Juhasz v Medical Life Assurance Society Limited

[2017] NZHC 2866

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-Ā-TARA ROHE

CIV-2016-485-000760 [2017] NZHC 2866

BETWEEN

EVA SUSAN JUHASZ

Plaintiff

AND

EVA JUHASZ LIMITED Second Plaintiff

AND

MEDICAL LIFE ASSURANCE SOCIETY LIMITED

Defendant

Hearing:	16, 17, 18, 19, 20 October 2017
Appearances:	C Meechan QC and W D Buckham for Plaintiffs E Horner and L Tidey for Defendant
Judgment:	23 November 2017

JUDGMENT OF CHURCHMAN J

Pursuant to r 11.5 of the High Court Rules I direct the delivery time of this judgment is

3:30 pm on 23 November 2017

JUHASZ v MEDICAL LIFE ASSURANCE SOCIETY LTD [2017] NZHC 2866 [23 November 2017]

Introduction  [1] Preliminary issue  [7] Facts            [8] Return to work  [22]

On-call work  [37] ESC contracting earnings  [45] The July 2015 report  [59]

The evidence at hearing  [109] Dr Juhasz’s evidence  [110] Relationship with Dr Kenny  [113] Amount of hours communicated to Dr Kenny  [124] Dr Juhasz’s perceived hours  [132] Evidence for MAS  [157] Dr Kenny’s evidence  [167] Medical and hospital witnesses  [180] The financial evidence  [197]

The submissions  [218] Counterclaim  [242] Analysis         [251] (a)  The correct questions under the policy  [257] Incapable of working for more than 40 hours per week  [264] “Actual work”       [266]

Dr Juhasz’s estimated work hours incomplete  [279] Claimed underperformance  [282] Capacity  [287] Weekly income calculations  [299]

(b)   Did the expert have all the relevant information?  [310]

Challenges to relevant information  [327]

(c)  Did MAS act in good faith in having due regard for the interests of

Dr Juhasz?  [336]

(d)   A decision reasonably open to it  [350] The counterclaim  [353] Costs  [373]

Introduction

[1]      The first plaintiff, Dr Eva Juhasz, is a general surgeon with sub-specialties in breast and colorectal surgery.

[2]      At the times relevant to this dispute, she was an employee of and (through the second plaintiff Eva Juhasz Limited) a contractor to the Waitemata District Health Board (WDHB).

[3]      The second plaintiff held a policy of income security insurance (the policy) with the defendant, Medical Life Assurance Society Limited (MAS). The first plaintiff was the Insured Person under the policy.

[4]      The policy provided loss of income insurance to cover circumstances when the

Insured Person suffers either Total or Partial Disablement.

[5]      The principal issue in this case is for what period, including up to the present day, Dr Juhasz fell within the definition of “Partially Disabled” and whether, in 2015, she ceased to meet the policy definition, giving MAS the right to cease paying the benefits under the policy.

[6]      There is also a counterclaim whereby MAS is seeking to recover what it says are overpayments relating to a period in 2015 during which Dr Juhasz received a Partial Disablement benefit and MAS says that she did not meet the criteria set out in the policy.

Preliminary issue

[7]      By way of minute of 9 October 2017 I raised with counsel the fact that the solicitors for the defendant in this matter had in the past undertaken some conveyancing work for me and by way of a minute of 10 October 2017 I advised that, when at the bar, I had occasionally received instructions from that firm. Neither party took any issue with me presiding over this matter.

Facts

[8]      On  15 December 2010  Dr Juhasz  underwent  what  should  have  been  a straightforward surgical procedure, a metatarsal osteotomy or, in simpler language, surgery for the removal of bunions from her feet.

[9]      Dr Juhasz suffered post-surgical complications in relation to the surgery on her left foot.  She began to experience persistent and increasingly severe pain.

[10]     Prior to the surgery, in addition to her work with the WDHB, Dr Juhasz had conducted a significant private practice through Waitemata Specialist Centre Ltd and Waitemata Endoscopy Ltd. Pre-disability, she worked some 50−60 hours per week in combined public and private practices.1

[11]     In both June and December 2011 Dr Juhasz underwent further surgery and, following her remedial bone graft surgery on 20 December 2011, she made a claim under the policy.  This date was treated as the commencement of the 90-day wait period before eligibility for payments under the policy commenced.

[12]     On 18 June 2012 Dr Juhasz was no longer able to work as a general surgeon and ceased work completely.

[13]     On 27 June 2012 MAS paid the first Total Disablement benefit under the policy for the period 19 March 2012 (being the date that the 90-day wait period had expired) to 1 April 2012.

[14]     The plaintiff initially also received payments from WDHB by way of sick leave and payments from ACC.2

[15]     MAS assessed Dr Juhasz’s annual Pre-disability Income for the purpose of the policy  as  $677,688,  which  produced  a  weekly  pre-disability  income  figure  of

$13,032.46.3  The Pre-Disability Income was subject to an inflation adjustment for the

1      Agreed Bundle of Documents [ABD] vol 4 at 1364.

2      Dr Juhasz’s brief of evidence, August 2017 at [4.1].

3      ABD vol 4 at 1384.

purpose of benefit calculation and by April 2015 was deemed to be $694,738.04 with a weekly figure of $13,360.35.4   For the periods between 19 March 2012 and 31 May

2015 MAS paid Dr Juhasz the total sum of $828,307.77 in Total and Partial Disability payments.

[16]     After some 18 months in receipt of a Total Disability payment from MAS, Dr Juhasz began to return to work on a graduated basis.

[17]     On   14 November 2012   the   WDHB   instructed   Dr Courtenay   Kenny, (Dr Kenny), a Specialist Occupational Physician to assess Dr Juhasz’s medical fitness for work.

[18]     Dr Kenny practices in the public sector as an employee of WDHB and in the private sector through his consulting company, Occupational Medicine (North Shore) Limited.

[19]     Dr Kenny  first  saw  Dr Juhasz  in  a  clinical  capacity  on  22 January 2013 following the referral from WDHB surgical services management team. He was asked to provide a specialist assessment of Dr Juhasz’s medical fitness for work and to assist in developing a plan leading towards normal work hours and duties.

[20]     Dr Kenny saw Dr Juhasz on six subsequent occasions at the referral of the

WDHB:  19 March 2013;  6 August 2013;  17 September 2013;  11 October  2013;

25 March 2014 and 11 July 2014.

[21]     On the referral of MAS Dr Kenny met with Dr Juhasz on 29 June 2015 in relation to Dr Juhasz’s current working capacity and that meeting produced a report that has become central to these proceedings (the July 2015 report).

Return to work

[22]     On 8 July 2013 Dr Juhasz commenced a return to work programme.5

4      At 1425.

5      The details of the return to work plan are set out in ABD vol 4 at 1106−1116.

[23]     Initially Dr Juhasz worked alongside colleagues in the Department of General Surgery at WDHB such as Susan Jerred, Matt Soop and Mike Holme-Moir and gradually increased her working hours from 12 to 28 hours per week over a ten-week period to September 2013.

[24]     With the gradual increase in work hours came a transition from the Total Disability benefit to the Partial Disability benefit and on 19 December 2013 MAS paid Dr Juhasz $97,362.72 by way of Partial Disability benefit covering the period of

29 July − 1 December 2013.

[25]     As  of  September 2013  Dr Juhasz  worked  a  regular  roster  that  averaged

28 hours per week.6  This rostered 28 hours did not involve any on-call work, Elective

Surgery Centre work or work for Breast Screen Aotearoa.

[26]     Doctor Juhasz’s  general  surgery  role  underwent  a  job-size  review  on

10 April 2014,  where  her  hours  were  agreed  as  comprising  an  average  total  of

30.5 hours per week broken down between clinical duties of 24.5 hours per week and non-clinical duties of 6 hours per week (the base hours, the job-sized role).7

[27]     Attached to the job-size review was a schedule of clinical duties specified the clinical hours,8  and a similar schedule listed non-clinical duties.9    The non-clinical duties did not allocate any time for activities such as teaching or continuing medical education (CME).

[28]     The WDHB  pay  periods  were  fortnightly and  the  certificate  of  earnings provided by WDHB’s payroll provider (healthAlliance) for the period 19 May 2014 to  15 June 2014  recorded  Dr Juhasz  as  being  “Currently  Employed,  FTE  .763 (61 hours)”. An hourly rate of $100.1918 was specified.10

[29]     As well as the job-sizing exercise which settled Dr Juhasz’s base hours in April

2014 Dr Juhasz entered into a separate agreement with WDHB in relation to the

6      ABD vol 4 at 1116.

7      ABD vol 4 at 1119.

8      At 1120.

9      At 1122.

10     ABD vol 3 at 798.

provision of surgical services as an independent contractor to the Elective Surgery

Centre (ESC).11

[30]     Although  the  contract  for  ESC  work  is  dated  8 April 2014  Dr Juhasz  in evidence confirmed that the work and invoicing for it commenced in March 2014.12

Although the ESC contract describes “Eva Juhasz” as the party contracting with WDHB, the actual entity that billed and was paid for the work was Eva Juhasz Limited.13   Remuneration was based on the particular procedures undertaken, with a fee per surgical procedure.14

[31]     The surgical fee was said to cover:

•    all pre-operative organisation;

•    the surgical procedure; and

•all post-operative care, including any after hours on-call requirements during the patient’s hospital stay.15

[32]     The ESC surgery occurred on a four-week cycle with Dr Juhasz undertaking one all-day ESC list and one half-day ESC list every four weeks.16   This equated to

12.5 hours  every  four  weeks  or  3.125  hours  averaged  per  week.    No  evidence addressed the quantum of time involved in pre or post-operative obligations, but it would have been in addition to the time involved in undertaking the surgical lists. Compared to the $100.1918 per hour that Dr Juhasz was paid for her job-sized general surgery  role,  the  ESC  contract  work  was  highly  remunerated  with  Dr Juhasz

estimating at the hearing that it produced an hourly return of $1,000.17

11     ABD vol 4 at 1346.

12     Notes of Evidence [NOE] at 30, line 24.

13     NOE at 30, line 22; Juhasz BoE at [10.2]; ABD vol 4 at 1262−1308.

14     The Schedule of Procedures and Rates of Remuneration is set out ABD vol 3 at 1309−1310.

15     ABD vol 3 at 1347.

16     Juhasz BoE at [10.2].

17     NOE at 95, line 4.

[33]     In addition to undertaking her base hours and the 1.5 days per four-week ESC surgical work, Dr Juhasz also undertook a separate stream of work for WDHB relating to Breast Screen Aotearoa from her return to work in July 2013.  This work was paid fortnightly and listed separately to Dr Juhasz’s base salary on her payslip.

[34]     As at the time the job-sizing exercise was undertaken in April 2014 Dr Juhasz’s estimated that her Breast Screen Aotearoa commitment was probably no more than a total of four hours in a four-week to six-week cycle.

[35]     In addition to undertaking the Breast Screen Aotearoa clinics there was also a related obligation to attend a weekly Wednesday morning multi-disciplinary meeting (MDM) in relation to the breast screening clinic although Dr Juhasz indicated that she did not attend every week.18  If she did not attend the breast screen MDM she was not paid for it. Payment for attending the MDM was at a fixed rate of $150.19  The fee for undertaking the Breast Screen Aotearoa clinic was a flat fee of $500 per clinic.20

[36]     Dr Juhasz’s payslip dated November 2014 confirms that the FTE base salary had increased to $212,000 per annum with a base hourly rate of $101.63.

On-call work

[37]     By mid-2014 Dr Juhasz wished to return to undertaking rostered on-call work. WDHB requested that before it would approve Dr Juhasz’s returning to on-call duties she obtain clearance to do so from Dr Kenny.21

[38]     Doctor Kenny met with Dr Juhasz on 11 July 2014 to assess whether it was reasonable and appropriate for her to join the on-call roster and approved the move.22

However,  as the on-call  roster was  already finalised  for the remainder of 2014

18     NOE at 77, line 31.

19     See ABD vol 3 at 825 for an example of a payslip relating to attendance at a breast screen MDM

on Wednesday 26 November 2014.

20     See, for example, ABD vol 3 at 827.

21     NOE at 33, line 20.  See also email from Karen Hellesoe on 19 September 2014 to Nina Burt at MAS recording that Dr Juhasz was keen to return to both being able to attend the hospital after hours for review/reassessment of her own surgical patients if and when required, and returning to participating in the general surgical afterhours roster.

22     ABD vol 4 at 1452.

Dr Juhasz  did  not  actually  commence  participation  in  the  on-call  roster  until

February 2015.

[39]     As to why she wished to recommence the on-call obligations that she had not undertaken since becoming unwell, and at a time when she said she was not fulfilling her 30.5-hour job-sized role Dr Juhasz said:23

As a surgeon in a department I believe everyone has to do their fair share of the bad as well as the good and on-call is seen as the bad, and I do not believe that anyone in our department believes that someone should be employed there and not do the on-call, and that was the reason why I wished to pull my weight and be back on the call roster.

[40]     She also said:24

I wanted to be a fully functioning member of our department and to be a fully functioning member of our department one really has to be on the call roster.

[41]     The on-call roster in the General Surgery Department at WDHB involved being on-call one in four Tuesday nights from 5 pm to 8 am the next morning; and over a 72 hour period one in 14 weekends from 8.00am Friday morning to 8 am Monday morning.  The on-call surgeon also covered the acute surgical theatre from 8 am to

5 pm Monday–Thursday in the week after their rostered on-call weekend.25   The on-

call work was remunerated additionally to the base hours salary. At the time Dr Juhasz recommenced the on-call work on 2 February 2015 it attracted an annual payment of

$82,619.26   At the hourly base rate of $101.63 this would have allowed for 812.94

hours of work annually or an average of 15.63 hours per week.  On 8 February 2016 as a result of an additional surgeon joining, the roster call became 1:15 and the remuneration was adjusted to $77,188.27

[42]     The on-call remuneration was paid fortnightly in the sum of $3,177.65 with the first   payment   showing   in   Dr Juhasz’s   payslip   for   the   pay   period   ending

8 February 2015.28     At this time Dr Juhasz’s weekly pay for her base hours was

23     NOE at 34, line 7

24     NOE at 34, line 27.

25     Juhasz BoE at [6.5].

26     ABD vol 4 at 1117.

27     At 1118.

28     ABD vol 3 at 847.

$3,099.71; the fortnightly base pay being $6,199.42. Receipt of the on-call allowance was shown in the same payslip that recorded the base fortnightly pay and increased that sum by over 50 per cent.

[43]     Once Dr Juhasz commenced on the on-call roster there was one change to what she did during her base hours that made up the job-sized role.  That change occurred one week in 14 (and as from 8 February 2016, one week in 15) when, after the week where she had worked the on-call weekend, her normal hours Monday–Thursday were replaced with acute theatre nine hours per day.29    On the Fridays of such a week Dr Juhasz would undertake her normal Friday duties for that week and fit in whatever ward rounds were related to the previous on-call weekend intake within the time allocated to her normal rostered duties.30

[44]     Dr Juhasz informed MAS of her on-call work during a telephone conversation on 23 February 2015. MAS’s notes of that conversation record Dr Juhasz as saying:31

Eva mentioned she is expecting her on-call to increase slightly this year.

That would seem to be a significant understatement in relation to the assumption of responsibilities  that  attracted  remuneration  of  $82,619  annually,  or  more  than

50 per cent of the income for her job-sized role, and in a situation where, prior to being cleared  by  Dr Kenny  to  participate  in  the  on-call  roster,  Dr Juhasz  had  been undertaking no call work at all.

ESC contracting earnings

[45]     Dr Juhasz began receiving payments (through Eva Juhasz Limited) for the ESC contract work in May 2014. The profit and loss statement for Eva Juhasz Limited for the month ended 31 July 2014 refers to receipt of payment for professional fees of

$18,240 in May 2014 and $26,082 in July 2014.32   The profit and loss statement for

Eva Juhasz Limited for the month ended 30 September 2014 shows receipt of payment for professional fees in August 2014 of $14,579 and September 2014 of $8,348.33

29 Dr Juhasz’s brief of evidence in reply, 25 September 2017 [BoE in reply] at [15].

30 At [16].

31     ABD vol 4 at 1419.

32     ABD vol 3 at 811.

33     At 810.

[46]     The profit and loss statement for Eva Juhasz Limited for the month ended

31 January 2015 shows receipt of payment for professional fees of $34,033 in October

2014;  $3,580  in  November 2014;  $14,234  in  December 2014  and  $14,079  in January 2015.34    The same document shows year-to-date payments of professional fees of $133,174.

[47]     MAS was unaware of the sums that Dr Juhasz was receiving via Eva Juhasz Limited in relation to the ESC contract work.  Throughout 2014 Dr Juhasz had been required to submit progress reports to MAS and those reports asked the following questions:

5.Please provide details of any change to your daily activities during the reporting period including any change in work ability.

6.Have you engaged in any other work, either paid or voluntary during the reporting period?

7.Do you receive or are you entitled to receive any income from any other source?

[48]     In the progress report completed by her on 4 February 2014, Dr Juhasz had answered “No real change” to question 5 and “No” to questions 6 and 7.35    After signing the ESC contract in April Dr Juhasz provided the same answers in the progress report dated 2 May 2014.36

[49]     In the progress report dated 24 June 2014 covering the period 1 April 2014 to

31 May 2014 Dr Juhasz left the answer to question 5 blank.37    She ticked “Yes” to question 6 and added “In addition to my salary I have received payments in May from WDHB for extra contract work undertaken in April and May − $18,240 plus GST.” She answered “No” to question 7.

[50]     In the 4 February 2014 progress report Dr Juhasz stated that her hours of work were “working up to 28 hours per week”.38   In the subsequent 2014 progress reports

34     At 813.

35     ABD vol 2 at 495.

36     At 511.

37     At 526.

38     At 494.

she referred to her weekly hours of work as either being 28 or 30 hours or “as previously documented”.

[51]     In the progress report dated 7 October 2014 Dr Juhasz left question 5 blank and answered “No” to questions 6 and 7.

[52]     On the progress report dated 3 December 2014 Dr Juhasz answered “No real change” to question 5 and “No” to questions 6 and 7.39

[53]     The progress report that Dr Juhasz had submitted in June 2014 was undated and unsigned so MAS sent it back to her with a covering letter which contained the following request:40

Also, can you confirm if the additional income you received from WDHB will have been included in your taxable earnings which we will be receiving details from [healthAlliance]?  The last certificate of earnings I received was for the four weeks to 18/5/14 and I have attached a copy which might help.

If it was paid in addition to the earnings advised, we will revise your entitlement for this period.

[54]     Dr Juhasz replied by email of Monday, 16 June 2014, the relevant passage saying:41

It looks like the additional earnings are included in the certificate of earnings.

[55]     This statement was incorrect.   The income from the ESC work was not included in the certificate of earnings received from healthAlliance and could not have been because Dr Juhasz was invoicing the ESC work and being paid for it through Eva Juhasz Limited.

[56]     On 8 January 2015 MAS emailed healthAlliance requesting a certificate of earnings  for  the  four-week  period  1 December 2014  to  28 December 2014,  and

emailed again on 15 January 2015 making a further request for this information.

39     At 549.

40     ABD vol 1 at 59.

41     At 59.

[57]     On 15 January 2015 Dr Juhasz telephoned MAS to let them know that there might have been an overpayment of her Partial Disability benefit entitlements.  As a result of that telephone call MAS emailed Sharon Cooper at Dr Juhasz’s accountant, Shore Chartered Accountants,  requesting  details  of the accounts  for Eva Juhasz Limited for the 2013 and 2014 financial year and monthly management reports from

1 April 2014.42   After further prompting the requested information was received by

MAS on 10 February 2015.43

[58]     The information provided revealed an overpayment in the region of $54,546.86 for the period 1 April 2014 to 30 November 2014.   Dr Juhasz agreed to repay the overpayment by way of deduction from the ongoing Partial Disablement benefit. This meant that payments under that benefit were suspended until the $54,546.86 had been repaid.44

The July 2015 report

[59]     By email of 26 February 2015 MAS advised Dr Juhasz that they wished her to see Dr Kenny, “for MAS’s benefit”.45    The email indicated that the purpose of the proposed meeting with Dr Kenny was:46

It would be a good opportunity for us to get a snapshot of where you are currently at and what could reasonably be expected to change, including exploring what interventions may have a positive impact on your work capacity.

[60]     Dr Juhasz replied to that email the same day with the email starting, “[t]hat all sounds fine”.47

[61]     By email of 18 May 2015 MAS confirmed that they had arranged for Dr Juhasz to see Dr Kenny on Monday, 15 June 2015 at 2.15pm.48  Dr Juhasz emailed MAS back

indicating that she was operating on 15 June and enquiring if she should organise an

42     ABD vol 3 at 850.

43     At 849.

44     NOE at 89, line 9.

45     ABD vol 1 at 68.

46     At 68.

47     At 68.

48     At 76.

appointment directly with Dr Kenny.49  That email did not indicate that Dr Juhasz had any concern about seeing Dr Kenny. An appointment was arranged for 29 June 2015.

[62]     By email on 19 June 2015 Dr Juhasz, for the first time, raised an objection to

Dr Kenny. The relevant parts of her email to MAS said:50

I was wondering if it was possible to see an alternative occ health specialist or do I need to see one employed by Waitemata DHB? I have not really ever felt completely comfortable with seeing Courtney [sic] Kenny in the past and do wonder about the  appropriateness of seeing someone who has the same employer.

[63]     By email of 23 June 2015 MAS indicated that they were unable to re-arrange an alternative Occupational Medicine assessment without there being a significant delay in obtaining another appointment date, and that they wished to proceed with the

29 June 2015 appointment.51

[64]     By letter of 23 June 2015 MAS advised Dr Kenny of the purpose of the referral.  Relevant passages stated:52

At this time, we need to understand Dr Juhasz’s current work capacity and whether, with optimal treatment and rehabilitation, Dr Juhasz could increase her capacity to consistently work beyond 40 hours per week and how MAS could provide support in this area ...

[Include] your opinion as to whether Dr Juhasz could increase her current work capacity and to what degree.  If you consider she is currently prevented from increasing her capacity to work as a result of a medical condition, please provide details about this including limitations and/or restrictions.

[65]     Dr Juhasz saw Dr Kenny on 29 June 2015.

[66]     Dr Kenny’s    report    dated   27 July 2015    was    received   at    MAS    on

7 August 2015.53

49     At 76.

50     At 91.

51     ABD vol 1 at 99.

52     At 97.

53     ABD vol 2 at 591.

[67]     The July 2015 report summarised Dr Juhasz’s medical history and noted that she:54

... has always had a very strong and immutable belief that her foot pain is a direct result of infection in the left foot (soft-tissue structures rather than bone or joint), and more recently throughout the soft tissue of her left lower limb more generally, but no evidence has been identified in recent years to support ongoing soft-tissue, bone or joint infection.

[68]     Dr Juhasz’s presentation was noted to be:55

... entirely consistent with a disorder of central neural sensitisation, best categorised as a central pain disorder, with symptoms experienced throughout the left lower limb.

[69]     In terms of Dr Juhasz’s capacity to work, the July report concluded that, since the implementation of the graduated return to work programme in July 2013:56

... Dr Juhasz has progressed from performing limited surgical tasks on a part- time basis, up to working approximately 30-34 hours per week (and up to 8-

10 hours on two days per week) in April 2014 through to her present level of surgical operating and clinical work (comprising at least 30 hours per week) and with a further approximately 10 hours per week of DHB contract work

(ESC), work with Breast Screen Aotearoa, and participation in the after-hours on-call roster for Waitemata DHB.

[70]     The July report also concluded:57

While Dr Juhasz continues to report significant, constant and widespread left lower limb pain and other sensory disturbances, she agrees that she is continuing to perform all of her normal expected operative and clinic duties at work, she advises that there are no reports of any errors, omissions or other impairment in the performance of her professional duties, and I am not aware of any concerns from her management or from clinical colleagues about her professional competence, reliability and attendance.

[71]     In a document appended to the July 2015 report intituled “Background Clinical Information” Dr Kenny summarised what he said Dr Juhasz had told him about the work she was undertaking and stated that:58

Dr Juhasz states that averaged over the full period of the surgical roster

(14 weeks), she believes that she works approximately 42 hours per week.

54     At 593A.

55     At 594.

56     ABD vol 2 at 594.

57     At 594.

58     At 596.

[72]     On 23 September 2015 MAS emailed Dr Juhasz indicating MAS had received Dr Kenny’s report and wishing to have a chat with her about it before sending her a copy.59

[73]     By email sent from her iPhone on 24 September 2015 Dr Juhasz indicated that she was away until 11 October 2015.60

[74]     By email of 28 September 2015 to Dr Juhasz MAS stated that:61

Information in the report regarding the number of hours you are working per week indicates that support under the policy has come to an end and was [sic] I wanting to go through that with you. I feel that leaving this for a further two weeks while you are away would not be ideal so I have attached a copy of the report.

The email invited Dr Juhasz to telephone to discuss the report.

[75]     Dr Juhasz  replied  on  28 September 2015  in  an  email  which  included  the comment:62

... I would be nervous about coming off cover in case I find myself unable to work in the near future.

[76]     By email of 30 September 2015 to MAS Dr Juhasz said:63

I have read Courtenay Kenny’s report and have no issue with the substance of the report. There are some inaccuracies with the hours worked which I would like to talk to you about.

[77]     By email of 1 October 2015 MAS told Dr Juhasz:64

With regards to the hours and why this impacts your claim, your policy provides a partial disability benefit up until the earlier of:

•       Your Weekly Income is more than 75 per cent of your Pre-Disability

Income, or

•       You are capable of working for more than 40 hours per week.

59     ABD vol 1 at 120.

60     At 120.

61     ABD vol 1 at 121.

62     At 121.

63     At 125.

64     At 126.

The email further said:

... Based on the hours the report indicates you are working, the support under the policy has reached its end point.

[78]     Dr Juhasz replied to that email the same day, the relevant parts of the email stating:65

As mentioned before I am not comfortable with Courtenay Kenny being the

Occ health physician involved as he also works for WDHB.

My hours are quite different than what he has documented (I am not sure why as I went over my schedule with him in detail) and I would appreciate the opportunity to discuss this in confidence with you when I am back.

The email did not indicate why it was necessary to have the discussions about the hours of work “in confidence”.

[79]     By email of 17 October 2015 Dr Juhasz wrote to MAS saying that she had “... a flexible contract for up to 30 hours per week as well as ... 12.5 hours at the ESC over a four-week period”.  The impression that the contract was flexible as to the number of hours worked is incorrect. The flexibility was around how the hours were worked. The role was job-sized for a fixed number of hours and that number was 30 hours per week.

[80]     Dr Juhasz also referred to her on-call commitments and her Breast Screen Aotearoa obligations and said that in an acute theatre week (1:14) she would be doing “a total of 39 hours” (0800–1700 Mon-Thurs and 0900–1200 on Fri)”. She said these duties averaged 23 hours a week and were:66

... less than what I should be doing but the contract was negotiated with the understanding that I would build up to a higher level over time without having to renegotiate my contract every six months.

[81]     MAS responded to the email of 17 October 2015 with an email to Dr Juhasz on 12 November 2015.67   That email indicated that MAS’s assessment that the claim

was at an end was based on the information obtained from Dr Kenny’s July report.  It

65     At 126.

66     ABD vol 1 at 130 and 131.

67     At 132.

noted that Dr Kenny had based his opinion on Dr Juhasz’s capacity to work on the stated “average 42 hours per week”.  It also noted that:

In saying that, our claim assessment is based on what your capacity to work is assessed as and not what hours you are paid to work.

[82]     The letter indicated that if Dr Juhasz believed that Dr Kenny had incorrectly documented the work commitments and hours stated she should let MAS know, and it indicated that in that situation MAS would need to refer Dr Juhasz’s email to Dr Kenny for his review and comment. The letter further indicated that:68

If the work commitments and hours were not accurately reported by you to Dr Kenny, you will need to consult with him at your own cost, to discuss the difference.

[83]     The letter also indicated that if, as a result of Dr Juhasz consulting again with

Dr Kenny, he amended his report, MAS would then:

... need independent verification of the hours you have indicated you are actually working and perhaps your surgical manager could assist with this?

[84]     The letter concluded by noting that if the content in Dr Kenny’s July report needed to be corrected then “it needs to be corrected at source”.   The email also indicated that MAS was happy to discuss this matter further by telephone with Dr Juhasz.

[85]     Dr Juhasz sent an email to MAS on 12 November 2015 indicating that she was not “happy with Courtenay Kenny being involved as he also works at the DHB … [and had] ... incorrectly stated my work commitments and [that she] would like this to be reviewed.”69   Dr Juhasz finished her email by saying that she preferred to have a occupational health specialist other than Dr Kenny involved.

[86]     On 13 November 2015 Dr Juhasz emailed MAS.70   That email contained the following comments:71

68     ABD vol 1 at 132.

69     At 134.

70     At 139.

71     At 139.

I have not got a good relationship with [Dr Kenny] because of the way he has dealt with me in the past.

...

I told him all the details of what I was doing on a day to day basis and offered to write them down.  He declined this.

...

I told him I was contracted to 30 hours per week but did not point out to him that I was not fulfilling my contract.

...

I would be happy to pay for an occ health specialist of your choice not affiliated to the DHB.

...

If I manage to get this problem resolved I would be able to fulfil my contract hours and the plan then would be to do an additional session in private doing scopes.  If I can do this it will take me over the 40 hours per week.  Currently I am physically unable to do this.

[87]     MAS replied by email on 13 November 2015 indicating that Ms Unuka of

MAS would need to speak to her manager before reverting to Dr Juhasz.

[88]     On 7 December 2015 Ms Unuka emailed Dr Juhasz.   The email addressed Dr Juhasz’s concerns that Dr Kenny might use information gained in his assessment of her to inform her employer of her details.  The email referred to the obligations under  the  Privacy  Act 1993  and  Health  Information  Privacy  Code  1994  and Dr Kenny’s position that the information in his report could only be used, stored or disclosed in accordance with those statutory obligations. The email also noted “[o]ur assessment considers the hours you are working as well as what your capacity is to work.”  It went on to say:72

We are unable to ignore Dr Kenny’s report and as previously advised, we are happy to consider further information if you seek correction of the parts you consider to be incorrect with Dr Kenny directly.   Your email of 13 Nov mentioned that your assessment of 33-36 hours per week is the average based on the duties to fulfil your contract so this would be something you would need to raise with Dr Kenny and we are more than happy to look at this.

72     At 153.

[89]     Dr Juhasz  replied  to  that  email  on  8 December 2015.    She  repeated  her objection to Dr Kenny and said:

He has not treated me very well in the past and I am happy to give you more details if you wish but would like them to remain confidential.

The email also claimed that Dr Kenny was:73

... responsible for a major breach in privacy when I saw him previously. Regardless of what he says about privacy in his report I am unable to trust him as one should be able to when seeing a doctor.

[90]     In the email Dr Juhasz specifically refused the invitation to  discuss with

Dr Kenny what she said were the errors in his report.  Dr Juhasz said:74

Because of the way he put his questions to me, his report is flawed and I really do not wish to have any further contact with him.  I certainly do not wish to contact him and argue about the content of his report.

[91]     On  11 December 2015  Ms  Unuka  acknowledged  receipt  of  the  email  of

11 December 2015 and indicated that she was working through with her manager the issues raised by Dr Juhasz.

[92]     Dr Juhasz replied to Ms Unuka by email on 16 December 2015.  That email referred to a difference of opinion between Dr Juhasz and some of her medical advisers as to the nature of her health condition.  It said:75

Unfortunately the ID doctors have dug a deep hole for themselves and there is no way they can admit a mistake so continue to refuse to treat me.... Courtenay Kenny has previously ridiculed the possibility of infection so I am sure that he also cannot change his opinion without losing face. I have laid a complaint with the HDC about the appalling way I have been treated. ... What I was hoping to keep confidential is the shenanigans that went on the last time I was involved with Courtenay Kenny. He colluded with one of the surgeons at NSH to try to force my resignation.  Given the situation I think it is unreasonable that you are accepting Courtenay Kenny’s flawed report to base your decision.

73     At 153.

74     At 153.

75     At 159.

[93]     Ms Unuka emailed a substantive response to her on 24 December 2015.76  This letter set out in detail MAS’s position.  Relevant paragraphs include:77

It was Dr Kenny’s opinion that you were fit to continue working at least to the level  as  identified  in  your  meeting  with  him −  that  is  surgical  practice including surgical operating, out-patient clinic sessions, on-call after-hours responsibilities and your involvement with clinical meetings and teaching − this work was stated to average 42 hours per week across a 14-week surgical roster.

[94]     The letter noted the policy requirements relating to meeting the classification of Partial Disablement. These included:78

(a)       Earning a Weekly Income less than 75 per cent of your Pre-Disability

Income; and

(b)       Incapable of working more than 40 hours per week.

The letter further advised:79

In November, MAS advised you that as the hours outlined in the report were significantly different to the statement you provided, the recourse to address this was for either MAS or you to discuss this further with Dr Kenny and if any amendments were made subsequent to this, MAS was happy to consider them.

You remained reluctant to discuss this further with Dr Kenny and so that we could consider whether the hours worked had been incorrectly recorded by Dr Kenny, we contacted him in December and asked that he review his notes. Dr Kenny has reviewed the contemporaneous notes and has confirmed that the information was taken from you and that this was discussed to the level of your daily activity.

[95]     The letter concluded:80

On this basis, our position remains unchanged in that the report indicates you have a capacity to work more than 40 hours per week.

[96]     Dr Juhasz wrote to Ms Unuka on 18 January 2016.  Her email contained the statement:81

76     At 167 for substantive response; see also ABD vol 1 at 166 for cover email.

77     At 167.

78     At 168.

79     At 168.

80     At 168.

81     At 170.

As I have said before Courtenay Kenny did not specifically go into the sessions or hours worked. His report is flawed. It is also inappropriate to use him for the basis of your decisions for the reasons I have outlined previously.

[97]     Neither sides’ position changed. Dr Juhasz remained unwilling to talk directly to Dr Kenny about what was said to be factual errors in his report and, after clarifying with Dr Kenny that he still stood by his report, MAS continued to rely on it.

[98]     On 11 February 2016 MAS emailed Dr Juhasz a detailed response to her letter of 18 January.  The letter noted that some of the information provided by Dr Juhasz had changed.  It said:82

MAS note the presence of significant inconsistencies in the correspondence we have received during the course of assessing your claim.

[99]     The letter re-stated MAS’s position about the need for Dr Juhasz to engage directly with Dr Kenny if she believed that he had made a factual error in his report.83

[100]   On  4 March 2016  Dr Juhasz  emailed  MAS  a  copy  of  an  email  from Karen Hellesoe, Operations Manager General Surgery and ICU−HDU at WDHB, which said:84

This is to confirm that Dr Eva Juhasz is contracted to work:

•30.5 hours per week (on average over four weeks) at North Shore Hospital WDHB.  This includes 2.5 hours per week which may or may not be worked depending on the availability of an additional theatre session.

•       3 hours per week (on average over four weeks) at the Elective Surgical

Centre WDHB.

•       As part of an on-call roster.

No number of hours was allocated to the on-call responsibilities and no mention at all was made of the Breast Screen Aotearoa work.

82     At 190.

83     At 190.

84     At 179.

[101]   By email of 4 March 2016 sent to MAS, Dr Juhasz detailed a number of instances between December 2014 and January 2016 where she had taken annual leave as a result of “flare ups” when her ESR levels had been elevated.85

[102]   By email of 4 March 2016 Ms Unuka replied giving details of the criteria for assessment of a Recurrent Disability Benefit and the necessity for the relevant disability to occur, “... within six months of the payment of a Total or Partial Disability Benefit”.86    The letter indicated that if relevant flare-ups had occurred within six months of the claim ending in June 2015 MAS would be happy to consider whether there was any entitlement and detailed the type of information that would be required.87

[103]   Dr Juhasz provided a Statutory Declaration dated 7 April 2016 stating that she did not currently work 40 hours per week and:

At no stage since suffering the illness that triggered my claim under the policy have I worked 40 hours per week.

The Statutory Declaration had appended to it a Schedule which was said to accurately summarise Dr Juhasz’s usual working hours.

[104]   The  Statutory  Declaration  was  provided  under  cover  of  a  letter  from

Dr Juhasz’s lawyers. That letter contained the following statements:88

To the extent Dr Kenny has based his opinion on Dr Juhasz’s capacity to work on a mistake in relation to her actual hours, his report is unreliable and cannot form a reasonable basis on which to decide to cease payment of the benefit payable under the policy.

...

With respect, it is not Dr Juhasz’s responsibility to procure a revision of the report which MAS commissioned.

[105]   One of the benefits of being in receipt of either a Total or Partial Disability benefit was that, during such a period, the premium for the policy was not required to

85     At 181.

86     At 182.

87     At 182.

88     At 195 and 196.

be paid.  MAS advised in February 2016 that the requirement for premium payments recommenced on 24 December 2015 being the date that Dr Juhasz’s objections to the claim outcome were fully considered and responded to.89   Dr Juhasz advised that she would pay premiums for continuing cover under the policy on a “without prejudice” basis.

[106]   As a result of the July report from Dr Kenny MAS paid the Partial Disability benefit up to 31 May 2015.90

[107]   MAS in October 2016 asked Dr Juhasz to provide details of the hours that she was   working   and   her   earnings   from   the   period   from   1 March 2015   until

30 June 2015.91

[108]   As a result of the information provided by Dr Juhasz MAS formed the view that Dr Juhasz had received a Partial Disablement benefit for the period 1 March 2015 to 31 May 2015 in the sum of $46,539.53 to which she was not entitled.   It seeks recovery of that sum.92

The evidence at hearing

[109]   The  three  key  witnesses  at  the  hearing  were  Dr  Juhasz,  Dr  Kenny  and

Ms Joanne Unuka of MAS.   I set out the details of those three witnesses’ cross- examination below, as well as a summary of the other witness evidence given at trial.

Dr Juhasz’s evidence

[110]   I heard extensively from Dr Juhasz.   She gave a history of the physical problems and pain she had experienced and also referred to the consequent depression she had suffered.  Dr Juhasz indicated that the pain she was experiencing started to worsen in late 2014 − early 2015.  She recorded that she took both sick leave and

annual leave to get help with the pain from overseas specialists.

89     At 191.

90     At 191.

91     ABD vol 3 at 1032.

92     Statement of defence and Counterclaim, 18 November 2016 at [6.4].

[111]   In relation to why she started working again in 2013, Dr Juhasz indicated that she was being pressed to return to work by WDHB out of fear of termination, and that throughout her part-time employment from July 2013 she was not necessarily actually working the hours she had listed, and kept this quiet out of fear of dismissal.93   She indicated that this fear of dismissal had particularly affected her interactions with Dr Kenny and their communications around her hours.

[112]   Dr Juhasz confirmed the job-sized role was initially 30.5 hours per week and then subsequently changed to around 30 hours per week around July 2015.94

Relationship with Dr Kenny

[113]   Dr Juhasz gave evidence in relation to the request by MAS in 2015 for her to see Dr Kenny for review.  She said that she explained to Ms Unuka at MAS over the telephone that she:

... did not have a very good relationship with Dr Kenny because of the way he had treated me before and I would prefer to go to someone unconnected with the WDHB if a review was required. … Joanna Unuka was insistent that I go to Dr Kenny.

[114]   As I have detailed in the summary of facts at the start of this decision, this is not a full or accurate description of Dr Juhasz’s interactions with both Dr Kenny or with Ms Unuka.95     Dr Juhasz had seen Dr Kenny on seven occasions before the meeting in June 2015.  She accepted at the hearing that she had not raised with MAS any concern about Dr Kenny until 19 June 2015 but claimed that she had previously expressed this view in telephone discussions.96

[115]   All of Dr Juhasz’s telephone conversations with her initial claim manager at

MAS, Nina Burt, were recorded; there is no record of such comments in relation to Dr

Kenny in the recordings of these conversations.  Ms Unuka took over from Nina Burt as the MAS representative dealing with Dr Juhasz in November 2014.  Her telephone

93     Juhasz BoE at [5.3] and [11.5].

94     Karen Lynda Hellesoe brief of evidence, August 2017 [Hellesoe BoE] at [3] confirmed a service adjustment in administrative hours reduced Dr Juhasz’s job-size assessment to 28.9 hours from July 2015.

95     At [20] and [59]–[65] above.

96     ABD vol 1 at 91.

conversations with Dr Juhasz were not recorded.  However, in Ms Unuka’s notes of the conversation on 15 January 2015 Dr Juhasz is noted as discussing her upcoming appointment with Dr Kenny without flagging any concerns she had.

[116]   Ms Unuka’s evidence, confirmed in cross-examination, was that the first MAS knew that Dr Juhasz had reservations about Dr Kenny was just before the June 2015 appointment. It was not put to her in cross-examination that there were prior telephone discussions.97    I therefore accept that 19 June 2015 was the first occasion that Dr Juhasz raised with MAS any of her objections to Dr Kenny.

[117]   Having raised her issue with Dr Kenny three days prior, the notes of the

22 June 2015 telephone discussion between Ms Unuka and Dr Juhasz recorded her reasons for not wishing to see him as a fear he would not be “particularly sympathetic” and that she had found him “antagonistic” in the past.98

[118]   Dr Juhasz was referred to notes of the telephone conversation she had with

Ms Unuka on 26 June 2015.99  Those notes indicated that Ms Unuka had outlined why she believed there was no conflict of interest on the part of Dr Kenny given that MAS had  no  contact  with  WDHB  and  recorded  Dr Juhasz  as  indicating,  “[s]he  now understood this”.100

[119]   In cross-examination Dr Juhasz accepted that at the outset of the interview on

29 June 2015 Dr Kenny had explained his role and objectivity in his review, but she added, “... but I didn’t trust him, because of my previous experiences with him”.101

[120]   When being cross-examined on this topic Dr Juhasz raised as one of the reasons she did not wish to see Dr Kenny in June 2015 was because of a claimed breach of privacy by Dr Kenny after which “the whole of the Auckland Medical Community knew what was happening”.102    This claim had not been mentioned in

either of her briefs of evidence.

97     NOE, at 185 line 21.

98     ABD vol 4 at 1423.

99     At 1423.

100   At 1423.

101   NOE at 40, line 11.

102   NOE at 45, line 15.

[121]   Dr Kenny was not cross-examined at all on these allegations.

[122]   As to why Dr Juhasz had not previously raised with MAS the alleged breach of privacy by Dr Kenny, Dr Juhasz’s answer in cross-examination was that she didn’t believe it was their business.103

[123]   There is no basis in the evidence for a finding that Dr Kenny breached

Dr Juhasz’s privacy or conspired against her.

Amount of hours communicated to Dr Kenny

[124]   Of the meeting with Dr Kenny on 29 June 2015 Dr Juhasz says:104

At that time I was very unwell and had been organising a further consultations [sic] with overseas specialists.  I was concerned that if he knew how unwell I was as then he would say I was not fit for work.  I was desperately trying to keep hold of my job at that point. I knew that if I had any more sick leave my employment would probably be terminated.

[125]   As to what occurred during the meeting, Dr Juhasz said that Dr Kenny “kept getting it wrong and I offered several times to write down my full weekly schedule for him.  He declined this offer”.105    Subsequently Dr Juhasz asserts there were roster mistakes in the final report.

[126]   At the hearing, Dr Juhasz produced some notes that she had obtained directly from Dr Kenny by making request under Privacy Act 1993 and Health Information Privacy Code 1994.106   She also produced a handwritten transcript of the notes.107

[127]   As to whether the detail in the notes recorded by Dr Kenny regarding the hours worked by her, Dr Juhasz said, “[s]ome of it’s accurate but some of it isn’t”.108

Dr Juhasz then detailed in evidence which parts of what Dr Kenny had written in his

notes as to her hours that she said was not correct.

103   NOE at 46, line 1.

104   Juhasz BoE at [7.4].

105   Juhasz BoE at [7.5].

106   ABD vol 4 at 1562−1569.

107   At 1572−1577.

108   NOE at 28, line 1.

[128]   Dr Juhasz gave evidence that some of the handwriting on Dr Kenny’s notes was hers.109     From the position of the words which Dr Juhasz said were in her handwriting it appears that she must have reviewed the notes (or at least the first page of the patient data form) after Dr Kenny had made his notes on that page and added her contribution later.

[129]   In relation to what was in Dr Kenny’s notes about the on-call component of her work Dr Juhasz said:110

One in 14 whole weekends, 72 hours on-call”, that refers to the fellow covering for Friday night on call and then I cover the rest of the weekend. “Stays at home can be from zero theatre to 16 hours”. That’s correct.  “After acute weekend, all week operating, 0800 to 1700 Monday to Thursday”, that’s correct, and then he’s got, “Operating all day difficult acute cases, laparotomy, volvulus, acute styptical gallbladder” that refers to the difficult cases I may need to be operating on.

[130]   In relation to the entry in Dr Kenny’s notes which read, “Approximately

40 hours  per  week”,  Dr Juhasz  denied  having  told  Dr Kenny  she  was  working

40 hours per week.

[131]   Dr Juhasz acknowledged that when she raised the claim of factual errors in Dr Kenny’s July report MAS invited her to contact him to provide him with the correct information.  She expressed her view as being:111

It was not up to me to correct the inaccurate report on which MAS had based its decision.

Dr Juhasz’s perceived hours

[132]   In relation to her work pattern Dr Juhasz’s evidence was:

My commitment to Breast Screen Aotearoa is part of my employment as a breast surgeon and is paid separately from my salary.

[133]   The statement that this work is paid separately from the base salary for the job- sized role is correct but any impression that the Breast Screen Aotearoa work is part

of the job-sized role is not correct.

109   NOE at 26, line 8.

110   NOE at 29, line 18.

111   Juhasz BoE at [9.2].

[134]   Dr Juhasz referred to her Outlook calendars and said that she utilised such a document to keep track of her Breast Screen clinics and other variable duties.

[135]   Printed versions of the Outlook diaries for the period January 2015 until

December 2016  were  originally  provided  in  discovery  (the  original  versions).112

Amended versions of these Outlook diaries for the same period were provided shortly before the hearing.113   Further copies of the 2015/2016 Outlook calendars “showing actual hours” were provided in a supplementary affidavit on 4 October 2017.114  These documents were materially different to the original versions of the Outlook diaries provided.

[136]   Dr Juhasz in her evidence went into some detail as to how some of the hours and meetings listed in her Outlook and other places were not actually attended or worked by her.  Consequently she opposed Mr Jordan’s evidence and assumptions based on those calendar entries as incorrect.115

[137]   Dr Juhasz also provided evidence that she had not attended all of the breast and colorectal MDM meetings and business meetings.  She said she attended 20 of the breast MDM meetings and 18 of the colorectal MDM meetings in 2015, and 22 of the breast MDM meetings and 10 of the colorectal MDM meetings in 2016.  She did not specify  how  many  of  these  meetings  she  missed.    Between  January 2015  and December 2016 she said that she attended 14 of the 18 business meetings in 2015. She said that of the 24 audit meetings in the calendar year 2015 she attended 18 and of the

31 audit meetings in the calendar year 2016 she attended 22.  She did not explain whether the reason she missed these meetings was because she was on annual leave, overseas study leave, on sick leave or simply in pain.

[138]   In relation to the on-call roster, Dr Juhasz distinguished between what she saw as “actual work”, such as attending the hospital and undertaking surgery or a ward

round, from being available on-call at home and providing assistance by telephone.

112   ABD vol 4 at 1082−1105.

113   ABD vol 4 at 1536-1559.

114   At 1578 and 1579.

115 Juhasz BoE at [4].

Dr Juhasz also gave evidence of a number of surgical procedures in which she merely supervised the actions of the registrars.116

[139]   Dr Juhasz concluded her September 2017 brief of evidence by saying that based on her recent analysis the only weeks in which she had worked 40 hours were the week of Monday, 6 July 2015 and the week of Monday, 25 January 2016.

[140]   Dr Juhasz also gave details of the extra work she took on and her motivations for doing so.   During cross-examination the proposition was put to Dr Juhasz that when she agreed to take on the additional ESC work, at the time of the job-sizing exercise in April 2014, she must have been able to carry out the job-sized tasks otherwise she would not have taken on the additional commitment of contracting with WDHB for the ESC work.  Her response to that proposition was to say:117

No, that’s incorrect. I was not capable at that point in time but it was my every intention that I would fulfil my obligations to my department and my colleagues and pull my weight within that department.  My expectation was that I would be able to fulfil that job-sized contract over time having just come off the return to work programme. I was also under pressure to sign up for the ESC in the same way as everyone had to sign up and do sessions, and it was seen as part of the obligations of working as a department to pull one’s weight and do one’s fair share.

[141]   Dr Juhasz similarly denied she had asked to be put on the on-call roster and asserted that she took on the burden because it was what the department and her colleagues expected of her. 118

[142]   Dr  Juhasz  admitted  in  cross-examination  that  she  had  not  challenged summaries of her hours as incorrect to MAS on any occasion because she herself did not know them and had not taken the time to sort through them. 119

[143]   Dr Juhasz was referred in cross-examination to an Outlook calendar which she had prepared for March 2015, which showed an entry for one hour on Friday 6 March for  house  surgeon  teaching,  and  a  similar  entry for  13 March  and  20 March.120

116   NOE at 17, line 14.

117   NOE at 82, line 30.

118   NOE at 84, line 6 and 19.

119   NOE at 93, line 4.

120   ABD vol 4 1538

Dr Juhasz would not accept that the teaching duties had not been included in the job- size because there had been no hours allowed under the “teaching” heading.121

[144]   When referred to the evidence of Ms Hellesoe of WDHB (her own witness) who had accepted that teaching hours were not included in the 30.5 hours covered by the job description, Dr Juhasz attempted to minimise Ms Hellesoe’s evidence:122

Q.        So, if Ms Hellesoe accepted that that was the case she is incorrect?

A.       Yes, Ms Hellesoe was our manager for a very short period of time, about two or three years.

[145]   When questioned about the discrepancies between the various iterations of the Outlook calendars she had produced  and  also  the inconsistency  with the sworn declaration of April 2016, in particular, on the point that the original Outlook calendars showed her working every Monday which was subsequently changed to one Monday out of four, Dr Juhasz said:123

I don’t work every Monday but I can go in and do things on a Monday.  I’m, I am rostered to do a − that particular four-week period I probably took additional, as part of my sizing I was expected to pick up additional lists so there is an additional theatre list on a Monday and I would have had a post- acute round on Monday as well.

[146]   When pressed on the discrepancy Dr Juhasz said:124

The schedule that I’ve provided is my regular rostered sort of sessions that

I’ve got. There are additional duties that I take on from time to time.

[147]   When   a   discrepancy   of   an   hour   between   the   Outlook   calendar   for March 2015125  and the revised calendar126  (which had changed the duration of the clinical  session  on  3 March  from  five  hours  (0800−1300  hours)  to  four  hours (0830−1230 hours)) was put to her Dr Juhasz claimed:127

No, that’s actually not entered in a way to reflect the hours.  That was just entered to block out that morning so that no additional meetings could be

121   NOE at 102, line 1.

122   NOE at 102, line 15.

123   NOE at 104, line 4.

124   NOE at 104, line 17.

125   ABD vol 4 at 1084.

126   At 1538.

127   NOE at 106, line 18.

scheduled, so that wasn’t put in there as a reflection on the hours.  That was put in there basically to block out that morning.

[148]   When it was put to her that the later iterations of the Outlook calendars had been prepared so as to shave time off the hours which were recorded, Dr Juhasz’s evidence was:128

These weren’t hours recorded.  These were events that were introduced into my calendar.   What I’ve done in going back is I’ve tried to be absolutely accurate on the hours that I was attending those sessions.

[149]   In response to the differences between the contents of the sworn declaration where the declaration showed Dr Juhasz working one Monday in four and the job-size worksheets had tasks every Monday, Dr Juhasz said:129

That non-clinical task is just written in there really to put it somewhere ...

[150]   The conclusion that I come to from these questions and answers is that the entries in the Outlook calendar are not a reliable record of the tasks actually taken by Dr Juhasz.

[151]   When it was put to Dr Juhasz that Ms Hellesoe had given evidence about her role being re-sized to 28.9 hours in July 2015 as a result of a service adjustment to clinical administration hours Dr Juhasz responded by saying:130

Well, actually that’s not correct. I’m not sure where that’s come from because I am still job-sized for 30 hours a week and that’s what appears on my pay sheet, so I was a bit puzzled when I saw that but I can’t explain it.  I don’t know where that comes from.

[152]   During cross-examination Dr Juhasz acknowledged that, notwithstanding her evidence that she was struggling to undertake her work commitments to WDHB and had been using her accumulated annual leave entitlement to provide respite from work, she had only recently travelled to the Solomon Islands and undertaken seven days of

work as a surgeon there on a volunteer basis.131

128   NOE at 106, line 25.

129   NOE at 106, line 13.

130   NOE at 112, line 17.

131   NOE at 113, line 12.

[153]   In supplementary oral evidence Dr Juhasz provided further details about Breast Screen Aotearoa. She indicated that up until 2006 the breast screening work had been outsourced to a private provider, but since then WDHB had resumed control of it and had delivered the service through a mix of WDHB employees, one surgeon who was not an employee and some private radiologists.132

[154]   She confirmed that the employees of the DHB who provided the service did not have separate contracts with the DHB and that their entitlement to payment was triggered by signing an attendance register.133

[155]   On the issue of when Dr Juhasz knew that her benefit payments would come to an end, during cross-examination Dr Juhasz was referred to the email she received from Ms Unuka dated 28 September 2015, which contained the sentence:134

Information in the report regarding the number of hours you are working per week indicates that support under the policy has come to an end ...

[156]   Dr Juhasz agreed that she was worried about the prospect of payment under the policy ceasing,135 but disagreed that the email of 28 September 2015 conveyed the message that support under the policy had come to an end.136  It is difficult to reconcile these observations.

Evidence for MAS

[157]   Joanne Unuka, a Senior Disability Claims Adviser employed by MAS gave evidence  of  taking  over  management  of  Dr Juhasz’s  claim  in  approximately November 2014.

[158]   Ms Unuka detailed the decision made in January 2015 for Dr Juhasz to be assessed by Dr Kenny.  She explained that the reason that Dr Kenny was chosen was

that he was deemed to be the most appropriate occupational physician because he had

132   NOE at 294, lines 11−24.

133   NOE at 294, line 25.

134   ABD vol 1 at 121.

135   NOE at 49, line 9.

136   NOE at 49, lines 15 and 25.

previously carried out assessments of Dr Juhasz for the WDHB and had been actively involved in her rehabilitation programme.

[159]   She said  that  it  was  not  until  Monday 22 June 2015  (a  week  before  the scheduled assessment by Dr Kenny) that she saw the email that Dr Juhasz had sent at

5.31pm on Friday 19 June 2015 and explained that the reason MAS did not agree to Dr Juhasz’s request to be assessed by an alternative occupational physician was because of the proximity of the arranged interview (which had taken some four months to arrange) and the likely lengthy delay in finding another occupational physician.137

Ms Unuka indicated that the referral letter sent to Dr Kenny on 23 June 2015 was

“more or less a standardised list of questions asked of an Occupational Physician”.138

[160]   Ms Unuka said that she was very surprised to receive the July 2015 report from Dr Kenny because it was inconsistent with Dr Juhasz’s progress reports over the preceding months.  She explained that the report was referred by MAS to their re- insurer for review and input and that subsequently the decision was made to stop the claim on the basis of the information that Dr Juhasz was working over 40 hours a week.  She rejected Dr Juhasz’s suggestion that MAS had deliberately delayed until around six months after payments had stopped so as to frustrate Dr Juhasz’s ability to access Partial Disability benefit payments.

[161]   When she was asked in cross-examination as to why, if MAS had a concern in relation to Dr Juhasz’s total hours of work, Dr Juhasz was not asked for the detail, she said that Dr Juhasz had provided the detail of the hours that she was working and they were not consistent with the information in the report from Dr Kenny.139

[162]   In response to the suggestion that Dr Juhasz formed a fair conclusion that the reason for the proposed consultation with Dr Kenny in June 2015 was to see what more could be done with her rehabilitation.  Ms Unuka said:140

I’d had email correspondence and discussions with her that part of the referral was to get a snapshot or to get an understanding of exactly what was going on

137 Joanne Louise Unuka brief of evidence, 17 October 2017 [Unuka BoE] at [25].

138 Unuka BoE at [28].

139   NOE at 153, line 6.

140   NOE at 155, line 1.

with her, and that included what hours she was working, what work she was completing.

[163]   In response to a suggestion that the number of hours Dr Juhasz was working was a primary concern of MAS in relation to the proposed assessment by Dr Kenny in June 2015, Ms Unuka said:141

No, I don’t believe that it was because at that stage while we needed to understand the hours it formed part of understanding what a rehabilitation programme would like that [sic].... We didn’t ask Dr Juhasz to confirm them before the appointment because as far as we were aware she was doing the 30 hours that she’d stated in her progress report.

[164]   In response to questioning about why MAS insisted that if Dr Juhasz believed that Dr Kenny had not accurately recorded details of her work, it was up to her to contact Dr Kenny directly to correct it, Ms Unuka said:142

With regard to the hours, yes they were − that was information that she’d provided to Dr Kenny and Dr Kenny had taken it down.  We weren’t in that assessment so we couldn’t correct them.

[165]   As to why MAS had not provided Dr Kenny with the statement from Dr Juhasz as to what hours she said she works Ms Unuka explained that Dr Juhasz had provided this information to MAS in confidence and had stipulated this in a phone call which had preceded the email containing the information.143

[166]   Under cross-examination, Ms Unuka agreed that a one-off performance of

40 hours per week would not be likely to result in MAS concluding that Dr Juhasz must no longer be entitled to a partial disability benefit.144   Ms Unuka also clarified that in terms of the policy the issue was not what hours had actually been worked but what hours the Insured Person was capable of working.145

Dr Kenny’s evidence

[167]   Dr Courtenay Kenny detailed in evidence his involvement with Dr Juhasz from

22 January 2013.  He confirmed that in December 2015 he was telephoned by MAS

141   NOE at 157, line 30.

142   NOE at 158, line 12.

143   NOE at 160, line 11.

144   NOE at 175, line 26.

145   NOE at 176, line 1.

in relation to Dr Juhasz’s hours of work.   He said he consulted his notes and was comfortable with his report.  He recognised it was possible that Dr Juhasz may have left some shifts earlier if she was not required but said this did not affect his assessment of her capacity.

[168]   In  relation  to  the  handwritten  notes  of  his  meeting  with  Dr Juhasz  on

29 June 2015 Dr Kenny said that they were not in chronological order but were jotted down as Dr Juhasz said things to him.146

[169]   Dr Kenny said that the majority of time during the consultation was focused around Dr Juhasz’s working hours and working activities because he already had a great detail of information about her health issues. Dr Kenny did not recall Dr Juhasz offering to write down her hours of work for him, nor could he recall her claim that he had got it wrong several times.147   He further said:148

I was confident with what she was telling me and what she told me is absolutely what I’ve written down in those somewhat haphazard notes ...

[170]   When pressed further, Dr Kenny referred to the alterations appearing on page 3 of the notes,149 and said that they got there as a result of Dr Juhasz correcting his first entry and him then altering that entry.150

[171]   Dr Kenny was cross-examined closely on his concept of “work” and what activities Dr Juhasz undertook which qualified as “work” and how intermittent obligations (like the one in four week Breast Screen Aotearoa obligations and the one in 15 week on-call roster) should be categorised.

[172]   Dr Kenny was cross-examined about whether it was appropriate to allocate to an on-call weekend 72 hours of work.  His response was:151

It’s an hour paid salary and therefore it’s an hour worked.  It’s an hour on which a clinician has clinical responsibility, perhaps to attend, perhaps only to

146   NOE at 199, line 20.

147   NOE at 200, line 18.

148   NOE at 200, line 23.

149   ABD vol 4 at 1564.

150   NOE at 201, line 9.

151   NOE at 227, line 6.

take phone calls and provide advice, but it is always considered part of what a person’s employment commitment was ... .

[173]   Dr Kenny was clear that in his eyes the 72 hour period of on-call work, while not being physical work, was a clinical responsibility and hours that Dr Juhasz was being paid to reserve her skills for.

[174]   Dr Kenny  was  asked  to  further  clarify  his  understanding  of  the  on-call obligation.  In addition to the one in 14 weekend call he explained that there was also

mid-week call every two to three weeks.  He described that as involving:152

... the on-call is from approximately 8 o’clock in the morning to 8 o’clock the following morning, so it means that the clinician is responsible for new admissions and surgery during a normal working day and those occurring through the evening until the following morning.

[175]   He further said that he had worked out that if it is one every two to three weeks it was approximately five on-call nights in a 14-week cycle; i.e. once every 2.75 weeks, or:

... approximately five every 14 weeks and five 12s are 60, divided by 14 is, is five.

[176]   And he confirmed that he therefore used an average of five hours per week.153

[177]   Dr Kenny explained that the words “approximately 40 hours per week” on his notes referred to the 30 hours of the job-sized role plus a ten hour per week average allocation for participation in the other duties.154

[178]   He agreed that the job-sized role and the on-call component, the ESC and Breast Screen Aotearoa work needed to be added together to produce the overall work obligation.155  He also confirmed that whatever CME Dr Juhasz was able to do would

be on top of the 30 hours of defined work output in the job-sized role.156

152   NOE at 236, line 30.

153   NOE at 237, line 27.

154   NOE at 238, line 17.

155   NOE at 239, line 20.

156   NOE at 240, line 18.

[179]   Dr Kenny accepted Dr Juhasz’s working schedule varied with one heavy week being followed by a lighter week. However, he did not accept the proposition that was put to him that this was an appropriate strategy for managing pain, nor that Dr Juhasz had presented the variation in weekly work as being justified on that basis.157  He said:

In my reasonable experience with chronic musculoskeletal pain, a pattern of very high intensity or provocative activities followed by a period of much reduced activities is not an appropriate strategy and I doubt will be recommended generally by multi-disciplinary pain service.

Medical and hospital witnesses

[180]   I heard evidence from the following witnesses as to Dr Juhasz’s pain levels, work schedule and work capacity.

[181]   Dr Susan Jerred, a breast and general surgeon at WDHB, said that she had regular professional contact with Dr Juhasz with both attending Wednesday morning Breast Screen Aotearoa MDM meetings and the symptomatic breast MDM held at the North Shore Hospital, as well as the Friday morning departmental meetings.

[182]   Dr Jerred’s gave evidence as to the job-sizing exercise for senior doctors and said the purpose was to establish an “aspirational” average weekly number of hours in which each doctor will undertake his or her duties.

[183]   Dr Jerred agreed that if part of a job-sized role was consistently not being undertaken, the DHB would be likely to re-size the role and eliminate that component. She confirmed that this had not been done in Dr Juhasz’s case and that the DHB must therefore accept that the role as set out in the job-size exercise was an accurate description of what Dr Juhasz was currently doing.

[184]   Dr Evan Dryson, an occupational medical specialist, gave evidence of seeing Dr Juhasz on 2 May 2016 following a referral from her general practitioner.  He said that  Dr Juhasz  advised  him  that  she  was  then  currently  working  on  average

approximately 32 hours per week.  He expressed the opinion that Dr Juhasz:158

157   NOE at 231, line 21.

158 Evan William Dryson brief of evidence, August 2017 [Dryson BoE] at [13].

... was competent to practice as a colorectal surgeon for up to 32 hours per week, but given her limitation due to pain and inability to stand for prolonged periods, and concerns about the stiffness of her hands, she was not able to work for more than that number of hours per week.

[185]   Under cross-examination Dr Dryson confirmed that his opinion was based on the information provided to him by Dr Juhasz. He acknowledged that he was unaware that, in addition to colorectal work, Dr Juhasz undertook breast surgery or work with Breast Screen Aotearoa.

[186]   Dr Christine Lipyeat gave evidence that she had been Dr Juhasz’s GP since

3 November 2000.   She confirmed that following the surgery in December 2010

Dr Juhasz’s  primary  debilitating  condition  of  intense  pain  in  her  left  foot  had continued.  She also gave evidence about Dr Juhasz’s erythrocyte sedimentation rate (ESR) (a marker of various conditions including infections), which had been consistently above average.

[187]   She described Dr Juhasz as:159

A very stoic woman and currently she has a lot of pain and she is working and coping with it and, you know, as a surgeon and a medical professional she probably endeavours to keep her practice going and her work going ...

[188]   Karen Hellesoe, the Operations Manager for Cancer Services at WDHB but previously Operations Manager of General Surgery at WDHB gave evidence of being the manager who undertook Dr Juhasz’s job-size assessment and review in May 2014.

[189]   She stated that the assessment recorded that Dr Juhasz was, as of May 2014, working an average of 30.5 hours per week and that this was reviewed in July 2015 and reduced to 28.9 hours due to a service adjustment in clinical administration hours.160

[190]   She noted that five hours of the job-sized role was allocated to a half-day theatre session that was not formally scheduled and that this session was included

because Dr Juhasz was keen to undertake at least one theatre session per week.161  She

159   NOE at 54, line 10.

160 Hellesoe BoE at [3].

161 At [3].

indicated that Dr Juhasz would do the five-hour theatre session when she could and provided what she described as “backfill”.  Ms Hellesoe described backfilling as:162

... taking the place of another surgeon on a vacant theatre, so when one of the

14 or 15 other surgeons were away on leave or attending conferences, or sick that meant that their theatre session was free and we would then be able to

have the opportunity to ask [Dr Juhasz] to backfill or operate in that session

in that doctor’s place.

[191]   Ms Hellesoe indicated that:163

... the fact that (Dr Juhasz) was able to be flexible with providing backfill that was of significant value to us and it also provided her the opportunity to do some extra work as it was available.

[192]   When  asked  whether  Dr Juhasz  regularly  provided  backfill  Ms Hellesoe said:164

She did as I recall, yes, and as I say she got us out of some sticky spots at times too because otherwise the session would’ve been left empty.

[193]   Ms Hellesoe confirmed that the on-call roster, in addition to one in fourteen weekends also involved one in four weekdays on-call.165    She also confirmed that participation in the on-call roster was not universal by the general surgeons and there was one older member of the department who did not participate.166

[194]   Melvine Easton (Dr Juhasz’s husband) indicated that prior to her surgery in

2010 the demands of Dr Juhasz’s public and private practice were significant and that she worked long hours and part of almost every weekend was spent working.167

[195]   Mr Easton said that he had an involvement in encouraging Dr Juhasz to return to work on the return to work programme of July 2013 and said that his reason for this

was because he:168

162   NOE at 65, line 23.

163   NOE at 64, line 7

164   NOE at 66, line 8.

165   NOE at 67, line 16.

166   NOE at 67, line 22.

167 Melvine James Easton brief of evidence, 15 August 2017 at [3].

168 At [5].

... felt that it was important that she attempted to get back to work to any extent she possibly could so that her years of training and hard work and the respect that she had achieved in her profession were not wasted.

[196]   He referred to Dr Juhasz being exhausted after a heavy working week and expressed the view that she could not work any more than she was working now.

The financial evidence

[197]   Both the plaintiffs and the defendant had expert accounting witnesses give evidence in Court.

[198]   Mr Callan Taylor gave evidence of being a member of the firm of Shore Chartered Accountants Limited which provided accounting services for Dr Juhasz and her company, Eva Juhasz Limited.  He detailed the information that the accounting firm had provided to MAS at their request.

[199]   Mr Taylor produced two new documents at the hearing. One was a spreadsheet listing Dr Juhasz’s hours of work between 7 June 2015 and 18 December 2016,169 and the other was a graph representing Dr Juhasz’s income over a similar period with entries for Weekly Income, 75 per cent Pre-Disability Weekly Revenue (CPI adjusted) and overall median weekly income.170

[200]   The spreadsheet detailed the hours that Dr Juhasz had worked in accordance with her job-sized role, added to that the fortnightly on-call allowance, “late adjustments” (additional hours), and further added amounts paid to Eva Juhasz Limited by WDHB.   The graph represented that information in graph form with superimposed lines on the horizontal axis for Overall Median Weekly Income and

75 per cent Pre-Disability weekly revenue (CPI) adjusted).

[201]   Mr Taylor explained to the Court that he had used a median rather than the average figure that had been used by MAS’s corresponding expert, Barry Jordan,

169   ABD vol 4 at 1664.

170   ABD vol 4 at 1665.

because he thought it would be a fairer representation of the troughs and the dips between the income over the relevant period.171

[202]   The analysis undertaken by Mr Taylor revealed that in 19 of the 82 weeks he had surveyed Dr Juhasz’s income exceeded 75 per cent of her Pre-Disability Weekly Revenue (CPI adjusted).

[203]   He acknowledged that the time period for his analysis was not exactly the same as the time period for Mr Jordan’s analysis.  He accepted that the average income for the time period analysed by Mr Jordan produced a figure of $7,491.19 per week and the average income for the time period analysed by him was $7,255.46 a week.

[204]   Barry Jordan, a forensic accountant, gave evidence of analysing Dr Juhasz’s weekly working hours and income.  Mr Jordan noted that the 30 hour job-sized role was based on a notional average and that the pattern of Dr Juhasz’s work indicated that she worked more hours in some weeks than others. He also noted that in addition to the 30 hour per week job-sized role Dr Juhasz undertook the breast screen clinic roster, the on-call roster, the acute theatre roster and took additional operating lists when available.  He posed the question as being what hours of work Dr Juhasz was capable of working.

[205]   He noted that the payslips indicated that Dr Juhasz was treated as if she worked six hours per day every day of the working week. He also noted that the on-call work could potentially result in many more hours than the “at most seven hours every weekend” stated in Dr Juhasz’s statement of claim.172

[206]   Mr Jordan produced a graph which indicated that Dr Juhasz was capable of working (as opposed to actually working) more than 40 hours on 31 occasions during the period 19 January 2015 to 1 January 2017 (102 weeks).173

[207]   Mr Jordan noted that the information provided by Dr Juhasz regarding her working hours was at times contradictory and noted that on occasions the Breast

171   NOE at 147, line 20.

172   Barry Phillip Jordan brief of evidence,8 September 2017 [Jordan BoE] at appendix A at 3.

173   At 4.

Screen Aotearoa clinic work was not recorded in the Outlook calendars produced by Dr Juhasz.  He also noted that the on-call obligations were not entered in the Outlook calendar and that on one occasion the acute theatre information was not in the calendar.174

•    Salary; and

•    Wages; and
•    Package fringe benefits; and
•    Commissions; and
•    Bonuses; and
•    Superannuation contributions.

If you are self-employed, for example, as a sole trader or as a partner in a business, Weekly Income also includes your share of the net profit (or loss) of the business (after deduction of necessarily incurred business expense).

Weekly Income does not include unearned income such as investment income, interest, rental income or proceeds from the sale of assets.

[301]   Counsel for Dr Juhasz submitted that because MAS calculated Dr Juhasz’s Partial Disability entitlement on the basis of taking the total amount earned in a period, dividing it by the number of weeks in that period and attributing the product of that equation as “weekly income” for the purposes of benefit calculation, this meant that there should be an averaging of the income earned by Dr Juhasz for the purposes of calculating whether she exceeded 75 per cent of her pre-disability weekly income.

[302]   This  submission  confuses  two  different  concepts.  The  basis  upon  which benefits are calculated  and paid is  a different  exercise to analysing whether, in accordance with the definition of weekly income and the policy, in any given week income exceeds pre-disability weekly income.  Such an approach would also involve the Court adding the word “average” to the concept “weekly income” so that it read “[average] weekly income”. Other than for anticipating adjustments for the deduction of necessarily incurred business expenses incurred by the self-employed, the policy definition of “weekly income” does not provide for averaging.

[303]   It is common ground that Dr Juhasz’s annual income has never reached 75 per cent of her Pre-Disability Income.  However the test under the policy is the weekly income.

[304]   The assessment of whether or not Dr Juhasz was earning 75 per cent or more of her Pre-Disability Income requires an intensely factual analysis.  The parties did not provide the full amount of information before the Court which would have aided

in assessing precisely when and on what basis Dr Juhasz’s income spiked semi- regularly above the policy threshold.  I will set out my analysis (as it is) below.

[305]   The starting issue was that the two expert accountant witnesses undertook income  analysis  for  different  periods.    Mr  Taylor  for  the  plaintiffs  surveyed Dr Juhasz’s income from 7 June 2015 until 18 December 2016 (a period of 82 weeks) and found in 19 of those weeks surveyed her income exceeded 75 per cent (23 per cent of the period assessed).

[306]   Mr  Jordan  for  the  defendant  assessed  between  14  December  2014  and

14 December 2016 that she had exceeded the 75per cent threshold on 23 occasions (22 per cent of the period assessed).  Mr Jordan in evidence explained that if he adjusted his calculations to observe the same time period as Mr Taylor, both agreed that there were 19 weeks where Dr Juhasz’s income exceeded 75 per cent of her Pre-Disability Income.

[307]   The question becomes one of competing percentages and what qualifies for the purpose of the policy.  For just under a quarter of the weeks in both periods surveyed Dr Juhasz was earning above the policy threshold.

[308]   Another way of looking at this is that the second plaintiff was invoiced for private contracting work 45 times in a two year period (under Mr Jordan’s analysis of December 2014 to December 2016).  Twenty-three of those times (or 51 per cent of the time) the amount invoiced tipped Dr Juhasz’s income over the 75  per cent threshold.

[309]   Together, these percentages are sufficient to convince me that for the purposes of the policy Dr Juhasz was earning above the threshold.  I am satisfied that, during the periods of time analysed by the two experts there were regular occasions when Dr Juhasz’s income exceeded 75 per cent of her Weekly Pre-Disability Income.  A one- off or isolated occurrence of exceeding 75 per cent would not disentitle Dr Juhasz from the benefit, but regularly doing that over an extended period does.  I am not prepared to add words to the definition used in the policy so that it refers to exceeding 75 per cent over an averaged period.

(b)      Did the expert have all the relevant information?

[310]   The principal expert relied on by MAS in determining the question of whether Dr Juhasz was incapable of working more than 40 hours per week as a result of her disability in 2015 was Dr Kenny.   At the hearing, MAS also relied on analysis undertaken by a Mr Jordan as being confirmatory of the conclusion that Dr Juhasz was not incapable of working more than 40 hours per week because she had actually worked more than 40 hours per week.

[311]   Dr Kenny acquired relevant information about Dr Juhasz’s work capacity by his contact with her over several years.  That contact included assessing her in 2014 and approving her requests to participate in the on-call roster and undertake afterhours work in relation to her own patients.

[312]   In relation to the number of hours of work that Dr Juhasz was capable of working in 2015, it is necessary to understand what information was provided to Dr Kenny at the 29 June interview. This involves making some credibility findings.

[313] Dr Juhasz’s account of the questions asked by Dr Kenny and her response has varied. I have set out at [76]–[96] above Dr Juhasz’s various accounts of what she communicated to Dr Kenny. Her initial response in September 2015 was that while the substance of the report was correct, there were “inaccuracies with the hours worked”. In November 2015 she alleged that she had offered to write down her day-

to-day hours for Dr Kenny and was rebuffed.  In December 2015 she communicated her allegations of misconduct against Dr Kenny to MAS.

[314]   In an email dated 16 January 2016 she wrote to Ms Unuka on confirming:206

As I have said before Courtenay Kenny did not specifically go into the sessions or hours worked. His report is flawed.

[315]   This  is  irreconcilable  with  her  previous  and  subsequent  assertions.    On

1 October 2015 by email to MAS Dr Juhasz said “[m]y hours are quite different to what he has documented (I am not sure why as I went over my schedule with him in

206   ABD vol 1 at 170.

detail)” 207  while at the hearing she said “[he] kept on asking me about my various clinics and commitments.  I listed what I was doing, but he kept getting it wrong”.208

[316]   When questioned about the notes recorded by Dr Kenny regarding her hours of work Dr Juhasz said “some of it’s accurate but some of it isn’t”.209  Dr Juhasz denied having told Dr Kenny that she worked 40 or 42 hours per week.

[317]   Dr Kenny was cross-examined extensively on the notes that he made at the

29 June interview. He denied that Dr Juhasz had ever offered to write her hours down or that he declined such an invitation. He said he was confident that what she told him was absolutely what he had written in his notes.   He indicated that he had made changes to his notes at the time to reflect some corrections she had made. He said that the majority of the time in relation to this consultation was spent around Dr Juhasz working hours and activities because he already had great detail around the health issues underlying her problems.

[318]   He confirmed that he had obtained an understanding of Dr Juhasz’s working hours and activities by a question and answer technique.   He said in evidence, in response to a question as to whether there was interchange between the two of them:

Yes, certainly, I mean it’s a question and answer and I think that’s evident from my scribblings out occasionally here where I had written down “ESC all day Monday”, and then she’d said “no, no” maybe it’s the DHB all day Monday.210

[319]   In cross-examination Dr Kenny said that he didn’t realise until the day that the hearing started the significance of the 40 hours per week figure in terms of the benefit entitlement.

[320]   Dr Kenny said that Dr Juhasz had talked in terms of her work being 40 or

42 hours a week on average which he said was consistent with the detailed hours she provided to him and his own cross-check against the other information available to

him.

207   Vol 1 ABD p 126.

208   Juhasz BoE at [7.5].

209   NOE at 28, line 1.

210   NOE at 201, line 8.

[321]   I find that Dr Kenny’s account of the interview is more likely to be accurate. Although the letter to him from MAS referred to a question of her 40 hours work per week, Dr Kenny did not understand the particular significance of the 40 hour figure in terms of the policy benefit entitlement.

[322]   I accept Dr Kenny’s evidence that the focus of the meeting was on him questioning Dr Juhasz about the particular hours and duties she was undertaking.  I am satisfied that this involved the question and answer process with Dr Juhasz having corrected a couple of instances where Dr Kenny had initially written down something she did not think was accurate. While Dr Kenny’s handwritten notes are not his report (indeed MAS never saw his handwritten notes at any time prior to making its decision on his report) I am satisfied that they are consistent with his statements that he questioned Dr Juhasz closely about her hours of work and job content and accurately recorded what she said.

[323]   I accept his evidence that Dr Juhasz did not offer to write down her hours of work and neither did he refuse that offer.  I also accept his evidence where he denies Dr Juhasz claim that he made lots of errors and failed or refused to correct them. The handwritten corrections to his notes show that he was open to making corrections to what Dr Juhasz has told him.

[324]   I also prefer Dr Kenny’s evidence on the issue of whether or not Dr Juhasz told him that she was working 40 or 42 hours average per week.

[325]   I find that, at the meeting, Dr Juhasz wasn’t particularly concerned that, as a result of the meeting, MAS might find that she was capable of working 40 or more hours per week and therefore ineligible to continue to receive her Partial Disability benefit.  Instead she was “concerned that if he knew how unwell I was then he would say I was not fit for work”.211    I find that she is therefore likely to have wanted to convey the impression that there were no problems with the hours she was working. That would also be consistent with her not telling Dr Kenny that she wasn’t fulfilling

all of her job-sized role.

211   Juhasz BoE at [7.4] is a more accurate reflection of her state of mind.

[326]   I find that Dr Kenny did accurately record what Dr Juhasz told him and that he accurately summarised that in his report to MAS.

Challenges to relevant information

[327]   I also need to consider whether this conclusion should be affected by what happened subsequently, in particular, the submission by Dr Juhasz to MAS of a schedule of hours and  duties that conflicted with the account she had  given to Dr Kenny and Dr Kenny’s report to MAS.  As well as providing a different schedule of hours and duties Dr Juhasz also acknowledged that she had not told Dr Kenny that she was not fulfilling the 30 hours of her job-sized role.

[328]   I find that, in circumstances where Dr Juhasz was asking MAS to disregard Dr Kenny’s report on the basis that it was not accurate then it was reasonable for MAS to ask Dr Juhasz to engage directly with Dr Kenny so that he could, if he thought fit, amend his report.

[329]   The next question I have to determine is whether or not the grounds advanced by Dr Juhasz for not engaging with Dr Kenny to amend the report are reasonable.

[330]   The reasons that Dr Juhasz gave MAS for not wanting to approach Dr Kenny directly varied.  Initially it was because of a perceived possible conflict of interest given that Dr Kenny was also employed by WDHB. It is difficult to see that any actual conflict of interest existed or how anything Dr Kenny reported to MAS could be used by WDHB to Dr Juhasz’s disadvantage.

[331]   I think there are likely to be two components to why Dr Juhasz chose to reject MAS’s invitation that she approached Dr Kenny to “correct” the information in his report. Firstly, she saw Dr Kenny as siding with those of the clinicians who had treated her and formed a view that her pain problem was not caused by an infection.  In her email to Ms Unuka of 16 December 2015 Dr Juhasz claims that Dr Kenny could not change his opinion as to whether the cause of her pain was an infection “without losing face” and implies that this somehow renders his assessment of her work capacity unreliable. This claim does not make sense.  Dr Kenny had not been tasked by MAS

with determining the cause of her pain and his opinion on that was irrelevant to the issue whether she had capacity to work more than 40 hours per week.

[332]   More significantly, she harboured a view that Dr Kenny had both committed a gross breach of privacy and had conspired with one of her colleagues to attempt to have her employment with WDHB terminated.

[333]   The allegations of breach of privacy and conspiracy are serious.  They were not contained in Dr Juhasz’s evidence-in-chief but emerged during the course of cross- examination.  However, significantly, they were not put to Dr Kenny by Dr Juhasz’s counsel during cross-examination.  I therefore cannot give them any weight.

[334]   My conclusion is that Dr Juhasz had no legitimate reason for refusing MAS’s invitation to approach Dr Kenny in order to get him to correct what she said were errors of fact in his report.  She was not treated unfairly by MAS in this regard.

[335]   Although the decision to cease payments of the partial disability benefit was made on the basis of Dr Kenny’s report, at the hearing MAS also called Barry Jordan who, in addition to giving evidence about Dr Juhasz’s income, also gave evidence as to whether she was capable of working 40 hours per week or more.   Although

Mr Jordan’s conclusion was the same as Dr Kenny’s he approached the matter by a slightly different route focusing on the concept of “capacity” and having significant regard to what WDHB paid Dr Juhasz to do rather than what she actually did.  That evidence was consistent with Dr Kenny’s conclusion that Dr Juhasz was not incapable of working 40 hours per week or more.

(c)      Did MAS act in good faith in having due regard for the interests of

Dr Juhasz?

[336]   Dr Juhasz’s counsel criticised a number of aspects of MAS’s actions.  It was noted that although the letter of instruction to Dr Kenny in relation to the June 2015 interview tasked Dr Kenny with obtaining “full details of Dr Juhasz’s current work commitments across her public and private work, including hours per week and duties

performed”,212  MAS had not provided Dr Juhasz with a copy of this letter with the result that Dr Juhasz “simply did not know that this would be a focus” and was thereby deprived of an opportunity to “have prepared a clear and concise outline of her hours and duties”.213

[337]   Although it is clear that Dr Juhasz was not provided with a copy of the letter of  instruction  sent  by MAS  to  Dr Kenny,  she  had  been  informed,  by  email  of

26 February 2015214 that the purpose of the meeting with Dr Kenny was “for MAS’s

benefit” and that “it would be a good opportunity for us to get a snapshot of where you are currently at” and “what could reasonably be expected to change, including exploring what interventions may have a positive impact on your work capacity”.215

Getting a “snapshot” of where Dr Juhasz was at could reasonably be understood as wanting to know what hours she was working or what her responsibilities were and whether there was any prospects of a change to what MAS understood the status quo to be.

[338]   I do not accept the assertion that Dr Juhasz was limited in her ability to outline her hours and duties.  She was questioned at length about these by Dr Kenny and did not appear to have any difficulty in expressing herself to him on this issue.

[339]   MAS were also criticised for giving Dr Juhasz what was said to be “mixed messages” about “what was going on in terms of her benefit entitlement”.  Counsel for the plaintiff said that it was nearly three months after the consultation before MAS even signalled to Dr Juhasz that there was an issue.

[340]   The delay is entirely explicable.  The evidence was that the report was not received by MAS until 3 August 2015.216  The report was discussed by Ms Unuka with her manager and was then referred to by MAS to its reinsurer for review and input and

then Dr Juhasz was contacted by email on 23 September 2015 to discuss the matter.217

212   ABD vol 1 at 98.

213   Plaintiffs’ closing submissions at [5.9].

214   ABD vol 1 at 68.

215   At 68.

216 Unuka BoE at [29]..

217   At [30]–[31].

[341]   When Dr Juhasz was unavailable to discuss with Ms Unuka as requested,

Ms Unuka emailed the Kenny report to Dr Juhasz on 28 September 2015 with a covering letter which conveyed the message that, as a result of the information in the report around the hours Dr Juhasz was working, support under the policy had come to an end.

[342]   I note that by email of 1 October 2015, Ms Unuka also drew to Dr Juhasz’s attention the recurrent claim provisions within the policy.218

[343]   The email from Ms Unuka to Dr Juhasz of 28 September 2017 clearly said that “support under the policy has come to an end”.  I therefore reject the submission of the plaintiffs’ counsel that it “had taken MAS just three days short of six months since the Kenny consultation to communicate its position and by the time the six month window for any Recurrent Benefit claim to be advanced and closed”.219   I also do not accept Dr Juhasz’s contention that there was a deliberate strategy by MAS to delay providing her with information so as to adversely affect her ability to claim a Recurrent Benefit.  The communication from MAS in both September and October consistently included an invitation for Dr Juhasz to discuss the matter with Ms Unuka.   It was unfortunate  that  Dr Juhasz  was  overseas  and  unable  to  immediately  take  that opportunity up but that was not MAS’s fault.

[344]   A further criticism made by counsel for Dr Juhasz was:

In that six month period the only inquiry made in relation to the actual hours Dr Juhasz worked was a call to Dr Kenny on 16 December 2015 … Not a single inquiry was made to the WDHB about the hours Dr Juhasz has worked in that time.

[345]   MAS had instructed its expert Dr Kenny.  It was were entitled to rely on his expertise.  It was not for MAS to engage in investigations of its own into the same matter that it had retained Dr Kenny to investigate.  As I have already found, it was reasonable of MAS to invite Dr Juhasz to contact Dr Kenny directly to raise with him

such corrections as she believed may be required to his report.

218   ABD vol 1 at 126.

219   Plaintiff ’s closing submissions at [5.11]

[346]   In the situation where Dr Juhasz has refused to do that, it was reasonable of MAS to ask Dr Kenny to confirm the accuracy of the facts upon which he based his report.

[347]   The submissions of counsel for Dr Juhasz has referred also to the statutory declaration Dr Juhasz made on 7 April 2016 and implies that there was something unreasonable in MAS not altering their position upon receipt of it.   The statutory declaration contained information that was different to Dr Juhasz’s prior position as to her hours of work and, as it happens, to the position she ultimately adopted at the hearing.   It also differed from her September 2017 brief where she acknowledged having worked 40 hours in one week in 2015 and one in 2016.220   There is no reason why MAS’s failure, upon receipt of a statutory declaration, to alter its position resulted in MAS not dealing with Dr Juhasz “fairly and openly”.

[348]   The timing of the email of 24 December 2015 conveying the information that, after a review, MAS was not altering its position was unfortunate but, as Ms Unuka put it, was better than delaying further over the Christmas break.

[349]   I therefore find that MAS dealt with Dr Juhasz fairly and had regard for her interests.

(d)      A decision reasonably open to it

[350]   I have found, in accordance with the principles laid down in van der Noll v Sovereign Assurance Co Ltd221  and Percy v Sovereign Assurance Co Ltd222 and the questions formulated at [256] above, that:

(a)       MAS framed the correct question in terms of Dr Juhasz’s capacity.

(b)MAS, utilising the expert evidence of Dr Kenny, correctly determined the question of Dr Juhasz’s capacity to work.

220 Juhasz BoE in reply at [20].

221   van der Noll v Sovereign Assurance Co. Limited [2013] NZHC 3051.

222   Percy v Sovereign Assurance Co Ltd [2014] NZHC 1573.

(c)      Dr Kenny asked the correct questions to Dr Juhasz in the June 2015 interview, and was entitled to rely on the information he received.

(d)MAS acted in good faith in engaging with Dr Juhasz after the Dr Kenny report was provided and making opportunities available to her to amend it.

(e)      MAS reached a decision reasonably open to it on the facts as set out by its expert.

[351]   As is clear from my analysis above, determining what Dr Juhasz had the capacity to do is a different exercise to inquiring as to what physical tasks she undertook.

[352]   Accordingly I decline to grant the declaration sought by Dr Juhasz and the claim  for  damages,  interest  and  recovery  of  the  insurance  policy  premium  of

$24,623.04.

The counterclaim

[353]   The counterclaim by MAS was based on the fact that the second plaintiff had been  unjustly  enriched  by  receipt  of  a  Partial  Disability  benefit  in  the  sum  of

$46,539.53 between the period 1 March 2015 to 31 May 2015 at a time when the first plaintiff did not qualify because she was regularly earning a Weekly Income of more than 75 per cent of her Pre-Disability Income and was capable of and even on her own admission had on occasion, worked more than 40 hours per week.

[354]   It was alleged that it was only following receipt of the Kenny report and certain specified additional information that the defendant became aware that the plaintiff’s circumstances were not what they had been led to believe and that she had not been eligible since 1 March 2015 to receive the Partial Disability benefit.

[355]   By way of defence to the counterclaim, the plaintiffs allege that the benefit was paid by the defendant following the complete disclosure of all information requested

by the defendant in circumstances such that the defendant is estopped from asserting, that it was, in any way, mistaken in relation to:

(a)       the hours worked by the first plaintiff; and

(b)      the income received by the first and/or second plaintiff.

[356]   It was also alleged that because the first plaintiff worked “on average, less than

40 hours per week [and] was not capable of regularly working more than 40 hours per week” the plaintiff met the policy definition of being incapable of working for more than 40 hours per week.  It was alleged that the defendant was estopped from taking any approach other than “averaging earnings and hours over an extended period” in assessing whether the entitlement to be paid a Partial Disability benefit existed.

[357]   The estoppel argument would appear to relate more to the issue of calculating the Weekly Income as less than 75 per cent of the Pre-Disability Income rather than whether the first plaintiff had the capacity to work more than 40 hours per week.

[358]   The defendant submitted that a claim of unjust enrichment required:223

•    proof of the enrichment of the plaintiff by receipt of the benefit;

•    the enrichment was at the expense of the defendant; and

•    that the retention of the enrichment is unjust.

[359]   The defendant acknowledged that estoppel was a defence to unjust enrichment but submitted that fault on the part of the payer was not sufficient to give rise to estoppel.224

[360] It was submitted that for an estoppel to be made out there must be a representation upon which the person to whom the representation was made relied and

223   National Bank of New Zealand Ltd v Waitaki International Processing (NI) Ltd [1997] 1 NZLR

724 (HC) at 728.

224   The defendant relied on General Accident Fire and Life Assurance Corp v National Bank Ltd

[1932] NZLR 1289 at 1292 for this proposition.

altered their position to their detriment. Such a representation had to be unambiguous. The payment recipient cannot rely on a representation by the payer which was the result of a breach or misrepresentation by the recipient.225

[361]   The plaintiff, in responding to the counterclaim, emphasised that she directed her accountant to provide MAS “whatever information they wanted”.   It was also emphasised that the defendant did not plead breach of the duty of good faith by the plaintiffs.  Neither of those submissions are directly relevant to the issue of whether or not the defendant was in full possession of all relevant facts between the period

1 March 2015 and 31 May 2015.

[362]   Stating that her accountant had been authorised to provide MAS with any information it had asked for was not sufficient, in the case, to ensure that MAS was in possession of all relevant information.

[363] In particular, MAS would not have known that Dr Juhasz was being remunerated for the ESC contracting work through Eva Juhasz Ltd as opposed to receiving that remuneration as part of her base salary.  It would therefore not have known to ask the accountants to provide financial information about the earnings of Eva Juhasz Ltd.

[364]   The fact that Dr Juhasz, when queried about the ESC payments, actively represented that the remuneration was included within the fortnightly salary payments also meant that MAS was not in possession of all the relevant information.226   When Dr Juhasz was generating the invoices for this work in the name of her company and submitting them for payment herself and receiving that payment into the company bank account, it is difficult to understand how she could genuinely have believed that the remuneration would have been included in the fortnightly salary.

[365]   The specific representation by Dr Juhasz to MAS was that there might be a

“slight increase” in her on-call responsibilities in 2015.  This would not have been sufficient to alert MAS to the very substantial obligation she assumed under the on-

225   Souter v Souter [1923] NZLR 1078, at 1101.

226   See above at [54] and [55].

call roster as from the start of February 2015.  This is all the more so when, in her regular progress reports that she was required to file, Dr Juhasz was consistently representing her work obligations as being largely unchanged.227

[366]   I conclude that it was not until it received Dr Kenny’s July report that MAS became aware of the true nature of Dr Juhasz hours of work and responsibilities. This is not a case such as Kelly v Solari where the insurance company was careless in checking its records and paid out on a lapsed policy.228  MAS was not careless in taking Dr Juhasz’s  reports  at  face  value.   Those  reports did  not  accurately reflect  the magnitude of the on-call roster obligations that Dr Juhasz had commenced in February

2015.

[367]   I have found that as a fact, once Dr Juhasz commenced the on-call roster, that work and her job-sized work meant that she was working and being paid for 40 hours per week and that the Breast Screen Aotearoa and ESC work would have pushed her well above 40 hours per week.   I am satisfied that MAS did not and could not reasonably have known that until receipt of Dr Kenny’s July report.

[368]   It is clear that Dr Juhasz had been working those hours at least from 1 March

2015. Accordingly, for the period 1 March 2015 to 31 May 2015 it could not be said that Dr Juhasz was incapable of working more than 40 hours per week.  On that basis she was not entitled to receive a Partial Disability benefit.

[369]   I also find that during the period of 1 March to 31 May Dr Juhasz’s income regularly spiked above the policy threshold, disentitling her to the benefit.

[370]   Counsel for the plaintiff conceded that neither Dr Juhasz nor her company had altered their position to their detriment upon receipt of the payments so as to create an estoppel prohibiting MAS from seeking recovery of this sum.  There was no dispute

that the sum involved is $46,539.53.

227   See above at [47]–[52].

228   Kelly v Solari (1841) 9 M & W 54.

[371]   The plaintiffs attempted to argue that unjust enrichment was not a settled and independent cause of action in New Zealand law.229   This is to misrepresent the basis of the counterclaim.  Various academics in New Zealand continue to debate whether “unjust enrichment” ought to constitute a cause of action in its own right.  However, the principles of restitution for a wrong are well-settled. Here, the counterclaim is for restitution of amounts paid by the insurer by mistake.  The principled foundation of the counterclaim is that it is unjust for a person to retain a benefit arising out of someone else’s mistake.  This is a generally accepted and non-contentious position in New Zealand law.

[372]   The elements of unjust enrichment as set out in National Bank of New Zealand Ltd v Waitaki International Processing (NI) Ltd have been made out.230    The enrichment by receipt of a benefit has been proved; the enrichment is at the expense of MAS and retention of the enrichment is unjust. Accordingly, I find in favour of the defendant in relation to the counterclaim in the sum of $46,539.53.

Costs

[373]   The defendant having succeeded in both its defence to the plaintiffs’ claim and on its counterclaim is entitled to costs.  I invite the parties to agree costs but failing agreement the defendant is to file a memorandum within 14 days from the date of this

judgment with the plaintiffs having 14 days to reply.

Churchman J

Solicitors:

Shieff Angland, Auckland for Plaintiffs

Mahony Burrowes Horner, Wellington for Defendant

229   Avoiding unjust enrichment’s perils: “an Aristotelian conception of justice” The Capital Letter,

2 May 2017.

230   National Bank of New Zealand Ltd v Waitaki International Processing (NI) Ltd 1 NZLR 724 (HC)

at 728.