Beveridge v Accident Compensation Corporation
[2016] NZHC 511
•23 March 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2015-404-002223 [2016] NZHC 511
UNDER the Accident Compensation Act 2001 IN THE MATTER
of an appeal to the High Court pursuant to s 162 of the Act
BETWEEN
ADELE BEVERIDGE Applicant
AND
THE ACCIDENT COMPENSATION CORPORATION
Respondent
Hearing: 9 March 2016 Appearances:
H Peart and P Schmidt for the Applicant
D Tuiqerqere for the RespondentJudgment:
23 March 2016
JUDGMENT OF MUIR J
This judgment was delivered by me on Wednesday 23 March 2016 at 4.30 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date:………………………….
Solicitors:
H Peart, Schmidt & Peart Law, Onehunga
P Schmidt, Schmidt & Peart Law, Onehunga
D Tuiqereqere, Medico Law Limited, Grey Lynn
BEVERIDGE v ACC [2016] NZHC 511 [23 March 2016]
Introduction
[1] The appellant seeks the special leave of the High Court to appeal in respect of
the following two questions which she says raise “important issues of law”:
(1)whether the District Court applied the correct legal test for the payment of interest as discussed in the Court of Appeal decision of ACC v Miller;1
(2)whether Work and Income New Zealand (WINZ) benefit information is “necessary information” under the definition in s 114 of the Accident Compensation Act 2001 (the Act) in the circumstances of this case.
Background
[2] On 20 January 2005 Ms Beveridge sustained a back injury at her place of work. She applied for and received ACC cover. This included earnings related compensation, it being accepted that she was incapacitated as a consequence of her injury.
[3] On 15 February 2005 a bone density scan identified features including osteoporosis.
[4] On 18 October 2005 an occupational medical report by Drs Adams and Callaghan diagnosed conditions of osteoporosis, compression fractures of the T6 and L4 discs and Chronic Pain Syndrome affecting the lumbar spine region with some features of central neurosensitisation. The report stated:
Adele’s compression fractures have healed adequately, however, she has developed a chronic pain syndrome.
[5] On 5 December she was reviewed by Dr Percival whose file note records
“diagnosis of a chronic pain syndrome … no compression factures … osteoporosis specialist”.
1 ACC v Miller [2013] NZCA 141 at [47].
[6] On 9 December 2005 she was seen by endocrinologist Dr Bagg who stated the applicant did not suffer from any compression fractures. Dr Bagg confirmed that the applicant had osteoporosis, the aetiology and management of which is discussed in his report.
[7] Between May and August 2006 she was reviewed by occupational physician Dr Dryson who, following an MRI scan, concluded “the cause of the underlying pathology producing Adele’s back pain is not known”.
[8] On 5 December 2006 pain specialist Dr Laubscher reported that the
applicant’s lower back pain was:
… consistent with the demonstrated disc lesion at L5/S1 and there are neurogenic features … It is more likely that she has persistent nociceptive pain and associated central sensitisation, though nerve root irritation cannot be excluded.
[9] Internal advice from ACC’s branch medical adviser Dr Sorley, dated 22
December 2006, records:
MRI shows an annular tear in the disc at the lumbosacral junction. This fits with the area of pain. In my opinion the current incapacity is likely to relate to the annular tear in which case cover would be applicable. The osteoporosis is a pre-existing condition which is present but unrelated to the injury. It may be pertinent to obtain a spinal surgical opinion with regards to management and you could ask/confirm the cover questions at the same time.
[10] In August 2007 the appellant was reviewed by orthopaedic surgeon Mr Otto. His report of 15 August 2007 concluded that the changes to the applicant’s spine apparent from the scans were better explained by her underlying pathology of osteoporosis rather than the effects of the covered injury. He acknowledged Dr Laubscher’s opinion but distinguished it saying:
She has been seen and examined by Dr Laubscher of the Pain Clinic and had an MRI scan completed, and emphasis was placed on the fact that there was an annular tear at L5-S1 and a minor central disc bulge, but it is well noted that the L5-S1 space is a large and forging space, and the MRI scan report on
9 August 2006 is, in my opinion, within normal limits for a woman of 48 years of age, and the tiny central disc bulge and annular tear are not the symptom producing issues in this case. She has clearly defined discomfort over the S1 joint in a pelvis that has demineralisation and softening of the
bone, and the changes are more in keeping with the effects of a strain on that joint than any disc pathology in the lumbar spine.
[11] The report concluded:
The underlying osteoporosis certainly explains the pain and discomfort in the mid thoracic region and that is a metabolic disorder, which is well established, and reflected by the effects of the stated injury event, and the persistence of symptoms, is now a reflection on the underlying pathological state of the bone and not the effects of the injury per se, which are well spent. A similar situation is applicable to the left SI joint area of complaint and discomfort. The stated of disc pathology in the spine has no contribution to her current clinical complaints. The basic pathology that persists causing symptoms in this woman is the underlying idiopathic osteoporosis.
(Emphasis added)
[12] Based on that report ACC suspended the applicant’s weekly compensation
entitlements from October 2007.
[13] The applicant challenged that decision and as part of the review and appeal process obtained further specialist advice from orthopaedic surgeon Mr Hooker in December 2007. He reported that it was “more likely than not that the injury of 20
January 2005 is a significant causative factor in Ms Beveridge’s continuing back pain”. He stated that in his opinion the most likely explanation was that the accident “caused a pre-existing asymptomatic condition [the osteoporosis] to become symptomatic”. He concluded that the applicant’s condition was “in large measure on the basis of the injury sustained on 20 January 2005 superimposed on a pre-existing but completely asymptomatic underlying condition”.
[14] On 29 January 2008 ACC dismissed the applicant’s application for review.
[15] In July 2009 the applicant obtained further evidence from rheumatologist Dr
Wigley. He reported among other things:
2) Is it likely that she had any degenerative condition affecting her
L5/S1 disc before the accident?
No, not in my opinion. She had no pain before the injury and the changes on MRI are best explained by an injury at that time causing internal disc disruption (Encl3). She also has sensory changes suggesting root pressure at L5 and/or S1. These changes were noted
by Drs Adams, Callaghan and Dryson and myself but may not have been adequately tested on other examinations. Presumably this has been present throughout. The protrusion was minor at the time of the MRI but it may have receded since the accident. Protrusion would be less lying down for the MRI than it would be with a spine under load. Standing MRI scans, done at some centres in the USA, are not available here.
3)On balance what is the predominant cause of her current incapacity?
Chronic nociceptive pain syndrome induced by disc injury and possible spinal strain and left sacroiliac strain. These factors may contribute to the continuation of the chronic pain syndrome.
[16] Thereafter and over the period of 1 September 2009 to 29 March 2010 Mr Otto and Dr Wigley traded further reports in which the diagnosis and causation was disputed.
[17] The matter came before District Court Judge Beattie in June 2010. He allowed the applicant’s appeal. Relevant findings are discussed later in this judgment.
[18] On receipt of his Honour’s decision ACC requested details from the applicant including tax forms, medical certificates and confirmation of WINZ benefits (all of which she acknowledges is standard practice). On 28 July 2010 WINZ informed ACC that the gross amount liable to be reimbursed to it under s 252 of the Act was
$16,776.28.
[19] On 2 August 2010 ACC paid the applicant backdated weekly compensation of $24,172.81, being the total of her entitlements less the reimbursement made to WINZ on account of benefits received by her over the intervening period.
[20] The applicant then applied for interest on the compensation payments, relying on the Court of Appeal decision of ACC v Kearney.2 That application was rejected in a decision dated 20 September 2010 which provided in part:
While your case bears some resemblance to Kearney, there are two important distinctions. Firstly, the original decision to stop paying weekly compensation in your case was not unlawful, and secondly, further
2 ACC v Kearney [2010] NZCA 327.
information was provided after ACC’s initial decision (Dr Wigley’s reports), which was not available to ACC at the time the initial decision was made, but which ultimately supported the decision at the final review.
[21] I infer that the reference to “final review” is to the appeal decision of Judge
Beattie.
[22] An application to review that decision was dismissed on 15 December 2010 following which the applicant appealed to the District Court. That appeal was placed on hold pending the Court of Appeal’s judgment in ACC v Miller.3
The District Court decisions
[23] On 27 August 2014 Judge Henare dismissed the appeal. She rejected the applicant’s submission that the facts of the case fell within either scenario 2 or 3 in [47] of Miller. She held that it was a scenario 4 case. Her reasons included:
· Dr Dryson considered the MRI scan did not assist causation, and
opined the pathology for the pain was “not known”.
· Dr Laubscher’s report of 5 December 2006 is “unclear”. He posits a
number of possibilities for the genesis of the pain.
· Mrs Beveridge’s persisting lower back pain “could not be explained”
in 2006 and she was referred to an orthopaedic surgeon.
· Mr Otto’s report is “clear and contemporaneous” identifying
osteoporosis responsible for the pain.
·Mr Otto’s report is “not ambiguous”. It was obtained to clarify the medical position, and it is “compelling”.
[24] Judge Henare’s essential findings were at [30] – [31] of her decision in terms:
[30] Applying Miller to the facts of this case, I find there is no doubt that this case falls within scenario 4. I find the Corporation’s decision to suspend entitlements on 19 September 2007 was made on the basis of the clear opinion of Mr Otto that Mrs Beveridge’s ongoing problems were due to an underlying osteoporosis condition. Mr Hooker’s report was consistent with that view. Dr Wigley’s reports took a contrary view that Mrs Beveridge’s condition was due to a pain syndrome. In the event, the District Court preferred Dr Wigley’s opinion but found the competing opinions were finely balanced.
3 ACC v Miller, above n 1.
[31] It therefore follows Mrs Beveridge will be entitled to interest from the date the Corporation received all necessary medical information to show the 2007 decision was wrong, and all necessary financial information to calculate the arrears payment. On the facts, the Corporation first received Dr Wigley’s report on 11 August 2009. Since Mrs Beveridge received a WINZ benefit, it sought financial information in order to make reimbursement, as it was obliged to do, under the Act, I find the Corporation received this information on 28 July and made the arrears payment on 2 August 2010. On this basis, the arrears payment was made within the one month period.
[25] The applicant then sought the leave of the District Court to appeal to the High Court. This was declined in a decision by Judge Harrison dated 1 September 2015. He set out the four scenarios in Miller and noted at [10]:
If the decision of the Corporation falls within any of the first three scenarios then the Court (of Appeal) held that interest is payable from the date of the decision cancelling or suspending the entitlement. Broadly, this is because the Corporation will have been at fault in reaching its decision. In scenario four however the Corporation will not have been at fault, if on all of the available evidence, its decision was correct, and only on later evidence is its decision quashed.
[26] His Honour concluded that Judge Henare’s decision was:
A finding of fact which cannot now be challenged. The Judge had before her all of the medical evidence that was before the Corporation when it made its decision.
[27] In reference to the second question on which the applicant seeks special leave his Honour held:
[15] The wording of section 114 is clear, and it requires that the Corporation has received all information necessary “to enable the Corporation to calculate and make the payment.
[16] As submitted by Mr Tui for the Corporation:
In the present case, at the time the Corporation received Dr Wigley’s report (in August 2009) the appellant was in receipt of a benefit. In line with s 252, the Corporation was required to reimburse WINZ any benefit payment. Therefore, the Corporation did not have all “financial information” in August 2009.
[28] His Honour concluded that “no question of law for reference to the High court has been identified” and accordingly declined the application.
[29] On 18 September 2015 the applicant filed an application for Special Leave to
Appeal to the High Court.
Legal test for special leave
[30] This is well established. In Kenyon v Accident Compensation Corporation Fisher J approved and adopted submissions of the Corporation in the following terms:4
(1) The purpose of requiring leave for certain appeals is to ensure that scarce judicial time is allocated sensibly: Sandle v Stewart [1982] 1
NZLR 708 (CA).
(2) Although it is ultimately a matter for the discretion of the Court, it will normally be necessary to show that there is an issue of principle at stake or that a considerable amount hinges on the decision, and that there is a reasonable prospect of success: Sandle; Manawatu Co-op Dairy Company Limited v Lawry [1988] DCR 509; Brown v Chowmein Fashions Limited (1993) 7 PRNZ 43.
(3) The fact that special leave is required is significant and suggests that leave ought not to be granted as a matter of course: O’Loughlin v Healing Industries Limited (1990) PRNZ 464.
(4) It is for the Applicant to show that leave is required in the interests of justice: Avery v No.2 Public Service Appeal Board [1973] 2
NZLR 86 (CA).
(5) As leave has already been refused by the District Court, however, there will normally have to be some extraordinary factor which has not been properly taken into account: Brown v Chowmein Fashions Limited (supra).
[31] In the most recent application of this test Woodhouse J noted that:5
[5] On an application for leave to the High Court there is the same initial requirement for the applicant to identify an error of law from the substantive District Court decision. But, in addition, the application to the High Court is for “special leave”. This draws a distinction between this application and the one dealt with by Judge Harrison. And the High Court retains a discretion – “the High Court may grant special leave to appeal”.
[32] The appellant must be able to identify a point of law capable of bona fide and serious argument. It is not, however, necessary for the High Court to determine the
4 Kenyon v ACC [2002] NZAR 385 (HC).
5 Thomas v ACC [2015] NZHC 3252 at [5].
point under debate.6 It is sufficient that a question or error of law be identified and have a realistic prospect of success.
[33] In the present case, however, both counsel for Ms Beveridge and the Corporation invite me to consider the substantive appeals in the event special leave is granted in relation to either question.
[34] In terms of what is a point of law I adopt the following frequently cited observations of Doogue J in Impact Manufacturing Ltd v ARCIC and Burns:7
[5] Whether or not a statutory provision has been properly construed or interpreted and applied to the facts is a question of law: Commissioner of Inland Revenue v Walker [1963] NZLR 339, 353-354 (CA); Edwards v BairstowI [1995] 3 All ER 48, 57; P & O Services (NZ) Ltd v ARCIC.
[6] Even where, as in this case, an appeal is limited to questions of law, a mixed question of law and fact is assailable as a matter of law: CIR v Walker, 354; P & O Services (NZ) Ltd v ARCIC, 6.
[7] It is well settled that a decision-maker’s treatment of facts can amount to an error of law. There will be an error of law where there is n o evidence to support the decision, the evidence is inconsistent with, and contradictory of the decision, or the true and only reasonable conclusion on the evidence contradicts the decision: Edwards v Bairstow, 57.
[8] The Court of Appeal in Lang v Eagle Airways Ltd [1996] 1 ERNZ
574, 576, cited Edwards v Bairstow in support of the following statement:
If those conclusions were not reasonably open to the Judge then this Court can rule, as a matter of law, that they are unsustainable and should be set aside …
[9] Whether or not particular evidence is relevant to a particular issue is a question of law: Ogilvy & Mather (New Zealand) Ltd v Turner [1996] 1
NZLR 641, 651-652.
Interest – statutory framework and case law
[35] The relevant statutory provision is s 114 of the 2001 Act which provides:
114 Payment of interest when Corporation makes late payment of weekly compensation
(1) The Corporation is liable to pay interest on any payment of weekly compensation to which the claimant is entitled, if the Corporation
6 ACC v Hawke [2013] NZHC 2982.
7 Impact Manufacturing Ltd v ARCIC and Burns HC Wellington AP266/00, 6 July 2001.
has not made the payment within 1 month after the Corporation has received all information necessary to enable the Corporation to calculate and make the payment.
(2) The Corporation is liable to pay the interest –
(a) at the rate for the time being prescribed by, or for the purposes of, section 87 of the Judicature Act 1908; and
(b) from the date on which payment should have been made to the date on which it is made.
[36] Prior to the Court of Appeal’s decision in Miller8 there was, in the case of a claimant who had received weekly compensation which had subsequently been stopped but then later reinstated on review or appeal, uncertainty as to when the Corporation had received “all information necessary” for the purposes of s 114. The point at which the Corporation had “all information necessary” in turn determined whether interest was payable from the date payments were stopped (in light of the fact that the primary decision had later been quashed) or some later date.
[37] In Kearney v ACC9 the Court of Appeal determined that interest was payable in that case from the date weekly compensation payments were stopped because the respondent had unlawfully ceased the payments.
[38] In Miller the High Court applied Kearney to mean that a claimant was entitled to interest in every case from the date payments were stopped and where the respondent’s decision in doing so was later quashed on review or appeal.
[39] The Court of Appeal did not, however, agree. It postulated four possible scenarios in which the Corporation might make a decision to cancel or suspend compensation which was later overturned on appeal being:10
(1) the Corporation makes an error in interpreting the Statute;
(2) the Corporation misinterprets medical advice;
8 Miller v ACC, above n 1.
9 ACC v Kearney, above n 2.
10 Miller v ACC, above n 1 at [47].
(3)the Corporation receives and correctly interprets ambiguous medical advice and reaches the conclusion that the compensation ought to be cancelled, but later advice reveals that decision to be incorrect; and
(4)the original medical advice provided to the Corporation conclusively supports the cancellation of compensation, but later advice reaches a different conclusion.
[40] In respect of scenarios (1) – (3) the Court of Appeal held that interest was payable from the date the weekly compensation payments were stopped. In respect of scenario 4, however, it held that interest was not payable until the Corporation had received “all necessary information” including the conflicting medical advice but bearing in mind the further principle that a claimant should never be penalised for failure to provide information that has not been requested by the Corporation.
[41] At [55] the Court of Appeal concluded in respect of scenario 4:
At the point at which compensation is withdrawn the Corporation does not have the necessary medical information. That is because the available medical evidence does not support continued cover. Although the necessary financial information may be known, that will not be sufficient.
[42] In Cullen v ACC11 the Court of Appeal further decided that where, following cancellation of compensation payments, a claimant has been in receipt of WINZ benefits, interest is not payable on the amount of such benefits refunded to WINZ under s 252 of the Act after the reinstatement of compensation. In that case the Corporation had (somewhat inconsistently with the position adopted in this case) allowed interest on the net amount of the backdated compensation after repayment of WINZ, but not on the WINZ amount. Its position was upheld. The Court of Appeal further found that the WINZ payments were, pursuant to s 252(6) of the Act, “deemed for all purposes” to have been paid in respect of the weekly compensation
entitlement.
11 Cullen v ACC [2014] NZCA 94.
[43] Reviewing this trilogy of Court of Appeal cases I distil the following principles:
(a) The purpose of s 114 is both punitive and compensatory.12 The section is intended to both compensate claimants for delays in processing their entitlements and to deter the Corporation from unnecessary delay.13
(b) Where compensation was, in hindsight, wrongfully cancelled by the Corporation the claimant cannot be made whole without being paid interest from the date of wrongful cancellation.14 Without interest from the date of “wrongful” cancellation the claimant will be in an economically worse off position due to the late payments, and as a necessary corollary the Corporation will have benefited.15
(c) Whether or not interest is payable to a claimant is not dependent on considerations of fault.16 However, it can be acknowledged that in all cases bar scenario 4 cases the Corporation was at fault for the decision to cancel compensation.17
(d) Where the evidence at the time the Corporation cancelled the compensation was conclusive, or in other words a scenario 4 case, interest can only accrue from the date of the medical opinion that recommends reinstatement of compensation. It is only at that time that the Corporation had “all information necessary” under s 114.18 The focus of the enquiry is when it can be said that the Corporation is first in possession of the necessary information to make the same decision as that eventually reached on review
or appeal.19
12 ACC v Miller, above n 1,at [40]; Cullen v ACC, above n 11 at [10].
13 ACC v Miller at [40].
14 Kearney v ACC, above n 2 at [35]; Cullen v ACC, above n 11 at [10].
15 Kearney v ACC, above n 2 at [31].
16 ACC v Miller, above n 1 at [57].
17 ACC v Miller, above n 1.
18 ACC v Miller, above n 1 at [55].
19 ACC v Miller, above n 1 at [41].
(e) Claimants should not be penalised for failure to provide information that has not been requested by the Corporation.20 Any subsequent lack of information is due to the Corporation’s decision to cancel compensation, (whether or not that decision was “at fault”), and thereafter the failure of the Corporation to continue to ask for information.21
(f) There is an “air of unreality” about any suggestion that requires a claimant whose entitlement has been cancelled or suspended to send in proof of their earnings or benefit receipts to the Corporation on a regular basis to preserve their entitlement to interest, on the chance that they establish it was
wrongly cancelled or suspended at a later time.22
(g) The claimant cannot receive a double benefit from WINZ and the Corporation; to that end interest is not recoverable on the WINZ payments received in the place of compensation from the Corporation.23 Section 252 of
the Act is aimed at preventing double recovery.24
Issue 1
Submissions
[44] In his written submissions Mr Peart submitted that Judge Henare had erred in focusing on whether Mr Otto’s views were “ambiguous” or “conclusive”. He said that the relevant inquiry was whether there was any competing evidence on the file at the time of cancellation of weekly compensation. He submitted that there was such evidence, relying particularly on the December 2006 report from pain specialist Dr Laubscher which he noted was cited by Judge Beattie at [14] and [17] in his decision.
[45] Relying on Dr Laubscher’s reference to the fact that the applicant’s lower back pain had “neurogenic features” with a “nociceptive focus” and that Dr Otto was
not, in the words of Judge Beattie, even “prepared to acknowledge there is such a
20 ACC v Miller, above n 1 at [50].
21 Miller v ACC HC Wellington CIV-2011-485-1702, 16 December 2011 at [38].
22 ACC v Kearney, above n 2 at [35].
23 Cullen v ACC, above n 11 at [15] – [16].
24 Cullen v ACC at [13].
condition as Chronic Pain Syndrome”, Mr Peart submitted that Mr Otto had simply failed to engage properly with Dr Laubscher’s views and that this was not a proper basis for a finding of conclusiveness. He said that Judge Beattie’s decision was based on all of the medical evidence on file, not just that of Mr Otto and Mr Wigley and that Judge Henare’s decision was at odds with those unappealed findings. He submitted that the only reasonable conclusion on the facts was that the case fell within Miller scenario 4 and that her Honour’s finding to the contrary therefore represented an error of law.
[46] In response Mr Tuiqereqere submitted that the question of whether the medical advice provided to the Corporation conclusively supported the cancellation of compensation turned on whether that advice was conclusive or decisive, not whether it was the only advice available. He submitted that despite the Court of Appeal’s reference in Miller at [50] to cases where “all medical evidence available to the Corporation pointed against compensation” the word “all” was not used by the Court in defining scenario 4 at [47]. This, he submitted, was for the very good reason, that ex hypothesi, in any situation where the Corporation has decided to cancel compensation, it will, at some stage, have received a previous report on which an award of compensation was based. He also postulated the case of a report from a general practitioner supporting cover but a subsequent report from a specialist with acknowledged expertise rejecting that assessment. In that case he submitted the Corporation could safely consider itself in possession of conclusive advice despite the previous report.
[47] Mr Tuiqereqere then undertook a very detailed analysis of all the medical evidence and of Judge Beattie’s decision. He emphasised, in particular, that Dr Laubscher had never made a diagnosis of Chronic Pain Syndrome (unlike Dr Wigley) and that, insofar as he had referred to neurogenic features and myofascial pain, this was on the assumption of an annular tear which Mr Otto found to have been fully resolved and which formed no part of Judge Beattie’s decision. Such decision, he submitted, was based on the existence of Chronic Pain Syndrome in
consequence of a “back strain injury”.25 This could, he said, be contrasted with the disc injury postulated as the underlying cause in Dr Laubscher’s report.
[48] He submitted that Mr Otto’s advice was emphatic, unequivocal and fully explained by the physical pathology (osteoporosis) which he said was the cause of Ms Beveridge’s pain. He emphasised Mr Otto’s finding that the effects of the injury per se were “well spent”, that he was qualified to make that call and that it was “conclusive”.
[49] In reply Mr Peart acknowledged that in deciding whether a case fell within Miller scenario 3 or 4 the Corporation (and any Court on appeal) is obliged to make what he termed a “qualitative assessment”. He did not suggest that in every case where the Corporation held an alternative view on file, Miller scenario 3 would be appropriate. However, in this case he submitted that there was ample and authoritative advice, in the form of Dr Laubscher’s report, pointing to a highly contentious fact scenario. He emphasised again Judge Beattie’s adoption of the Laubscher report as consistent with the subsequent findings of Dr Wigley.
Discussion
[50] The applicant’s acknowledgment that what is required under Miller scenarios
3 and 4 is a “qualitative assessment” is, in as many words, an acknowledgment of the factual nature of the inquiry conducted in each individual case. In assessing whether, in such a case, the medical advice is “conclusive” the Corporation (or District Court on appeal) must necessarily embark on an intensely fact specific inquiry belying much in the way of precedent value in any decision, including that of Judge Henare.
[51] This underscores the difficulty which the appellant faces in the present case because, apart from all the other constraints which apply on an application for special leave, the appellant must identify an error of law which, against the background I have described, necessitates a finding that Judge Henare’s decision was
not one which on the facts was reasonably open to her.
25 At [11] recording the appellant’s contentions.
[52] For myself, I do not find the outcome of this factual inquiry to be as clear cut as the learned Judge evidently did having regard to her finding that “there is no doubt that this case falls within scenario 4” but that does not of itself establish a proper basis for the grant of special leave. The test is whether, as a matter of reasoned analysis, the conclusion was, on the facts, open to the Judge. I have come to the conclusion that it was. In saying that I accept Mr Peart’s submission that the question is not whether Mr Otto’s report was ambiguous but whether at the point cancellation occurred it was reasonably open to the Judge to conclude that the position was conclusive. The fact that the Corporation’s most recent report is expressed in unequivocal terms will not of itself be decisive. A strongly held view may nevertheless simply be one such view among others held with equal conviction. But in other circumstances it may indeed be conclusive. In deciding whether it was reasonably open to the District Court Judge to conclude that the case fell within the latter category, I need to return to certain aspects of the medical evidence.
[53] The first substantive report is by Dr Frengley, a consultant endocrinologist, who on 15 February 2005 stated that there was no doubt about the diagnosis of osteoporosis of Ms Beveridge’s spine.
[54] The OccMed Unit report of 18 October 2005 contained a diagnosis of two
“co-morbidities” being:
(1) osteoporosis and compression fractures of T6 and L4; and
(2)Chronic Pain Syndrome affecting the lumbar spine region with some features of central neural sensitisation.
The Chronic Pain Syndrome was said to have resulted from the accident. It noted as plausible that she had sustained compression fractures at the L4 and T6 level and that although these had in all likelihood healed adequately, she had developed the Chronic Pain Syndrome due to disorder of central nervous system pain modulation.
[55] This early diagnosis of compression fractures was later found to have been
based on an error in the scan. However a 9 August MRI indicated “a tiny central
disc bulge at the lumbosacral junction with a small focus of peripheral high signal consistent with an annular tear but with no compromise of the nerve roots”. It was on the basis of this report that Dr Laubscher referred to “demonstrated disc lesion at L5/S1” with which he said Ms Beveridge’s lower back pain is “consistent”. However, he postulated a number of theories for the origins of her pain as Judge Henare noted at [12] of her decision. In that sense his report was far from unequivocal. Significantly, although identifying himself as a pain specialist, Dr Laubscher did not refer to Ms Beveridge suffering from Chronic Pain Syndrome. Although he did identify “neurogenic features” the pain was said to have a “nociceptive focus” most likely to be the L5/S1 disc consistent with his earlier reference to a “demonstrated disc lesion”.
[56] This theory was addressed directly by Mr Otto. He expressed the unequivocal view that the tiny central disc bulge and annular tear “are not the symptom producing issues in this stage”, that the effect of the injury was “well spent” and that the ongoing symptoms were more a reflection of the underlying osteoporotic pathology.
[57] Significantly, the decision of Judge Beattie was not based on evidence of an annular tear at L5/S1. He noted the competing contentions before him as being (on the part of the Corporation) that the pain was caused either by the underlying osteoporosis or a degenerative disc at L5/S1 and (on behalf of the claimant) that she suffered Chronic Pain Syndrome in consequence of a “back strain injury”. In the final analysis he regarded these two competing assertions as too finely balanced for
the test in Elwood v ACC26 to be satisfied and accordingly allowed Ms Beveridge’s
appeal.
[58] In summary therefore, the position is that the source of the pain identified by Dr Laubscher as likely (but not emphatically) responsible and rejected by Mr Otto (an annular tear) was not operative in terms of Judge Beattie’s decision. Rather that decision was based on Dr Wigley’s subsequent identification of “Chronic
Nociceptive Pain Syndrome”, a syndrome which the Judge formed a clear view Mr
26 Elwood v ACC [2012] NZHC 2887.
Otto was not prepared to acknowledge given his belief that pre-existing degenerative conditions must, ipso facto, be the source of Ms Beveridge’s ongoing pain.
[59] It is correct that Dr Laubscher’s report was referred to by Judge Beattie in terms that indicate that he considered it consistent with Dr Wigley’s diagnosis. Indeed at [17] of his judgment his Honour referred to Dr Laubscher’s identification of “Chronic Pain Syndrome as being the likely cause”, albeit that Dr Laubscher did not actually use that expression. However, Dr Laubscher’s report was based on a demonstrated disc lesion which did not feature in Judge Beattie’s reasoning.
[60] Against that background, I consider the conclusion reached by Judge Henare was reasonably open to her on the basis that, as at the date of Mr Otto’s report, the evidence available to the Corporation was unequivocal in terms that neither the originally identified compression fractures nor the subsequently identified annular tear were the source of Ms Beveridge’s pain. To the contrary, there was a different physical pathology which explained it (osteoporosis) from which Ms Beveridge had been consistently diagnosed as suffering by a number of previous specialists. The fact that Judge Beattie reverted neither to the annular tear nor compression fracture explanations supports the conclusive nature of Mr Otto’s opinion at the time it was given. There was accordingly a reasoned path by which the Judge’s decision could be reached having regard to the qualifications in the pain specialist’s report and the very clear views subsequently expressed by the consultant orthopaedic surgeon.
[61] It follows that in my view no error of law occurred in her Honour’s categorisation of the case and, accordingly, special leave to appeal from the decision is appropriately declined.
[62] In the result and applying the principles in Miller, interest runs from the date of receipt of Dr Wigley’s report unless later receipt of the WINZ information requires any different result. It is to that issue which I now turn.
Issue two
Submissions
[63] The appellant submits that Judge Henare erred in law when the Judge held that the WINZ benefit information was necessary financial information for the purpose of s 114 and to calculate the arrears payment.27 The appellant says that in cases such as hers, where compensation is cancelled or suspended and then reinstated some time later, there will almost always be some financial information required before the Corporation can calculate the arrears; such as WINZ information or earning information. However, that cannot and should not detract from the obligation on the Corporation to compensate claimants fully by paying interest from
the date of wrongful cancellation. Rather, the focus of the statutory test in s 114 should be on whether the Corporation had the necessary information to calculate the weekly compensation to which the claimant was entitled at the time of cancellation.
[64] Mr Peart also pointed to the Court of Appeal authority of Cullen28 as a case where both the Court and the Corporation must be taken as having accepted that WINZ information was not necessary information for the purpose of s 114, as interest was awarded from the date of Mr Cullen’s medical certificate.
[65] In supplementary submissions, the Appellant referred to the very recent decision of the District Court in Kirk v ACC as illustrating an approach to necessary information whereby the Corporation is deemed to have knowledge of payments made by WINZ under s 252(6).29 The Applicant submitted that this is the correct approach to the deeming provisions in s 252(6), whereby the Corporation has knowledge of the WINZ payments and their details, including quantum, attributed to it under s 252(6) “for all purposes”. The appellant relied on the reasoning in this
decision as an alternative basis for her application and substantive appeal.
27 Emphasis in the Applicant’s written submissions at [36].
28 Cullen v ACC, above n 11.
29 Kirk v ACC [2016] NZACC 48 (DC).
[66] In response Mr Tuiqerqere acknowledged the second issue raised a question of law but submitted that it was not sufficiently arguable to justify a grant of special leave.
[67] He submitted that the Corporation was only liable to pay interest on the backdated compensation from 28 July 2010, when it had “all necessary information” to make the payment of the arrears to Ms Beveridge including the necessary financial information from WINZ.
[68] He relied on what he says is the plain language of ss 114 and 252 to submit that the Corporation must receive the WINZ information before the payment to the claimant can be “calculated” under s 114. He proceeded to distinguish Cullen on the basis that the Corporation in that case acknowledged it had wrongly cancelled compensation, whereas in Ms Beveridge’s case the cancellation was, on the basis of the information then held by the Corporation, correct at the time (that is the case was within Miller scenario 4).
[69] In its supplementary submissions the Corporation submitted that Kirk was wrongly decided as the Judge misinterpreted s 252(6) which is not intended to deem knowledge of the quantum of WINZ payments to the Corporation for the purpose of the interest calculation under s 114. The Corporation submitted that deeming knowledge to it, that it does not in fact have, produces an absurd result on the basis of a tenuous interpretation.
Grant of special leave
[70] In my view special leave is appropriately granted in respect of Issue 2. It is accepted by the Corporation as raising an issue of law. The issue is in my view capable of bona fide and serious argument and the apparent conflict between Judge Henare’s decision in this case and the District Court decision in Kirk suggests that consideration by this Court is appropriate.
[71] In accordance with the parties’ request I now therefore consider the
substantive merits of the appeal.
Discussion
[72] The nature and scope of the Corporation’s liability under s 114(1) of the Act to pay interest “on any payment of weekly compensation to which the claimant is entitled” must be ascertained from the text of the provision interpreted in light of its purpose and the scheme of the Act read as a whole.30
[73] As the Court of Appeal held in Cullen, the text of s 114 and its heading, “Payment of interest when Corporation makes late payment of weekly compensation”, makes it clear that the compensation to which the claimant is “entitled” and in respect of which interest is payable is the late payment of weekly compensation.
[74] On its plain meaning the section directs the relevant inquiry to the time at which the Corporation can calculate and pay the weekly compensation. Although typically invoked at the point arrears are being calculated, as in Cullen, Miller and Kearney, the focus is on the information necessary to calculate and make the payment of weekly compensation, not the backdated amount.
[75] I accept that the Corporation does not have all the necessary financial information to calculate the amount of arrears it owed Ms Beveridge until it received the information from WINZ. But, at all times since receiving Dr Wigley’s report it did have the necessary information to calculate the weekly compensation which she was owed.
[76] I consider that this interpretation of s 114 is consistent with the approach taken by the Court of Appeal in Miller, the reasoning in which focuses on the point in time at which the Corporation had the necessary information to reach the decision, which, with hindsight, the Court has found to be correct.31 Moreover, it avoids the “air of unreality” associated with any suggestion that a claimant whose entitlements
have been cancelled and who, as a result, is required to seek the support of WINZ,
30 Cullen v ACC, above n 11 at [8]; Interpretation Act 1999, s 5; Commerce Commission v Fonterra Co-operative Group Ltd [2007] NZSC 36, [2007] 3 NZLR 767 at [22]; and Fonterra Co- operative Group Ltd v The Grate Kiwi Cheese Co Ltd [2012] NZSC 15, [2012] 2 NZLR 184 at [13].
31 See Miller v ACC, above n 1 at [57].
should nevertheless be providing the Corporation with regular updates in terms of his or her WINZ entitlements.
[77] I find therefore that the Corporation had all the necessary information at 29
July 2009 when it received Dr Wigley’s report. With the benefit of hindsight the Corporation should have reinstated entitlements from July 2009 as it had the ability at that point to calculate the weekly compensation that Ms Beveridge was due. In that sense, it had all necessary information for the purposes of s 114.
[78] Such result is also supported by a purposive approach to construction. It is well recognised that “ungenerous or niggardly” constructions are to be avoided in this area.32 I find the Corporation’s arguments in that category.
[79] Absent an allowance of interest in favour of Ms Beveridge she cannot, in an economic sense, be made whole and the Corporation in any equivalent sense, receives a windfall. As the Court of Appeal acknowledged in Miller, one of the twin purposes of the section is to compensate claimants for delayed payment of their entitlements. To deny Ms Beveridge’s appeal would be to subjugate that purpose entirely.
[80] Nor in my view is there any legitimate basis for distinguishing the case from Cullen given that the WINZ issue arises independently of Miller categorisation within scenarios 1 – 4.
[81] In coming to this conclusion I am conscious that in Wardle v ACC33 Gendall J appears to have reached a contrary result. However, in Kearney the Court of Appeal noted in respect of that decision:34
[38] We are not sure from the report what financial information Mr Wardle had supplied when he made his claim in 1992. If at that time he supplied all the financial information necessary to enable calculation of the compensation, then we think, with respect, the decision was wrongly decided. If, on the other hand, he did not supply the information at that time, then Wardle can be distinguished from the current case. In the present case, the Corporation did have all the information it needed at the time it wrongly
32 Harrild v Director of Proceedings [2003] 3 NZLR 289 (CA) at [19].
33 Wardle v ACC HC Wellington AP134/02, 18 October 2002.
34 Kearney v ACC, above n 2.
stopped paying compensation. It never thereafter sought the information
from Mr Kearney until after the review officer’s decision on 11 October
2004.
[82] In Wardle it was not until six years after the accident that the Corporation accepted coverage in a decision dated 4 December 1998. Information was then sought relating to both pre-accident earnings and subsequent WINZ support. This was provided on 11 March 1999 and 17 July 1999 respectively and the Corporation calculated the payment owed to Mr Wardle on 24 August 1999 which was paid shortly thereafter. The Corporation’s position, upheld by the Court, was that no interest was owed due to payment having been made within one month of final calculation.
[83] I cannot accept Mr Tuiqereqere’s submission that, in respect of Issue 2, Wardle survives Kearney. That is because, if the Court of Appeal had considered the provision of WINZ information a standalone impediment to the interest obligation, it would not have held Wardle to be wrongly decided as the nonprovision of income related details would have been rendered otiose by subsequent delay in receipt of that information.
[84] I do not, in order to dispose of this application and appeal, need to address the reasoning in Kirk. Indeed, given counsel’s indication that this case is likely to itself be the subject of an appeal, it is appropriate that any detailed consideration of the decision occur within that context.
[85] The Judge in Kirk relied on s 252(6) of the Act which provides:
(6) Any amount that is treated under this section as having been paid in respect of any treatment, service, rehabilitation, related transport, compensation, grant, or allowance is deemed for all purposes to have been so paid.
[86] The Judge reasoned that this section has the effect of attributing to the Corporation full knowledge of the quantum of WINZ payments made during the period of suspension, and on that basis found that provision of a summary of such
information was irrelevant for determining “all necessary information” under s 114.35
35 Kirk v ACC, above n 30 at [25].
[87] In my view the primary purpose of the subsection is to ensure that there can be no dispute that WINZ payments, in whatever form they were made, are to be considered the equivalent of compensation payments within a statutory scheme designed to prevent double recovery. Cullen supports such approach.36 However, I see nothing inconsistent with that assessment of primary purpose and the approach adopted by the District Court Judge in Kirk. If the Corporation is entitled to regard
any benefit as “for all purposes” having been paid, I do not regard it as inappropriate to say that it must likewise be deemed to know the details of such payments.
Result
[88] Accordingly:
(1) In respect of the first question, I decline special leave to appeal.
(2)In respect of the second question, I grant special leave and allow the appeal.
[89] In the result, interest is payable to Ms Beveridge from 29 July 2009 (being the date of receipt of the first report from Dr R D Wigley) to the date of the arrears payment.
Costs
[90] In the circumstances of the respective wins and losses I consider the appropriate outcome to be that costs lie where they fall.
Muir J
36 Cullen v ACC, above n 11 at [13].
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