Accident Compensation Corporation v Smith
[2016] NZHC 2051
•31 August 2016
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2015-485-390 [2016] NZHC 2051
UNDER THE Accident Compensation Act 1982 IN THE MATTER OF
an appeal under Section 111 of the Act
BETWEEN
ACCIDENT COMPENSATION CORPORATION
Appellant
AND
TREVOR SMITH Respondent
Hearing: 21 October and 20 November 2015 Appearances:
C Light for the Appellant
W A Forster for the RespondentJudgment:
31 August 2016
JUDGMENT OF NICHOLAS DAVIDSON J
Introduction
[1] Mr Trevor Smith’s relationship with the accident compensation system has
been tortuous and extensive since he suffered a back injury in 1981.
[2] The Accident Compensation Corporation (ACC), appeals against a 2014 decision of the Accident Compensation Appeal Authority (the Authority),1 which recalled a 1995 decision of the Authority. The 1995 decision held that Mr Smith had not shown a loss of earning capacity as a result of personal injury, but only that from
time to time he had suffered a temporary loss of earnings.
1 Smith v Accident Compensation Corporation [2014] NZACA 6.
ACCIDENT COMPENSATION CORPORATION v SMITH [2016] NZHC 2051 [31 August 2016]
[3] ACC was granted leave to appeal to this Court by the Authority on a question of law.2 The question for this Court is:3
Does the Authority have the power to recall an earlier sealed decision and is it relevant whether a higher court has upheld the decision?
Background
1981
[4] Shortly after Mr Smith’s injury, he was granted cover for earnings-related compensation. Payments began in May 1981.
1988
[5] ACC accepted Mr Smith was entitled to earnings-related compensation from
4 September 1987, which was paid until 20 March 1992.
[6] This appeal stems from the fact that in 2014, the Authority identified an error in calculation,4 whereby ACC had incorrectly used a divisor of 52 weeks instead of
46.29 weeks to calculate Mr Smith’s earnings-related compensation. This had the effect of depriving him of $25.95 per week compensation to which he was entitled. His relevant earnings at the date of his accident were $237.79 not $211.84 per week.
1992
[7] Mr Smith’s entitlement to earnings-related compensation was cancelled by
ACC on 2 April 1992, with effect from 29 March 1992. This was because Mr Smith had failed to keep ACC informed of his earnings.
2 Accident Compensation Corporation v Smith [2015] NZACA 5.
3 Accident Compensation Corporation v Smith, above n 2, at [37].
4 Smith v Accident Compensation Corporation [2014] NZACA 3.
1995
[8] ACC’s 1992 decision was appealed to the Authority (Judge Middleton), and in a 1995 decision it held that Mr Smith had not shown a loss of earning capacity by reason of his personal injury (the 1995 decision).5
[9] Judge Middleton addressed s 59(1) of the Accident Compensation Act 1982, as to whether Mr Smith’s loss of earning capacity was due to personal injury by accident, and he concluded:6
… in making a decision, it is essential to be aware of the full history of the appellant’s problems. The medical evidence is that the appellant is fit to do work other than bush work or work of a very heavy nature which requires lifting and bending. The appellant has demonstrated over a period of some
8 years that he has a capacity to work and for a period earned in excess of his relevant earnings. I agree with Mr Lucie-Smith’s submissions that the decisions in Ram, Nelley and Lance are not relevant to this appellant’s position. The appellant has chosen not to work full-time because he does not consider the reward warrants that and relies on makeup earnings related compensation for the balance of his income. That, in my view, is the most that he can expect. He has not demonstrated that he has suffered loss of earning capacity as a result of personal injury but only that from time to time he has suffered temporary loss of earnings.
[10] This is the key determination against Mr Smith from which this appeal can be traced. The Judge considered that there was medical evidence demonstrating that Mr Smith was capable of applying himself to less intensive manual labour than he had previously. Mr Smith had periodically been able to work, and although at times he had suffered temporary losses of earnings, he had not suffered the requisite temporary loss of earning capacity. According to the Authority he was therefore not entitled to earnings-related compensation, and he has not received such compensation since the 1995 decision.
[11] The current proceedings relate, primarily, to that 1995 decision which was taken on appeal to the High Court, where Mr Smith was unsuccessful.7 Chisholm J agreed with the Authority that a sufficient nexus between Mr Smith’s personal injury
and his loss of earning capacity had not been demonstrated.
5 Smith v Accident Compensation Corporation [1995] NZACA 169.
6 At 6.
7 Smith v Accident Rehabilitation and Compensation Insurance Corporation HC Dunedin
M68/97, 5 February 1998.
[12] Chisholm J expressed his reasoned concurrence:8
It was not disputed by Mr Sara that a causal connection between the injury and the temporary loss of earning capacity is essential. This is apparent from the words “as a result of” appearing in subs (1). The
1985 repeal of the proviso did not affect this requirement.
In Wicks v Accident Rehabilitation and Compensation Insurance Corporation Robertson J noted that the section called for an inquiry as to whether the loss of earning capacity is as a result of the accident. He also noted that the causative link was not necessarily broken by post-accident employment and that what has happened during the period between the accident and the alleged temporary loss of earning capacity will constitute evidential material which will need to be weighed and assessed. Robertson J considered that neither loss of earnings nor intervening employment constituted sole issues. In other words, it was necessary in any particular case to assess all the evidence to determine whether the necessary causative link had been established. I agree with those observations.
The Appeal Authority clearly proceeded on the basis that the causal connection between the appellant’s injury and his loss of earning capacity was a crucial issue. Specific reference was made to Wicks. The Appeal Authority noted that the appellant had demonstrated a capacity to work over some eight years, at times earning in excess of the “relevant earnings”, and that ultimately the appellant had chosen not to work full-time because the remuneration was not sufficiently rewarding. Although he might not have said so in so many words the Appeal Authority obviously reached the conclusion that the necessary causative link had not been established.
As indicated by Davison CJ in Harvey v Accident Compensation
Commission:
“The function of this Court is not to review a decision of the Appeal Authority on the facts if there is evidence on which such a finding could have been made so long as the Appeal Authority applies to his consideration of those facts any relevant principles of law applicable to this decision.”
The Appeal Authority carefully assessed the full history of the appellant’s problems. On the evidence it was open to the Appeal Authority to conclude that the necessary causative link had not been established. There is no sound basis for concluding that he misinterpreted s59 of the Act. I do not accept that the Appeal Authority’s decision leads to the conclusion that he was effectively applying the repealed s59 proviso or the provisions of s60.
At first blush Mr Sara’s argument that “but for” the injury the appellant would not have suffered the temporary loss of earning capacity has some attraction. But on further consideration I have reached the view that such an approach is too narrow and represents
8 At 4-6.
an over simplification of s59. Taken to extremes the “but for” approach could undermine the causal connection requirement built into the legislation. The proper approach, as explained by Robertson J in Wicks, is to weigh and assess the available evidential material relating to events between the time of injury and the time of the alleged temporary loss of earning capacity. Naturally evidential material relating to the time of when it is alleged that there has been a loss of earning capacity will also be relevant. From this overall picture a judgment can be made as to whether the necessary causative link has been established. (citations omitted)
The 2014 decisions of the Authority
First Decision
[13] The first decision9 addressed several issues including costs of earlier hearings. For the purposes of this appeal it addressed ACA 14/13.
[14] Mr Smith’s success in this 2014 decision came after he filed a (very) late application for review in respect of ACC’s decision of 15 August 1988, which decision had (incorrectly) calculated his relevant earnings for the purpose of calculating earnings-related compensation. This 2014 decision resulted in a recalculation of Mr Smith’s entitlement up to 29 March 1992, and that entitlement has since been paid.
Second Decision
[15] Given this finding of wrongful calculation, Mr Forster, for Mr Smith, then filed a memorandum dated 12 February 2014 seeking recall of the 1995 decision. On 6 March 2014 the Authority purported to do so.10
[16] The Authority held that the calculation error was relevant to the 1995 decision, and because there were no appeal rights available to Mr Smith, other than on a question of law, recall was held to be appropriate.
[17] It was suggested by Mr Forster that the Authority was not aware that the 1995
decision had been taken on appeal to the High Court. The Authority’s decision
makes no reference to the judgment of Chisholm J, but instead focuses on its own
1995 decision.
[18] Mr Light for ACC submits that the Authority’s reference to Mr Smith having no right of appeal from the 1995 decision was an implicit acknowledgement that such had been exhausted by the appeal to the High Court. However, I consider that it is more likely such comments by the Authority describe the utility of Mr Smith’s statutory appeal rights, given that they extend to appeals on questions of law only unless they fall within s 111(2) of the Accident Compensation Act 1982 which reads:
(2) The Appeal Authority or the High Court, as the case may be, may grant leave accordingly on a question of law or if in its opinion the question involved in the appeal is one which by reason of its general or public importance or for any other reason ought to be submitted to the High Court for decision.
[19] Mr Light submits that it is immaterial whether the Authority knew of the appeal to the High Court, and I agree. Knowledge of an appeal does not determine the jurisdiction to recall. The Authority identified what it considered to be an underlying error in the 1995 decision, having regard to evidence going back over
30 years, and recall of the 1995 decision was based on this consideration not on a question of law put before the High Court in 1995.
Third Decision
[20] ACC sought leave to appeal to this Court.11
[21] Jones v Accident Compensation Corporation12 is precedent that the Authority had no power to recall a “perfected” decision. The 1995 decision of the Authority had been perfected by sealing. The decision of the Authority to recall relies on the “exception” principles canvassed in Horowhenua County v Nash (No 2),13 but that
case involved an unperfected decision.
11 Accident Compensation Corporation v Smith, above n 2.
12 Jones v Accident Compensation Corporation [2014] NZACA 17.
13 Horowhenua County v Nash (No 2), 1968 NZLR 632 – 633.
Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected may be recalled – first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.
[23] The Authority (DJ Plunket) did not accept that the interests of justice could override the lack of jurisdiction to recall a sealed decision. The Authority referred to s 111(2) of the 1982 Act which extends beyond a question of law to a question of fact. Chisholm J’s judgment was thought to make it clearer than Jones that the Authority had no power to recall its 1995 decision. The notion that the Authority could recall a decision which was confirmed by the High Court was regarded as untenable. Further, the 1995 decision confirmed in the High Court was not thought to be related to the factual error identified on review of evidence of earnings in 1980 and 1981 by the Authority in February 2014. The 1995 decision confirmed the need for a causal link between an injury and compensation, but the Authority in 2014 simply identified the error concerning Mr Smith’s remuneration at the time of the accident.
[24] Accordingly, while the Authority concluded that there was no jurisdiction to recall a sealed decision, even more so following the judgment of the High Court on appeal, it concluded as there were competing decisions of the Authority as to the power to recall an earlier decision, and to rehear an appeal, the answer should be determined in the High Court and leave to appeal was accordingly granted.
The question/s for answer
[25] To repeat, the question is:15
Does the Authority have the power to recall an earlier sealed decision and is it relevant whether a higher court has upheld the decision?
(1) Whether the Authority has power to recall a decision once sealed; and
(2) Is it relevant to the answer that the decision was appealed to the High
Court.
Approach to the question/s
[27] Abstract questions of jurisdiction such as these do not usually involve the underlying merits. But where there is an identifiable error in the earlier decision of a judicial or quasi-judicial body which may wrongly deprive someone of an entitlement, then a jurisdictional barrier is not an attractive outcome, unless there is a sound reason which directs that result, and correction falls within established principle. Where jurisdiction is derived from exceptional circumstances a stricter approach to the question of jurisdiction is more palatable.
[28] For the reasons which follow, I consider that the Authority does not have jurisdiction to recall a sealed judgment. That in itself is a complete answer to the question of recall. The Authority’s decision is necessarily a sealed decision when taken on appeal to the High Court. That aside, I do not consider that it was open to the Authority to recall a decision which had been appealed to and answered by this Court. However, an error is an error, and if the High Court on appeal has through unawareness incorporated the same error as the body appealed from there is a respectable argument that the appeal judgment should not fortify the decision made in error and a remedy should be found unless there are good reasons to the contrary.
Some preliminary issues
[29] Mr Forster takes issue with the very question on which leave to appeal to this Court was given, namely whether the Authority had any jurisdiction to recall. He submits that this was an “afterthought”, and not something that had been put to the Authority until after its decision was reached, when leave to appeal was granted.
[30] I do not see anything in this point. Whether the Authority had the requisite jurisdiction was at the forefront of its decision, in terms of the conclusion it reached, and the reason for granting leave to appeal to this Court. The Member granting leave to appeal considered that the Authority did not have any jurisdiction to recall a sealed judgment.16 He acknowledged that that meant there were competing views held by members of the Authority and that an appeal to this Court on a question of law was entirely appropriate.17
Alleged change of position by ACC
[31] Secondly, Mr Smith says that ACC has changed its litigation position over the history of these proceedings. He says that in submissions made on the application for recall, ACC implicitly conceded that the Authority did have jurisdiction, but that it should refrain from exercising it in the exercise of discretion. In seeking leave to appeal, ACC argued that the Authority had no jurisdiction. Mr Smith says that in these circumstances ACC is estopped from arguing that contrary position.
[32] I do not consider ACC’s previous submissions to be inconsistent with its present case. They are consistent with the position that in these circumstances, where there is a sealed decision, whether or not appealed to this Court, the Authority has no power to recall. Furthermore, an estoppel could never be raised against the application of correct law, and there is in any case no detriment to Mr Smith.
[33] Leave to appeal was granted by the Authority on the basis that there was a serious issue to be tried, and a difference of opinion in the decisions of Members which called for resolution. I am called on to consider a question of law, and inconsistency in a litigation position should not impede the quest for the right answer unless there was irremediable prejudice to a party.
Analysis of the 1995 and 2014 decisions of the Authority
[34] It is relatively straightforward to apply principle to this appeal and to
conclude that Mr Smith’s path to a rehearing is blocked by one or both of the
propositions advanced by Mr Light for ACC, that either the Authority had no jurisdiction to recall the 1995 decision once sealed, or otherwise that having been taken to the High Court on appeal, the door to recall was closed. There is authority pointing to the conclusion that recall in these circumstances is not within the Authority’s jurisdiction.
[35] However, any such conclusion should be understood against the underlying
merits of Mr Smith’s case, which was on the facts upheld by the Authority in its
2014 decision, and on which Mr Forster puts his case.
[36] The Authority addressed evidence going back to 1981 when Mr Smith worked for the Central Logging Company, where he had worked since he left school in 1967, and then worked with another company for some time before his accident.
[37] The history of the relationship between Mr Smith and ACC has been at times fraught. Mr Smith alleged that ACC had falsely created a file note of
15 April 1983,18 and then forged his signature below it. The Authority said:19
I am not prepared to indulge Mr Smith or Mr Forster on this matter, as the file note is entirely consistent with the information in the 1983 application for review, which, on the face of it, was also written by someone else and signed by Mr Smith.
[38] It was alleged ACC deliberately closed Mr Smith’s file without adding employer information, and that too was rejected. What were plainly allegations of fraud or dishonesty was the subject of crisp response by the Authority.
[39] Mr Smith had, as the Authority put it, “sat on his hands” for over 30 years. He was thus “responsible for any inequity that he may claim arises as a result of the lack of reliable information now remaining on his ACC files.”20
[40] In November 1982 Mr Smith was held by ACC to have a permanent partial disability of ten per cent under s 119 of the Accident Compensation Act 1972.
18 Which recorded he was not concerned about having had to return to his former work as a fencer, apart from the extra expense involved, and that he was not claiming he had suffered financially as a result of his accident.
19 Smith v Accident Compensation Corporation, above n 4, at [38].
[41] A specialist medical report in 1988 said that Mr Smith was “fit for all but the heaviest of work or that involving prolonged sitting or working in a bent position”. His x-rays disclosed “healed fractures of the transverse processes of the first, second or third lumbar vertebrae”.
[42] Between November 1982 and April 1988 Mr Smith worked as a self-employed contractor but failed to supply ACC with details of his earnings. On 4 April 1987, he commenced work fulltime as a waged employee of Japanese Diesel Repowers & Sales Ltd. When this information was received by ACC in August 1988, it made an assessment of earnings-related compensation,21 from the day that he commenced work with Japanese Diesel Repowers & Sales Ltd.
[43] Mr Smith’s employment there ended on 12 July 1991 when he left for “personal reasons”, and to seek further employment. Earnings-related compensation was still paid on the basis of his pre-accident earnings, less the amount he was capable of earning as demonstrated by his employment.
[44] Mr Smith had other jobs, but on 2 April 1992 ACC advised him that because of his failure to keep it informed of his earnings, it proposed to cease payment of earnings-related compensation from 29 March 1992. He responded with advice of his earnings between 13 January 1992 and 29 February 1992. He had been working at the Clyde Dam, but that work had stopped. He applied for a review of the decision to cease payment of earnings-related compensation.
[45] The report obtained from an orthopaedic surgeon dated 20 May 1992, looking back to Mr Smith’s x-rays taken in 1981 expressed the opinion that Mr Smith was:
… unsuitable for manual labour, particularly that involving bending and lifting and … it would be unreasonable for him to be expected to return to this type of work particularly if his livelihood were to depend on it.
[46] His “current condition” was described in the following way:
X-rays taken in 1981 show fractures of the transverse processes of L1, L2 and L3 on the left side but no other significant abnormality. Serial x-rays up
21 Based on Mr Smith’s pre-accident earnings, updated by relevant Orders in Council, less post-accident earnings.
to 1991 over a period of ten years show progressive decrease in the lumbosacral disc space with some evidence of instability.
Opinion: I have been asked to comment on his current condition, his prognosis and his work-capabilities.
Current condition: My assessment today is that his current condition is of disc resorption and degeneration at the lumbosacral junction associated with an instability pattern at this level. The location of this current problem is far removed from the transverse processes of L1, 2 and 3 but, from his description, when the tree fell across his back, he was well flexed and it is not possible to exclude damage to the lumbosacral disc at the time of injury particularly as the degeneration has been progressive on x-rays taken since
1981. While disc degeneration at the lumbosacral junction is common in the population without injury, it is not possible at this stage to definitely say that
his current problem is not as the result of personal injury by accident and
should, in view of the documented spinal injury in 1981, constitute a valid claim against the Accident Compensation Corporation.
[47] There was other evidence referred to, including Mr Smith having worked at a petrol station, and that he was only working at that job for a limited period each week. Although he could work longer hours he did not do so as he did not think the money he was paid was very good.
[48] In 1995 Judge Middleton held that Mr Smith chose not to work fulltime because he did not consider the reward warranted such. His reliance on make-up earnings-related compensation for the balance of his income was the most he could expect. The Judge reached the conclusion, for the purpose of s 59(1) of the 1982 Act, that Mr Smith had not proved he had suffered the requisite loss of earnings capacity. Chisholm J concurred on appeal. He agreed that post-accident employment would not necessarily break the requisite causative link, but it was part of all the evidence to be weighed. He concluded that the Authority’s implicit conclusion was that the link was not established.
[49] In 2014, the Authority was trying to assess relevant earnings in 1981 against a paucity of evidence and with the passage of time there was a reluctance to “rely to any great extent upon Mr Smith’s evidence”. This was no suggestion that Mr Smith’s evidence was dishonest, but over 32 years his recollection of the exact amounts he was paid and the bonuses he received “understandably became less reliable”. After adjusting for the divisor Mr Smith’s relevant earnings were fixed at
$237.79 per week, as of 9 April 1981.
[50] Mr Smith had not pursued his application for review of the decision of
26 May 1988 because it was overtaken by a decision of 15 August 1988 which he accepted at the time. The errors in the relevant earnings calculation then favoured Mr Smith.
[51] The Authority concluded that ACC’s decision of 15 August 1988 should be quashed and substituted with a decision correcting Mr Smith’s relevant earnings entitlement from the date of his accident on 9 April 1981. This has been put into effect. It must be recognised that this was a decision on a very late appeal, arising out of a 1988 ACC decision.
[52] On 12 February 2014 Mr Forster filed an application for recall of the 1995 decision and rehearing, contending that it determined whether Mr Smith continued to suffer loss of earnings after 29 March 1992 because of his accident, and the decision was necessarily made by reference to ACC’s assessment of Mr Smith’s earnings. Thus, the 1995 decision was said to be impugned by the necessary recalculation of his earnings at the time of his accident.
Submissions
For ACC
[53] Mr Light for ACC says that there is no power within the rules of the Authority to recall its sealed decisions, whether or not they have been appealed to this Court.
[54] Mr Light submits that except in the case of a judgment obtained by fraud, a lower court cannot recall its own judgment which has been appealed and answered by a superior court. He refers to Hikuwai v Sanford Ltd,22 to the effect that there is no basis for a lower court, whether under its rules of procedure or any inherent jurisdiction, to recall or vacate a decision of a higher court and says that is what in essence is being sought here. The Authority is not just recalling its decision but one
upheld on appeal by this Court.
22 Hikuwai v Sanford Ltd (1996) 9 PRNZ 587 (HC).
[55] As Mr Light submits, the Authority has applied the test in Horowhenua County v Nash (No 2) and concluded that the 1995 decision was based on a mistake of fact, and that recall was appropriate since the respondent had no useful appeal rights (appeals on questions of fact), available to him.
[56] Mr Smith has maintained throughout that he was entitled to earnings-related compensation. He contends that ACC has incorrectly relied on its own calculation for decades, and that it “relied on that figure to suspend his earnings-related compensation in 1992”.
[57] The calculation of compensation is a separate consideration from entitlement to that compensation. The calculation of any earnings-related compensation which Mr Smith might receive necessarily supposes that he is entitled to that compensation. The entitlement comes first, and only if a calculation is fundamental to entitlement will the calculation and the proof of the nexus between personal injury and the loss merge to be a mixed question of fact and law. As Mr Light submits, the decision of
1995 was concerned with whether Mr Smith was entitled to compensation, and the corrected earnings figure does not and cannot alter that.
[58] The effect of ACC’s calculation error has already been reversed for the relevant period from 16 May 1981 (when Mr Smith first received cover) and
29 March 1992, when ACC determined that he was no longer entitled to earnings-related compensation (upheld by the 1995 decision and on appeal to the High Court).
[59] But for a successful challenge to the 1995 decision, whether by recall or otherwise, the respondent has suffered no outstanding injustice by reason of the calculation error at any time when he was entitled to earnings-related compensation. The underlying question is whether Mr Smith was entitled to earnings-related compensation from 1992 onwards. Such injustice could only arise if the error identified in the 2014 decision went to the heart of that underlying question and there is the obstacle of the sealed decision, which is a real impediment, and one which the Authority simply vaulted over by reference to the “exceptional circumstances” or “justice of the case” approach.
For Mr Smith
[60] Mr Forster’s core argument for Mr Smith is that the Authority had the “discretion” to recall its judgment, as it considered that its earlier decision was in error. Mr Forster says the “justice of the case” directs this answer. Relying on the existence of that discretion, Mr Smith says that ACC has failed to show that the exercise of that discretion was in error.
[61] Mr Forster refers to the “significant public interest in maintaining confidence in the Appeal Authority’s processes”, and submits that an attempt to correct what it has identified as an error in its 1995 decision should not founder on a narrow approach to jurisdiction.
[62] He emphasises the primary reason behind the Authority’s purported recall of its decision, that ACC had relied on an incorrect earnings assessment and that s 59(1) of the Act was repealed in 1985 so Judge Middleton’s approach, and thus that of Chisholm J, was wrong.
[63] Mr Forster submits that the interests of justice preclude ACC from allowing its own error to stand, by its reliance on what he calls “procedural rules”. Mr Forster says that a “justice of the case” exception should permit the Authority to recall its own decision even if “ordinarily” it could not do so. The Supreme Court in
Saxmere23 was cited as authority that a judgment might be recalled where the
interests of justice so dictate. Indeed, Saxmere was relied upon in the 2014 recall decision of the Authority.
Discussion
[64] As Mr Light observes, there is no express power given to the Authority to recall its previous decisions.
[65] The High Court’s jurisdiction to recall is narrow. The Rules contain limited provisions when a decision may be corrected for minor clerical errors and slips, and
23 Saxmere Co Ltd v Wool Board Disestablishment Co Ltd [2009] NZSC 122, [2010] 1 NZLR 76.
a general power to recall where the circumstances require it. These powers are contained in rr 11.9 and 11.10 which read:
11.9 Recalling a judgment
A Judge may recall a judgment given orally or in writing at any time before a formal record of it is drawn up and sealed.
…
11.10 Correction of accidental slip or omission
(1) A judgment or order may be corrected by the court or the Registrar who made it, if it –
(a) contains a clerical mistake or an error arising from an accidental slip or omission, whether or not made by an officer of the court; or
(b) is drawn up so that it does not express what was decided and intended.
…
Correction
[66] The power to correct would not apply here, as that is an administrative response when the terms of a decision do not accurately express what was decided, or there is a manifest error in the way the decision is expressed.
Inherent Powers
[67] A statutorily-constituted court or tribunal has no inherent jurisdiction beyond its power to regulate its own procedure to the extent necessary to enable it to act effectively.24
[68] The distinction between powers and procedure was discussed in Browne v Minister of Immigration,25 when the Court considered an order of the Deportation Review Tribunal to re-hear an application. It concluded that such an order went to jurisdiction and was not merely a matter of procedure. The Authority is
a similar body, of statutory constitution and possessed of limited powers.
24 Attorney-General v Otahuhu District Court [2001] 3 NZLR 740 (CA) at [16].
25 Browne v Minister of Immigration [1990] NZAR 67 (HC).
[69] ACC submits, correctly in my judgment, that the power given to determine its own procedure, whether under s 108 of the 1982 Act, or as a function of some implicit power, does not allow the Authority to increase its jurisdiction.
Sealing of a decision
[70] The High Court does not have the power to recall a judgment once it has been sealed. The sealing of a judgment has the effect of “perfecting” it, and the Court then cannot revisit its judgment by way of recall.26 For the Appeal Authority to have a power beyond that would, in my view, need express legislative empowerment.
[71] The 1995 decision was sealed before it was taken on appeal to this Court. That was required under the High Court Rules.27 That in effect disposes of the issue but for Mr Forster’s further argument.
Recall after appeal to the High Court
[72] Given my conclusion that the decision once sealed cannot be recalled, this question is superfluous but given that it forms part of the question for consideration and if that answer is wrong, I answer the question as follows.
[73] It is a fundamental principle that where a decision has been appealed to a higher court, it is not, in the ordinary course of things, open to the lower court to recall that decision. This is a function of the core precepts of finality of justice, and the integrity of judicial processes in a structured hierarchy. The Appeal Authority exists outside of the hierarchical paradigm applicable to the courts of general jurisdiction, but is amenable to appeal.
[74] The exception to this general principle is where judgment has been obtained by fraud.28 In such a case, the correct application is to have the judgment set aside.
In short, the High Court has no power, outside the abovementioned exception, to
26 See Horowhenua County v Nash (No 2) [1968] NZLR 632 (HC) at 633; Payne v Payne (2005)
17 PRNZ 518 (CA) at [12]; Rabson v Gallagher [2012] NZCA 237, [2014] NZAR 30 at [3].
27 Rule 11.13 provides that no step may be taken on an unsealed judgment, including an appeal, without leave of a judge.
28 Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue [2014] NZCA 350, (2014)
26 NZTC 21-086.
recall or vacate judgments which have been taken on appeal from it, so far as questions of law are concerned.29 The same principled outcome must, I consider, apply to the Authority.
[75] The effect of allowing the Authority to recall a sealed judgment, which has been pronounced upon by the High Court, has serious implications for the rule of law and finality of judgment. Mr Light refers to the articulation of this by Jessel MR in Re St Nazaire Co:30
… it is a petition presented to a Judge of the High Court to rehear a decision of the Appeal Court, I should have thought that the mere statement of that would be sufficient to shew that the Judge below had no jurisdiction. It would be a wonderful result indeed if the Judicature Act empowered a Judge of an inferior Court to rehear a decision of the Appeal Court which perhaps had reversed his decision. Upon that theory, how long is the thing to go on? If the Judge below has this power, he may exercise it by reversing the decision of the Appeal Court where the Appeal had reversed his decision.
[76] In Commissioner of Inland Revenue v Redcliffe Forestry Venture Limited,31
McGrath J said that it is well established the High Court has no power to recall or set aside judgments on questions of law that have been the subject of a subsequent appeal decision.
[77] I consider this to be apt in the present context, where a statutorily-constituted body such as the Authority has been given the power to refer particular matters to this Court.
Justice of the case
[78] At the heart of this appeal is the fact that the Appeal Authority has concluded that the 1995 decision of the Authority should be recalled because relevant earnings have been recalculated on the evidence, over 30 years after the event, and that, says Mr Forster, means there should be a recall in the interests of justice and the 1995
decision cannot stand.
29 Hikuwai v Sanford Ltd, above n 23, at 591; Commissioner of Inland Revenue v Redcliffe
Forestry Venture Ltd [2013] 1NZLR 804 (SC)..
30 Re St Nazaire Company (1879) 12 ChD 88 (CA) at 96-97.
31 Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd, above n 29.
[79] While Mr Forster accepts that the Authority has no inherent jurisdiction, per
se, he draws a distinction between “inherent jurisdiction” and “implicit powers”.32
The latter, he says, exist at all levels of the judicial hierarchy, and are “necessary for any judicial body to maintain its character as a body tasked with doing justice”. He says that the Authority must be able to recall its decision in the exercise of what he says is its jurisdiction to “prevent processes being used in a manner that allows for clear injustice”.
[80] Judge Middleton based his 1995 decision on the assumption that Mr Smith was fit to do certain kinds of work but had chosen not to work fulltime and instead chose to receive make-up earnings. He had not demonstrated a loss of earning capacity as a result of his personal injury, but only that from time to time he had suffered temporary loss of earnings. The Authority considered that Judge Middleton made his decision under the repealed proviso to s 59(2) which until 1985 allowed ACC to take into account other factors such as Mr Smith not working in paid employment to the extent to which he was capable, or if the only factor affecting his employment was his injury.
[81] For ACC Mr Light submits that the 1995 decision went much further because it addressed questions of work, both willingness to work, and capacity to work and went beyond the mere question of calculation. He submits that to recall the 1995 decision based on the miscalculation of earnings as found is to undo the entire effect of that decision, which was directed at a more fundamental precept, namely that the nexus between accident and the loss of earnings capacity had not been demonstrated. The fact that the earnings as calculated might be different does not undo that finding.
[82] If, however, the nexus found wanting was established, contrary to the 1995 decision, then the 2014 recalculation of earnings would be relevant to disposition. The two issues add together, but they do not overlap. The miscalculation does not
undo the fundamental conclusion in the 1995 decision.
32 Taylor v Lawrence [2003] QB 528 at [50]-[54].
Exceptional circumstances
[83] If the principles of the “justice of the case” and “exceptional circumstances” are wider and apply to extend the jurisdiction beyond that which this judgment holds exists, then the present circumstances are not, in any case, exceptional, such as to disturb the principles of finality and limited jurisdiction..
[84] Mr Light refers to the high threshold test which must be met for the High Court to reopen judgments in an exercise of its inherent jurisdiction. Similar principles, including the need for finality, govern the exercise of this discretion as they do for recalling a judgment in exceptional circumstances. In particular, the Court must be satisfied that:33
a substantial miscarriage of justice would result if a fundamental error in procedure is not corrected and…there is no alternative effective remedy reasonably available.
[85] The need to preserve finality of judgments is an overarching consideration. ACC points to English Court of Appeal authority where the principle is expressed as follows:34
…the injustice that would be perpetrated if the appeal is not reopened must be so grave as to overbear the pressing claims of finality in litigation- especially pressing where what is contemplated is a second appeal.
[86] Such a remedy may only be entertained where it can be shown that the previous decision proceeded in such a way that a wrong result was brought about.35
[87] For my part, I do not consider that there are sufficient grounds to warrant disturbance of the 1995 decision based on exceptional circumstances. Reliance by the respondent on ACC’s calculation error is something of a red herring, and the conflation of this with the issue in the 1995 judgment misplaced. This was not the view of the Authority in the recall decision, but it was the view of Chisholm J when
he upheld the 1995 decision in the High Court.
33 R v Smith [2003] 3 NZLR 617 (CA) at [36]. (emphasis added)
34 Re Uddin [2005] EWCA Civ 52, [2005] 1 WLR 2398 at [21].
35 Re Uddin, above n 34, at [22].
[88] ACC says that even if the 1995 decision and subsequent appeal proceeded on the basis of a mistake of fact, it has not been shown that the Authority must have reached the wrong result, and this is the substantial miscarriage of justice to which the authorities refer. There is also the recognised risk that re-opening proceedings which have already run their ordinary course has the potential to create new
injustices.36
Conclusion
[89] I therefore come to this. A decision of the Appeal Authority cannot be recalled after sealing of its decision, and this conclusion is fortified by judgment on appeal to this Court.
[90] The “exceptional circumstances”, “justice of the case” principles does not apply to undo this conclusion. If errors demand that there should be correction and these are “exceptional circumstances”, but I conclude this case does not disclose such and if it does then recall is not the available route to resolution.
[91] If Mr Forester is right, and the Appeal Authority has lent some weight to that, at least to the extent of a miscalculation, then this on the face of it may require a remedy if the nexus found wanting by Judge Middleton is irrelevant.
[92] In further submissions of 19 November 2015, ACC addressed the question put to it by the Court whether the 1995 decision might be revisited by a different route, namely by having the original appeal to this Court, heard by Chisholm J, re-opened with leave.
[93] It may well be that there are no other tracks by which Mr Smith can obtain the outcome he seeks, that he was entitled to earnings-related compensation from
1992 onwards. The appeal process ran its course, culminating in the High Court judgment of Chisholm J in 1998. If the entitlement is truly arguable and never dealt with by the Authority or this Court on appeal for some explicable and acceptable
reason, then a remedy might be available.
36 Payne v Payne, above n 26, at [14].
Disposition of the Questions for Answer
[94] For the reasons above, I answer the question/s as follows:
Q: Does the Authority have the power to recall an earlier sealed decision and is it relevant whether a higher court has upheld the decision?
(1) The Authority does not have the power to recall an earlier sealed decision.
(2) It does not otherwise have the power to recall an earlier decision which has been upheld by a higher court as that is irrelevant.
[95] I conclude that it was not open to the Authority to recall its 1995 decision and its 2014 decision was in this respect made in error.
…………………………………
Nicholas Davidson J
Solicitors:
Young Hunter, Christchurch
W A Forster, Barrister Dunedin
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