Dean v Accident Compensation Corporation HC Auckland CIV 2005-404-4766

[2005] NZHC 442

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2005-404-4766

UNDER  the Judicature Amendment Act 1972

IN THE MATTER OF     s 145 of the Injury Prevention, Rehabilitation, and Compensation Act 2001

AND IN THE MATTER OF  s 27 of the New Zealand Bill of Rights

Act 1990

BETWEEN  ALBERT RONALD DEAN Plaintiff

ANDACCIDENT COMPENSATION CORPORATION

Defendant

Hearing:         7 December 2005

Appearances: C Henry for the plaintiff

D Tuiqereqere for the defendant

Judgment:      20 December 2005

JUDGMENT OF ELLEN FRANCE J (Strike out)

Table of contents  Para No:

Introduction  [1] Factual background  [2] The pleadings  [15] Striking out  [17] Legislation  [18] Discussion  [31] Result  [48] Costs  [49]

DEAN V ACCIDENT COMPENSATION CORPORATION HC AK CIV 2005-404-4766  20 December 2005

Introduction

[1]      This is an application to strike out judicial review proceedings.  The issue is whether the proceedings are ousted by s 133(5) of the Injury Prevention, Rehabilitation, and Compensation Act 2001.  Section 133(5) requires challenges to decisions made under the Act about rights to compensation to be dealt with under the procedure set out in the 2001 Act, not by this Court by way of judicial review.

Factual background

[2]      The  plaintiff,  Albert  Dean,  was  injured  in  a  motor  vehicle  accident  in November 2000.  He lodged a claim with the defendant Corporation for cover and entitlements for those injuries.  He was granted cover and entitlements were paid to him including weekly compensation for loss of income.

[3]      He returned to his employment on a limited basis in April 2001 and so received abated weekly compensation.  His employment was terminated on 6 June

2002 and he then again received full weekly compensation from the Corporation.

[4]      The plaintiff was assessed by an orthopaedic surgeon, Mr Brian Otto, in April

2003.   Surgery was recommended which the plaintiff underwent.   Mr Otto gave follow-up treatment and prepared  a number of  reports on the plaintiff  after  the surgery.   By November 2003, Mr Otto took the view the plaintiff was ready for “resettlement back in gainful employment”.

[5]      The plaintiff was also assessed in March 2004 by a musculoskeletal and pain specialist, Dr Kuttner.   An MRI was recommended and undertaken.   Dr Kuttner’s report was that the MRI was normal.  He said he had told the plaintiff it was “time for him to move on and find a job.”

[6]      On 17 May 2004, the Corporation told the plaintiff that the Corporation considered that his condition was no longer the result of the injuries sustained on

1 November 2000 and as such his entitlement would be suspended from 16 June

2004.

[7]      The plaintiff sought a review of the decision of 17 May 2004 to suspend his entitlements.   A report for these purposes was obtained from another orthopaedic surgeon, Rodney Gordon.

[8]      The reviewer, Ms J P Setefano, issued her decision on 23 November 2004 after a hearing.  The reviewer’s conclusion was as follows:

Faced with the conflicting evidence from experienced specialists, I have concluded that a third specialist opinion is required to settle this matter.  I have therefore decided to quash ACC’s decision.   ACC is to provide Mr Dean with the names of three senior orthopaedic surgeons and arrange for the one of his choice to examine him and produce a report of their findings. The specific issue that is to be addressed is whether Mr Dean’s ongoing incapacity/symptoms   are   causally   related   to   the   personal   injury   of

1 November 2000.   The chosen surgeon is to be provided with all of the medical information currently held on Mr Dean’s claim file.   Once that information is to hand, ACC is to issue another decision with review rights.

[9]      The plaintiff’s Case Manager, Helen Watana, deposes that she sent an email to Ms Setefano, the reviewer, on 7 December 2004 to get her clarification about the effect of the decision.   She did that because the reviewer did not expressly state whether the defendant Corporation was to reinstate the plaintiff’s entitlements whilst the further report was obtained.  Ms Setefano’s response of 8 December 2004 was that her decision,

did not state that ACC is to reinstate Mr Dean’s weekly compensation while a further opinion is sought.

[10]     Ms  Watana  accordingly wrote  to  the  plaintiff  on  8  December  2004  and confirmed the advice received from the reviewer.

[11]     The plaintiff then sought a review of the decision in the letter of 8 December

2004.  Ms Watana says she did not consider that was a decision capable of review. Ultimately, she wrote to the plaintiff on 30 December 2004 to again confirm that the Corporation would not be reinstating the plaintiff’s weekly compensation.

[12]     The plaintiff sought review of the decision in the letter of 30 December 2004. There was a review hearing in early 2005.  Although both parties considered there was jurisdiction to review that decision, the reviewer (Mr R M Carter) in a decision of 3 March 2005 said he had no jurisdiction.

[13]     The Corporation meanwhile got a further medical opinion from a different orthopaedic surgeon, this time Mr Gavin Farr.  The Corporation then wrote to the plaintiff on 3 June 2005.   That letter set out the relevant findings from Mr Farr’s report and his conclusion that the plaintiff’s incapacity was not substantially due to his injuries of 1 November 2000.  The letter said:

Therefore ACC finds that your current condition is not the result of the injury on 1/11/2000 for which cover was accepted.

As you know, ACC can only provide entitlements if they are needed as the result of “personal injury” for which you have cover.

This means that entitlements in respect of your injury of 1/11/2000 cannot be reinstated.

[14]     The  plaintiff  has  not  appealed  from  the  second  reviewer  (Mr  Carter’s) decision of 3 March 2005.   Nor has there been an application for review of the Corporation’s decision of 3 June 2005 not to reinstate entitlements.

The pleadings

[15]     There are two causes of action.  The first cause of action alleges a failure to perform a public duty.  Essentially, what the plaintiff says is that the reviewer in the decision of 23 November 2004 quashed the Corporation’s decision not to continue his entitlements.  The effect of quashing that decision was, the plaintiff says, that he was entitled to compensation until the Corporation re-made its decision, which it did on  3  June  2005.    As  the  Corporation  is  bound  by  statute  to  comply  with  the reviewer’s decision, the Corporation has acted unlawfully.  A declaration is sought that the defendant has committed an abuse of process, and an order for mandamus compelling the defendant to comply with the reviewer’s decision.

[16]     The second cause of action is based on s 27 of the New Zealand Bill of Rights Act 1990, that is, the right to the observance of the principles of natural justice.  The challenge here is to the Corporation’s process in “clarifying” the intent of the reviewer’s decision.   This is a  reference  to  Ms  Watana’s  inquiry of  the reviewer as to the effect of her decision on entitlements.  The plaintiff says he should

have been advised of the Corporation’s inquiry and been given an opportunity to be heard on it.

Striking out

[17]     There  is  no  dispute  as  to  the  principles  applicable  to  the  strike  out application.  The defendant referred to the Court of Appeal’s decision in Attorney- General v Equiticorp Industries Group Ltd [1996] 1 NZLR 528 at 533. Reference can also be made to Attorney-General v Prince and Gardner [1998] 1 NZLR 262 at

267.   The effect of both decisions is that the jurisdiction to strike out is to be exercised sparingly and only in a clear case.

Legislation

[18]   The relevant legislation is the Injury Prevention, Rehabilitation, and Compensation Act 2001.  The pertinent parts of the Act reflect earlier provisions in the   Accident   Compensation   Act   1982,   the   Accident   Rehabilitation   and Compensation Insurance Act 1992, and the Accident Insurance Act 1998.

[19]     The  key  part  of  the  Act  is  Part  5  entitled  “Dispute  resolution”  and  in particular s 133, which is under the heading “Preliminary provision”.  Section 133 is described as the “Effect of review or appeal on decisions”.

[20]     Section  133(1)  provides  that  a  decision  by  the  Corporation  on  a  claim continues to be of full effect even though an applicant has made a review application or there is some other proceeding relating to the decision.   Similarly,  s  133(2) provides that a review decision continues to be of full effect unless subsection (3) applies, even though there is a notice of appeal filed relating to the review decision or any other proceeding.  In terms of s 133(3), a review decision ceases to be of full effect if all the parties to the review agree to a variation of it for the benefit of the claimant.

[21]     Under s 133(4), a review decision is subject to s 161 which sets out the

Court’s powers to determine an appeal.

[22]     Importantly for this application, s 133(5) provides:

If a person has a claim under this Act, and has a right of review or appeal in relation to that claim, no court, Employment Relations Authority, Disputes Tribunal, or other body may consider or grant remedies in relation to that matter if it is covered by this Act, unless this Act otherwise provides.

[23]     Part 5 then deals with “reviews”.  Section 134 sets out who may apply for a review.  A claimant may apply to the Corporation for a review of any of its decisions on the claim; and any delay in processing the claim that the claimant believes is unreasonable.

[24]     There then follow procedural provisions about how to apply for a review; the Corporation’s response to receipt of a review application; and the reviewer’s duties. There is provision, generally, for a hearing.

[25]     Section 145 provides that in making a decision on the review,

(1) .. the reviewer must

(a)  put  aside  the  Corporation’s  decision  and  look  at  the  matter afresh on the basis of the information provided at the review; and

(b) put aside the policy and procedure followed by the Corporation and decide the matter only on the basis of its substantive merits

under this Act. ..

(3) The reviewer must –

(c)  dismiss the application; or

(d) modify the Corporation’s decision; or
(e)  quash the Corporation’s decision; or

(f)  direct the Corporation to make a decision within a time frame specified by the reviewer if the Corporation has not made the decision in a timely manner as contemplated by sections 54 and

134(1)(b); or

(g) make  the  decision  for  the  Corporation  if  it  has  not  made  a decision in a timely manner as contemplated by sections 54 and

134(1)(b).

[26]     Section 145(4)  states that if the reviewer quashes the Corporation’s decision,

(4)  .. the reviewer must –

(a)  substitute the reviewer’s decision for that of the Corporation; or

(b) require   the   Corporation   to   make   the   decision   again   in accordance with directions the reviewer gives.

[27]     The reviewer in this case has acted under s 145(4)(b).

[28]     Section 146 then deals with deemed review decisions and s 148 with the costs on review.

[29]     Part 5 also deals with appeals.   The same sort of process as for reviews is followed.   Section 149 sets out who may appeal; s 151 deals with the manner of bringing an appeal; and s 155 with the hearing of an appeal.

[30]     In terms of s 161, the Court must determine an appeal by dismissing the appeal; or modifying the review decision; or quashing the review decision.  Section

161(2) states that if the Court quashes the review decision, it must “indicate the effect clearly.”

Discussion

[31]     I agree with the Corporation that the question is whether the plaintiff can bring the perceived error within the statutory remedies.  If what the Corporation has done, or has omitted to do, is amenable to appeal/review under the statutory scheme then s 133(5) means the Court cannot grant relief in separate judicial review proceedings.

[32]     That this is the effect of s 133(5) is clear from the Court of Appeal’s decision in Ramsay v Wellington District Court, CA 47/04, 4 August 2005.   The Court of Appeal was considering an appeal from a decision of Goddard J in the High Court. Her Honour concluded that the predecessor to s 133(5), which was in the same terms, operated to bar a challenge to the judicial review of the District Court’s process in considering an appeal in the District Court.   McGrath J delivering the reasons of the Court of Appeal explained that the effect of s 133(5) was to,

Require[s]  that  challenges  to  decisions  made  under  the  Act,  concerning rights for compensation, be brought under a prescribed procedure involving

an initial statutory review, which can be followed by an appeal on the merits to the District Court. (at [30]).

[33]     McGrath J said that the statutory procedure,

is intended to ensure that disputes concerning Corporation decisions  are speedily and finally resolved through a straight forward statutory process of administrative review, following by a right of general appeal to the District Court.  Further appeals to the High Court and Court of Appeal are restricted. They are confined to questions of law and require leave.  [at 31]

[34]     After discussing cases, for example, breach of natural justice going to the validity of a decision, where judicial review may be the only remedy, McGrath J continued,

[33]   In the case of [s 133(5)] the drafter has been careful to confine the scope of the statutory exclusion of the Courts to matters where the person has  a  right  to  invoke  the  statutory  process  of  review   and   appeal. Accordingly, if the perceived error or invalidity cannot be fitted within that procedure, then the exclusion of other remedies will not apply. .. It will accordingly be sufficient, in the present case, for the appellant to maintain its judicial review proceeding if he can show that the grounds on which he relies in seeking judicial review remedies could not be determined under the statutory process.  But if they are amenable to decision under the statutory scheme, the effect of [s 133(5)] is that the Court is barred from granting relief in the separate judicial review proceedings.

[35]     In  resisting strike out, Mr  Henry for the plaintiff  submits  it  is  clear the plaintiff has a tenable case based on the reviewer’s decision to quash the Corporation’s decision to suspend entitlements.   That follows, he says, from the meaning of “quash”.

[36]     As discussed, the question is rather whether the matters raised by the plaintiff in the judicial review proceedings are amenable to consideration in terms of the statutory processes.

[37]     On that, Mr  Tuiqereqere  for  the  Corporation  says  the  plaintiff  has  three options under the Act open to him:

a)       Appeal the reviewer’s decision of 23 November 2004 to quash the Corporation’s decision.  (An appeal is out of time and so leave would be required.)

b)Appeal  the  second  reviewer’s  decision  of  3  March  2005  that  the reviewer had no jurisdiction to review the Corporation’s letter of 8

December 2004 confirming the decision not to reinstate the plaintiff’s entitlements.

c)        Seek statutory review of the Corporation’s decision of 3 June 2005 that it will not reinstate.

[38]     As to the first option, the plaintiff’s position is that he succeeded in this review in that the Corporation’s decision was quashed.  There is nothing for him to appeal as he was successful.   Hence, on judicial review he instead seeks orders requiring the Corporation to comply with the reviewer’s decision.

[39]     It is necessary here to refer to the Corporation’s argument on the effect of the reviewer’s decision to quash.  The Corporation says that s 145(4)(b) means that the status quo is not reinstated, that is, the plaintiff’s entitlements are not reinstated. That section provides that in the present case the reviewer must require the Corporation   to   make   the   decision   again   in   accordance   with   directions. Section 145(4)(b) is of course predicated on the reviewer having first quashed the Corporation’s entitlements decision.

[40]     On its face, the decision to suspend entitlements is what is quashed.  As Mr Henry put it, what has been quashed if not that?   In the normal course one would expect the status quo then prevails.  However, it is not appropriate for me to express any concluded views on the merits of the plaintiff’s claim.   The plaintiff must be right, though, that in his case he cannot appeal the reviewer’s decision to quash. That is what he says he sought in applying for a review.

[41]     I deal next with the third option, that is, review under the Act of the 3 June decision not to reinstate.  The difficulty for the plaintiff is that if he lost on the merits in  a  statutory  review  of  that  decision  it  would  still  not  address  the  issue  of entitlement to reinstatement for the period from the date of the first reviewer’s decision (23 November 2004) to 3 June 2005.  Accordingly, I do not consider the third option is a viable one for the plaintiff.

[42]     The Corporation is right, however, that the second option, an appeal from the second reviewer’s decision declining jurisdiction is open to the plaintiff.  That would enable the plaintiff to challenge the Corporation’s decision of 30 December 2004 confirming the Corporation would not reinstate his benefits for the interim period. In the context of that challenge, the plaintiff could raise the issues arising out of the second cause of action because they are linked into the Corporation’s decision not to reinstate the entitlements.

[43]     I need to mention here Mr Henry’s argument that the Corporation’s decision not to reinstate entitlements is a nullity because the Corporation had no power to make that decision.  He says there is no ability to appeal a nullity and so judicial review is the only option.

[44]     I see the matter in this way.   The Corporation is bound by a reviewer’s decision (s 147(1)(a)).  The question on appeal from the second reviewer’s decision would be whether the Corporation in the decision in the letter of 30 December 2004 has complied with s 147(1)(a) of the Act in declining to reinstate entitlements given the reviewer’s decision to quash.

[45]   The position is directly analogous to that arising in Denzel v Accident Compensation Corporation (HC Wellington, CP 8/01, 29 October 2002).   There I took the view that a challenge to the way in which the Corporation used its power to revoke an earlier decision was amenable to the statutory process of appeal and review so the predecessor to s 133(5) applied.  The decision in issue was about the way the Corporation applied the Act.  In my view, that is the situation here.

[46]     In  these  circumstances,  in  terms  of  the  decisions  which  the  plaintiff challenges,  he  does  have  a  remedy available  under  the  Accident  Compensation Review and Appeal process, that is, to appeal the second reviewer’s decision that there was no jurisdiction.  That means s 133(5) applies to bar judicial review.

[47]     If leave to appeal from the second reviewer’s decision is required, this is a case in which leave seems appropriate.   Similarly, it would be expected that (assuming the Corporation wishes to maintain its stance on the effect of the decision

to quash) the Corporation would again take the view there was jurisdiction on an appeal.

Result

[48]     The application to strike out is accordingly granted.

Costs

[49]     Mr Tuiqereqere for the Corporation had no instructions about costs but said the Corporation did not usually seek costs in a case of this nature.  I consider this is a

case where costs should lie where they fall.  No award of costs is made.

Ellen France J

Delivery time in accordance with Rule 540(4):  20 December 2005, 10am.

Solicitors/Counsel:

C Henry, PO Box 616, Orewa

Witten-Hannah Howard, 187 Hurstmere Road, Takapuna, Auckland
D Tuiqereqere, PO Box 137 272, Parnell, Auckland
M J Mercier, PO Box 242, Wellington