by this Act; or(b) personal injury covered by the former Acts.(2) Subsection (1) does not prevent any person bringing proceedingsrelating to, or arising from,—(a) any damage to property; or(b) any express term of any contract or agreement (other than anaccident insurance contract under the Accident InsuranceAct 1998); or(c) the unjustifiable dismissal of any person or any other personalgrievance arising out of a contract of service.(3) However, no court, tribunal, or other body may award compensationin any proceedings referred to in subsection (2) for personal injury ofthe kinds described in subsection (1).11 As this is a question of jurisdiction, we did not consider it necessary to amend the terms of leave.The parties in any event had full opportunity to argue the additional points.12 See below at [27]–[35].(4) Subsection (1) does not prevent any person bringing proceedingsunder—(a) section 50 or section 51 of the Health and DisabilityCommissioner Act 1994; or(b) any of sections 92B, 92E, 92R, 122, 122A, 122B, 123, or 124of the Human Rights Act 1993.(5) Subsection (1) does not prevent any person bringing proceedings inany court in New Zealand for damages for personal injury of the kindsdescribed in subsection (1), suffered in New Zealand or elsewhere, ifthe cause of action is the defendant's liability for damages under thelaw of New Zealand under any international convention relating to thecarriage of passengers.(6) Subsection (1) does not affect proceedings to which section 318(3)applies.(7) Nothing in this section is affected by—(a) the failure or refusal of any person to lodge a claim forpersonal injury of the kinds described in subsection (1); or(b) any purported denial or surrender by any person of any rightsrelating to personal injury of the kinds described in subsection(1); or(c) the fact that a person who has suffered personal injury of thekinds described in subsection (1) is not entitled to anyentitlement under this Act.Submissions[15] ACC's formal stance (quite appropriately) was that it made submissions toassist the Court, rather than to advocate for a particular outcome in relation to thisissue. Nonetheless, ACC submitted that a possible reading of s 133(5) is that wherecover is approved, all subsequent decisions about that cover must be made under theAct's review and appeal processes. Here, ACC suggested, it could be argued thatMr Austin's claim against Roche NZ in substance asks the High Court to consider orgrant remedies in relation to the injury for which he sought and was granted cover.This is prohibited by s 133(5). Mr Austin had a right to seek review of the decisionapproving cover if he considered it to be wrong. He has not yet availed himself of thatright. If he now chooses to do so out of time, the relevant issues would be whether infact Mr Austin's review right has expired and whether, either way, s 133(5) barsrecourse to any other form of redress. In any event, ACC suggested, Mr Austin mayapply for a review out of time. Under s 135(3), ACC must accept late applications forreview if satisfied there are extenuating circumstances that affected the ability of theclaimant to meet the time limits.[16] Roche NZ generally supported the thrust of ACC's suggested interpretationand argued further that the principle in Ramsay v Wellington District Court applied.13That is, Mr Austin may not challenge ACC's coverage decision indirectly via a civilclaim. The bar remains even if Mr Austin is now out of time to apply for a review. Toallow Mr Austin to leapfrog his review rights under the Act would defeat the purposeof the statutory time limits and the need for speedy and final determination of disputesover ACC's decisions.[17] In oral submissions, Mr Thwaite, counsel for Mr Austin, accepted that theeffect of s 133(5) was that if Mr Austin was unsuccessful in overturning his cover bythe Act's own procedures, then that would be the end for his civil claim forcompensatory damages. Counsel also accepted that a stay of Mr Austin's proceedingpending an application for review out of time might be the "best and reasonableoutcome".[18] But in supplementary written submissions filed after the hearing (at the Court'srequest), Mr Thwaite adjusted his position. He argued that, in fact, the s 133(5) barapplies only if a dispute resolution procedure has been commenced under the Act, ass 133(5) must serve a different purpose from s 317. Counsel continued, as Mr Austinis out of time to apply for review, this proceeding is not barred by s 133(5) because heno longer has a right of review or appeal as required by the provision. Further, it wasrecognised in Ramsay that the predecessor to s 133(5) was not an absolute bar.14 Inthis case, it is argued that Mr Austin's unique position of opposing rather than seekingcover takes him outside the dispute resolution structure of the AC Act, and so s 133(5)does not apply.13 Ramsay v Wellington District Court [2006] NZAR 136 (CA).14 At [29]–[33].Analysis[19] For the purposes of this appeal, s 317 provides that Mr Austin may not bringproceedings for compensatory damages for personal injury covered by the accidentcompensation regime, whether or not he has made a claim for such cover. This meansit does not prevent proceedings for damages where the loss or injury is not covered bythe Act.[20] Section 133(5) is different. It is not triggered by coverage under the Act, butby the making of a claim for which there is a right of review or appeal. "Claim" isdefined in s 6 as a claim—that is, an application—to ACC for coverage under s 48 ofthe Act. So a claim is an application for an entitlement under the Act. It is not actualentitlement. The effect of s 133(5) is therefore that once a person lodges a claim, theyare locked into the Act's procedures.15 No court may "consider or grant remedies inrelation to that matter if it is covered by [the] Act".16[21] It is to be noted that the subsection excludes the courts from considering orgranting remedies in relation to the "matter", not the "claim". This means theexclusion relates also to any existing or concluded review or appeal in relation to theclaim.[22] Next, the section provides that courts and other bodies are excluded in relationto the matter "if it is covered by [the] Act". Clearly this cannot refer to whether theAct provides cover for the injury in question. Such an interpretation would lead to ahopelessly circular position where it is not known whether a court has jurisdiction todecide on cover until a court decides on cover.[23] Whether the matter is "covered by [the] Act" must therefore refer to whetherthe matter relates to a question provided for by the Act. For example, proceedingsrelating to or arising from damage to property, a term of any contract, a personalgrievance, the Health and Disability Commissioner Act 1994 or the Human RightsAct 1993 are not matters "covered by [the] Act".1715 Subject to the exception noted in Ramsay, above n 13, at [33], discussed below at [25].16 Accident Compensation Act, s 133(5).17 See s 317(2) and (4).[24] The effect of s 133(5) can be explained by the principles articulated inRamsay.18 That case concerned an application by ACC to strike out judicial reviewproceedings brought by Mr Ramsay. Although the case came before the Court ofAppeal after the AC Act had been enacted, the relevant legislation for the purpose ofthe proceeding was its predecessor, the Accident Insurance Act 1998. Section 134(4)of the 1998 Act (the predecessor to s 133(5)) provided:(4) If a person has a right to apply for a review or appeal about a matter,the person has no other remedy in relation to the matter, whether inany court, the Employment Tribunal, the Disputes Tribunal, orotherwise.[25] The Court of Appeal upheld the High Court's decision to strike the proceedingout. It explained that s 134(4) was not a general exclusion of the High Court'sjurisdiction in relation to personal injuries; rather, it channelled disputes aboutdecisions made under the Act into a prescribed procedure.19 That meant that ifchallenges could not be effectively addressed through that procedure, then s 134(4)did not exclude the High Court.20 In Mr Ramsay's case, the Court considered that hischallenges could have been made under the prescribed statutory procedure and sodismissed his appeal.21[26] The Court of Appeal also noted in Ramsay that there is no substantivedifference between s 134(4) and s 133(5).22 We agree with the Court of Appeal'sconclusions on both the effect of s 134(4) and its similarity with s 133(5).[27] The first question, then, is whether Mr Austin's challenge could have beenaddressed under the prescribed procedure in the AC Act. This question is worth askingbecause Mr Austin's challenge is unusual. He argues that ACC's error was inaccepting his claim because, he says, he does not have cover. He submits that this18 Ramsay, above n 13.19 At [30]–[31].20 At [32]–[33]. The Court was concerned in particular that breaches of natural justice duties goingto the validity of the decision should be not excluded from review unless Parliament uses clearlanguage. The approach in Ramsay was discussed by this Court in Tannadyce Investments Ltd vCommissioner of Inland Revenue [2011] NZSC 158, [2012] 2 NZLR 153 at [68] per Blanchard,Tipping and Gault JJ. See also at [16] per Elias CJ and McGrath J.21 At [38].22 At [27]. Ramsay was subsequently applied in Dean v Chief Executive of the AccidentCompensation Corporation [2007] NZCA 462, [2008] NZAR 318 at [6].takes him outside the normal dispute resolution structure and so s 133(5) does notapply to him.[28] The procedures for review and appeal are contained in Part 5 of the Act.Unsurprisingly, there is no special provision in the claims process for a claimant toobtain a declaration that they do not have cover. But that aside, there is nothing in thelanguage of Part 5 that suggests Mr Austin's challenge could not be appropriatelyaddressed within its procedures.[29] First, s 134(1)(a) of the AC Act provides that a claimant may apply to ACC fora review of "any of its decisions on the claim". A "decision" is defined in s 6 to include"a decision whether or not a claimant has cover".23 So, on its face, s 134(1) allowsclaimants to apply for review of decisions on the ground that they do not have cover.[30] Next, the procedure for applying for a review is described in broad terms: theapplication must (among other things) identify the decision or decisions beingchallenged, the grounds on which the application is made, and the relief sought, ifknown.24 There is no limit on the possible grounds of review that might suggest onlydecisions declining or restricting cover may be challenged: the reviewer must simply(among other things) look at the matter afresh and on the basis of its substantive meritsunder the Act.25 A claimant may then appeal to the District Court against a reviewdecision,26 and apply for leave to appeal to the High Court and Court of Appeal if thelower decision is considered "wrong in law".27[31] Finally, there are various provisions suggesting that decisions to accept covermay be challenged on review. For example, s 58(1) provides that where ACC fails tocomply with a time limit in assessing a claim, it is deemed to have decided that theclaimant has cover. Section 63 then confirms that a claimant has a right to apply for areview of a decision under s 58. In other words, a claimant has a right to apply for areview of a deemed decision that they have cover. Realistically, those who suffer23 Accident Compensation Act, s 6(1) definition of "decision", para (a) (emphasis added).24 Section 135(2)(c)–(e).25 Section 145(1).26 Section 149(1)(a).27 Sections 162(1) and 163(1).personal injuries will not commonly try to evade the benefits of the scheme, but it isclear that the Act's dispute processes are where such arguments must first be brought.[32] Mr Austin's challenge is therefore one that could have been made under theprescribed procedure. So, assuming for present purposes that it is irrelevant thatMr Austin is now out of time to bring a review under the Act, this proceeding is caughtby the s 133(5) bar.[33] Mr Austin submits that the fact he is out of time to apply for a review doesmake a difference. He submits that s 133(5) only prevents claims being broughtoutside the prescribed procedure if a claimant has a review or appeal underway, or hasthe right to commence one. As Mr Austin is plainly out of time, he does not have a"right" to review or appeal, and he has not obtained consent to file a late appeal unders 151(3)(c). It is therefore submitted that he is not barred by s 133(5).[34] This submission is without merit It would allow claimants in Mr Austin'sposition to obtain the benefit of cover under the Act, and then sue in the ordinary courtsat the same time, simply by sitting on their review or appeal rights until time has runout. As the firm wording of ss 317 and 133(5) demonstrate, that would be the veryantithesis of the Act's purpose in this respect.28[35] Given the Act's comprehensive system for challenging coverage decisions,including a right of appeal on a point of law to the High Court, and in light of the termsof s 133(5), we conclude that this Court does not have jurisdiction to considerMr Austin's appeal. Nor did the Courts below. We therefore cannot address thesecond and third issues identified above at [11].Outcome[36] In light of the fact that there remains a potential pathway in s 135 for Mr Austinto bring a review application out of time, we must consider whether the proceedingshould be struck out or stayed. This will depend on whether Mr Austin wishes to28 See also Spencer v The District Court at Wellington HC Wellington CIV-2006-485-1601,5 October 2007 at [10]–[11].pursue that avenue under the Act. If he does, a stay may be appropriate, but he willneed to act promptly to preserve his position.[37] The appeal will therefore be dismissed and the proceeding will be struck outone month from the date of this judgment unless the appellant makes an applicationunder s 135 together with an application to this Court for a stay of this proceedingpending completion of that process.Costs[38] Although Roche NZ has succeeded in this appeal, it did so on a point it did notraise. In the circumstances, costs will lie where they fall.Solicitors:Tompkins Wake, Hamilton for RespondentS Cohen-Ronen, Accident Compensation Corporation, Wellington for Intervener