Terry v Accident Compensation Corporation
[2018] NZHC 268
•28 February 2018
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-Ā-TARA ROHE
CIV-2016-485-379
[2018] NZHC 268
BETWEEN HAMAL TERRY
Appellant
AND
ACCIDENT COMPENSATION CORPORATION
Respondent
Hearing: 9 February 2018 Appearances:
D A Laurenson QC and F L Beecroft for the appellant T J McGurk for the respondent
Judgment:
28 February 2018
LEAVE TO APPEAL JUDGMENT OF CULL J
[1] The Accident Compensation Corporation (ACC) applies for leave to appeal to the Court of Appeal from the judgment of 26 September 2017 (the judgment) in which I made the following findings:1
(a)ACC’s determination under s 105(2) of the Accident Compensation Act 2001 (the Act) that Mr Terry was no longer incapacitated was flawed; and
(b)ACC and the District Court failed to take into account relevant considerations in relation to ACC’s termination decision under s 105(2).
1 Terry v Accident Compensation Corp [2017] NZHC 2352.
TERRY v ACCIDENT COMPENSATION CORPORATION [2018] NZHC 268 [28 February 2018]
[2] ACC applies for leave to appeal on the first finding only, namely that the Corporation’s process and determination that Mr Terry was no longer incapacitated was flawed.
[3] ACC submits the first finding is wrong in law, that the alleged errors of law give rise to a serious question of law capable of bona fide and serious argument and the errors involve an important issue of public interest. The alleged errors of law focus on the first issue in the judgment and are:
(a)there is no requirement on ACC under the Act that, after determining that a claimant is not entitled to weekly compensation, ACC must update the claimant’s individual rehabilitation plan before determining incapacity; and
(b)the Act’s provisions dealing with rehabilitation are distinct from those dealing with weekly compensation. Thus ACC can determine incapacity without carrying out any of the further rehabilitation procedures under the Act.
[4] Mr Terry opposes this application. He argues ACC have misconstrued the nature of the requirements under the Act and the alleged error of law is misconceived.
The judgment
[5] On 22 July 2011, ACC retrospectively accepted that Mr Terry was entitled to weekly compensation from 15 December 2006 to 31 October 2008. ACC determined that Mr Terry was not incapacitated, as of 1 November 2008, on the basis of a retrospective medical assessment. ACC further determined that Mr Terry was entitled to receive weekly compensation for loss of potential earnings up until that date, but not after that date. ACC’s decision was confirmed by an ACC reviewer on 20 May 2013. The reviewer’s decision was subsequently upheld by the District Court.2 The
2 Terry v Accident Compensation Corp [2015] NZACC 109 (DC).
District Court later declined leave to appeal.3 Mallon J granted special leave for Mr Terry to appeal to the High Court.4
[6] The background facts,5 the relevant legislation,6 and the timing of the events following Mr Terry’s accident are set out in full in the judgment.7
[7] In relation to the first question, for which ACC applies for leave to appeal, namely whether ACC’s process was flawed in determining Mr Terry was no longer incapacitated, I found:8
(a)ACC's first decision of 22 July 2011 was a dual decision, granting Mr Terry cover for weekly compensation to October 2008 and declining any future payment or entitlement. Having granted cover, ACC was obliged to determine Mr Terry’s need for a rehabilitation plan and update his individual rehabilitation plan under ss 75, 77, 78 and 89 of the Act.
(b)Instead of obtaining a vocational rehabilitation assessment in 2011, ACC relied on Dr Walls “rather arbitrary” retrospective medical assessment to disentitle Mr Terry from receiving weekly compensation. ACC overlooked the caveats Dr Walls inserted in his reports and missed the statutory requirement on ACC, to engage in the vocational rehabilitation processes under the Act.
(c)ACC sought an assessment from the orthopaedic surgeon on Mr Terry’s medical recovery and asked him to “comment” on Mr Terry’s fitness for work in relation to specific jobs for the period 1 November 2008 to 2010, when Mr Chan did not have the expertise to do so and relied on a retrospective assessment by Dr Walls from 2006 to 2008.
(d)Three subsequent medical reports from Dr Walls were completed, without seeing Mr Terry to assess his capacity to work in the identified types of work, in 2012, let alone from 2008.
(e)ACC sought assessments from Ms Hart and Dr Walls without an updated individual rehabilitation plan, which is contrary to s 77(3)(b). In light of its grant of cover to Mr Terry till 1 November 2008, ACC should have followed the procedure under s 89. In purporting to undertake such assessments in relation to the second decision, they were obtained without a rehabilitation plan, contrary to the statute. Neither assessment was used by ACC for the purpose of assessing
3 Terry v Accident Compensation Corp [2016] NZACC 130 (DC).
4 Terry v Accident Compensation Corp [2017] NZHC 118.
5 Terry, above n 1, at [7]–[8]. Refer also to the factual background recorded by Mallon J in her special leave decision, Terry, above n 4, at [6]–[25].
6 At [13].
7 At [20]–[28].
8 At [62].
Mr Terry’s vocational rehabilitation needs, contrary to the Act’s purposes and as required under s 89.
Was the finding that ACC’s determination s 105(2) of the Act was flawed, wrong in law?
ACC’s submission
[8] ACC argues that this determination is wrong in law because, in the case of a retrospective claim, there is no requirement that, after determining that a claimant is entitled to weekly compensation under s 100 of the Act, ACC must update the claimant’s individual rehabilitation plan and follow the statutory procedures under ss 75, 77, 78, 80, 87 and 89 of the Act, before determining whether the claimant is incapacitated under s 105(2) of the Act. ACC makes the following submissions in support of this:
(a)Decisions as to when a claimant becomes incapacitated and ceases to be incapacitated can be made at any time under the Act (including when considering a claim for retrospective compensation). There is nothing preventing these two decisions from being made at the same time.9
(b)When deciding a retrospective claim where the claimant was incapacitated but the period during which they were entitled to weekly compensation has ended, ACC is not required to carry out the vocational rehabilitation assessment process provided for under the Act. As the claimant is no longer incapacitated for employment there would be no utility in doing so.
(c)ACC’s obligations in relation to preparing an individual rehabilitation plan, and assessing vocational rehabilitation needs if required, commence after a claim for cover is accepted, not after it is determined that a claimant is entitled to weekly compensation.
[9] ACC points to two processes available under the Act, through which ACC can determine that a claimant is no longer entitled to weekly compensation:
9 Accident Compensation Act 2001, ss 102, 104 and 106.
(a)ACC can determine the claimant is vocationally independent. This requires an occupational assessment and a medical assessment based on information contained in the claimant’s individual rehabilitation plan. This process would require an assessment of the claimant’s vocational rehabilitation needs to have been conducted, under ss 89–96 of the Act.
(b)Alternatively, ACC can determine, after considering a medical/nursing practitioner’s assessment and any other advice it considers appropriate, whether the claimant is still incapacitated under ss 103(2) or 105(2). They submit this process does not require an assessment under ss 89– 96 to have been completed.
[10] ACC submits there is no statutory requirement that they must have regard to a s 89 vocational rehabilitation assessment before determining incapacity under s 105(2). Once a decision is made that a claimant is incapacitated under ss 103(2) or 105(2), ACC notes there is a statutory prohibition on making a vocational independence determination under s 107 (which would involve completing a vocational rehabilitation assessment).
[11] ACC argues there is no utility in requiring them to carry out a s 89 vocational rehabilitation assessment in cases such as Mr Terry’s, where the claims are retrospective. This is particularly so when ACC is in a position, based on information obtained as a result of the medical assessment under s 102(2), to determine a claimant is no longer incapacitated under s 105(2). Thus, the claimant does not require and is not entitled to any vocational rehabilitation. If the decisions about entitlement and disentitlement to weekly compensation are made at the same time, ACC is not liable to provide vocational rehabilitation under s 85.
[12] ACC submits this question of law is capable of bone fide and serious argument that the decision is wrong in law.10 Further, the appeal would raise an issue of public interest worthy of consideration by the Court of Appeal as it would determine the nature of the process ACC should follow when determining retrospective
10 Cullen v Accident Compensation Corp [2014] NZCA 94 at [5].
compensation claims. ACC submits this is not a moot issue, as it affects whether ACC must carry out a vocational rehabilitation assessment in remaking its decision in relation to Mr Terry. Thus, leave to appeal should be allowed.
Mr Terry’s response
[13] Mr Terry argues no question of law arises because there was no finding that the applicant is required to update a claimant’s individual rehabilitation plan and follow the statutory procedures under ss 75, 77, 78, 80, 87 and 89 of the Act before determining incapacity under s 105(2).
Discussion
[14] There is a critical distinction to be drawn between ACC’s decision to make the payment of weekly compensation (under s 100),11 on the one hand and its decision to terminate the payment of weekly compensation, because the complainant is no longer incapacitated, under s 105(2). In Mr Terry’s case, ACC made a dual decision on 22 July 2011: to grant him weekly compensation under s 100 retrospectively up to 31 October 2008 and on 1 November 2008, terminate any further payments because Mr Terry was no longer incapacitated. The termination decision was the subject of review and ultimate appeal to this Court.
[15] In the judgment, ACC’s dual decision was examined respectively, as ACC’s first decision and ACC’s second decision.
The statutory procedures following the grant of cover
[16] Under the heading “ACC’s first decision”, I found that under s 70 of the Act, once ACC had approved cover to a claimant, (which as ACC correctly submits is the initial decision under s 50), ACC is entitled to provide a claimant with rehabilitation. The obligations on ACC after 13 weeks from the date of cover is to determine whether the claimant is likely to need vocational rehabilitation and if so, prepare an individual rehabilitation plan. Paragraphs [42] and [43] of the judgment set out the statutory steps which ACC was required to carry out, following the grant of cover to the
11 Section 100 of the Act may apply, where a claimant has been granted cover under s 50 of the Act.
claimant and the decision to grant Mr Terry weekly compensation. Those statutory steps are further expanded at paragraphs [55], [57], [62(a)] and finally [100(b)] of the judgment.
[17] The focus of the judgment was on the statutory procedures relating to vocational rehabilitation, which must be followed after 13 weeks of weekly compensation payments.12 These procedures were not prerequisites under s 105(2) when determining a claimant’s incapacity, which was the second decision ACC made, albeit at the same time as it made its first decision. I found that ACC had not met the requirements under the statutory provisions in relation to Mr Terry’s claim and further, the retrospective nature of his claim did not negate the statutory obligations on ACC. By making a dual decision, ACC did not comply with the requirement to assess vocational rehabilitation needs for Mr Terry once ACC decided to pay him weekly entitlements.
[18] In other words, the judgment was not about whether the rehabilitation provisions needed to be followed before determining incapacity under s 105(2), as ACC alleges in this application. It is obvious, that in other cases, a claimant who is receiving weekly entitlements may well reach a position that they are no longer incapacitated before the 13 weeks expire. Thus, the statutory provisions, commencing under s 75 will not be engaged. ACC would therefore be entitled to determine that the claimant is no longer incapacitated, following a medical assessment, without the need for vocational rehabilitation plans or follow-up.
[19] At the appeal hearing, ACC contended that it followed the statutory process for Mr Terry under s 100 of the Act, which governs a claimant’s entitlement to weekly compensation and that it complied with s 102 in following the procedure to determine incapacity. However, the point of the judgment, is that once ACC decided to grant weekly compensation to Mr Terry (who was a claimant who had cover), the Corporation had determined that he was incapacitated within the meaning of s 105(2).
12 Accident Compensation Act 2001, s 75. It should be noted that a claimant can only receive weekly payments under s 100 of the Act after cover is initially granted under s 50.
[20] At that point ACC needed to follow the statutory processes as identified in the judgment, to determine whether Mr Terry needed vocational rehabilitation. ACC’s dual decision, to grant and to terminate weekly payments, conflated the two decisions in relation to Mr Terry, with the consequence that ACC failed to meet its statutory obligations.
The findings are fact specific to Mr Terry
[21] I accept Mr McGurk’s submission that the judgment is fact specific, concerning Mr Terry’s specific and unusual factual background. The circumstances surrounding Mr Terry’s accident and the subsequent events, which have been set out in both my judgment and the leave judgment of Mallon J,13 show the complications arising from the retrospective nature of Mr Terry’s claim.
[22] The statutory procedures, which were not followed in Mr Terry’s case, relate specifically to the grant of cover to Mr Terry and the requirement on ACC to provide vocational rehabilitation 13 weeks from the grant of cover. While ACC failed to update Mr Terry’s individual rehabilitation plan as required under s 78 of the Act and failed to assess his rehabilitation needs under s 89,14 those failures in themselves did not mean ACC’s process under s 105(2) (the second decision on his capacity) was flawed.
[23] I found ACC followed a flawed process because its determination that Mr Terry was no longer incapacitated (and no longer entitled to compensation) was based on unsatisfactory medical evidence. ACC accepts the finding in the judgment that the decision as to Mr Terry’s capacity as at 1 November 2008 should be remitted back to ACC to be re-made, in light of the conclusions reached in the judgment about the medical evidence.
[24] The judgment is clearly focused on Mr Terry’s specific and complex facts and circumstances. Thus, if ACC reached a determination that a claimant was no longer incapacitated under s 105(2), in circumstances where a claimant, receiving weekly
13 Terry, above n 1, at [7]–[8] and [20]–28]; and Terry, above n 4, at [6]–[25].
14 Mr Terry’s initial individual rehabilitation plan was completed on 20 June 2006 and was not updated subsequently.
compensation, has recovered before the expiration of 13 weeks, then ACC can make such a determination, on the basis of appropriate medical evidence.
[25] In applying the test for the grant of leave,15 I am satisfied there is no question of law capable of serious argument in this case, to outweigh the cost and delay of a further appeal.
Result
[26]The application for leave to appeal is declined.
[27] 2B costs are to be awarded. Counsel are to file subsequent memoranda if necessary.
Cull J
Solicitors:
Medico Law Limited John Miller Law
15 Cullen, above n 10, at [5]; and Ellwood v Accident Compensation Corp [2012] NZHC 2887 at [10].
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