Exemplary damages remain a difficult remedy for plaintiffs to achieve in New Zealand. In the long running Taylor v Roper litigation, the High Court has confirmed the high threshold that must be reached before exemplary damages will be awarded, and that exemplary damages will not usually be awarded against a vicariously liable defendant.

The Claim

Ms Taylor claimed the Royal New Zealand Air Force (RNZAF) was vicariously and directly liable to her for sexual abuse and false imprisonment committed by Sergeant Robert Roper between 1984 to 1988, whilst they were both serving in the Air Force. At trial, the High Court found Mr Roper had subjected Ms Taylor to the abuse, but it was not proven she had complained to the RNZAF about the abuse at the time. Following appeals on limitation and the application of the ACC Act, Ms Taylor’s claim for exemplary damages was remitted to the High Court for determination.

Ms Taylor sought an award of $400,000 against the RNZAF on the basis that it was both vicariously liable for Mr Roper’s wrongs and directly liable to her because his actions were directly attributable to the RNZAF. She also claimed the RNZAF was liable in negligence for failing to keep her safe, act on complaints, and prevent Mr Roper’s continued abuse.

Compensatory Damages | Exemplary Damages

Compensatory damages focus on restoring the loss or harm suffered by the plaintiff. In New Zealand, the ACC Act bars plaintiffs from claiming compensatory damages in personal injury cases. However, such plaintiffs in Ms Taylor’s position may still claim exemplary damages.

Exemplary damages are not about compensation. Rather, they focus on punishing the wrongdoer for their egregious conduct. Exemplary damages serve a broader public purpose, aiming to punish the wrongdoer and deter others from engaging in similar behavior. For this reason, a high threshold must be reached before the Court will award exemplary damages. Negligence or even gross negligence by the defendant is not enough. The defendant’s actions must be intentional and outrageous, or constitute subjective and outrageous recklessness.

The Courts have made it clear that exemplary damages cannot be used to circumvent the ACC Act bar and are not a substitute for compensatory damages. As Ms Taylor found out, claiming exemplary damages from a person who is not directly involved in the wrongdoing will always be very difficult.

No exemplary damages against a vicariously liable defendant

The High Court rejected Ms Taylor’s claim that the RNZAF should pay her exemplary damages because of its vicarious liability to her for Mr Roper’s wrongs. In doing so it was following existing Court of Appeal authority that exemplary damages are not typically available in cases of vicarious liability. Awarding exemplary damages against a person who did not commit the egregious conduct is wrong in principle as it punishes the wrong person. In this case, it was Mr Roper’s actions that called for punishment, denunciation and deterrence. Punishing the RNZAF for Mr Roper’s wrongs would not meet the purpose of exemplary damages.

High threshold for exemplary damages not met

When considering Ms Taylor’s direct claim in negligence against the RNZAF, the High Court followed Couch v Attorney-General (No 2) [2010] NZSC 27, in which the Supreme Court held exemplary damages in negligence cases require proof of intentional and outrageous conduct or subjective recklessness.

Edwards J distinguished between subjective and objective recklessness. Subjective recklessness requires a conscious appreciation of the risk of harm and a deliberate decision to take that risk anyway. Objective recklessness occurs where a person fails to appreciate an obvious risk of harm and proceeds in a negligent manner. The Supreme Court in Couch made it clear that only subjective recklessness, which is both deliberate and outrageous, can justify an award of exemplary damages. 

In this case, the evidence did not establish that the RNZAF was subjectively reckless. It had not been proven that the RNZAF consciously and deliberately exposed Ms Taylor to harm or acted in a way that was sufficiently outrageous to justify an award of exemplary damages.

Comment

Although in the context of exemplary damages, Edwards J’s discussion about the difference between subjective and objective recklessness may also be useful in other contexts.

The issue of exemplary damages will be increasingly important as more abuse survivors seek legal remedies against the institutions that cared for them, particularly if the proposed redress scheme is delayed or has limitations. Taylor v Roper reinforces important legal principles as to exemplary damages and vicarious liability in such claims. It confirms that:

  • Exemplary damages are not usually available for vicarious liability.
  • An award of exemplary damages for negligence requires proof of subjective recklessness or intentional and outrageous conduct.
  • Exemplary damages are not a substitute for compensatory damages.
  • Awards for exemplary damages will be rare.

If you would like to know more about the issues discussed in this article, please contact Kiri Harkess, Kylie Hudson or Sakshi Gulati.

  1. Roper v Taylor [2023] NZSC 49, [2023] 1 NZLR 1.
  2. Couch v Attorney General (No 2) [2010] NZSC 27 at [102] and [179].
  3. S v Attorney-General [2003] 3 NZLR 450 (CA).

This publication is intended as a general overview and discussion of the content dealt with. It should not be used in any specific situation, in which case you should seek specific legal advice.