ROCHE PRODUCTS (NEW ZEALAND) LIMITED v AUSTIN [2019] NZCA 660 [18 December 2019]

ROCHE PRODUCTS (NEW ZEALAND) LIMITED v AUSTIN [2019] NZCA 660 [18 December 2019]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA505/2018[2019] NZCA 660BETWEEN ROCHE PRODUCTS (NEW ZEALAND)LIMITEDAppellantAND LESLIE NORMAN AUSTINRespondentHearing: 19 September 2019Court: Kós P, Brown and Goddard JJCounsel: J A MacGillivray for AppellantG J Thwaite and J Y Kim for RespondentL M Hansen for Accident Compensation CorporationJudgment: 18 December 2019 at 3.00 pmJUDGMENT OF THE COURTA The appeal is allowed in part.B The claim for compensatory damages is struck out.C Leave is reserved for Mr Austin to file an amended pleading seekingcompensatory damages in respect of self-administration of Roaccutane(prescribed for other persons) which was not prescribed for him bya registered health professional from whom he sought treatment.D Costs lie where they fall.____________________________________________________________________REASONS OF THE COURT(Given by Brown J)Introduction[1] For many years the respondent (Mr Austin) took for the treatment of acne theprescription-only drug Roaccutane, distributed in New Zealand by the appellant,Roche Products (New Zealand) Limited (Roche NZ). He claimed that such use causeda range of medical problems relating to the ossification of his spine for which hereceived medical treatment, including surgery, from 1993 to 2016.On 11 December 2015 the Accident Compensation Corporation (the Corporation)granted his claim for cover for diffuse idiopathic skeletal hyperostosis (DISH) of hiscervical spine secondary to his use of Roaccutane. He received payment from theCorporation for 80 per cent of his lost income for two years until turning 65 on11 January 2017.[2] On 23 December 2016 he commenced a proceeding against Roche NZ allegingnegligence in connection with the distribution of Roaccutane in New Zealand andseeking both compensatory and exemplary damages. Application was made to strikeout the entire claim as being time barred and, in the alternative, the compensatorydamages claim as barred by s 317 of the Accident Compensation Act 2001 (the Act).The strike out application was dismissed in a judgment of Associate JudgeChristiansen who considered that the issues raised were incapable of properconsideration without full evidence being heard.1 Roche NZ's application for reviewof that decision, transferred to this Court by consent,2 is the subject of this judgment.[3] The agreed issues for determination are:31 Did the Associate Judge err in refusing to strike out [Mr Austin's]claim for compensatory damages as barred under s 317 of [the Act]on the basis that [he] has cover under that Act?1 Austin v Roche Products (New Zealand) Ltd [2018] NZHC 208 at [45], [48] and [54].2 Under s 64 of the Judicature Act 1908: Austin v Roche Products (New Zealand) Ltd HC AucklandCIV-2016-404-3299, 6 August 2018 (Minute of Muir J). A notice of appeal was not required:r 31(5) of the Court of Appeal (Civil) Rules 2005; and Roche Products (New Zealand) Ltd v AustinCA505/2018, 12 September 2018 (Minute of Clifford J).3 In an Agreed List of Issues in accordance with r 42A of the Court of Appeal (Civil) Rules.2 Does the case of G D Searle & Co v Gunn4 apply on the facts of thiscase and, if so, should this Court follow that decision or should theclaim be struck out as time barred under s 4 of the Limitation Act1950?3 Is [Mr Austin's] contention that he may be entitled to an extension oftime under s 28 of the Limitation Act 1950 clearly untenable?Because a finding in favour of Roche NZ on the second or third issues would bedeterminative of the entire claim, we commence with the second issue, but address itstwo limbs in reverse sequence.The status of G D Searle & Co v Gunn[4] Under s 4(7) of the Limitation Act 1950 (the 1950 Act) a claim in respect ofbodily injury was required to be brought before the expiration of two years from thedate on which the cause of action accrued.5 The 1950 Act did not define when a causeof action accrued but the "conventional view" was that time began to run as soon asa wrongful act caused personal injury beyond what could be regarded as negligible,whether or not the damage could be discovered.6[5] The conventional approach was affirmed by the Privy Council in InvercargillCity Council v Hamlin.7 Their Lordships explained that in the case of a latent defectin a building the element of loss or damage necessary to support a claim for economicloss in tort does not arise so long as the defect is unknown, and the market value ofthe building is unaffected.8 In latent defect cases knowledge or discoverability affectswhen the loss occurred. These cases do not represent a departure from the orthodoxfocus on occurrence of loss rather than on discoverability of a loss which had alreadyoccurred.9[6] However in Searle, which concerned a disease contracted following theinsertion and removal of an intrauterine device, this Court endorsed a test of4 G D Searle & Co v Gunn [1996] 2 NZLR 129 (CA) [Searle].5 Unless the action was brought with the consent of the intended defendant before the expiration ofsix years from that date.6 Murray v Morel & Co Ltd [2007] NZSC 27, [2007] 3 NZLR 721 [Morel] at [64] per Tipping J,citing Lord Reid's speech in Cartledge v E Jopling & Sons Ltd [1963] AC 758 (HL) at 771–772.7 Invercargill City Council v Hamlin [1996] 1 NZLR 513 (PC) [Hamlin].8 At 526.9 Morel, above n 6, at [42].reasonable discoverability for accrual purposes not only in relation to damage or lossbut also in relation to the causation of that damage or loss.10 The Court reasoned:11To hold that a plaintiff who has not discovered that a bodily injury isattributable to the wrongful action of another, and who could not reasonablyhave discovered that fact, is barred from suit if the injury in fact occurredoutside the statutory period is effectively to deny a person the right of action.We do not see that consequence as being required by the legislation. We wouldtherefore hold that for the purposes of s 4(7) of the Limitation Act 1950,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 omissions of the defendant.[7] Subsequently in Murray v Morel & Co Ltd a majority of the Supreme Courtheld that there is no general principle that a cause of action does not accrue forlimitation purposes until the elements are reasonably discoverable by the plaintiff.12As Tipping J explained:13[69] In my view the numerous references in the Limitation Act to accrualof a cause of action can only be construed as references to the point of time atwhich everything has happened entitling the plaintiff to the judgment of theCourt on the cause of action asserted. Save when the Limitation Act itselfmakes knowledge or reasonable discoverability relevant, the plaintiff's stateof knowledge has no bearing on limitation issues. Accrual is anoccurrence-based, not a knowledge-based, concept. The Limitation Act as awhole is structured around that fundamental starting point. [8] For Roche NZ Mr MacGillivray contended that the reasoning in Morelundermines Searle which should not be followed or applied simply because it isa longstanding authority. He submitted that this Court in White v Attorney Generalhad held that Searle now needs to be considered in light of Morel.1410 At [57].11 Searle, above n 4, at 132–133.12 The recognition of a general doctrine of reasonable discoverability was viewed as properlya matter for Parliament: see Morel, above n 6, at [2] per Blanchard J and [74]–[76] per Tipping J.13 Earlier at [63] Tipping J noted the Privy Council's recognition of Hamlin as a case where theelement of knowledge or discoverability can properly be regarded as forming a part of the causeof action itself.14 White v Attorney-General [2010] NZCA 139 at [93].[9] However that submission fails to recognise that in Morel the Supreme Courtexplicitly addressed what Tipping J described as the "status" of Searle:15[82] If discoverability issues can, as in Hamlin, be regarded as aningredient of the cause of action itself, rather than being a facet of when timestarts to run, they can properly be brought to account without doing violenceto the structure, language and purpose of the Limitation Act. In this case it isnot necessary to reach any final conclusion whether the circumstances ofSearle and like cases can properly be analysed along those lines. Nor wouldit be appropriate in this case to come to any final conclusion whether Searlewas wrongly decided. All that can be said is that the reasoning employed init is difficult to reconcile with the general views I have expressed about theplace of reasonable discoverability in the limitation field. That is not to say,however, that the actual result in Searle might not be capable of justificationon a different process of reasoning.[10] Blanchard J considered that Searle and S v G should not be overruled, and wasnot comfortable with an attempt to distinguish or "ring-fence" those cases solely onlogical grounds. He explained:[4] In cases of those kinds, these decisions of the Court of Appeal havebeen understood for over a decade to state the law of New Zealand.Undoubtedly, they have been relied upon. It is not without moment thatParliament has reformulated the accident compensation scheme in the InjuryPrevention, Rehabilitation, and Compensation Act 2001, and relevantlyamended it in 2005, so that it now provides cover for persons in the positionof the plaintiffs in S v G (in s 21A) and in Searle (in s 20(2), read with s 32),thereby limiting the practical application of those cases for the future.But there has been no legislative overruling of the Court of Appeal'sinterpretation of the Limitation Act.(Footnote omitted.)Mindful of the limited number of plaintiffs who might rely on those decisions,16 hepreferred not to produce an injustice by overturning them.17[11] We do not consider that it is appropriate to entertain Mr MacGillivray'sinvitation to overrule Searle. The Supreme Court was afforded the opportunity in15 And also of S v G [1995] 3 NZLR 681 (CA). In S v G the plaintiff claimed exemplary damagesfor personal injury resulting from sexual abuse, and said she only became aware of the linkbetween the abuse and her psychological problems some ten years later. The Court adopted thereasonable discoverability test in relation to the causative link between the sexual abuse allegedand the psychological harm relied on.16 Consequent upon the extension of statutory cover.17 Morel, above n 6, at [5].Morel to overrule Searle, but declined to do so.18 Blanchard J explained why in hisview it would not be appropriate to overturn Searle. His reasons, though strictlyspeaking obiter, are highly persuasive. We agree with his analysis.[12] There is a further reason for our declining to reconsider Searle. It follows fromBlanchard J's observation concerning the absence at that time of any legislativeoverruling of Searle. Subsequently when the 1950 Act was repealed by the LimitationAct 2010 (the 2010 Act), Parliament was presented with the opportunity to addressthis anomaly. However s 59 relating to causes of action based on acts or omissionsprior to 1 January 2011 relevantly provided:(2) The action, cause of action, or right of action must, despite the repealof the Limitation Act 1950 and unless the parties agree otherwise, bedealt with or continue to be dealt with in accordance with theLimitation Act 1950 as in force at the time of its repeal.[13] While mindful of the reservations that have been expressed about the notion oflegislative endorsement,19 and recognising the possible lack of legislative appetite torevisit principles solely in the context of a transitional provision, we neverthelessconsider that Parliament can be expected to have been cognisant of the then recentMorel decision in stating that the extant law should continue to apply. For this furtherreason we do not consider that Searle should be revisited in cases to which thetransitional provision in the 2010 Act applies.18 The Judges reached this result by different paths. As noted above, Blanchard J considered that thecourts should not revisit Searle regardless of whether it could be distinguished or "ring-fenced",as to do so could produce an injustice for some plaintiffs (at [4]–[5]). Tipping J said it was notappropriate to come to any final conclusion on whether Searle was wrongly decided, but left openthe possibility that a future court might need to consider that issue (at [82]). McGrath J consideredthat Searle was not undermined by the reasoning in Hamlin, and was in any event distinguishable(at [100]–[102]). Gault J (dissenting on the limitation issue) considered that Searle was correctlydecided and only the legislature could overrule the decision, and that a general principle ofreasonable discoverability should be adopted (at [114]–[117]). Henry J did not consider that itwas necessary to review Searle in any detail as the decision did not establish any general principleand was distinguishable. Rejecting any general principle of reasonable discoverability did notrequire Searle to be overruled (at [148]). A majority of the judges (Tipping, McGrath andHenry JJ) proceeded on the basis that Searle was distinguishable: it follows that the various(conflicting) observations made about its status cannot be seen as forming part of the ratiodecidendi of the Supreme Court decision.19 Discussed in Ross Carter Burrows and Carter Statute Law in New Zealand (5th ed, LexisNexis,Wellington, 2015) at 211–214.[14] If Searle survived Mr MacGillivray advanced an alternative submission that itought not to be applied to the instant case which, unlike Searle, cannot be categorisedas one where it was impossible or nearly impossible to discover the connectionbetween the injury and the breach of duty. The point was made that Mr Austin'smedical records would have revealed that he had taken Roaccutane since 1985 andhad sought on-going treatment for spinal problems from 1993. However publishedmedical studies20 were said to establish that skeletal abnormalities were a known riskassociated with taking Isotretinoin21 at high doses for extended periods of time.[15] Mr MacGillivray argued that to postpone the running of time in the presentcase would in effect be to hold that a cause of action did not and could not accrue untilthe claimant had personally discovered a link between Roaccutane and his ailments.That would represent an unwarranted extension of the principle of reasonablediscoverability.[16] Consideration of that contention would necessitate a review of the evidenceand making factual findings. That is the function of a trial and it is not appropriate inthe context of a strike out application. On this particular aspect we agree with theapproach of the Associate Judge in his reasons for declining the application.[17] In view of our conclusions on issue 2 it is unnecessary for us to engage withthe issue of postponement of the running of time in respect of Mr Austin's cause ofaction under s 28 of the 1950 Act.22Should the compensatory damages claim be struck out?[18] The Act provides entitlements only to those who suffer personal injury or death(or to their dependents) who are covered under the Act or former legislation.As Ms Hansen for the Corporation submitted, the quid pro quo of statutory cover isthat victims of personal injury relinquished the right to sue for compensatory damagesarising out of that personal injury at common law. In instances where there is no cover20 Dating from 1983 to 1990.21 The medical name for Roaccutane.22 Section 28 of the Limitation Act 1950 provides for the postponement of the limitation period incases of fraud or mistake.available for personal injury or death, there can be no entitlements under the Act andthere is no bar to bringing a claim for compensatory damages.[19] On 29 March 2015 Mr Austin's dermatologist made a treatment injury claimon Mr Austin's behalf for DISH of his cervical spine. The treatment said to give riseto the injury was the Roaccutane prescribed in the mid-1980s and 1990s for acne.On 11 December 2015 the Corporation accepted the claim and granted cover forDISH. However it did not grant cover for Mr Austin's spondylosis which it concludedwas a degenerative condition and not caused by treatment.23 Mr Austin receivedentitlements including weekly compensation for a period of nearly two years in thesum of approximately $135,000.[20] The Associate Judge considered that Mr Austin should not be denied theopportunity to argue that the injuries he sustained did not fall within the provisions ofthe Act but rather that what he suffered was an ordinary consequence of theconsumption of Roaccutane.24 Challenging that conclusion, Mr MacGillivraysubmitted that it is an abuse of process for Mr Austin as the grantee of cover and thewilling recipient of financial entitlements under the Act to be heard to argue that hisinjuries were not treatment injuries in order to pursue a claim for compensatorydamages. Similarly he was critical of Mr Austin's decision to "hedge his bets" byretaining those entitlements while pursuing his damages claim.[21] While maintaining the contention that Mr Austin had not suffered a "treatmentinjury", at the hearing in this Court Mr Thwaite for Mr Austin advanced a newargument to the effect that the activities of a supplier of a pharmaceutical are not"treatment". In order to evaluate these arguments a review of the relevant statutoryprovisions is necessary.Statutory framework[22] Under s 20 of the Act cover is provided for personal injuries suffered inNew Zealand on or after 1 April 2002 in three principal ways: personal injury caused23 Mr Austin unsuccessfully sought to review that aspect of the decision.24 Austin v Roche Products (New Zealand) Ltd, above n 1, at [52]–[53].by an accident, treatment injury or work-related gradual process, disease or infection.Provision for treatment injury was introduced in 200525 replacing the previous sectionsconcerning medical misadventure, medical error and medical mishap.[23] "Treatment injury" is defined in s 32:(1) Treatment injury means personal injury that is—(a) suffered by a person—(i) seeking treatment from 1 or more registered healthprofessionals; or(ii) receiving treatment from, or at the direction of, 1 ormore registered health professionals; or(iii) referred to in subsection (7); and(b) caused by treatment; and(c) not a necessary part, or ordinary consequence, of thetreatment, taking into account all the circumstances of thetreatment, including—(i) the person's underlying health condition at the timeof the treatment; and(ii) the clinical knowledge at the time of the treatment.[24] "Treatment" is defined in s 33(1) to include:(a) the giving of treatment:(b) a diagnosis of a person's medical condition:(c) a decision on the treatment to be provided (including adecision not to provide treatment):(d) a failure to provide treatment, or to provide treatment in atimely manner:25 By the Injury Prevention, Rehabilitation, and Compensation Amendment Act (No 2) 2005.[25] The surrender of rights to claim compensatory damages by those entitled tocover, which is part of the "social contract"26 represented by the first accidentcompensation scheme, is given effect to by s 317:27317 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.[26] The scope and purpose of the s 317 bar was confirmed by the Supreme Courtin Davies v Police where the majority reiterated the social contract aspect of the ACCregime and the importance of an effective bar in maintaining the integrity of thescheme.28 Delivering the majority judgment Elias CJ explained:29Section 317 is a pivotal provision in the social contract implemented throughthe accident compensation legislation. It prohibits any proceedingsindependent of the Act, "whether under any rule of law or any enactment", fordamages arising "directly or indirectly out of personal injury covered bythis Act". The prohibition does not extend to damage to property.Section 317(7) makes it clear that it is the scope of the Injury Prevention,Rehabilitation, and Compensation Act that prevents recovery, rather thanwhether a claimant actually receives any entitlement under the Act.[30]It provides that the prohibition on proceedings under s 317(1) is unaffected bythe failure of a person to lodge a claim for personal injury, or by any surrenderof rights relating to personal injury, or by the fact that the person who hassuffered personal injury "is not entitled to any entitlement under this Act".As this Court observed in McGougan v DePuy International Ltd, fundamental to thesocial contract is that the statutory bar is coextensive with cover under the Act.3126 See the purpose provision in s 3 of the Accident Compensation Act 2001, most recently discussedin McGougan v DePuy International Ltd [2018] NZCA 91, [2018] 2 NZLR 916.27 Claims for exemplary damages are unaffected by the Act: s 319.28 Davies v Police [2009] NZSC 47, [2009] 3 NZLR 189.29 At [27] (footnotes omitted).30 The Act's name was changed to the Accident Compensation Act 2001 on 3 March 2010:Accident Compensation Amendment Act 2010, s 5(1)(a).31 McGougan v DePuy International Ltd, above n 26, at [32].[27] With reference to Mr Austin's new argument it is also necessary to note cl 3(1)of sch 1:3 When Corporation is liable to pay or contribute to cost ofancillary services related to treatment(1) The Corporation is liable to pay or contribute to the cost of any serviceif the service facilitates the treatment and the service is reasonablyrequired as an ancillary service related to treatment, such as—(a) accommodation:(b) escort for transport for treatment:(c) pharmaceuticals prescribed by a treatment provider who hasstatutory authority to prescribe pharmaceuticals:(d) laboratory tests requested by a registered health professional:(e) transport (whether emergency or otherwise).An ordinary consequence of treatment?[28] Mr Austin's second amended statement of claim asserted that a claim fornon-exemplary damages in respect to an ailment is not barred by s 317 to the extentthat such ailment is not a "treatment injury" in terms of ss 20(2) and 32(1)(c).Roche NZ's request for further particulars sought the identification of Mr Austin'salleged ailments or medical problems caused by his taking Roaccutane and the basison which they were contended not to be a treatment injury. Mr Austin's reply statedthat no response was required.[29] However, as in the High Court, Mr Austin's argument, that his DISH diagnosiswas not a treatment injury the subject of cover under the Act, was based on thecontention that his injury was an ordinary consequence of treatment with Roaccutane.Hence the third element in the definition of treatment injury as set out in s 32(1)(c)was not satisfied.[30] Mr Thwaite submitted that sufficient evidence exists that Mr Austin's DISHailment was "inherent" in Roaccutane. As he expressed it:Just like a poison, which will ordinarily produce a predictable result.Hence the ailments are not 'accidental', but an ordinary consequence of thetreatment with Roaccutane. The ailments do not need to be the [sole] ordinaryconsequence.He distinguished McGougan v DePuy International Ltd on the basis that in that casean entitlement to cover under the Act was conceded whereas Mr Austin had putcoverage in issue.[31] The structure of s 32(1) provides for the presence of two elements followed bya carve out excluding two categories of personal injury, namely:• personal injury that is not a necessary part of the treatment; and• personal injury that is not an ordinary consequence of the treatment.The former contemplates a personal injury suffered in the course of the treatmentwhereas the latter appears to envisage a personal injury which is an effect or outcomeof the treatment. As the Explanatory Note to the 2005 Bill stated, treatment injurywould not cover injuries that were an anticipated part or consequence of the treatment,such as a surgical incision during an operation.32 Either circumstance is sufficient totake an injury outside that for which cover would be provided.33[32] The second exclusion, the focus of argument in this case, contemplatesoutcomes or effects of two types: ordinary or non-ordinary. However both instanceswill be the consequence of the treatment. In order for a product, like a pharmaceutical,to have a consequence, there must be some aspect of the pharmaceutical that causesor contributes to the personal injury. In that sense the defect or operative cause can besaid to be inherent in the product. But we do not find Mr Thwaite's proposition thatthe outcome was "inherent" in the pharmaceutical advances the analysis as to themeaning of the adjective in the phrase "ordinary consequence".32 Injury Prevention, Rehabilitation and Compensation Amendment Bill (No 3) 2004 (165-1)(explanatory note) at 4.33 Accident Compensation Corporation v McEnteer HC Wellington CIV-2008-485-1800,1 December 2008 at [21]. That point was not in issue on appeal in McEnteer v AccidentCompensation Corporation [2010] NZCA 126, [2010] NZAR 301.[33] The meaning of the phrase "ordinary consequence" in s 32 will need to beconsidered by this Court in another appeal due to be heard in 2020.34 However we donot consider that the present case raises any significant issues about the boundaries ofthat concept. The adjective "ordinary" is commonly defined to mean regular orusual.35 Likewise the adverb "ordinarily", which features in a variety of statutoryexpressions, means in an ordinary or unexceptional way. Similarly the phrase "out ofthe ordinary" means unusual.[34] The context of the usage here is the "not [an] ordinary consequence of thetreatment". We consider that whatever the boundaries of that phrase may be, it isclearly intended to exclude unexpected and significantly adverse medical outcomeswhich are disproportionate to the purpose of the treatment and the benefit expected tobe derived from it.[35] The DISH injury which Mr Austin suffered as a consequence of his treatmentwith Roaccutane was such an outcome. Hence it was not an ordinary consequence ofhis treatment. It follows that the requirement in s 32(1)(c) was satisfied and his injuryqualified as a treatment injury. He was entitled to cover and hence his claim forcompensatory damages in respect of his DISH injury was barred by s 317(1).36[36] Mr Thwaite advanced a further argument to the effect that the social contractis not intended to extend to manufacturers or distributors of defective medicines.He drew attention to the fact that s 32(4) provides that treatment injury includespersonal injury suffered by a person as a result of treatment given as part of a clinicaltrial in two circumstances. The first is where a claimant did not consent in writing toparticipate.37 Mr Thwaite's focus was the second specified in s 32(6):(6) The other circumstance referred to in subsection (4) is where—(a) an ethics committee—(i) approved the trial; and34 The appeal is from Accident Compensation Corporation v Ng [2018] NZHC 2848.35 Shorter Oxford English Dictionary (6th ed, Oxford University Press, Oxford, 2007) vol 2 at 2021.36 Ms Hansen for the Corporation accepted that to the extent Mr Austin sought to claimcompensatory damages for any injury not covered by the Act, eg spondylosis, s 317 did notpreclude such a claim.37 Accident Compensation Act, s 32(5).(ii) was satisfied that the trial was not to be conductedprincipally for the benefit of the manufacturer ordistributor of the medicine or item being trialled; and(b) the ethics committee was approved by the Health ResearchCouncil of New Zealand or the Director-General of Health atthe time it gave its approval.[37] In view of the requirement in s 32(6)(a)(ii) he submitted that there would notbe cover, and hence the s 317 bar would not apply, where that would protecta manufacturer or distributor who gained the principal benefit of a clinical trial.Hence he submitted that "not [an] ordinary consequence" in s 32(1)(c) should beinterpreted so as to exclude a bar to claims made against manufacturers or distributorswhen to do otherwise would impose a burden on the people of New Zealand in theform of rehabilitation costs.[38] The early history of the provision of cover for the treatment of injuriessustained in clinical trials was explored in detail by Nicola Peart and Andrew Moorein "Compensation for Injuries Suffered by Participants in Commercially SponsoredClinical Trials in New Zealand".38 In brief, under the Accident Compensation Act1972 the concept of personal injury by accident included medical misadventure whichcovered participants harmed in clinical trials.39 However the Accident Rehabilitationand Compensation Insurance Act 1992 excluded from the definition of medicalmisadventure an injury sustained in a clinical trial in which the injured person agreedin writing to participate.40[39] Peart and Moore explained:41The exclusion of clinical trials had a profound effect on all clinical research inNew Zealand. Some researchers were forced to terminate their trialsimmediately, while others managed to obtain insurance cover at considerableand unexpected expense. Public pressure persuaded Parliament to amend theAct in 1993 with retrospective effect, but only with respect to certain clinicaltrials.38 Nicola Peart and Andrew Moore "Compensation for Injuries Suffered by Participants inCommercially Sponsored Clinical Trials in New Zealand" (1997) 5 Med L Rev 1.39 Green v Matheson [1989] 3 NZLR 564 (CA).40 Accident Rehabilitation and Compensation Insurance Act 1992, s 5(8).41 Peart and Moore, above n 38, at 3–4 (footnotes omitted).[40] An amendment in 199342 narrowed the exclusion to the form which wasreproduced in the original s 32 of the current Act (addressing medical misadventure)and is now repeated in substance in the current s 32(5) and (6).[41] We consider that there is force in the suggestion in Health Law in New Zealandthat the underlying policy of the exclusion was that since a commercial sponsor derivesthe financial benefit from the clinical trial, rather than the State, that sponsor shouldbear the cost of compensating participants injured in the trial.43 That is the extent ofthe exclusion. There is nothing in the text of the exclusion or in the underlying historythat suggests any broader interpretation is required. Mr Austin did not takeRoaccutane as part of a clinical trial and hence s 32(6) has no application to him.[42] There is simply no basis in our view for the extravagant extrapolation advancedby Mr Thwaite that, because some clinical trials involve pharmaceutical products, theAct should be read as excluding from treatment (and hence cover) the administrationby a medical practitioner to a patient of any pharmaceutical medicine.Consequently there was no justification for attributing to the second exclusion ins 32(1)(c) the extended meaning which Mr Thwaite advocates. To do so would beinconsistent with the approach that a generous interpretation should be accorded to thescope of the term "personal injury".44[43] A slightly less ambitious version of this argument, that Mr Thwaite alsoappeared to be advancing, was that the supply of pharmaceuticals by a manufactureris not itself "treatment" and manufacturers are not protected by the bar, even if thesupply of those pharmaceuticals by a medical practitioner to a patient itself amountsto "treatment". The difficulty with this variant of the argument is that if the supply ofpharmaceutical products to a patient is "treatment" for the purposes of the Act, and ifa treatment injury results for which there is cover, the statutory bar in s 317 preventsany proceedings being brought against any person in respect of that injury. It isimpossible to read s 317 as preserving rights of action in respect of the injury against42 Accident Rehabilitation and Compensation Insurance Amendment Act (No 2) 1993, s 3.43 Peter Skegg and Ron Paterson (eds) Health Law in New Zealand (Thomson Reuters, Wellington,2015) at [31.6.1].44 Harrild v Director of Proceedings [2003] 3 NZLR 289 (CA) at [19] per Elias CJ, [39] per Keith Jand [130] per McGrath J.some categories of defendant, but not others. There is nothing in the text of the Act tosupport that interpretation, and it is inconsistent with the purpose of the Act and thesocial contract to which it gives effect.Provision of Roaccutane: services, not treatment[44] At the hearing Mr Thwaite advanced a new argument based on the propositionthat the supply of Roaccutane was not a "treatment" as defined in s 33 but instead theprovision of a "service". Consequently his ailment which derived from hisconsumption of Roaccutane was not caused by treatment, as s 32(1)(b) requires, andtherefore he did not suffer a treatment injury. This submission drew on the followingpoints:• cl 3(1) of sch 1 distinguishes between a treatment and a service facilitatingthe treatment, such services including "pharmaceuticals prescribed bya treatment provider who has statutory authority to prescribepharmaceuticals";• a treatment provider is defined in s 6(1) to embrace a variety of medicaloperational groups but does not include a supplier of pharmaceuticals;45and• the definition of "treatment" in s 33 does not cover the activities ofa supplier of pharmaceuticals.Reference was again made to the exclusion of liability for certain medical trials ins 32(5) and (6).[45] In our view it is apparent from s 32 that the "treatment injury" concept isintended to include a personal injury suffered as a consequence of the provision ofmedication (by whatever medium — oral, topical or injection) to a patient by anappropriately qualified health professional. Section 32(1)(a)(i) and (ii) refer toregistered health professionals, the definition of which includes a pharmacist.4645 See now the Accident Compensation (Definitions) Regulations 2019, reg 8.46 Regulation 7.Furthermore it is apparent from s 32(6)(a)(ii) relating to clinical trials that a treatmentinjury can be caused by a "medicine". That is the only reference in ss 32 and 33 to thephysical form of therapy administered in respect of a personal injury. There is noreference in those sections to "pharmaceuticals".[46] Consequently we consider that the definition of treatment in s 33, which isinclusive, necessarily incorporates within "the giving of treatment" (s 33(1)(a)) theadministration of medicine which has been prescribed consequent upon a diagnosis ofa person's medical condition (s 33(1)(b)) by a registered health professional.That conclusion is reinforced by the fact that s 33(1)(f) refers to "the provision ofprophylaxis".[47] A contrary interpretation of the tenor advanced by Mr Thwaite would give riseto an uncertain line of demarcation between diagnosis and "treatment" on the one handand therapy by the administration of medicines on the other. The availability ofstatutory cover should not turn on such nice distinctions.[48] We recognise that the Act contains a number of provisions which refer to"services", notably those relating to service agreements for the purchase of publichealth acute services and other health services: ss 301 and 302. Those sections, whichcontain references to "other services (including pharmaceuticals and laboratoryservices)" address the relationship between the Corporation and treatment providers.In our view several of the provisions in sch 1 (Entitlements) contemplate the samecontext: for example "cost" is defined in cl 1(2) to mean the cost agreed by theCorporation and the treatment provider.47 We further note that regulations were madein relation to the costs which the Corporation is liable to pay both in respect of cost oftreatment48 and ancillary services.49[49] We consider that references to pharmaceuticals (and indeed to laboratory tests)in cl 3(1) are to be construed in that context. In our view the manner of description ofthe Corporation's financial obligations under the Act vis-à-vis treatment providers can47 If paragraphs (a) and (b) of cl 1(1) do not apply.48 Accident Compensation (Liability to Pay or Contribute to Cost of Treatment) Regulations 2003.49 Accident Compensation (Ancillary Services) Regulations 2002 which address transport, escort,support person and accommodation costs but make no provision for pharmaceuticals.have no bearing on the interpretation of what constitutes "treatment" by a registeredhealth professional for the purposes of determining the scope of cover for treatmentinjury under the Act.[50] Accordingly we consider that the provision of a prescription forself-administration of a pharmaceutical involved giving a treatment (s 33(1)(a))consequent upon the diagnosis of Mr Austin's DISH condition (s 33(1)(b)) bya registered health professional from whom Mr Austin had sought treatment(s 32(1)(a)(i)). Consequently Mr Austin suffered a treatment injury in respect of whichhe had cover and entitlements under the Act. Any different interpretation would beartificial and unrealistic. It could have unacceptable limitations for large numbers ofNew Zealanders who presently look to the Corporation for cover in respect of adversereactions to prescribed pharmaceuticals.A qualification[51] Although Mr Austin took Roaccutane which had been prescribed for him bya number of medical practitioners, it transpired that for a period of some months inaround 2000 he also took some Roaccutane that had been prescribed by a doctor toMr Austin's sons. To the extent, if any, that his consumption of that small amount ofRoaccutane caused or contributed to his DISH ailment, it was not a treatment injurybecause it was not caused by treatment which Mr Austin had sought from a registeredhealth professional.[52] There may be room for argument therefore that such self-administration ofRoaccutane prescribed for other persons did not constitute the giving of treatment andhence did not give rise to a treatment injury which would be the subject of cover.In those circumstances we consider that it is appropriate to reserve leave for Mr Austinto file an amended pleading seeking compensatory damages solely in respect of thatconduct, should he wish to do so.Result[53] The appeal is allowed in part.[54] The claim for compensatory damages is struck out.[55] Leave is reserved for Mr Austin to file an amended pleading seekingcompensatory damages in respect of self-administration of Roaccutane (prescribed forother persons) which was not prescribed for him by a registered health professionalfrom whom he sought treatment.[56] Costs lie where they fall.Solicitors:Tompkins Wake, Hamilton for Appellant