Alliance Group Limited v Accident Compensation Corporation
[2024] NZHC 3930
•19 December 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2023-404-2746
[2024] NZHC 3930
UNDER The Accident Compensation Act 2001 IN THE MATTER OF
An application for special leave to appeal to the High Court on questions of law
BETWEEN
ALLIANCE GROUP LIMITED
Applicant
AND
ACCIDENT COMPENSATION CORPORATION
First Respondent
STEPHEN McLENNAN
Second Respondent
Hearing: 24 October 2024 Appearances:
H Evans for the applicant
No appearance for the first respondent (abiding) P Schmidt for the second respondent
Judgment:
19 December 2024
JUDGMENT OF CAMPBELL J
This judgment was delivered by me on 19 December 2024 at 04.00 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
ALLIANCE GROUP LTD v ACCIDENT COMPENSATION CORPORATION [2024] NZHC 3930 [19
December 2024]
Introduction
[1] In December 2008, Mr McLennan made a claim under the Accident Compensation Act 2001 (the Act) that he had suffered personal injury while at work. His employer, Alliance Group Ltd (Alliance), which is an accredited employer under the Act, declined Mr McLennan’s claim in July 2009.
[2] Mr McLennan applied for a review of Alliance’s decision. In June 2011, a reviewer quashed the decision and directed that Alliance reconsider Mr McLennan’s claim. Alliance did so, and in December 2012 again declined the claim.
[3] In 2017, Mr McLennan instructed a neuropsychiatrist, Dr Gil Newburn, to provide a report on Mr McLennan’s symptoms. At about the same time, Mr McLennan applied for a review of Alliance’s December 2012 decision. In August 2018, a reviewer dismissed Mr McLennan’s application for review.
[4] Mr McLennan promptly appealed against the reviewer’s decision. In May 2021, Judge P R Spiller allowed the appeal. The Judge found that Mr McLennan had suffered a personal injury at his workplace. The Judge remitted the matter for a further review to determine whether certain criteria in s 30 of the Act had been satisfied.
[5] In December 2021, an occupational physician, Dr John Monigatti, provided an opinion to the effect that the s 30 criteria were not satisfied. In January 2022, the reviewer dismissed Mr McLennan’s application for review on the basis there was no medical or expert evidence to counter Dr Monigatti’s opinion.
[6] In February 2022, Mr McLennan appealed against the reviewer’s January 2022 decision. Dr Newburn and Dr Monigatti provided further reports for the appeal. On 4 April 2023, Judge Spiller allowed the appeal.1 The Judge found that the s 30 criteria were satisfied, and that Mr McLennan therefore qualified for cover under the Act.
[7] Alliance wishes to appeal against Judge Spiller’s decision. By s 162 of the Act, Alliance requires leave to appeal. On 25 October 2023, Judge D L Henare refused
1 McLennan v Accident Compensation Corporation [2023] NZACC 54.
leave to appeal on the basis that no points of law were raised that were capable of bona fide and serious argument.2
[8] Alliance now applies for special leave to appeal. It says its appeal would raise questions of law that are capable of bona fide and serious argument.
[9] The purpose of requiring leave for certain appeals is to ensure that scarce judicial time is allocated sensibly.3 Special leave will be granted only where the question of law is “capable of bona fide and serious argument”.4 The question must arise “squarely” from the challenged decision.5 It will normally also be necessary that there is an issue of principle at stake or that a considerable amount hinges on the decision.6 Even if these matters are satisfied, the court has a discretion whether to grant leave.7 Relevant considerations are the desirability of finality of litigation and the overall interests of justice.8
[10] I refuse to grant special leave. Alliance’s proposed appeal would give rise to questions of law capable of bona fide and serious argument. But the predominant factor on this application is the delay that has already occasioned Mr McLennan’s claim under the Act. He made the claim 16 years ago. He has been through two rounds of reviews and appeals. In these circumstances, the desirability of finality of litigation outweighs any considerations that may favour the grant of special leave to appeal.
Background
[11] In early 2005, Mr McLennan commenced work as a shepherd at Alliance’s freezing works. His workplace activities included spraying sheep with an agricultural product that contained glutaraldehyde.
2 Alliance Group Ltd v Accident Compensation Corporation [2023] NZACC 172.
3 Kenyon v Accident Compensation Corporation [2002] NZAR 385 (HC) at [15] citing Sandle v Stewart [1982] 1 NZLR 708 (CA).
4 Chalmers v Accident Compensation Corporation [2023] NZHC 925 at [39] citing Impact Manufacturing Ltd v Accident Rehabilitation and Compensation Insurance Corporation HC Wellington AP266/00, 6 July 2001 at [4].
5 YZ v Accident Compensation Corporation [2020] NZACC 160 at [19] citing O’Neill v Accident Compensation Corporation DC Wellington 250/2008, 8 October 2008 at [24]–[26].
6 Kenyon v Accident Compensation Corporation [2002] NZAR 385 (HC) at [15].
7 Gilmore v Accident Compensation Corporation [2016] NZHC 1594 at [29].
8 Sandle v Stewart [1982] 1 NZLR 708 (CA) at 715; Cullen v Accident Compensation Corporation [2014] NZCA 94 at [5].
[12] From July to December 2008, Dr Stephen Dawson, a general practitioner, recorded that Mr McLennan reported chest pains, coughing up blood, constant headaches, a sore throat, burning in the chest, a racing heart, and a very inflamed nasal mucosa. On 10 December 2008, Mr McLennan claimed cover for personal injury owing to “exposure to chemical fumes”. In a separate claim lodged by Dr Dawson, it was submitted there had been “exposure to glutaraldehyde in spray”.
[13]In February 2009, Mr McLennan stopped working at the plant.
[14] On 8 July 2009, Alliance declined Mr McLennan’s claim. Alliance accepted that Mr McLennan may have experienced symptoms after exposure to glutaraldehyde. But Alliance was not satisfied that the symptoms could be shown to have been caused by a physical injury.
[15] Mr McLennan applied for a review of Alliance’s decision. On 13 June 2011, a reviewer quashed Alliance’s decision. The reviewer considered Alliance had not properly investigated Mr McLennan’s claim. The reviewer directed that, before Alliance issued a new decision, Mr McLennan be referred to a respiratory specialist to carry out respiratory function testing and to an occupational physician to investigate Mr McLennan’s claim and explore whether there were systemic toxic effects.
[16] On 17 December 2012, after completing the required process, Alliance declined Mr McLennan’s claim for a work-related gradual process injury resulting from exposure to glutaraldehyde. Alliance considered there was no evidence that his symptoms could be causally linked to a physical injury and, in particular, glutaraldehyde.
[17] On 25 August 2017, counsel for Mr McLennan engaged Dr Newburn to provide an opinion on: what diagnosis best fitted Mr McLennan’s symptoms and presentation; what was the most likely cause of these symptoms; why Mr McLennan’s symptoms persisted well after his exposure to stock wash stopped; and the usefulness of patch testing and respiratory testing to determine glutaraldehyde poisoning. On 31 October 2017, Dr Newburn reported:
Mr McLennan presents with a neurotoxic syndrome secondary to exposure to glutaraldehyde. At the age of fifty-two he had an onset of symptoms, in a familiar work environment, with no prior evidence through his life before this set of symptoms that he was an individual subject to abnormal illness behaviour. There is no evidence previously of any dependency seeking behaviour, nor of the use of medical or surgical symptoms in order to foster an avoidance of work responsibilities, or indeed of life responsibilities generally. Rather, the opposite is the case. Following exposure to glutaraldehyde, he developed a set of symptoms, also reported by others in his workplace, and in other environments (e.g. Judgement of Judge Nicola Mathers) which are consistent with data set out in other documents (e.g. Department of Labour Guidelines on Occupational Use of Glutaraldehyde), and other research (Glass, 1997) in a New Zealand setting. He presents with a typical range of symptoms seen in neurotoxic syndromes, which match also those described by Glass (1997), and a course that is typical for those who have developed neurotoxic syndrome from a broad range of organic solvent compounds.
Dr Beasley, while sitting on the fence somewhat initially, provides an opinion that the concentration of glutaraldehyde as measured in the work environment was too low to be associated with injury. Unfortunately, this relates only to a general statistical measure, and takes no account of individual’s sensitivities. It is notable in the work environment that there was no protective clothing, and masks to provide respiratory filters. Therefore, and whatever the air concentration showed, there is no specific measure of personal exposure. While it is second-hand information, the information is nevertheless that others developed similar, albeit less severe, symptoms within the same environment, with the exception of the case referred to by Judge Mathers.
There is no evidence of any other disorder. While there is some anxiety in relation to his symptoms, this is commensurate with his symptoms, and is not an abnormal reaction. It has not prevented his return to work, and is not associated with any other disabling process. There is no evidence for depressive illness, or any other psychiatric process.
I note other assessment has ruled out an allergic skin or respiratory reaction. He does continue to have upper respiratory symptoms, but it is outside my expertise to comment on these further. I do note however that the absence of evidence for an allergic reactivity bears no relationship to the development of a neurotoxic syndrome.
[18]In response to the specific questions posed to him, Dr Newburn reported:
1. What diagnosis best fits Mr McLennan’s symptoms and presentation?
This is a neurotoxic syndrome consequent upon exposure to probably glutaraldehyde within the stock wash material. The combination of cognitive, behavioural and physical symptoms matches those described in other documents including that by Glass (l 997), matches other data described by others exposed to glutaraldehyde, particularly in the health industry, and also those described by others in relation to other forms of organic solvent neurotoxicity arising from a broad range of well-described compounds.
2. What is the most likely cause of these symptoms?
Glutaraldehyde, within the Stockwash product he was exposed to in his work as a shepherd at the Pukeuri Freezing Works. There is no history of exposure to any other neurotoxic compound. There is no evidence for any other form of abnormal reactivity to workplace changes, with a long history of capacity to manage hard work, long hours, and stressful environments. There is no evidence for any models of exposure to dependency seeking behaviour in his formative or later years, nor indeed any evidence for the presence of this. In the absence of such history, it would be highly unusual to present with abnormal illness behaviour or psychogenically determined symptoms at the age of fifty-two. On the basis of probability this is far more likely to be due to toxin exposure. Similarly, there is no other evidence for any other condition present which would explain his symptoms.
3. Mr McLennan’s symptoms persisted well after his exposure to Stockwash stopped. What is the best explanation for this?
The usual pattern of development of neurotoxic syndromes with exposure is that symptoms will appear in the setting where there is exposure, and for a variable period of time (except with a very large acute exposure), will settle away from that environment. Gradually over time, symptoms will become more severe over the course of exposure, and take longer to settle away from this environment, until they reach a point where even removal from the environment does not lead to settling of the symptoms. At some point, which is variable from individual to individual, the symptoms will become permanent. It is notable in Mr McLennan’s case that while the history he initially provides, and that which has been focussed on by others, is on a sudden onset of symptoms in April 2008, he had in fact been developing symptoms for some months prior to this. In this regard, he was probably his own worst enemy, as, given his nature of being hardworking and wanting to do the best job possible, he had simply continued in the employment situation, with no complaint. It was not until a more severe level of symptoms broke through, and did not settle readily, that he voiced concern. Even then, his level of concern voiced was extremely limited initially, and he struggled to continue to work until the end of 2008. This is not the pattern of an individual who is avoided of work, or who is looking for excuses to become dependent. Thus, he presents with a typical pattern of chronic symptoms once he has crossed a particular threshold of symptoms being maintained with exposure over a prolonged length of time.
4. Mr McLennan has undergone patch testing and respiratory testing. Can you please comment on the usefulness of such testing in coming to a determination about glutaraldehyde poisoning?
I note that my expertise relates to the brain, and not to respiratory or dermatology conditions. Testing has shown no evidence of allergic reactivity. However, this does not preclude the development of neurotoxicity and indeed bears little relationship to this. Neurotoxicity relates to chemical effects of organic solvents on the brain and its function, and not to an allergic process, and therefore the absence of evidence of allergic reactivity in no way precludes a diagnosis of neurotoxicity.
I note that Mr McLennan has not had any specific therapeutic input for neurotoxicity. There are a number of areas where he could be assisted to maintain or develop a better quality of life. It would help him if these areas could be addressed.
[19] At about the time of seeking or receiving that report, Mr McLennan applied for a review of Alliance’s December 2012 decision.9 On 6 August 2018, a reviewer dismissed Mr McLennan’s application for review. The reviewer considered that Mr McLennan had not established that he had sustained any physical injury as a result of exposure to glutaraldehyde while working as a shepherd.
[20] On 9 August 2018, Mr McLennan appealed against the reviewer’s decision. Judge Spiller allowed the appeal on 6 May 2021.10 The Judge found that Mr McLennan had suffered a personal injury as a result of exposure to glutaraldehyde in his workplace. The Judge was satisfied that Mr McLennan had presented sufficient evidence to establish causation on the balance of probabilities. The Judge remitted the matter for a further review to determine whether the criteria in s 30 of the Act (which sets out the circumstances in which the Act covers personal injury caused by a work- related gradual process) had been satisfied.
[21] At the relevant time, s 30(2) required Mr McLennan to meet three criteria in order to be covered:11
(a)Mr McLennan performed an employment task, or was employed in an environment, that had a particular property or characteristic;
(b)The particular property or characteristic must have caused, or contributed to the cause of, Mr McLennan’s personal injury, and not be found to any material extent in his non-employment activities or environment; and
(c)Mr McLennan’s risk of suffering his personal injury must have been significantly greater for persons who perform his employment task or
9 The date on which Mr McLennan made this application for review was not clear from the record.
10 McLennan v Accident Compensation Corporation [2021] NZACC 73.
11 I have taken this summary from Judge Spiller’s judgment (McLennan v Accident Compensation Corporation [2023] NZACC 54 at [25]), which Mr Evans adopted in his submissions.
who are employed in that type of environment, than for persons who do or are not.
[22] The Court had already found that Mr McLennan met the first criterion. Alliance and the Accident Compensation Corporation (the Corporation) accepted that the second criterion was met (in that he did not have exposure to glutaraldehyde in his non-work activities). The third criterion was at issue on the remitted review. Did persons exposed to glutaraldehyde in stock wash have a significantly greater risk of suffering from glutaraldehyde poisoning than persons who were not exposed to glutaraldehyde in stock wash?
[23] On 5 December 2021, Dr Monigatti provided a report on that issue. In response to specific questions asked of him, he reported:
1) What is the risk of a person carrying out the relevant task in the relevant work environment developing the injury concerned – i.e. neurotoxic syndrome (“x”)?
There is no known risk.
2) What is the risk of persons not performing that task in that environment suffering from that personal injury (“y”)?
There is no known risk.
3) Is “x” significantly greater than “y”?
No.
[24] On 13 January 2022, the reviewer dismissed Mr McLennan’s review. The reviewer considered there was no medical or expert evidence to counter the opinion of Dr Monigatti, and so Mr McLennan did not meet the criteria for a work-related gradual process injury.
[25]On 8 February 2022, Mr McLennan appealed against the reviewer’s decision.
[26]On 1 April 2022, Dr Newburn provided a further report in which he stated:
In short, the risk of glutaraldehyde poisoning is significantly greater for workers employed in an environment where there is exposure to glutaraldehyde than for persons who do not work in such an environment. This is simply because glutaraldehyde is not a naturally occurring chemical or
a common household substance. Workers exposed to glutaraldehyde have some risk of being poisoned while persons not exposed to glutaraldehyde have zero risk of being poisoned.
[27] In a further report dated 25 August 2022, Dr Monigatti maintained his position that persons employed in a work environment where there was exposure to stock wash containing glutaraldehyde were not at significantly greater risk of being poisoned by glutaraldehyde than persons who did not work at such an environment. He said that Dr Newburn had not furnished any objective evidence to the contrary, only opinion.
[28] Mr McLennan’s appeal against the Reviewer’s decision was then heard by Judge Spiller, who delivered a reserved judgment on 4 April 2023.
Judge Spiller’s decision
[29] Judge Spiller said that the issue on the appeal was whether persons exposed to glutaraldehyde in stock wash have a significantly greater risk of suffering from glutaraldehyde poisoning than persons who are not exposed to glutaraldehyde in stock wash. The Judge said this comparison “involves consideration of medical evidence along with the application of judicial impression and should be resolved by analysis of all the facts in the case”.12
[30] The Judge noted the submissions of Alliance and the Corporation that the evidence of Dr Newburn was not admissible because he had no expertise in toxicology (the area of expertise that they submitted was required for expert opinion evidence to be helpful to the Court), that by contrast Dr Monigatti was registered as an occupational physician, and that in any event the evidence of Dr Monigatti should be preferred because he engaged more appropriately and directly than Dr Newburn with the test to be applied.
[31] The Judge referred to three considerations in response.13 First, he said that s 156(1) of the Act provides that the court may hear any evidence it thinks fit, whether or not the evidence would be otherwise admissible in a court of law. The Judge acknowledged that normally the court would require expert evidence of a medical
12 McLennan v Accident Compensation Corporation [2023] NZACC 54 at [26].
13 At [29]–[31].
practitioner qualified in the field of toxic disease conditions. However, he found Dr Newburn’s evidence to be admissible and entitled to weight by virtue of his medical qualifications, because his analysis was consistent with relevant medical literature and guidelines, and because of his ongoing close knowledge of Mr McLennan’s working environment and health symptoms.
[32] Secondly, the Judge said he was mindful that he had found (in his 6 May 2021 decision on Mr McLennan’s first appeal) that Mr McLennan suffered a personal injury as a result of exposure to glutaraldehyde in his workplace. The Judge said that in his reasons for that finding he had repeatedly noted that Mr McLennan suffered a personal injury as a result of his “exposure to glutaraldehyde” in his workplace, rather than “neurotoxic syndrome”. Dr Newburn stated in his report that he used the term “neurotoxic syndrome” to refer to the effects of glutaraldehyde poisoning. The Judge said he was satisfied that Dr Newburn had addressed the correct issue.
[33] Thirdly, the Judge highlighted Dr Newburn’s opinion that the risk of glutaraldehyde is significantly greater for workers employed in an environment where there is exposure to glutaraldehyde than for persons who do not work in such an environment. The Judge noted Dr Newburn’s reasons for that opinion.
[34]Having referred to those considerations, the Judge said:
[32] This Court finds that Dr Newburn’s medical opinion proceeds logically from as clear or settled a basis of fact as is possible; provides an appropriate analysis of that factual material; shows an appropriate level of regard for and consideration of medical research and studies bearing on the issue at hand; and comes to a logically reasoned conclusion.
[35] The Judge said that in light of the above considerations he found that persons exposed to glutaraldehyde in stock wash have a significantly greater risk of suffering from glutaraldehyde poisoning than persons who are not exposed to it. He therefore found that Mr McLennan qualified for cover under the Act, and allowed the appeal.
Judge Henare’s decision refusing leave to appeal
[36] Alliance wishes to appeal against Judge Spiller’s decision. By s 162 of the Act, Alliance can appeal only with leave. In accordance with s 162(1), Alliance
applied in the first instance to the District Court for leave to appeal. Alliance raised two questions of law: did Judge Spiller err in admitting Dr Newburn’s evidence, and did the Judge correctly apply the significantly greater risk test in s 30(2)(c)(ii) of the Act? The Corporation supported Alliance’s application for leave.
[37] Judge Henare refused to grant leave to appeal. The Judge found that neither of the two proposed questions of law were capable of bona fide and serious argument to qualify for a grant of leave.
Alliance’s application for special leave to appeal
[38] Under s 162(3), if the District Court refuses to grant leave to appeal, this Court may grant special leave.
[39]Alliance has three proposed grounds of appeal:
(a)Dr Newburn’s evidence should not have been admitted. The Judge failed to apply the “substantial help” test for admissibility of expert opinion evidence in s 25 of the Evidence Act 2006. Dr Newburn’s opinion was not substantially helpful because he is a psychiatrist, not an occupational physician.
(b)Judge Spiller failed to give reasons as to why s 25 of the Evidence Act did not apply to Dr Newburn’s evidence and as to why Dr Newburn’s evidence should be preferred over Dr Monigatti’s evidence.
(c)Judge Spiller failed to correctly apply the legal test under s 30(2)(c) of the Act.
[40] Mr Evans, counsel for Alliance, submitted that each of these grounds raised a question of law that was capable of bona fide and serious argument. He said that there was an inconsistency of approach in the District Court to the application of s 25 of the Evidence Act, and that there was therefore an issue of principle at stake. He said special leave should therefore be granted.
[41] The Corporation abided the decision of the Court on Alliance’s application and did not take any part in it.
Should special leave be granted?
[42] I consider that Alliance’s first two grounds of appeal would give rise to questions of law that would be capable of bona fide and serious argument.
[43] As to the first ground, while Judge Spiller acknowledged that the Evidence Act remained the framework within which all evidence is admitted and considered,14 and gave reasons as to why he considered Dr Newburn’s evidence was admissible,15 he did not refer to s 25 of the Evidence Act or to the “substantial help” test contained within s 25. It is seriously arguable that he failed to apply that test and that, were it to be applied, Dr Newburn’s evidence would not be admissible.
[44] As to the second ground of appeal, the Judge gave reasonably detailed reasons as to why he accepted Dr Newburn’s evidence. His reasons did not, however, engage with Dr Monigatti’s evidence. He therefore did not explain why he preferred Dr Newburn’s evidence over Dr Monigatti’s. As Mr Evans submitted, the factual dispute on which the two experts offered opinions was not straightforward and was contentious. In those circumstances, it is seriously arguable that the Judge should have provided reasons for preferring Dr Newburn’s evidence over Dr Monigatti’s and that the failure to do so was itself a ground of appeal.16
[45] The third ground of appeal would not give rise to a seriously arguable question. Judge Spiller did not misapply s 30(2)(c). His application of that section simply reflected his acceptance of Dr Newburn’s evidence.
[46] I consider that the first two questions raise issues of principle. The interaction between s 156 of the Act and s 25 of the Evidence Act appears not to have been directly addressed. The extent to which reasons should be given for preferring one expert over
14 At [24], referring to MacMillan v Accident Compensation Corporation [2014] NZACC 154.
15 At [29].
16 Flannery v Halifax Estate Agencies Ltd [2000] 1 WLR 377, [2000] 1 All ER 373 (CA).
another in the context of appeals to the District Court from reviewers’ decisions under the Act is of general importance to the judges who do that work in that Court.
[47] To be clear, however, I regard the two questions as no more than seriously arguable. Judge Spiller’s reasons were brief, but part of the context for that was that he had already, in his May 2021 decision, accepted an opinion of Dr Newburn in finding that Mr McLennan had suffered a personal injury as a result of exposure to glutaraldehyde in his workplace. The Judge might have thought it somewhat surprising that Dr Monigatti would then opine that there was no risk of a person carrying out Mr McLennan’s tasks in his work environment developing that injury. The Judge might have preferred to simply explain why he accepted Dr Newburn’s opinion on that issue, rather than engage with Dr Monigatti’s opinion. It might have been better if the Judge had engaged. But on any further appeal a court might reach the same conclusion as the Judge.
[48] These conclusions do not inevitably mean that I should grant special leave to appeal. I have a discretion in that regard. The most obvious consideration in that regard is the desirability for finality in this long-running dispute. Mr McLennan made his claim 16 years ago. I have, earlier in this judgment, detailed the passage of his claim in that time. Mr McLennan has been through two rounds of reviews, one of which had to be repeated. He has twice successfully appealed to the District Court from review decisions. In these circumstances, there is a very strong interest in bringing this dispute to an end.
[49] Overall, I consider that interest easily outweighs the interest that Alliance has in further pursuing two seriously arguable questions of principle. The questions are seriously arguable, but Alliance does not have a strong case. Accordingly, I refuse to grant special leave to appeal.
Result
[50]I refuse to grant special leave to appeal.
[51] If any issue as to costs arises, the parties may file memoranda. Each memorandum is to be no longer than three pages, excluding relevant schedules
or annexures. Mr McLennan is to file and serve his memorandum first, followed
within ten working days by Alliance’s memorandum.
Campbell J
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