Chalecki v Accident Compensation Corporation
[2016] NZHC 517
•23 March 2016
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2015-409-000649 [2016] NZHC 517
BETWEEN EDMOND CHALECKI
Applicant
AND
ACCIDENT COMPENSATION CORPORATION
Respondent
Hearing: 10 March 2016 Appearances:
W A Forster and T Barrowclough for Applicant
I G Hunt for RespondentJudgment:
23 March 2016
JUDGMENT OF GENDALL J
Introduction
[1] The applicant, Edmond Chalecki (Mr Chalecki), seeks special leave to appeal to the High Court against a decision made by the Accident Compensation Appeal Authority (the Authority).1 An application to seek leave had already been declined by
the Authority.2
[2] This matter concerns a self employment grant which was sought by the applicant Mr Chalecki nearly 30 years ago. As to this, Mr Chalecki as an injured person, contends that the respondent, the Accident Compensation Corporation (the Corporation), given the obligation to rehabilitate him, was required to fund the expansion of his then hobby farm as his identified rehabilitation programme. Accordingly, he says the Corporation is responsible for his actual and reasonable
expenses from January 1988 to April 1993 as he purchased a larger farm and
1 Chalecki v Accident Compensation Corporation [2015] NZACA 1.
2 Chalecki v Accident Compensation Corporation [2015] NZACA 12.
CHALECKI v ACCIDENT COMPENSATION CORPORATION [2016] NZHC 517 [23 March 2016]
incurred losses on the farm, and all this was effectively attributable to his injuries. In the alternative, he seeks the self-employment grant in line with accounting advice the Corporation received from his accountant Ray Gunn (Mr Gunn), contending there is no statutory maximum amount.
[3] The facts are extensively set out in both decisions of the Authority. However, in order to give some context, I will set out again briefly the crucial events that happened in the last 30 years.
Background
[4] On 23 November 1984, Mr Chalecki injured his back lifting steel and corrugated iron while working as a builder. After the back injury, Mr Chalecki was no longer capable of working as a builder. He was not able to undertake heavy lifting work or even, it seems, to stand for long periods of time. As he was unable to work effectively as a builder, he received earnings related compensation (“ERC”) from the Corporation. As far as the Authority was aware, Mr Chalecki continues to receive the ERC.
[5] At the time of the injury, Mr Chalecki had a small hobby farm running pigs. An officer of the Corporation visited him on 17 December 1987 to discuss his rehabilitative options. Mr Chalecki indicated that he wanted to become self- sufficient through his hobby of farming pigs, chickens and perhaps to engage in some horticulture. After several more visits by the officer and the completion of the necessary forms by Mr Chalecki, he was informed of the $5,000 self-employment fund available if Mr Chalecki was able to produce an appropriate and acceptable feasibility study.
[6] Between October 1989 and August 1991, there were approximately six visits and two phone calls from the Corporation’s officer to Mr Chalecki. There were continued requests for proper details of Mr Chalecki’s feasibility for the self- employment grant. While there were a few attempts by Mr Chalecki to submit the correct information, this information did not satisfy the Corporation to approve the self-employment grant. Meanwhile, Mr Chalecki had purchased a larger farm and had increased his free-range chicken farming operation.
[7] In September 1991, Mr Chalecki provided a four page hand-written proposal concerning a possible egg production operation. This suggested that, on the basis of
1,600 birds, Mr Chalecki estimated making an annual profit from the operation of just over $14,000 before tax. The Corporation sent this information to Devlin Wilding & Co, an accounting firm in Greymouth, who had previously been the accountants for Mr Chalecki, as I understand it, but were not retained by him at the time. A report from Mr Gunn, a partner at Devlin Wilding & Co, was provided on
6 March 1992. Mr Gunn considered that, given Mr Chalecki’s experience and
obvious determination to become self-reliant, the proposal was feasible.
[8] However, for reasons that are not clear, the report was overlooked by the Corporation and it seems a copy was not provided to Mr Chalecki at the time. Not knowing the existence of Mr Gunn’s report, the Corporation decided on 14 April
1993 that it was unable to accept Mr Chalecki’s request for a self-employment grant.
[9] Mr Chalecki brought several reviews, appeals and civil proceedings against the Corporation following its 14 April 1993 decision. The statutory review was under sections 36, 37 and 80 of the Accident Compensation Act 1982 (“the 1982 Act”). Of relevance to this present application is the decision dated 26 October 2012. This decision allowed Mr Chalecki’s appeal to the extent that he had the right to a formal review in respect of the Corporation’s decision of 14 April 1993 and the application
to review dated 27 April 1993. The Authority held:3
[The review process was] to be utilised only for the purpose of conducting the review of the decision declining the appellant’s self-employment grant… the issue on review is strictly limited to the decision of 14 April 1993…
(Emphasis added)
[10] Another review was carried out after the Authority’s 26 October 2012 decision. That review dismissed Mr Chalecki’s proceeding on the ground that there was no error of law or any essential factor overlooked by the Corporation when the
14 April 1993 decision was made.
3 Chalecki v Accident Compensation Corporation [2012] NZACA 15 at [49].
Appeal to the Accident Compensation Appeal Authority
[11] The Reviewer’s decision was once again appealed to the Authority. The Authority decided that Mr Chalecki was not entitled to the expenses and losses incurred by his failed farming venture. Claims for expenses were rejected on the basis that the 14 April 1993 decision was only concerned with Mr Chalecki’s application for a self-employment grant. Prior to the decision, there was no mention or itemised specification of the expenses incurred for the set up and running of the
farm. The Authority held:4
[110] …My jurisdiction is limited to claims made by Mr Chalecki which were the subject of the 14 April 1993 decision, or claims which should have been decided then as part of rehabilitation. That decision solely concerned the self-employment grant request.
[111] The claim for expenses was not dealt with in the 14 April decision because Mr Chalecki had made no such claim. While he had repeatedly sought a contribution towards his costs in expanding the farm, he never itemised in the context of any claim any actual or anticipated expenses for which he sought reimbursement… It was for Mr Chalecki to identify specific costs in relation to a particular venture and put that to the Corporation in a form which can be said to be a claim.
[12] Claims for annual losses on Mr Chalecki’s venture were also declined. The Authority held that there was no statutory authority for losses of a business being recoverable under ss 36 and 37 of the 1982 Act.
[13] However, the Authority held that the oversight of the accountant’s report was an error of law. To that end, the Authority held that Mr Chalecki was entitled to the maximum $5,000 self employment grant available at that time (holding that this
$5000 was to be paid at the value of that amount in “today’s money”). Instead of allowing the appeal and sending the decision back to the Corporation, the Authority took the initiative to reverse the Corporation’s decision and approved Mr Chalecki’s self-employment grant. The Authority’s decision to reverse the decision itself and not refer the matter back to the Corporation was reached essentially for two reasons:5
(1) The only reasonable decision under section 36(2)(b), based on the evidence I have seen, would be to make the grant, given Mr Gunn’s unequivocal report; and
(2) Without attributing fault to any party, a decision is well overdue. It is time this matter was finalised.
Application for leave to Appeal
[14] The applicant was still dissatisfied with the Authority’s decision and sought leave from the Authority to appeal that decision to this Court. Leave and special leave is governed by section 111 of the 1982 Act. It states:6
Appeal to High Court
(1) Where any party is dissatisfied with any order or decision of the Accident Compensation Appeal Authority, that party may, with the leave of the Authority, appeal to the High Court against the order or decision:
Provided that, if the Appeal Authority refuses to grant leave to appeal, the High Court may grant leave to appeal.
(2) The Appeal Authority or the High Court, as the case may be, may grant leave accordingly on a question of law or if in its opinion the question involved in the appeal is one which by reason of its general or public importance for any other reason ought to be submitted to the High Court for decision.
…
[15] The grounds submitted in the application to the Authority for leave to appeal are largely similar to the grounds put forward to this Court.
[16] Before this Court, Mr Chalecki essentially advanced the same grounds as he had before the Authority, namely that the Authority erred in:
(a) The requirement to overcome the public law test when reviewing and
appealing the exercise of ACC’s discretion. (b) The proper interpretation of ss 36 and 37. (c) The principles of reasonable contribution.
(d) The purported policy limit of $5000 on the principle of reasonable
contribution.
6 Accident Compensation Act, s 111.
(e) Deciding that s 80 does not apply.
Special leave
[17] The test for special leave to appeal adopted by the High Court in Murray v
ACC sets out a four part test:7
(a) The question posed is one of law;
(b) It is a question actually arising in the proceeding;
(c) It is capable of bona fide and serious argument; and
(d) It involves some interest, public or private, of sufficient importance to outweigh the delay and cost of a further appeal.
[18] The principles for granting leave were established in Kenyon v ACC.8 There, Fisher J accepted that:
(a) The purpose of requiring leave for certain appeals is to ensure that scarce judicial time is allocated sensibly.
(b)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.
(c) The fact that special leave is required is significant and suggests that leave ought not to be granted as a matter of course.
(d)It is for the applicant to show that leave is required in the interests of justice.
(e) As leave has already been refused by the Authority, however, there will normally have to be some extraordinary factor which has not been properly taken into account.
[19] Unlike the position relating to applications for leave to appeal and special leave to appeal under the 2001 Act, the High Court’s jurisdiction under the 1982 Act in these matters is not confined to questions of law. Appeals under the 1982 Act may be brought where the question involved ought to be submitted to the High Court by reason of its general or public importance or for any other reason. As the Authority
has held in Accident Compensation Corporation v Smith9 questions of fact may in
certain circumstances meet this criteria.
[20] As to the point noted at [18](e) above, the extent to which the current matter has been heard and reviewed needs to be emphasised here. Counsel for the respondent, Mr Hunt, pointed out before me that, a final resolution of this matter has long been overdue and I agree. The current matter has already been considered at an ACC review tribunal hearing and at, a full-day hearing before the Authority. A substantive reserved decision was delivered following that hearing before the Authority and an application for leave to appeal declined in another detailed reserved decision. For this Court now to grant special leave, Mr Chalecki must convince the Court that there is some extraordinary factor which has not been properly taken into account by the Authority when leave was declined by it.
Analysis
[21] I now turn to consider each issue submitted by Mr Chalecki and to examine whether any of them meet the four part test set out in Murray. I also bear in mind the principles for granting leave set out in Kenyon. However, as Brewer J in Accident Compensation Corporation v Hawke held in this Court, my task here is not to decide the merits of the issue but to “determine whether there is an issue of law which crosses the threshold of arguability”.10
(a) The requirement to overcome the public law test when reviewing and appealing
the exercise of ACC’s discretion
[22] This is an issue about the width of the Authority’s power on appeal to reassess the merits of decisions of the Corporation concerning rehabilitation under
sections 36 and 37 of the 1982 Act. It involves the question whether such an appeal arises from the exercise of a discretion (in which case the grounds of appeal are narrow) or is of a general nature (permitting a fresh assessment of the merits). The Authority decided that only the narrow ground of appeal applied.
[23] This issue however in my view does not satisfy the second part test in Murray noted at [17](b) above, being that it must be a question actually arising in the proceeding. This is because the Authority has held that irrespective of the nature of its jurisdiction, the outcome of the appeal would have been the same. This was again reiterated in the Authority’s decision to refuse leave:11
[62] The answer to that question of law can make no difference to the outcome of Mr Chalecki’s appeal… Irrespective of the nature of the appeal, I found that Mr Chalecki’s claims for the farm’s expenses or losses failed anyway.
[63] This is because there was no legal basis for those claims, Mr Chalecki had never advanced any such claims prior to the Corporation’s decision, the Corporation had made no decision on the claims (since they had not been submitted) at any relevant time) and the previous Authority had only opened up for review a particular decision of the Corporation and no other matters.
[24] Furthermore, I agree with the view expressed by the Authority that this question of law is no longer of any public importance. The rehabilitation provisions of the 1982 Act were repealed by the 1992 and subsequent Acts. The Corporation has referred to the Court of Appeal decision in Childs v Hillock which described the move from a more generous compensation scheme to a less generous one:12
…under the new Act certain eventualities occurring after 1 July 1992 that were covered under the earlier Acts are no longer covered. The cover under those Acts in respect of those eventualities would come to an end unless preserved… This is not a plainly unintended result. There may be hard cases; but no doubt the line had to be drawn somewhere.
[25] As I understand the position, Mr Chalecki is presently the only claimant under sections 36 and 37 of the 1982 Act. And there is a very limited number, if any, of possible claimants remaining due to the fact that the 1982 Act was repealed more than 20 years ago.
(b) The proper interpretation of sections 36 and 37
[26] Sections 36 and 37 of the 1982 Act were the rehabilitative provisions. Mr Chalecki before me submitted that the statutory wording of sections 36 and 37 focuses on the function of the Corporation to administer and fund rehabilitation. He contends that the function of the Corporation was to administer rehabilitation in the sense of seeking a “proactive” solution to a problem, instead of being merely a reactionary passive operator of a claims manual awaiting an injured person to lodge a claim before taking any action.
[27] Section 36 states in part:
Corporation to promote rehabilitation
(1) The Corporation shall place great stress upon rehabilitation and shall take all practicable steps to promote a well co-ordinated and vigorous programme for the medical and vocational rehabilitation of persons who have cover and who become incapacitated as a result of personal injury by accident and are for the time being in New Zealand.
(2) The rehabilitation programme in relation to those persons shall have as its objective-
(a) Their restoration as speedily as possible to the fullest physical, mental, and social fitness of which they are capable, having regard to their incapacity; and
(b) Where applicable, their restoration to the fullest vocational and economic usefulness of which they are capable; and
(c) Where applicable, their reinstatement or placement in employment.
…
[28] While I agree with the Authority that section 37 adds nothing here to Mr Chalecki’s submission, I include the relevant part for completeness. Section 37 states in part:
Functions of Corporation in relation to promotion of rehabilitation
...
(3) Without limiting any of its other functions, the Corporation shall, in relation to the rehabilitation of persons who are for the time being in New Zealand have the function of –
…
(b) ensuring the training or treating of incapacitated earners who cannot be so reinstated, so that they may secure other employment suited to their maximum capacity…
(d) For the purpose of the foregoing provisions of this section-
(i) Seeking the making of special arrangements for incapacitated persons to whom any of those provisions apply, whether individually or generally, concerning examinations, the completion of apprenticeships, or the obtaining of training or of practical experience necessary or desirable for the purpose of qualifying for entrance into any employment or occupation:
(ii) Ensuring the granting, where it considers this justified, of financial assistance to incapacitated persons to whom any of those provisions apply during any period of desirable training or education in cases where no earnings related compensation is payable, or where (having regard to the circumstances of the persons) the cost of the training or education is beyond the financial resources of the persons:
(iii) Ensuring the granting, where it considers this justified, of financial assistance towards the expenses of incapacitated persons to whom any of those provisions apply in cases where the persons are required to reside away from their ordinary places of residence for a period or periods while undertaking any such training or education:
(iv) Stimulating, supporting, and fostering any additional educational, training or other facilities which it considers necessary for the adequate development of its rehabilitation service.
…
[29] Mr Chalecki submits that because of what he says is a proper interpretation of the Corporation’s role, there is no requirement for a specific claim to be made in order for the Authority to consider a claim.
[30] However, as I see it, Mr Chalecki has misunderstood the Authority’s reasoning. The reason why the Authority declined to consider his claim for expenses and losses incurred in the farming venture was due to the ambit of the Authority’s review and the limits of the Authority’s jurisdiction. In its decision to refuse leave
the Authority held:13
13 Chalecki v ACC, above n 2, at [110].
[110] … The Authority was not opening up a general claim for costs independent of the self-employment grant. The Authority was commenting on the ambit of the review and not permitting the applicant to open issues that have previously been litigated before. This is not an issue of claim procedure but the jurisdiction of the Authority and the ambit of review.
[31] Whether specific claims were submitted is beside the point. The genesis of
this particular set of proceedings arose out of the Authority’s decision dated
26 October 2012.14 The Authority only allowed Mr Chalecki’s appeal to the very limited extent that his claim for a self-employment grant was entitled to be reviewed. Mr Chalecki was not entitled to reopen issues as to his claim for expenses and losses that fell outside the ambit of the review.
[32] Furthermore, I also do not accept Mr Chalecki’s suggested interpretation of ss 36 and 37. As the Authority noted, there were originally no specific claims under the rehabilitation sections. It was originally enacted as a principle of the accident compensation regime, but such claims were accepted by the Corporation and the Authority. However, it is a step too far, in my view, to expect the Corporation to take a “proactive” approach and anticipate a claimant’s needs without being notified of specific claims. It was not unduly burdensome for Mr Chalecki, when incurring the expenses, to produce an itemised account of expenses incurred at the time of his claim. The Authority was therefore correct, as I see it, in holding that Mr Chalecki was not entitled to have his claims for expenses and losses from the farm reviewed, due to the limited scope of the appeal and the lack of a specific claim at the time of the 13 April 1993 decision.
(c) The principles of reasonable contribution
[33] Under this head, Mr Chalecki contends that the Authority, not being a court of record, is not bound by its previous decisions. Before me he referred to a decision of the Authority which noted that courts should not be over fixated on previous judicial statutory interpretation.15 He suggests that individual cases must turn on a person’s individual circumstances.
[34] While it is true that each case should be determined according to its own circumstances, in my judgment it cannot be seriously arguable that the Authority is not entitled to refer to prior decisions and principles of law.
[35] I find especially persuasive here the Authority’s referral to Re Wright, where the Authority was considering the position of a carpenter who had injured his back and was no longer able to continue working as a carpenter. He had a flair for art, so moved to another city and enrolled in an art course. He claimed certain expenses from the Corporation, including removal costs. Judge Blair held:16
With respect I take the view that the Commission could have, and should have, utilised its rehabilitation powers in the unusual circumstances of this case. This is not to suggest that it should accept total responsibility for the whole of the arts course or the travelling expenses. On the contrary, the emphasis is on rehabilitation and the encouraging of independence and it would be wrong for the appellant to think that with his relatively minor disability he can rely on the public purse to meet all his expenses over a period of years.
[36] The Authority is entitled to be persuaded by relevant principles of prior cases and treat like cases alike.
(d) The purported policy limit of $5000 on the principle of reasonable contribution
[37] In a letter dated 14 April 1993, the Corporation referred to a “guideline” that sets out the criteria for applying for a self-employment grant. The guideline also purported to have set the cap at $5,000 for ordinary claims to a self-employment grant. However, due to the passage of time, it seems this guideline can no longer be located. Mr Chalecki now submits that there is no statutory maximum for such a grant. He further contends that the 14 April 1993 letter amounts to hearsay evidence and therefore is inadmissible as evidence for a cap on self-employment grants.
[38] On these aspects, the Authority held:17
[82] As I noted in my decision, I have never seen the policy or guideline document, as it no longer exists. That makes references to it (including the policy limit of $5,000) in other documents as hearsay, but it is referred to (including the limit) in so many documents that I accept as a fact that such a
policy (and its limit) existed then. I accept those documents as the best evidence now available of a policy development under the 1982 Act, and possibly even under the earlier statute.
[83] The strict rules of evidence do not apply to the admissibility of evidence before the Authority (section 109(5) of the 1982 Act) so the documentation adduced in evidence is all admissible to prove the existence of the policy and its limit, though issues of weight or probative value can arise. Having acknowledged that, I am left in no doubt as to the existence of the policy and the $5,000 limit under the 1982 Act.
[39] I am satisfied the Authority was entitled to make a finding of fact that such a guideline existed and that it set a limit of $5,000 for ordinary self employment grants. There was before it sufficient circumstantial evidence of documentation that clearly showed such policy limits existed.
[40] This issue also does not satisfy the first step of Murray. The issue related to a particular finding of fact and is not a question of law.
(e) Deciding that s 80 does not apply
[41] Mr Forster, counsel for Mr Chalecki, contends that the 1982 Act envisages claims for pecuniary loss, not related to earning. Section 80 of the 1982 Act states:
Compensation for pecuniary loss not related to earnings
(1) Where a person suffers personal injury by accident in respect of which he has cover… the Corporation, having regard to any other compensation payable and any rehabilitation assistance provided or to be provided, may, under this subsection, pay to him… compensation of such amount (if any) as it thinks fit for actual and reasonable expenses and proved losses necessarily and directly resulting from the injury or death…
[42] It is difficult to see how section 80 applies in the current circumstance. It cannot be seriously argued that the expenses and losses incurred by the failed farming venture were “necessarily and directly resulting from the injury”. Section 80 of the 1982 Act only permitted claims for actual and reasonable expenses arising directly from the injury, and I am satisfied that was not the case with Mr Chalecki’s claim here.
Outcome
[43] Having decided that none of the issues advanced by Mr Chalecki meet the four part test of Murray, the application to grant leave must therefore be declined. Mr Chalecki has also failed to identify any extraordinary factor that was not discussed by the Authority in its prior decisions. None of the issues he has submitted rises to the level of serious arguability and, in my view, in all the circumstances prevailing in this case to grant leave here would be a waste of the Court’s scarce resources.
Result
[44] The application to grant special leave is declined.
[45] Costs are reserved. If they are in issue here between the parties, counsel may file memoranda (sequentially) which are to be referred to me and, in the absence of either party indicating they wish to be heard on the matter, I will decide the question of costs on the basis of the material then before the Court.
...................................................
Gendall J
Solicitors:
Warren Forster, Dunedin
Young Hunter, Respondents
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