Contents

Chapter 3
Tort law and Crown liability

Proposed direct liability in tort

Introduction

3.2For the most part, section 6(1) of the Crown Proceedings Act 1950 makes the Crown liable only vicariously for the actions of its officers or servants. This contrasts with the position under the previous New Zealand statutes, which appeared to make the Crown directly liable.

Other jurisdictionsTop

3.3On this point the 1950 Act follows the 1947 United Kingdom model. In drafting the 1947 Act, the United Kingdom law drafters rejected the recommendation of the Hewart Committee that would have imposed direct liability on the Crown for torts as well as contracts.14
3.4The 1947 United Kingdom model continues to govern Crown proceedings in most Canadian provinces. However, Australian states along with British Columbia recognise direct liability of the Crown. The Crown Proceedings Act 1988 (NSW) provides:15
(1) Any person, having or deeming himself, herself or itself to have any just claim or demand whatever against the Crown (not being a claim or demand against a statutory corporation representing the Crown) may bring civil proceedings against the Crown under the title “State of New South Wales” in any competent court.
(2) Civil proceedings against the Crown shall be commenced in the same way, and the proceedings and rights of the parties in the case shall as nearly as possible be the same, and judgment and costs shall follow or may be awarded on either side, and shall bear interest, as in an ordinary case between subject and subject.
3.5The New South Wales Act defines “civil proceedings” in this way:16

civil proceedings includes civil proceedings at law or in equity, and also includes proceedings by way of preliminary discovery, cross-claim, counterclaim, cross-action, set-off, third-party claim and interpleader.

3.6The British Columbian Crown Proceedings Act enacts direct liability in an even more economical way:17

the government is subject to all the liabilities to which it would be liable if it were a person.

Arguments for and against direct liabilityTop

3.7In many cases, the distinction between whether the Crown is directly liable, or vicariously liable, is not material to the outcome. What counts is that the Crown is liable for torts committed by its employees. The difficulty comes when there is no particular officer or servant who has committed a tort, but rather what is alleged is that the government department as a whole has failed, or a number of government departments have collectively failed.

3.8 Couch v Attorney-General (Couch) revealed some of the conceptual difficulties that arise when there is an allegation of systemic failure.18 Professor Stuart Anderson makes the point that Couch arguably suggests that New Zealand lawyers and judges are in effect working around the difficulties caused by the Crown Proceedings Act model by conducting the case as if institutional liability were possible. Professor Anderson then continues:19

It looks plausible to them because departments function as though they are legal persons, the more so since the State Sector Act gave them chief executives along business lines … There is no virtue in a statutory rule that judges and crown counsel conspire to evade, but which remains a trump card should the crown wish to play it. The statutory limitation of torts liability to vicarious liability is an embarrassment to our law, and a distortion of it. It has no principled justification, and it never has had. It is the result of accidents of English history. It was brought into New Zealand law that by then had its limitations, but was a rule based on principle.

3.9Professor Anderson suggested that a better way of resolving the issue would be to give departments sufficient legal personality to be sued by adopting a formula based on the Australian legislation.20
3.10Direct liability in tort is premised on a legal person having committed, or omitted to do, a particular act. As the Crown has no legal personality and can only act through its servants, it cannot, under this logic, commit a tort. The reason that the United Kingdom drafters rejected direct, as opposed to vicarious, tort liability was that they believed direct liability was not conceptually possible. Sir Thomas Barnes, the English Treasury Solicitor, explained in a 1948 article:21

Section 2 [the equivalent of section 6], probably the most important section in the Act, imposes upon the Crown for the first time liability in respect of tort. On this point it is essential to appreciate that, although it is possible and indeed proper in a very large part of the field covered by the activities of the Crown to draw an analogy between those activities and those of private enterprise, there are certain necessary functions of Government where no analogy exists. For instance, no private person has a duty to maintain Armed Forces or to undertake the many activities which must be undertaken by the Crown in discharging this duty to defend the Realm. Furthermore, the servant of a private person is appointed by the mere will of his employer, whereas in the case of a Crown servant the appointment may be made by an officer of the State and his duties may be controlled by statute. The legal consequences which follow from these facts were stated in the judgment of Chief Justice Earle in the case of Tobin. It was consequentially impossible for the Act to deal with the question of tort by the summary and attractive method of merely enacting that the Crown should be liable to be sued in tort. Section 2 therefore sets out three classes of the wrongs which it is thought completely cover, possibly with some overlapping, all that is required.

3.11Some force remains to this argument. However, direct liability has been recognised in the states of Australia and in British Columbia, seemingly without the difficulties that this objection might have foretold. As Professor Anderson has observed in relation to the functioning of the Australian legislation:22

Australian experience shows that the procedural difficulties that were put forward as an obstacle in New Zealand in 1950 are illusory, and that such a provision does not predetermine what the extent of crown liability should be—that is a matter for judges to determine on ordinary principles of tort law, as they do in disputes solely between citizens.

3.12Moreover, since 2002, Crown organisations (including departments) that are not bodies corporate have been recognised as having sufficient personality to be prosecuted under the Resource Management Act 1991, the Health and Safety in Employment Act 1992 and the Building Act 2004.23

3.13There has also been no problem with recognising that the Crown itself can breach contracts or trustee duties in section 3(2)(a) of the current Crown Proceedings Act. Indeed section 6(1)(b) contemplates direct liability for breaches of duties owed as an employer and section 6(1)(c) contemplates direct liability for breaches of common law duties relating to the ownership, possession or control of property.

3.14The Ontario Law Reform Commission advocated for a transition to direct liability following the United Kingdom model, but the recommendation was not enacted.24
3.15In 1976 the New South Wales Law Reform Commission firmly rejected the suggestion that the State ought to adopt the United Kingdom model and recommended the retention of direct liability. The Commission was scathing in making its recommendations:25

Section 2 [of the United Kingdom Crown Proceedings Act] deals with the liability of the Crown in tort. It is fair comment upon the section that “in view of the barrage of criticism that has been directed against the maxim that ‘the King can do no wrong’, it might have been expected that the Crown Proceedings Act would abolish this maxim. This, however, the Act does not altogether do. There is no section of the Act, stating generally that the Crown shall be liable in tort. Indeed the general principle is left but very wide exceptions are carved out of it” [Glanville Williams Crown Proceedings (1948) at 28]. In comparison with the Claims against the Government Act, the United Kingdom legislation is complex and restrictive of the judicial role. The long Australian experience is that counsels of prudence do not require such complexity or restriction in New South Wales. We recommend against the adoption of the United Kingdom legislation.

3.16It might be said that that this conceptual difficulty is compounded in New Zealand by the way in which statutory duties are often not placed on a department, or the Crown in general, but on particular servants or officers. For example, in the Couch litigation, the relevant statutory duties were not on the probation service or the Department of Corrections but on a probation officer.26 There may be important reasons why obligations ought to be placed on a particular officer, as opposed to those obligations being fulfilled by a department. Such drafting may help define where the relevant accountability for the performance of an obligation lies within a department. The need to have a basis for internal accountability does not, however, necessarily answer the question of who ought to provide compensation when a particular duty is not fulfilled.

Approach in our draft BillTop

3.17Our draft Bill simply states that the Crown can sue and be sued as another person can be, and therefore does not determine the degree to which the Crown might be held to be directly liable in tort.

14Crown Proceedings Committee Report (1927) Cmd 2834 [Hewart Committee].
15Crown Proceedings Act 1988 (NSW), s 5. Compare also Crown Proceedings Act (Vic), s 22:
(1) Every proceeding which may be taken by or against the Crown under this Part shall be taken in the court which would have jurisdiction if the proceeding were between subject and subject.
(2) Every proceeding under this Part shall be taken by or against the Crown under the title of the “State of Victoria” and shall be instituted and proceeded with in accordance with any procedure of the court specifically applicable thereto or, if no procedure is specifically applicable thereto, as nearly as possible in accordance with the procedure applicable to proceedings between subject and subject.
16Crown Proceedings Act 1988 (NSW), s 3.
17Crown Proceedings Act RSBC 1996 c 89, s 3(c).
18See for instance the discussion in Geoff McLay “The New Zealand Supreme Court, the Couch case and the future of governmental liability” (2009) 17 Torts Law Journal 77.
19Stuart Anderson “‘Grave Injustice’, ‘despotic privilege’: the insecure foundations of crown liability for torts in New Zealand” (2009) 12 Otago L Rev 1 at 21.
20At 21.
21Thomas Barnes “The Crown Proceedings Act” (1948) 26 Can Bar Rev 387 at 390.
22Anderson, above n 19, at 21.
23Crown Organisations (Criminal Liability) Act 2002, s 6.
24Ontario Law Reform Commission Report on the Liability of the Crown (OLRC, Toronto, 1989) at 25–26.
25New South Wales Law Reform Commission Proceedings By and Against the Crown (LRC24, 1975) at [4.7].
26See Criminal Justice Act 1985, s 125 (now repealed).