Murray v Accident Compensation Corporation
[2013] NZHC 2967
•11 November 2013
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2013-485-0510
CIV 2013-485-2131
CIV 2013-485-2162
CIV 2013-485-2164
CIV 2013-485-2165
CIV 2013-485-2166 [2013] NZHC 2967
BETWEEN VALERIE MURRAY, HANS KOGLER, RW, RN, SA, and CORAL WAITERE Applicants
ANDACCIDENT COMPENSATION CORPORATION
Respondent
Hearing: 3 October 2013
Counsel: J Miller with K Lau for Applicants
L Hansen with J Roberts for Respondent
Judgment: 11 November 2013
JUDGMENT OF THE HON JUSTICE KÓS (Special leave to appeal)
[1] The six applicants for leave to appeal have all been denied weekly earnings- related compensation under s 100(1)(a) of the Accident Compensation Act 2001.1
All were in employment at the time of incapacity. But none were in employment at the time of injury. Three were children at the time of injury (Ms Murray, Mr Kogler and RW). They are eligible for the lesser level of weekly compensation for loss of potential earnings under s 100(1)(d). They say they should be eligible for the higher level under s 100(1)(a). The other three applicants, RN, Ms Waitere and SA, have
been denied weekly compensation altogether.
1 Herein “the Act”.
MURRAY, KOGLER, RW, RN, SA, and WAITERE v ACCIDENT COMPENSATION CORPORATION [2013] NZHC 2967 [11 November 2013]
[2] The applicants seek to argue that the decision of Gendall J in Accident Compensation Corporation v Vandy2 is wrong. Alternatively, that it may be distinguished. Vandy held that to be eligible for weekly compensation under s 100(1)(a) of the Act, a person had to be in employment both at the time of injury and immediately before incapacity set in. It was recognised that this interpretation could produce unfairness. Gendall J said:3
It is of course the case that the legislative policy is not to be undermined by an ungenerous or niggardly approach and a broad, rather than restrictive, interpretation is necessary. But where, as here, the meaning of the statutory provisions could be interpreted only in one direction, despite understandable notions of what might be “fair” in an individual case, the remedy if there is to be one has to be provided by Parliament.
[3] As Mr Miller (who appears for the applicants) submits, the main interpretation issue is whether it is correct that if an injured person is not an earner at the time of injury, then no weekly earnings-related compensation can be paid if she or he has to give up work later because of that injury.
Special leave
[4] I will summarise the factual circumstances of each of the six cases later in this judgment. But in each case the District Court held that Vandy applied and denied the applicants weekly compensation under s 100(1)(a). Leave to appeal was sought in the District Court. It was denied. This is an application for special leave under s 162 of the Act.
[5] The proper test for special leave was set out by Dobson J in Ellwood v ACC:4
An applicant for special leave is required to establish that there is a question of law that is capable of bona fide and serious argument, and that it arises in a case which involves some public or private interest of sufficient importance to outweigh the delay and cost of a further appeal. It will usually be necessary for an applicant to show that there is an issue of principle at stake or that a considerable amount hinges on the decision, and that there are some reasonable prospects of success.
2 Accident Compensation Corporation v Vandy [2011] 2 NZLR 131 (HC).
3 At [24].
4 Ellwood v Accident Compensation Corporation [2012] NZHC 2887 at [10].
[6] It follows that for special leave to be granted, the following criteria all must apply:
(a) the question posed is one of law;
(b)it is a question actually arising in the proceeding (as opposed to being hypothetical or abstract);
(c) it is capable of bona fide and serious argument; and
(d)it involves some interest, public or private, of sufficient importance to outweigh the delay and cost of a further appeal.
The real point of contest before me concerned (c).
Factual background
[7] I will here summarise, very briefly, the individual circumstances of each applicant. These provide essential context for what follows.
Ms Murray
[8] Ms Murray was 16 and still at school in 1976 when she suffered personal injury for which she received cover. She commenced employment in 1979. In 2003, while employed, she became incapacitated as a result of the injury suffered in 1976. Initially she was given weekly compensation entitlement based on her pre-incapacity income. Subsequently the Corporation reconsidered her entitlement and determined that she had not been an earner at the time of her injury. Instead she receives weekly compensation on the basis of being a “potential earner” only at the time of injury. The net effect of that was her compensation payments were reduced by $231 per week.
Mr Kogler
[9] Mr Kogler was severely injured in a motor vehicle accident in 1991, when he was 16 and still at school. Subsequently his left leg had to be amputated. From
1994, after leaving school, he received a sickness benefit. He obtained full time work for 10 months in 2003, but was forced to give up that work because of continuing problems caused by his injury. As with Ms Murray, he has been given weekly compensation on the basis of loss of potential earnings, pursuant to cl 47 of sch 1 of the Act. He argues that his entitlement is greater, and that cl 32 applies instead of cl 47.
RW
[10] The third applicant, RW, was sexually abused as a child in the 1970s and 80s. He was granted cover for mental injury arising from sexual abuse. It is accepted he was not in employment at the time of injury. He was later employed and, in 2007, while in employment, incapacitated. His position as to weekly compensation is also the same as Ms Murray’s.
RN
[11] The fourth applicant, RN, was sexually abused before she turned 18. The abuse included sodomy. That occurred when she was aged about 12. Because the event was not reported at the time, there was no medical evidence of physical injury, such as abrasion or tearing. She first received treatment for the consequences of the abuse at the age of 28 (in 1999). At that time she was neither in employment nor a “potential earner”, as the Act defines that expression. In the District Court it was held “bodily invasion without some distinct physical injury” would not per se amount to “physical injury”. Or, thereby, personal injury by accident.
SA
[12] The fifth applicant, SA, was abused sexually, psychologically and physically, by her husband between 1994 and 2006. In 2007 she took up employment as a care and protection guard. Her last shift occurred in March 2007. In April 2007 she received counselling for symptoms of mental illness. She was diagnosed with post- traumatic stress disorder and major depressive disorders in November 2009. Like Ms Waitere, weekly compensation was denied on the basis that she was not an earner at the date of injury.
Ms Waitere
[13] Ms Waitere had not worked between 1999 and 2005. But in the latter year she obtained employment at the Nelson Nursing Service. On 12 October 2005, the day before she was due to start work, she suffered an electric shock. Her start date had to be deferred to 1 November 2005. She then continued in employment until July 2006 when aspects of the injury prevented her from continuing in employment. Her claim to weekly compensation was denied on the basis that she was not an earner at the date she suffered personal injury.
Questions of law advanced
[14] The applicants have advanced five questions of law.5 Those questions are as follows:
(a) Question 1: Does s 103 deny weekly compensation to an earner who has to cease work because of the effect of a covered injury suffered when they were not an earner?
(b)Question 2: Whether the definition of potential earner in s 6 of the Act is met by accepting the actual date of the sexual abuse as qualifying even though the deemed date of injury is set later by s 36(1)?
(c) Question 3: Whether the wording in s 36(1) can be satisfied by the date that any treatment (including, e.g., counselling for depression) is provided and that treatment or counselling can be accepted in retrospect to have been provided for a mental injury due to the underlying sexual abuse even if it was not disclosed at that time?6
(d)Question 4: Whether an invasion of bodily integrity is a physical injury, and whether s 36(2) applies to mental injury from such a
physical injury?
5 There was a sixth, but at the hearing it was accepted that this was embraced by the first.
6 This question was advanced in a slightly different form by the applicants. By consent it was revised (once at the hearing, and once again thereafter) to the form which it appears above because, thus expressed, the respondent will not contest the proposition.
(e) Question 5: Whether cl 47(5) of sch 1 can allow a claimant to obtain
80 per cent of the higher amount of lost wages through referring the claimant to cl 32 and without recourse to s 103?
Statutory framework
[15] The Act is not easy to construe. As Elias CJ said in Allenby v H:7
[The Act] provides cover on the basis of line-drawing which reflects policy choices. Such line-drawing has resulted in legislation which is technical. Approaches taken to the interpretation of provisions under earlier accident compensation legislation need to be treated with some caution in considering the current legislation. Nor is this easy legislation to follow. It contains much cross-referencing, repetition, and circularity in expression.
[16] It is common ground that the starting point is s 67, the heading of which underscores the point just made by the Chief Justice:
67 Who is entitled to entitlements
A claimant who has suffered a personal injury is entitled to 1 or more entitlements if he or she–
(a) has cover for the personal injury; and
(b) is eligible under this Act for the entitlement or entitlements in respect of the personal injury.
[17] Weekly compensation is an entitlement under the Act: s 69(1)(a). Entitlement to weekly compensation is governed by s 100. Section 100(1) sets out four categories of entitlement. The first and fourth categories are relevant here.
100 Entitlement to weekly compensation depends on claimants’
incapacity for employment and vocational independence
(1) A claimant who has cover and who lodges a claim for weekly compensation–
(a) is entitled to receive it if the Corporation determines that the claimant is incapacitated within the meaning of section
103(2) and the claimant is eligible under clause 32 or clause
44 of Schedule 1 for weekly compensation:
(b) is entitled to receive it if the Corporation determines that the claimant is incapacitated within the meaning of section
7 Allenby v H [2012] NZSC 33, [2012] 3 NZLR 425 at [7].
103(2) and the claimant is eligible under section 210 for weekly compensation:
(c) is entitled to receive it if the Corporation determines that the claimant is incapacitated within the meaning of section
105(2) and if the claimant is eligible under section 224 or clause 43 of Schedule 1 for weekly compensation:
(d) is entitled to receive it if the Corporation determines that the claimant is incapacitated within the meaning of section
105(2) and if the claimant is eligible under clause 47 of
Schedule 1 for weekly compensation.
[18] Under s 100(1)(a) the Corporation must determine whether a person is incapacitated under s 103 and cls 32 or 44 of sch 1. Under s 100(1)(d) the Corporation must determine incapacity under s 105 and cl 47 of sch 1. In each case it must consider an assessment undertaken by a medical practitioner: s 102.
The s 100(1)(a) pathway
[19] As just noted, eligibility under s 100(1)(a) depends on two hurdles being cleared. The first is s 103. It provides:
103 Corporation to determine incapacity of claimant who, [at time of personal injury, was earner or on unpaid parental leave]
(1) The Corporation must determine under this section the incapacity of–
(a) a claimant who was an earner at the time he or she suffered the personal injury;
(b) a claimant who was on unpaid parental leave at the time he or she suffered the personal injury.
(2) The question that the Corporation must determine is whether the claimant is unable, because of his or her personal injury, to engage in employment in which he or she was employed when he or she suffered the personal injury.
(3) If the answer under subsection (2) is that the claimant is unable to engage in such employment, the claimant is incapacitated for employment.
...
[20] The second hurdle is cl 328 of sch 1. So far as is relevant it states:
8 Or cl 44, which is not applicable here.
32 Corporation to pay weekly compensation for loss of earnings to claimant who was earner
(1) The Corporation is liable to pay weekly compensation for loss of earnings to a claimant who–
(a) has an incapacity resulting from a personal injury for which he or she has cover; and
(b) was an earner immediately before his or her incapacity commenced.
[21] Three definitions in s 6(1) are of immediate importance.
[22] “Earner” is defined in s 6, so far as is relevant, as “a natural person who engages in employment, whether or not as an employee”. In my view it is certainly open to argue, for the purposes of special leave, that an “earner” need not necessarily be in current employment at the time of enquiry. Ms Waitere, for instance, who had sought and obtained a job prior to injury (which occurred the day before that employment commenced), might well be an “earner” for the purposes of the Act.
[23] “Employment” means, so far as is relevant, “work engaged in or carried out for the purposes of pecuniary gain or profit” (including paid leave).
[24] “Incapacity” is defined in s 6 as follows:
Incapacity, –
(a) for the purposes of determining incapacity, means incapacity determined under section 103 or section 105, as the case may required; and
(b) includes absence from employment in order to get treatment for personal injury covered by this Act, if the treatment –
(i) is necessary for the injury; and
(ii) is treatment of a type that the claimant is entitled to under
Part 1 of Schedule 1.
The s 100(1)(d) pathway
[25] The second pathway concerns weekly compensation for “potential earners”.
Section 105(1)(b) requires the Corporation to first determine the incapacity of a
claimant who is a potential earner. A “potential earner” is defined in s 6 as a
claimant who:
(a) either suffered personal injury before turning 18 years; or
(b) suffered personal injury while engaged in full-time study or training that began before the claimant turned 18 years and continued uninterrupted until after the claimant turned 18 years
The question the Corporation must decide under s 105(2) is:
... whether the claimant is unable, because of his or her personal injury, to engage in work for which he or she is suited by reason of experience, education, or training, or any combination of those things.
In contrast to s 103(2) there is no suggestion current employment is relevant to that enquiry.
[26] Next, s 100(1)(d) also requires eligibility under cl 47 of sch 1. That requires the Corporation to pay weekly compensation for loss of potential earning capacity in the following circumstances:
47 Corporation to pay weekly compensation for loss of potential earnings capacity
(1) The Corporation is liable to pay weekly compensation for loss of potential earning capacity to a claimant who–
(a) has an incapacity resulting from a personal injury; and
(b) was a potential earner immediately before his or her incapacity commenced; and
(c) is 18 years or over; and
(d) is not engaged in full-time study or training; and
(e) does not have earnings in excess of the amount of minimum weekly earnings determined under clause 42(3).
(2) The weekly compensation payable is 80% of the claimant’s weekly
earnings calculated under this clause.
(3) The weekly compensation is payable when the claimant has been incapacitated for at least 6 months.
(4) For the purpose of calculating the claimant’s weekly compensation, the claimant’s weekly earnings are deemed to be the amount of weekly earnings determined under clause 42(3).
(5) This clause does not apply if the claimant has an entitlement under any other provision of this schedule to weekly compensation for loss of earnings that is greater than the claimant’s entitlement under this clause.
(6) A claimant does not have any entitlement to weekly compensation for loss of earnings, if he or she has an entitlement under this clause to weekly compensation for loss of potential earning capacity that is greater than any entitlement he or she has to weekly compensation for loss of earnings under any other provision of this schedule.
...
[27] Clause 47 is addressed particularly in Question 5. Certain other provisions are relevant to particular questions only. They will be addressed later.
The decision in Vandy
[28] Ms Vandy was 12 when she fell from a horse. She suffered shoulder and hip injuries. She was a school student, not in employment. Five years later she entered the work force. Then she suffered an aggravation of the hip injury. This incapacitated her from continuing in employment. She sought weekly earnings- related compensation. That was refused by the Corporation and a reviewer. In the District Court her appeal was allowed. The Corporation appealed to the High Court. Ms Vandy did not participate in that appeal, but an amicus was appointed.
[29] Gendall J held that the requirements for entitlement to weekly compensation in s 100(1)(a) are cumulative.9 An eligible claimant must both be incapacitated within the meaning of s 103(2) and eligible under cls 32 or 44. To be incapacitated for the purposes of s 103(2) the claimant must have been in employment “when he or she suffered the personal injury”. As the Judge put it:
[23] ... The requirements in s 100(1)(a) are clearly cumulative. One is that the claimant was incapacitated within the meaning of s 103(2). The other is eligibility under cl 32. The Corporation cannot answer the question posed by s 103(2), because there was no employment when the injury occurred. Thus it cannot determine “incapacity” which for the purpose of the legislation has to be given the meaning provided in s 103(2). That requires a current inability to pursue employment that was held when the personal injury was suffered and earnings immediately before the current period of incapacity.
9 At [17].
[30] I have already quoted a later section from the judgment noting that the meaning of the statutory provision in this instance was capable of only one valid construction.10
Question 1: Does s 103 deny weekly compensation to an earner who has to cease work because of the effect of a covered injury suffered when they were not an earner?
[31] Gendall J was clear in Vandy that for a claimant to be “incapacitated within the meaning of s 103(2)”, the claimant must have been engaged in employment when he or she suffered the personal injury.11 Gendall J acknowledged that as a matter of social policy, that might seem unfair. He quoted Judge Ongley in Giltrap v Accident Compensation Corporation:12
That result must be regarded as unfair to a claimant such as the appellant who has a history of full employment before and after the personal injury, but who happened to be unemployed at the time of the injury. At the same time a person with a history of unemployment but briefly employed at the time of personal injury would qualify for weekly compensation.
But he reached the same conclusion as that experienced District Court Judge who said:13
The provisions as they stand reflect a legislative intention that weekly compensation is available only to persons earning at the time of suffering personal injury.
[32] Mr Miller contends that Vandy and Giltrap are wrong. He submits that it cannot have been the intention of Parliament to deny weekly compensation to persons who have to give up their work through an injury covered by ACC, but which occurred at an earlier time when they were non-earner. This, he says, is particularly so when the injured claimant has been sexually abused as a child (when invariably they are non-earners). Mr Miller notes that the applicants were all in employment at the time they became in fact incapacitated, and that their employers had been paying accident compensation levies. The focus of pt 2 of sch 1, he says, is
on whether the claimant “was an earner immediately before his or her incapacity
10 See at [2] above.
11 Accident Compensation Corporation v Vandy [2011] 2 NZLR 131 (HC) at [22]–[23].
12 Giltrap v Accident Compensation Corporation DC Wellington 141/206, 9 June 2006 at [14]–
[15].
13 At [15].
commenced”.14 Normally injury and incapacity occur together. But obviously many times they do not, and there may be a delay. As he puts it:
The problem with s 103 is the drafting deals with the usual situation of the injury and the incapacity for work happening at the same time. It is not drafted appropriately to recognise delayed incapacity.
[33] Mr Miller also placed some emphasis on the use of the word “earner” in s
103. I have indicated already that in my view it is arguable that that word does not necessarily connote current employment at the time of inquiry (whether that be the time of injury, or the time of incapacity).15
[34] The anomalous outcome of the legislation (or the construction applied in
Vandy) can be tabulated. This table was prepared by counsel following the hearing. There is disagreement over two of the five examples however.
Date of injury Employment status at
date of injury
Date of incapacity
Employment status at
date of incapacity
Eligibility to weekly compensation
Person A 1 January 2011 as an adult
Person B 1 January 2011 as an adult
Person C 1 January 2011 as an adult
Person D 1 January 2011 as an adult
Person E 1 January 1990 as a child
Employed as a lawyer
Employed as checkout operator
Employed as a lawyer
Not employed Not employed
30 June
2012
30 June
2012
30 June
2012
30 June
2012
30 June
2012
Employed as a lawyer
Employed as lawyer
Not employed Employed as a lawyer Employed as a lawyer
Eligible for weekly compensation based on lawyer earnings Eligible for weekly compensation based on lawyer earnings?16
Not eligible
Not eligible
Eligible for loss of potential earnings?17
14 See for example cl 32(1)(b).
15 At [22].
16 The respondent takes this view. The applicants doubt it, if Vandy is correct, because of the change in employment.
17 This example is at the heart of the present application. The applicants say there should be eligibility for higher earnings-related weekly compensation, and that loss of potential earnings may easily cease if the claimant is found fit for any work he or she has the skills for – for example as a car park attendant.
Discussion
[35] I agree that the outcome of the construction applied by Gendall J in Vandy is anomalous. Gendall J recognised that himself. So did Judge Ongley in Giltrap. But I have to agree also with Ms Hansen that it is an anomaly that Parliament intended.
[36] In a recent decision I respectfully suggested that the principle stated by Richardson J in Accident Compensation Corporation v Mitchell,18 that the 1982 Act be given a “generous unniggardly interpretation”, still had application despite the more crystalline legislative drafting that has followed in later versions of the Act.19 I suggested that lines of exclusion in a social welfare context needed to be drawn clearly. Expectations which were the “fair and reasonable product of statutory language and ... consistent with the overall statutory purpose should not be read down except by language of the clearest kind”.
[37] This however is a case where lines of delineation have been drawn clearly. As much was confirmed by the 2005 amendment to the heading of the very provision that we are concerned with. Originally the heading of s 103 read: “Corporation to determine incapacity of claimant who, at the time of incapacity, was earner”. In 2005 it was amended to its present form, found in [19] above. The amendment was made in the Injury Prevention, Rehabilitation and Compensation Amendment Act (No 2) 2005. The explanatory note to the Bill simply says that it is
a “correction”,20 and there is no Hansard discussion of the change. Nonetheless, it
emphasises the connection between injury and currency of employment.
[38] That point is made even clearer when one looks at the words of the provision. Section 103(1)(a) filters eligibility by requiring the claimant to be “an earner” at the time he or she suffered the personal injury. That, I have noted already, may contemplate a person not currently in employment. However a finer mesh is then applied in s 103(2). That requires the Corporation to determine whether the claimant
is unable (by reason of the injury) “to engage in employment in which he or she was
18 Accident Compensation Corporation v Mitchell [1992] 2 NZLR 436 (CA) at 438.
19 Brosnahan v Chief Executive of the Ministry of Social Development [2013] NZHC 2618 at [32]–
[33].
20 Injury Prevention, Rehabilitation and Compensation Amendment Bill (No 3) 2005 (165-1) (explanatory note) at 16.
employed when he or she suffered a personal injury”. That I think must include (to make sense of s 103(1)(b)) a person who was at the time on unpaid parental leave. But Parliament has deliberately chosen the broader word “earner” at one place, and then subsequently the word “employment” later. It tinkered with the provision in
2005. It did not change the point of distinction, and indeed gave emphasis to it. It is in my view clear that Parliament intended in s 103(2) to identify a point in time at which injury and employments must be contemporaneous. “When” and “suffered” are both terms of precision. It is clear that, as Gendall J held in Vandy, the claimant must have been engaged in employment when he or she suffered the personal injury.
Conclusion
[39] Mr Miller’s argument has an emotional cogency. But the statutory words eliminate it. I cannot say it is capable of bona fide and serious argument. The answer to Question 1, as s 103 is presently drafted, can only be “Yes”.
Question 2: Whether the definition of potential earner in s 6 of the Act is met by accepting the actual date of the sexual abuse as qualifying even though the deemed date of injury is set later by s 36(1)?
[40] Sections 21 and 21B provide cover for a mental injury in certain circumstances, provided it is suffered on or after 1 April 2002 (in the case of s 21), or on or after 1 October 2008 (in the case of s 21B). Section 36(1) determines the relevant date of injury. It provides:
36 Date on which person is to be regarded as suffering mental injury
(1) The date on which a person suffers mental injury in the circumstances described in section 21 or 21B is the date on which the person first receives treatment for that mental injury as that mental injury.
[41] RM, for instance, first received treatment for the consequences of the sexual abuse she had suffered in 1999 when she was 28. At the time of treatment she was neither an “earner” nor a “potential earner”. The District Court Judge ruled that earlier medical treatment for a suicide attempt when she was 16 (in 1987) was not
treatment for the mental injury as such.21 SA first received counselling in April 2007
for the mental illness consequent on her husband’s various abuses between 1994 and
2006. April 2007 was her deemed date of injury under s 36(1). The District Court Judge held that she was no longer an earner at that date, nor was she a potential earner.
[42] Mr Miller contends that the definition of potential earner in s 6 can be met by accepting the actual date of the sexual abuse as qualifying, even though the deemed date of injury is set later by s 36(1). Mr Miller contends that if a claimant has been sexually abused under the age of 18, they should qualify as a “potential earner”, even though the “mental injury” might for the purposes of s 36 occur later. If that was so then they would be entitled to weekly compensation (albeit at the reduced potential earner rate) and vocational rehabilitation.
Discussion
[43] Mr Miller did not press this argument as strongly as the other questions, and in my view rightly so.
[44] I agree with Ms Hansen’s submission (for the Corporation) that where sexual abuse occurs when a person is under 18, but treatment for mental injury caused by the abuse is only first received after 18, the words of s 36 are clear. If the mental injury is suffered because of physical injury, s 36(2) applies. The mental injury is suffered on the date of the physical injury. But otherwise s 36(1) makes it clear that the date of injury is the date on which the person first receives treatment for the mental injury (caused by the abuse) “as that mental injury”.
[45] I think Judge Ongley was correct to say, in BRM v ACC that s 36 establishes a purely notional or assumed date on which the mental injury is deemed to have occurred.22 Frater J reached the same view in A v Roman Catholic Archdiocese of
Wellington.23
21 Relying on MJR v ACC [2010] NZACC 105 and BRM v ACC DC Wellington 224/2004,
6 August 2004.
22 BRM v ACC DC Wellington 224/2004, 6 August 2004 at [21].
23 A v Roman Catholic Archdiocese of Wellington HC Wellington CIV-2001-485-961,
15 November 2006 at [537].
[46] I do not consider, therefore, that the question posed is capable of bona fide and serious argument. The statutory language is too clear to admit of such argument. The alternative interpretation advanced by Mr Miller cannot stand in the face of the statutory wording, the meaning of which is plain.
Question 3: Whether the wording in s 36(1) can be satisfied by the date that any treatment (including, e.g., counselling for depression) is provided and that treatment or counselling can be accepted in retrospect to have been provided for a mental injury due to the underlying sexual abuse even if it was not disclosed at that time?
[47] This question was the subject of substantial debate, and then accord, at the hearing. The question was amended at the hearing, and again after the hearing. Thus amended, there is agreement as to the answer.
[48] It is agreed that the answer to Question 3 is “Yes”.
[49] In light of the accord that exists, there is no need to grant leave on Question
3.
Question 4: Whether an invasion of bodily integrity is a physical injury, and whether s 36(2) applies to mental injury from such a physical injury?
[50] Question 4 is a further proposition advanced by Mr Miller to bring back the date at which a person is deemed to have suffered mental injury for the purpose of s 36(2). As we have seen, that provides that the date on which a person “suffers mental injury because of physical injuries suffered by the person” is the date on which the physical injuries are suffered. So what, then, is meant by “physical injuries”?
[51] Section 26(1)(b) provides that personal injury means inter alia:
Physical injuries suffered by a person, including, for example, a strain or a sprain.
[52] Mr Miller submits that interference with bodily integrity involved in sexual abuse is as much a physical injury as a strain or sprain. This question arises in the
context only of RN’s proceedings. The facts in that case were, as Judge Ongley
recorded them:24
[RN] was the victim of at least one act of sodomy, and while there is no evidence of actual physical injury, there is a possible inference that some level of physical injury was probable.
But Mr Miller argues before me (as he did before Judge Ongley) that the fact of invasion of the integrity of the body, without evidence of even minor injury, is itself a physical injury.
Discussion
[53] I was initially attracted to the argument that Mr Miller advanced. In short, it seemed to me that the forcible invasion of bodily integrity could arguably be considered a physical injury, even if the physical consequences thereof were transitory only. (The importance for present considerations being the mental injury resulting from the act of sexual violation). There is, of course, no doubt that such
invasion of bodily integrity is an “accident” for the purposes of s 35.25
[54] In Accident Compensation Corporation v D (a decision the applicants rely on), Mallon J was considering a case where a failed tubal ligation resulted in an unexpected pregnancy.26 The issue in that case was whether pregnancy was a “physical injury”, and therefore could constitute “personal injury” under the Act. Mallon J referred to the decision of the High Court in Teen v Accident Rehabilitation and Compensation Insurance Corporation27 and concluded that “bodily harm or damage” was the natural and ordinary meaning of “physical injury”. Interference would need to have a “detrimental physical effect” before it could be described as an injury. Mallon J considered that, when viewed from the perspective of a woman’s body in its pregnant state as compared with its pre-pregnant state, the physical
impacts of pregnancy were capable of being described as an “injury”.
24 RN v Accident Compensation Corporation [2012] NZACC 273 at [20].
25 Allenby v H [2012] NZSC 33, [2012] 3 NZLR 425 at [82].
26 Accident Compensation Corporation v D [2007] NZAR 679 (HC).
27 Teen v Accident Rehabilitation and Compensation Insurance Corporation HC Wellington CIV-
2003-485-1478, 11 November 2003.
[55] However, on further appeal the Court of Appeal held that pregnancy was not a “personal injury” within the meaning of the Act.28 It should perhaps be noted that William Young P dissented, holding that the expressions “personal injury” and “physical injuries” were sufficiently broad to encompass unwanted pregnancy resulting from medical misadventures.29
[56] All these authorities then came together in the Supreme Court decision, Allenby v H.30 In that case H suffered a mental illness after becoming pregnant following a failed sterilisation procedure carried out by Mr Allenby. The Supreme Court held that impregnation from a failed sterilisation was a personal injury. It held, also, that impregnation from rape was a personal injury under s 20(2)(a).
[57] Blanchard, McGrath and William Young JJ held in a joint judgment that
“physical injuries” in s 26(1)(b) required:31
... some appreciable and not wholly transitory impact on the person but which are not necessarily long-lasting or ones that cause serious bodily harm.
That view is entirely consistent with the analysis of Mallon J in D, discussed at [54] above. But it is difficult to reconcile with the argument now advanced by Mr Miller, the point of which is to deny the need for evidence of appreciable physical impact beyond the act of violation itself.
[58] After recording that rape was a species of “accident” under the Act, the
judgment continued:32
The conception of a child (an impregnation of the victim) is a physical consequence of the rape and should not be differentiated, for the purpose of coverage under the scheme, from any other physical consequence, such as a tearing of the vagina, which plainly may be far more transitory than the pregnancy. The pregnancy is properly to be regarded for the purposes of the accident compensation scheme as an injury suffered by her.
28 Accident Compensation Corporation v D [2008] NZCA 576.
29 At [78].
30 Allenby v H [2012] NZSC 33, [2012] 3 NZLR 425. This was an entirely separate case from D.
31 At [56].
32 At [72].
[59] The judgment went on to say that the evident purpose of s 21 is to extend cover to a victim of an act (such as rape) where the victim has suffered mental injury but no physical injury, and so would not otherwise have suffered a personal injury as defined in s 26.33 But s 21 has temporal limits that exclude, in this case, RN.
[60] The question then is whether there is room to argue, in light of Allenby, that invasion of bodily integrity alone may be “physical injury”, and thereby “personal injury”. Grave and disgraceful as such violation is, it would not be “physical injury” without there also being an appreciable and not wholly transitory impact (or trauma) to bodily tissue or skeletal structure. If RN can establish that, she may fall within ss
26(1)(b) and 36(2). If she cannot, then the effect of the decision in Allenby is that she will not.
Conclusion
[61] Following the Supreme Court decision in Allenby the legal position is clear. It is as stated at [60] above. Invasion of bodily integrity alone cannot be physical injury for the purposes of the Act. There is no justification for further consideration of this issue at High Court level.
Question 5: Whether cl 47(5) of sch 1 can allow a claimant to obtain 80 per cent of the higher amount of lost wages through referring the claimant to cl 32 and without recourse to s 103?
[62] Clause 47 deals with liability to pay weekly compensation for loss of potential earning capacity. By cl 47(2), the weekly compensation payable is 80 per cent of the claimant’s weekly earnings calculated pursuant to cl 47(4). Where potential earnings are in question that is based on the minimum weekly rates under
the Minimum Wage Act 1983. Clause 47(5) provides:
33 At [73].
47 Corporation to pay weekly compensation for loss of potential earnings capacity
...
(5) This clause does not apply if the claimant has an entitlement under any other provision of this schedule to weekly compensation for loss of earnings that is greater than the claimant's entitlement under this clause.
...
[63] This question applies to the applicants Ms Murray, Mr Kogler and RW. They were not entitled to weekly compensation under s 103, but instead under s 105, being potential earners at the time of injury (all were still at school at the time). Mr Miller’s argument is that cl 47(5) applies to these three applicants, on the basis that they may be said to have an entitlement under cl 32 instead.
[64] By way of comparison, in Giltrap v Accident Compensation Corporation,34 the combined effect of ss 100(1)(c) and 105(2), and cl 43, conferred eligibility on persons ceasing employment within 28 days before a period of incapacity (differently defined) and which did not then depend on the claimant being an earner at or within 14 days at the time of personal injury. Mr Miller mentioned this to show that there are a variety of curious pathways to compensation in the legislation.
Discussion
[65] In my view the statutory wording is clear, in that entitlement arises under cl 32 by the pathway defined by s 100(1)(a). Where instead the pathway is that for a potential earner under s 105(2), cl 47 does not reroute them back into the more beneficial cl 32 compensation regime.
[66] I agree, also, with views expressed below that the rationale for the exception in cl 47(5) is to provide for the situation where the claimant satisfies the definition of “potential earner” but is at the time of injury engaged in employment (and which
employment was providing earnings greater than the entitlements under cl 47(4)), or
34 Giltrap v Accident Compensation Corporation DC Wellington 141/2006, 9 June 2006.
if the claimant were to suffer a second personal injury whilst an earner and the second personal injury was also identified as incapacitating under the Act.35
[67] Entitlement to weekly compensation through cl 32 is only available via s 103(2). That status depends on being in employment at the time personal injury is suffered.
[68] The statutory wording is clear, and the point is not reasonably in my view capable of bona fide and serious argument on further appeal.
Result
[69] The outcomes under the present Act are unquestionably anomalous. It was not suggested otherwise before me. No Judge could frame common law duties in so inconsistent and erratic a fashion. Nor could insurers achieve such outcomes in an informed market. But cover under the Act is the product of careful and crystalline drafting by legislators. The meaning and effect of the statutory words in issue is quite clear.
[70] The application for special leave is dismissed.
[71] In my view, costs should lie where they fall. If that view is disputed, memoranda may be filed.
Stephen Kós J
Solicitors:
John Miller Law, Wellington for Applicants
John Roberts (ACC Legal), Wellington for Respondent
35 Accident Compensation Corporation v Murray [2011] NZACC 340 at [16]; Accident
Compensation Corporation v RW [2012] NZACC 28, at [19].
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