PEWHAIRANGI V THE MINISTRY OF HEALTH HC TAU CIV 2006-470-95

PEWHAIRANGI V THE MINISTRY OF HEALTH HC TAU CIV 2006-470-95 7 August 2007IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY CIV 2006-470-95IN THE MATTER OF the Official Information Act 1982, the Health Act 1956, the New Zealand Bil of Rights Act 1990 and the Health and Disability Commissioner Act 1994 BETWEEN S M PEWHAIRANGI Plaintiff AND THE MINISTRY OF HEALTH Defendant Hearing: 11 July 2007 (Heard at Rotorua) Appearances: Mrs S M Pewhairangi in person L M Hansen for Ministry of Health Judgment: 7 August 2007 at 10 a.m.JUDGMENT OF ASSOCIATE JUDGE DOOGUEThis judgment was delivered by me on07.08.07 at 10 am, pursuant to Rule 540(4) of the High Court Rules. Registrar/Deputy Registrar DateCounsel: Crown Law Office ( L M Hansen), P O Box 2858, Wellington Mrs S M Pewhairangi, P O Box 6174, Brookfield, TaurangaBackground[1] The plaintiff by her second amended statement of claim sues the Ministry of Health. Crown counsel said that she ought to have sued the Attorney-General in right of the Minister of Health, but no point was taken was taken concerning the irregularity in the pleadings for the purposes of the proceeding before me. The matter came before me on 11 July 2007 when I heard the defendant's application to strike out all or parts of the plaintiff's current pleading, the second amended statement of claim. [2] The defendant without objection from the plaintiff, has filed extensive affidavits relating to the application to strike out. I will say something about the admissibility of this affidavit material below. In the meantime, I will refer to matters of undisputed background to explain the decision that follows. [3] In February 1985 the plaintiff was admitted to Gisborne Hospital for routine surgery. She was then aged 44 years and was a fit and healthy person. While she was in hospital she received two blood transfusions on 28 February and 5 March 1985 respectively. [4] The blood was given to her in ignorance of the fact that part of it was contaminated by hepatitis C, or, as it was known at that time, hepatitis NonANonB. [5] Hepatitis C is know as a "blood to blood virus", that is it is passed on to the recipient from the blood of another person. It may be distinguished from hepatitis B which is transmitted by other means. Because hepatitis C (as I shall call it) was transferable by blood, there was a risk that a blood donor who had the condition could contaminate bloodstocks that are held for the administration of transfusions. This is what Ms Pewhairangi says happened to her. The hepatitis virus takes some time to develop, apparently. It was not until January 2005 that Mrs Pewhairangi received the bad news that she was carrying the hepatitis C virus. Subsequently she made a claim under the Injury Prevention Rehabilitation and Compensation Act 2001. The ACC accepted that she had cover and assessed the "date of injury" as 8 February 2005. The ACC accepted that she had suffered physical injury caused bymedical treatment, with the specific categorisation of her claim being one of "medical mishap". The medical mishap, the ACC stated in a letter to Mrs Pewhairangi accepting cover under the Act, occurs:Where there is an adverse consequence of treatment, and where the treatment has been properly given by, or at the direction of, a registered health professional. The personal injury caused must be rare and severe. "Rare" means the probability of the adverse consequence must be 1% or less.[6] The communication from the ACC went on to quote a medical specialist as saying that the risk of acquiring hepatitis C through a transfusion of blood products at or in 1985 would have been < 1%, fulfilling the rarity criteria. The ACC also accepted that her injury was severe as required by the Act. [7] Mrs Pewhairangi says that she does not want to be covered by ACC and that she does not bring any claim relying upon the legislation relating to the ACC scheme. She wishes to bring a common claim for damages.Approach to strike out applications.[8] This case raises a novel question and in that circumstance it is right to heed what the Court of Appeal said in Attorney-General v Body Corporate 200200 [2007] 1 NZLR 95:[50] In all cases the threshold for a strike-out application is rigorous and the Courts are especially slow to strike out claims in negligence which assert novel duties of care; this in recognition of the factually sensitive nature of the inquiry and what will often be the need for evidence, including expert evidence, and the testing of such evidence in a trial setting. In a proper case, however, a determination may be made on the existence of a duty of care on a strike-out application. The difficulty of the associated legal issues does not preclude the granting of the application. As to these considerations, see the remarks of Richardson P in Attorney-General v Prince and Gardner at p 267.[9] In the last-mentioned case, Richardson P set out these considerations at p 267 as follows:A striking-out application proceeds on the assumption that the facts pleaded in the statement of claim are true. That is so even although they are not or may not be admitted. It is well settled that before the Court may strike outproceedings the causes of action must be so clearly untenable that they cannot possibly succeed (R Lucas & Son (Nelson Mail) Ltd v O'Brien [1978] 2 NZLR 289 at pp 294 – 295; Takaro Properties Ltd (in receivership) v Rowling [1978] 2 NZLR 314 at pp 316 – 317); the jurisdiction is one to be exercised sparingly, and only in a clear case where the Court is satisfied it has the requisite material (Gartside v Sheffield, Young & Ellis [1983] NZLR 37 at p 45; Electricity Corporation Ltd v Geotherm Energy Ltd [1992] 2 NZLR 641); but the fact that applications to strike out raise difficult questions of law, and require extensive argument does not exclude jurisdiction (Gartside v Sheffield, Young & Ellis).[10] In deciding whether the statement of claim advances a tenable case of action the following issues need to be addressed: a) Is the plaintiff's claim for compensatory damages statute-barred? b) Can the expert evidence tendered by the defendant be taken into account? c) Is there a tenable argument that the defendant owed a duty of care to the plaintiff in these circumstances? d) Is there a tenable argument that the defendant could be liable for exemplary damages?The amended statement of claim[11] It must be said that the amended statement of claim has many short-comings. It is difficult to follow. It lacks particularisation of essential matters. The present application is not, however, an application to strike on the grounds set out in r 186. Had it been, it is likely that orders would have been made, at the least, requiring re- pleading. [12] The statement of claim after stating a number of background matters made a number of key allegations, which I will now summarise. [13] In paragraph 7 the plaintiff alleges that the defendant knew about hepatitis NonANonB (hepatitis C) virus in the 1970s but choose not to screen blood for thisvirus by using the surrogate test that was available in the early 1980s. In paragraph 8 it is said that hepatitis NonANonB virus was formally identified as hepatitis C in 1989 and a commercial test for testing blood became available which New Zealand introduced later, in 1992. [14] In paragraph 9 the statement of claim sets out the role of the Ministry of Health. The plaintiff did not explain to me at the hearing the source of the contents of paragraph 9 of her statement of claim setting out the various alleged functions of the Ministry of Health. I simply note at this point that they are materially different from those which were to be found in s 7 of the Health Act 1956 which was in force as at January 1985. [15] In paragraph 10 the statement of claim claims that the plaintiff contracted hepatitis C due to the negligence of the defendant, in the following respects: a) Failing to provide funding in the early 1980s to enable surrogate testing to be used to test donated blood for hepatitis C; b) Failing to have policies or directives in place to screen blood donors; c) Failing to have policies or directives in place to allow hospital staff to inform the plaintiff on admittance to hospital, if practicable, that any blood that may be received in a transfusion could be contaminated with hepatitis virus, known then as about hepatitis NonANonB; and d) If a blood transfusion was necessary, then the plaintiff would need to have a blood test as soon as a commercial one became available in New Zealand. [16] In paragraph 11 it is alleged that the plaintiff was not given information about hepatitis NonANonB in the period commencing on 4 March 1985, while she was in hospital, when she made a request for information and also that she was not informed of the risk that blood received in a transfusion would be contaminated with a hepatitis virus, and was not informed if a blood transfusion was necessary, of theneed to have a blood test as soon as a commercial one became available in New Zealand. [17] By paragraph 11(c) she said that if she had received the information concerning the risk of contaminated blood and of the need to have a commercial bloodtest when it became available:She may have refused the second transfusion of two units of blood on 5 March 1985, as the reason for this transfusion was not life threatening.[18] In paragraph 11(d) she pleaded that she had a right as a "health consumer" to receive uncontaminated blood. [19] Paragraph 13 - 16 sets out the circumstances in which the plaintiff became aware of the fact that she was a hepatitis C carrier. This was disclosed to her some years later when she attempted to make a donation of blood at the hospital where she then worked and when her blood was routinely tested the virus was detected which was later confirmed by further blood tests and a liver biopsy. She pleads as well that she has developed chronic about hepatitis C. [20] The plaintiff alleges in paragraph 21 that the defendant was also negligent in not honouring the fiduciary duty, which she alleges is based upon a relationship of special trust and confidence that patients have with hospital staff. [21] Paragraph 22 sets out the loss that the plaintiff claims she suffered which are the adverse health effects. [22] The plaintiff claims several categories of damages. In paragraph 23(a) she claims $30,000 for:Not providing funding, in the early 1980s, to enable surrogate testing procedures to be used.[23] In paragraph 23(b) she claims $50,000 for:Not having policies or directives in place (prior to 1992) to screen blood donors AND allow hospital staff including the staff at Gisborne Hospital to inform the plaintiff [about the risks of hepatitis though blood transfusion andthe need to take a commercially available bloodtest as soon as it was available.][24] In paragraph 23(c) $30,000 is claimed in respect of the alleged failure to obtain informed consent and under 23(d) $50,000 for breach of her right to receive uncontaminated blood. The plaintiff also claims damages for breach of the asserted fiduciary duties. Under this head she claims various amounts. Finally, she claims exemplary damages in the sum of $80,000. These are stated to be:Damages for knowingly allowing defective blood and blood products, with a risk of contamination with Hepatitis NonANonB (Hepatitis C), to be used in transfusions, thereby putting thousands of peoples health and lives at risk. The defendant had this knowledge in the late 1970s and, prior to 1990, did not even warn health consumers, other members of the public and some of their own health employees of the risk. Today, there are still people finding out that they contracted about Hepatitis C from blood transfusions prior to 1992.Defendant's response[25] The defendant has made an application to strike out the statement of claim. I should add that the hearing of this application before me was rather one-sided. The issues raised by the defendant involved difficult and complicated legal issues. Mrs Pewhairangi, although she advanced her claim with sincerity and conviction, was simply not able to make meaningful responses to any of the issues that were raised by the defendant. It was regrettable that Mrs Pewhairangi has felt unable to accept the advice that I have previously given to her in these proceedings, that she should obtain legal representation. [26] In the first place, the defendant says that the plaintiff is precluded from bringing a claim for compensatory damages under the Injury Prevention Rehabilitation and Compensation Act 2001 ("IPRC Act"). Secondly, it says that the Department of Health did not owe the plaintiff a duty of care to fund surrogate testing and the third response is that even if there was a duty of care owed, the plaintiff cannot "realistically argue for an award of exemplary or punitive damages." [27] I will now examine the various contentions made by the defendant.Coverage under the IPRC Act[28] There is no doubt that the contention made by the defendant's counsel concerning coverage under the IPRC Act is correct. The plaintiff's claim for compensatory damages is statute-barred. Section 317(1) of the Act provides:1. (No person may bring proceedings independently of this Act, whether under 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.[29] The plaintiff told me that she did not intend to seek coverage under the Act. That does not assist her. S 317(7) of the Act provides that a failure or refusal to make a claim, or the purported denial or surrender of rights under the Act do not allow a plaintiff to circumvent the statutory bar. [30] I conclude that this statutory provision is a bar to Mrs Pewhairangi's claim for compensatory damages. [31] The defendant submitted, in my view correctly, that the starting point when enquiring into the remainder of the plaintiff's claim, which was for exemplary damages, is to determine if the defendant owed a duty of care to the plaintiff and I shall deal with that issue shortly. First it is necessary to make reference to two affidavits which the defendant filed.Additional factual background[32] The defendant filed extensive affidavit material from two medical specialists. The first was from Clinical Associate Professor David Graeme Woodfield of Auckland who is a semi-retired specialist in transfusion medicine. An affidavit was also filed by Doctor James Faed of Dunedin, a transfusion haematologist and transfusion medicine specialist. Both of these deponents are very highly qualified experts in the field of blood transfusions.[33] The usual rule is that the application to strike out is usually based on the pleadings alone and the assumption is made that the plaintiff can make out all of the factual allegations pleaded: Attorney-General v Prince and Gardner at p 267. The application is not a proper vehicle for resolving disputed factual matters, although if an affidavit is not contradicted, and does not itself contradict the pleadings then it can be taken into account: Bishop v New Zealand Airline Pilots Association [1992] 2 NZLR 237.. [34] In this case the defendant does not admit that Mrs Pewhairangi contracted hepatitis at the Gisborne Hospital in 1985 following a transfusion of contaminated blood. The affidavits though are not concerned with the essential factual allegations on which Mrs Pewhairangi's claim is based. The affidavits go into a number of background topics. The affidavit evidence explains the various types of hepatitis and refers to the fact that initially there were two types of hepatitis only which had been identified: hepatitis A and hepatitis B. Doctor Faed explained that the term NonA NonB was first used in the 1970s when cases of hepatitis that were not due to hepatitis A or hepatitis B viruses began to evidence itself. He said:The clinical condition called non-A non-b hepatitis was a group of conditions defined by the presence of changes in blood tests that indicated the presence of a hepatitis but the absence of features indicating that the infection was caused by hepatitis A or hepatitis B, or any other identifiable environmental cause.[35] He went on in paragraph 18 to say this:At that time and through until the mid-1980's the condition was generally only recognised when a rare patient became unwell and developed a pattern of illness that could be identified as hepatitis. Various research studies in the subsequent decade identified a larger group of patients who developed changes in liver enzyme levels that suggested non-A non-B hepatitis was more common and in some cases became a chronic condition that might evolve into severe liver damage called cirrhosis. At this time it was far from clear whether the group of conditions called non-A non-B hepatitis was due mainly to one virus causing an illness with widely varying severity, or too (sic) many different viruses. It became apparent though the 1980's that some people who had received a transfusion or injection of a blood product developed persisting inflammation in the liver and sometimes after many years developed cirrhosis, but the natural history of the condition involved was not clear at that time. It is acknowledged that the range of severity varied from very mild in some cases through to severe inflammation that led in apparently rare cases to development of severe liver injury called cirrhosis.[36] He said that in mid-1990 a blood test became widely available in New Zealand for detecting hepatitis C infection. National screening of blood donations commenced in July 1992. There had been recognition prior to 1989 in academic and medical circles that post-transfusion hepatitis ("PTH") was a small but continuing problem. Doctor Woodfield wrote an article concerning this in the New Zealand Medical Journal in 1987. He said in that article:Between 1977-1984 there were 135 reported cases of PTH, of which 24 were classified as non-A non-B hepatitis.[37] Doctor Woodfield wrote his article in 1987, he said, to alert doctors to a persistent problem of PTH. The paper also referred to the use of surrogate tests in screening blood donors for non-A non-B hepatitis. In his affidavit he said:Using both the alanine aminotransferase (ALT) test and Hepatitis B core antibody test (anti-HBc) it was estimated that in the USA that 39% of posttransfusion non-A, non-B hepatitis could be prevented.[38] The paper drew attention to the problems of ALT and anti-HBc testing in New Zealand. There was insufficient data to institute these tests in New Zealand at that time, particularly as there were major differences in the frequency of Anti-HBc in New Zealand donors as compared with blood donors in the USA. There was a very high frequency of Anti HBc in Polynesian blood donors. At that time there was also little known about ALT frequencies in New Zealand blood donors. Then in a critical passage of his affidavit he said:10. If the surrogate tests had been instituted, it would have had to be done on the basis of insufficient knowledge of the frequency and relevance of ALT and Anti-HBc to PTH in NZ. It would have resulted in a large loss of routine blood donors from the regular blood donor panels and would have been expensive. Commencing screening would also not have been in accord with the policies of other transfusion experts in Australia, England and Europe who also did not feel the evidence for surrogate testing was at that time justified.[39] He considered that to commence expensive surrogate testing at the date when he wrote his article, 1987 would have been financially "inappropriate". He was aware of discussions in the Blood Transfusion Advisory Committee ("BTAC"). Hehimself had been director of the Auckland Regional Blood Service from 1976 to 1998. He said that the BTAC and individual directors of blood services had studied and discussed these matters and were aware of controversy overseas on the subject of surrogate testing but their conclusion was that it would not have been appropriate in the period 1985 – 1989 to commence surrogate testing of donor blood in New Zealand. He went on to say, in paragraph 14:Given the low specificity of the tests, the uncertainty of the international opinions and the expense, there was insufficient justification for the introduction of these tests at that stage. Further from 1988 we became aware that a specific test would become available. It must also be recognised that even in the USA there was controversy regarding the value of the tests and nation-wide testing was not fully introduced in that country until 1987.[40] The affidavit asserted that in mid 1990 a blood test became available in New Zealand for detecting hepatitis C infection and national screening of blood donations commenced in July 1992. [41] Doctor Woodfield explained that the BTAC, which was a national advisory committee established by the Minister of Health in 1963 under Section 13 of the Hospitals Act 1957 to advise the Minister of Health on technical aspects of blood transfusion, had been considering whether surrogate testing should be introduced in 1987. In that year, the BTAC decided it was not appropriate to recommend the introduction of surrogate testing for the reasons that Doctor Woodfield has given. [42] The structure of the blood transfusion services in New Zealand was also the subject of evidence. Doctor Faed said that in the 1980s blood transfusion services were provided by blood transfusion units funded by the Department of Health through hospital boards. In the 1980s there were six regional blood transfusion centres under the direct responsibility of the respective hospital boards in Auckland, Hamilton, Palmerston North, Wellington, Christchurch and Dunedin. Each regional centre organised blood donation and collection and provided advisory and specialist services to the hospitals in their districts and to adjacent hospital boards as required. It was his recollection that in 1985 Gisborne Hospital was operationally linked to the Auckland blood transfusion service. He also set out the history of the constitution and operations of the BTAC to which I have already made reference. That committee made recommendations to the Director-General of Health, it did not haveany executive authority. He was a member of the BTAC in 1982 and remained a member until it was disbanded in the early 1990s. He has since been appointed to the National Blood Transfusion Service Advisory Committee. [43] Much of the evidence given by the two doctors conflicts with the allegations in the plaintiff's statement of claim. She says that the "defendant" knew about hepatitis C in the 1970's but choose not to screen blood for this virus using the surrogate test available in the early 1980's. There is a conflict as to when New Zealand blood transfusion specialists acquired knowledge that there was a third type of hepatitis virus, hepatitis C and also as to when a surrogate testing procedure became available. It would appear that a surrogate blood testing process could have been established at some point in the 1980's but, for reasons including those of efficacy and expense, the two defendant experts were of the view that conditions justifying implementation of such a test were not present in 1985 when Mrs Pewhairangi received her transfusion of allegedly contaminated blood. At its simplest, the conflict between the plaintiff's position and that of the defendant is one of timing. The defendant accepts that a surrogate testing programme became feasible and desirable and indeed was implemented in this country but not in 1985 when Mrs Pewhairangi was infected. All of these issues are relevant to existence of a duty of care, whether there was negligence and whether the negligence of the defendants was causative of loss to Mrs Pewhairangi. [44] The affidavits seek to refute the plaintiff's claim in several respects. They are designed to show that it would not be fair or reasonable to affirm that the defendant owed a duty of care because of policy considerations such as the expense of surrogate testing and the loss of potential donors that screening would have caused in 1985. They are designed, too, to show an absence of negligence; that the defendant's position was justified by the then state of medical knowledge in New Zealand. [45] The defendant has not, as it could have, sought leave to bring an application for summary judgment. Had such an application been brought forward, the contentious affidavit material may well have been able to assist the Court in coming to a conclusion on the matter. There may be good reasons why such an applicationwas not made. But the fact is, no such application was made. The only application is one to strike out. I do not accept that it is warranted by authority to have regard to the material in the affidavits of the medical experts in those areas of subject-matter where the experts' affidavits seek to contravert the truth of the factual matters stated in the plaintiff's statement of claim. To do so would be to go against the reasoning in Bishop v New Zealand Airline Pilots' Association noted at [33] [46] I therefore decline to take into account the affidavits of the medical experts on these subjects. [47] It is, nonetheless, possible that the application to strike out could succeed even without the calling in aid of the two affidavits, and it is to that matter I turn to next.Duty of careThe factual allegations[48] The statement of claim raises issues concerning the way in which her medical treatment was carried out at the Gisborne Hospital. The allegation in paragraph 7 when connected with the other allegations in the statement of claim suggests that the defendant breached an obligation to screen blood for hepatitis C, which does not seem to be an allegation that was explicitly limited to what occurred at the Gisborne Hospital. It seems to be a generalised complaint about the failure to screen blood. It assumes that the defendant was responsible for that decision and that, implicitly at least, what occurred to the plaintiff Gisborne Hospital was a concrete consequence of that generalised policy. When I say, "generalised" I mean that it was a national policy. [49] In paragraph 9 of the statement of claim the plaintiff makes reference to the role of the Ministry of Health which I have already made reference to. [50] In paragraph 10 she alleges that she contracted hepatitis C due to the negligence of the defendant which is then particularised in a number of ways. First there is alleged failure to provide funding to enable surrogate testing procedures tobe used. This seems to be a variant on the earlier allegation in paragraph 7 that it "choose not to screen blood". Paragraph 10(b) says the defendant failed to have policies or directives in place prior to 1992 to screen blood donors. That is a generalised complaint but no doubt the plaintiff again asserts that what happened to her was a localised consequence of a generalised policy. Paragraph 10(b) is really another particularisation of the complaint that the defendant negligently failed to make provision for blood screening, referring as it does to a failure on the part of the defendant to have policies or directives in place prior to 1992 to screen blood donors. Paragraph 10(c) alleges that the negligence of the defendant included having policies or directives in place at the hospital to inform the plaintiff that a transfusion could be contaminated with hepatitis. Paragraph 10(c)(ii) gives another particularisation of the negligence as being that the staff of the hospital should have advised her that as a blood transfusion was necessary then the plaintiff would need to have a blood test as soon as a commercial one became available in New Zealand. I make no comment about this assertion except to say that it may ultimately be very difficult for the plaintiff to establish that this aspect of negligence caused her any loss. The test may have come too late to save her. [51] Paragraph 11 criticises the defendant as being negligent for not having policies (presumably in operation at the Gisborne Hospital) to give her information about the risk posed by hepatitis C. Paragraph 11(b) alleges negligence through a failure to obtain from her an informed consent to the operation that she underwent. In paragraph 11(c) she pleads that if she had received the information that the blood may be contaminated with a hepatitis virus, and if she had been told about the necessity for a screening test, she might have refused at least the second transfusion which would have reduced the risk of receiving contaminated blood. In paragraph 11(d) she apparently alleges that as a "health consumer and consumer of blood units" she had the right to receive units that were not defective and were safe to use. [52] In a later part of her statement of claim, paragraph 21, she asserts that the defendant was:Also negligent in not honouring the fiduciary duty.[53] This seems to amount to a suggestion that failure to have the policies and directives in place that she had earlier sued on as being particulars of negligence, also amounted to a breach of fiduciary duty. [54] I will now attempt to determine whether or not the pleadings disclose a viable cause of action.A relationship of proximity?[55] At the outset, I observed that the claimed duty of care owned is a novel one. I was not referred to any relevant authority where a Court had considered the question of whether or not a defendant had been negligent in circumstances where a plaintiff had contracted hepatitis because of a negligent failure to screen the blood by means of surrogate testing, or to provide resources to enable such screening to take place, or to advise on the risks that hepatitis C might be present in unscreened blood. [56] As to whether or not the defendant owed a duty of care, I propose to follow as the main authority the Court of Appeal decision in Attorney-General v Body Corporate 200200 [2007] 1 NZLR 95. That case re-affirms that in determining whether a duty of care exists, the ultimate question for the Court is whether it is just and reasonable that such a duty be imposed. The Court also confirms that the Courts look to the proximity or relationship between the parties and also to any wider policy considerations that bear on whether a duty of care should be imposed. [57] The plaintiff's statement of claim would seem to assert that the defendants duty arose at the level of providing funding to hospitals generally for surrogate testing and for the Gisborne Hospital in particular. It similarly alleges negligence in not having directives in place for hospital staff including staff at Gisborne Hospital. [58] There was not a great deal of discussion at the hearing before me as to the structure and characteristics of the health services in New Zealand in 1985. Ms Hansen referred me to the functions of the Department of Health set out in the Health Act 1956. In particular, she referred to s 7 of the Act which provides:7. Principal Functions of Department—The principal functions of the Department of Health shall be— (a) To administer this Act and all other public Acts, so far as their purpose is the promotion or conservation of health: (b) To advise local authorities in matters relating to public health, so far as those local authorities are charged with the care of the public health by this or any other Act: (c) To prevent, limit and suppress infectious and other diseases: (d) To promote or carry out researches and investigations in relation to matters concerning the public health and the prevention or treatment of disease: (e) To publish reports, information, and advice concerning the public health: (f) To organise and control medical, dental, and nursing services, so far as such services are paid for out of public money: (g) Generally, to take all such steps as may be desirable to secure the preparation, effective carrying out, and co- ordination of measures conducive to the public health.[59] Certainly, the broad statement of functions contained in s 7 of the Act would be capable of interpretation to acquaint itself with the existence of hepatitis C and to devise means of avoiding harm to those who might contract the disease by means of a blood transfusion. Section 7(c) and 7(g) seem to be broad enough to accommodate those two objectives. [60] I was not told however whether or not the Department would be the effective decision-maker as to whether transfusion services in New Zealand should adopt surrogate testing. [61] There was some evidence in the affidavits of the relationship between the Ministry of Health and the blood transfusion units in the affidavit evidence. Doctor Faed said that in the 1980s blood transfusion services were provided by blood transfusion units funded by the Department of Health through Hospital Boards. He then went on to say that six regional blood transfusion centres under the direct responsibility of the respective hospital boards organised geographically alongside the major providers of acute trauma/surgical/medical/oncology care in Auckland, Hamilton, Palmerston North, Wellington, Christchurch and Dunedin. The sixregional centres organised the blood donations and provided advisory and other specialist services. He said that Gisborne Hospital was operationally linked to the Auckland Blood Transfusion Service. He also made reference to the BTAC which advised the minister on blood transfusion issues at national level. But, as I have said, I am precluded from taking that evidence into account. [62] In any event, such evidence as there is, is not informative on the matter of what if any control the defendant had over policies concerning blood screening which were to be followed by local blood transfusion services. Nor is there information concerning what if any control or influence the Department had over the policies that should be followed by local hospitals when using transfusion blood products. The plaintiff's statement of claim apparently assumes that both of these critical areas were within the power and responsibility of the Department. If the role of the Department was to provide funding and at the same time to leave it to the blood transfusion services and the hospitals to make determinations on this issue, then there would not seem to be a proximate relationship between the plaintiff and the defendant. It might be theoretically foreseeable that if a funder, by providing funds, made it possible for the other two entities to administer transfusions to people without attaching conditions to the circumstances in which they should do so, then harm could be done to a plaintiff of exactly the type that Mrs Pewhairangi complains of. But that level of forseeability would not establish a proximate relationship, which on its own would justify a conclusion that, it was just and reasonable that a duty of care be imposed upon the defendant. [63] In Attorney-General v Body Corporate 200200 the Court at [37] said that substantiality of the nexus between the alleged negligence and the plaintiffs loss may also be relevant when enquiring into proximity. The Court noted that this might overlap with considerations of remoteness and causation. Without any information about the terms upon which the defendant provided funding to the other two agencies, it is different to know what causal influence providing the funding had. It would certainly pass the "but for" test but that would not seem to be enough. If the defendant knew that the transfusion service to which it was providing funding had to meet its own obligations of good practice and prudence in the matter of blood collection, and if it had no reason to believe other than that the blood transfusionservice was functioning properly in this regard, then the defendants role as nothing more than fund provider represents a fairly tenuous basis on which to assert that it was the cause of the plaintiff's loss. [64] Then there is the role of the hospital. I know nothing about what statutory basis the hospital functioned on and what its responsibilities for patient safety were. It is not hard to envisage that the entity which operated the hospital would have obligations to ensure that products generally, including blood products, which it acquired for administration to patients were of a proper quality.The Statutory Context and Policy considerations[65] In Attorney-General v Body Corporate 200200, the Court of Appeal in its judgment said, at paragraph 39:[39] The primary policy issue that must be addressed is whether the imposition of a duty of care would be consistent with the terms and policies of the statute which governed the functions of the defendant. A duty of care will not be imposed if the effect would be inconsistent with the scheme and policy of the Act (see, for instance, Attorney-General v Prince and Gardner [1998] 1 NZLR 262). Reference can usefully be made to X (Minors) v Bedfordshire County Council [1995] 2 AC 633; Fleming v Securities Commission [1995] 2 NZLR 514; Oceania Aviation Ltd v Director of Civil Aviation (Court of Appeal, CA 163/00, 13 March 2001); and Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540.[66] Given the limited argument before me, it is difficult to embark upon an analysis of the policy underlying the statute in question in this case. [67] To impose a duty of care on a health authority to ensure that steps are taken to secure publicly the good health of members of the public is in a generalised sense clearly consistent with the objectives of the Health Act 1956. That statute would be part of the context in which the Court would enquire whether of not the duty of care is established. But as against that, the Courts must respect the autonomy of the Minister of Health in deciding whether resources should be expended on projects such as surrogate testing. The practicality of such testing, its cost and effect on blood-donating services, would all be matters to be factored into the judgment. Thematter of competing priorities for health funding would also be relevant. The Court would be reluctant to intervene in such areas. They are matters that the Minister has the right and duty to make decisions. [68] On the other hand, if the allegation is that the defendant (as opposed to a Hospital Board or some other entity) actually operated the blood transfusion service at Gisborne, then having regard to the fact that administration of a transfusion to the plaintiff had obvious and immediate potential to damage her health if the blood had not been tested, the Court might be readier to accept that an obligation was owed to her to take care. [69] In Attorney-General v Body Corporate 200200 the Court of Appeal said:[42] The Courts are slower to impose duties of care in relation to omissions to act (non-feasance), as opposed to the positive exercise of statutory powers (misfeaseance) (see Stovin v Wise [1996] AC 923). As well, the more policy-orientated and less operational the power in question is, the less likely a duty is to be imposed (albeit that the policy/operational test is not always altogether easy to apply (compare Stovin v Wise at p 951)). The further removed the public body is from day-to-day physical control over the activity which directly caused the loss, the less likely the Courts are to impose a duty of care (see, for instance, Yuen Kun Yeu at p 196 per Lord Keith of Kinkel).[70] Hayne J in Crimmins (As Executrix Of Estate Of Crimmins Dec'd) v Stevedoring Industry Finance Committee (1999) 167 ALR 1 stated the problem in the following terms:[270] The fact that the Authority is a statutory body given statutory discretions does not prevent the application of ordinary principles of the law of negligence.But the courts have often found the task of identifying the duty of care that is owed by a statutory body to be difficult. To whom is the duty owed? What is the content of the duty? [271] There are several reasons why the task is difficult. As Gummow J pointed out in Pyrenees Shire Council v Day, a person claiming against a public body with statutory powers seeks "to translate the public law `may' into the common law `ought' ". Should the courts (and can the courts) distinguish between policy and operational decisions of statutory bodies? Is the distinction between non-feasance and misfeasance relevant? Does it matter that the constituting statute gives a body some statutory duties and then, in different language, gives it some statutory powers? Is the body to be liable in negligence when it does not use the powers it was given but was under no statutory duty to use them (or perhaps even to consider their use)? All these, and more, are questions that may arise.[71] In the present case though, the plaintiff's claims do not strictly fall into one category or the other. It depends upon how the pleadings are read. It might be that the statement of claim is intended to make the following assertions: a) That the Ministry of Health acting through its employees and agents carried out the operation on the plaintiff; b) That before doing so, it knew that a transfusion might be required; c) That it knew before the operation commenced of the existence of hepatitis C and the threat that it posed to someone receiving a transfusion because it could be transmitted "blood to blood"; d) Nonetheless it failed to take reasonable precautionary steps, including surrogate screening. [72] If that was the purport of the pleading, then the pleadings could be read as including acts of non-feasance and misfeasance. [73] In the Crimmins case that I have referred to above, the plaintiff succeeded in a case of non-feasance. There the port authority was sued because it failed to take steps to protect a waterside worker from harm from asbestos. The worker was particularly vulnerable because he had to work where the port authority directed him. The port authority directed him to work on ships where asbestos was being unloaded. The authority was alleged to be under a duty of care to take steps to protect his health and well-being. The specific breaches pleaded included not providing information and equipment which would have protected the plaintiff. In the circumstances a duty to act was held to be established. The judgments in that case placed considerable weight on the vulnerability of the plaintiff. [74] It is plainly relevant when deciding whether it is fair and reasonable to recognise a duty of care, to take into account any special vulnerability on the part of the plaintiff to personal injury. On the basis of her pleadings, the plaintiff in this case was at the mercy of whatever party was responsible for making decisionsconcerning the quality assurance of blood products. Their failure to do their job properly would immediately and directly impact upon a person in the position of the plaintiff. Once the plaintiff had submitted herself to the care of the hospital, then she would have little alternative but to accept a blood transfusion. She might unknowingly be running a risk that she would receive contaminated blood. [75] Unfortunately, because of the short-comings in the statement of claim, it is difficult to know just what the allegations are in this case. I appreciate that in its broadest terms it is a claim that the defendant owed a duty of care which was essentially breached by its part in the series of events which resulted in her being given a blood transfusion in circumstances where those responsible knew that there was a risk that it contained contaminated blood which could pass on hepatitis C. But the part that the defendant allegedly played in this sequence is not adequately specified. The extent to which it had control of the hospital and blood transfusion agency at Gisborne (if any) is a key factor that is not made plain in the statement of claim.Exemplary damages[76] It is incumbent upon the plaintiff to establish that she was owed a duty of care if her claim for exemplary damages is to succeed. For the reasons already outlined, I am not prepared to conclude that she was not owed a duty of care. Further, the plaintiff has asserted in her statement of claim that the Ministry of Health knew about the hepatitis C but choose not to screen blood for it notwithstanding the availability of the test. As well, the plaintiff's pleading (for example 10(c)) seems to assert that the defendant had operational control of the hospital and its staff. In those circumstances, no matter how unlikely I consider it is that the plaintiff will be able to establish all of these matters at trial, nonetheless the less the application for exemplary damages should not be struck out either. [77] I observe that before an award of exemplary damages is made there has first to be a finding that the conduct of the defendant was outrageous. The present case is no doubt one of those which the author of The Law of Torts in New Zealand, Todd (4th Edition) had in mind when he wrote, at page 983:Regardless of what is said by the Courts, it is absolutely inevitable that exemplary damages will be regarded by victims as fulfilling a compensatory role in the filed of personal injury. The mere fact that a plaintiff chooses to sue for exemplary damages rather than laying a criminal charge indicates that compensation is being sought.[78] While there may be an unstinting enthusiasm on the part of plaintiffs for claims for exemplary damages, the Courts have made it clear that there is a high threshold to be cleared before an award will be made. The question is whether the conduct is sufficiently outrageous to merit punishment: A V Bottrill [2003] 2 NZLR 721(PC). [79] As well, awards of damages must be modest with Todd, ibid at page 96, referring to leading authorities which show that any award will not be greatly in excess of $10,000 to $20,000, depending upon all of the circumstances. [80] Notwithstanding the difficulties in the plaintiff's way in obtaining an award of exemplary damages, I would not be prepared to conclude that the claim for exemplary damages could not succeed. Again though, the plaintiff's pleadings are sub-standard in that they do not particularise the basis upon which an award of exemplary damages is sought.Conclusion[81] The plaintiff's pleadings are unsatisfactory. They do not adequately particularise the facts from which the duty of care is said to arise. Nonetheless, given the novel circumstances of the plaintiff's claim and given that there are some apparent features would point in favour of a duty of care, and some away from that conclusion, it would not be right in my view to come to a conclusion on a strike out application that no cause of action was disclosed. Part of the statement of claim must however be struck out. [82] This matter is well overdue to be brought to a conclusion. The defendant has remedies available to it if it does not consider that the remaining parts of the statement of claim comply with the Rules. I will say nothing more on that point.[83] In the meantime though, I make an order striking out paragraph 23 (a), (b), (c), (d) and paragraph 24 (e), (f), (g), (h) of the Second Amended Statement of Claim, being the claims for compensatory damages. [84] The parties are to file and serve concise memoranda on costs with the plaintiff doing so fourteen days after the issue of this judgment and the defendant in a further fourteen days. [85] The Registrar at Rotorua is to convene a further telephone case management conference at which any further interlocutory applications can be considered as well as setting the matter down for trial. _____________ J.P. Doogue Associate Judge