District Court case awards higher costs to successful appellant
Tag: ACC Case Law
Mr Toomey is a self employed builder who was called upon (or co-opted) by the Fire Service to retrieve the injured from the PGC site in the aftermath of the Feb 2011 earthquakes in Christchurch. He suffered PTSD from that event. The Court did not want to discourage people from assisting the police and fire service during emergencies when their skills were called upon – such as an off duty doctor or police officer- or in the case of Mr Toomey he was a self employed builder and his expertise assisted with the retrieval. The Court held that he was at work because he was under the direction of the fire service and although he was not being paid, he was self employed, and a self employed person is not paid in each and every situation even though they are working. It is notable that he paid his employee to assist in the retrieval as well. Mr Toomey will now be covered by ACC.
ACC law changed on 1 October 2008 to provide ACC cover for workers who suffer mental injury (like PTSD) from an event at work. That a person can get cover for mental injury at work, without having suffered a physical injury, is not well known. It is known that a person who has been assaulted at work during a robbery and is physically injured and also suffers PTSD will be covered for both the physical injury and the mental injury such as PTSD- so long as the PTSD is caused by the physical injuries and the events surrounding them. But in the case of mental injury without physical injury, there have been less than 10 cases before the District Court – don’t know how many claims have been successful- i.e. haven’t had to go to Court. District Court has rejected most cases because the claims have been incremental events that cause mental injury such as bullying at work over a period of time; or the events have not happened at work. District Court have made two very important decisions in 2016, a soldier serving in Afghanistan received cover for the events that occurred there; and the case of Toomey v ACC in April 2017.
A cover decision. Mr Wyatt suffered a general pain sensitisation disorder caused by the cumulative effects of physical injuries.
Double-up the specialist costs at review
The Injury Prevention, Rehabilitation, and Compensation (Review Costs and Appeals) Amendment Regulations 2010 confirms the amount a reviewer may award in relation to specialists report used at review, as follows:
Item: All relevant and reasonably necessary reports for applicant or another person by any registered specialists.
Maximum Award ($): 935.54
- It has long been debated whether the noted cost regulation should be interpreted as allowing a reviewer to award costs for:
Each and every specialist report. In other words, where four specialists reports are obtained at the individual cost of $1,500.00 per report whether one should then allow $935.54 for each of the four reports, totalling $3,742.16; or
- Whether the regulations only allowed a reviewer to award one payment of $935.54 for all the specialists’ reports collectively.
The District Court in Anderson v ACC  NZACC 164 at  has now shed some light on this vexed question noting the following :
… Specifically, pursuant to the Injury Prevention, Rehabilitation, and Compensation (Review Costs and Appeals) Regulations 2002, “All relevant and reasonably necessary reports for applicant … by any registered specialists” are entitled to a maximum award of $935.54. Quite clearly, the maximum award must relate to each report prepared rather than the maximum that the specialist is entitled to with regard to the totality of their involvement in a review…
The Supreme Court has issued a decision on 9 May 2012 allowing ACC cover for pregnancy following a failed sterilisation operation. Despite the Court of Appeal decision of Accident Compensation Corporation v D, the Supreme Court found no difficulty in deciding that pregnancy can be “personal injury” capable of being covered by the ACC Scheme.
The ACC Scheme provides cover for “personal injury”, whether it is from an accident, because of certain criminal acts (e.g. rape), and for the non-ordinary or abnormal consequences of treatment. The case of Allenby v H concerned personal injury suffered as a result of a medical misadventure (now known as “treatment injury” as amended in July 2005).
Having ACC cover is a statutory bar to suing for personal injury. The Supreme Court has ruled that, as H could be covered for medical misadventure under the ACC scheme, H cannot sue the surgeon who performed the sterilisation procedure for compensation.
H will now have to pursue her claim for medical misadventure with the ACC. If cover is granted (based on the specific facts of H’s case), H will be able to apply to the ACC for entitlements. Such entitlements could include payment of treatment costs, rehabilitation (both social and vocational), and weekly compensation if her personal injury gives rise to incapacity for work.
Specifically, this case illustrates how an initial injury (e.g. impregnation following failed sterilisation) may set up “a gradual process, disease, or infection” which may in turn cause a personal injury (e.g. pregnancy). Other examples could include an acute injury to a knee causing on-going osteoarthritis, or work-related hearing loss causing on-going tinnitus, or an acute back injury leading to urinary and faecal incontinence. In all of these examples, the secondary injury would be covered by the ACC.
However, Justice Blanchard notes that a male’s failed vasectomy resulting in pregnancy would not result in cover for the woman’s pregnancy. This is because a third party cannot receive cover under the ACC scheme for personal injury, except in limited circumstances, e.g. when an infection caused by a treatment injury is passed directly to that third party, or a person at work directly witnesses a traumatic event causing injury or death to a third party.
Justice Blanchard also notes that there could not be cover in other unwanted pregnancy situations (excluding pregnancy following rape) such as one resulting from a “bursting condom” or from unprotected sexual intercourse. In these situations, there is no “treatment” and therefore no medical misadventure.
The case demonstrates the inherent tension between the ACC organisation (acting as insurance company and limiting its liability) and a statutory scheme that has replaced ordinary New Zealander’s right to sue for personal injury. The significance of this case is that the Supreme Court has yet again mandated that the ACC legislation be interpreted expansively in relation to the consequences of personal injury. Underpinning the judgment appears to be an avoidance of opening up the ability to sue for personal injuries.
Hazel Armstrong & Kristen Bunn
In New Zealand, mental injury arising from sexual violation is a coverable injury in our ACC scheme. The Court of Appeal in the decision of KSB v ACC has clarified the definition of sexual violation; confirming that a partners failure to disclose to his girlfriend that he was HIV positive and having unprotected sex with her constitutes sexual violation. Therefore, if diagnosable mental injury arising from such sexual violation occurs, it is coverable.
Salient points of the judgment include:
- A person cannot consent to unprotected sexual intercourse if they are unaware their partner carries an infectious disease capable of being transmitted via sexual intercourse (such as HIV).
- In such a situation, a claimant does not need to be infected with the infectious disease for cover for mental injury to be granted. It is enough that there was a diagnosable mental injury arising from the sexual violation.
- A claimant does not need to prove fault on behalf of the perpetrator of the sexual violation. The claimant does not have to reveal to ACC the name of the partner, the police do not need to be notified, and there does not need to have been a successful criminal prosecution.
- The claimant does not need to prove whether the perpetrator of the sexual violation knew the claimant had not given consent.
This case serves as a reminder of the purpose of New Zealand’s accident compensation scheme; the ACC is there to help those suffering from trauma arising from sexual violation; both physical and mental consequences. This case is not a revelation, but the Courts upholding the underlying principles of the scheme.
In the High Court of New Zealand, Wellington Registry
In 1974, Mr Miller suffered an injury to his back at work, and was granted weekly compensatory payments. Following the reports of two surgeons, which both stated that the claimant’s condition was due to disease rather than his accident, the payments were suspended in 1978.
Mr Miller obtained a new report in 1993, which said that there was not a disease process affecting his back, and then made an application to review the suspension of entitlements. The Accident Compensation Appeal Authority made a ruling in 2003 that Mr Miller’s condition was due to a combination of disease and his workplace accident. Under the laws which applied at the time of Mr Miller’s injury, he was entitled to continuous, ongoing weekly compensation. As such, Mr Miller’s compensation was backdated to the date of the wrongful suspension of his entitlements.
The issue before his Honour Justice Simon France in the appeal to the High Court in Miller v ACC was whether Mr Miller was entitled to interest on his backdated compensation. Section 114 of the Accident Compensation Act 2001 (the Act) states that:
The Corporation is liable to pay interest on any payment of weekly compensation to which the claimant is entitled, if the Corporation has not made the payment within 1 month after the Corporation has received all information necessary to enable the Corporation to calculate and make the payment. [Emphasis added]
What is meant by “information” in s114 is critical to the issue of whether Mr Miller is entitled to interest. On one hand, “information” could refer to only the information required to calculate the gross weekly entitlement, primarily medical evidence. However, “information” could also mean everything required for ACC to pay the claimant the correct final amount, such as Work and Income New Zealand payments or IRD special tax codes.
When Miller v ACC was heard in the District Court, the Court identified two areas where it felt there was insufficient information under s114 until 2003. Firstly, ACC did not have details of Mr Miller’s WINZ payments, which must be deducted and repaid by ACC; secondly, the Corporation did not have the necessary medical information, as there were insufficient reports supporting the view that Mr Miller’s condition was injury related until 2003. Precedent for this approach is set in cases such as Donovan v ACC (210/2011), where Judge Beattie states:
In the circumstances of this case, I find that necessary information within the meaning of Section 114 was advice from the appellant as to whether or not he had received any income during the period or had received a WINZ benefit.
In the appeal at hand, France J had to determine whether the recent Court of Appeal decision ACC v Kearney had changed the law as set out in Donovan. Kearney concerned an individual whose compensation was stopped in 1991, and then reinstated in 2004. As with Miller, the Corporation needed further information to determine the level of backdated compensation, such as any earnings or benefits given, as such income is required to be deducted from backdated compensation payments. In spite of this, the Court in Kearney ruled that Mr Kearney was entitled to interest for the whole period.
Council for Mr Miller contended that Kearney has set a precedent, which applies to all cases regarding wrongful suspension. It was argued that at some point, the claimant will have been receiving compensation, and therefore ACC had the required information for weekly payments. As such, interest should be payable on backdated compensation.
ACC contended that the decision in Kearney applies only to situations where the Corporation is at fault in suspending the compensation, whereby fault refers to situations where blame for the wrongful cession of entitlements is solely due to ACC, not medical evidence received at a later date. The Corporation argued that as there is no fault on their behalf in Miller, interest should not be payable to Mr Miller.
France J says of the decision in Kearney, that “the focus indeed seems to be on whether the Corporation at some point had the information.” As such, France J favours the appellant’s interpretation of what is meant by “information”. This decision is supported by further case law, mainly at District Court level, one such example being Lethbridge. After the reinstatement of Mr Lethbridge’s compensation, the Corporation did not pay interest to the claimant. However, it was later held by Judge Middleton that ACC were obligated to pay interests, as interest payments were not designed as a penalty on the Corporation, but rather were compensatory in nature.
After discussion of the relevant law, in particular the Kearney case, France J writes:
I consider it is clear that where the Corporation has been paying compensation, stops it and then later it is held that the compensation should have continued, the claimant will be entitled to interest. It seems that this is because at the time of suspension or cancellation the Corporation had all the information it needed. The fact that it later needs further information at the time of reinstatement does not matter.
France J rejects the arguments of the Corporation that backdated interest should only be granted in situations where the Corporation was at fault, and says that in the event of an incorrect suspension “… s114 is to be applied at the time that decision was taken and not at the time the backdating is being calculated.” The District Court decision is found to be erroneous, and hence it is overruled. Mr Miller is therefore entitled to backdated interest payments. 
 At the time of writing, ACC has lodged an appeal of this decision with the Court of Appeal.
Supreme Court reins in ACC
McGrath v ACC  NZSC 77
This case serves as a salient reminder to ACC that it can only make a claimant undergo the vocational independence process when he or she is “likely” to be assessed as vocationally independent; the process is not be used as a mere investigative process.
The recent Supreme Court decision of McGrath v ACC brings long-awaited clarity to the requirement under section 110(3) of the Accident Compensation Act 2001. The section dictates that ACC must not require a claimant to participate in a vocational independence assessment unless the claimant is likely to achieve vocational independence and until the claimant has completed any vocational rehabilitation that ACC was liable to provide under his or her rehabilitation plan.
The Supreme Court emphasised that in order to commence the vocational independence process (consisting of a vocational independence occupational assessment and vocational independence medical assessment) ACC must have evidence that vocational independence is likely, at the date of referral for assessment. The Court agreed that “likely” in this context “is an outcome reasonably in prospect” (para 33)
Chief Justice Elias recognised that the purpose of section 110(3) is “to protect claimants from unnecessary assessments where there is no real prospect of vocational independence” and that “[s]uch assessments are intrusive and upsetting” (para 32)
In order for a claimant to be vocationally independent, they must be occupationally suited to a particular job and have the medical capacity to work in that job for 30 hours or more.
In this case, when ACC required the claimant to undergo the vocational independence assessments, it had evidence from the claimant’s treating medical practitioners (a specialist in pain management and her general practitioner), that she could only sustain 15 hours of work per week. It did not have any current medical information or opinion to suggest that she could sustain anything longer. ACC had previously commenced the vocational independence process and had a vocational independence medical assessment that was over four years old that said the claimant could work for periods of 35 hours or more. Ultimately, due to a flaw in the process, the claimant was not found to be vocationally independent. The Chief Justice stated that it was not “reasonable to rely on an assessment that was four years out of date when supporting the view in September 2008 that vocational assessment was likely to lead to a conclusion of vocational independence when other medical opinions in the interim had expressed quite different views” (para 37).
Further, the Court warned against case managers forming a view that the claimant is likely to be assessed as vocationally independent by “extrapolating from experience with others with similar injuries”, which is contrary to the claimant’s reporting and the history of treatment and expert opinion. In other words, the case manager’s assessment must be objective, rather than subjective (para 38).
The issue of the claimant’s pain syndrome was also addressed. The Court recognised that notwithstanding the fact that the claimant had “self reported” pain symptoms, they were “of long standing” and had “been accepted by all professional workers dealing with” with the claimant. The claimant’s pain specialist had certified that her pain symptoms prevented her from working more than 15 hours a week. er As such, the claimant’s pain management should have been taken into account before a vocational independence assessment was undertaken (para 42).
In relation to Individual Rehabilitation Plans, the Court noted that completion of an individual rehabilitation plan does not in itself justify obtaining a vocational independence assessment, without further consideration of whether completion of the plan “bore on whether vocational independence was likely”. It cannot simply be seen as “the next stage in an inexorable process” (para 39).
The Chief Justice emphasised that the vocational independence process is the end of the process, not part of the rehabilitation programme (para 34).
This judgment serves as a pointed reminder to ACC not to use the vocational independence process as a mere investigative process; it must be likely at the time of the vocational independence process that the claimant is vocationally independent. It is the author’s opinion that the court has effectively placed a burden on ACC to show that it has the evidence to “reasonably support” the conclusion that it is likely that the claimant will be vocationally independent (para 31).
The nature of these proceedings means that where a claimant does not believe they are likely to achieve vocational independence and/or the claimant has not completed the vocational rehabilitation as specified under the vocational rehabilitation plan, judicial review (rather than the more common ACC review) may need to be sought.
We are finding that the earlier we are involved in the vocational independence process, the fairer it is for the claimant, and the less likely it is that ACC will assess a claimant as vocationally independent.
For further information, please contact one of our team.
 At the relevant time, the requirement was that the claimant could work 35 hours or more per week. It is now 30 hours or more.
Attached is a copy of the High Court’s decision in Martin v ACC.
A copy of the Court of Appeal’s decision in Wildbore v ACC.