Chand v Accident Compensation Corporation HC Auckland CIV 2008-485-000270

[2008] NZHC 1969

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2008-485-000270

IN THE MATTER OF     an appeal against a decision of the District Court at Auckland under s 162 of the Injury Prevention Rehabilitation and

Compensation Act 2001

BETWEEN  MUKESH CHAND Applicant

ANDTHE ACCIDENT COMPENSATION CORPORATION

Respondent

Hearing:         5 November 2008

Appearances: P Moses for the Appellant

D Tuiqereqere for the Respondent

Judgment:      10 December 2008

JUDGMENT OF JOHN HANSEN J

This judgment was delivered by me on 10 December 2008 at 1:00 pm pursuant to Rule 540(4) of the High Court Rules.

Registrar/Deputy Registrar

Date: ……………………….

Solicitors/Counsel:

M J Mercier, PO Box 242, Wellington

P Moses, PO Box 106-419, Auckland

D Tuiqereqere, PO Box 16-204, Sandringham, Auckland

CHAND V THE ACCIDENT COMPENSATION CORPORATION HC AK CIV 2008-485-000270  10

December 2008

[1]      This was an application for special leave to appeal to this Court against the decision of the District Court on an ACC appeal dated 31 May 2004.

Background

[2]      In March 1999, Mr Chan commenced work at the Manukau Knitting Mills Limited.  Around 31 August that year he fell at work fracturing his left wrist.  He continued working but visited a doctor on 9 September 1999. Mr Chan’s wrist was placed in plaster and the Accident Insurance Treatment Certificate listed the injury as occurring at 6:56 am on 2 September 1999.  On 10 October that year he revisited his doctor. Section (f) of the Accident Insurance Treatment Certificate was completed. That noted that Mr Chand was restricted in lifting weight and could not perform repetitious activities involving lifting, pushing or pulling.   Section (g) was also completed and this confirmed that Mr Chand was able to return to his normal duties on an ongoing basis.  Mr Chand took no time off work.  He continued to attend work until 4 November 1999 when his employment was terminated for reasons unassociated with this injury.  Until that date he regularly worked 60 hours per week.

[3]      Almost immediately he commenced work at Aztec Packaging Limited as a casual worker where he stayed until 22 December 1999.  Again he left for reasons unassociated with the injury.  He was subsequently unemployed.

[4]      In  January 2000  he  was  assaulted.    He  lodged  a  claim  with  ACC  who subsequently accepted cover.  He was declared unfit for work from the date of the assault.   As he was not in paid employment at that time, he was not eligible to receive earnings-related compensation.

[5]      On 4 August 2000, the insurer received an email from ACC.  Mr Chan was claiming the assault only involved facial injuries and was not related to his hand or wrist. The insurer was requested to investigate further.

[6]      On 18 August 2000, the insurer recorded a conversation with a Mr David

Barnes at ACC.  He confirmed the claim had been lodged with ACC and the injuries

listed were:  closed scaphoid fracture, soft tissue injury to neck and back, laceration to leg and contusion to chest and face.

[7]      In late September 2000, a Dr Morunga completed a retrospective medical certificate declaring Mr Chan had been unfit to work from 9 November 1999 until 12

October 2000.   This was the first occasion the insurer had received information suggesting Mr Chan had suffered an incapacity following the event in August 1999. On 2 October 2000, the insurer wrote to Dr Morunga seeking further particulars and on 6 October, the Doctor replied withdrawing the medical certificate.

[8]      On 9 October 2000, Fusion wrote to Mr Chan declining his claim for weekly compensation.  The letter included the following:

I have requested full earnings details from Manukau Knitting Mills Limited who were your employer at the time you ceased employment on 4 November

1999.  The information supplied to me indicates that you continued to work from the date of your injury in September 1999 until 4 November 1999.

You worked between 56 and 60 hours per week.  They have indicated that you continued to work full time and you carried out your normal duties

during this time …

In order to pay weekly compensation a person must have incapacity to work as certified by a registered medical practitioner.  Based on the information as presented to Fusion at this time, we are unable to pay you any entitlement for earnings related compensation because, you had a clearance to work and did work full time in your normal work until you ceased employment on 4

November 1999.  There is no medical information to support that you were unfit to work until after you were assaulted in February (sic) 2000.

[9]      Mr Chan exercised his right of review.   The review upheld the insurer’s decision that Mr Chan was not in permanent employment at the time of the incapacity;    his  Australian  earnings  would  not  be  taken  into  account  with  a calculation of his weekly compensation entitlement;  and no interest was payable on the payments of weekly compensation.

[10]     His appeal to Judge Cadenhead was unsuccessful.

[11]     The main contention is that the District Court Judge erred by taking account of  facts  that  arose  subsequent  to  the  applicant’s  incapacity  when  determining whether the applicant was in permanent employment at the time of that incapacity.

The District Court decision

[12]     Judge Cadenhead noted that under clause 8(3) of Schedule 1 of the Act it is the opinion of the insurer that is the relevant opinion.   He held in reaching that opinion the insurer was entitled to have regard to all the circumstantial evidence. That is all present and past evidence available at the date of the decision.  At [63] he stated:

[63]     Clause 8(3) of the Accident Insurance Act 1998 provides:

“For the purposes of this clause and clause 9, an insured is regarded as having been in permanent employment if, in the opinion  of  the  insurer,  he  or  she  would  have  continued  to receive earnings from that employment for a continuous period of more than 12 months after the date on which his or her incapacity  commenced,  if  he  or  she  had  not  suffered  the personal injuries.”

It should be noted that it is the opinion of the insurer that is relevant and that opinion relates to the continuation or receiving of earnings for a continuous period of more than 12 months from the date of incapacity.  In arriving at that decision the insurer is entitled to have regard to all the circumstantial evidence, both present and past, available to it with the date of the decision.  This type of issue has been dealt with in other areas of the law.  for example, in Williamson v John I Thornycroft Co Ltd [1940] 2 KB 658 (CA) Scott LJ said at

659:

“It is quite true that the measure of damages has to be assessed at that date, but Courts in assessing damages are entitled to inform their minds of circumstances which have arisen since the cause of action accrued and throw light upon the reality of the case.”

[13]     The Judge also referred to Mulholland v Mitchell (1971) AC 666. In both cases cited it was held or stated that a decision-maker can have reference to circumstances that have arisen since the cause of action to show the reality of the circumstances.

[14]     The Judge found, based on that principle, that a decision-maker was entitled to look at the reality of the employment in making the decision as to whether there was continuous employment.  Such reasoning, he found, was similar to that of Smith v ACC [1993] NZAR 156, where the ACC Appeal Authority held it was possible to

look at a work history that was subsequent to an accident to gain a more accurate picture of earnings at the time of the accident.

[15]     That decision, of course, was based on a section that allowed the decision- maker to consider “such other relevant factors as a corporation thinks fit”.

[16]     At [75] Judge Cadenhead found:

The circumstantial evidence available to the respondent at the time of its decision included  a  consideration  of  all  the  facts  up  to  the  date  of  the decision as to the calculation of earnings made on 14 December 2001.  The reality of the factual situation may be taken into account along with the past work history of the appellant.  A consideration of those factors support on a probability basis that the appellant would not have continued in “continuous employment”.

[17]     Mr Chand contended in the District Court that Judge Cadenhead was wrong in law because:

[ … erred by in law by interpreting clause 8(3) of Schedule 1 to the 1998

Act as allowing the assessment of permanent unemployment to have regard to what may occur after the date the incapacity commenced as opposed to

assessing the situation at the date the incapacity commenced.

[18]     Leave to appeal was declined on 25 January 2008.  Mr Moses submitted that for the purposes of this special leave application, the question can be re-stated as:

In determining whether an employee was, at the date of his or her incapacity in “permanent employment” as defined in clause 8(3) of Schedule 1 of the

1998 Act, can the insurer take into account events following the date of the claimant’s incapacity?

Submissions

[19]     Mr Moses submitted that Judge Cadenhead erred by holding that clause 8(3) entitled the insurer to look at the reality of the employment facts at the time it reached its conclusion.  It was further submitted that the Judge was wrong to rely on the decisions of Williamson v John I Thornycroft Co Ltd and Mulholland v Mitchell.

[20]     Mr Moses argued that ACC accepts permanent employment existed at the time of incapacity and post-injury events, while they can affect the compensation

that is required, cannot alter the nature of the employment at the time of the incapacity.   He submitted it would be contrary to the purposes of the Act.   He submitted that the assessment relates to the nature of the employment relationship and that decisions such as Bridges  v ACC Decision 80/99 and Te Amo  v ACC Decision No. 206/02 support that approach.

[21]   He argued that Bridges was a case where there was only a temporary employment contract but Judge Beattie examined the term “permanent employment” and found it to mean that employment was “intended to exist” and “not expected to change”.  He submitted that this was the situation in this case.

[22]     Essentially, Mr Moses’ submission is that the decision-maker was limited to considering the letter from the employer that stated the applicant was in permanent employment in making their decision.

[23]     However, ACC claims there was no error of law.  Mr Tuiqereqere submitted if Parliament had intended subsequent events were not to be taken into account, then it would have been indicated in the legislation.  It is submitted the statute as enacted would allow the interpretation adopted by the Judge and there is no basis to read into the statute words that would limit its interpretation.  To do so, it is submitted, would be artificial for the decision-maker and would mean the exclusion of facts that were available when making assessment under clause 8(3) artificial.

Discussion

[24]     I agree with Mr Tuiqereqere that a qualification would need to be read into the statute if the evidence upon which the insurer could form their opinion was to be restricted only to evidence that was available at the time of the accident.

[25]     The Courts can read implied limitations into the wording of a statute.   As

Cooke P said in R v Salmond [1992] 3 NZLR 8 (at 13):

This Court has emphasised the importance of a practical and realistic interpretation of Acts of Parliament.   In cases of ambiguity of hiatus they should be interpreted so as to be made to work.  Gaps may be filled to cover

problems not foreseen when the legislation was enacted, provided that the policy-making function is not usurped by the Courts.

[26]     Further, in Magor and St Mellons Rural District Council v Newport Corp

[1951] 2 All ER 839 (at 841) Denning LJ said:

Wherever a statute comes up for consideration it must be remembered that it is not within human powers to foresee the manifold sets of facts which may arise, and, even if it were, if it not possible to provide for them in terms free from all ambiguity.   It would certainly save the Judges trouble if Acts of Parliament were drafted with divine prescience and perfect clarity.   In the absence of it, when a defect appears a Judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament, and he must do this not only from the language of the statute, but also from a consideration of the mischief which it was passed to remedy, and then he must supplement the written words so as to give “force and life” to the intention of the legislature.

[27]     Lord Diplock in Jones v Wrotham Park Settled Estates Ltd [1980] AC 74 (at

105) made it plain that the reading in of an implied limitation must be done with restraint.  He stated:

First,  it  [must  be]  possible  to  determine  from  a  consideration  of  the provisions of the Act read as a whole what the mischief was that it was the purpose of the Act to remedy;   secondly it [must] be apparent that the draftsmen and Parliament had by inadvertence overlooked, and so omitted to deal with, an eventuality that required to be dealt with if the purpose of the Act was to  be achieved,  and thirdly it [must  be]  possible to  state  with certainty what were the additional words that would have been inserted by the draftsmen and approved by Parliament had their attention been drawn to the omission before the Bill passed into law.

[28]     Applying that criteria, it is unclear that reading in a limitation as the applicant suggests would remedy the mischief that the Act’s purpose was to remedy.  The Act was to modify the existing no fault insurance regime to allow for competition (ss 2, 7 and 8).  The purpose of clause 8 of the First schedule was to establish a method of establishing weekly earnings.  There is nothing about either of these purposes that mandates a restriction of the sort of information to which the insurer could have regard when determining if someone was or was not in weekly employment. Furthermore, there is no injustice if no qualification was read into the schedule. To the contrary, the decision-maker would be making decisions based on better information and justice would be more likely to eventuate in that case.

[29]     As to the second of Lord Diplock’s elements, it cannot be said that the draftsmen and Parliament inadvertently overlooked such a restriction on what the insurer could take into account.  A situation where an incapacitated person continues to work after being incapacitated would be rare, if not unique.  The case of Smith featured a similar situation when the incapacitated person continued to work subsequently to their incapacity.   There, the Appeal Authority held the decision- maker could look at the employment history subsequent to incapacity to determine the reality of the situation.  That case was reported in 1993, several years before the enactment of the 1998 legislation, so one can assume the drafters of the legislation were acquainted with reported cases dealing with the interpretation of the old Acts when drafting the revised legislation.  An omission of this type is therefore probably not inadvertent but more likely deliberate.

[30]     With regard to the third point, the words required would be readily able of formulation.

[31]     I do not accept Mr Moses’ submission that essentially an implied limitation should be read into clause 8 that would restrict the insurer to information available at the time of the accident.

[32]     This  is  backed  up  by  two  factors.    Firstly,  the  insurer  has  to  make  an assessment  of  whether  the  particular  employment  in  which  the  applicant  was engaged would continue for 12 months or more. Such an inquiry is not just whether or not the applicant would be in employment, but employment of the same kind as they had been prior to the accident and any incapacity.   That is a very specific criterion about which the insurer would have to form an opinion based mostly on circumstantial evidence.   In  such  circumstances there is sense in expanding the information available to an insurer which is more likely to avoid injustice rather than create it.   It would be better to make a decision based on more information rather than too little.

[33]     Secondly, the submission is wrong that the employer’s letter was sufficient for a finding of permanent employment.   If it was correct it would remove the decision-making power from the decision-maker to that of the author of the letter.  I

do not consider that could have been Parliament’s intent.   It would open up the scheme to abuse, as all a casual worker would then require is a letter from an employer stating that it was intended to employ them on a permanent basis for 12 months after an accident.   In my view, the intention of Parliament was that the evidence given by an employer must be considered in the light of all surrounding circumstances which would include the employment history of the worker up to the date of the decision.

[34]     It follows that this application for special leave is dismissed.

[35]     Memorandum  of  costs  should  be  filed  within  five  working  days  of  the handing down of this decision.

………………………… John Hansen J