Accident Compensation Corporation v Terry
[2018] NZCA 585
•13 December 2018 at 3.00 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA148/2018 [2018] NZCA 585 |
| BETWEEN | ACCIDENT COMPENSATION CORPORATION |
| AND | HAMAL TERRY |
| Hearing: | 13 November 2018 |
Court: | Miller, Dobson and Mander JJ |
Counsel: | D A Laurenson QC and J G Roberts for Appellant |
Judgment: | 13 December 2018 at 3.00 pm |
JUDGMENT OF THE COURT
AThe appeal is allowed.
BThe High Court erred in finding that ACC’s retrospective decision to accept Mr Terry for weekly compensation was flawed because ACC was obliged to and failed to update Mr Terry’s rehabilitation plan and to follow the vocational rehabilitation procedures set out in the Accident Compensation Act 2001.
CThere is no order for costs.
____________________________________________________________________
REASONS OF THE COURT
(Given by Mander J)
The Accident Compensation Corporation (ACC) appeals on a question of law a finding by the High Court that, in undertaking a retrospective assessment of a claimant’s entitlement to weekly compensation, it followed an incorrect process.[1]
Background
[1]Special leave was granted by this Court under s 163(2) of the Accident Compensation Act 2001: Accident Compensation Corporation v Terry [2018] NZCA 236.
In April 2006, Hamal Terry suffered a serious spinal injury. He was 17 years old at the time and in his final year of secondary school. He was admitted to hospital and underwent surgery before returning to school at the end of June.
ACC accepted him for cover under the Accident Compensation Act 2001 (the Act). That placed a number of statutory obligations on ACC and extended certain entitlements to Mr Terry. ACC was obliged to determine whether Mr Terry was likely to need social or vocational rehabilitation.[2] Mr Terry underwent a social rehabilitation assessment and an individual rehabilitation plan was prepared. That plan was never updated and did not address the issue of vocational rehabilitation. In November 2006, Mr Terry was notified by ACC that his file would be closed because no “active involvement”, presumably by ACC, “was required at that stage”.
[2]Accident Compensation Act, s 75.
In 2009, Mr Terry made a claim for weekly compensation. After providing information requested by ACC regarding details of his employment since leaving school, ACC obtained a retrospective assessment of Mr Terry’s incapacity from an occupational medical specialist. Based upon that report, ACC considered that Mr Terry was entitled to weekly compensation for loss of potential earnings from 15 December 2006 (the date he left school) to 31 October 2008. ACC determined that, because Mr Terry had not been incapacitated since 1 November 2008, his entitlement to weekly compensation ended on that day.
Mr Terry lodged a review against ACC’s determination that his incapacity had ended on 1 November 2008. In March 2012, the reviewer quashed ACC’s decision because it had been based upon insufficient medical information. It was directed to obtain an independent orthopaedic opinion and further medical evidence.
As part of its further investigation into Mr Terry’s claim, ACC obtained an occupational assessment report which identified a range of work type options suitable for a person of Mr Terry’s education, skills, training and work experience. A spinal evaluation and assessment report was obtained from a specialised spinal rehabilitation unit. A report was also obtained from an orthopaedic and spine surgeon.
These reports were referred to the original occupational medicine specialist who, in September 2012, issued his own report reviewing Mr Terry’s physical ability to engage in the identified work type options. In a final report issued in October of that year, the occupational medical specialist confirmed that from 1 November 2008, Mr Terry would have been capable of engaging in a number of the identified work type options.
After Mr Terry was advised that the new information confirmed that his incapacity had ended on 1 November 2008, and that he was not entitled to any weekly compensation beyond that date, he lodged a further review. This was dismissed in May 2013. Mr Terry appealed against that decision to the District Court.[3] After that appeal was dismissed, he obtained leave to appeal to the High Court.[4]
The High Court appeal
[3]Terry v Accident Compensation Corporation [2015] NZACC 109.
[4]Terry v Accident Compensation Corporation [2017] NZHC 118.
Cull J found that ACC’s determination that Mr Terry was no longer incapacitated after 31 October 2008 was flawed because it had relied on inadequate medical evidence to support its conclusions.[5] She also held that the District Court had failed to take into account relevant considerations when dismissing the earlier appeal and had erred in its finding it was open to ACC to find Mr Terry had capacity from 1 November 2008.[6] ACC does not challenge those findings.
[5]Terry v Accident Compensation Corporation [2017] NZHC 2352 [HC judgment] at [79]–[81].
[6]At [70] and [99].
However, the High Court also found that ACC’s determination that Mr Terry was no longer incapacitated was flawed because of defects in the procedure it followed. The Court found that ACC’s failure to update Mr Terry’s rehabilitation plan and to assess his vocational rehabilitation needs before deciding he was no longer incapacitated was a procedural error.[7]
[7]At [55]–[61].
In reaching that conclusion, the High Court held that ACC had conflated its decision that Mr Terry was entitled to weekly compensation from 15 December 2006 with its determination that Mr Terry was no longer incapacitated from 1 November 2008.[8] By doing so, ACC had rendered itself unable to discharge its statutory obligations to assess vocational rehabilitation and update Mr Terry’s individual rehabilitation plan. Having decided Mr Terry was entitled to weekly compensation, the High Court held that ACC was obliged to assess his vocational rehabilitation needs and review his plan before deciding that he was no longer incapacitated.[9]
The appeal
[8]At [56]–[57].
[9]At [60].
It is against those findings that ACC brings its appeal. The question of law for our determination is whether the High Court erred in finding that ACC’s decision that Mr Terry was no longer incapacitated was flawed because on retrospectively accepting the claimant for weekly compensation, it failed to update the claimant’s rehabilitation plan and to follow the vocational rehabilitation procedures set out in the Act.[10]
[10]Accident Compensation Corporation Act, ss 75, 87, 88 and 89.
ACC argued that the High Court was wrong in the circumstances of it making a retrospective determination of weekly compensation to find that it was under an obligation to carry out a vocational rehabilitation assessment. ACC submitted that its obligation to carry out such an assessment was triggered by the acceptance of cover and not the retrospective acceptance of an entitlement to weekly compensation. Because ACC also determined that Mr Terry was no longer incapacitated from a certain date and therefore no longer entitled to receive weekly compensation, it maintained it had no obligation to carry out a vocational rehabilitation assessment. ACC submitted any such requirement is contrary to the Act.
Because there is no challenge to the High Court’s finding regarding the inadequacy of the medical evidence and Mr Terry has already received retrospective compensation, the appeal has no bearing upon his claim. As a result, Mr Terry did not wish to be heard on the appeal. Mr Thompson was appointed as counsel to assist the Court to ensure any contrary arguments were before the Court. We are grateful to him for discharging that role.
The statutory framework — an overview
Whether ACC was required to assess Mr Terry’s vocational rehabilitation needs despite its determination that his weekly compensation ceased from 1 November 2008 is a question of statutory construction.
Cover and rehabilitation
On receiving a claim for cover for a personal injury under the Act, ACC must decide whether or not it accepts that the person has cover.[11] If it does, it must provide information about the claimant’s entitlements and facilitate access to those entitlements.[12]
[11]Section 50(1)(a).
[12]Section 50(1)(b).
Upon accepting that a claimant is covered, ACC assumes a number of statutory obligations. Under s 75 of the Act, it is required to determine within 13 weeks of accepting the claim whether the person is likely to need social or vocational rehabilitation after that 13 week period has ended. In such a case, ACC is required to assess the claimant’s needs for rehabilitation and prepare an individual rehabilitation plan in consultation with the claimant.[13] In doing so, ACC must assess the claimant’s needs for vocational rehabilitation.[14] The plan is required to be updated from time‑to‑time to reflect the outcome of assessments and progress made by the claimant.[15]
[13]Sections 75, 84, 87 and 89.
[14]Section 77.
[15]Section 78.
These are some of the obligations which the High Court considered ACC failed to discharge at the time it determined the question of Mr Terry’s entitlement to weekly compensation, and which resulted in an error of process.
Weekly compensation
A claimant who has cover and who lodges a claim for weekly compensation is entitled to receive compensation if he or she is incapacitated. Because Mr Terry was a “potential earner” at the time of his injury, the determination of his incapacity was required to be assessed under s 105 of the Act.[16] It provides that ACC must determine the incapacity of a claimant who is a potential earner, by determining whether the claimant is unable, because of his or her personal injury, to engage in work for which he or she is suited by reason of experience, education, or training, or any combination of those things.[17]
[16]Accident Compensation Act 2001, s 100(1)(d) and sch 1, cl 47; “potential earner” is defined in s 6 as meaning a claimant who either suffered a personal injury before turning 18 years or while engaged in full-time study that began before he/she turned 18 years and continued uninterrupted until after he/she turned 18 years. Section 103 of the Accident Compensation Act applies to a claimant who at the time of his or her personal injury was employed. Claimants who were earners at the date of their injury will be incapacitated if they are unable, because of their injury, to engage in employment in which they were employed when they suffered the injury.
[17]Section 105(2).
ACC retrospectively found that Mr Terry was entitled to receive weekly compensation for loss of potential earning capacity because he was incapacitated from the date he left school. However, it also determined that his incapacity ended on 31 October 2008.
Vocational rehabilitation
Section 85 of the Act provides that ACC is liable to provide vocational rehabilitation to a claimant who has suffered personal injury for which he or she has cover and is entitled to weekly compensation. The purpose of vocational rehabilitation is to help a claimant maintain or obtain employment or acquire vocational independence.[18] In deciding whether to provide vocational rehabilitation, ACC must have regard to various considerations.[19] These include whether the vocational rehabilitation is likely to achieve its purpose under the claimant’s individual rehabilitation plan.[20]
[18]Section 80.
[19]Sections 86 and 87.
[20]Section 87(1)(a).
ACC acknowledged that this mandatory consideration indicates that once it is decided a claimant is entitled to weekly compensation and it has been determined that the claimant is likely to need social or vocational rehabilitation after 13 weeks from acceptance of the claim for cover, if an individual rehabilitation plan assessing the claimant’s needs for vocational rehabilitation has not already been prepared, then that must be done.[21]
[21]Section 75.
ACC may from time-to-time determine the vocational independence of a claimant who is receiving weekly compensation and may require a claimant to participate in an assessment to determine that person’s vocational independence.[22] Vocational independence means the claimant’s capacity to engage in work for which he or she “is suited by reason of experience, education, or training, or any combination of those things” for 30 hours or more a week.[23] A determination that a claimant has vocational independence is to be regarded as a determination under s 105 that the claimant is no longer incapacitated.[24]
Discussion
[22]Sections 100(2) and 107(1).
[23]Section 6.
[24]Section 111(b).
The difficulty that arises in the present case derives from the retrospective application of the Act in the absence of any statutory framework as to how ACC is to deal with retrospective claims. This is not an uncommon situation. Retrospective claims are made reasonably frequently.[25]
ACC’s obligations to assess vocational rehabilitation
[25]Accident Compensation Corporation v Terry, above n 1, at [16].
The obligation on ACC to determine whether a claimant is likely to need social or vocational rehabilitation arises from ACC’s acceptance of a person’s claim for cover.[26] It is limited to a determination under s 75 of the Act of the likely need for rehabilitation after the elapse of the 13 week period from when cover was accepted, in which event an individual rehabilitation plan is required to be prepared.
[26]Accident Compensation Act, s 75.
An individual rehabilitation plan was prepared for Mr Terry in 2006, when he was still at school. While it addressed his social rehabilitation needs, it does not appear that ACC specifically considered the question of vocational rehabilitation, and no vocational plan was prepared. On ACC’s own assessment Mr Terry’s incapacity continued for almost two years after he left school. However, his needs for vocational rehabilitation were not assessed during this period.
Notwithstanding ACC’s obligations under s 75 at the time it accepts a claimant’s claim for cover, a discrete liability to provide vocational rehabilitation arises when it determines a claimant is entitled to weekly compensation as a result of being incapacitated. ACC becomes liable under s 85 of the Act to provide that person with vocational rehabilitation.[27] Various matters are required to be considered in deciding whether to provide vocational rehabilitation. These include whether such rehabilitation is appropriate in the circumstances, its cost effectiveness, and whether it is likely to achieve its purpose under a claimant’s individual rehabilitation plan.[28] The assessment of a claimant’s vocational needs must consist of 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 so identified are, or are likely to be, medically sustainable for the claimant.[29]
[27]Section 85(1)(b)(i).
[28]Sections 86–87.
[29]Section 89.
In either case, whether pursuant to s 75 or s 85, the obligation to provide vocational rehabilitation derives from the claimant’s entitlement to be provided with rehabilitation to assist in restoring the claimant’s health, independence, and “participation to the maximum extent practicable”.[30] Where a claimant is in receipt of weekly compensation, ACC is under an obligation to assess and determine what, if any, vocational rehabilitation is required to help the claimant towards obtaining and maintaining employment or achieving vocational independence to the extent he or she is no longer incapacitated and therefore no longer in need or entitled to weekly compensation under the Act.
Separate means of determining a claimant is no longer entitled to weekly compensation
[30]Section 70(a).
Mr Laurenson QC, on behalf of ACC, emphasised to us that under the Act there are two processes that can result in a determination that the claimant is no longer entitled to weekly compensation. ACC can determine the claimant has achieved vocational independence, which is a finding that the person has the capacity to engage in work for which he or she is suited by reason of experience, education, or training.[31] The Act anticipates that such an assessment will occur following the provision of vocational rehabilitation.[32] Alternatively, ACC can determine the claimant is no longer incapacitated, which similarly requires a determination that the person is able to engage in work for which he or she is suited by reason of experience, education or training.
[31]Sections 111 and 112.
[32]Section 107(3).
However, there are significantly different processes by which these conclusions are reached. In order to be satisfied that a claimant is no longer incapacitated under s 105(2) and therefore no longer entitled to weekly compensation, ACC need only consider an assessment undertaken by a medical or nurse practitioner.[33] ACC may obtain professional or specialist advice, but that is at its discretion and is not mandatory.[34]
[33]Section 102(2)(a).
[34]Section 102(2)(b).
That process is to be contrasted with a finding of vocational independence which requires an occupational assessment by a specialist followed by a medical assessment by a qualified medical assessor.[35] These assessments are required to be undertaken in accordance with the requirements of the Act, which include the preparation of reports containing specified information addressing issues relating to a claimant’s experience and training and the person’s suitability to engage in particular work.[36]
Retrospective claims
[35]Section 108(1).
[36]Schedule 1, cls 24–29.
The Act entitles ACC to determine the question of a claimant’s incapacity “from time to time”.[37] In Mr Terry’s case, a retrospective determination was made as to when his incapacity started, and therefore when his entitlement to weekly compensation began. At the same time, a further retrospective determination was made as to when his incapacity came to an end, after which Mr Terry was no longer entitled to weekly compensation. No issue arises regarding ACC’s ability to accept a retrospective claim for weekly compensation based on a person’s past incapacity. Nor is it contested that ACC is entitled, in respect of such a retrospective claim, to determine when such a claimant’s incapacity, and therefore his or her entitlement to such compensation, ended.
[37]Section 102(1).
A prerequisite to ACC being liable to provide vocational rehabilitation is that the person who has cover under the Act is entitled to weekly compensation.[38] The effect of a determination by ACC that a claimant who was entitled to weekly compensation during a finite period in the past but is no longer incapacitated is that, as at the date of that determination, they are no longer receiving nor entitled to weekly compensation. ACC has determined that the claimant is able to engage in work for which he or she is suitable by reason of that person’s experience, education or training.[39] ACC’s liability to provide vocational rehabilitation to a claimant who is no longer incapacitated has passed.
[38]Section 85(1)(b)(i).
[39]Section 105(2).
Similarly, ACC’s ability to determine a claimant’s vocational independence is dependent on that person receiving weekly compensation.[40] While a claimant is receiving weekly compensation, ACC may determine that person’s vocational independence.[41] Section 106 of the Act expressly provides that if a determination is made by ACC under s 105(2) that the claimant is able to engage in work for which he or she is suitable by reason of experience, education or training, a claimant loses that entitlement immediately and cannot be subject to a determination of vocational independence under s 107 of the Act.
This case
[40]Section 107(1).
[41]Section 100(2)(c) and (d).
We consider that once it was determined that Mr Terry was no longer incapacitated and no longer entitled to weekly compensation, any obligation ACC had to assess his vocational rehabilitation needs under s 85 of the Act ceased. We do not consider the contemporaneity of the determinations of Mr Terry’s entitlement to weekly compensation, and when that entitlement ended, requires any gloss to be placed on the plain meaning of the legislation. Having made the assessment (rightly or wrongly) that Mr Terry had not been incapacitated for some years, ACC was under no obligation under the Act to assess his vocational independence.
Mr Thompson submitted that simultaneously determining the beginning and ending of incapacity circumvents the process envisaged by the Act, by which a claimant’s incapacity and rehabilitation needs can be assessed and over time revisited to ensure that, in accordance with the Act’s purpose and to the extent provided by it, claimants are rehabilitated to the maximum extent practicable.[42] He argued that a claimant will still often benefit from vocational rehabilitation even if the person is no longer incapacitated, and that an entitlement had accrued to Mr Terry to have his vocational rehabilitation needs assessed as a result of it being determined that he was eligible for weekly compensation. The retrospective nature of the decision should not mean that entitlement is lost.
[42]Sections 3 and 70.
We accept that had Mr Terry’s claim for weekly compensation been made and considered prior to the resolution of his incapacity, his then ongoing entitlement to weekly compensation would have obliged ACC to assess his vocational rehabilitation needs. He would likely have received the benefit of rehabilitation designed “to assist in restoring [his] health, independence, and participation to the maximum extent practicable”.[43] However, such counterfactuals can lead to speculation as to what the outcome may have been for Mr Terry. Arguably, access to rehabilitation, including vocational rehabilitation, may have led to Mr Terry not being assessed as retrospectively incapacitated for as long as he was, and therefore not entitled to weekly compensation for the period for which he was assessed.
[43]Section 70(a).
Mr Thompson argued that simultaneously determining the beginning and end of incapacity circumvents a statutory process whereby it is envisaged that once incapacity is determined, the claimant will receive the benefit of rehabilitation, or at least have the benefit of an assessment of the person’s rehabilitative needs. By not following such a process a claimant is being denied a rehabilitative entitlement which they may have otherwise received.
The difficulty with that argument is that it ignores the reality of the retrospective nature of Mr Terry’s claim. Mr Terry sought payment of the compensation that he was entitled to for the period he was incapacitated. The nature of the claim required ACC to assess Mr Terry’s entitlement to receive weekly compensation. Having determined when Mr Terry was no longer incapacitated, and therefore no longer entitled to weekly compensation, there was no statutory basis upon which vocational rehabilitation could be provided to him. We do not accept that ACC’s assessment as to when Mr Terry became incapacitated could be isolated from its decision as to when his incapacity ended in the context of a retrospective claim for compensation.
Having reached that conclusion, we acknowledge that because Mr Terry’s entitlement to weekly compensation arose from his status as a potential earner, which only triggered when he left school, the issue of his eligibility for weekly compensation, in terms of his ability to engage in work for which he was suited by reason of experience, education and training, or any combination of those things, was particularly acute. Mr Terry, as a young man, has been unemployed for long periods and has struggled as a result of his injury to maintain work. He therefore has little vocational skills and experience to call upon.
ACC was permitted to determine the question of Mr Terry’s incapacity as a potential earner under s 105(2), which only requires it to consider an assessment by either a medical or nurse practitioner. ACC was not obliged to assess Mr Terry’s vocational independence which, as discussed at [31], would have required the involvement of an occupational specialist and the carrying out of a medical assessment in accordance with the prescribed process laid down in the Act.
While as a matter of statutory construction we have held that ACC is not required, when making a retrospective determination of a claimant’s past entitlement to weekly compensation, to carry out an assessment of that person’s vocational needs, in practice that may not always be the case. Mr Terry’s situation is a case in point. He was a student who suffered his injury before joining the workforce and before he had the opportunity to obtain further training and qualifications. The adequacy of the assessment that he was no longer incapacitated has understandably been the subject of close scrutiny.
Each retrospective claim will turn on its own facts and circumstances but, as the history of this case illustrates, ACC may not be able to discharge its obligations when determining the question of incapacity under s 105(2) without a very thorough assessment of whether a claimant is no longer incapacitated. Specialised occupational and medical reports may well be required to assess whether a claimant is able to engage in work for which that person would be suited. In Mr Terry’s case that is of some importance when regard is had to the apparent failure by ACC to determine whether he was likely to need vocational rehabilitation at the time he was accepted for cover and to address that issue in the individual rehabilitation plan that was prepared in 2006, shortly after he suffered his personal injury.
We do not consider that failure, which relates to an omission arising from ACC’s acceptance of cover, affects the procedural validity of the process ACC followed in determining Mr Terry’s entitlement to weekly compensation. However, the absence of any vocational rehabilitation assessment in the past may potentially bear on the quality of evidence necessary to allow ACC to justify a decision under s 105(2) of the Act that the claimant is no longer incapacitated.
Result
The appeal is allowed.
In answer to the question of law for which leave was granted, we conclude that the High Court erred in finding that ACC’s retrospective decision to accept Mr Terry for weekly compensation was flawed because ACC was obliged to and failed to update Mr Terry’s rehabilitation plan and to follow the vocational rehabilitation procedure set out in the Act.
There is no order for costs.
Solicitors:
Medico Law Ltd, Auckland for Appellant