Case Law & Appeal Decisions
An ACC appeal decisions database is available through the New Zealand Legal Information Institute (NZLII). The database is a joint project of the University of Otago Faculty of Law, University of Canterbury and the Australasian Legal Information Institute (AustLII), with the assistance of the Law School, Victoria University of Wellington. The database is available on the NZLII website.
On this page (below) there are Court Cases and legislation that have been referred to or used in ACC reviews. The case law information is grouped by injury type, and notes the legal statute that applies to each injury type. There are also summaries from the Judge's decision in each case. This may be useful if you are looking for information about a particular law or injury. You can also use the search function at the top of the page to look for specific words or phrases.
Please note that these cases may not be the most recent nor relevant to your particular situation. They are intended as a guide only.
Injury
Treatment
Compensation
Vocational Independence
Entitlement
Out of Time Issues
Payments and Costs
* Please note the legislation that is referenced here is the Injury Prevention, Rehabilitation, and Compensation Act 2001. If your injury happened before 2001 or you were granted cover before the 2001 Act came into place, you may need to look at earlier legislation.
Injury
Personal injury
Personal injury caused by accident
Work-related personal injury
Work-related gradual process injury
Other Issues
Medical misadventure
Treatment injury
Mental injury
Overseas personal injury
PERSONAL INJURY
Legislation - Sections 20 and 26
Definition of physical injury
The Courts accept the dictionary definition of “physical” and “injury.” In Teen (244/02) Judge Beattie stated:
“Physical in this context I find to be in accordance with the dictionary meaning “of or relating to the body as distinguished from the mind or spirit”. (Using the definition of physical injury in line with the natural and ordinary meaning it must therefore involve) physical damage or hurt, that is bodily harm or damage.”
Pain alone is not a physical injury
• There needs to be evidence, at the time of the alleged injury, of a discrete physical injury. Pain alone is not sufficient evidence of a physical injury: See Teen(supra) and Mura (133/03).
• Further cases are discussed in the ‘Work-Related Gradual Process’ chapter.
Swelling
Jurczak (323/06): Judge Cadenhead discussed the contrasting approaches on the question of whether swelling was a physical injury.
"[40] It is necessary to deal with the decisions of Baker (86/02) and Govind (310/02), which were cases where there was some overt signs of swelling and on the facts of those cases an appeal was allowed. However, there are other cases such as Jones (242/02) and Pine (195/02), which held despite some slight overt evidence of swelling taken as a whole the weight of the medical evidence favoured the view that there was no objective evidence of a discrete physical injury being caused by a gradual process, and in turn causing a chronic pain syndrome.
[41] These contrasting cases show that at the margins of liability careful analysis of all the medical evidence is required."
The judge found on the facts that the appellant’s swelling was a symptom rather than an injury:
“Isolated references to swelling and carpal tunnel symptoms do not demonstrate the necessary degree of probability that a physical injury was suffered. Swelling is a description of a symptom, rather than a diagnosis of a discrete identified physical injury.”
Injury at a microscopic level not personal injury
Henderson (77/06): Judge Ongley commented on physician, Dr Hancock’s opinion that work-related OOS can precipitate a non-recovery pain process with injury occurring at a microscopic level:
“The concept of injury at a microscopic level has not been accepted as meeting the definition of a personal injury for ACC cover; see Judge Beattie in Teen (144/02) and also Wild J refusing special leave to appeal in Teen v ARCIC (High Court, Wellington, CIV 2003 485 1478, 11 November 2003). One reason for that is that there is no scientific research available to distinguish between a microscopic alteration of tissue as an injury process or as a process of disease or a consequence of mental and physical stress. While the distinction may seem artificial to persons experiencing pain following physical stress at work, it is one that has to be drawn in order to apply the legislation.”
Precise label for the injury not required
Te Puna (117/99): the Court said:
“the onus on the appellant is simply to establish that he is presently suffering from injury arising from accident and that it is not necessary that the appellant be able to determine or label the precise nature of that injury providing that the effects of it can be seen and are manifest.”
Drug dependency
Geraets (113/02): Judge Beattie stated:
“… drug dependency is prima facie not a physical injury and this Court is on record as stating so in decisions in relation to cannabis dependency.”
See also Suddaby (145/03), where the Court confirmed that the mere fact of drug dependency was not, of itself, a personal injury.
Ruffel (43/06): a claim for medical misadventure. The appellant claimed that he suffered a physical injury as a consequence of his dependency/addiction to the Benzodiazepines prescribed to him by Dr McCallum, psychiatrist. He also claimed that his withdrawal from that dependency constituted personal injury.
Judge Beattie accepted that physiological symptoms can be evidence of physical injury. He found that the evidence established that the appellant’s dependence on Benzodiazepines was a physiological dependence. Hence, the Benzodiazepine dependency did amount to a personal injury. However, the post-withdrawal condition was not a physical injury.
On the question of medical error, the Court found that there was no error as the evidence established that the prescription was appropriate in the particular circumstances. Therefore, the appeal was dismissed.
Conditions that have been accepted as personal injury
• Occupational asthma: Davy (91/06).
• Irritant dermatitis: Copson (63/03).
• Allergic response to the fumes of mushroom compost: ACC v Doyle (77/02).
• Solvent neurotoxicity: Primary Producers Co-op Soc (265/99).
• HIV: Estate of N v ARCIC (10/8/95, Heron and Doogue JJ, HC Wellington AP127/94).
Natural use of teeth
McCardle (74/06): The appellant damaged his tooth while eating a ham roll. He alleged that the damage was caused by a foreign object in the roll. Judge Beattie was not satisfied from the evidence that the object was a foreign body, as opposed to being a piece of bone or gristle from the ham. The judge also rejected ACC’s suggestion that cover could be granted if the object chewed was a foreign object.
In dismissing the appeal, Judge Beattie applied the principles in the High Court decision in Partner (Auckland High Court, 180/93, Blanchard J). He also referred to the District Court decisions in Moulder (34/97) and Brumby (87/97). The Judge stated:
“[17] I consider the wording “caused by the natural use” to be significant and that phrase clearly denotes that damage to teeth whilst chewing in the usual way is to be excluded. Damage from normal mastication is excluded.
[18] Clearly damage to teeth caused by impact with some external object from outside the mouth would be covered, such as if teeth were damaged by a blow to the face, either accidentally or purposely applied. Similarly if the teeth are being used in an unusual way, say as a third hand for holding or gripping an object.
[25] As I have stated earlier, the appellant was engaged in the natural use of his teeth when the damage was done and I find that it was the intention of the Legislature that damage done to teeth during normal mastication was to be excluded from cover under the Act. That is the point which Justice Blanchard considered was clarified by the changed phraseology in the 1992 Act and which has continued with its successors.
[26] I do not see that the “foreign object”, whatever it may have been, is in a different category than the foreign object believed to have been a piece of bone in Mrs Partner’s pie. I therefore find that, as a matter of fact and law, the appellant does not have an entitlement to cover in the circumstances under which he suffered damage to his tooth.”
Failed sterilisation/ unwanted pregnancy
• DK v ARCIC [1995] NZAR 529: confirmed that pregnancy and a subsequent abortion from a failed sterilisation operation did not constitute a personal injury.
• However, in the Court of Appeal decision in Harrild v Director of Proceedings [2003] 3 NZLR 289 (CA) a majority of the Court of Appeal held that an injury to the foetus is also an injury to the mother.
• Harrild (supra) also confirms the established position that where a child is born alive after suffering ante-natal injuries, the child is then considered a person and entitled to claim compensation.
• D (255/05): Judge Cadenhead held that an unwanted pregnancy through failure of a surgical procedure (tubal ligation) can be a personal injury. On appeal to the High Court, Justice Mallon in ACC v D (CIV 2005-485-765, Wellington, 16/05/07) held that “pregnancy” is capable of being described as a “physical injury” and was therefore a “personal injury” under the 2001 Act.
Progression of disease through failure of medical treatment
• Personal injury can include the progression of a disease to a stage that it would not have reached had the condition been diagnosed and proper treatment been given. For example, the spread of cancer in Wilson (102/05).
• However, in Versey (175/05) Judge Beattie held that there was no personal injury as the progression of the disease would not have been altered by any earlier treatment. This approach was followed in Lewes (221/06).
• Blackford (200/06): the appellant claimed that she had suffered anaemia from the administration of a drug during an operation, which had led to fatigue. The Court held this was not a personal injury as it was a fleeting condition of the administration of the drug.
PERSONAL INJURY CAUSED BY ACCIDENT
Legislation - Sections 20, 25 and 26
Elementary requirement for cover
• Wakenshaw (HC Auckland CIV2003-404-000021): Priestley J stated:-
“It is trite law that there must be a nexus between a personal injury by accident and a claimant’s condition or situation before there is an entitlement to cover. That elementary requirement is central to the scheme of the Act and, importantly, is the underlying policy of the Act.”
Section 25(1)(a): specific event or series of events
• Section 25(1)(a) [as amended, from 1 July 2005] states that an accident means a specific event or series of events, other than a gradual process, that:
(i) involves the application of a force (including gravity), or resistance, external to the human body; or
(ii) involves the sudden movement of the body to avoid such a force, or resistance, external to the human body; or
(iii) involves a twisting movement of the body.
Difference between series of events and gradual process
• Miller- Helu (30/05): Judge Ongley referred to the NZ Court of Appeal decision in ACC v E [1992] 2 NZLR 426, at pp 432-433, where it was noted:
“It will be a matter of fact and degree in any case as to whether an occurrence not confined to a short time can be said to constitute an accident (or series of accidents) rather than a process.”
• Milne (221/04): Judge Cadenhead discussed the distinction between gradual process and series of events. He referred to his comments on gradual process in F (74/04) as follows:
“The word “process” was considered by the House of Lords in Nurse v Morganite Crucible Ltd [1989] 1 All ER 113, in the context if the Asbestos Regulations 1969, when it was held that the word “process” used in its broad sense meant any operation or series of operations of more than minimal duration, which had some degree of continuity or repetition of a series of acts. The word “gradual” imports a narrower view and connotes some kind of continuous activity.”
He stated that “the words series of events connote that the events have an interdependence.” He went on to reason that the event (force external to the human body) would generally be apparent and there would normally be knowledge of how and when the event took place.
On the facts of Milne a series of events was not established. The appellant was unable to recall anything specifically causing his back problem and the symptoms started gradually.
Series of events
• Simm (33/05): Passive smoking is not a series of events. Passive smoking is also statutorily excluded from cover. Leave to appeal these points was granted: Simm (152/05).
• Newson (15/01): a theatre nurse was granted cover for a personal injury arising from a series of events. She changed from wearing one pair of plastic gloves in theatre to wearing two pairs. After a long day in surgery, she developed numbness and swelling in her right hand, with pins and needles. Her GP diagnosed carpal tunnel syndrome. Judge Middleton held that, due to the immediate onset of the problem on a specific date, the problem was a personal injury by a series of events; that, is the gripping performed during surgery, while wearing the tight gloves.
• Fitzsimmons (197/00): the appellant had spent about an hour digging and planting shrubs before driving home and sweeping the deck. She experienced pain in her back as she sat down after the sweeping. Judge Beattie held that the activities involved in digging and sweeping were a series of events, and that those activities would have involved considerable external force and resistance.
Application of external force or resistance
• Under s 25(1)(a)(i) the event or series of events must involve the application of an external force or resistance. Any external force or resistance, which can be identified as a cause of the injury, is sufficient, including gravity.
Cases where there was external force or resistance:
• Chaplow (321/06): bilateral foot pain following a treadmill exercise. The Court held that the act of walking was potentially a force or resistance external to the human body and under Section 25 of the Act, may constitute a series of events amounting to an accident.
• Shore (334/03): making the bed involving bending over, pulling the mattress up and back.
• Hodgson (53/00): “heel strike” while running resulted in an impact, and the action of running did involve force to the heel, which caused an injury.
• Fitzsimmons (197/00): digging holes, lifting dirt, and pulling roots all involve considerable external force and resistance.
• Hurunui (276/99): the effect of wearing heavy boots.
Cases where there was no external force or resistance
• Shan (124/04): bending over to inspect a car tyre, resulting in a back twinge.
• Bezzant (193/03): coughing was found to be an internal force.
• Biggart v HIH Workable LTD (290/00): the claimant leaned over a bed to turn on a bedside light. Both feet were on the floor and one hand was on the bed for support when the appellant felt pain in their left calf.
• Lovelace (264/00) a sneeze that caused a disc prolapse was an internally generated force.
Gravity as an external force or resistance
• Section 25(1) (a)(i) now specifically includes gravity within the definition of accident.
• Johnson (311/04): the appellant was sitting on a sofa when her pillow slipped and she injured her neck. Judge Beattie considered that an accident had occurred, as “the movement carried out involved a stretching and extension of the neck, whether or not this was caused by the loss of the supporting pillow or not.” He found that the forces of gravity did enter into the picture and that the incident involving the extension of the neck did involve gravity.
• Sonter (279/2006): the appellant suffered an epigastric hernia, which she claimed she suffered in the course of a strenuous work-out involving repetitive sit-ups. The Court dismissed the appeal on the ground that the hernia did not arise due to a specific traumatic event. The Court also discussed the effect of gravity, noting that where the abdominal muscles were being used to lift the weight of the upper body (as in the sit-up exercise), the weight of the upper body was experiencing the force of gravity.
Sudden movement of the body to avoid application of force
• Section 25(1)(a)(i) extends cover to include the sudden movement of the body to avoid a force or resistance external to the human body. A situation such as that in O’Regan (5/99), where a dairy farmer twisted her back when moving quickly to avoid being kicked by a cow, would now be covered.
Hernias
• For a claimant to have cover for an inguinal hernia he or she must come within the definition of personal injury by accident. The injury must be caused by a single external event involving a force or resistance, or a series of events, as opposed to a gradual onset over a period of time. It is not sufficient for the accident to merely cause the appearance of a pre-existing hernia.
• In Bryant (124/99), Mason (62/01) and Middleton – Echave (335/00) the District Court referred to criteria that had been promulgated by Dr GD Smith in a paper in a medical journal entitled “Inguinal Hernia and Single Strenuous Event”. As a result of that study, the authors of that paper suggested the following guidelines to help decide between genuine and doubtful cases.
Those guidelines are as follows:
1. An officially reported incident of muscle strain;
2. Severe groin pain at the time of the strain;
3. Diagnosis of an inguinal hernia by a doctor, preferably within three days of the muscle strain and certainly within 30 days;
4. No previous history of an inguinal hernia.
• As noted by Judge Cadenhead in Peneha (75/04), the guidelines are evidential guidelines only and do not have the force of law. The guidelines operate to assist in the assessment of whether or not the appellant can show, on a probability basis, that the hernia was caused by a traumatic incident. On the facts, Judge Cadenhead held that the failure to report the incident within a reasonable period of time was of significant evidential importance. The applicant was unsuccessful.
• Coory (108/04): Judge Cadenhead granted cover in circumstances where not all the guidelines were satisfied.
• Brock (240/04): Judge Cadenhead noted that whether or not a hernia has been caused by an accident is a medical issue that is often fraught with difficulties of diagnosis. The Smith criteria are a useful guide. In this difficult area of diagnosis, they provide pragmatic evidential guidelines for the Court on the issue of causation. In Brock Judge Cadenhead was not persuaded, on the balance of probabilities, that the hernia was caused by the rowing accident. He found that the evidence went no further than showing that the rowing incident was merely consistent with causing the hernia.
• PPCS Ltd (373/05): Judge Barber upheld the reviewer’s decision to reinstate cover to the claimant for an inguinal hernia, noting that the three month delay in consulting the doctor was not determinative. The Judge also stated that the hernia guidelines did not have the force of law.
• Elliott (57/06): Judge Beattie described the guidelines for claims involving inguinal hernia as a “practical evidential test.”
• In Cochrane [CIV 2003-485-2009] Miller J stated that at the end of the day, causation is a question for the Court. Temporal considerations may enter into it, as may issues of credibility, and these issues cannot be delegated to experts.
• Middleton – Echave (335/00): a fitness instructor spent two days in the water doing presentations involving substantial physical exertion. She was then ill due to food poisoning. The next day she noticed a small bulge on her abdomen. Some weeks later, she filed a claim for cover for two epigastric hernia. Judge Beattie held that if the initial bout of vomiting was all there was to the matter, then there could be no cover as the act of vomiting involves no external force or resistance. However, a short time before the vomiting, the appellant had been engaged in substantial physical exertion, the type of which could have caused a hernia. However, Judge Beattie dismissed the application on the grounds that guidelines 1 and 2 were not met, and that there was insufficient evidence to suggest that the hernias were a result of a single event or series or events in the water during those two days. However, Judge Beattie directed ACC to consider the claim as a work-related gradual process injury.
S 25(1)(b): inhalation or ingestion
• Under s 25(1)(b), an “accident” includes the inhalation or oral ingestion of any solid, liquid, gas, or foreign object on a specific occasion. However, in the absence of a criminal act, “accident” does not include the inhalation or ingestion of a virus, bacterium, protozoa, or fungus.
• Estate of TFF Lilo (64/96): a successful claim under the equivalent provision of the 1992 Act.
• Miller-Helu (30/05): an unsuccessful claim for cover for an anaphylactic reaction to a fungus over a two day period. Oral ingestion of fungi is excluded from the definition of accident.
Section 25(1)(c): burns or exposure
• Section 25(1)(c): an accident includes burns or exposure to radiation or rays, but does not include burns or exposure caused by exposure to the elements. The burn or exposure to radiation or rays must occur on a specific occasion. Rays of any kind are included. Sunburn, sunstroke, and hypothermia would seem to be excluded, except where s 25(1) (e) applies.
Section 25(1)(d): chemical absorption
• Section 25(1)(d): an accident caused by absorption of any chemical through the skin must occur within a defined period of time, not exceeding one month.
• Bell v ARCIC (53/95): cover was extended to a fire fighter who suffered a personal injury as a consequence of being soaked with chemicals when cleaning up after a fire.
• Sarten (2/04): the appellant did not establish that there was a link between any exposure to chemicals and his current health problems. The actual content of the chemical containers was never analysed.
Section 25(1)(e): exposure
• Under Section 25(1)(e), to constitute an accident, the exposure must occur within a defined period of time not exceeding one month, to:
(a) the elements;
(b) extremes of temperature; or
(c) the environment.
• It must also be shown that the exposure caused either a restriction or lack of ability to perform an activity within the range that is considered normal for a continuous period of more than one month, or death.
• Weston v ARCIC (47/94): The appellant was granted cover after suffering severe sunburn whilst on a skiing trip. The resulting scab came off less than a month after the burn. The appellant was a skier and a qualified sailing instructor. Both of these activities involved exposure to the sun and, owing to the sensitivity of the burn sites, the appellant was restricted in undertaking them. The resulting scar required make-up, which the appellant had not previously used to that extent. The Court held that in all the circumstances the appellant met the test of disability, and the disability had lasted for more than one month.
Section 25(3): no presumption
• Section 25(3) states that the fact that the person has suffered a personal injury is not of itself to be construed as an indication or presumption that it was caused by an accident.
• Anderson (26/05): Judge Cadenhead held that the appellant had not established that his spinal injury (T4 fracture) was caused by him accidentally striking his head on the scoop of a front-end loader in the course of his employment. The Judge left it open to the appellant to seek a further primary decision from ACC as to whether he had suffered his injury by accident.
• Following Judge Cadenhead’s decision, the appellant applied to ACC for cover for personal injury by accident (but not a work accident). ACC declined cover. On appeal, Judge Beattie held in Anderson (63/06) that he was eligible for cover. The Judge stated:
“[18] Having regard to the medical evidence, I find that the substance of it from all the specialists is that the most likely scenario is that of an incident of trauma and that incident would involve an external source of force.
[19] I find and rule that it is not necessary that an act of trauma which is found to be the probable cause be able to be identified, or even pin-pointed by date. Mr Hlavac’s submission that this latter detail was necessary for the purpose of consideration of entitlements, I find, is not a barrier, as it can certainly be the case that the notional date of injury can be the date when the injury was first identified as an injury.
[20] I agree with the submission of Mr Sara that the provisions of Section 28(4) [Section 25(3) of the 2001 Act] do no more than remove the presumption that the injury was caused by an accident. It does not mean that an accident cannot be inferred or found from other relevant and credible evidence.
[21] In the case of this appellant, I find that the medical evidence, which overwhelmingly points to this injury arising from a traumatic event, most likely a blow to the head, is sufficient for the purposes of establishing that the injury was caused by an accident, that is, an event involving an external force causing a blow to the appellant which brought about the fractured vertebrae.”
Legislation - Sections 28, 29 and 30
Onus
• Where an employer challenges an ACC decision that an injury was work-related, the onus is on ACC in the first instance to prove, on the balance of probabilities, that the claimant did suffer a work injury: South Pacific Tyres Ltd (5/97) and Suttons Logging Co Ltd (247/98).
• If ACC’s decision was based on adequate evidence and a correct assessment of the law, the onus shifts to the employer. The onus is then on the employer to show, on the balance of probabilities, that ACC’s decision was incorrect. (Suttons Logging Co Limited (supra).
Employer’s review rights
• ANZ Banking Group (NZ Ltd) (Webb) (302/04): Judge Beattie noted that an employer’s review rights were limited:
“[17] A person with the status of the appellant as an employer only has a limited right of review as set out in Section 134, being the right to review a decision that a claimant's injury was a work-related personal injury, and secondly as a levy payer, an employer can apply for a review of a determination under Section 209(1) or Section 236(1)".
• Section 134(3) prohibits an employer from reviewing a decision on entitlements provided to a claimant who has cover for a work-related personal injury.
Place of employment
• ACC v HIH Workable Ltd (Grace) (271/00): the claimant injured his leg when he was scratched by metal overhanging a rubbish bin. The injury occurred in his employer’s car park, while he was leaving work. The Court held that the injury was a work injury, and came within Section 32(1)(a) of the 1998 Act [now Section 28(1)(a)]. The Court noted that the employer’s car park was “a place to or through which” the claimant needed to move in order to depart the premises to go home.
• Woolyarns Ltd v ACC (Crawford) (271/06): Mr Crawford twisted his ankle on a footpath on a public road that separated his employer’s main premises from the staff carpark. He had finished work for the day and was leaving work to go home. Judge Ongley distinguished the Grace decision and found that Mr Crawford had not suffered a work-related personal injury. The reasons were that the public road was not a place of employment. Furthermore, Mr Crawford was not approaching his car for the purposes of employment, but for the purpose of returning home, which was not a work-related activity.
Breaks from work
• The question of whether a claimant has suffered a work-related personal injury where the claimant is having a break from work was considered in ACC v HIH Workable Limited (Ashford) (66/01), and QBE Workable v ACC (27/02).
• In the Ashford case, the claimant injured his ankle on a publicly owned grass area while on his lunch break. The grass area was beside the employer’s car park. The Court held that the injury was not work-related, since the claimant was not at his place of employment when he was injured. Furthermore, he was not there for the purpose of employment. The Court noted that the fact of employment and the activity must be considered when determining whether an injury is work-related.
The Court analysed the distinction between Section 32(1)(a) [now Section 28(1)(a)] and 32(1)(b) [now Section 28(1)(b)] of the 1998 Act:
“[13] To determine the issue in this appeal it is necessary to consider which of the relevant statutory provisions are applicable to the facts of this case. Section 32(1)(a), by its use of the words “any place” clearly establishes that injury can occur at a place other than the employer’s own premises but the limiting factor is that the person must be at that place for the purposes of his or her employment.
[14] If one applies that purpose of section 32(1)(a) to the facts in this case, I find it is clear that the circumstances of Mr Ashford’s injury cannot come within that definition in section 32(1)(a). He was not on the grass verge walking towards the lunch bar for the purposes of his employment. He was not engaged in an employment task or some activity connected with his employment.
[15] I consider the facts in this case highlight the distinction that exists between (a) and (b) of the definition in Section 32 and (b) expands the definition to include injury suffered when not engaged in an employment related activity, that is when specifically having a break from work for meal or rest or refreshment, but the limiting words in this definition are at his or her place of employment. That is it cannot be at any place whilst having the break from work for meal or rest or refreshment.
[16] Subsection (b) calls into consideration the definition of place of employment and again the definition for the purposes of this case must be limited to (b) in the definition as “being a place to which a person has access because of his or her employment.”
[17] In the light of that definition it would clearly be the case that Mr Ashford would have been at his place of employment if the injury had occurred whilst he walked out of the building itself through the employee car park and out of the driveway. I find that it is that physical area only which on the facts of this case could come within definition (b) of place of employment.
[18] The facts are that Mr Ashford had left the area to which (b) definition of place of employment would apply and he was on a grass verge on public land adjoining a public road. In those circumstances, I find as a fact and as a matter of law that Mr Ashford was not at his place of employment when he suffered the injury.”
• In the QBE decision the claimant was injured in a boxing match during his lunch break. The Court held that the claimant’s injury was a work injury. The Court noted that the term refreshment was used to “extend cover to employees during any break in work which is taken for the purpose of reanimating or reinvigorating themselves.”
WORK-RELATED GRADUAL PROCESS INJURY
Legislation - Sections 30, 24 and 26
Onus of proof
• In Nolan (333/04) Judge Cadenhead summarised the legal principles:
“[a] Even if matters are difficult the Court should endeavour to first solve the issue without recourse to the onus of proof, unless that is really necessary;
[b] It should only be in comparatively few cases that the onus of proof is decisive of the outcome.
[c] A temporal connection is an important piece of circumstantial evidence.
[d] It is the judge that ultimately considers all the evidence, including the relevant facts and the medical opinion in assessing a causal connection.”
Standard of proof
• The legal standard of proof is on the balance of probabilities, which is different from the scientific/medical view of proof.
• Smith (255/04): Judge Beattie said:
“Again, I find that Professor Gorman is looking for that degree of certainty which is far higher for medical certainty than the evidential standard of proof for medico-legal issues which arise under ACC legislation.”
ACC’s investigative role
• Click Clack International (61/95), Dalley (126/98) and Rowe (82/99) emphasise the need for ACC (or the insurer) to undertake reasonable investigations when determining cover for gradual process injuries.
• Click Clack International (61/95): Judge Ongley noted a number of deficiencies in ACC’s investigation. This included a lack of factual findings concerning the work environment and the home environment. The Judge noted that:
“…the Corporation must be satisfied on reasonable grounds that the requirements of s7 of the Act [now s30] are established. It follows that the Corporation must make reasonable enquiries before making a decision affecting an employer.”
• Dalley (126/98): there was a total lack of diagnosis in the evidence before the Review Officer. Judge Beattie referred the matter back for ACC to conduct appropriate enquiries so that a proper diagnosis could be made.
• The Department of Corrections (74/99): Judge Beattie stated (at page 4) that:
“… there is a duty on [ACC] to be satisfied on reasonable grounds that the requirements of section 7 [now Section 30] have been established and that to reach that stage of satisfaction [ACC] must make reasonable enquiries before making a decision which can affect an employer, ought to be adhered to. Those enquiries must include a work place assessment and a biomechanical task analysis and opinion regarding biological plausibility.”
• Rowe (82/99): the Court found that ACC’s investigative procedures were totally deficient and that the appellant’s claim had not been given fair consideration. The matter was referred back to the Review Officer to obtain an expert opinion from an appropriate occupational medicine specialist.
Personal injury
Claimant must identify a discrete physical injury
• There are a number of District Court decisions stating that the statute requires evidence of a discrete physical injury: In Teen (244/02) and Jones (242/02), the Court held that pain, which may be a symptom of injury, cannot be covered. However, where pain is a consequence of a discrete physical injury, that condition can be covered.
• Williams (80/01): Judge Beattie noted that the first step to obtaining cover for a gradual process injury was to identify a discrete physical injury:
“As a first step to obtaining cover under section 7 of the Act [now s.30] the appellant must establish that she has suffered a personal injury and it is only when such a personal injury has been identified that one needs to then go on and consider the provisions of section 7 and the three tests that are contained in that section. The tests, or criteria, which are set out in that section all relate back to the fact of a personal injury.”
On the facts, Judge Beattie held:
“The evidence that has been presented in this appeal I find at best raises possibilities that the appellant may have suffered some discrete injury which is the cause of her present condition, but equally I find that the evidence that militates against that proposition is weightier and more convincing and for this reason I find that the appellant cannot discharge the onus of proof which is upon her to establish her right to cover. On the evidence presented, I cannot find on the balance of probabilities that this appellant did suffer or is suffering from a discrete physical injury that would bring her within the provisions, firstly of section 4 of the Act [now s.26], and thereafter within the framework of section 7.”
• Television New Zealand Ltd (297/99): the claimant was employed by TVNZ (the appellant). He lodged a claim for blurred vision, irritable eyes, headaches and light sensitivity, said to have arisen from his editing job. ACC declined cover, and this decision was overturned at Review. In upholding TVNZ’s appeal, Judge Hubble found that the claimant had not suffered a physical injury. The Judge noted:
“In my judgement, it is one thing to establish that a claimant has various “symptoms”
such as pain, blurred vision, sensitivity to light etc. But it is another to be satisfied on the balance of probabilities that those symptoms have been “caused” by a physical injury. The question must be asked in this case “What is the physical injury that has caused Mr Bennet to display his symptoms?” I believe one can accept as a matter of common sense that the symptoms have been caused by work-related activities, but this leaves the missing link, namely, some evidence that there has been a “physical injury”.”
Pain as a consequence of an initial physical injury
• In Fulford (330/01) the appellant lodged a claim for de Quervain’s tenosynovitis, said to have arisen from keyboard and mouse operation. Dr Turner, an occupational medicine specialist, examined the appellant 18 months after the symptoms first arose. Dr Turner diagnosed regional myofascial pain syndrome. ACC declined cover on the basis that there was no evidence of a physical injury.
The Court allowed the appeal. The Court found that the appellant had suffered a physical injury, namely, de Quervain’s tenosynovitis, as diagnosed by his GP, Dr Kee. The Court did not accept Dr Turner’s opinion that Dr Kee’s diagnosis was incorrect. The reasons for this finding were stated as follows:
“On balance I am not prepared to discount Dr Kee’s diagnosis simply because
Dr Turner is unable to elicit symptoms from the appellant in December 1999 and seeks to have the appellant provide the symptoms which were pertaining some eighteen months earlier. When one is dealing with the condition of pain and inflammation of tendons, I find that reliance on a lay person to provide the background facts is open to error and therefore I have no reason to find or rule that Dr Kee was wrong with his diagnosis at the time when he made it.
Accordingly then I find that the appellant did present with a physical injury which was a personal injury within the meaning of the Act and that from Dr Kee’s perspective that injury was caused by the appellant’s occupation and his use of computer keyboard.”
The Court further noted that while the appellant may not presently be exhibiting physical signs of actual injury, “that is not the test where the pain which is the present indication was initially caused by a physical injury.” The Court found that the appellant’s tenosynovitis (which was a physical injury) brought about the regional pain syndrome, which he presently suffered from. Hence, s.7(1)(a) was satisfied. The Court also found that the appellant met s.7(1)(b) and (c), and therefore qualified for cover.
Injury at a microscopic level
• Henderson (77/06): Judge Ongley commented on physician, Dr Hancock’s opinion that work-related OOS can precipitate a non-recovery pain process with injury occurring at a microscopic level:
“The concept of injury at a microscopic level has not been accepted as meeting the definition of a personal injury for ACC cover; see Judge Beattie in Teen (144/02) and also Wild J refusing special leave to appeal in Teen v ARCIC (High Court, Wellington, CIV 2003 485 1478, 11 November 2003). One reason for that is that there is no scientific research available to distinguish between a microscopic alteration of tissue as an injury process or as a process of disease or a consequence of mental and physical stress. While the distinction may seem artificial to persons experiencing pain following physical stress at work, it is one that has to be drawn in order to apply the legislation.”
OOS not a diagnosis of specific injury
• Peters (25/01): Judge Beattie noted that:
“The term OOS is not a diagnosis of any specific injury by rather is an umbrella term to describe a type of condition which may or may not include a discrete physical injury.”
The Judge further noted that:
“Pain is not evidence of injury and this Court notes that the causes of pain need not necessarily be as a consequence of physical injury.”
First limb of the test:
“Causes, or contributes to the cause of ” [s.30(2)(b)(i)]
• Beets (320/02):
“It is the paramount requirement for a claim for cover under s.33 of the Act [now s.30] that the particular property or characteristic of the workplace or employment task be found to have caused or contributed to the personal injury. The Court has ruled on several occasions that the words ‘contributes to’ are to be read as meaning ‘contributes to the cause of the personal injury’ that is the workplace factors must be causally contributory.”
• In Cullen (128/01), Judge Beattie noted that s.33(2)(b)(i) [now s.30(2)(b)(i) of the 2001 Act] only requires:
“that the particular work task contribute to the cause of the personal injury, that is it need not be the sole cause. ”
• Similarly, in Barnsley (68/99), Judge Barber stated that s.7(1)(a) [s.30(2)(b)(i)] only requires that the claimant establish that the work was a cause of the personal injury. The claimant was not required to prove that work was the cause. Judge Barber commented:
“I certainly agree with Mr Barnett that it would be wrong to find a causal association between work and CTS [carpel tunnel syndrome] merely because there is a temporal association between the emergence of symptoms and repetitive wrist or hand activity in the workplace. I also agree it would be a mistake to infer that because another or others in the same workplace have been diagnosed with CTS, the work was causative of the disease.”
Judge Barber further noted (at page 11):
“I am also of the view [as was the Judge in Matthews (62/97)] that medical controversy over a particular condition or its cause should not necessarily prevent a Court from attributing a cause, or a contributory cause, to workplace activities; and it is all a question of there being sufficient probability arising from a specific set of facts and expert evidence.”
Pre-existing conditions
• Tran (220/98): the appellant suffered from asthma and dermatitis, which he attributed to his employment. The Court found, on the medical evidence, that the appellant’s asthma and dermatitis were pre-existing conditions which were not caused by his workplace. The workplace was found to have only triggered the conditions.
• Food Solutions Ltd (211/99): the Court held that the words “caused or contributed” were not satisfied where a claimant’s employment merely aggravated or accelerated an existing condition. The Court noted that a claimant who comes to the workplace with a degenerative condition cannot gain cover for it simply because there is something in the work tasks or work environment which aggravates or causes the condition to flare up.
• Judge Cadenhead commented in Goodwin (318/04) that the above decisions in Tran and Food Solutions:
“…merely emphasise the importance of being able to identify the particular property or characteristic arising in the work place in order then to measure the risk factors. If a person had a predisposition or a propensity to a disease this would make the identification of the risk factors and subsequent measurement of them extremely difficult.”
• Cowan (83/05): the claimant sought cover for an ulnar impaction injury said to have arisen from pelting lamb hides. The claimant had a slightly longer ulnar on his left wrist. The medical evidence showed that he suffered the ulnar impaction injury due to the punching down operation in pelting, and that his extended ulnar pre-disposed him to that injury.
Judge Beattie distinguished the decisions in Tran, Food Solutions and Goodwin on the basis that the Court found in those cases that a pre-existing medical condition had flared up as a consequence of a work task or the work environment. On the facts in Cowan the Judge found that it was not a pre-existing medical condition that was flaring up but rather, “the natural condition of his wrist which is being injured by a particular work-task.” Therefore, the first limb of the test was satisfied.
• Sutherland (282/05): a mill worker claimed cover for Gastro-oesophageal Reflux Disease (GORD) said to have arisen from bending and lifting during his employment. The claimant had a lax oesophageal sphincter. The Court found that his employment task of bending during heavy lifting brought about the intra abdominal strain, which triggered the GORD, “which was likely only to occur because of the lax gastro oesophageal sphincter.” The Court noted that:
“for the purposes of causation the fact that the appellant was more susceptible or pre-disposed to such an injury than other mill workers cannot detract from that clear causal nexus.”
• Davy (91/06): Judge Ongley made a distinction between conditions which were pre-existing and simply triggered by occupational exposure, and those conditions that a claimant was predisposed to.
“Predisposition would not exclude cover, while an underlying condition would exclude cover. That is to say, if the appellant had an asymptomatic asthmatic condition, a flare up or triggering of symptoms would not qualify for cover. Dr Whyte’s proposition that it is likely that she “would have” developed respiratory symptoms without her occupational exposure does not exclude the appellant’s claim that she did develop respiratory symptoms because of her exposure to chemical agents.”
Second limb of the test:
non-employment activities [s.30(2)(b)(ii)]
“Particular property or characteristic”
• Now (254/05): the claimant sought cover for solvent neurotoxicity said to have arisen from long-term exposure to solvents in his employment as a spray painter. There was evidence of heavy alcohol use and ACC declined his claim under Section 30(2)(b)(ii). Judge Beattie held that the claimant’s use of alcohol was irrelevant. The “particular property or characteristic,” in the context of Section 30(2)(b)(ii), meant that there must be the presence of solvents in spray painting in his non-work activities. As there was no suggestion that solvents or spray painting were a characteristic of the appellant’s non-work activities, the appeal was allowed and cover was granted.
The Court stated:
“[24] Section 30 requires the identification of a property or characteristic, in this case in the environment, that is causative of the personal injury complained of. In this case there are several properties or characteristics that have been identified and they are various solvents found in paint used for spray-painting motor vehicles. There has been no dispute about the causative features of various such solvents in relation to the injury now complained of.
[25] Having found that to be the case, I find that the statute requires that there be an enquiry whether those particular properties or characteristics, i.e., various chemicals in paint solvents, are found in the non-work environment of the appellant to an extent that they can be found to be material in the causative process.
[26] There is no suggestion that the appellant carries on any spray painting or other use of solvents in his non-work activities or that they are present in his non-work environment. Rather, it is the assertion that the appellant has a history of alcohol consumption and that this somehow can cause the type of injury which he displays.
[27] I find that this is not the test that the Statute sets out. The Statute is only concerned with whether the same properties or characteristics are present in the non-employment activities or environment of the person, not that there may be some other possible causative factor for the personal injury which has been identified.”
“Not found to any material extent”
• In Turner (95/04) the Court stated that:
“The second test which must be met is whether any non-work activities carried on by the appellant involved those same properties or characteristics to a material extent. The words 'material extent' have been held to mean 'causative'. In other words, the non-employment activities in question must be identified as being causative of the injury sought to be covered.
In the appellant's case he acknowledged leisure activities of mountaineering and swimming. Professor Gorman noted that both of those activities were acknowledged as being associated with an increased prevalence of rotator cuff tendonitis. His advice was that both of the appellant's recreations were significantly associated with rotator cuff tendonitis.
The issue that needs to be determined is whether in the case of this appellant, these particular activities were sufficient to be a material factor in the causation process.”
Non-employment activities: exclusions
• Self-employment at home is not part of a claimant’s non-employment activities: Barrett (216/97). Similarly, stress in the claimant’s home life is not relevant.
Third limb of the test:
risk assessment [s.30(2)(c)]
• The High Court decision in Knox v ARCIC [2000] NZAR 609 sets out the relevant test for this subsection. Knox was decided under the 1992 Act, hence the reference to Section 7 (now Section 30):
“Section 7(1)(c) requires the decision-maker to make three assessments. The first is to assess the risk of a person carrying out the relevant work task in the relevant work environment developing the injury concerned, say x. The second step is to assess the risk persons who do not perform that task in that environment have of suffering from that personal injury, say “y”. The third step is to decide whether x is ‘significantly greater’ than y. If it is, s.7(1)(c) is satisfied. If not, then a claim for cover must fail.”
• The High Court in Cullen v ARCIC (25/2/04, Goddard J, HC Wellington, AP254/02) clarified how the test in s.33(2)(c)(i) was to be applied:
“The significant risk test in s.33(2)(c)(i) is to be undertaken by a comparison between all occupations involving employment tasks with the same characteristics as those undertaken by the applicant (i.e. tasks involving lateral wringing movement of the wrists) and all other occupations not involving those particular employment tasks.”
• Elliott (36/05): The Court noted that the use of the word “persons” means that the specific employment task and injury must be considered on an objective basis for the purpose of comparison. The third test is general, whereas the first two are particular to the claimant.
• Logan (159/05): The claimant was diagnosed with Carpal Tunnel Syndrome (CTS). His work tasks as a help desk technician all involved computer use. In relation to the third test under s.33(2)(c)(i), Judge Beattie referred to Cullen (supra), noting that the test was not a comparison between computer operators and the general population. The test was:
“a comparison between persons who, in the course of their work, carry out certain activities which can be causative of CTS and those whose work does not involve those same characteristics.” (page 13)
• Sutherland (282/05): the facts are stated above (under the first limb of the test). The appellant failed to satisfy the third limb and therefore did not have cover. The Court set out the relevant test as follows:
“[28] The test in Section 30(2)(c) however is not whether the appellant was at significantly greater risk but rather persons in general, and I find that the evidence of Dr Turner is wholly against sawmill workers or others working in circumstances which require heavy physical work and bending, to be at significantly greater risk of developing GORD than the general population not so engaged in those particular work activities.”
• McKenzie (351/05): a 49 year old sheep farmer sought cover for degenerative disc disease. Judge Barber found that the appellant satisfied the three-part test. In relation to the third limb of the test, the Judge found that it was:
“self-evident that farmers as a group have a significantly greater risk of suffering such back disease than do other people in general and, in any case, that the particular type of farming which the disputant undertook for some decades had such a significantly greater risk of him suffering such a disease.”
Information required to make the risk assessment
• Elliott (supra): Judge Cadenhead set out what information was necessary to make the risk comparison:
“This comparison may involve consideration of medical evidence along with the application of judicial impression. At the end of the day it should be resolved by relatively simple analysis of all the facts in the case. Medical experience may often be an important factor. I do not think the Court is helped by compendious materials.
Once the characteristic is specifically identified then a comparison should be readily made with persons not performing that task. The intent of the legislation is that liability should not extend to those persons, who are performing an employment task that has caused an injury that could have arisen with, either outside activities, or that the particular employment task created a significant risk of injury not suffered by the persons not performing that task or its characteristics.
It cannot be that the mere fact that there is no research in the particular employment tasks or in respect to the other group for comparison should prohibit the claim. If that was the case, then no person, who was not in a classified group that had been the subject of research into the particular employment tasks under consideration could claim. The assessment of risk is a subjective matter that may be aided by medical experience and comparative analysis.”
Cover being determined years after the injury first occurred
• Where cover is being determined some years after the injury first occurred, Judge Beattie in Barnett (239/00) noted:
“Medical evidence as to the appellant’s present condition is not helpful or relevant to that enquiry and in that regard, evidence which seeks to look back some five years or so must be treated with caution, but present day opinion evidence based on the hard data of the facts which were available at the time the claim for cover was made would be acceptable. In other words simple crystal ball gazing based on present day examination of the claimant is unlikely to be persuasive but opinion evidence based on reasoning from hard facts that have been ascertained at the relevant time must be persuasive.”
Chemical exposure/ multiple chemical sensitivity
• Matthews (62/97): The Court noted that the diagnosis of multiple chemical sensitivity (MCS) was controversial. While this did not prevent the Court or ACC from accepting a diagnosis, there needed to be reasonably persuasive medical opinion in the claimant’s favour:
“Where the diagnosis is controversial the Court must be guided by expert opinion rather than embarking on its own assessment of the claimant’s medical condition. The function of the Court is not to make a diagnosis but to weigh the evidence. The medical literature is helpful in understanding the background to medical opinion, but it cannot have the same weight as qualified medical or scientific opinion directed specifically to the claimant’s case.”
Sick building syndrome
• Anderson (59/06): the appellant was an ACC employee who alleged she had suffered Sick Building Syndrome caused by her working environment at ACC’s Dunedin office. ACC declined her claim in 1998. Judge Beattie found that the appellant’s various symptoms (breathing difficulties, itchy skin, cough, etc) did not amount to a personal injury. The Judge also found no causal relationship with her work environment. Judge Beattie noted that while there was a temporal connection:
“a temporal connection is not sufficient and a causal link must be established by sound reasoning and medical facts.”
Asbestos related diseases
• Where a claimant suffers lung cancer or mesothelioma that is diagnosed as being caused by exposure to asbestos, their claim comes under Schedule 2 (Occupational Diseases): s.30(3).
• Personal injury under s.30(3) does not require an assessment of causation under s.30(2)(b) and (c): s.30(4).
• Lehmann (225/04): This concerned an application for lump sum compensation. Clause 55(2) of Schedule 1 states that a person who suffers a work-related gradual process injury is not entitled to lump sum compensation if either the date the person last performed the employment task (or worked in the environment), or the date the person first received treatment for the personal injury preceded 1 April 2002.
In the District Court, Judge Ongley held that Clause 55(2) did not apply to Schedule 2 diseases. Therefore, as Mr Lehmann had cover under s.30(3), and not s.30(2), he was entitled to lump sum compensation. This decision was overturned by the High Court. The High Court decided that lump sums were not available to Schedule 2 claimants.
The Court of Appeal in Estate of Priddle and Others (CA223/05, 19 October 2006) held that the transitional limit on lump sum compensation contained in Clause 55(2) of Schedule 1 did not apply to people suffering from a Schedule 2 occupational disease. Hence, the appellants were entitled to lump sum compensation.
Legislation - Sections , 32, 33, 34, 38, 57, 62, 64, 134, 142, 149, 228, 229, 230, 284 and 285 (repealed)
Jurisdiction
• Taylor (39/06): the Court held that where a claimant has cover for medical misadventure on the basis of medical mishap, the reviewer does not have jurisdiction to hear an application for review on the issue of medical error, as there is no live issue.
• That approach has been confirmed in Estate of SH (166/06).
Personal injury
• The claimant must show a physical injury.
• Pisarek-Rocca (336/00): there must be a physical injury suffered as a consequence of an act of medical misadventure.
• D (255/05): Judge Cadenhead held that an unwanted pregnancy following a failed tubal ligation operation was a personal injury.
Treatment
• Treatment is not defined in the Act but is stated to include physical and cognitive rehabilitation and an examination for the purpose of providing a certificate, including the provision of a certificate. (Section 6).
• Otherwise, treatment is given its ordinary meaning.
• In the High Court decision of ARCI v RW (HC AP 60-SW99), Justice Anderson stated:
“There is no need to go beyond the ordinary meaning of “treatment” as defined in the standard dictionaries, such as the New Shorter Oxford English Dictionary which provides the definition:-
“The application of medical care or attention to a patient, ailment” ”
• An accident in a treatment environment need not be during the course of treatment.
Registered health professional
• Defined at Section 6.
Onus of proof
• The onus of proof is on the claimant at all times, including where the applicant is a registered health professional.
• In Harman (182/03), Judge Cadenhead noted that:
“The fact that the case here is between the doctor on the one hand, and the Accident Compensation Corporation on the other, as it were, representing the claimant, does not shift the onus of proof on to the doctor.
It is for the claimant to establish on a balance of reasonable probability that she is entitled to cover under the legislation for medical mishap, either by medical error or medical misadventure."
Date of injury
• The date on which a person suffers personal injury caused by medical misadventure is the date on which the person first seeks or receives treatment for that personal injury as that personal injury. (Section 38(1)).
Evidence
• Evidence of medical misadventure from a qualified medical professional is preferred.
• Olive (100/99). Judge Beattie found that matters of causation require specialist comment:
“Whilst the appellant herself is quite entitled to give evidence of the symptoms that she in fact experienced, she is not competent to give evidence that those symptoms are a direct consequence and as a result of the injections that she received. Such evidence would be required to be forthcoming from a qualified medical professional”.
Medical Error
• Medical error means the failure of a registered health professional to observe a standard of care and skill reasonably to be expected in the circumstances: Section 33(1).
• Medical error can arise in the giving of treatment, in deciding whether or not to give treatment, deciding the type of treatment, diagnosis and obtaining consent: Section 33(3).
• In the 2001 Act only, where the treatment is being provided at the direction or under the management of an organisation, it includes the failure of the organisation to observe a standard of care and skill reasonably to be expected in the circumstances: Section 33(2).
• Medical error does not exist solely because desired results are not achieved or subsequent events show that different decision might have produced better results: Section 33(4).
• In the 2001 Act only, medical error does not exist where there is delay or failure to treat attributable to resource allocation decisions of the organisation: Section 33(4).
• Thomas (381/04): The principles governing medical error under the Act reflect those established under common law.
Causation
• Ford (279/01): The medical error must have caused the personal injury. A claimant must establish that they suffered a personal injury and that the personal injury was caused by a negligent act of a treating health professional.
Standard of care and skill reasonably to be expected
• J (33/06):
“What is required is that a practitioner exercises a level of skill commensurate with that of an ordinary competent person exercising that particular profession at that period of time.”
• Matthews (146/05): Judge Ongley stated that the standard to be expected was not a standard of perfection or an extremely high standard, “but is referable to the accepted standards of contemporary medical practice.”
• In determining what those contemporary standards are, medical opinion of what the established practice was at the relevant period of time is important: J (supra).
• Corcoron (239/03). Judge Cadenhead identified the key considerations for a medical error finding:
“ Where you get a situation which involves the use of some special medical skill or competence, the test as to whether there has been negligence or not is the standard of the ordinary skilled person exercising and professing to have that special skill. A person need not possess the highest expert skill; it is well established law that it is sufficient if that person exercises the ordinary skill of any ordinary competent person exercising that particular profession.
A person is not guilty of negligence if he/she has acted in accordance with a practice accepted as proper by a responsible body of medical people skilled in that particular art. Putting it another way around, a person is not negligent if he is acting in accordance with such a practice merely because there is a body of opinion who would take a contrary view.
Where the conduct of a doctor is concerned, the circumstances are not so precise and clear-cut as in the normal case of negligence. In the realm of diagnosis and treatment there is ample scope for genuine difference of opinion and one person clearly is not negligent because his/her conclusion differs from that of other professional people. The true test for establishing negligence in diagnosis or treatment on the part of a doctor is whether he/she has been proved of such failure as no doctor of ordinary skill make if acting with ordinary care.
It is ultimately for the court, not for medical opinion, to decide what was the standard of care required of a doctor in the circumstances of each particular case. The court is not bound to hold that a doctor escapes liability for negligent treatment or diagnosis just because he/she leads evidence from a number of medical experts who are genuinely of the opinion that the defendant's treatment or diagnosis accorded with sound medical practice. However, such medical evidence is treated with great respect and the circumstances in which the court would disregard this type of the evidence would be rare. However, the evidence tendered should always be subject to critical and logical analysis.”
• Verscheren (78/03): Judge Cadenhead said:-
“What has to be proved is the failure of a doctor to observe a standard of care and skill reasonably expected in the circumstances. In the case of failing to diagnose correctly there is no liability unless negligence is proved to a probability standard. The statute provides essentially that a doctor is not an insurer concerning desired results, and that what must be taken into account is that hindsight reasoning might have produced a different decision or better result is not necessarily medical error.”
Evidence
• A finding of medical error involves the consideration of, and reliance upon, expert medical evidence. However, that question is ultimately a question for the Court based on the facts and an assessment of the evidence as to whether a practitioner has acted negligently: J (33/06).
• Burrows (228/98): Judge Cadenhead said:
“Whilst the question of negligence is a matter of law and ultimately for this Court to determine, this Court is heavily reliant on the evidence of medical personnel expert in the particular field and upon which it can make its assessment of whether or not there has been a falling below the standard of care required of the health professional in the particular instance.”
• Lewis (274/99): Judge Beattie said:-
“In cases of medical misadventure this Court is entirely reliant on the evidence of experts to be informed of what is acceptable medical practice in any particular situation and whilst the finding of negligence or otherwise is a matter of law for the Court to determine, the facts upon which that finding is made must in large measure be reliant on the medical opinion of what is or is not an acceptable standard of conduct in any given case.”
Informed consent
• Blair (162/04): Judge Cadenhead quoted with approval the following passage in Rogers v Whitaker (1992) 109 ALR 625 (High Court of Australia):
“The question is not whether the conduct accords with the practice of the medical profession or some part of it, but whether it confirms to the standard of reasonable care demanded by the law. It is a question for the Court, and the duty of deciding it cannot be delegated to any profession or group in the community.
Generally speaking, whether the patient has been given all the relevant information to choose between undergoing and not undergoing the treatment, is not a question the answer to which depends upon medical standards or practices.
The nature of the matter to be disclosed, the nature of the treatment, the desire of the patient for information, the temperament and health of the patient and the general surrounding circumstances must all be considered by a medical practitioner in deciding whether to disclose or advise of some risk in a proposed procedure.
A doctor has a duty to warn a patient of a material risk inherent in the proposed treatment. A risk is material if, in the circumstances of the particular case, a reasonable person in the patient’s position, if warned of the risk, would be likely to attach significance to it, or if the medical practitioner is or should reasonably be aware that the particular patient, if warned of the risk, would be likely to attach significance to it. This is subject to the therapeutic privilege, i.e. an opportunity afforded to the doctor to prove that he or she reasonably believed that a disclosure of a risk would prove damaging to a patient.”
• Tooley (297/05): Judge Cadenhead set out the main principles when considering the issue of informed consent:
- The main consideration is that patients should be warned of “material risks.” These are risks relevant to their particular circumstances.
- A patient should be informed about the potential risks and benefits of the proposed treatment.
- A patient’s signature on the consent form is merely evidence of consent and is not necessarily conclusive (see paragraph 68 of the decision).
- The manner in which the doctor communicates a warning or explanation is critical. The doctor must take reasonable care to give a warning which is adequate in scope, content and presentation, and to take steps to see that the warning is understood.
- A warning should not be given at an inappropriate time or in unsuitable conditions.
- Tooley (supra): the approach to credibility on the issue of informed consent where the evidence is not tested in cross-examination:
- In general, less weight should be given to evidence that has not been tested by cross-examination.
- Administrative tribunals operate more informally and are exempt from normal evidentiary rules. However, the evidence tendered should be logically probative and reliable.
- In considering the weight to be given to the evidence:
“it is important to ask to what extent that evidence might be reasonably undermined by cross-examination and to test that evidence against the other evidence so tested.” (paragraph 78)
Medical Mishap
• Medical mishap is an adverse consequence of treatment properly given by, or at the direction of, a registered health professional and where that adverse consequence is both severe and rare: Section 34(1).
• Severe is defined as death, being hospitalised for more than 14 days or causing significant disability for more then 28 days: Section 34(2).
• Rare is defined as the probability that the adverse consequence would not occur in more than 1% of cases where the treatment is given: Section 34(3).
Case Law
• (ACC) Arnold (157/03): Judge Beattie observed:
“The medical evidence which is directed to the questions of physical injury and causation are now set out. Both questions it should be noted are questions of medical fact. The question of law being limited to the statement of the principle that as a matter of law a physical injury which may be found to have been suffered, must be shown to have been caused by, and be an adverse consequence of, medical treatment properly given …
The next requirement is that the physical injury so complained of must be shown to have been caused as a consequence of treatment properly given and which consequence is an adverse consequence, both rare and severe. Thus it is that the injury must be the result of an adverse consequence suffered from treatment properly given. “
• Jacobs (211/02): The burden of providing that the adverse consequence is not rare is on ACC.
Variations to the rarity criteria
• Where the likelihood of an adverse consequence is rare in the ordinary course, but is not rare having regard to the circumstance of the person, medical mishap does not exist if the greater risk to the person was known before treatment: Section 34(5).
• Kennard (78/05): Judge Cadenhead stated that for Section 34(5) to apply, the applicant should have known of the greater risk. What is required is:
“A sensible idea of the increased risk, that is to say that it was greater than the risk to a healthy patient, and it was a significant risk.”
• The question in applying Section 34(5) is not one of informed consent, but of actual knowledge of the increased risk before the treatment. The burden of proof is on ACC.
Miscellaneous
• ACC must obtain, and have regard to, independent advice from a suitably qualified person or body when considering medical error: Section 62.
• ACC is to notify health professionals or an organisation in writing on a decision on a claim for medical misadventure: Section 64.
Review and appeal
• A registered health professional or organisation may apply for a review of a decision finding error against them: Section 134(4).
• A registered health professional or organisation may be present at a review relating to a decision to decline or accept a claim for medical error: Section 142(b).
• A registered health professional or organisation may appeal against a review decision with a finding of error against them: Section 149(5).
The Treatment Injury provisions of the Injury Prevention, Rehabilitation and Compensation and Amendment Act (No 2) 2005 (“the Amendment Act”) replaced the Medical Misadventure provisions of the Injury, Prevention, Rehabilitation and Compensation Act 2001.
- It takes effect from 1 July 2005.
- The Amendment Act removes mishap and error and replaces it with personal injury caused by treatment or treatment injury.
- The intent of the change is that the cover should be no less than it is at present.
Legislation
The most significant amendments affect sections 32-34 and 38 of the 2001 Act. These are repealed and new sections substituted (ss13 and 14 of the Amendment Act). Regarding review and appeal, s134, 135, 142 and 149 of the 2001 Act are amended (ss25 – 29 of the Amendment Act). The full changes are as follows:
The 2001 Act – amended or repealed sections and clauses.
s6, 19, 20, 21A, 22, 28, 32-34, 38, 50, 53, 57, 62, 64,134, 135, 142,149,284, 285, 322, 322A, Schedule 1 clause 55.
The Amendment Act
s3, 6, 9, 11, 13, 14 – 19, 25-29, 4 7, 48, 52, 53, 60.
Key Changes
The Amendment Act does not change:
• the personal injury definition
• the requirement that the personal injury must have happened as a result of treatment
• the Registered Health Professional definitions
• the need for a causal relationship between treatment and injury
• the clinical trial provisions
• some exclusions, such as where the treatment did not achieve the desired results or where the injury is solely attributable to a resourcing decision.
The Amendment Act:
• removes error
• removes rarity and severity criteria
• expands the definition for treatment to include a failure to provide treatment in a timely manner, equipment failure, support systems, prophylaxis and others.
• clarifies third party infections to remove the possibility of endless third parties,
• adds exclusions such as:
i. where the injury was wholly or substantially caused by an underlying health condition,
ii. where the injury was a necessary part, or ordinary consequence, of treatment.
Treatment injury
Treatment injury means personal injury suffered by a person seeking treatment from, or at the direction of, one or more health professionals and is caused by treatment.
Personal injury
• Does not include:
- personal injury caused wholly or substantially by a person’s underlying health condition.
- personal injury that is an anticipated part, or consequence of, the treatment.
- personal injury solely due to a resource allocation decision
- personal injury that is a result of a person unreasonably withholding or delaying their consent
to undergo treatment.
• It includes:
- personal injury suffered as a result of treatment given as part of a clinical trial.
- third party injuries, but is limited to infection passed directly to a spouse, child or third party,
or from that spouse to a child or third party.
Treatment
• Treatment includes diagnosis, a decision on the treatment to be provided (or not provided), a failure to provided treatment at all or in a timely manner, obtaining or failing to obtain consent, and failure of equipment.
• It includes the application of any support systems used by the organisation responsible for providing treatment including policies, processes, practices and administrative systems.
• The fact that the treatment does not produce the desired results does not, of itself, constitute personal injury.
Date of injury
• The date on which a person suffers a treatment injury is the date on which the person first seeks or receives treatment for the symptom of that person’s injury, whether or not it was known that the treatment was the cause of the symptoms.
Transitional
• In essence, all treatment injury claims lodged on or after 1 July 2005 will be considered under the treatment injury criteria regardless of when the injury occurred or was diagnosed. Claims lodged prior to that date, and investigated under the medical misadventure provisions, cannot be reconsidered under the new provisions unless they were declined due to lack of personal injury which has since become apparent.
Review and Appeal
• A registered health professional or organisation cannot apply for a review or attend a review hearing. The same changes apply to appeals.
Miscellaneous
• ACC is no longer required to report error, competency, or trends but is obliged to notify, to the authority responsible for patient safety, where it identifies a risk of harm to the public.
• ACC is no longer obliged to obtain and have regard to advice from an independent suitable qualified person when making a decision on a claim.
Case Law
Treatment
• ACC v Barron (204/06): the Court found that the wearing of prescription contact lenses was ‘treatment’:
“By reference to Section 33(1)(g) I find that the failure of any prescribed equipment, device or tool at any time is to be considered part of the treatment process. It therefore follows that the wearing of contact lenses, as part of the treatment for the appellant's eye-sight problems, does come within (g), but it is the case that it must be the failure of the equipment which causes the injury for cover to apply.”
Personal injury
• ACC v Deverick (67/08): the claim was for cover for the failure of a gastric band. ACC had granted cover for a gastro-intestinal obstruction caused by a previous gastric band, but when a subsequent gastric band leaked, ACC declined cover for that leakage. ACC’s decision was overturned at review, and ACC appealed to the District Court.
Judge Beattie allowed the appeal and found that while the failure of the gastric band came within the definition of ‘treatment’, it had not caused a personal injury. Therefore, a treatment injury had not occurred. The Judge also found that a gastric band was not a “prosthesis,” as it did not replace a part of the human body. Therefore, damage to the gastric band could not be regarded as an injury.
Causation
• ACC v Barron (supra): the appellant, who wore prescription contact lenses, contracted Acanthamoeba Keratitis, an infection in the cornea. This led to blindness in his right eye. The Court found that while Acanthamoeba Keratitis was confined to contact lens wearers, it was not the failure of the contact lens that caused the condition. Rather, it was caused by the amoebic parasite which was trapped under the lens.
The Court stated that the amoebic parasite was an intervening force and noted that
“an intervening act which is itself causative thereby excludes the treatment itself from being causative".
Hence, the Court held that there was no causal link between the injury to the claimant’s right eye and the treatment.
“Necessary part or ordinary consequence”
• McEnteer (105/08): the claimant underwent neurosurgery in August 2005 to remove an aneurism. During the operation, the aneurism ruptured and temporary clipping was employed to control the aneurysm. The total temporary clipping time exceeded 40 minutes. The claimant developed behavioural problems (cognitive disorders) and lodged a claim for cover. ACC declined the claim. On appeal, ACC argued that the prolonged clipping was necessary and the injury was an “ordinary consequence” of the surgery.
Judge Cadenhead held that the operation and the prolonged clipping was a necessary part of treatment. He noted that this element was analogous to what was formerly covered by “medical error”. The Judge discussed the term “ordinary consequence of the treatment” and stated that the term “ordinary” should be interpreted along the lines of its common meaning – normal, expected usual or anticipated. On the question of whether the injury was wholly or substantially caused by the claimant’s underlying health condition, the Judge stated:
“In my view, the onus on this issue is upon the respondent (ACC). This qualification to liability will cause problems, because most medical treatment arises from an underlying condition. Similarly, difficulties of concurrent causation may arise, where both the underlying condition and the treatment combine to produce a personal injury.”
Judge Cadenhead concluded that the claimant’s cognitive impairment was substantially caused by the prolonged clipping. The prolonged clipping was “a substantial intervening cause that was a distinct and separate cause from the underlying condition: that is a novus actus interveniens.” Hence, ACC had not discharged the evidential onus to show that it was not a treatment injury. Therefore, the appeal was allowed.
Legislation - ss 21, 21A, 26, 27 & Schedule 3
Other references:
• s.36 (date on which person is regarded as suffering mental injury)
• Section 26(1)(c) includes, in the definition of personal injury, mental injury suffered by a person because of physical injuries suffered by the person.
• Section 21 provides cover for mental injury caused by one of the crimes listed in Schedule 3 of the Act. Schedule 3 covers the major sex offences.
• Section 21A covers mental injury from historic sexual abuse prior to 1 April 1974.
• Section 27 defines mental injury as “a clinically significant behavioural, cognitive or psychological dysfunction.” Lesser mental trauma such as transient feelings of anger, humiliation, fear, embarrassment or shock are not covered.
• The deemed date for suffering the mental injury is the date the victim first receives treatment for that mental injury as that mental injury [s.36].
Case Law
Mental injury suffered because of physical injuries
• To have cover for mental injury under Section 26(1)(c), the definition of personal injury makes it clear that the mental injury must be suffered because of physical injuries.
• Queenstown Lakes DC v Palmer [1999] 1 NZLR 549 (CA): Mental injury suffered from watching or being involved in a horrific event is not covered if the claimant does not suffer a physical injury. Even if the claimant does suffer a physical injury, the mental injury must come from the physical injury and not from the horrific event. In this case, the claimant saw his wife drown in a rafting accident. The Court held that this did not come within the definition of personal injury because the claimant’s mental injury did not arise from physical injuries to him, but arose from physical injuries to his wife.
• Gallagher (184/05): the Court found that the claimant’s post traumatic stress disorder and depressive symptoms were due to the events surrounding the boating accident in 1993, rather than any physical injury sustained in that accident.
• ACC v Geerders (188/04): Judge Cadenhead set out the general legal principles:
“Section 4 of the Accident Rehabilitation and Compensation Insurance Act 1992 provided the statutory test of causation, of any mental injury suffered by a person which was the outcome of physical injuries to the person. Section 29(1)(c) of the Accident Insurance Act 1998 gave cover for mental injury suffered by an insured because of physical injuries suffered by the insured. Section 21(c) of the present Act is couched in similar terms.
In all three statutes the claimant has the burden of proof on a balance of probabilities, of showing that on the facts of the case, there was a causal relationship between the physical injury suffered with the mental injury that is now alleged as its outcome. There has to be a direct causal link between a physical injury and the mental condition alleged. An indirect link is not sufficient.”
• Seddon (320/04): the appellant had suffered a strained neck at rugby, for which he was granted cover. He considered that this covered injury had caused his chronic pain syndrome (mental injury). Judge Cadenhead held that ACC had correctly declined ongoing entitlements. The Judge said (at paragraph 23):
“It is necessary for a claimant to show on a probability basis that the mental injury was directly caused by the physical injury suffered. Indirect causation, such as brooding or worry, is not sufficient. The case of Woodd (54/03) clearly postulated direct causation issues. This case is more akin to Robinson (62/03) and Gable (66/02), which were cases of indirect causation.”
Chronic pain syndrome
• Hewitt (217/01): a chronic pain syndrome/disorder was identified as a mental injury, in the context of a decision suspending ongoing entitlements. The Court referred to the DSM IV criteria (Diagnostic & Statistical Manual IV Edition of the American Psychiatric Association) and found that the appellant was still suffering from the mental consequences of her covered back injury.
• See also Binnie (49/02).
Violent physical assaults
• Woodd (54/03): the appellant was a victim in a pharmacy burglary. She was forcibly held, pushed around, a gun was held to her head, and her hands and feet were tied. She suffered bilateral shoulder pain and bruising to the neck. She received cover for these physical injuries. She also suffered post-traumatic stress disorder. ACC rejected the claim for mental injury on the basis that the post-traumatic stress disorder was not the result of the physical injuries, but arose from the frightening nature of the robbery.
In allowing the appeal, Judge Cadenhead drew a distinction between the assault in this case, which was accompanied by violence and physical injury, to a mere assault not involving any physical injury to the person:
“In my view, both the review officer and the submissions of the respondent failed to take into account the effect of the physical injuries inflicted upon the appellant in considering the issue of “assault” or “trauma”. Put another way this type of “assault” accompanied as it was by violence and physical injury to the appellant, was a different type of “assault” than that of a mere assault unaccompanied by any physical injury to the appellant. On the facts of this case, it is artificial to sever the physical injuries from the matrix of fact making up the “assault”, as indeed the physical injuries, along with the shock, were undoubtedly in combination substantial factors that consequently gave rise to the post-traumatic stress disorder.”
• See also Greenland-Tangipo (28/03), in which ACC had rejected the claim for post-traumatic stress disorder as it had arisen from the frightening circumstances of the assault rather than the injury itself. In this case the claimant was struck on the back of her head by her ex-husband. Judge Middleton allowed the appeal, on the basis that the mental injury was suffered because of physical injuries.
Indirect causation not sufficient
• Where mental injury is an indirect outcome of the physical injury, the claim will fail. In Robinson (230/03) the Court rejected a claim for mental injury based upon brooding and depression caused by the alleged mishandling of the appellant’s claims by ACC. Judge Cadenhead considered that the claimant’s mental injury had arisen indirectly from the physical injuries and were not covered by the Act.
• Geerders (supra): The Court was reluctant to find that the claimant’s mental injury arose from a soft tissue injury, the effects of which were spent. In this case the claimant suffered a back strain in 1997, and in 2001 was diagnosed as suffering from clinical depression. The Court noted that there were significant stressors in the claimant’s life, which had contributed to his depression.
• Similarly, in Gable (212/03) the Court found that the appellant could not establish a causal connection between the assault and his mental injury. The Court noted that the appellant had a history of significant stressors prior to the physical injury. The Court distinguished this case from Woodd (supra) and Greenland-Tangipo (supra), stating that in the latter cases:
“there was no pre-accident history of emotional or personal difficulties. Likewise the documentation of the assault was clear and consistent. Both these cases were incidents that had the potential to be life-threatening and were combined with physical assaults. The combination of the physical assaults, along with the exceptional dramatic circumstances readily led to the inference that the physical assault was a substantial cause to the ensuing post-traumatic stress disorder.”
Pre-existing mental disorder
• Garlick (11/06): the appellant claimed cover for post traumatic stress disorder (PTSD) as being a consequence of physical injuries sustained in a motorcycle accident in 1990. There was medical evidence of pre-existing mental problems and a history of substance abuse. The Court found that the appellant had not suffered a PTSD. The Court also found that there was no causal connection between his current mental condition and the 1990 injury. Accordingly, the appeal was dismissed.Mental injury from a sexual offence
• To have cover for mental injury under Section 21, it must be suffered as a result of one of the crimes listed in Schedule 3.
• No one need actually be charged with or convicted of that offence [s.21(5)].
• Cover is given if the offence was performed on the victim inside or outside New Zealand. If the offence occurs outside New Zealand, the victim must be ordinarily resident in New Zealand at the time it occurred [s.21(2)].
• The deemed date of suffering the injury under Section 36 does not apply for the award of a lump sum under Clause 5 of Schedule 1. To qualify for a lump sum the sexual crime must take place after 1 April 2002.
Schedule 3 offences
• Mental injury caused by a Schedule 3 sexual offence is covered even if the claimant does not suffer a physical injury. All that is required is that the act performed on the victim comes within the description of an offence listed in Schedule 3.
• Schedule 3 includes crimes such as sexual violation and indecent assault. It also includes infecting with a disease (Section 201 of the Crimes Act 1961) and Section 194 of the Crimes Act 1961.
• Section 194 deals with assault on a child, or by a male on a female. Schedule 3 states that for the purposes of the Schedule, Section 194 must be regarded as relating only to situations where a female sexually assaults a child under 14 years.
• There is no specific sexual offence for a female assaulting a child under 14 years , so Section 194 has been crafted to fit this purpose. In J W B (340/99) a claim for cover under the 1992 Act failed because the appellant had been indecently assaulted by his mother and there was no such offence in the 1992 Act.
• CLM v ACC (12/05/06, Randerson J, HC Wellington, CIV 2005-485-000893) the issue was whether Section 8 of the 1992 Act provided cover for mental or nervous shock suffered by the appellant upon discovering that her sexual partner was HIV positive. The appellant did not contract HIV but argued that her partner’s failure to disclose his HIV status meant that the sexual intercourse was either sexual violation or indecent assault (both of which were listed as offences in the Schedule). The High Court dismissed the appeal, concluding that the law in New Zealand did not extend to the appellant’s proposition that the non-disclosure of the HIV status of her partner vitiates consent to sexual intercourse or indecent assault. The Court considered that such a change to the law was a matter for Parliament.
Mental injury from re-enactment of assault
• GS (145/05): The appellant suffered a sexual assault while overseas in 1982. She made a claim for cover in 2003. ACC declined the claim on the basis that the appellant was not ordinarily resident at the time of the assault. The focus of the claim then changed, with the appellant alleging that she was suffering from a mental injury that arose out of the re-enactment of the assault during the course of therapy. The Court found that the re-enactment did not involve an indecent assault. Furthermore, there was no evidence of physical injury during the therapy and so, a consequential claim for mental injury could not be established. The appeal was dismissed.
Belief that sexual assault may be committed
• Woodd (supra): The appellant argued that her belief that the offenders might rape her brought her claim within a Schedule 3 offence, even though no sexual offence was committed. The appellant argued that the definition of assault in s 2 Crimes Act 1961 is satisfied if the person making the threat has or causes the other to believe on reasonable grounds that he had present ability to effect his purpose. The appellant argued that even though the assaults had not been indecent, the actions of the offenders in causing the victim to believe that she could be raped brought this “within the description of an offence listed in Schedule 3”. The appellant conceded that such an argument would not suffice for a criminal conviction but argued that a compensation statute should have a more liberal interpretation. Judge Cadenhead rejected the argument but the appeal succeeded on other grounds.
Mental injury to another from the offence
• Brookers at paragraph IP 21.06 states that:
“A mental injury suffered by another (for example, mental injury suffered by a parent on learning of a sex crime on their child) is probably not intended to come within the Act. Section 21(2) requires the sexual crime be “performed on, with, or in relation to the person” who suffers the mental injury. The words “or in relation to” however are wide enough to cover a situation where a crime is perpetrated on one person as a means of harming another. For example, sexually assaulting a child to strike at the parent would seem to be an act performed in relation to the parent who suffers the mental injury. Apart from such unusual circumstances, a parent who suffers a mental injury from learning of the sexual abuse of their child does not come within the Act.”
Only mental injuries and sex crimes covered under Section 21
• B S (72/95): The claimant had a heart attack, allegedly suffered through being wrongfully accused of sexual abuse. He was excluded from cover, as it was neither a work injury nor medical misadventure. He was also excluded, as it did not come within s 8(3) of the 1992 Act, because the claimant was not the primary victim of the sexual abuse but was instead wrongfully alleged to be the offender.
Date of mental injury
• Brookers states at para 21.08:
“Section 21(4) refers to s 36. Section 36 gives the date of first seeking treatment for that mental injury as the date the mental injury is suffered. The reference to “as that mental injury” in the section is to deal with situations where treatment may have been sought for a mental trauma but no connection has been made at that time between that trauma and the prior sexual abuse. The connection between the trauma and the sexual abuse may only come about at a later stage and it is the stage that that treatment is sought that is taken as the date the mental injury is suffered. This is an important consideration when ascertaining if someone comes under the Act or not. If the treatment for the unconnected trauma occurred before 1 April 1974 but the treatment for the trauma now connected with the sexual abuse occurs after 1 April 1974, then the claim comes under the accident compensation legislation.”
• BRM (224/04): The appellant suffered a mental injury from childhood sexual abuse but only sought treatment in 2001 when he was 35 years old. Section 36 deemed his date of injury to be that date and at that time, he was 35. Therefore, he could not come within the definition of a potential earner even though the actual sexual abuse had occurred before he was age 18.
Date for lump sum compensation
• The date regarded as the date the mental injury is suffered may be much later than the actual sexual abuse. For example, sexual abuse in 1985 may give rise to treatment after 1 April 2002. It is the treatment date that is taken as the date of the mental injury. In this example, lump sum compensation for the mental injury under Part 3 of Schedule 1 would not be awarded because Clause 55 of Schedule 1 requires that the actual act of sexual abuse take place after 1 April 2002. There are no awards of lump sum compensation for historical sexual abuse before 1 April 2002, even where the claimant’s mental injury is taken to occur after that date. Such claimants may be awarded an independence allowance under the 1998 Act.
No prosecution necessary
• Section 21(5) provides that cover for mental injury is available irrespective of whether any person has been charged with the offence or whether the alleged offender was capable of forming criminal intent. There does not even have to be a complaint to the police, although ACC must be satisfied that a criminal offence has occurred.
• In P M (64/04) a 10 year old girl suffered mental injury following an examination by a doctor who was checking for evidence of sexual abuse. It was found that no indecent assault occurred, so no cover was available within Section 21.
Legislation - Sections 17, 22 - 24
Case Law
• Estate of SC (7/05): The appellant had left New Zealand on 1 October 2002 on a working holiday. On 29 March 2003, he decided to return to New Zealand as soon as it could be arranged. Unfortunately, he died overseas on 30 March 2003. The 6-month period under s 17(2) expired on 1 April 2003. Judge Barber held that the appellant came within the plain meaning of the first limb of Section 17(2) and had remained absent from New Zealand for more than 6 months. Judge Barber’s reasoning is set out below:
“ [23] The meaning of ss.22(1) and 17(2) must be that, for the purposes of obtaining cover under the Act, a person who suffers personal injury overseas must not have been absent from New Zealand for more than six months and even if not yet absent for six months, must intend to return to New Zealand within six months.
[24] The appellant’s case is that the evidence establishes that Mr C intended to return to New Zealand “as soon as possible” as at 29 March 2003. I agree, but that intention is inadequate for cover under the Act. It was not practically possible to achieve a return to New Zealand by 1 April 2003 within the two remaining days in Mr C’s circumstances. He needed to book a ticket to travel from the Isle of Man to an international airport from which flights to New Zealand depart, and book a ticket from that international airport to New Zealand to have him arrive on 1 April 2003; and to undertake that travelling and actually arrive in New Zealand before the expiry on 1 April 2003 of the said six month period…
… [29] As indicated above, when I stand back and look at the facts of this case overall, I cannot be satisfied on the balance of probabilities that, although the late Mr C on 29 March 2003 intended to return to New Zealand as soon as reasonably possible, he intended to be back in New Zealand as soon as 1 April 2003. Accordingly, he intended to be absent from New Zealand for more than six months. This means that he is excluded from cover under the Act by the operation of s.17(2) of the Act.”
• Donaldson (329/05): a case decided under the 1998 Act, where the Court considered the question of whether the deceased was ordinarily resident at the time of his death in Bolivia.
Treatment
Physical treatment
Surgery
Rehabilitation plan
Vocational rehabilitation
Aids and appliances
Attendant care
Home help and child care
Modifications to the home
Motor Vehicles
Legislation - Schedule 1, Clauses 1-6; and Regulations
Other references: s.6 (definitions of treatment, treatment provider)
• Clause 1 provides that (subject to the requirements of Clause 2 and to any agreement with the treatment provider or regulations), ACC will pay or contribute to the cost of the claimant’s treatment for his or her covered personal injury.
• Clause 2 sets out the circumstances when ACC will pay for the cost of treatment.
• Under Clause 4, ACC’s prior consent to treatment is required unless:
it is acute treatment; or
- the regulations do not require prior approval; or
- there is an agreement between ACC and a treatment provider that prior approval is not necessary for treatment from that particular provider.
• The Injury Prevention, Rehabilitation, and Compensation (Liability to Pay or Contribute to Cost of Treatment) Regulations 2003 came into force on 1 April 2004. It prescribes the amounts and the circumstances in which ACC will pay for the cost of treatment.
• For the costs of treatment prior to 1 April 2004, the Accident Insurance (Insurer’s Liability to Pay Cost of Treatment) Regulations 1999 still apply.
• The new Section 68 [as substituted by Section 20 of the Injury Prevention, Rehabilitation, and Compensation Amendment Act (No.2) 2005] allows ACC to provide extended discretionary entitlements/payments for treatment for which ACC has not given prior approval: Section 68(3)
• Claimants cannot review any decision to provide extended discretionary entitlements: Sections 68(4) and 134(1A).
• The discretion under Section 68(3) only applies to the provision of entitlements for periods after 1 July 2005.
Case Law
No discretion to depart from amounts prescribed in regulations:
• Jeans (67/04): This case concerned the payment of dental costs. Judge Cadenhead confirmed the approach in the cases under the former Acts, which established that there was no discretionary power to depart from the amounts ACC was required to pay under the previous regulations:
“Clause 1(1)(b) of Schedule I to the 2001 Act is specific in that it empowers the Corporation to pay for the costs of treatment only to the extent that it is permitted by the Regulations. In turn, the Regulations themselves are specific in that the Corporation’s contribution to dental treatment extends only to the amount specified in the Costs Schedule. There have been a line of accident compensation cases, which have reaffirmed the principle that there is no residual discretionary power vested in the respondent to depart from these amounts.”
• This approach has been confirmed in Dobson (11/05), a decision by Judge Barber.
• Other cases adopting the same approach include: Duncan (136/04), McLoughlin (240/98), Evison (22/96), and Jenkins (96/96).
Prescription costs
• Nicholl (45/07): the appellant sought reimbursement of Sebizole shampoo that his GP had prescribed for dermatitis. The appellant had cover for a 1996 back injury, which led to a chronic pain condition. The appellant claimed that the stress related to his chronic pain caused his dermatitis. The Court held that the dermatitis was not caused by the appellant’s stress arising from his chronic pain syndrome - it was only exacerbated or aggravated by it. Hence, the prescription costs were not payable.
Hot springs pool pass
• Nicholl (46/07): The Court upheld ACC’s decision to decline the appellant’s request for payment of a pass to Taupo Hot Springs and associated travel. The Court noted that Taupo Hot Springs did not meet the definition of “treatment provider” under the Act. The Court also commented that if the costs had been part of the appellant’s rehabilitation plan, then ACC may have been able to consider payment.
Legislation - Schedule 1, Clauses 1 - 6; s.26
Other references: s.7 (definition of acute treatment)
• Clause 1 provides that (subject to the requirements of Clause 2 and to any agreement with the treatment provider or regulations), ACC will pay or contribute to the cost of the claimant’s treatment for his or her covered personal injury.
• Clause 2 sets out the circumstances when ACC will pay for the cost of treatment.
• A claimant is not entitled to receive statutory entitlements (such as surgery costs) where his or her personal injury is caused wholly or substantially by gradual process, disease, infection or the ageing process [Section 26(2) and (4)].
• Under Clause 4, ACC’s prior consent to treatment is required unless:
- it is acute treatment; or
- the regulations do not require prior approval; or
- there is an agreement between ACC and a treatment provider that prior approval is not necessary for treatment from that particular provider.
• However, the new Section 68 [as substituted by Section 20 of the Injury Prevention, Rehabilitation, and Compensation Amendment Act (No.2) 2005] allows ACC to provide extended discretionary entitlements/payments for treatment for which ACC has not given prior approval: Section 68(3)
• Claimants cannot review any decision to provide extended discretionary entitlements: Sections 68(4) and 134(1A).
• The discretion under Section 68(3) only applies to the provision of entitlements for periods after 1 July 2005
Case Law
Prior approval (pre-1 July 2005)
• Guy (23/04): prior approval had not been obtained for laser treatment. Judge Cadenhead held that no matter how beneficial, ACC was not obliged to reimburse the claimant.
• However, in Ali (181/04), while there had been no prior approval, Judge Cadenhead held that ACC was obliged to pay for the cost of surgery to remove a malignant tumour, even though the tumour was later found to be a non-covered injury.
In Ali, the appellant had hit his head in an accident and had cover for an operation to remove a cyst relating to the injury. In the operating theatre the surgeon ascertained that the cyst was solid and decided to obtain the results of a biopsy test before proceeding. The biopsy revealed that the cyst was in fact a malignant tumour. It was quickly removed within the week. ACC declined to pay for the surgery on the basis that the tumour was not caused by the covered head injury.
In allowing the appeal, Judge Cadenhead considered that all parties had acted innocently and bona fide. The surgeon had to act with expedition and the appellant had relied on the grant of the original cover, which he thought had included the costs of the operation. His Honour referred to AJ Burr Ltd v Blenheim Borough Council [1980] 2 NZLR 1 and Martin v Ryan [1990] 2 NZLR 209 as authority for the proposition that an administrative decision may have a life of its own until set aside: “[a]ccrued rights, therefore, initially validly given may be enforced, even if retrospectively the primary decision was wrong” (paragraph 31).
Judge Cadenhead held that as the appellant had incurred expenses relying on the existence of cover, he was entitled to be repaid for the expenses he had incurred before he had notice of revocation.
Whether the treatment was acute treatment
• Doyle (122/04): the Court held that a delay of 5 weeks between the visit to the surgeon and the operation in the private hospital, without prior ACC approval, made it clear that the surgery was not urgent and therefore not acute treatment.
Causation
• The claimant needs to establish that the need for surgery arises from the injury (or injuries) for which cover was granted.
• Hayes (165/04): the Court highlighted the key issue when determining causation:
“In this case the concentration is upon the issue of whether an operation at the time of request was necessitated or caused substantially by the relevant accidents for which cover had been granted. In causation issues it is important to state clearly the effect attributed to the cause in order to answer the causation issue. Clearly, the issue of continuing entitlements some time after the initial accident poses different factual and medical questions than that of the need for an operation, occurring within a short time from the occurrence of the accident. The question to be answered is what was the substantial cause for the operation sought?”
• Dobbs (46/05): Judge Cadenhead set out the main principles:
“[26] The crux of this case is a causal issue: the appellant to have an entitlement for the costs of surgery has to satisfy the respondent on the balance of probabilities that the need for surgery arises from and is an effective consequence of the original injury or injuries, for which cover was granted. This issue will generally involve a consideration of the type of injury or injuries suffered, the x-rays, and medical reports evaluating the present symptoms against what has brought about the need for present surgery. I would have thought that on this type of issue the view of the general practitioner and the medical specialists, who have actually examined and seen the claimant would be important.
[27] The appellant must demonstrate on a probability basis that the need for surgery arose from the accident or accidents and that the need for surgery was not 'wholly or substantially’ caused by the ageing process. The onus of proof of this step is upon the appellant upon a balance of probabilities.”
• Sparks (45/06): the question was whether the claimant’s need for surgery was a consequence of an underlying torn rotator cuff condition, or whether it was required because of a further rotator cuff tear caused by a fall. In allowing the appeal, Judge Ongley stated:
“In the absence of evidence that the underlying condition required surgery, I consider that the need for surgery was caused by the covered injury, namely the probable significant tear causing the failure of a rotator cuff that was otherwise functional. I regard this as a claim in which there is a fairly fine balance, but one where the necessary causation is shown.”
Reasons must be given
• Jones (246/04): Judge Cadenhead stated that it was necessary for specialists to give their reasons as to why they considered that there was a causal nexus, and a “tick in a box” was not sufficient:
“If the parties or specialists themselves are seeking to have specialist opinions on medical matters within their speciality considered on Accident Compensation issues, then it is necessary for such specialists to flesh out any opinion as to a causal nexus by giving proper logical and medical reasoning for that opinion. A tick in a box is not sufficient where the Court is presented with contrary evidence by way of opinion and reasoning and which is given from a proper medico-legal perspective.
In the present case, I find that the evidence of Dr Turner, supported as it is by Dr Taylor, is to be preferred to the statements made by Mr Robertson which consists only of a tick in a box and then a subsequent statement that he considered the appellant's ongoing problem to be "related to ACC coverage".
A temporal association cannot be lightly discounted
• ACC v Newstead (310/04): In the context of a request for surgery, Judge Cadenhead held that, on issues of causation, a temporal association cannot be lightly discounted. After referring to decisions in the High Court, the Judge stated, at paragraph 28:
“In my view, these passages sum up the attitude of Higher Courts towards the onus of proof and the importance of the temporal connection on issues of causation; i.e:
(a) Even if matters are difficult the court should endeavour to first solve the issue without recourse to the onus of proof, unless that is really necessary;
(b) It should only be in comparatively few cases that the onus of proof is decisive of the outcome.
(c) A temporal connection is an important piece of circumstantial evidence.
(d) It is the judge that ultimately considers all the evidence, including the relevant facts and the medical opinion in assessing a causal connection.”
Regulation 18
• Ashley and Colthurst (58/08): the appellants were challenging ACC’s decision that it was only liable to pay 60% of the surgery costs under regulation 18 of the Liability to Pay or Contribute to Cost of Treatment Regulations. Both appeals were dismissed. The Court found that ACC had discharged its obligation to explain the funding options and had adopted transparent procedures at all times.
Legislation - ss. 75 – 78; Cl. 7 – 10
Other references: s.6 (definition of ‘individual rehabilitation plan’, and ‘rehabilitation’)
• Section 75 provides that within 13 weeks of accepting a claim for cover, ACC must determine whether the claimant is likely to need social or vocational rehabilitation after the 13 weeks have ended. If so, ACC must prepare an individual rehabilitation plan (IRP) in consultation with the claimant.
• Section 76 describes the circumstances when ACC will be liable to meet the costs of rehabilitation before and after an IRP has been agreed.
• Section 77 requires ACC to assess the claimant’s needs for rehabilitation when preparing an IRP.
• Section 78 states that the IRP must be updated from time to time.
• Clauses 7 to 10 concern:
- the preparation of the IRP
- getting agreement to the IRP
- disputes about the IRP
- modifications to the IRP
Case Law
Whether an IRP is reviewable
• Weir v ACC (18/8/04, Miller J, HC Wellington CIV 2003-485-1921): the Court held that an individual rehabilitation plan (IRP) was a decision on the claim, and was therefore reviewable under s.134. On the facts, the Court also found that the IRP did not comply with the Act, since the goal of a return to work, or work readiness, was adopted without an assessment of the claimant’s need for rehabilitation under s.77. The Court noted that such an assessment should have been undertaken when the plan was prepared.
• This judgement contains some detailed discussions on vocational rehabilitation and the content of the IRP:
“(b) Vocational rehabilitation as both entitlement and obligation
[13] Rehabilitation appears in s.69 as the first in a list of entitlements that include various forms of compensation. But rehabilitation differs from other entitlements. The Act’s purpose statement provides that where injuries occur, rehabilitation is to be ACC’s primary focus, with fair compensation being paid during rehabilitation. And rehabilitation is intended to remove the need for compensation. It is accordingly both an entitlement and an obligation. Section 70 of the Act provides:
A claimant who has suffered personal injury for which he or she has cover—
(a) is entitled to be provided by the Corporation with rehabilitation, to the extent provided by this Act, to assist in restoring the claimant's health, independence, and participation to the maximum extent practicable; but
(b)is responsible for his or her own rehabilitation to the extent practicable having regard to the consequences of his or her personal injury.
[14] In the case of a claimant in receipt of weekly compensation, ACC is liable under s.85 to provide vocational rehabilitation, to the extent provided by the Act, whether or not she applied for it, and the claimant must co-operate or risk loss of compensation. Section 72 requires the claimant to co-operate with ACC in the preparation of an IRP, and s.117 allows ACC to suspend or decline compensation if the claimant fails to agree to an IRP or comply with it.
(c) Obligation to prepare IRP
[15] Although ACC is liable to provide rehabilitation, the content of its obligation in any given case depends on whether the claimant needs rehabilitation and, if so, in what form.
“Rehabilitation”:
(a) means a process of active change and support with the goal of restoring, to the extent provided under section 70, a claimant's health, independence, and participation; and
(b) comprises treatment, social rehabilitation, and vocational rehabilitation
[16] Section 75 of the Act requires that ACC must, within 13 weeks after accepting a claim for cover, determine whether the claimant is likely to need social or vocational rehabilitation after the 13 weeks have ended. If so, it must prepare an IRP in consultation with the claimant.
IRP:
(a) means a plan under section 75 that provides for a claimant to receive rehabilitation that will assist in accordance with section 70 in restoring the claimant's health, independence, and participation to the maximum practicable extent
[17] ACC may include provision for treatment in the IRP. After an IRP is agreed, ACC is liable to provide the claimant with rehabilitation in accordance with the IRP and schedule 1 of the Act, but only to the extent that ACC has specified which services it will provide under the plan; section 76(4).
(d) IRP must reflect assessment of claimant’s vocational rehabilitation needs
[18] In preparing an IRP, ACC is obliged under s.77 to assess the claimant’s need for rehabilitation having regard to the purposes of social and vocational rehabilitation. The purpose of vocational rehabilitation is set out in s.80…”
• Weir has been applied in a number of District Court decisions. For example, Print (394/04), McKean (132/05) and Priest (141/05).
• Peacock (370/05): the Court confirmed that IRPs under the 1982 Acts or 1992 Acts are not reviewable per se, unless they contained entitlement provisions which were in dispute.
• A draft IRP is not capable of review: Howard (83/04).
• Nadali (53/06): Judge Barber referred to Purches (239/05), where the Court considered what was required on the part of ACC to discharge the obligation of explaining review rights on an IRP. In Purches the Court said that it was incumbent upon ACC to provide evidence of what the claimant had been told when ACC gave review rights orally. Acknowledgement in the IRP signed by the claimant that he had been informed of review rights had little or no evidentiary value.
Deemed IRP
• Print (311/06): the Court held that ACC was correct in deeming an IRP and requiring the appellant to undergo initial occupational and medical assessments.
Whether ACC can require a claimant to participate in IOA and IMA
• Print (supra): Judge Barber summarised the case law on this issue:
“[26] In a series of subsequent decision (Henderson (396/2004), Millin (397/2007), Gibb (122/005) and McKean (132/2005), Judge Beattie considered the effects of an IRP which contained within it, as its sole steps, referral of a claimant to the Initial Occupational Assessment ("IOA") and the Initial Medical Assessment ("IMA") procedure under the Act, In each of those cases, Judge Beattie held that, while reference to a claimant undertaking initial assessments was often included in the IRP, they are outside the true nature and purpose of the IRP. It is not open to a claimant to question the right of ACC to require that the claimant undergo the IOA and IMA. Both assessments are precursors to identifying what is appropriate rehabilitation for a claimant, and for the inclusion in the IRP thereafter of the necessary initiatives which had been identified by those assessments.
• White (58/06): Judge Beattie concluded at paragraph 51 of his judgement:
"The time-framed initiatives stated in the IRP are those that clearly reflect the statutory provisions, and in particular Section 77 of the Act, which requires the respondent to prepare an IRP having obtained an assessment of the claimant's needs for rehabilitation, and this is the purpose of the Initial Occupational and Medical Assessments."
Legislation - s. 80, ss. 85 – 89
• Section 85 requires ACC to provide vocational rehabilitation to a claimant who is:
- entitled to weekly compensation; or
- likely, unless he or she has vocational rehabilitation, to be entitled to weekly compensation; or
- on parental leave.
• Sections 86 and 87 set out the matters ACC must consider when deciding whether to provide vocational rehabilitation.
• Section 89 provides for an initial occupational assessment to identify the types of work that may be appropriate for the claimant, and an initial medical assessment to determine whether the types of work identified by the occupational assessor are likely to be medically sustainable for the claimant.
Case Law
General principles
Thomson (56/04): one of the issues was whether ACC had correctly declined the appellant’s request for payment of weekly compensation for the duration of a two year opera singing course. Judge Hole summarised the main principles that applied:
“When considering if the respondent’s decision was correct, I am required to look at the way it issued its decision. An appeal against the Reviewer’s decision (and, accordingly, the respondent’s decision) can only succeed if it is established that the respondent exercised its discretion on a wrong principle, or that it failed to take into account some relevant matter, or that it took into account some irrelevant matter or, finally, that it was plainly wrong in the sense that it was so extraordinary that no person vested with that discretionary power and acting properly could have made such a decision. (Wood (278/2002) and Webby (156/2001)).”
Must be an earner or potential earner to qualify
• Vocational rehabilitation is not available to non-earners.
• To qualify for vocational rehabilitation the claimant must be entitled to weekly compensation for loss of earnings or loss of potential earning capacity: Innes (107/96) and Miller (130/97).
Entitlement determined at date of application
• McKenzie (135/04): the appellant requested ACC funding for retraining. ACC declined the request on the grounds that at the time of the application, the appellant was not in receipt of or entitled to weekly compensation.
On appeal, Judge Cadenhead held that Clause 53 of Schedule 1 to the 1998 Act (now Clause 85 of Schedule 1 to the 2001 Act) requires that at the date of application for vocational rehabilitation, the claimant must be entitled to weekly compensation. On the facts, at the time of application, the appellant did not meet the statutory criteria. He had returned to employment and was not in receipt of weekly compensation. Hence, the appeal was dismissed.
ACC has a discretion to determine appropriate vocational rehabilitation
• Wood (278/02) and Harris (4/02) are authority for the proposition that ACC has a discretion to determine what particular vocational rehabilitation initiatives or interventions it deems appropriate in the particular circumstances.
Request for retraining
• Walsh (253/00): Judge Beattie stated:
“I find that a plea for a requirement of retraining or up-skilling could only be successful if an occupational assessment did not identify any types of employment that match an insured’s existing skills.”
• Lunam (313/05): there were four appeals, of which three were dismissed. Judge Barber observed that ACC had made commendable efforts to assist the appellant with his rehabilitation. The Judge also found that the appellant had a range of transferable skills. However, on the issue of the appellant’s request for funding for an agricultural course, the Judge directed ACC to give further consideration to the course.
Whether the vocational rehabilitation was appropriate
• Dekker (34/02): the appellant, a self-employed brick and block layer, sustained a back injury in 1987. His orthopaedic surgeon advised him not to continue in heavy physical work. A vocational assessment in November 1998 addressed various options, including continuing with his self-employment, with extra part-time work to supplement income. A work capacity assessment identified that he had the capacity to work for 30 hours or more in other appropriate jobs, and ACC ceased his weekly compensation. ACC revoked the decision, in order to consider further material. ACC later confirmed that the vocational rehabilitation provided had been appropriate and complete.
ACC’s decision was upheld on appeal. Judge Ongley held that it was open to ACC to review the rehabilitation and evaluate whether it was complete. He found that ACC was not abdicating its responsibility or taking into account a wrong principle.
Judge Ongley noted (at paragraph 12):
“I agree with the Reviewer that the Corporation properly adopted that course. Provided the necessary consultation was done and the objectives were addressed, there need not have been a modification to the existing rehabilitation plan. It was open to the Corporation to regard the plan as completed. Of course an insured person should not be unfairly prejudiced by an agreement that he has entered into through a mistake as to his available options. At the stage of review under s 135, and on appeal from the review, there needs to be an enquiry to ascertain whether the matter should be re-opened on the ground of mistake after Mr Dekker had indicated his preference for no rehabilitation addressing other employment.
There is unmistakable advice in Mr Peak’s vocational assessment of 18 November 1998 that supplementary employment would be one of the options that could be addressed. It is difficult to accept that Mr Dekker was not aware of that. What appears to be more likely is that he focused on continuing in his own business with the support of weekly compensation and did not confront the question of finding extra work until he was told that the compensation would cease.
I am unable to find evidence to support Mr Rowlett’s submission that the Corporation abdicated its responsibilities or took into account a wrong principle by deciding that a constructive modification of the rehabilitation plan was not cost effective because Mr Dekker would be going off weekly compensation in any case. The material indicates that the Corporation went through the process, giving an opportunity for consultation, and was unable to identify, with the help of Mr Dekker, any rehabilitation programme that would assist him to remain in his business.”
Work trials
• Hanmore (99/06): a vocational independence decision, in which the appeal was allowed on the ground that the appellant had not been adequately rehabilitated. In relation to the work trial, Judge Cadenhead expressed concern that arbitrary restrictions were placed on the length of time of the trials:
“I would have thought that the length of time would be dictated by the progress that the appellant made performing those work trials, and could not be realistically set before the work trials had been undertaken.”
Legislation: s.81, Schedule 1, Part 1, Clause 12 – 13.
• Section 81 outlines the liability of ACC to provide key aspects of social rehabilitation. It also sets out the required conditions to be met for ACC to provide the entitlement, under Section 81(4).
• Clause 12 defines “aid” or “appliance” as any item likely to assist in restoring a claimant to independence.
• Clause 13 sets out the circumstances where ACC will provide or contribute to the cost of an aid or appliance.Case Law
Aid and appliances distinguished
• Layton (53/95):
“The provision of aids and appliances under the social rehabilitation provisions must be distinguished from the provision of equipment to enable employment to be undertaken under a vocational rehabilitation programme.”
Hearing aids
• Lawson (236/05): Judge Beattie considered the provision of hearing aids to a person who had cover for noise induced hearing loss (NIHL). The Judge noted that:“The statutory provisions of the Act relating to the provision of aids such as hearing aids give the respondent (ACC) a discretion, but a primary consideration must be that the respondent must determine the aid is necessary and is required as a direct consequence of a personal injury for which the claimant has cover.”
In dismissing the appeal, Judge Beattie explained that on the facts before him there was:
"… no evidence which would suggest that the appellant’s NIHL was of a degree which by itself would require or warrant the provision of hearing aids.” (Underlining added)
• Penberthy (24/01): the Court found that although the claimant required a new hearing aid, the hearing aid was not required as a direct consequence of the personal injury because much of his hearing loss was due to ageing.
• See also Byrant (98/07), in which Penberthy (supra) was applied.
Household furniture and appliances
• Kanara (99/05): the Court considered whether ACC correctly declined the appellant’s request for the provision of a bed, dishwasher and fridge. The appellant had lived in “spartan conditions” before his accident and had previously done without these items. In dismissing the appeal, Judge Ongley stated (at paragraph 36):
“I find that Mr Kanara is able to satisfy the requirement that the items in question are required as the result of his injury, because he is a person whose pre-injury requirements were less than the vast majority of people. But unfortunately the three items are not of a type usually supplied by a rehabilitation provider.
The evident intention of the legislation is that claimants have to provide their own ordinary household furniture and appliances and the responsibility of the Corporation arises only when special or modified articles are needed. Mr Kanara may have lived in relative poverty either by choice or by necessity, but the cost of improving his household amenities does not fall on the Corporation, even though the need to provide for a higher level of comfort or convenience is brought about directly by his accident related impairments.”
• Judge Barber adopted a similar approach in Townsend (5/07), noting that a bed was not an item normally provided by a rehabilitation provider. The Judge stated:
“The decision in Kanara makes clear that ACC is not liable to provide ordinary household furniture and appliances unless special or modified articles are required i.e. items which are normally provided by a rehabilitation provider. That is also my assessment of the legislation.”
• However, in Grassam (23/07) Judge Cadenhead distinguished Kanara (supra) and held that ACC was liable to fund a new bed for the appellant. The Judge set out his reasons as follows:
“[28] Essentially this appeal turns on the facts. It seems relatively clear to me from the medical evidence that the therapist said it was necessary for the appellant to obtain a suitable bed for the purpose of his social rehabilitation in terms of s.79 of the Act. I have considered in depth the consideration of Judge Ongley in Kanara and I do not derogate from it. However, I am of the opinion in this case having regard to the strength of the medical evidence, and that of the therapist, that this case is distinguishable from Kanara.. I accept at once that the respondent is not liable to provide the appellant with household utensils or items of furniture that would normally be within the province of everyday living. However, on the facts of this case I am (of) the view that the appellant would not have purchased this type of bed but for his back condition, and for this reason on the facts, this case falls outside the Kanara principles.”
Legislation: s.81; Schedule 1, Clauses 12, 14.
• Clause 12 defines ‘attendant care.’
• Clause 14 sets out the circumstances where ACC will provide or contribute to the cost of attendant care
General principles
• Waaka (101/03): The Court upheld ACC’s decision determining that the appellant was entitled to 35 hours per week of attendant care. The Court identified the main principles that applied to the exercise of a discretion (at paragraph 17):
“As a matter of law, although this Court is hearing this appeal by way of rehearing, nevertheless it is an appeal against the exercise of a discretion and the clear principle of law pertaining to such appeals is that such a discretion should not be interfered with unless it can be demonstrated that that discretion has been exercised on a wrong principle. I find that it would require the appellant to demonstrate that the respondent had not complied with its statutory obligations when considering the appellant’s application for attendant care or that having viewed the matter as a whole the Court could not accept that the decision was proper and fair.
The most oft quoted passage relating to the formulation of the principles to be considered when the Court is considering an appeal against the exercise of the discretion is that enunciated in the decision of May v May [1982] 1NZFLR 165.
“An appellant must show that the Judge acted on a wrong principle, or that he failed to take into account some relevant matter or that he took account of some irrelevant matter or that he was plainly wrong”.
That principle continues to be approved as the correct statement of the law, one of the more recent re-statements of it being by the Court of Appeal in Alex Harvey Industries v Commissioner of Inland Revenue (CA36/01).”
The assessor’s report
• Woods (320/03): the assessor had identified that the appellant required 95 hours of attendant care per week in November 2000. The appellant subsequently suffered congestive heart failure and was reassessed as requiring 24 hour care from September 2002. The Court held that there was no basis for interfering with September 2000 assessment:
“The Court is only concerned with a capsule of time from November 2000 until the appellant returned home from hospital following his heart problems in September 2002. I have considered the assessment of Mr Guest and found it to be thorough and based on sound reasoning. As with other assessments which various other provisions of the Act require to be made by professionals, it should be the case that such an assessment should not be disregarded unless there are clear and cogent reasons demonstrated for doing so.”
• Anderson (208/06): The appellant had been assessed to require 50 hours of attendant care per week in June 2003, which was reduced to 17.5 hours per week from November 2004. The appellant’s husband, a lifestyle coach, was providing the care. On appeal, the husband submitted that the provision of care to his wife was a significant disruption to his career. In allowing the appeal, Judge Cadenhead directed ACC to arrange a further assessment of the appellant’s attendant care needs. The Judge noted that the assessor should specifically address personal safety issues and the appellant’s husband’s occupation.
• Tukaki-Keremete (211/06): the appellant suffered severe cognitive dysfunction following an injury at birth in 1990, which was accepted for cover as medical misadventure (medical mishap). ACC accepted that he had a complex personal injury in 1998 and assessed him under the attendant care regulations. In March 2003 ACC issued a decision revising his attendant care entitlement for the period from August 1994 to May 1999 to 77 hours per week
On appeal, the appellant’s advocate argued that ACC should pay for 24 hour care, noting that the medical evidence classified his injury as being severe. Judge Beattie rejected this argument, stating that a ruling of “severe” under the criteria for medical mishap did not necessarily translate to all aspects of the appellant’s attendant care needs. The Judge stated that the attendant care requirements must be considered by a duly qualified assessor. He found no basis for interfering with the attendant care assessment and dismissed the appeal. The Judge also accepted ACC’s argument that, as the appellant was a child, some hours of supervision could be expected to be “part of normal parental supervision rather than supervision for any heightened need required as a consequence of injury.”
Backdating of attendant care
• Rangiwhetu (149/05): one of the issues raised by the appellant was whether section 83(3) of the 2001 Act allowed ACC to backdate attendant care to a date prior to the making of the formal application. In this case, the appellant had applied in June 2001 for attendant care, but sought payment from May 1995. Judge Beattie held that section 83(3) was confined to applications made under the 2001 Act, and was not capable of allowing payment prior to the commencement of that Act.
• On appeal to the High Court, Justice Mallon held in Rangiwhetu v ACC (19/04/07, HC Wellington, CIV 2006-485-1402) that there was a written application, as required under the 1992 Act, on 15 May 1995 and accordingly, the appellant was entitled to attendant care from that date. The Court also found that the 2001 Act did not allow ACC to pay for attendant care for any period prior to the commencement of the Act. Accordingly, the appellant could not receive attendant care from the date of his discharge from hospital.
• Day (222/05): a late appeal, in which the substantive issue concerned the backdating of attendant care payments under the 1998 Act. The appellant argued that attendant care can be paid under the 1998 Act for periods prior to the date of application and prior to the date when the 1998 Act came into force. Judge Ongley accepted ACC’s argument that the 1998 Act did not preserve or create any entitlement to attendant care compensation prior to 1 July 1999. The Judge declined the make a decision as to whether the 1998 Act permitted payment of attendant care for periods prior to the date of application.
Rate of payment to the carer
• Williams (46/06): one of the appeals concerned the rates payable to carers. The appellant, a tetraplegic, had 24 hour attendant care. He managed his own carer’s regime by personally recruiting, training and paying his carers. In November 2003 the reviewer directed ACC to pay the appellant the contracted provider rate (the rate paid to carers contracted through an agency), rather than a wage rate for individual carers. The appellant appealed ACC’s decision to fix the rate at the contracted provider rate. He sought a higher rate. Judge Ongley dismissed the appeal. The Judge noted that while the appellant raised a serious question as to the adequacy of payments, there was insufficient evidence to support a higher rate.
• Tuhakaraina (138/06): the appeal concerned the hourly rates payable to a non-agency carer who provided attendant care. The appellant sought a higher rate, on the basis that ACC paid a higher rate to carers from agencies. Judge Beattie dismissed the appeal, holding that there was no basis for the Court to interfere with the exercise of a discretion by ACC. The Court noted that a direct comparison between the rate paid to agencies could not be made to establish that the amount paid to a private carer was wrong.
Legislation: s.81; Schedule 1, Clauses 12, 15 & 17.
• Clause 12 defines ‘home help’ and ‘child.’
• Clause 15 sets out the circumstances where ACC will provide or contribute to the cost of child care.
• Clause 17 sets out the circumstances where ACC will provide or contribute to the cost of home help
Case Law
Medical evidence
• Luke (149/04): The Court held that ACC had given insufficient weight to the medical evidence, which had indicated that there had been a deterioration in the appellant’s condition. Accordingly, ACC’s decision to reduce the appellant’s home help from 3.5 hours to 2.5 hours, and to discontinue personal support was set aside. The Court restored the appellant’s previous entitlements, pending a further reassessment.
Support from family members
• Knighton (65/05): this case concerned child care and home help (Clauses 15 and 17 of the 2001 Act). The appellant suffered pelvic injuries in an accident in January 2000. She had two young children and there were various assessments for home help and child care. After the break-up of her marriage in March 2002, her parents provided substantial levels of support. The appellant’s parents were no longer available to provide support from July 2003. The appellant sought compensation for the support that her parents were forced to provide from December 2002 to July 2003.
Judge Barber noted that clauses 15 and 17 of Schedule 1 provide a statutory expectation that family members, without financial assistance, will provide at least some of the home help and/or childcare required. However, it was also noted that “account must be taken that such family members have their own lives to lead.” The Judge held that ACC had not acted reasonably, and that the exercise of its discretion was unrealistic. The appeal was allowed.
Home help restricted
• Elliston (317/01): the Court held that the provision of home help was restricted to meal preparation, laundry and house cleaning. There was no provision for the payment of window cleaning or lawn mowing costs.
• Lewis (305/05): Judge Cadenhead confirmed that home help did not include garden maintenance:
“The provision of external maintenance as home help, such as lawn mowing and hedge trimming in respect to the home of the claimant, is not a domestic activity as defined in the Injury Prevention, Rehabilitation, and Compensation Act 2001, and is therefore not provided for under the Act.”
Legislation: s.81; Schedule 1, Part 1, Cl.12, 18 & 19
• Clause 12 defines ‘modifications to the home’.
• Clause 18 sets out the circumstances where ACC will provide or contribute to the cost of modifications to the home.
• Clause 19 sets out the rights and responsibilities of the claimant and ACC in relation to modifications to the home.
Case Law
• Dow (168/04): the Court considered whether ACC should have met the cost of constructing an independent housing unit for a tetraplegic teenage claimant. ACC had only agreed to contribute to the cost of modifying the parents’ existing home. The Court said (at paragraph 30) that the operation of Clause 47 (of Schedule 1 of the 1998 Act) occurs when ‘deciding whether to provide modifications to the home’. The Court further noted that:
“It is not a provision for fixing the cost but for selecting the scheme to be adopted to assist the insured to undertake the activities of daily living to the greatest extent possible. Once the scheme has been selected, while having regard to the likely cost of reasonable alternative living arrangements, the latter cost does not dictate the compensation. In a similar way, cost effectiveness is a consideration under cl 41 but it is not an overriding consideration.”
ACC’s requirement unreasonable
• Manos (210/01): The appellant, who was wheelchair bound, sought ACC’s contribution to the cost of enlarging his bedroom. ACC declined the request on the grounds that he could use a larger room in the house, which was originally the lounge, but was currently being used (by his daughter) as a bedroom. The Court allowed the appeal on the ground that ACC had not exercised its discretion in accordance with the statute. The Court noted that ACC’s requirement that the appellant and his wife move into the lounge and use it as a bedroom was not a reasonable alternative within the meaning of the Act.
• Dolamore (339/02): the appellant, a paraplegic, applied to ACC for the cost of modifications to his home. Part of these costs included the enclosing of the existing carport. ACC agreed to pay for the various modifications, except the closing in of the carport.
Legislation: s.81, Schedule 1, Part 1, Clauses 12, 21 & 22
• Clause 12 defines ‘transport for independence.’
• Clause 21 sets out the circumstances where ACC will provide or contribute to the cost of transport for independence.
• Clause 22 sets out the rights and responsibilities of the claimant and ACC in relation to the cost of transport for independence.
Case Law
General principles
• Demanser (175/06): Judge Beattie made the following observations:
“[13] It seems to me that the matters required to be considered under Clause 21 are matters relating to the need of the claimant for Transport for Independence, and they are criteria which, if satisfied would, prima facie, entitle the claimant to the contribution to the cost of Transport for Independence which has been sought.
[14] Clause 22, on the other hand, sets out a number of disqualifying circumstances which, even if the criteria of Clause 21 might be able to be satisfied, would nevertheless disentitle a claimant to the contribution sought. They are a different type of criteria to those in Clause 21. The circumstances set out in Clause 22 are firstly if the claimant owns a vehicle that can be modified in such a way as to enable the appellant to have Transport for Independence. Secondly, the respondent has no responsibility if the claimant has disposed of a motor vehicle after suffering the personal injury and which vehicle may have been able to have been modified to restore the claimant’s Transport for Independence.”
Whether need for motor vehicle due to the personal injury
• Rongonui (308/05): the appellant suffered back, leg and head injuries. He did not have a car prior to his injury. A transport for independence assessment identified that he needed a motor vehicle with automatic transmission and power steering. ACC declined the request on the basis that the need for a vehicle related to his financial position rather than any injury-related need. Judge Cadenhead allowed the appeal, holding that ACC had addressed the wrong question:
“The issue to be determined is whether the appellant's personal injury has caused the appellant to need a motor car. The appellant does not have a motor car and the issue is not one of modification, but rather whether the appellant is in need of a car. Indirectly the type of car would have to have the features of power steering and automatic transmission. The question answered by the primary decision and the review decision was too narrow.”
Ownership of another motor vehicle
• Caulfield (306/05): Judge Beattie held that under clause 22 of Schedule 1, previous ownership is only a consideration where modification is being sought (see paragraph 15). On the facts, the Judge found that at the time the appellant established a need for assistance for transport for independence, she was not the owner of a motor vehicle which satisfied those needs.
• Smith (235/05): ACC declined the appellant’s request for assistance with the purchase of a motor vehicle on the ground that he already owned a Toyota Hi-ace van, which was a work vehicle, that met his needs. In allowing the appeal, Judge Beattie held that there was a distinction between vocational and social rehabilitation in terms of transport for independence. The Judge stated that:
“the mere fact that the appellant owns a work vehicle is not an answer to his claim for transport for independence where there was an identified problem, which I find to have been established, with the vehicle that he had hitherto relied on for his social independence.”
Judge Beattie directed ACC to carry out a further assessment and issue a new decision.
• Cromb (3/05): The appellant sought assistance for the purchase of a replacement vehicle for a Mitsubishi van which ACC had funded ten years earlier. The appellant sought to change his work vehicle for reasons of comfort. The appellant and his wife jointly owned a Holden Commodore which the appellant could drive without problems. In his decision, Judge Barber stated that no evidence had been put forward that Mr Crombe needed another vehicle to maintain independence or that the provision of another vehicle would enable him to become more independent. The Judge similarly found that the Holden Commodore was suitable for his needs:
“The Holden Commodore is part-owned by the appellant. His requirements are for a saloon car with automatic transmission and the Commodore meets these requirements even without modification.”
Disposal of suitable vehicle
• Demanser (175/06): the Court held that ACC had misapplied clause 22(1) of Schedule 1. On the facts, clause 22(1) did not apply, as the vehicles the appellant had disposed of since the accident were not vehicles which could have been modified to assist in restoring his independence. The Court noted that clause 22 solely related to the modification of vehicles or vehicles potentially capable of being modified to satisfy a claimant’s requirements. Having found that ACC did not exercise its discretion on the correct statutory principles, the Court held that the appellant was entitled to assistance, and ordered ACC to make another decision on the extent of its contribution.
• Doyle (270/04): the issue was whether ACC had correctly declined a second grant for motor vehicle modifications, on the ground that the appellant already had a suitable vehicle, but had sold it. In 1996, ACC had agreed to grant $12,000 to purchase a motor vehicle. The appellant purchased a car, with the occupational therapist’s approval, for $23,700. In 2001, the appellant requested ACC’s contribution for a replacement vehicle. She claimed that the current vehicle was no longer suitable for access to the community, and was uneconomic to maintain. ACC declined the request, and this decision was upheld by the District Court.
In dismissing the appeal, Judge Ongley stated:
“I agree with Mr Corkill that in this case the evidence is not enough to show that the vehicle had reached the end of its useful life. Judgement of whether there is no further value in the assistance provided by the Corporation needs to be made on objective grounds. The appellant's concern or anxiety that the vehicle was no longer reliable is not enough on its own. In my view it would have to be reasonably based and the enquiry therefore depends on an appraisal of roadworthiness and mechanical condition. There could be an area of conflict between the Corporation's statutory responsibilities and the preferences of an owner who perceives a need for replacing the vehicle for various reasons not directly connected with aspects of social rehabilitation. …
… In my view, the Corporation refused further contribution on reasonable grounds. The Corporation had no proper evidence of the economic life of the transmission, and consequently the economic life of the car itself. It needed a mechanical report on which to base a different decision. Mrs Doyle was asked to provide such a report but did not do so.
I find that the Corporation weighed the relevant factors and reached a decision that was justified in the circumstances.”
• Wratt (306/04): the Court upheld ACC’s decision to decline the appellant’s request for assistance in the purchase of a motor vehicle. ACC had previously contributed to the purchase of a suitable vehicle (automatic with supportive adjustable seating). The appellant disposed of this vehicle because of the continuous repair costs and later purchased a manual Ford Telstar. The Court noted that there was nothing unique in the type of vehicle he required. Furthermore, the appellant had purchased the Ford for his daughter, who wanted to obtain her driver’s licence.
The Court set out the relevant legal principles, and observed that the various cases cited by the appellant were all dependent on their specific factual backgrounds.
• Perkins (140/02): The appellant sustained a back injury in 1981. She had a total hip replacement operation in 1996 which resulted in a left foot drop. ACC accepted this as medical misadventure. ACC assisted with the purchase of a Mitsubishi Lancer in 1996. In 1998 the appellant returned to work as a real estate agent. She sold the Mitsubishi and purchased a Honda Accord (without consulting ACC). In July 2000 the appellant had a fall, and again injured her back and hip. In January 2001 she requested further vehicle assistance, stating that the seating in the Honda was too low for her. ACC declined the request, noting that she previously owned a vehicle that was suitable, which she then disposed of.
Judge Beattie allowed the appeal. He found that the July 2000 incident was a novus actus interveniens (a new act intervening), and that the appellant’s mobility was further restricted as a result of this incident. Hence, she was entitled to assistance, and ACC was required to determine the amount of assistance.
Request for more suitable vehicle
• Naish (234/03): the appellant sustained a serious spinal injury which caused paraplegia. He subsequently developed syringomyelia, which resulted in C6 tetraplegia, and he required 24 hour attendant care. ACC contributed to the purchase of a vehicle and the cost of modifications in 1999. The appellant sought further assistance in 2001 for a more suitable vehicle. He required a vehicle that would enable him to drive without having to transfer from his wheelchair, since the transfers caused significant pain. ACC declined the request.
In allowing the appeal, Judge Cadenhead commented that ACC had given insufficient weight to the vehicle assessor’s report, the medical evidence and the evidence of the appellant as to his need for another vehicle.
Prior approval
• Van Rooyen (286/05): the Court held that it was not necessary for the appellant to have sought prior approval for the purchase of a suitable motor vehicle, provided he had been assessed as having a need for the vehicle.
Replacement of uninsured vehicle
• Walls (10/06): the Court held that ACC was not liable to replace a vehicle it had previously funded when that vehicle was written off and had not been insured. The Court stated that ACC had no discretion under the current (unamended) 2001 Act, though it noted the amendment, to take effect from 1 July 2005, permitted some discretion.
Compensation
Entitlement to weekly compensation
Weekly compensation calculations; employee, self employed, shareholder-employee
Suspension/cessation of entitlements
Unreasonable refusal/failure: Section 117(3)
Disentitlement
ENTITLEMENT TO WEEKLY COMPENSATION
Legislation: ss. 100 – 106, Clause 32.
Other references: s.6 Definitions of “earner”, “incapacity”, “weekly compensation”, “employment”.
• Section 100 sets out the criteria for entitlement to weekly compensation. The claimant must have an incapacity for employment, and be eligible under the provisions in Section 100(1)(a) to (d). In general, the claimant must, at the time of incapacity, be:
- an earner
- an employee on unpaid parental leave
- a deemed earner
- a potential earner
- a self-employed person who had purchased weekly compensation.
• Section 101 directs ACC to determine a claimant’s incapacity under Sections 103 or 105.
• Section 103(2) sets out the relevant test for determining incapacity:
“The question that the Corporation must determine is whether the claimant is unable, because of his or her personal injury, to engage in employment in which he or she was employed when he or she suffered the personal injury.”
• Section 104 outlines the consequences of ACC determining that a claimant is not incapacitated for employment.
Case Law
Applicable statute
• Rieper (196/04): when assessing a claimant’s weekly compensation, the Act to be applied is the Act that was in force at the time the claimant applied for weekly compensation. See also Frewen (154/02) and McIlwaine (282/03).
• However, in Willis (55/07) Judge Beattie applied the 1992 Act when the claimant applied for weekly compensation in 2004 (during the currency of the 2001 Act).
Incapacity
• Defined in s.6, and is determined under s.103 or s.105.
• s.103(2):
“The question that the Corporation must determine is whether the claimant is unable, because of his or her personal injury, to engage in employment in which he or she was employed when he or she suffered the personal injury.”
• Ilich (244/05): Judge Cadenhead observed that the test for incapacity under the 2001 Act was much broader than in the previous legislation.
Onus
• Vincent (79/06): Judge Ongley discussed onus, noting that, on the question of incapacity, onus was important:
“[66] Taking that view of the legislation, I consider that a claimant does not carry an onus to prove his or her continued entitlement during a period while the Corporation has not changed its decision on s103 incapacity. Ability to work is sometimes described in terms of “capacity” rather than fitness to work. The claimant does have a responsibility under s72 of the Act to provide certificates when reasonably required. In the case of a retrospective claim, it is difficult to discharge the onus of showing unfitness for work in the absence of contemporaneous medical certification. It is even more difficult when the claimant has been working. When a claimant has been working full time, the cases have established that there is a presumption of fitness to work.
[67] If the claimant has continued to do work similar to his pre-injury employment, the claimant’s fitness to work may well demonstrate capacity for pre-injury employment. In that case the Corporation may make a retrospective decision removing entitlement to weekly compensation until further or supervening incapacity can be established.”
“Employment in which he or she was employed”
• Wilson (134/06): the Court accepted the appellant’s submission that as he was a dairy farmer at the time of his injury, when determining whether he was incapacitated, the enquiry was limited to a consideration of what work tasks he performed or was not able to perform in his employment as a dairy farmer prior to his injury. Those findings were then to be used to define the scope of that “employment.”
The Court stated:
“I accept that submission as a general principle, as the statutory provision is specific to a consideration of the “employment in which he was employed,” and must be taken as being more particular, but not narrowly so, than the generic considerations which would apply to employment types or work types if one were considering whether a claimant has attained Vocational Independence.
Having accepted that submission, however, I find that if the personal injury under consideration further limits the range of activities which the claimant can undertake, but which are functions of the employment, then in those circumstances a finding of incapacity would be made.”
Claimant substantially able to perform generic employment tasks (of pre-accident employment)
• Lamb (74/98): [A decision under the 1992 Act] The appellant, a registered nurse, injured her back in 1990. At the time of the injury, she was working as a geriatric nurse. She was certified unfit for work, and later commenced part-time work as a psychiatric nurse. She received abated weekly compensation. In October 1996, ACC determined that she was no longer incapacitated.
On appeal, Judge Beattie noted that the medical evidence indicated that geriatric nursing was not suitable for the appellant, due to the requirement to lift elderly patients. The Judge also found that the appellant had demonstrated an ability to undertake psychiatric nursing. The appellant argued that s.37A [now s103] required a consideration of whether she was able to return to nursing in a geriatric environment. In rejecting this argument, Judge Beattie stated:
“I find that such an interpretation of section 37A is far too narrow and gives a far too restricted meaning of the word employment. “Employment” as defined in section 3 means “work engaged in or carried out for the purposes of pecuniary gain or profit.”
Where a person is a duly qualified registered nurse I find that limiting that qualification to a particular type of nursing would be an artificial limitation. The appellant is a nurse and if she is able to resume her work as a nurse, and in that regard the field of nursing is multi-faceted and some tasks within it are less demanding physically than others, then I consider that no such incapacity can be said to arise within the meaning of section 37A.”
• Irving v ACC (11/4/03, Laurenson J, HC Whangarei AP53/01): the appellant was a truck driver at the time of the accident. He later worked in a cafe, and his cafe work included truck driving. The Court found that the appellant was not incapacitated from employment, on the basis that he had demonstrated that he was capable of driving.
In discussing the District Court decision of Lamb (supra), Justice Laurenson stated:
“The principle which I discern in that case is that when considering s37A and in particular the words ‘in employment in which the person was engaged when the personal injury occurred’, that consideration is not to be restricted to an assessment of the specific task being undertaken at the time of injury.
Rather, the question to be determined is whether the basic elements of, or skills required to perform the specific task, are peculiar to that specific task, or are they such that they can be applied to a wider sphere of work engaged in or carried out for the purposes of pecuniary gain or profit. If the answer is the latter, then it is possible to define a field of employment within which it can reasonably be said a particular claimant can work, engage in or carry out for the purposes of pecuniary gain or profit.”
The Court identified that the basic skills required of a driver were the ability to drive road vehicles by suitably qualified or experienced persons for pecuniary gain or profit. Therefore, truck driving was part of the wider field of general employment, and the medical evidence indicated that the appellant was capable of driving.
Claimant who has “soldiered on” in employment
• Vincent (79/06): Judge Ongley summarised the case law in this area. There are a line of cases which accept that where a claimant has “soldiered on” in employment, he or she cannot be considered incapacitated at the time he or she was in fact employed. These include:
- Heaney (5/01): the claimant resumed work as a ski field worker for two seasons after her injury, despite being troubled by pain. She was found not to have been incapacitated.
- Warriner (317/02): the claimant had resumed work for 15 months after recovering from an injury, stoically working to save his business from collapse. The Court did not accept retrospective certification of incapacity.
- Lovett (238/99): the claimant was able to carry out the same range of tasks that the pre-accident employment required, albeit at a slower pace, and was found not to have an incapacity.
• Cases where the claimant was found to be incapacitated:
- Court (225/03): a seasonal meatworker was found to be incapacitated on the last day of his seasonal work, having continued in his pre- injury employment despite a shoulder injury. There was continuing evidence of medical consultation and treatment which established that he was not fit while he was still working.
- Marwick (100/04): a soldier suffered a back injury but literally “soldiered on” in the military until he was certified unfit six months after the initial injury. Judge Beattie found that the claimant was not incapacitated in law during his period of military duty. However, when the period of duty ended, “the incapacity actually came into being as a matter of law as well as a matter of fact, it having hitherto only been the latter of the two.”
• Judge Ongley noted the following principles from these decisions (at paragraph 59 in Vincent):
“[59] One of the effects of those decisions is that, while incapacity may exist in fact, in law the claimant cannot be considered to be incapacitated for the purpose of claiming weekly compensation. The judgement in Marwick accepts that there may be a situation of incapacity in fact, although the claimant has continued to work. The decisions also appear to accept the proposition that, for the purpose of fixing earnings, the commencement date for incapacity may occur at the end of the period of employment.”
When is the claimant no longer incapacitated?
• In determining when a claimant has regained the ability to work and is no longer incapacitated in terms of Section 103, the following should be taken into account:
- Whether the employment is of the same general kind as his or her pre-injury employment.
- Whether the employment is medically sustainable for the claimant.
• Where the claimant has been working full-time, there is a presumption of fitness to work. However, capacity to work cannot be assumed solely because the claimant is in full-time work with an employer.
• In a retrospective claim, it is difficult to discharge the onus of showing unfitness for work in the absence of contemporaneous medical certificates.
Termination of employment
• Reid (60/99) and Lang (265/03) are authorities for the proposition that where the claimant’s work is terminated, because of factors not connected to the covered injury, the claimant ceases to be an earner at the time he or she applies for reinstatement of entitlements.
• In Mansson (23/03) Judge Cadenhead stated:
"I do not think on the balance of probabilities I can say, having regard to the fact that the appellant resumed work and then resigned, making no mention of the injury to his right shoulder as a reason for his resignation, that the appellant falls inside the statutory prescription.
The original medical certificate given by his local doctor certified that he would be able to return to work on 21 June 2000. The facts are that the appellant then did return to work and resigned, and did not attribute his resignation to his employers as due to his injury to the right shoulder. It may be that at the present time the appellant has a permanent disability, but that is not the issue that I am called to decide."
• See also Moore (293/06).
Certification for sickness benefit does not indicate incapacity
• Reid (222/00): Judge Barber stated:
“I do not consider that certification for the purposes of a Sickness Benefit indicates an incapacity for the purposes of section 37A of the Act. Section 37A has its own precise definition of incapacity which is not applicable for the purposes of obtaining a Sickness Benefit from the Income Support Service. It does not necessarily follow that a person who qualifies for a Sickness Benefit is incapacitated for work purposes, although one would trust that people able to work do not accept such a benefit.”
Incapacity compared to vocational independence
• Trask (68/06): Judge Ongley made the following observations about the incapacity and vocational independence provisions:
[48] There is a potential conflict in principle between the line of cases which rejects vocational independence for a generic work type where the claimant cannot undertake all subcategories, and the line of cases in which capacity to work is accepted where the claimant cannot meet the requirements of his or her pre-injury subcategory but is fit for employment in other sub-categories.
[49] These two lines of cases concern different sections of the Act relating to capacity. The statutory language is different because s103 refers to engaging in employment, and the vocational independence provisions refer to types of work that are suitable. The drafter did not attempt to coordinate the language of the two sets of provisions. They have different functions, both directed to the same purpose of ending eligibility for weekly compensation.
[50] The approaches taken in the cases concerning the two different provisions have not attempted to achieve precise uniformity. There has probably been a stricter judicial approach to vocational independence, formerly called capacity to work, in order to avoid the manifest unfairness that could result from assessing a claimant for a supposedly suitable work type if the claimant has limitations. In contrast, decisions concerning the approach to capacity for former employment have tended to take a more relaxed approach.
[51] When examining incapacity under s103, the line between generic and subgeneric groups needs to be drawn in a logical and fair way. Sometimes the exercise concerns distinguishing particular tasks that are not within the capacity of the claimant, but which are exceptional for the type of work concerned. Sometimes the question is whether a particular kind of job should be regarded as a job type for the purpose of vocational independence, or as an unimportant subdivision of another job type. The decision may frequently be influenced by the opinion of an occupational assessor who is familiar with the features of a job which bring it into the same class as other jobs.”
Medical assessments obtained for vocational independence
• Ashton (146/03): the Court cautioned that a medical assessment obtained for a VIA must contain the “substance” that enables ACC to properly make a determination of the question in s.103(2). On the facts, the Court found that ACC’s decision to cease the appellant’s weekly compensation on the basis that he was no longer incapacitated could not be sustained. The reasoning for rejecting the medical assessor’s report is set out below:
“…Dr Moy was not asked to consider questions of capacity or incapacity, indeed the question he was asked was quite different and I find that the concept of medically sustainable is a much more flexible concept than the concept of capacity and this is certainly borne out in the manner in which Dr Moy gave his advice where he qualified it significantly by noting the need to have flexibility to manage the warning signs that this appellant’s injury would throw up at regular intervals because of the interaction of his prosthesis on his stump.
Dr Moy’s focus was on rehabilitation needs and it must be remembered that his report also considered a number of other employment options suggested by the occupational assessor.” (page 8)
Retrospective medical certificates
• In the Appeal Authority decision of Allen (113/92) Judge Middleton considered whether retrospective medical certification of incapacity could be used as a basis for paying earnings related compensation under the 1982 Act. The Judge stated:“While it has been accepted that retrospective certificates by themselves are not generally accepted in support of a claim it is necessary to consider the whole of the evidence before rejecting such a certificate.”
• A similar issue was considered in Schwalger (54/94) concerning certification of incapacity under Section 37 of the 1992 Act.
• In Reid (222/00), Judge Barber summarised the legal position (at page 9) as follows:
“This Court has accepted (in various other decisions) that retrospective certification of incapacity will be acceptable in certain circumstances. However, the onus is on the claimant to produce evidence establishing a “clear picture”, or ‘strong and supporting evidence’ other than contemporary medical certificates, of continuing incapacity over the period in question”.
….The cases of Allen and Schwalger refer to the requirement for additional and strong evidence in addition to retrospective certification if retrospective incapacity is to be proven to the required standard.”
• Palmer (26/06): Judge Beattie confirmed the above principle:
“… this Court has reaffirmed on many occasions that retrospective certification is to be treated with the utmost caution and retrospective certification of itself will be insufficient but that it can be evidence supporting incapacity if there is other credible evidence from which the necessary inference can be drawn.”
Earner immediately before incapacity commenced
• To receive weekly compensation, the claimant must have been an earner immediately before his or her incapacity commenced: Clause 32, Schedule 1.
“Immediately” must be strictly construed
• Ryan (107/04): Judge Cadenhead summarised the legal position on the interpretation of the words “immediately before his or her incapacity commenced.” This is a decision under the 2001 Act.At page 4 of the decision, the Judge stated:
“In Vasquez (146/96) and Chamberlain (115/98) the term "immediately before his or her incapacity" was considered. Vasquez was a case concerning a claimant, who had been injured while on paternity leave, but whose status as an employee was protected by the Parental Leave and Employment Act 1987. Chamberlain was the case of a claimant, who had sustained a severe head injury as a freezing worker in the off season at the freezing works. His employer said that he was covered by a collective employment agreement. He was regarded by his employer as an employee at the time of the accident and would have been taken on again at the beginning of the season with his seniority in place. In both cases this Court held that "immediately before" meant just that and the claimants were not entitled to weekly entitlements of compensation.
Similar decisions have affirmed the principle of "immediately before his or her incapacity" namely Lynch (43/99), Te Wake (10/2) and Hardie (256/02).”
• Similar comments were made by Judge Beattie in Verma (208/04), at page 4:
“It is the case that this Court has construed the word 'immediately' strictly and two oft cited decisions of this Court in Hardie (256/02) and Vasquez (146/96) confirm that interpretation. The practical effect of those decisions is that the claimant must have been in employment at the time of becoming incapacitated. This would mean that if a claimant was "between jobs" when he/she had the misfortune to become incapacitated then the fact that the claimant had every expectation of obtaining further employment would not assist in giving eligibility. This would be the situation, prima facie, which pertained to this appellant, as I find on the facts that she was "between jobs" when she suffered the incapacitating injury.”
Earner at the time of incapacity but not at the time of personal injury
• Giltrap (141/06): the appellant was not an earner at the time of her personal injury, but was an earner when she later became incapacitated. Judge Ongley held that the appellant was not eligible for weekly compensation. The Judge stated that Section 103 was clear in its terms and only applied to a claimant who was an earner at the time he or she suffered the personal injury, or was on unpaid parental leave. While Section 103 referred in its heading to “time of incapacity,” that was amended by statute to “time of personal injury.” The purpose of the amendment was to repair an obvious inconsistency between the heading and body of Section 103.
Whether the date of incapacity can precede the deemed date of injury
• R (192/06): Judge Cadenhead held that the date of incapacity was unable to precede the deemed date of injury. In this case the claimant had cover for mental injury and. under Section 36, her deemed date of injury was 15 May 2003, being the date that she first sought treatment for the mental injury. The claimant’s GP requested that ACC backdate the period of incapacity to 1 April 2003. The Judge stated.
“[33] However, the date of incapacity and any compensation entitlement for incapacity cannot precede the deemed date of injury. There is no mechanism in the 2001 legislation, to backdate incapacity to before the date of injury. I find that the affidavit of the appellant and the record of earnings does not help the appellant on the issue of the relevant date, which is the critical issue as to determining the issue the "immediacy' of the relevant earnings.
[34] The appellant's evidence is that she ceased employment on 16 April 2003. She was not an earner at the date of incapacity, and she does not quality for the extension of entitlement in clause 43. Again, there is no evidence that the appellant was an 'earner' in 1999 in terms of the legislation.”
• For a case concerning the date of incapacity and deemed date of injury under the 1992 Act, see V (289/06).
Payment on termination of employment – whether earnings
• Palmer (26/06): the Court held that the $15,000 payment the appellant received on terminating his employment was a redundancy payment and therefore was not “earnings.” In reaching that finding the Court noted that the payment:
- did not pertain to loss of wages. The appellant had received one month’s salary in lieu of notice;
- was not subject to tax, therefore was not regarded as a form of income or some other earnings related emolument;
- was not subject to an earner levy.
Potential earners
• Clause 47 of Schedule 1 provides that ACC is liable to pay weekly compensation for loss of potential earning capacity to a claimant who was a “potential earner” immediately before incapacity commenced.
• “Potential earner” is defined in s.6 as a claimant who either:
“(a) suffered personal injury before turning 18 years; or
(b) suffered personal injury while engaged in full-time study or training that began before the claimant turned 18 years and continued uninterrupted until after the claimant turned 18 years.”
• BRM (224/04): the appellant had suffered mental injury from childhood sexual abuse. The abuse occurred before he was 18 years old. However, he only sought treatment in 2001, when he was 35 years old. Under s.36, his date of injury was deemed to be 2001. On this basis, the Court held that he did not come within the definition of “potential earner.”
• Courtney (22/04): the appellant suffered a spinal injury in 1977, and was paralysed as a result. He received compensation as a potential earner under s 118 of the 1972 Act. He then started work in February 1978 as a payroll officer. In 1985, the appellant moved to the United States and was employed there. After 17 years, the appellant returned to New Zealand. He bought a house which required modifications and ACC agreed to assist. He applied for weekly compensation in November 2002 based on being a potential earner. ACC declined the request on the ground that loss of potential earnings was not designed to be used in cases of subsequent incapacity.
The issue on appeal was whether, from the date of the original accident and entitlements to cover, there had been a break in the chain of causation, so that it could be said that the appellant’s present incapacity was not connected to the original injury. Judge Cadenhead held that the chain of causation had not been broken, and that the appellant had the status of a potential earner from the date of his original injury. The Judge noted that even though the appellant was subsequently able to engage in employment and make earnings, the subsequent earnings applied by way of abatement. The subsequent earnings did not extinguish his original status as a potential earner.
Legislation
Schedule 1, Clauses 33 – 36, 42 & 43
Other references: ss. 9 – 11 (definitions)• Where a claimant had earnings as an employee, Clause 33 explains in what circumstances Clause 34 will apply. Clause 33(1) provides that Clause 34 applies to a claimant who:
“(a) was an earner immediately before his or her incapacity commenced; and
(b) was in permanent employment at that time; and
(c) had earnings as an employee from that permanent employment at that time.”
• Clause 34 sets out how weekly earnings for employees in permanent employment are calculated. There is a distinction between the first 4 weeks after the first week of incapacity, and any weekly period following those 4 weeks.
• Clauses 35 and 36 apply to claimants who received earnings as employees but were not in permanent employment.
• Clause 43 provides for the extension of entitlement where an employee’s employment has ceased before the commencement of incapacity. Clause 43(2) states that a person who has ceased to be an employee shall be deemed to continue to be an employee where, immediately before the commencement of the incapacity the claimant:
a) Had been an employee within 14 days; and
b) Would have been an employee; and
c) But for the incapacity, would have been an employee within 3 months after the commencement of incapacity.
Case Law
Employment status immediately prior to incapacity determinative
• Windle (104/04): Judge Barber stated (at paragraph 18):
“Clauses 33, 35 and 37 make it clear that it is a claimant’s occupation status immediately prior to the date on which his or her incapacity commenced, which is relevant for the purpose of assessing calculation of weekly compensation.”
Whether the claimant was in permanent employment
• Te Amo (206/02): in determining whether the appellant was in permanent employment, the Court noted that it was not relevant that he did not have any written contract, or that the period of his employment prior to the injury was of short duration.
The key question was “would he have continued to receive earnings from that employment for a continuous period for the next 12 months or more?”
On the facts, the Court concluded that the nature of the appellant’s employment was casual. The reasons were that the appellant’s employment was subject to availability, there was no guarantee as to hours or days of work, he had no claim on the employer for any minimum work period, and he was totally at the whim of the employer as to when and if he worked. Judge Beattie further noted:
“To my mind that is the antithesis of permanent employment where there is a structured arrangement, not necessarily needing to be in writing, but nevertheless each party knowing that there is a continuous employment arrangement of specified times or days of a week.
The rationale for the distinction between the calculations for permanent and non-permanent employees is explained in paragraphs 21 to 23:
“[21] The purpose of the Act of the distinction to be drawn between employees in permanent employment and employees not in permanent employment for the purposes of calculating weekly compensation, is to give the employee who is considered to be a permanent employee the proper recognition of his pre-accident earnings for the period that he has been so permanently employed, particularly if his permanent employment is only of recent time.
[22] The purpose of weekly compensation is to compensate an injured employee during the period he is unable to earn by reason of incapacity. It is intended to compensate him for lost earnings. For this reason the Legislature has seen fit to give the benefit to a permanent employee who it can safely be said would in the future have continued to earn his income from that employment had he not been injured, and that it is right and proper that he be compensated in line with the income from that employment that he has lost because of his injury.
[23] Contrasted with that is the calculation to be made for a non-permanent employee who is a person who may be a casual employee or a person who is there on a short-term contract. In the case of that person a crystal ball would be much cloudier and it could not be confidently predicted that that person would in the future continue to earn the type of income that he was receiving at the date of injury, particularly for the next 12 months. So the Act then takes an historical look at the person’s track record of employment for the preceding 52 weeks and says that he/she is entitled to receive weekly compensation calculated by dividing the income that that person had received over the last 52 weeks, whether in fact they had worked for all of those 52 weeks. The divisor must in every case be 52 rather than just the number of weeks worked. Thus the future is intended to reflect the past.”
• Van Huysen (135/03): the appellant was a relieving teacher who worked in a part-time position. Judge Beattie held that she was in permanent employment, stating that:
“I find that permanency does not require a notion of full-time employment but simply that there is an effective employer/employee relationship which each party can call on”.
• Estate of Lawton (89/04): Judge Hole distinguished Te Amo, and held that the appellant in this case was an employee in permanent employment. The “on-call” nature of his employment did not detract from his “permanent employment” status.
• Drylie (310/03): ACC had calculated the appellant’s weekly compensation on the basis that he was not in permanent employment at the time of his incapacity. There had been evidence from the employer that the work was only available so long as contracts existed, and the employer could not guarantee permanent employment to any of its employees. On appeal, Judge Barber found that the appellant was in permanent employment at the date of injury. He noted:
“It seems to me most employers could only retain staff subject to availability of work, and cannot guarantee employment to anyone whether for the requisite 52 week period or more or less. It cannot follow from that realistic situation of many relatively small businesses that the employees of those businesses do not have permanent employment in terms of accident compensation law.”
Earner status already determined by IRD
• Andrews (84/2004): The appellant contended that he was an employee, even though IRD had classified him as self-employed. The Court held that it was not competent to alter his status when this had already been determined by IRD:
“Whilst it is competent for this Court to consider certain questions of status such as whether a claimant is in permanent employment or is a shareholder/employee, I find that it is not competent for the Court to alter the taxation status of a person from being that of an employee on wages to that of a self-employed person when that particular status has been determined by the Inland Revenue Department.
Should it be open to the appellant to persuade the IRD to amend his status for the relevant period from that of self-employed to that of employee, then it would be open for the appellant to require the respondent to revisit its calculations as to his weekly compensation entitlement. However, until that status is changed by a body which is competent to do so, the matter must remain as it presently is, with the appellant's weekly compensation being determined in accordance with Clause 38.”
Permanent and non-permanent earnings from the same employer
• Warren (225/05): the appellant had been employed as a casual worker, and later, a permanent employee, by the same employer. Judge Ongley held that Clause 34(2) of Schedule 1 required an assessment on the basis of all earnings from that employer, and was not restricted to earnings from permanent employment with that employer. The Judge upheld ACC’s calculation of the appellant’s weekly earnings and the appeal was dismissed.
• The appellant has been granted leave to appeal to the High Court by Judge Barber in Warren (5/06).
Paid leave
• The definition of "employment" applies to a period of "paid leave": Ryan (107/04).
• See also Couper (109/06)
Unpaid leave
• Ryan v ACC (15/05/06, France J, HC Auckland, CIV 2005-404-5967): confirmed that a person on unpaid leave is not an earner immediately before the incapacity commenced. Justice France rejected the appellant’s argument that she was an earner by virtue of a subsisting employment contract with her employer at the time of incapacity.
• Rankin (226/05): Judge Ongley held that a person on unpaid leave was not engaging in employment:
“Engaging in employment means engaging in work, so that a person is not an earner merely through having a contractual relationship as an employee. A person having unpaid leave is not for the time being engaging in work.”
Clause 43: extension of earner status
• Verma (208/04): the Court held that the appellant’s holiday pay component of her salary brought her within the requirements of Clause 43(2)(a)(ii). The Court did this by effectively adding on the holiday period (that the appellant had already been paid) to the date her employment ceased. Judge Beattie distinguished Drake Personnel (NZ) Ltd v Taylor [1996] 1 ERNZ 324; [1996] 2 NZLR 644 (CA), stating:
“I note the decision of Drake Personnel (NZ) Ltd v Taylor relied on by the respondent, but that decision was wholly involved in an employee’s entitlement to holiday pay and the circumstances in which that payment could be made or could be expected to be received. Whilst it is the case that the appellant could not expect a further payment of holiday pay at the cessation of her employment because she had already received payment, nevertheless I find that the holiday must be taken to be the period of days following cessation, and as I have found, the amount of holiday pay that this appellant received would have been more than sufficient to cover at most three days holiday at the end of the 12 months employment.”
• See also Couper (109/06).
• Brady (248/06): the appellant argued that deemed period of continuation of employment by reason of holiday pay could be added to the 14 day period under Clause 43(2)(a). The Court rejected this argument, stating:
“[25] This submission requires the Court to find and rule that a deemed period of continuation of employment by reason of holiday pay can be added to a further period of up to 14 days within which the date of incapacity must have commenced.
[26] This is what Clauses 43(2)(a) and (b) may have meant if one word in between those provisions were to read 'and' rather than 'or', which it plainly does.
[27] The categories of extension of employment are stated as being two, and they are in the alternative; it is either (a) or (b) but not both.”
Holiday pay and the calculation of weekly compensation
• Sim (62/06): the issue was whether ACC was correct to exclude the appellant’s holiday pay from his pre-incapacity earnings when calculating his weekly compensation. In dismissing the appeal Judge Beattie held that:
“The clear meaning and purpose of the statutory provisions of the Injury Prevention, Rehabilitation and Compensation Act 2001, is not to include holiday pay which has accrued at termination or incapacity as being part of the appellant's weekly earnings for the purposes of the calculation of weekly compensation entitlement.”
Non-permanent employment
• Under clause 35(2), employment is not permanent if ACC is of the opinion that the claimant would not have continued to receive earnings from that employment for a continuous period of more than 12 months after the date his or her incapacity.
• The circumstances in which the divisor under clause 36(2) can be adjusted were considered in White (93/03).
WEEKLY EARNINGS: SELF-EMPLOYED
Legislation: Schedule 1, Clauses 37, 38
Other references: s. 14 (definition)
• Clause 38 explains how to calculate the weekly earnings of a self-employed person. When calculating weekly earnings, the first 4 weeks after the first week of incapacity, and any weekly period following those 4 weeks are differentiated.
• Clause 37 states that Clause 38 will only apply to persons who were self-employed immediately before incapacity commenced. It also explains how weekly earnings must be determined if the appropriate income tax return is not available.
• Section 14 defines “earnings as a self-employed person.”
Case Law
Whether the claimant is self-employed
• Andrews: (84/04): the appellant had a fixed term contract with Carter Holt Harvey as Field Manager. He argued that he was not self-employed because his position was one that was wholly at the direction of his superiors, his hours were fixed by them and he was not in the same position as that of a self-employed person. The Court held that he was self-employed because:
(a) He was GST registered;
(b) The IRD had categorised him as self-employed;
(c) His contract of employment was in fact with TMP Worldwide which stated that he was self-employed; and
(d) He was paid a gross sum from which he was responsible for payment of tax.
The Court further noted that the Court could not alter the taxation status of a person from that of an employee on wages to that of a self-employed person, when that particular status had been determined by IRD.
Personal exertions: Section 14(2)(b)
• The High Court in Caverhill v ARCIC (2/10/98, Potter J, HC Rotorua, AP 93/97) stated that personal exertion:
“does not necessarily involve manual or physical labour; exertion by the ‘sweat of the brow’. Input or contribution to a business enterprise may be to management, administration, planning, strategy, structuring etc.”
• Collie (134/05): the appellant was held to have generated income from his “personal exertions,” since the Court found that he was actively involved in generating income from the forestry operation. He managed the planting and monitoring of a forest and arranged the interventions of the contractors concerned with the physical work.
• Rockx (43/05) Judge Beattie held that monies the appellant received from a partnership business were drawings and not derived from his personal exertions. They were found to be a return on capital, set against his share of the profits of the partnership.
• G (151/06): the Court analysed the components of the claimant’s taxable income and held that a significant proportion of that income was not derived from the claimant’s “personal exertions”.
Tax returns required when assessing self-employed earnings
• Bourne (117/03): Judge Cadenhead held that the appellant was not entitled to weekly compensation payments from the date of her accident, on the basis that there was no evidence of income in the form of income tax returns. The Judge stated (at page 4):
“The cornerstone of assessing weekly compensation of a self-employed person is the objective evidence provided by the relevant income tax returns. In this case there is no evidence in that respect of the earnings of the appellant. Further, there is no objective measurable evidence of how much the appellant earned at the time of her accident. The evidence to be relied upon is speculative, and I cannot see how the respondent, if that course was permissible, could fairly and reasonably assess her normal average weekly earnings.”
Drawings do not represent earnings
• Truscott (134/98): Judge Beattie stated:
“It has been well settled by this Court, and before the Accident Compensation Appeal Authority, that drawings do not represent earnings. It is well established that if a claimant organises his affairs to suit his own or his business purposes he is stuck with that situation for the purposes of calculating weekly compensation.”
• Truscott has been applied by Judge Middleton in Rowe (65/03).
Weekly compensation can be included as earnings
• Monk (3/04): Judge Beattie held that weekly compensation received during the relevant year should be included as earnings of a self-employed person when calculating future weekly compensation.
Whether the amendment to Clause 38 can be applied retrospectively
• Piesse (108/06): Judge Beattie held that the amendment to clause 38 of Schedule 1, which came into effect on 1 July 2005, did not apply to claims for weekly compensation (under the 2001 Act) which had already been considered and determined before 1 July 2005. The Court declined to give retrospective effect to the amendment to clause 38.
• Judge Ongley applied Piesse with approval in Oliver (176/06), finding that the amendment to clause 38 could not be applied retrospectively.
• However, in Roberts (284/06), also a decision by Judge Beattie, the appellant, who had applied in March 2006, was allowed to have a fresh claim for weekly compensation considered in light of the amended clause 38. The Judge declined to follow Piesse and allowed the appeal.
WEEKLY EARNINGS: SHAREHOLDER-EMPLOYEE
Legislation
Schedule 1, Clauses 39, 40
Other references: s. 15 (definition)
• Clause 39 explains what is included, and how to calculate the weekly earnings of a claimant who had earnings as a shareholder-employee immediately before the incapacity commenced.
• Clause 40 sets out how to calculate the weekly earnings for a person who had been employed continuously, but had changed from receiving earnings as a self-employed person to receiving earnings as a shareholder-employee.
• “Earnings as a shareholder-employee” is defined in s15.
Case Law
• Russell (63/2005): [a decision under the 1998 Act]: the Court held that ACC had correctly determined the appellant’s weekly compensation by reference only his earnings as a self-employed person. The Court noted that the belated allocation of shareholder income did not show that the appellant was actually earning prior to incapacity. The appellant was only nominally a shareholder employee, and not in receipt of earnings from the company.
Income replacement
• Willis (55/07): the appellant, a shareholder employee, became ill from January 1996 and received income from her income protection insurance policy. She suffered an injury in August 1996 and a further injury in May 1998. She was still receiving income replacement and the question on appeal was whether income replacement was “earnings.” The Court confirmed the approach in earlier cases that income replacement was not “earnings.” The Court held that the appellant was not an earner in May 1998 and therefore not entitled to weekly compensation. The Court stated:
“[11] Earnings which qualify must be earnings which are obtained consequent upon the personal exertions of the claimant in employment. Unearned income such as income from investments or, as in this case, an Income Protection Policy, do not amount to earnings for the purposes of weekly compensation entitlement.”
SUSPENSION/CESSATION OF ENTITLEMENT
Legislation ss 117(1), 26
• Section 117(1) authorises ACC to suspend, cancel or decline to pay statutory entitlements if it is not satisfied, on the basis of information in its possession, that the claimant is entitled to continue to receive the entitlement. For example, where medical information establishes that the personal injury has resolved and that the claimant’s underlying degenerative condition is causing the symptoms and the ongoing incapacity.
• Section 117(2) requires ACC to give the claimant reasonable written notice before the start of the suspension.
• Section 117(3) provides that ACC may decline to provide any entitlement if the claimant unreasonably refuses or fails to comply with any requirement of the Act, undergo medical or surgical treatment, or agree to, or comply with an individual rehabilitation plan.
Section 117 (1), Onus
• The High Court in Ellwood (18/12/06, Mallon J, HC Wellington, CIV 2005-485-536) addressed the question of the onus of proof when ACC suspended entitlements in circumstances where the competing evidence was in the balance. The appeal concerned Section 116 of the 1998 Act (equivalent to section 117 of the 2001 Act). The Court stated that it was not persuaded that the onus was on the claimant where ACC was making a decision to suspend entitlements.
The Court set out its interpretation of the requirement in Section 116 of ACC being “not satisfied” of the right to entitlements:
“In a situation where the evidence is unclear or in balance, is it reasonable to suspend entitlements? In many cases it may not be. Before entitlements are suspended at ACC’s initiative (or that suspension is upheld by a reviewer or the District Court) ACC should take steps to clarify the position one way or the other. The claimant is not present at the first stage so the obligation must be on ACC at this stage to obtain sufficient evidence. Mr Beck’s proposed test of asking whether there is a sufficient basis on which entitlements should be suspended (in effect, terminated) is a reasonable one. If there is an insufficient basis then the test of “is not satisfied” is not met. If there is a sufficient basis then ACC can be “not satisfied” of the right to entitlements. As the reviewer and the District Court apply the same test the same approach should be taken at each stage.
[65] I therefore consider that s 116 combined with the requirement in s 62 on ACC to make reasonable decisions requires ACC to have a sufficient basis before terminating benefits. If the position is uncertain then there is not a sufficient basis. The “not satisfied” test is not met in these circumstances.”
• Ellwood has been applied in the District Court by Judge Ongley in Edwards (70/07).The following is a summary of the Court’s approach to the onus of proof prior to the Ellwood decision:
• Cochrane v ACC (CIV 2003-485-2099): the High Court commented that while the onus was on the appellant to establish the necessary degree of causation, too much emphasis should not be placed on onus. Rather, the question is:
“whether the evidence as a whole justifies a conclusion that the necessary nexus between the accident and incapacity exists”.
While the decision concerned a 1982 Act claim, the District Court has applied its principles to claims under all subsequent Acts. The High Court stated that in cases where an accident triggered symptoms where they might otherwise have remained asymptomatic forever, then it was the injury rather than the degeneration, which was the cause of the incapacity.
• McDonald (AP2/02): the High Court considered a 1992 Act case. The issue was whether incapacity arising from disease, the onset of which was brought about by an accident, was personal injury that was covered under the Act. The Court found that relevant provisions of the Accident Insurance Act 1998 supplied a code that posed a single test. The test was whether disease was the whole or substantial cause of an injury. If this was found to be the case, then cover was unavailable, regardless of whether an accident had triggered or accelerated the progression of the disease.
• Fowlie v ARCIC (AP 50/00): the High Court considered the interpretation of the law applying to suspensions of entitlement or cessation of cover under Section 10 of the 1992 Act. Justice Hansen held that the onus was on the claimant to establish, on the balance of probabilities, that he or she had continuing entitlements.
Causation
• It is an established principle that there must be a causal nexus between the claimant’s covered personal injury and current incapacity.
• Cochrane (HC Wellington, CIV 2003-485-2099): Justice Miller stated that:
“An appellant may not establish causation simply by showing that the injury triggered the underlying condition to which the appellant was already vulnerable (the ‘egg-shell skull principle’) or that the injury accelerated the condition that would have been suffered anyway (the ‘acceleration’ principle). The question is simply whether the necessary causal nexus continues to exist between the injury and the condition.”
• Steadman (229/04): the Court drew on principles in Cochrane (supra) to decide a matter concerning a knee injury and underlying degeneration. Judge Cadenhead set out the following three principles:
1) The onus is on the appellant to show, on a balance of probabilities that he is entitled to continue receiving compensation. The case law that applies is that subsisting at the date of cover.
2) The first step is a causal issue – the appellant must satisfy ACC that his current incapacity is presently a substantial and effective cause of the ongoing original injury.
3) Having done this, the appellant must demonstrate that this present injury giving rise to entitlements is not “exclusively” caused by the ageing process.
Steadman was a 1982 Act claim. The Court held that the appellant was suffering from a pre-existing degenerative condition and that he could not prove, on the balance of probabilities, that his present symptoms were directly related to his injury.
• Jones (246/04): the Court found that a simple statement of belief by the treating orthopaedic surgeon that the claimant’s current symptoms were being caused by his injury was not sufficient. This was particularly so against a background of the claimant’s multi disc degeneration. Judge Beattie stated that the Court required “proper and logical medical reasoning” for an opinion on the causal nexus between injury and current symptoms or incapacity.
• Riley v ACC (CIV 2004-485-607) There were two aspects to this case. The appellant argued first, that the suspension was invalid because the ACC medical advisor was asked the wrong test under the wrong Act. Secondly, he argued that his injury was still the cause of his incapacity. Justice France said that the appeal was to be decided on the evaluation of evidence and that no question of law arose. The evidence was unequivocal that the claimant’s covered medical misadventure injury was not the cause of his current incapacity. Therefore, it was not critical that the District Court said that the 1982 Act test of “exclusivity” was met when the question asked of the doctor was whether the 1992 Act test of “substantiality” was met. Riley has been followed in White (347/04) and Young (234/04)
Pre-existing conditions that become symptomatic
• Fowlie v ARCIC (AP 50/00): Justice Hansen expressly approved Judge Beattie’s dictum in Finnemore (262/98):
“As was observed by his honour Judge Middleton in the decision of Bell, and which has been followed by other decisions of this Court, the fact that a personal injury by accident causes previously asymptomatic pre-existing conditions to become symptomatic does not entitle a claimant to ongoing entitlements under the Act when the effects of the injury have dissipated and all that is left is a continuing, now symptomatic, pre-existing degenerative conditions. When that stage is reached entitlement must cease.”
• McDonald v ARCIC (AP2/02): Justice Pankhurst referred to another dictum of Judge Beattie in Hill (189/98) as follows:
“But the provisions of section 10 make it clear that the personal injury caused wholly or substantially by the ageing process is not covered by the Act. If the medical evidence establishes there are pre-existing degenerative changes which are brought to light or which become symptomatic as a consequence of an event which constitutes an accident, it can only be the injury caused by the accident and not the injury that is the continuing effects of the pre-existing degenerative condition that can be covered. The fact that it is the event of an accident which renders symptomatic that which was previously asymptomatic does not alter that basic principle. The accident did not cause the degenerative changes to become apparent and of course in many cases for them to become the disabling feature.”
Aggravation or acceleration of a pre-existing condition
• Gallagher (24/06): the appellant had shoulder injuries in October 1994 and October 1995. Weekly compensation was paid from 1997 and then suspended in July 2003. The medical evidence was that the appellant was currently suffering from osteoarthritis in the right shoulder. Dr Hancock, physician, was of the opinion that there was a causal nexus on the basis that the appellant was pain-free before the first accident; and x-rays showed more advanced arthritic changes in the right shoulder than in the left. The Court rejected this view, and made the following comments:
“[14] I have considered the reports of Dr Doube and Dr Hancock and note that Dr Hancock recognises that the current diagnosis is that of osteoarthritis. He appears to base his opinion of a causal nexus on the fact that the appellant was pain-free prior to the first incident in October 1994. It is that comment which I find simply indicates that Dr Hancock has identified a temporal connection rather than a link based on pathology or clinical reasoning.
[I5] In the final analysis, Dr Hancock simply notes that if x-rays showed that the right has more significant advancement of arthritic changes than the left, then it must be accepted that those changes in the right shoulder have been accelerated by injury.
[I6] That is not a statement identifying causation but merely identifying an acceleration of a pre-existing arthritic condition. 'The 'acceleration' submission as a causative factor has been specifically rebutted both in this Court and by the High Court on appeal. See the decision of His Honour Justice Pankhurst, in McDonald v ACC (AP 2102 Christchurch Registry). Dr Hancock gives no reasons for his statement that the shoulder injury of October 1994 is still causative of the appellant's current symptoms. If he is simply stating that it has accelerated the degenerative change, then that concept is not a concept of causation in medico-legal parlance which is applicable under the Accident Compensation regime. Again I refer to the comments of Justice Pankhurst in the McDonald decision as confirmation of that.”
• Fowlie (97/99): the mere aggravation of a pre-existing condition was not, of itself, the basis for continued entitlement once the actual effects of the injury sustained in the accident had been resolved, and all that was left was the pre-existing condition.
Inference to be drawn from a return to work
• McFarlane (288/05): the appellant had a back injury in 1988 and returned to work in 1998. In August 2000 he had a further back injury. ACC suspended his entitlements and Judge Beattie upheld this decision. The Judge found that the appellant’s ongoing pain was of unknown aetiology, and not directly attributable to either back injury in 1988 or 2000.
Judge Beattie made the following comments concerning the inference to be drawn from the appellant’s return to work in 1998:
“[18] The evidence suggests that the appellant, of his own volition, elected to re-enter the workforce and Mr Evans, quite rightly, suggested that the Court could infer that at least by that time the difficulties that the appellant may have earlier faced with that back injury, had largely resolved. I find that that is a reasonable inference to draw in the circumstances.”
Incapacity caused by two injuries
• Collison (59/99): the appellant had a severe back injury in 1963, which resulted in his discharge from the army. He suffered a second back injury in 1985. When he was examined in 1993, the orthopaedic surgeon noted that disc degeneration, which was then apparent, dated back to the first injury. The Court said (at page 8):
“There is no suggestion that the appellant’s osteoarthritis has been caused by the ageing process, it certainly is described as degenerative, but in the case of this appellant the cause of that degenerative condition, which is continuing on, is the trauma of the two injuries.
In those circumstances I find the question of whether his condition is ‘wholly’ or ‘substantially’ caused by disease or the ageing process does not apply and that for so long as there is medical opinion establishing that part of the appellant’s disability is being caused as a direct consequence of the personal injury by accident for which he had cover, his entitlement to cover continues. There can be no dividing up of responsibility. The disability is indivisible and, as in this case, it is a determination of causation between two injuries as opposed to an injury and a natural disease or the ageing process. In the former, substantial causation is not an issue whereas it is in the latter because it is in the latter case that the provisions of section 10 apply.”
The Court allowed the appeal on the basis that the medical evidence indicated that some part of the appellant’s present incapacity was due to the 1985 injury.
• Lye (7/07): the Court applied Collison (supra). The Court noted that the exclusionary provision in Section 26(4) for personal injury caused “wholly or substantially” by the ageing process did not apply where there were competing issues of causation between covered and non-covered conditions.
• Hamilton (318/06): the Court referred to Collison, but distinguished it on the facts.
Other incapacitating injuries to be considered
• Kenealy (102/06): the appellant, a carpenter, had cover for neck and back injuries sustained in 1988. He also had cover for work-related left tennis elbow in 1991. After surgery to his left elbow failed, he did not return to work. ACC suspended the appellant’s weekly compensation on the basis that his ongoing incapacity was no longer due to the neck and back injuries he had sustained. Judge Beattie allowed the appeal, finding that ACC had failed to take into account the effects of the left tennis elbow, which remained a covered condition.
Appellant not required to determine or label the injury precisely
• Te Puna (117/99): Judge Beattie set out the causal nexus test:
“The onus on the appellant is simply to establish that he is presently suffering from injury arising from accident and that it is not necessary that the appellant be able to determine or label the precise nature of that injury providing that the effects of it can be seen and are manifest.”
ACC may review progress of injury
• Leo (180/04): Judge Cadenhead noted that s 117(1) of the 2001 Act enables ACC to review from time to time the progress of a claimant’s injury, and, if the evidence so warrants, allows ACC to cancel or suspend entitlements.
• Similarly comments were made in Denzel (269/05).
Statute to be applied
• Gray (250/01): sets out the error of applying the provisions of a later statute to an earlier injury. The statute applying at the date of injury determines the substantive legal issues.
Mental injury and ongoing entitlements
• ACC v Geerders (188/04): the District Court, when considering the 2001 Act provisions, rejected Mr Geerders' claim that his current incapacity was caused by a mental injury which arose as a consequence of his physical injury. Judge Cadenhead found that Mr Geerders’ injury was caused by depression, which was in turn caused by other stressors like separation from his wife and the loss of employment. Judge Cadenhead stated that the claimant must show, on the balance of probabilities, that the mental injury was directly caused by the physical injury suffered.
Comparison with ACC’s power to revoke cover
• Under Section 237, if ACC considers that it made a decision in error, it may revise that decision by either:
- amending the original decision: Section 237(2)(a); or
- revoking the original decision and substituting a fresh decision: Section 237(2)(b).
• O’Hara (256/00): ACC revoked its decision under the 1992 Act to grant cover, on the grounds that the decision had been made in error. Judge Beattie noted that a decision to revoke cover is quite different to a decision to cancel entitlements.
“ In the former case the Court is required to look at the position as it was at the time the Corporation made its initial decision, whereas in the latter the Court is required to consider the position of the claimant at the time the corporation makes its decision to cancel.”
Ongoing entitlements in context of request for surgery
• De Vos (8/03): Mr de Vos’ specialist applied for fusion surgery on his lower lumbar spine. ACC suspended all entitlements on the grounds that his current back condition was not attributable to the personal injury by accident for which he had been granted cover. The Court found that Mr De Vos’ lower back problems were attributable to his pre-existing spondylolithesis, and that was the condition presently causing his problems, rather than any injury by accident. Judge Beattie commented:
“Merely because earlier surgery was in fact agreed to and accepted by ACC does not mean that ACC is somehow bound to accept responsibility for further surgery for the same symptoms.”
Reasonable notice to be given before the start of the suspension
• Stevenson (267/99): ACC used the 1992 Act to cease the appellant’s weekly compensation entitlement from 9 September 1997. ACC subsequently determined that its decision to cease was flawed, and in a 14 July 1998 decision, ACC suspended the appellant’s weekly compensation, backdating the decision to September the previous year. The Court found that ACC had no authority to backdate the suspension decision to 9 September 1997, and confirmed ACC’s decision only to the extent that the suspension should be effective from the date of the Corporation’s decision letter.
UNREASONABLE REFUSAL/FAILURE: SECTION 117(3)
• What amounts to unreasonable refusal or failure depends on the facts of each case.
• The test of what is unreasonable is objective: Merritt (34/95) [a case concerning Section 73 of the 1992 Act].
• Hika (253/04): Judge Cadenhead noted that:
“Where a substantial credibility issue is involved, it would be rare that a finding of credibility could be made “given conflicting versions” on the sworn evidence of only one of the parties.”
Issues of credibility require examination of evidence. In that case, the appellant had a history of failing to co-operate with rehabilitation requirements. There was no sworn evidence from the appellant’s case manager, yet the reviewer preferred the case manager’s evidence to the sworn evidence from the appellant. Judge Cadenhead directed that a reviewer rehear the case.
• ACC v Peck (CA 10/04): the claimant was asked to attend a medical assessment in January 2000 and refused. ACC declined to pay weekly compensation. That decision was unsuccessfully challenged at Review and in the District Court. The claimant underwent the assessment in May 2001. ACC reinstated her weekly compensation, but refused to pay her for the period that she was non-compliant. The claimant successfully appealed to the High Court.
The Court of Appeal overturned the High Court decision. The Court held that ACC had the power to permanently withhold entitlement during a period in which a claimant unreasonably refuses to comply with their obligations under the legislation. The reasoning was that the effective management of the ACC scheme would be frustrated if ACC was not able to refuse to pay entitlements permanently during a period of default.
• Farquhar (304/04): the claimant refused to attend and then refused to participate in an initial occupational assessment. ACC relied on s117(3) to decline to pay weekly compensation. The claimant argued that the 1998 and 2001 Acts did not have retrospective effect. Therefore, ACC could not use them to cancel or suspend payments or entitlements arising under earlier Acts. Judge Cadenhead held that present payments and entitlements arising under earlier ACC legislation could be cancelled or suspended under the 2001 Act.
Cases where Section 117(3) met
• Howard (134/03): the Court held that the requirement that the claimant provide a list of his daily activities to assist ACC assess appropriate rehabilitation, and subsequently to attend a meeting to discuss rehabilitation were reasonable requests with which the claimant had unreasonably refused to comply.
• Watson (94/04): The appellant was held to have unreasonably refused to comply after he did not respond to three requests for statutory declarations and tax returns. The Court found that ACC had properly declined to pay weekly compensation.
• Atley (271/04): The appellant had unreasonably failed to undergo an initial occupational assessment and had refused to supply ACC with an informed consent to obtain his medical and other records.
• Print (394/04): The appellant’s refusal to attend the initial occupational assessment (IOA) on his solicitor’s advice and two further non-attendances amounted to unreasonable refusal to comply. The Court noted that was not open to the appellant to refuse to undergo the IOA. ACC was obliged to assess rehabilitation needs. ACC was correct to decline to pay entitlements.
• Henderson (396/04): The appellant refused to attend the initial medical assessment. ACC declined to pay entitlements. The Court noted that Section 89 required an IOA and IMA. The appropriateness of rehabilitation was to be considered when the initial assessments were obtained. The Court held that the appellant was required to submit to the initial assessments and that ACC was correct to decline to provide entitlements.
• Newman (277/06): another case involving a refusal to attend an IMA, which the court held was unreasonable. The Court also noted that ACC’s request that the appellant attend an IMA was not a reviewable decision.
• Prendergast (128/05): The appellant failed to attend appointments with the Greymouth Pain Management Centre. ACC suspended entitlements. The unreasonableness of the appellant’s refusal was confirmed and the appeal dismissed.
• Farquhar (176/05): There were inaccurate file records of the appellant’s domestic status. The appellant refused to provide consent to enable a rehabilitation assessment until the privacy breach was remedied. Judge Cadenhead held that the appellant’s refusal to provide consent was unreasonable in the circumstances.
• Watson (103/06): the appellant argued that the second IRP was invalid since ACC had failed to consult with him and the relevant specialists. The Court agreed with ACC that, on the facts, ACC did not have to consult about every item in an IRP. In this case the basic rehabilitation plan had not changed. The Court noted that if there was an aspect of the plan affected by some change in circumstances, then failure to consult may have been significant.
• Traynor (224/06): the appellant’s refusal to attend a computer course that had been agreed in his IRP was held to be unreasonable.
• However, in a further proceeding in Traynor (225/06) the Court found that the referral ACC had arranged to the Wakefield Institute was not in accordance with the mediated agreement.
• Dewe (290/06): the claimant’s refusal to sign the consent form was found to be unreasonable.
Cases where Section 117(3) not met
• Jackson (168/02): The appellant refused to undergo a medical assessment unless the medical practitioner undertaking the assessment agreed to the assessment being taped. The Court held that the appellant’s refusal was not unreasonable.
• Geyde (230/04) the Court did not feel that a claimant should be burdened by the unreasonable advice of his or her advocate not to attend a vocational assessment, so was held not to have unreasonably refused to comply.
• Saggers (181/05): the appellant was suffering from pain after a neck and shoulder injury in 1989. The IRP provided for a referral to a psychologist. The appellant did not agree to the plan. ACC confirmed the plan. The appellant refused to attend counselling sessions. The purpose of the counselling sessions was to alleviate sleep problems and depression. ACC declined to provide further entitlements in April 2004.
Judge Beattie found that the counselling for sleep problems and depression was not directed at the appellant’s vocational rehabilitation. There was inadequate communication between ACC and the appellant and the appellant’s incapacity was not prolonged by the refusal to attend counselling. Judge Beattie held that ACC acted unreasonably and there was no unreasonable refusal in terms of s117(3).
Notice
• Sherson (86/06): the Court held that the requirement under Section 117(2) to give reasonable notice did not apply when ACC was declining to provide an entitlement under Section 117(3). The Court’s reasoning is set out below:
“[I8] Suspension or cancellation of entitlements is put in one particular provision under the Act and requires that the respondent establish that a claimant is no longer entitled to receive the entitlement. If that power is sought to be exercised, then by Subsection 2 the respondent must give the claimant written notice and that notice must be within a reasonable period before the proposed starting date.
[19] Section 117(3) is the provision regarding the respondent's power to decline to provide an entitlement where there is a failure to comply with certain requirements. Here the eligibility for the entitlement is not in question, just the right to presently receive same whilst a default exists.
[20] I apply the well-known statutory interpretation maxim expressio unius exclusio est alterius, the expression of one excludes the other, and which means that in this - particular statutory provision, the requirement of reasonable notice cannot be read into Section 117(3).
The Court added that it would expect that, in the usual manner of things, such notice would be given.
Self-incrimination
• Nesbit (130/06): the appellant claimed that his failure to comply with ACC’s request for certain information was not unreasonable as he was invoking the privilege against self-incrimination. Judge Cadenhead discussed the case law relating to privilege against self-incrimination. The Judge noted that the right to an entitlement is not an absolute right but rather, a contingent right. Judge Cadenhead stated that just as the appellant had the privilege of declining to self incriminate, ACC had the power to insist upon reasonable information from the appellant. (See paragraphs 30 – 31).
ACC demand for claimant to return to New Zealand
• Krishna (140/06): Judge Ongley held that ACC’s demand that the appellant return to New Zealand for a vocational independence assessment was unreasonable, and lacked statutory authority. The demand was made when no assessment appointments had been arranged, and when the appellant had not shown himself unwilling to make suitable arrangements to attend assessments in New Zealand.
• Clark (143/06): Judge Ongley distinguished the facts in Krishna (supra) and found that on the facts, ACC’s requirement that the appellant return to New Zealand for vocational independence assessments was reasonable. The Judge accepted ACC’s submission that in this case, ACC did not simply demand that the appellant return to New Zealand. ACC’s initial requirement or demand contained reasonable requirements for the appellant to assist in devising a suitable arrangement in accordance with her obligations under Section 72.
Backdating entitlements
• The Injury Prevention, Rehabilitation and Compensation Amendment Act clarifies that ACC is not required to backdate entitlements over the period it declined to provide those entitlements, by adding s 117(3B). It does, however, allow ACC to backdate entitlements if it believes that:
- exceptional circumstances exist; and
- it would be inequitable to refuse to backdate.
Legislation
s119, 21 and 27
• Under Section 119 ACC is not liable to provide an entitlement (except treatment) under Schedule 1 for:
(a) a personal injury that a claimant wilfully inflicts on himself or herself or, with intent to injure himself or herself, causes to be inflicted upon himself or herself; or
(b) the death of a claimant due to an injury inflicted in the circumstances described in paragraph (a)
(c) the death of a claimant due to suicide.
• However, where the injury or death results from mental injury, ACC is liable to provide entitlements (s119(2)).
• Mental injury (s27) means “a clinically significant behavioural, cognitive or psychological dysfunction.”
Case Law
Onus of proof and standard of proof
• There is an initial onus on ACC to establish that the personal injury was self-inflicted. If that onus is discharged, then the onus shifts to the applicant to establish, on the balance of probabilities, that the prima-facie “willfulness” is negated by a finding that the self inflicted injury was caused by the appellant when he was suffering from a mental injury.
• The Estate of Nigel John Black (130/00): Judge Barber held that ACC is not bound by the Coroner’s finding, although it is certainly a factor to be taken into account as is the evidence given to the Coroner. He noted that:
“ A Coroner is required to apply proof of suicide to the standard of a high degree of probability, but the test in s81 is the lower standard of balance of probabilities”
“Wilfully inflicted injury”
• AP (357/04): the Court accepted that section 119 should be read having regard to criminal law principles relating to proof of a wilful or intentional act. In that case the appellant tried to hang himself in a police cell and suffered severe brain damage. In allowing the appeal, Judge Ongley stated that it was difficult to avoid the inference that the appellant intended to cause himself some injury. However, it could not be further inferred that he wilfully inflicted or deliberately caused to be inflicted on himself the personal injury of acute strangulation likely to cause brain injury.
• Cohen (133/98): considered what is a wilfully inflicted injury. If an act is done wilfully then it is done deliberately, as distinct from being done without thought or in the spur of the moment. An act may be nonetheless deliberate because the actor has not pondered its propriety or reviewed its possible consequences before committing it. It is not necessary that the intended injury is not the injury, which actually occurs.
• ACC v Stevens [1993] NZAR 322: considered the phrase ‘with intent to injure himself”. Greig J said:
“I think that it means with intent to harm himself, to cause injury, to hurt and not to merely inflict the injury in the phrase ‘any personal injury’”
• The Estate of Goodwin (71/99) and the High Court in DMTH (Wellington registry AP221/00) considered the meaning of wilfully. In both cases the Court approved the test in R v Senior [1899] 1 QB 283, where it stated:
“ An act is done deliberately not by accident but so that the mind of the person who does the act goes with it.
• The High Court in DMTH noted that motive is irrelevant in terms of whether the infliction of the injury was wilful in the sense of intentional:
“ It is a deliberate, and not mistaken, accidental, negligent or inadvertent act. The mind of the person who does the act must go with it in the sense that they must know what they are doing, that is inflicting injury. But the motive for such deliberate action does not have to be proven.”
DMTH involved a 15 year old who left a suicide note and survived after shooting himself in the head. The Court held that the evidence did not in anyway suggest an incapacity to act deliberately and consciously.
Intention to kill oneself
• Estate of Goodwin (71/99): the Court held that if the deceased’s mental state was such that he could not form an intention to kill himself then, even though the death was self-inflicted, it was not suicide. The meaning of ‘suicide’ was “the act or instance of killing oneself intentionally.”
Mental injury
• If the personal injury or death was the result of mental injury for which the claimant had cover, ACC is liable to provide all entitlements: The Estate of Nigel John Black (130/00).
• In ABM [35/04] Judge Beattie held on the facts that the reason why A shot himself was because his mind was altered by methamphetamine which he had voluntarily ingested, does not amount to him having a mental injury. He noted in terms of policy that:
“ the altering of the mind of a person by self- induced drug-taking should not be allowed to permit a person to escape responsibility for the actions they commit whilst in that state. That is the situation in the criminal jurisdiction and I find that it must equally apply in the accident compensation field, where the contended mental injury is simply a drug induced state freely and voluntarily undertaken. Deliberate self infliction is identified a s clear exception to the ‘no fault’ principle of Accident Compensation Legislation.”
Vocational Independence
Occupational assessment
Medical assessment
Vocational independence and incapacity
Reassessment
Legislation - ss.107 - 113; Schedule 1, Part 1, Cl. 24 - 29
Other references: s.6 definitions of “individual rehabilitation plan”, and “vocational
independence.”
• ACC may determine a claimant’s vocational independence, by requiring the claimant to participate in an assessment. This assessment must be carried out in accordance with Sections 108 to 110, and Clauses 24 to 29 of Schedule 1 to the Act. [s.107]
• “Vocational independence” is defined in Section 6 as
“…the claimant’s capacity, as determined under Section 107, to engage in work –
(a) for which he or she is suited by reason of experience, education, or training, or any combination of those things; and
(b) for 35 hours or more a week.”
• In assessing a claimant’s vocational independence, ACC is required to obtain an occupational assessment (under Cl.25, Schedule 1) and a medical assessment (under Cl.28, Schedule 1). [s.108]
• The occupational assessment report must comply with Clause 26 of Schedule 1, and the medical assessment report must comply with Clause 29.
• Claimants must be notified in writing about the need to participate in a vocational independence assessment. Such notices must comply with section 110(2). [See Prasad (282/01) and Kane (9/02)].
• If ACC determines that a claimant has vocational independence under Section 107, the claimant loses his or her entitlement to weekly compensation. The entitlement ceases three months after the date on which he or she is notified of the determination. [s.112]
Case Law
Onus
• The onus is on the applicant to prove that the vocational independence procedure was not correctly applied: Kenyon v ACC (19/12/01, Fisher J, HC Wellington AP258/00).
• In Kidd (53/04) Judge Barber stated:
“It is settled law that the onus of proof is on the appellant to establish that the decision of the respondent was incorrect, and the standard of proof is the balance of probabilities. As Judge Beattie noted in Williams (101/2000), “… this Court must be presented with clear and cogent evidence on the matters which are asserted by the appellant as casting doubt on that decision.” I would add that there also needs to be clear and cogent argument to show that either assessor has erred.”
• However, in Ramsay v ACC [2004] NZAR 1, Hansen J accepted the submission that once the "initial onus" of establishing the requirements of the work capacity procedure had been discharged, it was for the appellant to show that ACC’s decision that he had a capacity for work was wrong.
General principles
• The Court will not lightly question or overturn the assessments of the duly qualified and appointed assessors unless there is clear and cogent evidence which gives rise to serious doubts about the efficacy of the assessments: Ramsay v ACC [2004] NZAR and Eustace (244/01).
• The Court will not necessarily consider that an assessment is in some way flawed merely because the contrary opinion is expressed: Eustace (supra).
• The principles in Ramsay apply to both the occupational and medical assessment: Connell (161/00) and Stanlake (291/03).
• Waters (116/00):
"... The Court cannot substitute its own assessment of a claimant's physical capabilities of carrying out any particular job option. The person appointed to determine that is the medical assessor and again, in the absence of medical evidence to the contrary, it must accept the opinion of the assessor as it is given and this is the case in this present appeal..."
• Similarly in Carter (137/04) Judge Hole noted:
“It is not the function of this Court, when hearing an appeal, to determine whether or not a particular appellant is suitable for any proposed job option. That is the function of the occupational assessor and medical assessor. Unless there is clear and cogent evidence which indicates that the way either the occupational assessor or medical assessor reached his or her conclusion is flawed, those conclusions must stand. See Eustace v ACC (244/01) and Ramsay v ACC (High Court, Christchurch, AP 412/02).”
• Mouritsen (322/2002): Judge Middleton stated that a finding of capacity for work had serious implications for an appellant, and should not be made unless it is supported by strong evidence. He noted that the whole purpose is to provide compensation for injured persons and, as far as possible, to rehabilitate them to the workforce. He further stated that in keeping with the spirit of the legislation, the identification of job options should be realistic and should have some relationship to the education, training and skills of a claimant. [See also Waa (332/04), at page 11 and Galway (124/05), at page 8].
• Vocational independence need only be established in one employment option: Churchill (22/03), and Buffett (334/02).
• See also Martin (232/05), where Judge Cadenhead outlined the general principles.
Applicable statute
• Marsh (167/05): in determining whether the 2001 Act or the 1998 Act applies, the date that the first assessment was carried out is relevant. On the facts, while Catalyst (ACC’s agent) had referred the claimant for assessment during the currency of the 1998 Act, the first assessment by the occupational assessor took place on 9 April 2002. This was after the commencement of the 2001 Act. Hence, the Court held that the 2001 Act applied, and not the 1998 Act.
Commencement of the vocational independence assessment process
• s.109(1): ACC may determine the claimant’s vocational independence at such reasonable intervals as it thinks appropriate.
• Notice must be given to commence the procedure: s.110
• A letter of referral to an assessor for an assessment is only a procedural step and not a reviewable decision: Anderson (115/00). See also Jordan (135/06) and Newman (307/06).
Rehabilitation must be completed
• Vocational rehabilitation, as identified in the claimant’s IRP, must have been completed before the assessment process commences: s.107(3), s.108, and s.110(3).
• Waa (332/04): the claimant suffered repeated trauma to his left shoulder. He was unable to complete a work trial with his pre-injury employer. The medical assessor had also made a number of recommendations, which ACC did not follow through. Judge Cadenhead allowed the appeal on the grounds that the claimant’s rehabilitation was incomplete.
• In Tuffery (107/05) and McCulloch (109/05) Judge Ongley allowed the appeals on the grounds that the claimants’ rehabilitation was not completed. In terms of what was required, Judge Ongley stated in Tuffery (at paragraph 31):
“The Act does not require the Corporation to achieve a successful outcome, but there is an entitlement to effective rehabilitation in s.70 of the Act.
… In this case I consider that the purpose in s107(3) to ensure reasonable completion of comprehensive vocational rehabilitation, as identified in a claimant’s individual rehabilitation plan, was not achieved. ”
• In McCulloch, the claimant argued that she required further treatment for her pain. Judge Ongley noted:
“Dr Davis’ recommendation for further treatment has not been followed up in any of the material before the Court…It is no doubt difficult for the Corporation to deal with ongoing reports recommending more of the same kind of therapy or treatment that has already been attempted, but in order to find that rehabilitation has been completed there needs to be evidence that the treatment which has been made available is as far as rehabilitation can be reasonably be taken pursuant to the obligations of the Corporation under the Act.” (paragraph 25)
Work trials
• Hanmore (99/06): Judge Cadenhead expressed concern that the restrictions placed on the length of the work trial seemed to be arbitrary:
“I would have thought that the length of time would be dictated by the progress that the appellant made performing those work trials, and could not be realistically set before the work trials had been undertaken.”
The Judge also stated that while work trials did not have to extend to 35 hours, the work trial should enable the Court and medical assessor to be able to draw the inference that the claimant would be able to sustain that type of work for that period.
• Hohepa (22/06): while acknowledging that ACC had provided the appellant with substantial rehabilitation measures, the Court held that the appellant’s rehabilitation was not complete and that the cessation of his work trials was premature. The Court, noting that there appeared to be no evidence that the medical assessor, Dr Nicholson, had received the results of the work trials, commented:
“[64] I would have thought that if Dr Nicholson had received all the documentation he would have covered why he did not consider further work trials necessary and why the appellant could work 35 hours per week, when the work trials seemed to indicate the opposite. While fatigue and the respiratory problems are noted Dr Nicholson does not go on and explain in any detail the impact of them on the capacity of the appellant to specifically be able to work 35 hours per week.”
Deterioration vs premature commencement of procedure
• Hylton (311/05): Judge Cadenhead noted that the margin between what is a further deterioration and what is a premature assessment was in some cases difficult to draw. On the facts, the Judge held that “the balance favours a premature igniting of the vocational independence procedure.”
Procedure
“Snapshot in time”
• Bondarenko (173/05): Judge Cadenhead described the vocational independence assessment (VIA) process as follows:
“The vocational independence procedure is a procedure that is a snapshot in time relative to that procedure.”
Judge Cadenhead also stated that the procedure “should not to be examined in a mechanical and rigid way like a blood alcohol prosecution.” What was required was a “common sense application of the legislation to the requirements of the vocational independence procedure.” The Judge further noted that non-causative breaches of the legislation were not necessarily fatal to the final outcome.
Effect of breaches to mandatory provisions in the legislation
• U (266/06): The appellant challenged the VIA procedure, arguing that the medical assessor was not properly qualified, he was biased as he had carried out the initial medical assessment and ACC had not properly complied with the notice provision in Section 110. Judge Cadenhead dismissed the appeal, concluding that the breaches had not impacted “in any relevant way on the final assessments made as to vocational capacity.” The Judge found that there had been no prejudice to the appellant and there had been substantial compliance.
Power to determine vocational independence is discretionary
• Bulman (172/06): Judge Beattie noted that Section 107 gives ACC a discretionary power to determine whether a claimant has vocational independence. In exercising that power, ACC must take account of the realities of the circumstances:
“[49] Section 107 of the 2001 Act provides for the Corporation to have the discretionary power of determining whether a claimant who is receiving weekly compensation has attained Vocational Independence. I find that a proper exercise of that discretionary power must take account of the realities of the circumstances which exist. It must be the case that the realities would dictate that it would be a wrong exercise of its discretion if the Corporation made a determination of Vocational Independence where, although the covered personal injury was not of itself an inhibiting factor in carrying out the functions and activities of any identified work-types, nevertheless a non-covered injury or disease clearly did. In those circumstances the Corporation would not be exercising its discretion in accordance with the legal principles pertaining to the exercise of a discretionary statutory power."
Copy of occupational assessment to be given to claimant
• Clause 26(2) of Schedule 1 states that ACC must provide a copy of the occupational assessment report to the claimant and the medical assessor.
• Skedgwell (237/05) and McDonald (341/05) confirm that if the claimant was not given a copy of the occupational assessment report before the medical assessment, then that is a flaw in the statutory procedure which would render the whole VIA procedure invalid.
• Skedgwell has been applied in Armijo (3/07) and Guy (4/07).
Failure to give review rights in IRP
• Laidlaw (52/06): the Court held that ACC’s failure to advise the claimant of his review rights when putting his IRP to him was not, in the circumstances of the case, sufficient to invalidate the subsequent work capacity assessment procedure.
• Purches (35/07): the issue was whether the VIA should be set aside on the ground that the appellant had not been advised of the right to review ACC’s earlier decision to adopt an IRP. In dismissing the appeal, Judge Ongley quoted the decision in U (supra) with approval. The Judge noted that in considering whether an omission in the IRP had significant consequences, the VIA should be examined to decide whether the omission had “a significant and unfair effect on the outcome.”
• Purches (supra) was confirmed in Nadali (53/06), where Judge Barber found that ACC’s failure to advise of review rights when two updates of the IRP were put to the claimant was not sufficient, in that particular case, to invalidate the subsequent Vocational Independence procedure and decision.
Delay in the process
• Anderson (223/06): the appellant challenged the length of time between the occupational and medical assessments. The Court upheld ACC’s decision, finding that the length of time between assessments was not a flaw in the process.
Work types identified must be generic
• Madgwick (227/05): The Court confirmed that the job options identified by the occupational assessor must be of a generic job type, not specific to either a particular job or a particular employer.
The Court further noted that provided a claimant is generally qualified to undertake a generic job type,
“the assessment will not be flawed because there happens to be a specific job falling within that generic type for which he may not be sufficiently qualified.”
• Jones (342/04):
“The jurisprudence which has evolved in this field makes it quite clear that the work types to be identified must be generic in nature, that is, be of general application rather than job specific and identify all the requirements that may be necessary in that particular work type.
"I find that the fact that the appellant’s level of skills may be suited to a secretarial position in a small motel, or a company with 1-5 employees, is not sufficient for those skills to be within the generic requirements of the work type ‘Secretary’. I therefore find and rule that this appellant is not so suited, within the meaning of the Act, to the work type of Secretary.”
• Utumapu (58/05): the job option identified by the occupational assessor was that of “Loss Prevention Officer”. The Court found that this particular work type came within the industry group known as “Security Officer” which required the need for a current security guard licence. The Court held that while a person within that category could be employed in a particular job-specific situation (for example an in-store shop detective or shop floor worker), nevertheless, that was not sufficiently generic to be an acceptable work-type for which a capacity for work could be determined.
• Aitken (2/07): the Court found that the job option of “Sales Assistant (Light Duties) was not a generic work type. The Court noted:
“A generic work-type is clearly Sales Assistant and the associated work-types mentioned, such as Retail Sales Person, Wholesale Sales Person, Shop Assistant, Sales Assistant, maintain that generic status. None of those associated work-types have any qualification.”
Whether the work type provides 35 hours of work per week
• Aitken (supra): Judge Beattie held that because the work-type of Teacher Aide was not one where a claimant could expect to be employed for 35 or more hours per week, a claimant could not be found to have vocational independence as a Teacher Aide.
Skills must be demonstrated at the time of the assessment
• Vivian (126/02): the appellant argued that he did not have the experience, training or education in the four identified job options. Judge Willy commented:
“In considering this submission, it is necessary to keep in mind that the Act requires these conditions to exist at the time of the assessment. It does not contemplate that the insured might acquire such work capacity in the future. I think this is what Judge Barber had in mind in Alsig v ACC (54/2001) when he took the view that the only job for which the appellant might be fit (that of a picture framer) was one for which he had “insufficient experience or education or training.”
It may be that many disabled people could, with patience and application, acquire such skills, but that is not how the legislation is cast. It requires that it be demonstrated that the appellant possesses these qualities of experience, education or training at the time of the assessment.
Skills gained by claimant through self-funded course
• Shailer (234/06): the appellant argued that ACC should not be able to take into account a computer drafting qualification he had funded after ACC declined to pay for it (and opted instead to pay for a less expensive course). Judge Ongley found that:
“…the assessment is not dependent on how the appellant acquired his ability and the fact that he completed the computer course at his own cost has no relevance to whether the Corporation can determine that he is vocationally independent in this occupation, which is of particular interest to him.”
Basic skills through ACC funded course
• Johnson (178/07): The Court accepted the claimant’s evidence that the short course ACC had funded many years previously had not sufficiently equipped him for the role of buyer/purchasing agent.
Requirements of each employment type must be specified
• Vrins (299/02):
“…the Occupational Assessor must specify the various requirements of each particular type of employment and that specificity must be sufficient so as to enable the Medical Assessor to know what the physical parameters of the particular employment are.” (page 5).
• Renwick (65/02): Judge Willy was critical of the occupational assessor’s description of a function or activity as being “variable.”
“Given the nature of the appellant’s disabilities it is with respect pompous describing the place of walking or standing in the job environment and function as ‘variable’. That can mean anything or nothing and it is no help to the doctor at all in deciding if the applicant is medically capable of doing any of the jobs listed.”
Claimant highly specialised in a very narrow field
• Salmon (214/04): the claimant suffered from noise induced hearing loss arising from his employment as a cellist in the New Zealand Symphony Orchestra. The occupational assessor had identified four job options, all of which the Court rejected. Judge Ongley noted that the claimant’s work experience was highly skilled and in a very narrow field, and that the four jobs suggested by the occupational assessor were not suitable for the claimant.
Whether work types need to be identified in the IRP
• El Jawhari (278/04): the appellant argued that one of the employment options (Electronic Equipment Assembler) identified by the occupational assessor could not be considered, since it was not recorded in his IRP. In rejecting this argument, Judge Beattie stated:
“This is not the situation where an employment option has come out of left field, where it has not been in contemplation by the claimant or by any vocational programme which the claimant may have been put through. The particular employment option of Assembler (Electronic and Electric Goods) is a specific employment option which was identified some years earlier and for which the appellant underwent a course of training and which honed already existing skills in that regard.
"If Mr Ormsby's submission were to be taken literally it would mean that it was only employment options which were mentioned in an IRP that could be considered and that employment options which could be taken as being covered by existing skills and abilities would never therefore be in the picture unless some form of further vocational rehabilitation in respect of it was to be carried out under the guise of the IRP. Such can plainly not be the case and a claimant's existing skills and experience must be able to be brought into the picture when identifying what may be suitable employment options."
• Judge Beattie expressed a contrary view in Jones (342/04).
• The matter seems to have been settled in Collins (404/04) and Priest (141/05). Both were decisions of Judge Beattie, in which the approach in El Jawhari was favoured.
Kiwi Careers, NZSCO and other sources
• Toi (149/03): Judge Beattie made the following observation about the use of the descriptions of occupations from Kiwi Careers and the New Zealand Standard Classification of Occupations (NZSCO):
“It must be noted that Kiwi Careers and NZSCO are simply reference points for the assistance of an assessor and have no statutory endorsement. This ground of appeal therefore cannot be sustained.”
• Connell (161/03): when a claimant relies on information from sources such as Kiwi Careers website in challenging an occupational assessment, that information is only a guide and cannot replace the occupational assessor’s opinion as to the prerequisites for any particular job option. [See also Veltmans (141/03)].
• Gallagher (177/04): the claimant argued that the occupational assessment was flawed because it failed to mention attributes of the position that were mentioned in other sources from the internet such as Kiwi Careers. In rejecting this argument, Judge Hole stated:
“An occupational assessor (who is qualified in his field) is entitled to gain his information as to what any particular job might entail from such sources as he deems appropriate. Unless it can be shown that those sources are inappropriate, then this is not a ground for challenging the assessment. I accept that other persons of similar qualifications may well gain their information from other sources. All of this relates to opinion evidence and, unless it is particularly cogent, the occupational assessor’s conclusions will stand. See Connell (supra). That is the case here.”
ACC database
• Brook (61/06): the Court rejected the appellant’s argument that the two work types of Mental Health Support Worker and Community Support Worker were not work types contained on ACC’s database and, therefore, could not be considered.
The Court observed that the ACC database was simply:
“a useful guide and is not in any way a classification reference which has the force of law or the only reference to which an assessor can have regard.”
Work details sheet
• Wilson (343/05): The Court discussed Clause 26(1) of Schedule 1 (content of the occupational assessment report), particularly in relation to the Work Details Sheet.
• Coombs (230/06): the appellant challenged the occupational assessment on the basis that the subsequent work details sheets provided different functional requirements than those identified by the occupational assessor. In dismissing the appeal, Judge Cadenhead noted that the job details sheets were tools or guides, “they are not something prescribed by the Act and thus do not have the force of a statutory requirement.”
Actual experience or direct knowledge of job option not required
• Kenyon (278/99) and Brooker (305/99) establish that work for which a claimant “is suited” means work that the claimant is capable of doing from a knowledge/ability perspective at the minimum required level for that particular occupation. The claimant is not required to have had previous experience in that particular role. The possibility of further on the job training being required is not precluded. [See also Gallagher (177/04) at page 3, and Kennedy (186/04), at page 13]
Whether the employment type is suitable
• Knight (149/02): The Court found that the appellant “only presents with life skills rather than any which have been created by her education or training.” In overturning a finding of capacity for work in three employment options (Boarding Hostel Supervisor, Clerical Assistant, and Teacher Aide), Judge Beattie commented:
“The notion of suitability is emphasised by the provisions of s.94 [now s.108], which relate to the conduct of the Occupational and Medical assessments. Here again “suitability” and “matching” are the key imperatives which need to be considered.
"This Court has previously expressed its concern that in some cases where an insured has had or obtained little skill outside the particular skill of their pre accident employment and has in reality no skills other than normal life skills, they have nevertheless been foisted off into an entry level position because it meets their rudimentary skills rather than giving any consideration as to whether there is a match between the person and the proposed employment option. This is particularly so if there are other factors which would indicate that the person has no aptitude for that job option.
"In the present case I find that to determine that the appellant has an occupationally assessed ability to engage in the three options in question is stretching the meaning and purpose of the concept of a capacity for work to a point which I find was not contemplated by the wording of the Act. I find the words “suitable” and “match” to be important and at the heart of the assessment procedure and unless the suitability and matching can be demonstrated over and above a mere rudimentary ability to do the work, then the provisions of s.94 and others have not been adhered to."
• Beals (295/03): The claimant had argued that he had no skills other than normal life skills and was being foisted into an entry-level position. Judge Hole, in referring to the Knight decision, found that the identified position of weighbridge attendant was one that was suitable for the claimant. The Judge noted:
“This is plainly more than a mere unsophisticated type occupation designed as a catch-all for waifs and strays attempting to remain on accident compensation. Thus, I am satisfied that Mr Beals’ suitability and matching demonstrates more than a mere rudimentary ability to do the work proposed and, accordingly, the provisions of s 94 have been adhered to.”
• Boorer (44/06): Judge Ongley found there was a “clear mismatch” between the appellant’s transferable skills and the position of a film or television producer. The Judge stated that:
“[55] In my view, the material presented on the appeal shows an unexplained gap between the job type and the appellant's education, skills and experience. These matters go beyond what might be regarded as a mere alternative opinion that should not displace the assessment reached by a statutory process. On the face of this evidence, it is an untenable proposition that a claimant with limited education and experience, and with a history of work capacity significantly limited by pain, should be regarded as suitable for the position of a film or television producer. There is a palpable disparity such that the Court cannot accept uncritically the outcome of the opinions of the two assessors.”
Lack of qualifications
• Walker (218/05): Judge Ongley made some obiter comments concerning flaws in the occupational assessment where the appellant lacked the necessary qualifications for some of the occupations:
“In my view the assessment should specifically address the basis on which the appellant was thought fit for such semi-qualified positions without further training. Because this case does not turn on the validity of the occupational assessment, it is inappropriate to go further and consider whether it was unreasonable. It is sufficient to note that those jobs may be considered to have been wrongly recommended, because of an obvious lack of qualification, unless the assessor provides reasons.
[32] The assessment introduced a further job as a legal professional to “perform professional legal tasks other than those of barristers, solicitors or judges”. The occupations nominated in the work sheet were those of mediator and arbitrator. One would expect those to be skilled occupations requiring some recognised qualification. The task description may match Mrs Walker’s experience only to the extent that she could perform the introductory administrative work. There is no indication in her history of skills matching the work of a mediator or arbitrator, certainly not that of an arbitrator. While the Court is bound to accept that an occupational assessor exercises judgement on the basis of specialised knowledge, this particular recommendation is one that appears so unsuitable that it is unlikely to be regarded as credible without further explanation in the assessment. It may serve to undermine the credibility of the whole assessment.”
Age of the claimant
• Hanmore (99/06): Judge Cadenhead was critical of the occupational assessment and found that it had not properly addressed the claimant’s age:
“A suitable job is a job that a 62 year old with the appellant’s skills, many of which are not transferable, would have to address. It must be a realistic assessment taking into account these facts.”
Work type same as pre-injury job
• Fowler (114/06): the work type of Maintenance Officer was rejected by the Court on the basis that this work type, in its generic description, included functions and duties that were part of the appellant’s employment at the commencement of incapacity. The Court referred to the line of cases (discussed below under the heading “Vocational Independence and Incapacity”) that establish that a claimant cannot be considered incapacitated and yet have vocational independence in his or her pre-incapacity employment.
Achieving pre-injury remuneration not an objective
• In Grimstone (246/99), the Court held that the capacity for work provisions (under the 1992 Act) were only concerned with determining capacity for work. They did not extend to a consideration of “an ability to attain comparable remuneration with that which may have been received pre-injury.”
Overturning the medical assessor’s report
• Ramsay (supra):
“… something more is needed to set aside a determination that an insured has a capacity for work other than an opinion from another medical professional not qualified under s.98. What is required is evidence on which the Court, or the respondent [ACC], could say the opinion reached was wrong, and consequently the insurer’s decision was wrong.” (page 20)
• The High Court in Ramsay set out some of the situations where the Court would be entitled to disregard the opinion of the medical assessor (at page 18):
- where the medical assessor was not properly qualified under s.98 (now Cl. 27)
- where the medical assessor had failed to take into account matters that he or she must take into account (now Cl. 28)
- where the medical report failed to contain some of the information required under s.100 (now Cl. 29).
• Similarly in Jones (71/00) Judge Beattie stated:
“In this present case, I find that where the diagnosis is not flawed or the procedure is not shown to be defective but that it is simply one opinion against another it would require clear and cogent reasons why the appointed medical assessor, who in this case has particular expertise in occupational medicine, should have his findings questioned to the extent that it cannot be relied upon.”
Medical assessor’s clinical examination
• Maniapoto (15/07): the Court was not satisfied that the medical assessor had conducted a sufficient clinical examination. The Court then considered the question of whether that defect was sufficient to invalidate the assessment:
“In the present case I find that there is no room to make an exception merely because, as a matter of fact, the outcome of this assessment has not been affected in any way by a breach of that statutory imperative. An exception in such circumstances would create a dangerous precedent and would leave open-ended as to where to draw the line. I take the clear view that the line must be drawn from the point where it can be said the statutory requirement has been followed and if it hasn’t, then no matter what little or no impact it may have had, the assessment process required by the Act has not been complied with.”
The Court allowed the appeal.
Claimant’s self-analysis not sufficient
• Ewart (51/02): the appellant gave his own analysis of his skills and abilities, and his physical capabilities, in relation to each of the job options identified. There was no expert evidence to support his submissions. In dismissing the appeal, the Court noted:
“This Court has stated on several previous occasions that an appellant’s own self analysis of his physical capabilities would not carry the day when it is set against the advice of specialists, and in particular the medical assessor, who is required by virtue of the provisions of Section 98 of the Act to have certain skills and attributes in the field of Occupational Medicine.”
Relevant date
• Gregory (166/04): Judge Cadenhead noted that the relevant date is the date that the medical assessor considered the material and reached a conclusion. In this case, the countervailing medical opinion came at a much later date. This opinion did not demonstrate that the appointed assessor’s assessment was flawed. Therefore, the appeal was dismissed.
• Hirst (42/03): Judge Middleton stated:
“As Justice J. Hansen identified in Ramsay v ACC AP412/14/02 in the High Court at Christchurch on 12 December 2002, the assessment made by a qualified assessor should not overturned unless the opinion was wrong’. While Doctor Robinson has made his assessment with the benefit of hindsight and following a deterioration in the appellant’s condition, I do not consider that indicates that at the time Dr Hartshorn made his decision it was wrong.”
Further information submitted after the medical assessment
• Mark (143/03): The appellant supplied a medical report (from an orthopaedic surgeon) challenging the medical assessment. This report was written two years after the initial report by the medical assessor. Judge Cadenhead held that the medical assessor was not required to take into account any information (whether medical or not) provided after the medical assessment had been completed. The Judge also noted, however, that it would be prudent for ACC to refer the material back for further comment, though this was not a requirement.
Non-accident-related medical problems
• Heppleston (79/02): the appellant argued that the medical assessor should have taken into account the non-accident related medical problems. The analogy was given of a person who was blind in one eye and who loses sight in their other eye due to accident. The appellant contended that if ACC’s submission was accepted, the capacity for work assessment would have to disregard the blindness in the eye not caused by accident.
In relation to this analogy, Judge Beattie commented:
“Using the analogy of the half blind claimant, the accident causing blindness to his one good eye would thereby create the state of total blindness and therefore his capacity for work would likely be considered non-existent. Certainly, he would not thereby be regarded as having some notional sighted eye. That is a nonsense and so is the nonsense of the ‘legless tap dancer’ which had been used as an analogy in the submissions which were made to Justice Fisher in the Kenyon decision and which seems to have had as its genesis a submission by illustration in the decision of Alsig (54/01).
Judge Beattie held that the fact that the medical assessor did not take account of the appellant’s non-accident conditions did not, in the circumstances of that case, render his assessment invalid. The Judge stated (at page 7):
“In summary then, I find that on the facts of this case there is no evidence that the non-injury-related medical problems were in any way inhibitive of this appellant’s ability to perform the tasks required in the job options which the medical assessor determined she was capable of doing having regard for her accident injury. The assessment cannot be said to be invalid simply because those conditions were not factored into the assessment when there is no evidence that they were required to be so factored into the assessment. The accident related injury must stand or fall on its own as to its consequences on a claimant’s ability to fulfil any job options identified. If it is assessed that there is nothing preventive about the accident injury then the Act and Procedure stipulates that any non-injury-related factors are to be disregarded.”
Therefore, the appeal was dismissed.
• See also Bulman (172/06). This case is discussed under the heading “Procedure.”
Content of the medical report - report must be sufficiently reasoned
• Carnahan (176/02): the report must be sufficiently reasoned to sustain the conclusion. In this case, the claimant had experienced ongoing issues with pain. Judge Beattie found that there was insufficient reasoning to suggest that the claimant had a capacity to work.
• Bidois (318/01): the medical assessor had failed to give reasons as to why the claimant, with the identified physical characteristics was, nonetheless, capable of working the required hours in each of the job options. ACC’s determination of a capacity for work was overturned.
• Inwood (43/02): the report of the appointed medical assessor, Dr Marshall was compared to the report of Dr Burry. Judge Beattie stated that the comments he had made in Bidois (supra) were equally applicable to the appeal before him.
• Lock (39/05): the assessor must turn his or her mind to the characteristics of each of the occupations, as set out in the occupational assessment, in relation to each of the nominated jobs.
• Galway (124/05): at page 8 of the decision, the Judge stated:
“In circumstances where employment types identified occupationally involve activities which have been accepted as being factors of the appellant’s incapacity, then it behoves the Medical Assessor to give clear and cogent reasons why the appellant can nevertheless carry out those activities in the various identified employment options.”
• See also Churchill (22/03).
• A contrary view was expressed by Judge Barber in Kidd (53/04):
“Whatever other Judges in this jurisdiction might be taken to have said, s.100(1)(d) [now Cl. 29(1)(d)] does not require a reference to job details sheets but simply requires that, in the medical assessment report, the medical assessor state his or her opinion of the insured’s capacity for work for each of the types of employment identified in the occupational assessor’s report. That means that the medical assessor should refer to each of the types of employment identified by the occupational assessor as suitable for the insured and state the medical assessor’s opinion on the insured’s capacity for work for each of them. I agree that it would be helpful if, in stating that opinion, the assessor gave reasons however brief, but failure to do so is not necessarily a fatal flaw in itself, although that failure could contribute to the overall report being inadequate."
• Walker (218/05): the vocational independence assessment was set aside on the grounds that the medical assessor had failed to “deal transparently” with the question of the claimant’s disability through pain.
• Gear (287/05): Judge Beattie commented on the apparent conflict between Bidois (supra) and Kidd (supra):
“I consider the correct position to be nicely put by His Honour Judge Hole in Park (552/02) where he was commenting on a suggested inconsistency between comments in Bidois and those made by His Honour Judge Barber in Kidd (53/04) which at first glance seemed to be in conflict. The contention being put to Judge Hole was that on the one hand that Judge Barber considered detailed reasons were not required, whereas I had stated that they were in Bidois. His Honour went on to say:
“I disagree with that analysis. While the words are different, each Judge agrees when giving an opinion on job suitability, information sufficient to justify that opinion is necessary and that information should relate to factors identified as characteristics of that job option by the Occupational Assessor. The Assessment should be sufficient to inform both a claimant and the Corporation how the Medical Assessor reached his conclusion, however detailed reasons may not be necessary.”
[31] Following on from that I take the view that each case must ultimately depend upon its own facts. It may be the case that where, on an analysis of the job functions and activities, there may seem to be anomalies between employment types that are approved and those that are disapproved and where in both cases there are functions and activities which are common to both yet in one case the Assessor contends the appellant can meet those physical requirement, whereas in the other the Assessor has found that the appellant could not. It is those types of situations where particularity would be necessary to identify the reasons why the decision reached was made.”
• Hay (132/06): Judge Beattie discussed Bidois (supra) and Osborne (353/02), both his own decisions. The Judge noted that in Osborne, he endeavoured to put the Bidois decision in its proper context. The following extract from the Osborne decision was quoted with approval:
“[14] For the avoidance of doubt, I should indicate that the decision in Bidois should not be taken as establishing a procedural requirement which, if not met, renders the assessment invalid. It is an evidentiary requirement only and where a medical assessment is brought into question it would be up to the respondent to consider whether or not that assessment required further clarification, as a matter of evidence, before any review or appeal.”
Assessor to address pain
• Nenewale (319/04) and Miles (2/05) establish that adequate reasons must be provided by an assessor for each type of work considered suitable. Where chronic pain is at issue, as it was in these cases, it should form part of the discussion.
• However, the decision in Godsall (207/05) shows that there will be situations where a claimant is identified as experiencing ongoing pain, yet this will not prevent him or her from being medically capable of carrying out the various required tasks.
• Walker (218/05): Judge Ongley confirmed that a medical assessment must include comment on the nature and degree of pain and how it affects a claimant's ability to work, particularly when this is the essential feature in a claimant's presentation.
• Buckthought (296/05): Judge Cadenhead held that the medical assessor had not adequately addressed the issue of the appellant’s ongoing pain, and the finding of vocational independence was overturned.
Relevant documents
• Brook (61/06): held on the facts that an independence allowance assessment report is not a relevant document under Clause 28(2) for the purposes of the medical assessment.
Job options with restrictions
• There are a number of District Court decisions where a finding of vocational independence (or capacity for work) has been overturned on the grounds that the job options identified as being suitable had conditions placed on them.
• Buffett (334/02):
“It is not open to a medical assessor to identify that a person can do the functions and activities of the employment type only when certain limitations on those functions and activities are placed on it.
"Whilst it may well be the case that an actual employment position might be one which does not have the disqualifying characteristics, that is not the test. The determination that needs to be made by the medical assessor is that the appellant is physically capable of carrying out all the functions and activities that the generic description of the employment option would require. There can be no selectiveness or limitations.”
• Meiklen (207/01): the medical assessor had indicated that the appellant would only be suitable for a delivery driver position if it was one in which he would be delivering light items such as food. In finding that the appellant could not be said to have a capacity for work in that position, the Judge made the following comments:
“[30] I find that those limitations or refinements that would need to be placed on the job option of delivery driver cannot be so placed up that option for the purposes of assessing a capacity for work. The requirements of the Procedure as I find them to be are for there to be a vocational and medical determination that the appellant is both vocationally equipped and physically capable of carrying out the range of tasks which a particular job option can encompass in its normal and usual requirements. It matters not whether a particular employment position may or may not have all of the requirements, that is a matter which is employment specific and not job specific, which connotes a far wider generic consideration.
[31] In the case of a delivery driver, I find that it matters not that certain categories of employment of a delivery driver may only involve the requirement of lifting light objects such as food, that would not be a job option but would be a sub-category of a job option and relates to a specific sub-category of employment. It does not come within the generic concepts of job and work.
[32] For the foregoing reasons therefore, I find that this appellant cannot be determined as having a capacity for work as a delivery driver as such a job option cannot be limited to only involving being a delivery driver who makes light deliveries. Such limitation is not within the job description of delivery driver and it is acknowledged that the appellant could not carry out the full range of duties that may be required of a delivery driver having regard to the range of duties of a delivery driver in its broad generic description.”
• Similarly, in Murrihy (111/01), Judge Middleton rejected ACC’s finding of a capacity for work, noting that the medical assessor had qualified his findings in each of the jobs and as such, the appellant could not be found to have a capacity for work in those positions.
Employment in a sheltered environment
• Duncan(319/00): Judge Beattie stated that:
“Special considerations or arrangements that could make it possible for employment to take place but which would not be part of the normal parameters of the job, cannot enable it to be said to be within a claimant’s capabilities, and across the board it could not be so.”
• Similar sentiments were expressed in Geerston (29/00), where the Court noted that the work should be available on the open market, and not in sheltered employment.
• Galway (124/05):
“As previously identified, the fact that the appellant was coping quite well with 32 hours per week in a sheltered situation, I find is insufficient reasoning to establish a physical capacity to carry out all the functions and activities of the work types which the Assessor was required to consider.” (page 9)
Medical assessor entitled to draw own conclusion as to medical condition
• Chapman (60/04): Judge Hole stated:
“It is worth noting that, if a medical assessor is not entitled to draw his own conclusions as to the medical condition of an insured, then there is little point in a medical assessment. I accept that it is important that he have regard to the opinions of other medical specialists. Indeed, he is required to do so, pursuant to s 100(1)(c). However, he is not required to slavishly adhere to the opinions expressed in other medical assessments if he disagrees with them.”
Medical assessor cannot put own refinement on functions/activities
• Reeves (343/02): Judge Beattie stated (at page 8):
“I find that it is not open to the Medical Assessor to put his or her own refinement on the function and activities as have been identified in the occupational assessment. If it is accepted as a medical fact that a person is not capable of heavy lifting, pulling, etc., then if the employment option states that heavy lifting, pulling, etc., is part of it, then it cannot be that the person is physically capable of carrying out the activities required of that particular employment option.”
Factors raised after the assessment
• Cade (34/07): The Court held that the medical assessor’s omission to comment on the appellant’s anxiety and depression did not make the assessment deficient, since those factors were not raised until after the assessment.
Medical specialists should confine comments to area of expertise
• Hosie (204/02): The Court was critical of the medical specialists for commenting on (and criticising) the occupational assessment. The Court noted:
“The criticism from Drs Burry and Glass is really confined to the occupational aspects rather than the physical, and as I have stated, I do not consider their views can carry the day. I certainly have no evidence that either of them have the status of expert witnesses in the field of occupational assessment.”
Outcome departing from reality
• Atkinson (340/05): Judge Barber overturned a finding of capacity for work as a weighing and tally clerk on the basis that the outcome seemed to depart from reality. This was despite his finding that proper procedures had been followed (for both the occupational and medical assessment), and the finding that the medical assessment was “thorough and carefully considered” and not intrinsically flawed.
VOCATIONAL INDEPENDENCE AND INCAPACITY
• The concept of “vocational independence” (previously “capacity for work”) is distinct from the concept of “incapacity.” The general principle is that a person cannot be determined as having vocational independence in his or her pre-injury employment.
• Trask (68/06): Judge Ongley made the following observations about the incapacity and vocational independence provisions:
[48] There is a potential conflict in principle between the line of cases which rejects vocational independence for a generic work type where the claimant cannot undertake all subcategories, and the line of cases in which capacity to work is accepted where the claimant cannot meet the requirements of his or her pre-injury subcategory but is fit for employment in other sub-categories.
[49] These two lines of cases concern different sections of the Act relating to capacity. The statutory language is different because s103 refers to engaging in employment, and the vocational independence provisions refer to types of work that are suitable. The drafter did not attempt to coordinate the language of the two sets of provisions. They have different functions, both directed to the same purpose of ending eligibility for weekly compensation.
[50] The approaches taken in the cases concerning the two different provisions have not attempted to achieve precise uniformity. There has probably been a stricter judicial approach to vocational independence, formerly called capacity to work, in order to avoid the manifest unfairness that could result from assessing a claimant for a supposedly suitable work type if the claimant has limitations. In contrast, decisions concerning the approach to capacity for former employment have tended to take a more relaxed approach.
[51] When examining incapacity under s103, the line between generic and subgeneric groups needs to be drawn in a logical and fair way. Sometimes the exercise concerns distinguishing particular tasks that are not within the capacity of the claimant, but which are exceptional for the type of work concerned. Sometimes the question is whether a particular kind of job should be regarded as a job type for the purpose of vocational independence, or as an unimportant subdivision of another job type. The decision may frequently be influenced by the opinion of an occupational assessor who is familiar with the features of a job which bring it into the same class as other jobs.”
• In Churchill (22/03), Judge Beattie stated (at page 8):
“… the whole concept of “capacity for work” is quite separate and distinct from the concept of “incapacity” within the meaning of the Act and the two are mutually exclusive. The decisions of this Court in Chesterman (213/01), Carnahan (176/02) and Reeves (343/02) have established the line of authority that a person cannot be determined as having a capacity for work in that person’s pre injury employment. If such were to be the case that person would no longer be regarded in law as being incapacitated. The whole concept of capacity for work is based upon the premise that a person is incapacitated, as that word is defined, but yet is found capable of undertaking other forms of employment for 30 or more hours per week after due and proper assessment.”
Incapacity vs deterioration
• QBE (Harris) (248/05): in November 2003 the insurer had determined that the claimant had a capacity for work as a forklift driver, truck driver and forecourt attendant. This was confirmed at review and there was no appeal. In September 2004 the claimant requested a re-assessment on the grounds of deterioration. The request was declined and upheld at review. However, the reviewer also directed payment of weekly compensation for two periods of incapacity that had been certified by the GP. On appeal by QBE, Judge Beattie held that the claimant had no entitlement to weekly compensation.
The Judge stated:
“[16] Once a claimant has been determined as having the status of having a Capacity for Work, notions of incapacity do not arise and in the event of supervening injury or aggravation of the subject injury, the only method by which a claimant can reassert a right to weekly compensation is if the insurer, pursuant to Section 89(5), determines that the claimant no longer has a Capacity for Work. It is then that the provisions of Section 92 apply and entitlement to weekly compensation revives.
[17] The procedure required is more than simply a certificate from a doctor, which is usually the accepted means of determining incapacity, at least in the first instance. Rather a reassessment of a claimant’s Capacity for Work by way of Occupational and Medical Assessments pursuant to Sections 93 to 100 of the Act, is required, the end result of which would need to be that a claimant was found to be no longer capable of working 30 hours or more in the employment types for which he/she may otherwise have been assessed as being suited by reason of experience, education or training.”
• ACC must determine a claimant’s vocational independence again where:
- ACC has previously determined that the claimant had vocational independence (2001 Act) or a capacity for work (1998 Act or 1992 Act); and
- ACC believes or has reasonable grounds for believing that the claimant’s vocational independence or capacity for work may have deteriorated since the previous determination: s.109
Deterioration of the original injury
• Hemmings (217/04) and Pickering (218/04) were heard by Judge Beattie on the same day. The issue was whether ACC had to determine a claimant’s vocational independence again, where s.109(2)(b) was triggered. In particular, whether ACC had to carry out another assessment (in accordance with s.107(2) and s.108(1)), which must include a new occupational assessment.
The Court held that where s.109(2)(b) was triggered, a new assessment had to be undertaken, which included another occupational and medical assessment. On the facts, Judge Beattie held in Hemmings that the information received from the appellant’s GP and ACC’s subsequent conduct indicated that s.109(2)(b) had been triggered. Hence, a proper assessment had to be undertaken, and this included the requirement for a fresh occupational assessment. As no occupational assessment was carried out, the appeal was allowed.
However, in Pickering, Judge Beattie found that ACC was correct in seeking further information from the medical assessor in determining whether the appellant’s condition may have deteriorated. In this case, the appellant’s GP had only provided a medical certificate with no further information, whereas in Hemmings, the appellant’s GP had responded to ACC’s request for further particulars of deterioration, which were provided prior to ACC issuing its decision.
Non-injury factors and deterioration
• Sparrow (74/02): The appellant submitted that when ACC refused to refer him for reassessment, it had failed to take into account his non-injury disabilities, and these should have been considered. The appellant relied on Justice Fisher’s comments in the Kenyon decision (supra) concerning the example of a one-eyed person who loses sight of his good eye.
In rejecting this argument, Judge Beattie stated (at page 6):
“For the avoidance of doubt I formally rule that the respondent was not required to take into account or consider any pre existing disabilities or any of the notions that may have been raised by the decision in Kenyon. I further note that in Para 24 of Justice Fischer’s decision he indicates that he expresses no final view on the question as is raised by Mr Miller and advice identified by the Learned Judge in Para 21 of his decision.”
Deterioration due to new injury
• Chapman (6/06): The question was whether the effects of a new injury could be regarded as a feature of deterioration of the claimant's vocational independence, and therefore require ACC to determine vocational independence again. The Court held that once vocational independence was established, a new injury was logically not a deterioration in the injury condition at the time of an earlier vocational independence
assessment. Therefore, the appellant’s argument was rejected and the appeal was dismissed.
Interval between assessments
• Sharpe (7/06): in April 2004 a completed vocational independence assessment showed that the appellant did not have vocational independence. ACC arranged for new initial occupational and medical assessments and directed the assessors to focus on sedentary or supervisor options. In December 2004 the appellant was assessed as having vocational independence.
On appeal the Court found that there was no statutory impediment to reviewing the initial occupational assessment and the IRP, and that ACC acted reasonably under s109(1) in recommencing the initial and final assessments. The Court stated:
“[46] There is some force in Mr King's argument that the structure of the legislation does not accommodate revisiting vocational rehabilitation when it has been certified complete. But Parliament is not likely to have intended closing the door to vocational independence in cases where 'the process has produced an unsatisfactory result and where further rehabilitation is possible. In my view, the Corporation must be able to revisit vocational rehabilitation under the broad provision of s88, at least if it acts reasonably.”
Entitlement
Independence allowance
Lump sum compensation
Interest
Payments outside New Zealand
Transport to treatment
Upper age limit (effects of NZ Superannuation)
Legislation - ss 377, 378 and 379; Schedule 1, Clause 55(4)
Other references: s.6 (definition of “impairment”)
Personal injury suffered before 1 July 1999
• Section 377 [as substituted, from 1 July 2005, by Section 59 of the Injury Prevention, Rehabilitation, and Compensation Amendment Act (No.2) 2005] concerns the independence allowance for personal injury suffered before 1 July 1999. Part 4 of Schedule 1 of the 1998 Act applies to injuries occurring before 1 July 1999, subject to some modifications.
• All injuries that occurred before 1 July 1999 are to be assessed together i.e. whole person impairment for the combined effect of all injuries.
• Where a claimant has received lump sum payments under the 1972 or 1982 Act, any lump sum paid is deducted from the percentage of whole person impairment.
• Independence allowance payments start from:
- The date of the application, for a person who has received lump sum compensation under the 1972 or 1982 Act.
- In all other cases, the later of the date the claim for cover was lodged, or 1 July 1992.
* NB: the new Section 377 has repealed Sections 441 and 442 of the 1998 Act.
Personal injury suffered between 1 July 1999 and 1 April 2002
• Section 378 applies to personal injury suffered on or after 1 July 1999 and before 1 April 2002. Part 4 of Schedule 1 of the Accident Insurance Act 1998 continues to apply to such injuries.
• To qualify for payment of the independence allowance, Clause 58 requires a degree of whole person impairment of 10% or more.
• Clause 59 states that assessments for the independence allowance cannot be undertaken unless:
- there is a certificate from a registered medical practitioner indicating that the injury has stabilised and it is likely that there is impairment; or
- 52 weeks have passed since the injury and there is a certificate from a registered medical practitioner that the injury has not stabilised but there is likely to be impairment resulting from the injury.
• Clause 60 of Schedule 1 sets out the requirements for the assessment. In conducting the assessment, Clause 60(4) requires the assessor to use the 4th Edition of the American Medical Association Guides to the Evaluation of Permanent Impairment (“the AMA Guides”). The assessor is also required to exclude from the assessment any impairment that does not result from the personal injury for which the claimant has cover.
Case Law
Grounds for challenging an assessment
• Brierly (183/06): Judge Ongley quoted the decision of Judge Hole in W (284/04) with approval. This decision summarises the main legal principles:
“No challenge was made to these: they are well settled. Cases such as Gowthorpe (252/98), Daniels (235/98), Leeming (324/99), Kidd (52/01), Thompson (120/01), Anderson (286/99), Stanley (212/99), MacDonald (218/99) and Bull (168/99) have all established the following principles:
(a) A mere difference of opinion between specialists is not sufficient to unseat the advice of an appointed assessor: there needs to be some compelling factor which makes it clear that the assessor has overlooked some material factor.
(b) It is not for the Court to form an opinion as to whether or not the AMA Guides have been correctly applied: this is the province of duly qualified medical practitioners. The Court must rely on the evidence of the medical practitioners in this regard.
(c) In order to succeed in an appeal of this nature, it is for the appellant to establish on the balance of probabilities that the assessment was in some way flawed or incorrect, This requires credible expert evidence directed at the specific aspects of the assessment which are said to be incorrect.
(d) In order to upset an assessment, the Court does not necessarily have to
be provided with an alternative assessment from a duly qualified expert. It is sufficient if there is expert compelling evidence either that the AMA Guides have not been correctly interpreted or that the assessor has failed to take into account all relevant factors of impairment.
• Judge Beattie stated in the decision of Byrnes (73/04):
“The legal principle that has evolved in decisions relating to independence allowances is that, in the absence of clear and cogent evidence that the assessment was wrong, the assessment of the duly appointed assessor must be accepted.”
• Similarly in Strange (142/03), Judge Beattie said:
“.. the Court will accept the evidence of the medical assessor duly appointed to carry out the assessment unless there is compelling evidence from an appropriately qualified expert which makes it clear that the assessor has overlooked some material fact or has not correctly interpreted the diagnosis in the Guides.”
• Bull v ARCIC (168/99): the Court held that the assessments by the appointed assessors were not sacrosanct. Any challenge to the accuracy of an assessment must be considered on a case by case basis, and each “challenge” must be considered on its own merits. The Court further stated:
“Suffice is to say that if there is expert evidence which is compelling that either the AMA Guides have not been correctly interpreted in the assessment of the percentage impairment or that the assessor has not necessarily taken into account all factors of impairment that ought to be considered when considering the whole-person impairment of any particular claimant, then the Court will direct that any decision affecting a claimant based on that assessment be revoked and a new assessment be undertaken.”
• See also King (4/04), Kidd (52/01), Waddilove (162/99), and Leeming (324/99).
• Gardiner (22/02): the Court preferred the report by an experienced treating psychiatrist over the ACC trained assessor’s report. The ACC trained assessor was a GP. The Court’s reasoning was stated follows:
“[9] Obviously as is established by authorities such as Gowthorpe (252/98), Daniels (235/98), Leeming (324/99), Kidd (52/01) and Thompson (120/01) the Court will not become involved in a debate between medical practitioners contesting the respondent’s assessments where the evidence sought to be adduced simply lacks the necessary medical qualifications to controvert the assessor’s opinion.
[10] That is not, however, the case here. Central to this appellant’s assessment for an independence allowance is his psychiatric condition. The evidence sought to be adduced is that of Dr Sarfarti who is not only an qualified psychiatrist but has had a doctor/patient relationship with the appellant extending over some years.
[11] In addition, the evidence which Dr Sarfarti controverts is that of a medical practitioner who has no academic psychiatric qualifications or relevant experience in that medical discipline.
• Gardiner was followed in Stanley (294/03), where ACC was required to have the claimant reassessed by a psychiatric assessor rather than a GP.
• Bland (47/02): the claimant was assessed by three different ACC trained assessors, whose reports were conflicting. One assessment gave 5% impairment, a second 15%, and the third 5%. The Court expressed concern as to the accuracy of the assessments. The appeal was allowed and the matter was referred back for a fourth assessment.
• Savage (115/04): the claimant suffered multiple injuries, including a head injury, in a motor vehicle accident in 1999. The issue was whether she suffered whole person impairment from the head injury. An assessment in December 2002 concluded that there was 0% whole person impairment. The claimant provided an alternative assessment of 29% from Dr Newburn. The Court was satisfied that the evidence from Dr Newburn raised doubts about the original nil assessment. The appeal was allowed and ACC was ordered to obtain a new assessment by an independent neuropsychiatrist.
Error of fact
• Ellis (88/06): Judge Ongley allowed the appeal on the ground that there had been a material error of fact:
“[38] It is not a case of a difference of opinion between specialists, but of an error of fact that is clear from the evidence. I think that the error in this case should be regarded as material, judged from the point of view of a non-expert tribunal of fact. The proposition that it was not material to the outcome of the assessment should be for the Corporation to establish. In my view, the medical evidence does not serve to answer the argument that there has been a material error.
[39] For those reasons, I find that the medical assessment was flawed.”
Disability vs impairment
• “Disability” is defined in the AMA Guides as:
“an alteration of an individuals capacity to meet personal, social, or occupational demands or statutory or regulatory requirements because of an impairment.”
• Needs (80/00): Judge Beattie noted that there was little correlation between the assessment of a disability under the former independence allowance criteria and the assessment of whole person impairment under the AMA Guides.
Whether pain ought to be taken into account
• Potter (245/01): Judge Beattie stated:
“The AMA Guides refer to the presence of pain but the fact is that clinical signs of various degrees of limitation of function need to be established in order to obtain a percentage rating which would take it over the threshold.”
Consequential chronic pain
• Stockan (20/05): the appellant had a back injury in 1989 and had received 10% lump sum. In 2003 he applied for the independence allowance and he was assessed to have 10% whole person impairment. The appellant alleged he had consequential chronic pain syndrome. Judge Beattie directed ACC to determine whether his chronic pain syndrome was a result of the 1989 injury.
Medical practitioner must certify impairment
• Glasson (320/01): the appellant applied for the independence allowance. In the medical certificate the GP, while indicating that the injury to the knee was stable, had also noted that the injury had not resulted in impairment. ACC therefore declined to assess the appellant on the grounds that there was no doctor’s certificate indicating that there was impairment.
In dismissing the appeal, Judge Beattie noted that the wording of Clause 59 of the Accident Insurance Act 1998 was in the imperative, and requires that the medical practitioner certify that there is impairment from the injury:
“The whole basis of an independence allowance is to assess an injured person’s whole person impairment arising from that personal injury. If there is no impairment whatsoever to be determined then of course there can be no right to apply for an independence allowance.”
• Bowering (145/02): the Court held that unless an injury has been certified on the medical certificate, it cannot be taken into account in the assessment.
“I find that the appellant’s contention that the assessor took no account of injuries arising from the January 2000 accident does not have substance as there is no evidence that those injuries are injuries for which an impairment has been certified as the medical certificate from Dr Karl only refers to shoulder and cervical spine.
Clause 59 (1)(a)(ii) of Schedule I to the Act requires that there be a certificate from a registered medical practitioner indicating that there is a likely impairment resulting from the personal injury. No such certificate pertaining to any injury arising from the January 2000 accident has been presented.”
Peer review of impairment assessments
• Wylie (247/06): Judge Beattie made the following comments about ACC’s peer review process:
“[13] The only further comment I make is that it is the respondent's practice to peer review the assessments carried out. This is to determine that the correct methodology has been used to arrive at the impairment rating commensurate with the injury. It is not unusual for that peer review to identify an error, and it is for this reason that Dr Chew was asked to reassess in the light of that error. I find there is nothing sinister in this practice and it is simply designed to ensure that a claimant has been treated correctly in the assessment process.”
Mental injury
• Wiki (37/06): the appellant had cover for leptospirosis and later developed chronic fatigue syndrome. In 2003 the assessor, Dr Reekie, assessed the appellant to have 7% whole person impairment assessment under the head injury section of the AMA Guides (chapter 4). The appellant provided an alternative impairment assessment of 25% from Dr Newburn, neuropsychiatrist, who had applied chapter 14 of the AMA Guides (mental injury).
The Court noted the following about the assessment of mental injury:
- a diagnosis of mental injury has to precede an assessment, or otherwise a psychiatrist should do the assessment, as a matter of caution.
- If there is a mental injury that is not recognised by the assessor; the assessment will probably be flawed.
On the facts, the Court found that at the time of Dr Reekie’s assessment, there was no clear evidence of mental injury. However, there was evidence of mental injury at the time of Dr Newburn’s assessment, and the Court accepted this as being equivalent to a certificate by Dr Newburn that the appellant’s impairment may have increased. Therefore, the Court directed ACC to arrange for another assessment by an assessor qualified to deal with mental consequences.
• WR (238/06): the Court accorded greater weight to the alternative assessment completed by a psychiatrist than the assessment ACC had obtained from the appointed assessor, who was a general practitioner.
Mental consequences of a physical injury
• Lungulescu (9/03): the appellant argued that the assessor, Dr Kanji, had failed to take into account psychological impairment. In finding that the assessment was correct, Judge Beattie noted that the appellant did not have cover for any mental injury. He found that until a proper causal nexus was accepted, this was outside the ambit of the independence allowance assessment.
Judge Beattie stated:
“In summary then I find it is the case that Dr Kanji has correctly carried out an assessment of the appellant’s physical injuries in accordance with the AMA Guides and there is simply no evidence to suggest that his assessment and interpretation of the Guides was not correct. If it be that certain peripheral matters which have now been raised by the appellant and which he contends ought to be considered as part of the consequences of his covered injury, they will need to be determined by the respondent in the first instance. It would then be open for any further independence allowance assessment to include those matters, should they indeed be matters which can be the subject of measured whole person impairment.”
Assessor must see the claimant
• HLH (106/05): the Court held that the independence allowance assessment was “fatally flawed” since the assessor had not interviewed the claimant when carrying out the assessment. Instead, the assessor completed her assessment by reference to notes made during a previous interview.
Apportionment
• CB (238/05): Judge Ongley found that there was no clear basis for original assessor excluding all impairment relating to the appellant’s alcohol use. The assessor had assessed 45% whole person impairment but attributed most of the impairment to the appellant’s drinking, with the result that only 5% was injury-related (sexual abuse). An alternative assessment found 40% impairment with 10% deduction for non-injury factors. Judge Ongley held that the difference between the assessments went beyond a difference of opinion, and allowed the appeal.
Mahaki and Fenemor – transitional independence allowance provisions
The High Court in Mahaki and Fenemor v ACC (24/11/06, Wild and Mallon JJ, HC Wellington CIV 2005-485-177 & CIV 2005-485-001002) considered the interpretation of sections 441 and 442 of the Accident Insurance Act 1998.
• There were two issues:
The date from which the independence allowance was payable
- both suffered injuries before 1 July 1999; and
- both applied for the independence allowance after 1 July 1999.
• Mr Fenemor: whether the independence allowance for his 1998 leg injury should be reduced because of lump sum compensation he received for an earlier and unrelated back injury (in 1990).
• Mr Mahaki:
- suffered a right thumb/finger injury in 1991, for which he received 8% lump sum compensation under the 1982 Act.
- Suffered an arm injury in 1993
- Applied for an independence allowance in 2002
- He was assessed to have a whole person impairment of 44%.
- ACC deducted 8% for the previous lump sum compensation, which resulted in a whole person impairment for the independence allowance of 36%.
- ACC also determined that payment would commence on the date he applied for the independence allowance.
- Mr Mahaki argued that his independence allowance should be paid from the date of his claim for cover.
- The High Court dismissed the appeal, ruling that Mr Mahaki’s independence allowance was payable from the date of his application.
• Mr Fenemor:
- suffered a back injury in 1990 for which he received 10% lump sum compensation under the 1982 Act.
- In 1998 he suffered a leg injury resulting in a below knee amputation.
- He applied for the independence allowance in 2003.
- He was assessed to have impairment of 28% for his knee injury and 5% for the back injury. When combined, he had a 32% whole person impairment.
- ACC deducted 10% for the lump sum received for his back injury, which gave a combined whole person impairment of 22%.
- In allowing the appeal, the High Court ruled that Mr Fenemor’s independence allowance should not have included his back injury, and his entitlement should have been assessed at 28%.
- The Court also ruled that Mr Fenemor qualified under s441 and therefore, the independence allowance should be paid from the date of lodging his claim for cover for his leg injury.
• NB: the new Section 377(3)(a) of the IPRC Act continues the requirement for a combined assessment of impairment for all pre 1 July 1999 injuries.
Whether a re-assessment or new assessment
• A (295/05): The appellant had cover for a back injury and a sensitive claim mental injury. She had been receiving an independence allowance for her back injury since 1998. In 2002 she applied for an independence allowance for her mental injury. Her impairment was assessed for both her back injury and her mental injury, and the increased independence allowance entitlement was paid from the date of the next quarterly payment following the reassessment. The appellant challenged this decision on the basis that she had not previously received an independence allowance for her mental injury, and contended that it should be paid from the date she lodged her sensitive claim.
Judge Cadenhead noted that the appellant had not previously applied for an independence allowance for her sensitive claim and concluded that the increased entitlement should be paid from the date she applied for an independence allowance for her sensitive claim. Judge Cadenhead stated that the assessment of both her physical and mental injury was not a reassessment of the original assessment.
Date from which a re-assessed amount is payable
• O’Riley (249/06): the issue concerned the commencement date for payments of the increased independence allowance following an increase in the appellant's assessed whole person impairment.
The appellant suffered head and stomach injuries in 1985 for which he received a 20% lump sum under the 1982 Act. In June 1999 he applied for the independence allowance and was assessed to have 42% whole person impairment (WPI). ACC paid the independence allowance at 22% after deducting the 20% lump sum, from June 1999. In September 2003 the appellant applied for a re-assessment of his independence allowance, to include the effects of his post-traumatic syndrome (PTSD). ACC obtained evidence that cover extended to PTSD and the appellant had a further assessment of impairment, taking into account his mental injury.
The appellant was assessed to have 61% whole person impairment and ACC advised that it would backdate payments from the date he applied for an independence allowance, being June 1999. The appellant argued that he was entitled to have his independence allowance backdated to the date he lodged his claim for cover.
The Court held that the appellant’s request to have the effects of PTSD included in the independence allowance was a request for a re-assessment. Therefore, section 377 of the 2001 Act, sections 441 and 442 of the 1998 Act, and Clause 63 of Schedule 1 of the 1998 Act applied. The Court found that ACC was only liable to pay the increased amount from the next quarterly payment following the re-assessment. The fact that ACC had backdated the increased amount from the date he applied for the independence allowance (in June 1999) “must be regarded as a windfall for the appellant.” The appeal was therefore dismissed.
NB: in this case ACC’s decision was issued in October 2004, when the unamended section 377 of the 2001 Act was in force. However, as the case concerned a re-assessment, the Court applied clause 63 of Schedule 1 to the 1998 Act, which continues to apply to the independence allowance for injury suffered before 1 July 1999.
Legislation
2001 Act Schedule 1, Part 3 (Clauses 54 – 62); Injury Prevention, Rehabilitation, and Compensation (Lump Sum and Independence Allowance) Regulations 2002
Other references: s.6 (definition of “impairment”)
• Clause 54 introduces lump sum compensation for permanent impairment. The requirements are:
- The personal injury must be suffered after 1 April 2002.
- The claimant must survive the injury for at least 28 days.
- An assessment under Clause 59 establishes a whole person impairment of 10% or more.
• Clause 59 sets out the requirements for the assessment. The assessor is required to:
- assess the claimant in accordance with the Regulations;
- exclude from the assessment any impairment that does not result from personal injury for which the claimant has cover, or arising from injury suffered before the commencement of the Act.
• The Regulations prescribe the assessment tool for assessing whole person impairment as:
- The American Medical Association Guides to the Evaluation of Permanent Impairment (4th Edition); and
- The ACC User Handbook. The ACC User Handbook prevails if there is a conflict between it and the AMA Guides.
• Clause 57 states that assessments for lump sum compensation cannot be undertaken unless:
- there is a certificate from a registered medical practitioner that the injury has stabilised and it is likely that there is permanent impairment; or
- 2 years have passed since the injury and there is a certificate from a registered medical practitioner indicating that the injury has not stabilised but it is likely that there is permanent impairment.
• Permanent impairment is defined in the ACC User Handbook as meaning:
“A loss, loss of use or derangement of any body part, organ system, or organ function, that is well established and unlikely to change substantially in the next year, with or without further medical treatment.”
• Stability is defined in the ACC User Handbook as meaning: “unlikely to improve in the next 12 months.”
• If the injury is a mental injury, the certificate must be from a suitably qualified registered medical practitioner: Clause 57(3).
Case Law
Disability vs impairment
• “Disability” is defined in the AMA Guides as:
“an alteration of an individuals capacity to meet personal, social, or occupational demands or statutory or regulatory requirements because of an impairment.”
• Gruar (343/04): Judge Beattie commented on the difference between impairment and disability:
“[19] It is the case, of course, that the entitlement to lump sum compensation arises in respect of Whole Person Impairment which is assessed according to the criteria and tables in the Guides. The notion of ‘impairment’ is quite different from the notion of ‘disability’ and it is that latter aspect on which the appellant has given the Court numerous examples of how the loss of his leg has affected him and his ability to carry out the activities of daily living to which he had learned to adjust in the 7 years he had been in a wheelchair since the time of his first accident.
[20] The Court has the greatest sympathy for the appellant and the circumstances which he now finds himself in, and it would be the case that if factors of disability were to be included, then there would be no question that the appellant ought to be entitled to compensation in some way. The concept of impairment takes no account of such factors separately.”
Jurisdiction
• ACC (Rollo) (83/06): the Court determined that the reviewer did not have jurisdiction to modify ACC’s decision and round up the claimant’s assessed whole person impairment from 9% to 10%. The Court noted that the assessment of the assessor must be accepted unless there was credible evidence that it was flawed.
Date for lump sum compensation
• Lehmann (225/04): Clause 55(2) of Schedule 1 states that a person who suffers a work-related gradual process injury is not entitled to lump sum compensation if either the date the person last performed the employment task (or worked in the environment), or the date the person first received treatment for the personal injury preceded 1 April 2002.
In the District Court, Judge Ongley held that Clause 55(2) did not apply to Schedule 2 diseases. Therefore, as Mr Lehmann had cover under s.30(3), and not s.30(2), he was entitled to lump sum compensation. This decision has since been overturned by the High Court. The High Court decided that lump sums are not available to Schedule 2 claimants.
The Court of Appeal in Estate of Priddle and Others (CA223/05, 19 October 2006) held that the transitional limit on lump sum compensation contained in Clause 55(2) of Schedule 1 did not apply to people suffering from a Schedule 2 occupational disease. Hence, the appellants were entitled to lump sum compensation.
Apportionment for mental injury
• The question of apportionment was discussed by Judge Barber in N (19/05):
“[50] Dr Harvey reduced the whole person impairment for the appellant’s sensitive claim down 2% on the basis that some of the impairment should be apportioned to other non-covered factors. The appellant’s advocate, Mr Rowlett, subsequently entered into correspondence with the respondent querying Dr Harvey’s apportionment.
[51] However, apportionment is a valid tool for assessment of injuries: AMA4 specifically allows for assessors to apportion (“deduct”) impairment which is not due to the effects of a covered personal injury. ...
[55] It is appropriate that independence allowance assessors apportion and deduct non-covered factors when calculating a claimant'’ whole person impairment. This is particularly so when dealing with the difficult task of assessing a mental injury impairment arising from a sensitive claim. Importantly, as covered above, apportioning is a concept consistent with applying AMA4.”
• Fowler (367/05): the appellant challenged the assessor's deduction of 10% to account for past drug and alcohol problems. Judge Beattie noted:
"[14] Clause 59(3) of Schedule 1 to the Act requires that there must be an assessment of permanent impairment that does not result from the covered personal injuries. Thus it is only where there is actual impairment can there be any deduction from the assessed impairment that is identified from the covered injury. Like has to be compared with like."
His Honour found as a matter of fact that there was no evidence of permanent impairment due to the drug and alcohol problems in the past, and that there must be evidence of impairment prior to the personal injury before a deduction can be made. Judge Beattie stated:
“[22] Whilst the court recognises that the assessments of duly-appointed specialists is to be accepted in the absence of cogent evidence to the contrary, it is equally the case that the court, being the final arbiter, is entitled to look at the assessment objectively and to determine whether it does in fact amount to a proper and correct assessment on its face.
[23] In the present case I find that there is no proper reason for establishing an apportionment for non-covered injury factors as there is no evidence of any impairment from any such factors which would warrant an apportionment.”
Consequential chronic pain
• Stockan (20/05): the appellant had a back injury in 1989 and had received 10% lump sum compensation. In 2003, he applied for the independence allowance and was assessed to have 10% whole person impairment. The appellant alleged he had consequential chronic pain syndrome. Judge Beattie directed ACC to determine whether the appellant’s chronic pain syndrome was a result of the 1989 injury.
Application after claimant’s death
• Estate of Puddle (188/07): the claim for cover and entitlements was made by the estate after Mr Puddle had died. ACC declined to pay lump sum compensation because Mr Puddle had not been assessed while alive, as required under clause 54, Schedule 1 of the 2001 Act. The appellant argued that, adopting a purposive approach, the requirement that a claimant be alive when assessed should not be regarded as a mandatory requirement, and in the circumstances of this case, lump sum compensation should be paid.
Judge Ongley found that the legislation was clear, and the requirement that a claimant’s impairment be assessed while they were alive was a mandatory requirement.
Legislation
s. 114
Other references: s.371 (transitional provision)• Section 114 states that interest on weekly compensation is payable by ACC, if payment is not made within one month after ACC has received “all information necessary to enable the Corporation to calculate and make the payment.”
• If the obligation to pay interest arises, ACC is required to pay interest at the rate prescribed in Section 87 of the Judicature Act 1908. [7.5% for periods after 1 August 2002].
Case Law
Applicable statute
• The Act that applies is determined by the date that the claimant lodges the application for interest. This was confirmed by Judge Beattie in Granich (214/05):
“The starting point for the determination of the issue in this appeal must be the relevant statutory provision, or provisions. The application for interest was made in December 2003 during the currency of the Injury Prevention, Rehabilitation, and Compensation Act 2001. Whilst it may be found that the appellant has an eligibility for interest for a period which pre-dates the coming into force of that Act (1 April 2002) the claim for interest was made during the currency of that statute and therefore it follows that it is the law that was in being at the time the claim was made that is prima facie applicable.
• See also Smith (108/07), where Judge Beattie noted:
“[10] The appellant’s application for interest was lodged during the currency of the Injury Prevention, Rehabilitation, and Compensation Act 2001 and thus it is the Act which covers the question of interest liability.”
• This question was also considered in the High Court decision of McLean v ACC (2/5/08, Stevens J, HC Auckland, CIV 2007-485-2653):
“[35] I agree with the submission of counsel for the Corporation that the application of the relevant legislation at the time that the determination is made by the Corporation regarding payment of compensation (or interest) is consistent and would avoid haphazard results dependent upon accidents of timing.
[36] So far as the Corporation is concerned, being a creature of statute it must apply the legislation in force at the time it is dealing with any particular claim. It would be entirely artificial to say that the Corporation, dealing with claims for interest in 2003 or 2006, could reach back and apply s 72 of the 1992 Act when, at the point of determination, that section had been repealed. It is true that the effect of s 72 continued in part at those times, but that was only due to the effect of s 371 of the Act. By its express terms the payment of interest prior to 1 July 1992 was not possible.”
Date from which interest is payable
• Entitlement to interest only arises from the date when it can be established that ACC was in possession of all information necessary for it to calculate and make payment: Granich (supra).
• An entitlement to weekly compensation does not give rise to a concurrent entitlement to interest from the date of commencement of that weekly compensation: Granich (supra) and Wardle v ACC (18/10/02, Gendall J, HC Wellington AP134/02).
• The one month period does not run from the date that ACC may or could have obtained the necessary information: Eagles (380/04).
• Justice Randerson summarised the legal position in the High Court decision of ACC v Knight (9/11/05, HC Christchurch CIV-2005-485-1582):
“[28] I respectfully adopt the view expressed by Gendall J in Wardle v Accident Rehabilitation & Compensation Insurance Corporation (HC Wellington, AP 134/02, 18 October 2002) at [15] when he rejected the appellant’s contention that interest ran under s72 of the 1992 Act from the date when payment of compensation was due. Gendall J drew a distinction, which I accept, between the date from which a compensation entitlement arises and the eventual payment of the entitlement. The legislation deliberately provides for interest to run from a date one month after all information necessary to enable the Corporation to calculate and make the payment is received.
[29] The legislation does not provide for interest to be paid from the date of commencement of the entitlement. Nor does it allow for a retrospective deeming of “all information necessary” when it is later established on enquiry that, for example, there was not relevant post-accident income which would require abatement of the compensation due.”
• See also Smith (108/07), which contains a useful summary of the case law.
Necessary information
• In the High Court decision of Barnett v ACC (AP64 – SW02 Auckland Registry) Justice Paterson considered the phrase “all information necessary.” His Honour stated:
“[38] The determination of what constitutes “all information necessary” must depend on the facts of each case. In Howley it was the receipt of the C3 form. In other cases, and the present case is such a case, the provision of the C3 form will not be sufficient. Without necessarily accepting that the list is exclusive in every case, I accept the submissions on behalf of the Corporation that in the particular case it was necessary to determine:
(a) That there had been an incapacity due to personal injury;
(b) The personal injury was caused by an accident;
(c) The date of the accident;
(d) That Mr Barnett was an earner during the relevant period; and
(e) Mr Barnett’s relevant earnings during the period.”
"[39] The date upon which the Corporation had all information necessary would not usually be the date of a review or an appeal decision. It is the date on which the Corporation was in possession of the necessary information to make the same decision as the Reviewer or the appeal Court has made…”
• The question of whether information from Work and Income New Zealand (WINZ) is part of “all information necessary” depends on the applicable statute. Judge Ongley summarised the legal position in Potbury (226/04):
“[13] In Wardle v ARCIC (High Court Wellington, AP134/02, 18 October 2002) Gendall J held that if the interest question is considered prior to the coming into force on 1 July 1999 of the 1998 Act, the WINZ information is not part of "all information necessary" because at that time there was no mandatory obligation to make a refund to WINZ.
[14] Once the 1998 Act came into force on 1 July 1999 the relevant sections in both the 1998 Act and the 2001 Act referred to both calculating and making the payment.
[15] In Barnett v ACC (High Court Auckland, AP 64-SW02, 5 December 2002) Paterson J held that calculation of the WINZ repayment was not necessary to calculate the claimant's compensation, but the WINZ information is necessary to "make" the payment which is required under s101 of the 1998 Act and s114 of the 2001 Act.”
• Burrows (4/08): ACC calculated the claimant’s weekly compensation in 1994 when he first applied for it. There was a legislative amendment in 1996, which meant ACC could apply a more favourable basis for assessing the claimant’s weekly compensation. However, ACC delayed obtaining the necessary evidence from the employer. It eventually obtained the relevant (“necessary”) information in November 2000 and paid the claimant the gross arrears of weekly compensation in April 2006.
In May 2006 ACC assessed and paid the claimant interest on the outstanding amount. ACC calculated interest back to November 2000, the date when it had received all the necessary information from the employer to calculate and make payment. The claimant argued that the date should have been 1996. ACC made an ex gratia payment of $2,000.
Judge Barber found that ACC was correct in its determination of the date on which it in fact had, (as opposed to should have had, or enquired about), the necessary information to calculate and make payment. The appeal was dismissed. The Court did, however, express the view that the shortfall in interest (due to the Corporation’s delay) less the $2,000 ex gratia payment, should be paid to the claimant.
Simple or compound interest?
• The Court of Appeal in Robinson (CA15/05, 13/10/06) has now settled this question. Interest on late payments is to be calculated on the basis of simple and not compound interest.
• The High Court in Robinson v ACC (19/09/05, Heath J, HC Auckland CIV 2005-485-0127)had held that compound interest was payable.
Legislation
2001 Act ss 127 – 130 & s.68
• Section 127 describes the limited circumstances when ACC is liable to pay weekly compensation and lump sum compensation to a claimant who has cover for personal injury suffered outside New Zealand.
• Section 128 provides that ACC is not liable to pay for rehabilitation costs incurred outside New Zealand except where Section 129 applies or where expressly permitted by regulations.
• Section 129 allows ACC to pay for attendant care to a claimant who is outside New Zealand, for periods of up to 28 days.
• The new Section 68 [as substituted by Section 20 of the Injury Prevention, Rehabilitation, and Compensation Amendment Act (No.2) 2005] allows ACC to provide extended discretionary entitlements/payments for:
- overseas assessments or travel costs for weekly compensation;
- overseas assessments or travel costs for lump sum compensation;
- attendant care to a claimant who is overseas for longer than 28 days. [Section 68(3)]
• Claimants cannot review any decision to provide extended discretionary entitlements: Sections 68(4) and 134(1A).
• The discretion under Section 68(3) only applies to the provision of entitlements for periods after 1 July 2005.
Case Law
(pre 1 July 2005)
• Nicholson (185/03): the appellant had cover for a back injury. She moved to Australia in March 2002, and sought ACC funding for her ongoing pain medication while resident in Australia. As a gesture of good faith, ACC funded her medication for a few months, until July 2002. In August 2002, ACC declined to continue funding the medication while she was resident overseas.
In dismissing the appeal, Judge Cadenhead followed the principles in the High Court decision in ACC v Mohi-Rudolph (13/03/00, Williams J, HC Auckland, AP 146-SW99).
• In Mohi – Rudolph (supra) the appellant sought attendant care costs for a period when she was outside New Zealand with her mother. Her aunt had accompanied them to provide the care. ACC declined to pay for the costs on the basis that Section 88 of the 1992 Act did not allow for such payments. The claimant’s appeal to the District Court was successful. .
However, the District Court decision was overturned on appeal to the High Court. Justice Williams held that although the contract was entered into in New Zealand, and one of its terms was for payment in this country, the performance of the contract by the aunt was to be outside New Zealand. The obligation incurred for the costs was accordingly for costs incurred outside New Zealand. The Court noted that:
“… the focus of the requirements of s 88(2) is on whether the costs were incurred outside New Zealand not on the place of making of the contract which gave rise to the provision of the services for which the costs were payable nor on the place of payment for those costs. If the costs themselves were incurred outside New Zealand then s 88(2) makes it clear that the corporation was under no liability to meet them, irrespective of where the contract for the services for which the costs were payable was made or where payment was to be made.”
Current legislation
• Zhu (229/06): the appellant suffered injuries following an assault. He was referred to a plastic surgeon for surgery, but prior to the date scheduled for surgery, he was arrested under an immigration warrant and deported from New Zealand as an overstayer. He applied for both treatment costs incurred in China and weekly compensation since he had been working illegally in New Zealand. The Court held that he was not entitled to weekly compensation by virtue of s 127(2). Furthermore, he could not receive payment for treatment expenses incurred outside New Zealand, because he was no longer in New Zealand.
Legislation - Schedule 1, Clauses 3 and 11; and Regulations [Injury Prevention,
Rehabilitation, and Compensation (Ancillary Services) Regulations 2002].
• Clause 3 lists the type of ancillary services related to treatment that ACC is liable for. It is subject to the Ancillary Services Regulations 2002.
• Clause 11 states that ACC is liable for services reasonably required by a claimant as an ancillary service related to rehabilitation. This clause is also subject to the Regulations.
Case Law
• ACC v Gill (10/04): Judge Beattie rejected ACC’s appeal against the reviewer’s decision to grant the claimant travel costs to visit her GP (Dr Ewer), who lived in another town that was 20 kilometres away, rather than the local GP in Richmond. The reasons were stated as follows:
“There can be no question that Dr Ewer has the necessary knowledge, skill and expertise to treat the respondent's complex urological problems and he has been doing so to the full satisfaction of the specialist urologists for some years now. The Court has received not one jot of evidence from the appellant [ACC] that there is any practitioner in Richmond who can provide that same level of service. The Court has been provided with no evidence which would establish that Richmond was the nearest place where this appellant was able to get the particular rehabilitation she requires.
If it is the appellant's position that the respondent should go canvassing the GPs to see if there is someone who might be able to help her, then I find that this is not what is contemplated by the Regulations. If the appellant had been able to present a particular person with the necessary skill, knowledge and expertise, who was able and willing to take on the respondent, then it may be that the Corporation would have made out a case under Regulation 8(2)(a).
I find that the respondent certainly satisfied the initial onus of proof which was upon her to establish, prima facie, the entitlement under that Regulation, and it was therefore for the appellant, in the context of this appeal, to disclose evidence which would establish a disentitlement. I find that it has failed to do so and that the respondent has made out a case for an entitlement to reimbursement of transport costs for her attendances on Dr Ewer at Mapua, providing of course that the frequency of those attendances bring her within Regulation 8(1)(b).”
• Crabb (195/03): the case concerned the interpretation of Regulation 8 of the IPRC (Ancillary Services Regulations). The appellant suffered a back injury and travelled three return trips of 74 kilometres to consult his orthopaedic surgeon. As his travel was not made within 14 days of the injury, the Court ruled that Regulation 8(1)(a) did not apply. The Court also held that Regulation 8(1)(b) did apply to him, noting that as the first two journeys were made within the calendar month, they could be aggregated to bring him within the criteria. The Court stated:
“[11] I find it is clear from the wording of Regulation 8(1)(b)(i) that the distances of the journeys can be aggregated for so long as they occur within a calendar month and in total amount to travel of more than 80 kilometres. This appellant travelled 148 kilometres within the calendar month commencing 13 June 2002 and is entitled to travel expenses for same at the rate provided in the Regulations.”
Actual cost of travel
• Holland (179/07): the Court said that payments under clause 3 of Schedule 1 were subject to regulations. Regulation 11(2) of the Ancillary Services Regulations 2002 provides for ACC to pay 28 cents per km towards the cost of transport for treatment. However, Regulation 11(4) allows ACC to pay the actual cost if the claimant satisfies the criteria in sub-clause 2(a), (b) or (c) and ACC has given prior approval. The appeal was dismissed on the ground that ACC had not given prior approval.
UPPER AGE LIMITS (EFFECT OF NZ SUPERANNUATION)
Legislation
2001 Act Schedule 1, Clauses 52 - 53
• Clause 52 applies when a claimant who is entitled to weekly compensation, reaches the superannuation qualification age.
• Clause 53 prescribes how a claimant is to make an election under Clause 52, for either weekly compensation or New Zealand superannuation.
Case Law
• Wyse (352/04): ACC ceased the appellant’s weekly compensation entitlement on the basis that he was 65 years old on 13 August 2004. The appellant argued that ACC’s decision breached Section 21 of the Human Rights Act. In dismissing the appeal, Judge Beattie stated:
“[7] The provisions of the Act are quite clear, Clause 52 of Schedule 1 to the Act states that entitlement to receive weekly compensation ceases when the recipient attains New Zealand Superannuation qualification age. That age is 65. The legal position is that the respondent has no statutory authority to continue payments to any person after they attain that age.
[8] The appellant referred to the decision in the High Court of Watton (AP 43/99 Wellington Registry) as supposedly supporting his claim. That decision does not support his claim as it was a decision which related to an earlier statutory provision which had it that weekly compensation would cease when a person attained the age that they were eligible for superannuation. At that time persons were eligible for superannuation earlier than age 65. Watton simply determined that that appellant continued to have a right to weekly compensation until age 65 as had been provided for by the 1982 Act.
[9] The respondent’s decision cancelling weekly compensation to the appellant for the reason that it did, was correct.”
Out of Time Issues
Late lodgment of the review application
Failure to issue a decision
Late commencement of the review hearing
Jurisdiction
LATE LODGMENT OF THE REVIEW APPLICATION
Legislation -Section 135
Other references: Section 64 (notice provision)
• Section 135 details the procedure for applying for a review. Under Section 135(2)(f) a written application for review must be lodged within 3 months of:
- the date the claimant has a decision under Section 58;
- the date ACC gives notice of the decision under Section 64 or a decision under the Code.
• However, under Section 135(3) ACC must accept a late application where there are extenuating circumstances that affected the claimant’s ability to meet the time limits. Examples of extenuating circumstances are described in this section.
Case Law
Three month time limit – previous legislation
• Under the 1992 and 1998 Acts there was a three month time limit for filing a review. If not filed in that period, ACC rejected the review. The District Court has upheld those decisions in cases such as Zehnder v ARCIC (73/95). The reasoning was that those Acts provided no discretion to accept a review outside the 3-month time limit.
• Clarey (124/95): The three months for lodging the application for review runs from the date on which written notice of the decision was personally delivered, or from when it would have been delivered in the ordinary course of post.
Procedure for late applications
• Knight (193/05): Judge Beattie set out a new procedure. If ACC receives an application for review which is, on the face of it, a late application, then it is obliged to advise the applicant of that fact and invite the applicant to apply so ACC can consider whether there are any extenuating circumstances. When ACC receives this information, it can then make a decision about whether it is satisfied that extenuating circumstances exist. This decision is reviewable and must provide review rights. If the applicant reviews ACC’s decision, then a reviewer can determine the matter. If the application for review is successful, the reviewer should then arrange to convene a further hearing to consider the substantive matter.
• Kidston (319/05): Judge Ongley followed the Knight decision, and referred the matter back to ACC to make a preliminary decision on whether there were extenuating circumstances.
Notification of the decision
• Boe (244/04): An application for review was lodged outside the 3 month time frame. ACC accepted that the appellant did not receive the decision. The case was referred back for a rehearing.
• Dobson (290/03): The appellant suffered dental injuries and made a request for dental repair. On 18 May 2001 ACC wrote to her, setting out the limits of entitlement. A treatment account was then submitted. ACC wrote in October 2002 declining to pay the account and enclosing a copy of its 18 May 2001 letter. The appellant gave evidence that the 18 May 2001 letter was never received. The reviewer accepted the appellant was a truthful witness. An application for review was made on 5 November 2002.
The issue was whether evidence can displace Section 368(5) of the 1998 Act (the deeming provision). Judge Beattie discussed the statutory deeming principles and case law. He concluded that Section 368(5) raised an irrebuttable presumption as to the time of delivery but a rebuttable presumption as to the fact of delivery. He accepted that Ms Dobson did not receive the decision letter and the application for review was made within three months of her actually receiving the decision in October 2002.
Whether Section 135(3) applies to decisions prior to 1 April 2002
• Ward (64/03): Judge Beattie held that the ameliorating provisions of Section 135(3) which allow late reviews cannot apply retrospectively to decisions made before the Act came into force. This was a case decided under the 1998 Act.
• Los’e (12/04): ACC issued a decision revoking cover on 12 March 2002. ACC received the review application on 12 July 2002. The issue was whether the 1998 Act or the 2001 Act applied for the time limit for filing a review. Judge Cadenhead held that Part 6 of 1998 Act did not apply when the application for review was filed after 1 April 2002 in respect of a pre-1 April 2002 decision. Section 391(4) provided that the 2001 Act applied. The case was referred back to decide whether there were extenuating circumstances.
Extenuating circumstances
• Section 135(3) sets out examples of what might constitute “extenuating circumstances:”
(d) where the claimant was so affected or traumatised by the personal injury giving rise to the review that he or she was unable to consider his or her review rights;
(e) where the claimant made reasonable arrangements to have the application made on his or her behalf by an agent, and the agent unreasonably failed to ensure that the application was made within the required time;
(f) where ACC failed to notify the claimant of the obligations of persons making an application.
• The cases show that there is flexibility beyond the statutory examples in allowing an extension of time for a late application for review.
• Williams (78/04): Judge Cadenhead considered that the purpose of s 135(3) was to preserve a balance between the principle of the finality of decision within a certain time-frame against the ability to extend time for the correction of an unjust decision. His Honour noted that extenuating circumstances must relate to the ability of the claimant to meet the time limit, and that mere oversight or forgetfulness would not suffice.
Judge Cadenhead stated (at paras 36-37) that the statutory examples were not to be construed as:
“rigidly specific, but they provide pointers and guidance of what may constitute exculpatory instances… the examples given are not exhaustive.
[37] Thus it might be that mere forgetfulness of itself, given the absence of a causative traumatic disabling injury that could affect the decision not to review, would not be sufficient. Again, on the other hand, if the Corporation innocently represented a situation pertaining to the existence of cover, or as to the exercise of the claimant’s obligations as to applying for review, then that type of circumstance might amount to extenuating circumstances affecting the ability of the claimant.”
• Kohe (95/05): Judge Beattie stated:
“I agree with the views expressed by Judge Cadenhead that the meaning and purpose of the provision is that the extenuating circumstances must relate to the ability of the claimant to lodge the application within the three-month period. It cannot extend to cover extraneous reasons such as capriciousness, forgetfulness, or any circumstances that are within the control of the claimant … It matters not that the period of time which elapsed outside the three-month period was comparatively short as there is nothing in the section which indicates that length of delay is a relevant factor. Once the time limit has past, I find, a claimant must establish extenuating circumstances affecting the ability to meet the time limit, and the time limit itself is not a movable point which could accommodate a short period of oversight.”
Cases where the District Court found extenuating circumstances
• Hari (63/04): The application for review was filed five weeks out of time. Mrs Hari’s husband opened the decision letter when she was overseas. Mrs Hari received a later copy letter in early February 2003. The second letter did not contain information on review rights. ACC accepted that Mrs Hari did not receive the first letter. It was held that ACC failed to notify the appellant of her review obligations and that amounted to extenuating circumstances in terms of Section 135. Judge Hole stated:
“The section is quite is quite specific to the effect that extenuating circumstances include a situation where the respondent has failed to notify a claimant of the obligations of persons making an application. In my view, this goes beyond merely indicating the time within which a review application must be lodged and extends to the procedure within which an application for review must comply.”
• Renata (170/04) ACC issued a decision declining weekly compensation on 8 November 2002. The appellant did not file a review application until 27 February 2003. The reasons given for finding extenuating circumstances were the complexity of ACC’s decision letter, the appellant was uneducated, he had difficulty accessing a formal lawyer, the intervention of the Christmas period and the appellant feeling frustrated, depressed and confused. The extenuating circumstances were sufficiently oppressive to affect the appellant’s ability to file a review application in time.
Cases where the District Court did not find extenuating circumstances:
• Chambers (212/05): part of the appellant’s submission was that the volume of correspondence brought about confusion and difficulty. Hence, the delay in lodging the review application in time. Judge Ongley rejected this argument, stating that:
“There are obvious reasons for the Court to decline the invitation to treat Mr Chambers as a special case of extenuating circumstances because of the volume of communication he has thought fit to maintain with ACC.
[12] Mr Chambers was aware of the rules and was active in pursuing his complaints of error by the Commission. There is no evidence of any particular aspect of the correspondence “that affected the ability of the claimant to meet the time limits”. The explanation comes down to one of oversight. That is not enough to require the Corporation to accept the late application under s135(3).”
• Palmer (98/04) concerned a claim for weekly compensation that was declined but reinstated at review. The appellant then made a claim for interest, which ACC declined. ACC explained the basis of the decision in a meeting with appellant. ACC provided a range of information to the appellant explaining the decision not to pay interest. The appellant did not review that decision because they believed their prospects of success were low. They subsequently came across further information that led them to believe their chances of success were greater and they filed an out of time application for review. Judge Cadenhead noted that the appellant’s view of the merits of their claim does not affect their ability to file a review application. ACC provided correct advice to the appellant. There were no extenuating circumstances. Judge Cadenhead also noted that the law in this area is to be allowed to develop on an incremental basis.
• Cone (210/04): Judge Barber found that this was a case where ACC properly informed the appellant of their rights of review and there was no misinformation. He held that the appellant’s ability to meet time limits was not compromised and there were no extenuating circumstances.
• Thompson (378/04): In September 2002 ACC issued a causation decision. The appellant contacted an advocate. The advocate advised a specialist referral. There was a conflict of evidence over what the advocate agreed to do in relation to review. There were issues about the credibility of the appellant. The reviewer and the District Court accepted that the advocate had not agreed to file an application for review. The appellant had neglected to follow up on the specialist referral or lodge a review. It was held that there was no failure by the advocate and no extenuating circumstances.
• Gordon (165/05): mere oversight or forgetfulness is not an extenuating circumstance.
Cases that the District Court referred back for rehearing at review
• La Belle (202/04): A review application was filed six months out of time. The reviewer determined the jurisdictional question on the papers at the request of the appellant’s advocate. At appeal the appellant argued that the advocate did not have authority to agree to an on the papers determination. Judge Cadenhead held that issues of fact should be canvassed at a proper hearing and the case was referred back for rehearing.
• Glasson (241/04): ACC declined a claim for medical misadventure on 6 August 2003. A review was lodged and a hearing scheduled and adjourned. The appellant’s solicitors then withdrew the review on her behalf in December 2003 after they had sought a medical report that was unfavourable. 15 days later the appellant lodged a further application for review. The reviewer determined that it was lodged out of time and no extenuating circumstances justified a late review. In the District Court the appellant alleged she faced pressure from her former solicitors to withdraw the original review application. The case was referred back to review to consider section 135(3).
• Thompson (378/04): In September 2002 ACC issued a causation decision. The appellant contacted an advocate. The advocate advised a specialist referral. There was a conflict of evidence over what the advocate agreed to do in relation to a review. There were issues about the credibility of the appellant. The reviewer and the District Court accepted that the advocate had not agreed to file an application for review. The appellant had neglected to follow up on the specialist referral or lodge a review. It was held that there was no failure by the advocate and no extenuating circumstances.
Legislation - s.58
• Section 56 requires ACC to make a decision on a claim for cover within 21 days, unless an extension of time is sought. However, a decision must be made within 4 months of the claim being lodged.
• Section 57 requires ACC to make a decision on complicated claims within 2 months. ACC can request an extension of time beyond 2 months, but must make a decision within 9 months of the claim being lodged.
• Section 58 provides that of ACC fails to meet the time limits imposed on it by Sections 56 and 57, then the claimant is deemed to have cover. The claimant will still need to apply for entitlement. The time limits only apply to cover decisions, not entitlement decisions.
• Section 134(1)(a) provides a right of review if ACC unreasonably delays in providing a decision on an entitlement.
Case Law
• ACC (Estate Versey) (66/04): The District Court held that ACC had power to revise, by way of section 390 of the 2001 Act, an earlier deemed decision found to be so, by the direction of a reviewer. The appellant lodged a claim for cover in April 2001. It was accepted. In May 2001 the appellant lodged a claim for medical misadventure. In January 2002 ACC declined the claim and revoked the PICBA claim. The reviewer confirmed there was a deemed decision on the medical misadventure claim pursuant to section 66 of the 1998 Act because the claim was not determined within the statutory time-frame. In January 2003 ACC revoked the deemed decision under section 390.
• Woolley (198/04): The District Court held that there had not been an unreasonable delay in ACC processing the appellant’s claim for weekly compensation. In October 2001 the appellant requested backdated weekly compensation. ACC declined the request in December 2001 after the appellant’s advocate failed to provide the substantive detail required. At review, the reviewer found incapacity but referred the entitlement issue back to ACC. In July 2002 ACC requested further information from the appellant’s advocate. The appellant’s advocate demanded a decision, then lodged a review on the basis that the delay was unreasonable. The reviewer concluded that the period between the provision of the incapacity certificate on 16 September 2002 and lodging the application for review did not reasonably constitute an “unreasonable delay”. ACC had continued to unsuccessfully request an earnings history between 1985 and 2002 from the appellant’s advocate. ACC provided a detailed explanation of why earnings details were required. It was not possible to find an unreasonable delay given there was only two days between the submission of the certificate and the application for review.
• Govind (372/04): The issue was the scope of a deemed decision in respect of an independence allowance. The actual assessment showed that there was a nil disability. The appellant unsuccessfully argued that she was entitled to at least the minimum amount of independence allowance (10%). Judge Cadenhead stated that the following principles applied to deemed decisions:
“A deemed decision had to be considered in the context that the claim was made. The decision in some cases would mean that cover had been accepted. However, a deemed decision could not override a statutory requirement, where entitlements were sought.
In those cases, where a statute laid down necessary requirements as a condition precedent, then the effect of the deemed decision is to have the claim considered to see if those requirements have been met. A deemed decision cannot fictionally create a power, where no such power existed. The Corporation cannot be required to act ultra vires.
The effect of a deemed decision is not to create a windfall for the claimant.”
The content of the claim still required an assessment of whole person impairment. The Court found that there was no entitlement to independence allowance.
LATE COMMENCEMENT OF THE REVIEW HEARING
Legislation - s.146
• Section 146: If a date for hearing a review has not been set within 3 months after the application for review, then there is a deemed decision in favour of the applicant unless the applicant has caused or contributed to the delay.
Case Law
• Howard (154/05): The review was not set down within 3 months and the claimant contributed to the delay. In that case the claimant was unable to attend a pre- hearing telephone conference because he said he had other commitments.
• Khan (43/04) involved a deemed review decision under section 90(9) of the 1998 Act. Weekly compensation was paid for an arm injury. Following a fraud investigation, weekly compensation was ceased under section 73(1). A review was filed, but the hearing was not set down within three months. A deemed decision was made. In 1997 the appellant was convicted of fraud for providing false earnings details. The conviction was upheld at the Court of Appeal. ACC re-ceased weekly compensation in May 1997. In July 1998 ACC decided that the appellant was not an earner at the date of injury and had no entitlement. ACC issued a decision that there was an overpayment of $36,167 to April 1996. There was a review and appeal. The Court noted that it was open to ACC to issue a new section 73 decision in May 1997 and that the deemed decision had the effect that entitlements existed up to the date of new cessation.
• Goh (297/04): The appellant had a 1997 neck injury. They lodged a claim for a neck sprain in 2002. Entitlements were suspended in August 1998. The 2002 claim for chronic pain was attributed to the 1997 accident and cover was declined on the basis that there was no personal injury. A review was filed but not set down for hearing. There was a deemed decision granting cover on 20 August 2003. The appellant lodged a review of the August 2003 decision. The reviewer declined jurisdiction to review the deemed review decision. Judge Beattie noted that the case was procedural mire. The appellant was concerned with entitlements due to 1997 injury, but the Court had no jurisdiction to intervene and the appeal was dismissed.
• O’Neill (359/04): Judge Beattie held that there was no deemed decision in the appellant’s favour, pursuant to s146 of the 1992 Act, because the review hearing was not set within 3 months. The appellant limited his argument to the deemed decision point. The other parties conceded the Court’s jurisdiction to decide the substantive issue. The November 2002 claim was declined in March 2003. A review was made by email. ACC accepted it was a valid review application. The reviewer did not and declined jurisdiction. A further decline decision was issued in August 2003 and there was a further review. The second reviewer also declined jurisdiction on the basis that the issue was determined in the first primary decision and no valid application for review had been made. The appellant asserted the first review a nullity and therefore there was a deemed decision in his favour. The Court held that the first review hearing was properly conducted and not a nullity and that the parties were bound by the reviewer’s decision in absence of appeal. There was no deemed decision.
Limitations of deemed decisions
• Denzel (269/05): Judge Cadenhead set out the limitations of a deemed decision:
"[34] Deemed decisions cannot breathe life into an ultra vires decision, or confer a power that does not come within the ambit of the legislation. A deemed decision cannot grant to a claimant something, which the Corporation does not have the power to give; Buckland (271/97) Govind (259/04). If the statute lays down certain conditions precedent to an entitlement being attained, then the effect of a deemed decision cannot surpass or obviate the need to comply with those statutory requirements. In this case it is not suggested that the decision was ultra vires or that the respondent did not have the power to make it. However, it is important when the considering the scope of a deemed decision to realise the limitations on the extent of what can be granted.
"[35] No matter what action or lack of action the claimant or respondent takes, jurisdiction cannot be conferred outside the parameters of the statute. No action or lack of action can vest a jurisdiction, which the Act does not give. The respondent does not have any power to act, other than according to the power given by the Act (see Steinborn v Minister of Immigration (M1334-SW01 Auckland High Court, O'Regan J, 20 September 2001).
"[36] The cases of Tito (13/96) and Hayward (49/96) are clear examples, where a deemed decision could not hurdle the statutory precondition of transitional time limits provided by the legislation. As Judge Middleton said in Tito:
“I agree with Mr Morrison’s submission that in those circumstances s90(9) cannot now operate to require the respondent to make a finding which is ultra vires its powers.”
Must have compliant application for review to rely on Section 146
• Howard (250/05): Judge Ongley ruled that the appellant could not rely on Section 146 to claim a deemed review decision when his application for review was defective. The application failed to identify the decision being reviewed. The Judge stated:
“[24] If the formal requirements of s135 were not to be observed, it would be difficult to identify whether a deemed decision arises and in what terms. Compliance with s135 is mandatory, but a flexible approach may well be taken where defects in identifying decisions, grounds, or relief can be remedied before a review, much in the way of amendments to pleadings. A flexible application of the section cannot be permitted when ss 135 and 146 combine to produce a deemed decision. In that case the two sections must be read together to avoid uncertainty. The legislature could not have intended that meaningless or ambiguous deemed decisions should arise by operation of the Act.
[25] This is a case where there is no deemed decision, because there was no compliant application for review. The review application could not or did not identify a specific decision by the Corporation. Neither did it identify a period of time for which weekly compensation was declined. I consider that there was no deemed decision, but the Court is not called upon to make a formal finding because the threshold of jurisdiction to hear the appeal is not reached.”
Out of time review applications
• ACC can no longer refer out of time issues to DRSL for a review to consider whether there are extenuating circumstances, without first considering the matter and issuing a decision.
• Knight (193/05): Judge Beattie stated that Sections 133 and 134 preclude the review process from being the first stage of the decision making process. ACC can not delegate its quasi-judicial function under Section 135(3) to investigate and make a decision about whether or not it is satisfied that there are extenuating circumstances that affected the ability of a claimant to meet the time limits, to DRSL. (See discussion under ‘Late lodgment of review application’ in the Out of Time section)
Code of Claimant Rights
• Duurloo (335/04) and Chalecki (336/04): There are no review rights attached to an investigation of non- Code of ACC Claimant Rights matters. The cases concerned a complaint about media comments by the Healthwise General Manager. It was alleged that Rights 1, 2, 3 and 8 of the Code of ACC Claimant Rights had been breached. The investigator held that as the comments made were not directed at the appellant personally, she was unable to apply the provisions of the Code to the complaint. The reviewer held that there was no jurisdiction to deal with the matter because the complaint made was not a complaint against a provision of the Code and as such did not carry review rights. The Code does not extend to the way ACC deals with claimants generally. Section 149(3) of the 2001 Act prevents the District Court from considering review decisions dealing with either valid or invalid Code Complaints.
Court awarded disbursements
• Saipe (350/04): There is no jurisdiction for a reviewer to consider ACC’s contribution towards disbursements arising out of an earlier District Court hearing. The Court has the sole jurisdiction to award disbursements at appeal.
No decision that can be reviewed
• O’Leary (153/04): A reviewer has no jurisdiction to deal with the issue of an overpayment decision revoked by ACC before the review. Nor any jurisdiction to hear issues that were not the subject of the primary decision, namely the rate of weekly compensation and the backdating of entitlements.
• Tahere (60/05): Section 452 of the 1998 Act gives ACC discretion as to whether it will exercise its powers to revise a decision. The Act states that if it does exercise its powers, that constitutes a fresh decision. The corollary is if ACC, for whatever reason, chooses not to exercise its powers of revision, a communication advising of that does not constitute a fresh decision within the meaning of the Act. Whilst ACC’s letter may advise of review rights, that does not mean that such rights arise. (Denis (255/00), Ferguson (84/00) and Wellington City Council (343/99).
Res judicata
• Where an issue is res judicata, a reviewer has no jurisdiction. An example of such a case is Smith (196/03). In 1992 ACC ceased the appellant’s weekly compensation. The appellant failed to disclose earnings while receiving weekly compensation. The decision was upheld on review and appeal. An appeal to the High Court was dismissed. ACC subsequently approved an MRI scan. The appellant lodged an application for review, which was an attempt to re-litigate weekly compensation cessation issues. There was a further review decision declining jurisdiction in respect of refusals by ACC to reconsider the reinstatement of weekly compensation. Judge Beattie held that the issue was res judicata and that the Court had no jurisdiction on either review, any attempts to re-litigate were bordering on vexatious. The appeal was dismissed.
Deemed review decision
• Goh (297/04): A reviewer has no jurisdiction to review a deemed review decision.
Jurisdiction limited to primary decision
• Piesse (108/06): the issue concerned the effect of an amendment to Clause 38 of Schedule 1, and whether the amendment could be applied retrospectively. Judge Beattie held that the amended Clause 38 could not be applied to a claim for weekly compensation made and determined before 1 July 2005. The Judge further noted that the jurisdiction of the Court only extended to whether the primary and review decisions were correct.
What constitutes a reviewable decision
• Thomas & Jones (145/06): Judge Cadenhead summarised the legal principles:
“[24] There have been numerous cases involving the issue of what constitutes a
decision, and some of these cases are:Hull, 249/97
Tuioti, 327/00
Ferguson, 84/00
Osborne, 105/06
[25] From those decisions the following may be stated:
[a] The mere confirmation of a prior decision does not constitute a new
decision.
[b] The request of a claimant to reconsider or revise its original decision
does not turn into a fresh decision if the Corporation declines to do so
and maintains its earlier decision was correct.
[c] The Corporation is able to issue an amended decision, which amends,
revokes or substitutes a new decision, and in that event, there are new
appeal rights.
[d.] A statutory estoppel might arise, but the Court should not be too
ready to look for one.
[26] A recent High Court Decision namely, Estate of Waenga (CIV 2005-485-572, Gendall J, 13 September 2005) reaffirms the principle that confirmation of an existing decision does not create a new decision. This decision, also, confirms that it is important to closely analyse what in fact has been decided and that substance must prevail over form in ascertaining if a decision has in fact been made. As His Honour said:
"It is clear that a claimant cannot demand or insist that the Corporation reconsider or revise its original decision and, if it declines to do so, that such a response is a decision that is subject to review. "
• Wilce (121/06): the issue was whether ACC’s letter of 21 March 2005 was a decision on a fresh issue or a restatement of an earlier decision. The Court found that the letter was a restatement of an earlier decision, and not a reviewable decision. The Court discussed the principle of issue estoppel:
“In summary then, I find that the principle of issue estoppel does apply in the present case, and that the line of authority which has developed from the decision in Hull onwards, and more latterly Wooller (Decision 231/02) and Hackeff (Decision 129/05) apply in this case. That line of authority is to be distinguished from the other line of authority represented by the decisions of M (supra) Patangata (supra) and Osborne (supra) where a new or separate issue or claim has been required to be determined by the respondent and where the respondent is simply not entitled or able to rely on its previous decision as that decision was on a separate or different issue.”
• Osborne (105/06): Judge Beattie considered whether ACC’s letter of 18 December 2002 to the appellant's then solicitors constituted a reviewable decision. ACC declined the appellant’s gradual process claim for solvent toxicity in October 1997, and he did not review this decision. In October 2002 he submitted a further application for cover accompanied by new medical reports. ACC confirmed the original decision to decline in December 2002.
Judge Beattie found that a new claim of causation had been introduced with the second claim, and that the second claim was materially distinct from the first claim. He held that the December 2002 letter constituted a reviewable decision on a new claim, and the appeal was allowed.
• Creagh (130/05): the Court held that ACC’s settlement offer to the claimant was a reviewable decision. The letter offered the sum of $83,402 in full and final settlement of attendant care claims with ACC.
Adjournments
• Parker (219/04): a case where the District Court found that a reviewer should have granted an adjournment request. ACC made a suspension decision that was reviewed in September 2001. The hearing was set down and adjourned at the appellant’s request. The appellant then sought a further adjournment at the second hearing. The reviewer refused and allowed two weeks following the hearing to schedule a specialist’s report. Judge Beattie referred to O’Malley v Southern Lakes Helicopters Limited (CP513/89), where Justice Tipping stated:
“The essential question which the Court always has to consider when asked or an adjournment is whether or not that is necessary in order to do justice between the parties. One must not overlook not only is it necessary to do justice to the party seeking the adjournment but also justice to the party seeking to retain the fixture. It is essentially a balancing exercise.”
Judge Beattie noted that the appellant had been left in a difficult position at the second hearing by their solicitor. He held that the reviewer should have granted the adjournment of the second hearing. The case was referred for further review.
Details required on review application
• Cameron (126/06) a reviewer had dismissed an application for review as being invalid as it did not identify the decision or grounds beyond a general statement. The Judge considered that it was not appropriate to dismiss the review and noted that if there were issues of lack of particularity then it would be for the reviewer to identify that and require the claimant to provide the necessary particulars. Judge Beattie suggested a pre-hearing conference or by dialogue before the hearing. The Judge pointed out that in many instances the reviewer was dealing with a lay person who may not be familiar with the niceties of the statutory requirements.
Costs and Overpayment
Legislation - ss 248- 251
• Section 248 of the 2001 Act provides that the following are debts due to ACC:
a) A sum paid to a person, which is in excess of their entitlement under the Act (an overpayment)
b) Any levies, penalties, interest or fees payable under the Act; and
c) Any amount payable to ACC, which is received by another person as agent of ACC.
• ACC may either recover the debt by way of proceedings, or deduct the debt from any amount payable to the person.
• Section 251 provides for the recovery of debts.
• ACC may not recover payments made to a person when:
a) Section 251(1): ACC revises its original decision under Section 65 on medical grounds, and when the person received the payment in good faith.
b) Section 251(3): ACC revises a deemed decision under Section 65(2)
c) Section 251(2): A payment in respect of an entitlement was paid by virtue of an error not intentionally contributed to by the recipient, if the recipient received the payment in good faith, and has altered their position in reliance on the validity of the payment rendering it inequitable to require repayment.
Three element test
The claimant must satisfy each of the 3 statutory requirements to obtain relief from repayment under s 251. So it is necessary to consider:
a) Firstly whether the payment was the result of an error not intentionally contributed to by the recipient.
b) Secondly, whether the claimant received the payments in good faith;
c) And thirdly, whether he or she altered their position in reliance on the validity of the payments so that it would be inequitable to require repayment.
Case Law
• In Karl (CIV 2004-485/800), the High Court noted in relation to Section 372(2) of the 1998 Act, which is the same as s 251(2), that:
“The defence created by s 372(2) had 3 elements: a payment in respect of statutory entitlements which was made as a result of an error not intentionally contributed to by the recipient; receipt of the payment in good faith; and alteration of the recipients’ position in reliance on the validity of the payment so that it would be inequitable to require repayment. The statute did not divide the third element into constituent parts each of which must be satisfied independently of the others. Rather, the structure of the section indicated that the questions of change of position in reliance on validity and inequity form part of a single defence.”
No general equitable defence
• Karl held that ACC’s claim for relief is not restitutionary in nature. The claimant must repay the debt unless the defence in s372 (now 251) can be made out. ACC does not have to prove enrichment at its expense or that it is inequitable to order repayment. The legislature clearly delineated the scope of the defence at the time it created the obligation. The legislation precludes reliance on the wider principle that repayment may be denied where it is inequitable to require repayment.
Error not intentionally contributed to by the recipient
• The first issue is whether monies were paid by ACC to the recipient as the result of an error not intentionally contributed to by the recipient. An error must be established first in order for the other issues to bear consideration.
• It has been held in Moody (104/05) that an appellant intentionally contributed to a debt by failing to advise ACC of her income, as she was aware that she needed to do so, and had signed statements to that effect. It was no answer to allege that both WINZ and her employer were aware of the situation and that ACC should have contacted them.
Recipient received the payment in good faith
• Reinders (33/96), Saunders (113/98,) and Russell (206/98) are all cases where Judge Middleton held that the claimant acted in good faith in relation to alleged over-payments.
• A person may not be said to receive payments in good faith if he/she was receiving payments in excess of their proper entitlement and did not contact ACC and enquire why. In Gear (250/03) Judge Barber held that Mr Gear must have been aware he was receiving compensation payments in excess of his entitlements, as the overpayment was about 25% more than his entitlement. Judge Barber stated:
“A reasonable person in the appellants position should have realised that he was not entitled to that and should have contacted the respondents office and enquired about that.”
• McGregor (160/05): Judge Cadenhead held that an overpayment was not received in good faith. ACC paid money to Mr McGregor and his son for attendant care, yet the son only lived with the father for a brief time during the purported period of care.
Alteration of position in reliance on the validity of the payment such that it would be inequitable to require repayment.
• Karl (CIV 2004-485/800): the High Court held that in some situations expenditure on day to day living expenses may amount to an alteration of position such that repayment may be inequitable. Justice Miller stated:
“It may involve a conscious course of action, and the money is used in away that creates no asset the defendant can use to repay ACC. Alteration of position may take the form of failure to claim other state benefits to which the defendant would have been entitled but for the overpayment. The defendant may be able to point to financial commitments assumed in reliance on validity. It is also possible that the defendant can show that, but for belief in validity, the money would have been dealt with in a way that made it possible to repay. While the burden of proof rests in the defendant, the Court must recognise that it may be unrealistic to expect the defendant to produce conclusive evidence.”
The issue in every case was whether the appellant’s position was so changed that she would suffer an injustice if called upon to repay. There must be a direct connection between the receipt of the overpayment and the matter relied upon to show that repayment would be inequitable.
• In Karl the overpayment was spent on normal living expenses and some overseas travel. Justice Miller remitted the case back to the District Court for rehearing, so the parties could lead evidence relating to change of position and any inequities resulting from that.
• The Court accepted that the phrase “alteration of position” meant a deliberate course of conduct following the receipt of the overpayment, the course of which would not have been followed had the payment not been received.
• The decision of Karl also discussed the meaning of the phrase “whether it is inequitable to require repayment”; the conclusion being that it carried the connotation of unfair or unjust, and involved a balancing of equities. Justice Miller stated in part:
“First, the statute requires a direct connection between the receipt of the overpayment and the matter relied upon to show repayment is inequitable. The defendant must establish an alteration of position such that it would be inequitable to order repayment.
It follows that considerations such as relative wealth and the defendant’s poverty (unless connected to overpayment) are irrelevant. … In the ordinary way, a defendant relying on the statutory defence must show that to order repayment would leave the defendant in a worse position than if payment had never been made.
Second, fault is likely to be a significant consideration. It is the alteration that must make repayment inequitable. On the defendant’s side, the court reaches a point of balancing the equities only if the defendant received the money in good faith and did not intentionally contribute to the error. On ACC’s side, the usual explanation is likely to be mundane clerical error, as in this case. There was a tendency in the appellant’s argument to attach fault to ACC because repayment is burdensome, which is to confuse error and its consequences.”
• Cossey (32/05): Judge Ongley adopted the principles articulated in Karl. He found no material alteration of the appellant’s position in reliance on the validity of the payment such that it would be inequitable to require repayment. He stated:
“There is no evidence that she resorted to greater than usual expenditure in reliance in the payment. Ms Cossey had applied some of the money to defray normal household expenses as well as credit card and bank debts which were attracting interest. When it was found that the payment had been made in error she was returned to her position of pre- existing indebtedness of about $2,230 together with a new debt arising entirely from living expenses. Ms Cossey’s resources are not fully in evidence. It is not known whether she would otherwise have been able to meet all this expenditure from her income, but it should be assumed that’s she could have met the domestic related payments including car repairs. There is no hard evidence of actual hardship connected with the circumstances of the overpayment and its later discovery. In practical terms, the bank debts were then replaced by a debt to the Corporation, for which no unreasonable demand was made for payment. The Corporation did not demand interest, so in that respect the debt to the Corporation was a lesser burden than the debt to the bank.”
• Moody (104/05): Judge Cadenhead found no material alteration of the appellant’s position in reliance on the validity of the payment such that it would be inequitable to require repayment.
Penalties under Section 249
• Sarich (73/06): the appellant, who received weekly compensation, returned to part-time work without telling ACC, resulting in an overpayment. ACC imposed a penalty of 10% of the overpayment (under Section 249(1)(a)) and three times the amount of the debt (under Section 249(1)(b)). This resulted in a total debt due of $8,322.76.
The Court found that the appellant had provided a credible explanation for not informing ACC, and the evidence did not establish a clear case of deliberate deceit. The Court noted that Section 249 was to be construed as a penal provision which would require proof of the necessary knowledge to be clearly demonstrated. The Court held that ACC was not entitled to impose a penalty under Section 249(1)(b), though the 10% penalty imposed under Section 249(1)(a) was found to be properly imposed.
Whether the Limitation Act applies to the recovery of debt
• Devereux (301/05): Judge Ongley considered whether Section 4 of the Limitation Act applied to decisions by ACC to recover debts. The Judge stated:
“[22] Section 4 of the Limitation Act bars actions for recovery, including recovery of a statutory debt. Action is defined to mean any proceeding in a Court of law other than a criminal proceeding. I accept the correctness of Mr Sumner’s submission that a decision by the Corporation to recover the debt is not an action. It is not proceeding in a Court of law. The decision itself is not barred by the Limitation Act. In this appeal, the Court is dealing only with the decision that was taken to review the calculation and establish the amount of an overpayment, not with proceedings for recovery of the debt. The decision making process was governed by the Injury Prevention, Rehabilitation, and Compensation Act 2001. If the debt survives the appeal process, then the Corporation may find it statute barred.”
Court orders of reparation in criminal cases
• Compton (8/04): ACC is able to recover money by civil action where the Court has also ordered reparation.
Inmates on remand
• Van der Kaap (4/99): The Court held that while the appellant was on remand, he was an inmate of a penal institution, and ACC was correct to suspend his entitlement to weekly compensation and claim repayment of the amount overpaid.
Legislation -
• Section 148 provides for the Reviewer to award costs and expenses in accordance with the regulations, whether or not there is a hearing. The Injury Prevention, Rehabilitation, and Compensation (Review Costs and Appeals) Regulations 2002, as amended, prescribe a scale of costs and expenses.
• Section 148(2)(a): The reviewer must award the applicant costs and expenses, if the reviewer makes a review decision fully or partly in favour of the applicant.
• Section 148(2)(b): The reviewer may award the applicant costs and expenses, if the reviewer does not make a review decision in favour of the applicant but considers that the applicant acted reasonably in applying for a review.
• Section 148(2)(b): The reviewer may award any other person costs and expenses, if the reviewer makes a review decision in favour of the person.
• Section 148(3): If a review application is made and ACC revises its decision fully or partly in favour of the applicant for review before a review is heard, whether before or after a reviewer is appointed and whether or not the review hearing has been scheduled, ACC must award costs and expenses on the same basis as a reviewer would under subsection (2)(a).
Case Law
Whether the applicant acted reasonably in applying for the review
• Skedgwell (13/06): the Court held that the Reviewer, having found that the application for review had been reasonably brought, ought to have allowed for the cost of Dr Wigley’s report. The Court noted that the reviewer’s concerns about Dr Wigley’s report was not a legitimate basis for refusing to contribute to the report.
• Biehler (56/03): The reviewer’s decision to award no costs was upheld on the basis that all of the applicant’s concerns had been met before the application for review was lodged. It was held that the applicant acted unreasonably in applying for a review.
• Mete (28/04): The issue was whether the appellant was acting reasonably when he lodged a review. Judge Beattie noted that the discretionary power given to a reviewer under Section 148 requires consideration by a reviewer as to whether the applicant acted reasonably in applying for the review, rather than whether they acted reasonably in proceeding to hearing. He held that there were reasonable grounds for the appellant to file a review application and there were no reasonable grounds to pursue the review to hearing, at which stage the evidence was wholly against her. He decided that the reviewer had not exercised her discretion properly and he awarded scale costs, but disallowed report costs.
• Devenport (293/04): A reviewer stated that the review was not reasonably brought, but provided no reasons for refusing to award costs. Judge Cadenhead held that reviewers are required to provide reasons when exercising discretion not to award costs.
• The same comments were made in Thomson (296/04) and Smith (305/04).
• Storey (126/05): ACC issued a decision suspending the claimant’s entitlements. At review the suspension decision was upheld. The reviewer did not award costs. Judge Beattie held that the review was reasonably bought and review costs were payable. The appeal was allowed in part.
• Faalele (39/07) the reviewer declined to award costs as he considered the review had not been reasonably brought. Judge Beattie disagreed and allowed costs of $400 plus another $300 costs on appeal. The judge noted that the fact that the appellant’s arguments were ultimately rejected was not a ground for declining costs.
Medical reports obtained for VIA reviews
• Apu’ula (355/05): the Court discussed the reviewer's refusal to order payment for Dr Huthwaite’s report, obtained for a VIA review:
“There is good reason for liberality in ordering payment for such reports. A vocational independence assessment has serious consequences for a claimant. Assessments are done without the benefit of multidisciplinary input and they frequently appear, at least to a claimant, to give insufficient recognition to real incapacity. There needs to be fair allowance for a claimant, endeavouring to meet an assessment made with the large resources of the Corporation, to have reimbursement of the cost of specialist evidence obtained in an attempt to expose a flaw in the assessment …
…[37] The refusal of reimbursement is discretionary and the Court will not interfere with a reasonably exercised discretion. In this case the Reviewer decided the point on the basis of relevance, not adverting to the question whether it was reasonable to seek the report for the purpose of supporting a relevant argument which was, in the event, not supported by the report when it came to hand. I find that the exercise of discretion did not take that consideration into account and was therefore wrong.”
Exercise of the reviewer’s discretion
• Kirkwood (387/04) and McLeod (388/04) considered the proper exercise of the reviewers discretion under Section 148(3).
• Kirkwood (387/04): In February 2004 ACC issued a decision terminating the claimant’s entitlements. Mrs Kirkwood filed a review. The decision was revoked in March 2004. No agreement as to costs was agreed and the matter proceeded to a review hearing simply on the question of review costs. The reviewer awarded $400 including $150 for “other preparation of the case for review”. The appellant sought the maximum amount for preparation even though the review did not proceed to hearing.
Judge Cadenhead held that the prescription of $300 as a “ maximum award” envisaged that awards would be made of a lesser amount. Judge Cadenhead held that the reviewer retained discretion and had exercised it properly. The appellant’s counsel refused to provide details of the time spent in preparation. Judge Cadenhead noted that the following principles emerged:
“ The reviewer may award costs for preparation up to $300. As there is no method of calculation the reviewer would be able, if necessary, to call for an account as to what were the actual costs in the circumstances.
In most cases, particularly if a solicitor is involved this should not be necessary, as the costs are not high in today’s economic climate.”
• McLeod (388/04) involved the overpayment of weekly compensation. A review was lodged and the decision revoked. Costs of $850 were claimed. ACC awarded $100. At review, the reviewer allowed the costs claimed but reduced the accountancy costs to a contribution of $200. Holden v Architectural Finishers Limited was referred to. Judge Cadenhead commented that the prescription of a maximum award envisaged that awards would be made of a lesser amount. He held that the reviewer had discretion to consider “expenses reasonably incurred”. The reviewer provided reasons for the reduced contribution to the accountancy costs and the appeal was dismissed.
• Gardner (90/05): ACC issued an unreasonable refusal decision in December 2002. A review was filed and the compliance issue resolved by February 2003. Weekly compensation was reinstated. There was no substantive issue outstanding by the time the review heard. The appellant refused to withdraw the review. The reviewer dismissed the review and awarded $240 costs. Judge Barber held that the appellant was reasonable to proceed with the review to obtain costs. The appellant sought costs of a scribe for the meeting with ACC and appeal costs. The Court held that the reviewer properly awarded the maximum amount payable under the regulations in relation to review. The award of $240 was upheld and the appeal dismissed.
Representation costs
• Lucas (266/00) an award of representation costs could only be made where there were actual costs of that representation.
• This approach has been confirmed in Pfenniger (61/08), where the Court stated:
“Having regard to the fact that no such costs were incurred, and in keeping with the principles enunciated in Lucas, I find that where no costs have been incurred there can be no claim under the costs regime provided for under the Act and the Regulations made thereunder.”
• Howard (154/05): Judge Barber stated:
“representative must mean someone who represents the appellant as his counsel or agent of some type (and refers to one representative only). When a claimant such as Mr Howard appears in person assisted by his wife, that does not amount to representation.”
Disbursements
• Dodson (337/05): Judge Cadenhead noted the following principles when considering the award of costs for disbursements:
“[a] The issue of costs and disbursements is a discretionary matter up to the maximum shown in the Schedule.
[b] Full disbursements should normally be allowed up to the maximum amount.
[c] The quantum of those disbursements should be assessed by the review officer, who is bound the turn her mind to items claimed.”
• Kliskey (264/07): the reviewer awarded $450 representation costs and $35 for office costs. The advocate, who was involved with a charitable trust (a support group for ACC claimants), claimed $135 for office expenses. This sum included a contribution for rent, insurance and a subscription to a legal publication. Judge Barber increased the award to $135, noting that there should be some contribution to the advocate’s overheads.
Award of costs where review withdrawn
• McGregor (267/06): the review was withdrawn and there was no hearing. Judge Beattie held that the acceptance of the withdrawal was a decision and the Reviewer was required to consider the question of costs.
Code reviews
• Barwood (80/06): The question was whether the reviewer had incorrectly exercised a discretion to refuse an award of costs following an unsuccessful Code review. The Court found that there had been no wrongful exercise of discretion by the reviewer and that the reviewer had appropriately refused to award costs. The appeal was therefore dismissed. The Court also confirmed that there was a right of appeal against a refusal to award costs on a Code review, and cited the decision in Trembath (279/05) with approval.