High Court limits the availability of exemplary damages

The Taylor v Roper [2025] NZHC 30 (30 January 2025) decision confirms the legal position in New Zealand with respect to whether there is jurisdiction to award exemplary damages in cases of vicarious liability. The court held that no such power exists, except in the case of an unidentified culprit, which was not the case with Roper.

Vicarious Liability

Vicarious liability is a legal concept that assigns liability to one party, for the actions of another, third party. In business and in other contexts, vicarious liability often arises in an employer-employee or principal-agent relationship, where the employer or principal can be held liable for the wrongful actions of their employee or agent.

Exemplary damages

As the court in Taylor v Roper stated: “Exemplary damages are in a different category to those routinely sought in a civil claim. Rather than compensating for harm suffered, they are aimed at punishing a wrongdoer for outrageous conduct and deterring the wrongdoer and others from acting in the same way. Words like “contumelious”, “high-handed”, “oppressive” and “wilful” are used to describe the sort of conduct which attracts an award of exemplary damages.”

Taylor v Roper & Attorney-General

The case arose out of sexual abuse and false imprisonment Ms Taylor endured at the hands of former sergeant Robert Roper during their period of service in the Royal New Zealand Air Force (RNZAF) in the 1980s. An earlier round of litigation found that Ms Taylor’s claim for compensation could not proceed because it was barred by the Accident Compensation Act 2001 (ACC Act).

That left her claim for non-compensatory (exemplary) damages, which she sought from the RNZAF. That claim, however, faced a legal pincer movement of sorts: on the one hand, in a 2003 case called S v Attorney-General, the Court of Appeal held that exemplary damages are generally not available in a case of vicarious liability.

Then, on the other hand, in a 2020 case called Attorney-General v Strathboss Kiwifruit Ltd, the Court of Appeal held the effect of s 6 of the Crown Proceedings Act 1950 (CPA) was that the Crown (RNZAF) can only be held vicariously liable for a tort (civil wrong). It cannot be held directly liable.

As the court said: “That may seem very unfair in these circumstances, but, as the Court of Appeal said [in Strathboss], the law in this area is a matter for Parliament to change if it sees fit.”

It noted that the court in S had recognised the “unidentified culprit” exception but that did not apply on the facts because Roper had been identified as the wrongdoer. And her claim against him was discontinued, for reasons that are not clear from the judgment.

Test for exemplary damages

The court also made some interesting comments about the extent to which there is jurisdiction to award exemplary damages in cases of non-intentional wrongdoing. The test requires evidence of outrageous subjective recklessness: Couch v Attorney-General (No. 2) (New Zealand Supreme Court, 2010).

Applying that test here, the court noted there were factual findings in the earlier round of litigation which made it very difficult for Ms Taylor. In short, there was insufficient evidence to prove she had complained to her superiors about Roper’s conduct or that senior officers knew about his nicknames, such as “Rocky Roper” and “the backscratcher”. The court noted there was evidence that might be enough to show RNZAF was aware of the risks posed by Roper to young women more generally.

But that was not enough for exemplary damages, for which Ms Taylor would still need to show that the RNZAF deliberately ran the risks Roper posed, and acted so outrageously that it deserves to be punished. The court also put weight on the fact that it was 30 years since Roper’s heinous conduct towards Ms Taylor. Therefore, an award would have little if any deterrent effect.

Comment

The court had sympathy for Ms Taylor and cited scathing criticism of Crown immunity under the CPA, a “despotic privilege” according to one commentator, however the claim had to be dismissed.

By Laura Howell and Partner Stuart Dalzell.