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

PEWHAIRANGI V THE MINISTRY OF HEALTH HC TAU CIV 2006-470-95 11 March 2008IN 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 Bill of Rights Act 1990 and the Health and Disability Commissioner Act 1994 BETWEEN SHIRLEY MARGARET PEWHAIRANGI Plaintiff AND THE MINISTRY OF HEALTH Defendant Hearing: 11 March 2008 (Heard at Rotorua) Appearances: No appearance for plaintiff Ms Hansen for defendant Judgment: 11 March 2008ORAL JUDGMENT OF ASSOCIATE JUDGE DOOGUECrown Law Office, P O Box 2858, Wellington Mrs S Pewhairangi, P O Box 6174, Brookfield, Tauranga[1] The defendant has filed an application for security for costs which is scheduled to be heard before me today. Mrs Pewhairangi has not appeared today. She sent a fax to the Registry saying that she would not take part in the hearing of the application. The grounds that she gave for that were that she had an appeal to the Court of Appeal against an earlier judgment of mine given 7 August 2007. That judgment was given on the defendant's application to strike out. The defendant was partly successful in that application in that I struck out the plaintiff's claim for compensatory damages leaving only the claim for exemplary damages as the extent claimed for relief. [2] Even if the existence of an appeal had anything to do with the present application, it needs to be noted that the appeal that the plaintiff filed has apparently lapsed in any case. Ms Hansen has advised that enquiries made with the Court of Appeal indicate that the security for costs of the appeal was not provided. [3] I conclude that there is no good reason why Ms Pewhairangi should not have appeared before me today, she has had the opportunity to do so. I have resolved to proceed with hearing the application in her absence. [4] The application is made pursuant to r 60 which provides that where the Court is satisfied on the application of a defendant that there is reason to believe that a plaintiff will be unable to pay the costs of the defendant if the plaintiff is unsuccessful in the plaintiff's proceeding, the Court may, if it thinks fit in all the circumstances, order the giving of security for costs. [5] The first enquiry therefore must be as to what is known about Mrs Pewhairangi's financial situation. In an affidavit given by Leanne Margaret Pearson, dated 31 July 2006, the deponent states that she has caused checks to be made concerning Mrs Pewhairangi through credit data bases and also by means of a Landonline search. The results are that Mrs Pewhairangi does not appear to own any property.[6] Mrs Pewhairangi has not responded to the affidavit of Ms Pearson. [7] In these circumstances Ms Hansen, for the defendant, invited me to have regard to what Rodney Hansen J said in the case of Goston v Jamieson & Tenancy Tribunal, HC AK M815-SW00 22 March 2001, which was also a case where the defendants sought security for costs. In the judgment at [12] the following passage appears:The defendants have necessarily drawn on public records and the Jamiesons' personal dealings with the plaintiff in order to provide a picture of the plaintiffs' financial position. That evidence establishes, at least prima facie,that the plaintiffs have no assets and at least one substantial liability. That impression has not been countered by the affidavit of Mr Goston. He has challenged many factual matters of detail but appears deliberately to have avoided giving any substantial information about he (sic) and his wife's financial position. There is nothing to displace the inference that they have little in the way of assets and have at least one substantial creditor who has commenced bankruptcy proceedings. This is clearly a case in which I am entitled to draw an adverse inference from the absence of any detailed information from the plaintiffs[8] I asked Ms Hansen what costs award would be likely to be made in the event that the plaintiff was unsuccessful. Ms Hansen submits, and I have no reason to discount, that the costs of a one-week hearing on a 2B basis would be some $36,000 excluding disbursements, while with a two-week hearing costs would rise to $60,000. [9] Given an apparent complete absence of assets on the part of the plaintiff, it seems to me that the threshold test posed by r 60 has been satisfied in this application. I consider that there is reason to believe that the plaintiff would not be able to pay an order for costs that lies in the range $30 – 60,000. [10] I will now go on and consider other matters that have relevance to whether I should order security. [11] Ms Hansen made submissions to me on the strength of the plaintiff's case. I have an advantage in this application in that I have already made an assessment of the merits of the plaintiff's case in an earlier strike out judgment. I do not regard it as being a strong case. In fact it is a weak case.[12] Essentially the plaintiff claims damages arising from her contraction of type C Hepatitis as a result of receiving a blood transfusion whilst being treated in the Gisborne Hospital in 1985. She bases her present claim on the proposition that the defendant ought to have taken steps to provide for surrogate blood testing to be available. Had that been done, she asserts, she would not have suffered the damage that she did to her health through contracting type C Hepatitis. [13] In my judgment of 7 August 2007, I attempted to analyse just what the allegations by the plaintiff amounted to. One of the problems that emerged on that analysis being made was that there was a considerable lack of clarity in the plaintiff's claim concerning what authority, if any she says that the defendant had with regard to the services offered at the Gisborne Hospital in 1985. The hospital was then under the governance of an area health board. The defendant was not in any sense operationally involved in the running of the hospital. The defendant was a funding body only. [14] What Mrs Pewhairangi's claim seems to reduce to is that the defendant in discharging its statutory responsibilities ought to have provided funding for and procured routine surrogate blood testing at the Gisborne Hospital at the relevant time. That would have meant that blood that was to be used for transfusions would be tested before being so used. [15] Its necessary to note further background factual material which was raised in the affidavits of two experts earlier filed in the proceeding: those of Doctors Faed and Woodfield. The factual position – very much simplified – is that these two experts who were eminent in the area of blood transfusions generally considered the question of whether surrogate testing of the kind referred to by the plaintiff was a practical reality in 1985 and considered if a case could be made for introducing it back then. Their conclusions were that the blood testing procedures then available were indicative only with a low level of certainty. They also concluded that the introduction of such surrogate testing would come at a considerable price to the blood collecting activities carried on by transfusion services in New Zealand. The evidence established that even if such services had been available there was only a39% chance that contamination of the kind which has caused such unfortunate loss to the plaintiff could have been detected. [16] Against that background I remain of the view that the plaintiff's claim is a weak one - first as to whether there is a duty of care on the part of the defendant and second whether she would be able to established at trial that any breach of that duty caused her loss. I accept Ms Hansen's submission that she has repeated to me today that the defendant had a statutory power to take steps to prevent the spread of infectious diseases for members of the public generally, but, she submitted, and I accept:Any implied power to make a policy decision to fund a procedure such as surrogate testing is vested in the Department for the benefit of the general public. This factor strongly negates proximity. A legislative grant of power to protect the general public does not ordinarily give rise to a duty owed to an individual or to members of a particular class: Graham Barclay Oysters PTY Limited & Anor v Ryan & Others Commonwealth Law Reports (2002) 211 CLR 540.[17] As well, another factor militated against the finding of a duty of care as I found in my judgment at paragraph [67] the question of whether money and resources should have been devoted to financing surrogate testing of this kind was very much a matter of making a judgment about priorities that would include assessing the practicality of the testing, and its cost-effectiveness. Other matters of competing priorities for health funding that also have to be relevant in these areas of policy. In my view, it would be unlikely that the Court would intrude into those areas. Therefore, the prospects of establishing a duty of care which was breached seem to be low as well. [18] Given the 39% accuracy figure that I have already mentioned earlier in my judgment, I think Ms Hansen is also correct when she says it is unlikely that the plaintiff would establish on the balance of probabilities that any breach of duty caused her loss. [19] There are further problems with the type of relief sought which is an award of exemplary damages. Before there can be award there must be:Some conscious creation of, or persistence in, an unsafe system knowing that there is a substantial risk of harm to the plaintiff or someone in his position:Attorney General v Gilbert [2002] 2 NZLR 342.[20] The question of whether surrogate testing should have been introduced as long ago as 1985 was a matter that was considered by those with expertise in the field and by means of consultation, the defendant. Given the low levels of the apparent risk of post-transmission Hepatitis C being caused and given that there were good reasons why such a system should not be introduced it seems most unlikely to me that there would be any grounds for awarding exemplary damages in this case. There has just not been the outrageous conduct deserving of punishment which is the platform on which awards of exemplary damages are based. [21] Ms Hansen also raised for my consideration the fact that any award of exemplary damages would be a modest one. While I agree that that observation is correct – and I expressly adopted it in my earlier judgment – I do not see that as having more than a peripheral relevance to the question of whether an order of security for costs would be made. [22] Two of the major factors that the Court has to take into account when making a judgment on an application of this kind is balancing the right of the defendant to be indemnified against the considerable financial cost that can be caused to it by a claim, against the right of the plaintiff to bring the claim. The Courts have to be alert to ensure that there is no unjustified restriction on access of persons in the position of the plaintiff to the Courts to bring cases. That balancing exercise will assist a decision an order for security for costs will be made and, if so, the extent of that order. [23] I am satisfied that in all the circumstances here an order is required. [24] The defendant submits that the appropriate quantum of any order should be $20,000. Having regard to the effect that an award of any security for costs must have on the plaintiffs prospects of continuing with the case, and at the same time not losing sight of the extent of the costs that the defendant will incur in defending this proceeding, I consider that the $20,000 suggested represents a satisfactory balance. Itherefore direct that the plaintiff is to provide security for costs in the sum of $20,000 with $10,000 to be provided within 28 days of this judgment and the balance to be paid at the point where the proceeding is set down for trial. In the meantime I make an order that the plaintiff's claim is stayed until the security has been provided. [25] Ms Hansen for the defendant does not seek costs on the present application so no order will be made. _____________ J.P. Doogue Associate Judge