Sohail v Accident Compensation Corporation
[2022] NZHC 1130
•20 May 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-002058
[2022] NZHC 1130
BETWEEN MOHAMMED SOHAIL
Applicant
AND
THE ACCIDENT COMPENSATION CORPORATION
Respondent
Hearing: 22 March 2022 Appearances:
Philip Schmidt for the Applicant Fenella Becroft for the Respondent
Judgment:
20 May 2022
Reissued:
26 May 2022
JUDGMENT OF MOORE J
[Application for special leave to appeal]
RECALLED AND REISSUED ON 26 MAY 2022 AT 2:00 PM
This judgment was delivered by me on 20 May 2022 at 3:00 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar / Deputy Registrar Date:
SOHAIL v THE ACCIDENT COMPENSATION CORPORATION [2022] NZHC 1130 [20 May 2022]
Introduction
[1] Mohammed Sohail was formerly a self-employed taxi driver. He injured his neck in 2005. Mr Sohail said that this injury prevented him from working. He claimed work-related weekly compensation from the Accident Compensation Corporation (“ACC”). ACC began making payments but suspended them after Mr Sohail was unable to produce his logbooks.
[2] Three years later, Mr Sohail’s lawyer filed an application to review ACC’s decision. The application was withdrawn when ACC agreed to investigate the matter. ACC paid out backdated compensation.
[3] In 2010, Mr Sohail claimed for work-related compensation for depression and anxiety. As part of that process a doctor prepared a report which concluded that Mr Sohail was working part-time when he was injured and that he remained capable of doing so. A physiotherapist undertook a functional capacity evaluation and agreed that Mr Sohail could work part-time hours. ACC consequently suspended Mr Sohail’s entitlement.
[4] Mr Sohail appealed ACC’s decision. On 1 February 2019, Judge A A Sinclair dismissed the appeal.1 Mr Sohail sought leave to appeal. On 7 October 2021,
Judge G M Harrison refused to grant leave.2
[5] Mr Sohail now seeks special leave to appeal on the following two questions of law:
(a)Question One: Did ACC settle a prior dispute about entitlement to weekly compensation and if so, what is the effect of this?
(b)Question Two: Is the decision at issue a suspension decision or a revocation decision? If it is a revocation decision, did ACC need to prove the decision was made in error?
1 Sohail v Accident Compensation Corporation [2019] NZACC 7 (DC).
2 Sohail v Accident Compensation Corporation [2021] NZACC 157 (DC).
[6] The crux of this appeal is whether ACC, having initially accepted that Mr Sohail was working full-time as a taxi driver, can subsequently determine that he was in fact working part-time and cancel his entitlement to weekly compensation.
Mr Sohail’s claim for physical injury
[7] The history of Mr Sohail’s dealings with ACC is a reasonably lengthy. It starts with when Mr Sohail injured his spine. This was on 2 January 2005. He was certified unfit to work as a taxi driver. From mid-January that year he received weekly compensation payments from ACC.
[8] In February 2005, ACC referred Mr Sohail for an Occupational Medical Assessment with Drs Monigatti and Adams. These specialists prepared a report dated 17 February 2005. This stated that Mr Sohail injured his neck while changing a tyre on his vehicle. The specialists concluded that this history was consistent with a cervical spine sprain. They also identified Mr Sohail’s history of depression and self- reported work related stress.
[9] On 24 March 2005, a physiotherapist, Mr Robert Sellars, undertook a Worksite Assessment. Mr Sellars noted that Mr Sohail drove his taxi for between four and five hours per day in the evenings and attended a travel course for four hours each weekday. Mr Sohail advised, however, that prior to the injury he was working between 60 and 70 hours per week.
[10] Mr Sohail was referred to an orthopaedic and spinal surgeon, Mr Alistair Hadlow. In his report dated 24 May 2005, Mr Hadlow stated that an MRI scan of Mr Sohail’s spine showed a “central C4/5 disc prolapse”. His view was that the impingement of the spinal cord was likely causative of Mr Sohail’s neck and brachialgic pain.
[11] ACC asked Mr Sohail for his logbooks to corroborate Mr Sellar’s comments as to his hours of work. In a statutory declaration provided to ACC, Mr Sohail said that his logbook for January, February and early March 2005 had been lost. He attached a lost property report filed with the Police. Some communications about the
claim followed. It appears that the file was archived in 2006. Mr Sohail moved to Sydney in 2007.
[12] Mr Sohail instructed Mr Schmidt as counsel. On 23 June 2008, Mr Schmidt wrote to ACC requesting that it investigate Mr Sohail’s entitlement to weekly compensation. On 8 August 2008, Mr Schmidt sent a follow-up letter. On 18 September 2008, ACC responded that Mr Sohail had failed to provide the information it requested. Mr Schmidt then filed an application for review.
[13] On 5 December 2008, ACC wrote to Mr Schmidt stating that, in the course of preparing for the review hearing, it was discovered that Mr Sohail had provided the requested further information at a meeting on 6 September 2005. Mr Sohail then withdrew his application in exchange for ACC’s agreement to investigate his weekly entitlement.
[14] ACC arranged for Mr Sohail to be assessed by an occupational medical specialist, Dr Rod Nicholson. Dr Nicholson produced a report dated 13 July 2009. His description of the accident was consistent with that of Drs Monigatti and Adams. He referred to Mr Hadlow’s report. He noted that Mr Sohail continued to experience pain related to the injury. He noted, however, that Mr Sohail had returned to work as a taxi driver on a part-time basis, working 20 hours per week.
[15] Mr Schmidt subsequently filed a second application for review claiming late delivery of entitlement. ACC responded by way of letter dated 3 September 2009. It accepted that Mr Sohail was continuously incapable from 13 May 2005. On 5 February 2010, ACC informed Mr Sohail that he was owed $65,651.24 in backdated weekly compensation.
Mr Sohail’s claim for cover for mental injury
[16] On 21 September 2010, Mr Schmidt wrote to ACC on Mr Sohail’s behalf seeking cover for mental injury manifesting as depression and anxiety. Correspondence followed. However, despite this ACC failed to arrange for a medical assessment and make a decision within the statutory timeframe. ACC thus granted deemed cover for anxiety on 24 April 2013.
[17] Mr Schmidt applied for review of the decision claiming that Mr Sohail was also entitled to deemed cover for depression. ACC approved cover on 13 December 2013.
[18] ACC arranged for Mr Sohail to be assessed by a psychiatrist, Dr Grant Galpin. Mr Sohail told Dr Galpin that on the night of his neck injury his taxi was rear ended by another car. He said that his car was not damaged as the other car hit his towbar. This was the first occasion where Mr Sohail mentioned this incident during his assessments. Mr Sohail then said that when he was changing a tyre later that night, he struck his neck on the edge of the boot lid.
[19] Dr Galpin questioned Mr Sohail about his hours of work. Mr Sohail acknowledged that while his logbook recorded longer hours of work, he was actually working for 18 to 20 hours per week. He said that he worked these hours in two or three hour stints, but in the remaining time he often went to rest at his or a friend’s house and logged that time as if he was working. His view was that this approach was of no significance as he was only paid for the work that he did.
[20] Dr Galpin opined that Mr Sohail’s symptoms were consistent with the residual features of a major depressive disorder. He did not consider that Mr Sohail’s neck injury was causative of the depressive disorder.
[21] A second report dated 5 March 2014 was prepared by an occupational medicine specialist, Dr David Beaumont. Dr Beaumont noted that Mr Sohail’s description of the accident given to him and Dr Galpin differed from his previous accounts. Mr Sohail had not told the previous assessors about the incident where his taxi was rear ended.
[22] Dr Beaumont agreed with Dr Galpin that there was no evidence of a causative nexus between Mr Sohail’s alleged physical injury and the development of a major depressive disorder. His opinion was that Mr Sohail’s symptoms and described incapacity were wholly or substantially caused by pre-existing depression and anxiety.
[23] Dr Beaumont considered that there were inconsistencies in Mr Sohail’s claims about his ability to work. He described it this way:
“Mr Sohail told me that he works two morning shifts per week, between 10 and 15 hours per week, adding, when questioned regarding the 15 hours that occasionally he will work a third morning shift. This was a very specific description to me, which does not accord with the description given at his Initial Occupation Assessment, of working 20 hours per day, 4 to 5 hours per day, or that given to Dr Galpin.
Dr Galpin refers to Mr Sohail’s driving log from his current job in Sydney. The information that Mr Sohail presented to Dr Galpin was that he worked 6 or 5 hours per day, approximately 18-20 hours per week. Dr Galpin challenged him that this was not what his work log showed, which he explained by saying that he would go to his friend’s house to rest and not work for those full hours.
Turning to the log that Dr Galpin referred to, I note that for instance, in the month of April 2013 Mr Sohail worked on 22 days out of 30. In that time he worked for approximately 160 hours, giving an average of over 7 hours a shift. There is considerable variation between shift lengths, with several extending to 10 or 12 hours. This computerised recording of his working hours is at variance from the description he gave to me, albeit that this refers to last year. If ACC seeks to understand more accurately his work pattern then perhaps his financial records for that may help also, although I note that he has an arrangement with the taxi owners that he works for which may make such data difficult to interpret.
I do have financial details for his income during the 2003 and 2004 tax years ($3,563 and $9,360 respectively) and a loss of $1,058.84 in the 2005 tax year. The description that Mr Sohail had given to me was that he was working 50 or 60 hours per week prior to his accident in January 2005. 60 to 70 hours has also been described. These financial figures would seem to suggest that Mr Sohail was only working on a part-time basis prior to his described accidents.”
[24] Dr Beaumont therefore considered it “difficult to comment with any conviction” on Mr Sohail’s work ability.
[25] ACC sought further comment from Dr Galpin, who provided an addendum to his earlier report. This was dated 2 May 2014. Dr Galpin considered that Dr Beaumont’s analysis “makes sense” and did not disagree with his opinion.
[26] On 3 July 2014, ACC cancelled Mr Sohail’s deemed cover for depression and anxiety. ACC considered that Mr Sohail’s mental illness was not eligible for cover because it was pre-existing and thus not caused by his physical injury.
[27] Mr Sohail applied for a review. On 19 November 2014, the Reviewer dismissed his application. The Reviewer found that ACC was correct to revoke Mr Sohail’s deemed cover for mental injury. The evidence from Dr Galpin and Dr Beaumont was that Mr Sohail’s physical injury post-dated and therefore did not cause his mental illness.
ACC’s decision suspending entitlement
[28] Having reviewed Dr Galpin’s and Dr Beaumont’s reports, ACC began investigating Mr Sohail’s cover for physical injury. ACC arranged for Mr Sohail to undertake a functional capacity evaluation with Mr Sellars. Mr Sellars produced a report dated 7 November 2014 in which he noted that Mr Sohail worked as a taxi driver in Sydney three days per week in four hour shifts. He stated that Mr Sohail had generally been working these hours for many years. Mr Sellar’s conclusion was that Mr Sohail had no clinical, physical, or psychological impairments to functional ability. He considered that Mr Sohail demonstrated safe physical capacity for full-time light to medium work, which is the work demand level for a taxi driver.
[29] On 18 December 2014, ACC communicated to Mr Sohail its decision suspending his entitlement to weekly compensation from 16 January 2015. The decision was based on the reports of Mr Sellars, Dr Beaumont and Dr Galpin. ACC’s view was that Mr Sohail’s injury was not preventing him from the doing the job he had at the time he was injured – that is as a part-time taxi driver.
ACC review decision
[30] Mr Sohail applied for review of ACC’s decision. He adduced evidence of a report of Dr Saeed Kohan dated 24 August 2015. Dr Kohan’s opinion was that “it is likely that the C4/5 discovertebral disease is responsible for the ongoing pain that Mr Sohail is experiencing”. He noted, however, that other factors may worsen the severity of Mr Sohail’s symptoms, including the centralisation of the pain, chronic pain syndrome and the contribution of depression.
[31] ACC obtained a further report of Dr Beaumont dated 10 September 2015 in response. Dr Beaumont’s conclusion was that:
“… whatever the cause for Mr Sohail’s symptoms, and whatever the relationship his symptoms have to the original injury event in January 2005 and irrespective of any identified inconsistencies in his account, the fact would seem to remain that despite any such symptoms these have been accommodated to allow him to continue working as he was prior to the injury.”
[32] The Reviewer found that Mr Sohail’s claim that he was working 60 hours per week prior to his injury was inconsistent with the earnings information obtained by ACC. Nor could his claim be corroborated by his logbook, which he said was lost. The Reviewer thus considered that the issue was whether Mr Sohail was unable to substantially undertake his part-time work as a taxi driver from December 2014.
[33] The Reviewer considered that Dr Kohan’s report was directed at the veracity of Mr Sohail’s description of the mechanism of injury. Dr Kohan did not speak to Mr Sohail’s ability to continue working as a part-time taxi driver with that injury. For that reason, the Reviewer agreed with Dr Beaumont that Dr Kohan’s report had limited bearing on that issue.
[34] The Reviewer accepted Dr Beaumont and Mr Seller’s evidence that Mr Sohail was capable of part-time work as a taxi driver. The application for review was accordingly dismissed.
District Court dismissal of the appeal
[35] Mr Sohail appealed to the District Court. The issue was whether ACC was correct to suspend Mr Sohail’s entitlement to weekly compensation from December 2014.3
[36] Mr Sohail adduced further evidence in support of his appeal from Dr Jonathan Herald, an orthopaedic surgeon, and Dr Uthum Dias, an occupational physician. In a report dated 13 September 2016, Dr Herald opined that it was likely that Mr Sohail suffered a neck injury in 2005. The MRI scan showed a clear C4/5 disc prolapse.
3 Sohail v Accident Compensation Corporation [2019] NZACC 7 (DC) at [3].
While not imaged, it was also possible that Mr Sohail sustained a lumbar spine injury. Dr Herald considered that this injury was causative of Mr Sohail’s pain. His view was that Mr Sohail did not meet the criteria for a diagnosable pain disorder. Mr Sohail’s depression may lower his tolerance to pain, but it did not cause his pain – the neck injury did.
[37] Dr Dias provided a report dated 28 April 2017. He noted that Mr Sohail suggested two possible mechanisms for the cause of his neck injury – his car being rear ended and the subsequent incident changing a tyre. This injury resulted in Mr Sohail reducing his hours of work to part-time. Dr Dias considered that the injury would be aggravated by work as a taxi driver, which involves prolonged static postures of the neck, interspersed with repetitive rotation of the neck and spine (to perform head movements when checking for blind spots when changing lanes and when turning at intersections). Dr Dias opined that Mr Sohail would therefore be incapable of returning to work as a full-time taxi driver. He noted that his opinion was underscored by the “simple fact” that Mr Sohail had never returned to full-time hours over the past 12 years, despite having the opportunity to do so.
[38] Dr Beaumont provided a further report dated 13 December 2016. His view was that Dr Herald’s report largely ignored relevant psychological and social factors that were significant determinants of incapacity. He considered that this approach was wrong in that it neglects the complexities of the case. He criticised Dr Herald’s report for failing to distinguish between the history obtained from Mr Sohail and the evidence presented in his file.
[39] Dr Beaumont’s view was that there is insufficient evidence to conclude that Mr Sohail suffered an acute disc injury. There was no evidence that any such injury would have progressed to degenerative disc disease at multiple levels in the cervical spine by way of injury. Nor was there any suggestion of back injury, meaning that the diagnosis of lumbar spondylosis is coincidental. He concluded that the presence of cervical spondylosis and lumbar spondylosis commonly coincide, and are likely to be non-injury related.
[40] Dr Beaumont continued by clarifying that his opinion was not that there was no neck injury at all. His view was that there were significant discrepancies in Mr Sohail’s account of the mechanism of injury, his actual work hours and the recording of those hours. He considered that the accuracy and veracity of Mr Sohail’s account might be adversely affected by conscious secondary gain motivations.
[41] Dr Beaumont noted that Mr Sohail had been working part-time as a taxi driver since he was injured. In his view, the dispositive issue was the number of hours that Mr Sohail was working at the time he was injured. If he was not actually working full-time hours at that time, then he was not incapable of undertaking the work that he was doing pre-injury.
[42] Judge Sinclair observed that Mr Sohail told Dr Dias that prior to his injury he earned between $800 and $900 per week working full-time.4 He also told Dr Beaumont that ACC paid him $200 per week, which was about a third of what he previously earned.5 The Judge considered that this account of his previous earnings was not reflected in his declared earnings for the financial years 2003 to 2005.6 Nor was Mr Sohail’s case helped by his inconsistent accounts of the mechanism leading to injury, the hours he worked and his failure to produce logbooks or any other corroborative evidence of his working arrangements.7
[43] The Judge thus found that ACC was correct to conclude that Mr Sohail’s pre- incapacity employment was that of a part-time taxi driver.8 Taking into account the reports of Dr Galpin and Dr Beaumont, the Judge considered that Mr Sohail was capable of working as a part-time taxi driver.9 ACC therefore had a sufficient basis to suspend Mr Sohail’s weekly compensation entitlements at the time the decision was made.10
4 At [55].
5 At [55].
6 At [54]–[55].
7 At [56].
8 At [57].
9 At [60].
10 At [62].
[44] The Judge further considered that ACC had a sufficient basis to suspend Mr Sohail’s entitlement on the evidence before the Court on appeal.11 She considered that Dr Herald’s opinion was speculative and did not address the ultimate issue of whether Mr Sohail was able to undertake his pre-accident work as a part-time taxi driver.12 Nor did Dr Kohan’s report address that issue.13 Dr Dias, on the other hand, expressed the view that Mr Sohail was capable of working part-time as a taxi driver, albeit less than full-time.14 The appeal was dismissed.15
District Court refusal to grant leave to appeal
[45] Mr Sohail sought leave to appeal to this Court. Judge Harrison refused to grant leave.16 The Judge considered that the decision Mr Sohail was capable of resuming his work as a part-time taxi driver was based on fact.17 ACC’s prior decision to pay backdated compensation did not contemplate whether Mr Sohail was able to resume work – compensation was paid due to ACC’s failure to reach a decision within the statutory timeframe.18 ACC thus made no decision which bound it to pay compensation thereafter.19
[46] Judge Harrison concluded that the fundamental issue was whether Mr Sohail was able to resume his occupation as a part-time taxi driver as at 18 December 2014 and Judge Sinclair determined as a matter of fact that he was so capable.20
Special leave to appeal
[47] A party to an appeal who is dissatisfied with the decision of the District Court as being wrong in law may, with the leave of the District Court, appeal to the High Court.21 If the District Court refuses to grant leave, the High Court may grant
11 At [73].
12 At [70].
13 At [66].
14 At [71]–[72].
15 At [74].
16 Sohail v Accident Compensation Corporation [2021] NZACC 157 (DC) at [27].
17 At [21].
18 At [22].
19 At [23].
20 At [26].
21 Accident Compensation Act 2001, s 162(1).
special leave to appeal.22 The fact that special leave is required is significant and suggests that leave ought not to be granted as a matter of course.23
[48] It is for the applicant to show that a grant of leave is in the interests of justice.24 This ordinarily involves demonstrating that there is an issue of principle at stake or that a considerable amount hinges on the decision, and that there is a reasonable prospect of success.25 The point of law must be capable of bona fide and serious argument.26
Mr Sohail’s submissions
[49] Mr Schmidt submitted that ACC, by way of its decision confirming that Mr Sohail was entitled to weekly compensation, accepted that Mr Sohail worked full- time as a taxi driver prior to his injury. That is inherent in the conclusion that he should be paid weekly compensation for the difference between full-time work and the part- time that he was capable of carrying out despite his injury.
[50] Mr Schmidt submitted that the relevant time to dispute the extent of Mr Sohail’s pre-accident employment was during the 2009 review process. He says that ACC should not be permitted to dispute this fact having avoided a hearing where this was a key issue. He submitted that ACC must be regarded as having settled the dispute and be bound by its decision. That is the consequence of taking away the claimant’s right to a hearing in which essential facts are determined.
[51] Mr Schmidt submitted that ACC has not suspended Mr Sohail’s entitlement to weekly compensation, but rather has revoked the decision accepting such entitlement. The distinction is an important one. Revocation places a burden on ACC to prove that the original decision was made in error. He submitted that ACC cannot decide in 2014 that Mr Sohail was working part-time as a taxi driver and cancel his entitlement
22 Section 162(3).
23 Kenyon v Accident Compensation Corporation [2002] NZAR 385 (HC) at [15(c)] citing
O'Loughlin v Healing Industries Ltd (1990) PRNZ 464.
24 At [15(d)] citing Avery v No. 2 Public Service Appeal Board [1973] 2 NZLR 86 (CA).
25 At [15(b)] citing Sandle v Stewart [1982] 1 NZLR 708 (CA); Manawatu Co-op Dairy Company Ltd v Lawry [1988] DCR 509; and Brown v Chowmein Fashions Ltd (1993) 7 PRNZ 43.
26 Impact Manufacturing Ltd v Accident Rehabilitation and Compensation Insurance Corporation
HC Wellington AP266/00, 6 July 2001.
without acknowledging that there was an error in the 2009 decision insofar as it accepted that Mr Sohail was working full-time prior to his injury. He submitted that the District Court’s conclusion that ACC’s 2014 decision was issued as a suspension of an entitlement is wrong and must be overturned.
[52] Mr Schmidt further submitted that ACC reaching a different conclusion on evidence existing at the time of the decision is not an error that engages the power to revoke that decision. It follows that ACC had no basis to revoke the decision confirming Mr Sohail’s entitlement to weekly compensation.
ACC’s submissions
[53] Ms Becroft, for ACC, submitted that Mr Sohail’s case is premised on the false proposition that the 2014 decision suspending his entitlement constituted a revocation of the 2009 decision to pay weekly compensation. She submitted that ACC was not estopped from suspending weekly compensation in 2014 because it decided that Mr Sohail was entitled to compensation for the preceding period. The 2014 decision was a fresh decision concerning a new period of weekly compensation not previously determined by ACC.
[54] Accordingly, Ms Becroft submitted that ACC’s 2014 decision did not revise a prior decision. She submitted that ACC considered Mr Sohail’s entitlement for a new period and made a fresh decision for that period. ACC is obliged by the Accident Compensation Act 2001 (“the Act”) to consider a claimant’s incapacity from time to time. Ms Becroft submitted that ACC did just that, with the evidence being sufficient to discharge the onus of showing that Mr Sohail was no longer entitled to receive weekly compensation.
If ACC settled a dispute about an entitlement to weekly compensation, what is the effect of that settlement?
[55]I turn to consider the first question posed by Mr Sohail.
[56] A claimant who has suffered a personal injury may receive entitlements under the Act if he or she has cover for the personal injury and is eligible under the Act for
the entitlement.27 One of the entitlements provided for by the Act is weekly compensation.28
[57] Cover and entitlement are separate concepts. A person has cover for a personal injury if, among other things, that personal injury is a physical injury caused by an accident.29 As noted above, cover is required for a person to have entitlements under the Act.
[58] A claimant who has cover and who lodges a claim for weekly compensation is entitled to receive it if ACC determines that the claimant is incapacitated within the meaning of s 103(2) and the claimant is eligible.30 One circumstance in which the claimant is eligible is where that claimant:31
(a)(somewhat circularly) 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.
[59] An earner is a natural person who engages in employment, whether or not as an employee.32 The quantum of the claimant’s weekly compensation is 80 per cent of their weekly earnings.33 There is a minimum weekly earnings, which applies to self- employed full-time workers, that is defined by reference to the minimum wage.34
[60] When a claimant lodges a claim for weekly compensation,35 ACC must determine whether that claimant has cover for a personal injury.36 ACC must make decisions on a claim on reasonable grounds, and in a timely manner, having regard to
27 Accident Compensation Act 2001, s 67.
28 Section 69(1)(c).
29 Sections 8, 20(1) and (2)(a), and 26(1)(b).
30 Section 100(1)(a). In Mr Sohail’s circumstances eligibility is dealt with under cl 32, 44, and 44A of sch 1 to the Act.
31 Schedule 1 cl 32(1).
32 Section 6 definition of “earner”.
33 Schedule 1 cl 32(3).
34 Schedule 1 cl 42.
35 Section 48 provides that a person may lodge a claim cover for his or her personal injury; or cover and a specified entitlement for his or her personal injury; or a specified entitlement for his or her personal injury, once ACC has accepted the person has cover for the personal injury.
36 Section 50(1)(a).
the requirements of the Act, the nature of the decision, and all the circumstances.37 ACC must investigate a claim for cover within 21 days of it being lodged, to the extent reasonably necessary to either make a decision on the claim or determine that it needs further information and extend the time for making its decision.38 If ACC requires further information, its decision must be made within four months of the claim being lodged.39 When ACC fails to comply with the statutory time limitations, the claimant is to be regarded as having a decision by ACC that he or she has cover for the personal injury in respect of which the claim was made.40
[61] If ACC accepts that the claimant has cover, it must provide information about the entitlements to which it considers the claimant may be entitled and facilitate the claimant’s access to those entitlements.41 Where a claimant is entitled to weekly compensation, ACC must determine the quantum of compensation payable to the claimant in accordance with the Act. This involves considering the total time (including overtime) being worked by the claimant at the time he or she suffered their personal injury.42
[62] Mr Schmidt’s submissions are premised on the proposition that ACC effectively settled the dispute with Mr Sohail by agreeing to investigate his entitlement in exchange for him withdrawing his application for review. Mr Schmidt then withdrew a second application for review on the basis of late delivery of entitlement after ACC accepted that Mr Sohail was incapable of carrying out his pre-injury work.
[63] Mr Schmidt relies on Wood v Accident Compensation Corporation43 and Budgen v Accident Compensation Corporation44 for the proposition that because a party cannot relitigate an issue that has been determined at a review hearing, ACC’s decision following the withdrawal of a review by agreement must be binding.
37 Section 54.
38 Section 56(2).
39 Section 56(5).
40 Section 58.
41 Section 50(1)(b).
42 Gibson v Accident Compensation Corporation [2016] NZHC 1003.
43 Wood v Accident Compensation Corporation [2003] NZACC 80 (DC).
44 Budgen v Accident Compensation Corporation [2006] NZACC 217 (DC).
[64] These cases are of limited relevance. Both concern issue estoppel where a claimant sought to litigate a cause of action that had already been decided against them. Attempts to adduce further evidence that was not fresh did not constitute special circumstances that could prevent the operation of cause of action estoppel. In those circumstances there is an authoritative decision from the reviewer or the Court by which the parties are bound on the particular issues.
[65] Here, however, the circumstances differ. The crucial point is that ACC agreed to investigate Mr Sohail’s entitlement and cease delaying making a decision in consideration for the withdrawal of his application for review. ACC made a decision about Mr Sohail’s entitlement under its statutory authority. In my view it is not arguable that ACC settled the matter. To do so would be inconsistent with its statutory powers to make decisions. It follows that there is nothing in the associated question about the effect of such a settlement.
[66] I do not accept Mr Schmidt’s submission that Mr Sohail is prejudiced by filing a review in these circumstances. Mr Sohail’s applications were for review on the basis of unreasonable delay. If ACC’s decision declined him an entitlement, he could have nevertheless applied for review on the merits of ACC’s decision. The correctness of ACC’s decision had not been reviewed because the decision had not been made. Mr Sohail therefore cannot be estopped from applying for a review on that basis. This is evident from Mr Sohail’s ability to subsequently apply for review of ACC’s 2014 decision terminating his weekly entitlement without being estopped from doing so.
Is the decision at issue a suspension decision or a revocation decision, and if it is a revocation decision, did ACC need to prove the decision was made in error?
[67] I turn to the second question posed by Mr Sohail. The question concerns ACC’s powers under the Act.
[68] Mr Schmidt appears to suggest that because ACC’s initial grant of cover implicitly accepted that Mr Sohail was working full-time prior to his injury, it now cannot revise that assumption, even if the consequence would be paying Mr Sohail weekly compensation indefinitely. In my view that cannot be correct. ACC’s
authority is statutory. It retains powers under the Act to divest a claimant of their entitlement in particular circumstances.
[69] First, ACC may do so by operation of ss 103 to 112 of the Act.45 ACC must determine under s 103 the incapacity of a claimant who was an earner at the time he or she suffered the personal injury.46 The question 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.47
[70] ACC may determine “any question” under s 103 from “time to time”.48 When doing so ACC must consider an assessment undertaken by a medical practitioner or nurse practitioner, and may obtain any professional, technical, specialised, or other advice from any person it considers appropriate.49
[71] Section 104 then provides for the effect of a determination under s 103(2) on a claimant’s entitlement to weekly compensation. There are two different circumstances contemplated by s 104(a) and (b):
(a)where a claimant who is receiving weekly compensation for loss of earnings from employment is not incapacitated for employment, that claimant loses their entitlement immediately; and50
(b)if the claimant is not yet receiving weekly compensation for loss of earnings from employment, they are not entitled to begin receiving it.51
[72] Section 104 accordingly contemplates that ACC may make a determination under s 103(2) that a claimant is no longer incapable of carrying out their pre-injury employment and is thus no longer entitled to weekly compensation. This is consistent
45 Accident Compensation Act 2001, s 100(3).
46 Section 103(1).
47 Section 103(2).
48 Section 102(1).
49 Section 102(2).
50 Section 104(a).
51 Section 104(b).
with s 100(3), which provides that a claimant may lose his or her entitlement to weekly compensation through the operation of s 103.
[73] As I understood her, Ms Becroft appeared to go so far as to submit that ACC is required by these provisions to review a claimant’s entitlement from time to time and that the provisions authorise the 2014 decision.
[74] While the sections read together do appear to impose an obligation on ACC to review a claimant’s entitlement from time to time, the principal focus of these sections is seemingly to permit ACC to review whether those entitled to weekly compensation remain incapable of carrying out their pre-injury employment. Such an interpretation makes sense. Not all injuries have permanent consequences in terms of disability. Some may resolve with time. Many are transitory. Others may require surgical or other interventions. In many cases claimants will at some point regain, fully or partially, the ability to return to their pre-injury employment.
[75]The learned authors of Personal Injury in New Zealand share this view:52
“The object of a determination under s 103 is to determine whether a person is, by reason of his or her personal injury, for the time being unable to engage in his or her pre-injury employment. The object is not to determine whether the person has a “capacity for work” generally. The Corporation may make a determination from time to time without restriction on frequency.”
[76] Similarly, the learned authors of Mazengarb’s Employment Law comment that s 102:53
“… must be read in the context of both initial assessment of incapacity and the continuing assessment after an initial determination of incapacity which might result in the claimant losing her or his entitlement to weekly compensation.”
[77] In my view these sections are not directed at ACC forming a different view on the hours of work that the claimant was engaged in prior to their injury. The review process might, however, reveal new evidence calling into question whether a claimant
52 Samuel Hack and others Personal Injury in New Zealand (online looseleaf ed, Thomson Reuters) at [AC102.03].
53 John Hughes and others Mazengarb’s Employment Law (NZ) (online looseleaf ed, LexisNexis) at [IPA102.3].
remains eligible for an entitlement. In those circumstances it is entirely appropriate for ACC to investigate the matter further, which may result in it suspending a claimant’s entitlement or revising its prior decision if it appears on the new evidence to have been made in error.
[78] Next, ACC may suspend or cancel an entitlement if it is not satisfied, on the basis of the information in its possession, that a claimant is entitled to continue to receive the entitlement.54 ACC must have a sufficient factual foundation to do so before terminating benefits. Mere uncertainty is insufficient.55 If ACC determines to suspend or cancel a claimant’s entitlement it is required to give the claimant written notice of the proposed suspension or cancellation within a reasonable period before the proposed starting date.56 However, the section does not limit or affect any other power of ACC to decline or end an entitlement.57
[79] One of those other powers is ACC’s authority to revise prior decisions.58 If ACC considers it made a decision in error, it may revise the decision at any time, whatever the reason for the error.59 ACC may amend or revoke the original decision.60 The onus is on ACC to establish that a revised decision was made in error if a claimant seeks review of that decision.61
[80] ACC is entitled to establish an error in a prior decision using material not available to it at the time of the original decision.62 In Accident Compensation Corporation v Bartels, Gendall and Ronald Young JJ commented that:
“[34] … a decision will not be made in error if there are credible differences of opinion between experts. “Error” requires the identification of factual material significant to the original decision which has now been exposed to be clearly wrong. It will not be sufficient to establish error for others to have a different opinion unless the new opinions are based on fresh or new evidence which was not in the possession of the original decision-makers and which
54 Accident Compensation Act 2001, s 117(1).
55 Ellwood v Accident Compensation Corporation [2007] NZAR 205 (HC).
56 Section 117(2).
57 Section 117(4).
58 Section 65.
59 Section 65(1).
60 Section 65(3).
61 Section 145(2).
62 Accident Compensation Corporation v Bartels [2006] NZAR 680 (HC) at [28].
undermines their decision to a degree from which one can conclude, with that information, that their decision was clearly wrong.”
[81] ACC’s power to revise decisions ensures that erroneous decisions do not persist and unjustifiably benefit or disadvantage either claimants or ACC.63 Cover by way of the publicly funded insurance scheme operates on the basis that “[t]hose who suffer personal injury by accident should have cover under the Act and those who do not should not get cover when none is due”.64
[82] In RH v Accident Compensation Corporation, Judge Joyce noted that medical opinions obtained after the grant of cover could satisfy the “fresh or new evidence” requirement under Bartels.65 But to do so that opinion must present new facts, evidence or knowledge that undermines the original opinion.66 The opinion cannot be sufficient to demonstrate an error if it merely draws different inferences or conclusions from the same facts.67 With respect I agree with that approach.
[83] In Gilmore v Accident Compensation Corporation, Dunningham J commented that ACC is not estopped from revoking an erroneous decision if it failed to independently verify each aspect of the claim at the time of granting cover:68
“[46] While I accept that ACC has an obligation to make appropriate investigations at the time of granting cover, I do not think it can be criticised for taking Ms Gilmore’s account at face value when it first granted cover. It would be administratively inefficient to require ACC to independently verify every aspect of each claim made at the time of granting cover.
[47] In any event, even if ACC had not properly investigated the matter at the time of granting cover s 65 is worded broadly enough, in my view, to encompass errors which are the “fault” of ACC. The section expressly says that ACC can revise the decision “whatever the reason for the error”. This ensures that questions of fault do not preclude either party from seeking to correct the error once the true position comes to light…”
[84] Often the decision to cancel or suspend is based upon the claimant’s injury resolving thus allowing them to return to their pre-injury employment. In those
63 At [33].
64 At [33].
65 RH v Accident Compensation Corporation [2013] NZACC 40 (DC) at [14].
66 At [16].
67 At [16].
68 Gilmore v Accident Compensation Corporation [2016] NZHC 1594.
circumstances the initial decision granting cover remains correct. ACC would have no jurisdiction to revoke the decision.
[85] In the present case, Mr Sohail’s injury has not healed. Rather, ACC made a decision after taking a different view of his hours of work to that which it accepted at first instance.
[86] Mr Schmidt’s fundamental contention is that there was no fresh evidence upon which ACC could revoke the decision granting Mr Sohail weekly compensation. However, ACC obtained further evidence in the form of medical opinions when Mr Sohail applied for cover for mental injury and was required to attend further appointments with Dr Galpin and Dr Beaumont. It was during this process that Dr Beaumont considered that Mr Sohail’s account of his hours of work might be untruthful, or at least inaccurate. The combination of Mr Sohail’s inconsistent explanations and absence of a contemporaneous documentary record resulted in Dr Beaumont forming a different view as to Mr Sohail’s credibility and accuracy when providing his hours of work. To that end the doctor’s opinion amounts to new evidence which undermines the original uncritical opinions. As noted above, ACC is not estopped from revoking an erroneous decision if it failed to independently verify each aspect of the claim at the time of granting cover.
[87] In that regard the present case is materially similar to Smits v Accident Compensation Corporation.69 There the claimant sought weekly compensation for a hand injury which he attributed to his work as a bricklayer.70 He was assessed by a doctor who erroneously presumed that the claimant was working as a bricklayer at the time of the onset of symptoms.71 ACC granted cover.72 Later opinions from other doctors revealed that the claimant’s symptoms in fact arose at least a month after he ceased working as a bricklayer.73 Thus his symptoms could not be attributed to his
69 Smits v Accident Compensation Corporation [2014] NZACC 119 (DC).
70 At [1]–[24].
71 At [29].
72 At [24].
73 At [30]–[34].
work.74 Judge Powell, as he then was, held that this was an error for which ACC could exercise the s 65 power to revoke cover.75
[88] In my view the second question posed by Mr Sohail is inapt on these facts. ACC’s jurisdiction to cancel Mr Sohail’s entitlement is substantially the same as the jurisdiction to revoke it because the reason Mr Sohail is not entitled to weekly compensation is that his personal injury never rendered him incapable of carrying out his pre-injury employment. The medical expert evidence is unequivocal that Mr Sohail is capable of carrying out part-time work as a taxi driver.
[89] Consistently Mr Sohail has been unable to establish that he was working full- time as a taxi driver prior to his injury. ACC uncritically presumed that Mr Sohail’s account was true and only later discovered that it was unsupported by contemporaneous documentary evidence.
[90] That error permits ACC to revoke the decision. Section 117(4) expressly states that the power to suspend does not limit ACC’s power to revise decisions. In cases such as this ACC’s powers under ss 65 and 117 are co-extensive to a degree. This “fine distinction” between suspension and revocation was discussed by Mallon J in Ellwood v Accident Compensation Corporation as follows:76
“[46] In Mr Ellwood’s situation, there is at best a fine distinction between suspending entitlements and removing cover. The approach taken was that whatever the effects of any injury from an accident they were spent. But it may have been the case that there was never any effects from an accident. That is, that degenerative disease has always been the cause of the symptoms. If that is the case, then no cover ought to have been granted at all.
[47] In Mr Ellwood’s case a suspension of entitlements has the same effect as a revocation of cover – Mr Ellwood’s entitlements are terminated. Mr Ellwood can theoretically reapply for entitlements, but to do so he would need to have new evidence which, on the balance of probabilities, establishes that it was the accidents that are causing the pain (and not degenerative disease). That must be only a remote possibility at best …”
[91] There is little pragmatic difference between cancellation and revocation in the present case. If ACC suspended Mr Sohail’s entitlement he could theoretically re-
74 At [30].
75 At [41].
76 Ellwood v Accident Compensation Corporation [2007] NZAR 205 (HC).
apply for weekly compensation if he obtained new evidence which, on the balance of probabilities, established that he was working full-time as a taxi driver prior to his injury. But given his inability throughout the review and appeal process to establish that fact, combined with the inconsistencies and want of credibility in his account, it is unlikely he would be able to meet that burden. Throughout the review and appeal process Mr Sohail adduced new evidence from medical experts. None of this went to the dispositive issue of whether he was in fact working full-time as a taxi driver prior to his injury. In that context, there is little merit in Mr Schmidt’s concern that relevant evidence would have become unobtainable due to the passage of time.
[92] For those reasons, it is my view that the proposed appeal has no reasonable prospect of success. Nor is there an issue of principle at stake. It is accordingly not in the interests of justice for leave to be granted.
Result
[93]The application for special leave to appeal is dismissed.
Moore J
Solicitors:
Mr Schmidt, Auckland Ms Becroft, Auckland
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