Terry v Accident Compensation Corporation
[2017] NZHC 118
•9 February 2017
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2016-485-379 [2017] NZHC 118
UNDER the Accident Compensation Act 2001 IN THE MATTER OF
an application for special leave to appeal to the High Court pursuant to section 162 of the Act
BETWEEN
HAMAL TERRY Applicant
AND
ACCIDENT COMPENSATION CORPORATION
Respondent
Hearing: 10 October 2016 Counsel:
T McGurk for the Appellant
F Becroft for the RespondentJudgment:
9 February 2017
JUDGMENT OF MALLON J
Introduction
[1] Mr Terry suffered a serious spinal injury on 28 April 2006 when he was in his final year of school. Some five years later, when he had not been employed in any capacity for more than a few short periods, he was first assessed for an entitlement to weekly compensation. He was assessed as not incapacitated as a result of that injury after 1 November 2008. The Accident Compensation Corporation (ACC) therefore determined he was entitled to weekly compensation up until that date but not after
that date.
TERRY v ACCIDENT COMPENSATION CORPORATION [2017] NZHC 118 [9 February 2017]
[2] That decision was ultimately confirmed by an ACC reviewer on 12
November 2012. The reviewer’s decision was upheld by the District Court.1 Leave to appeal was declined by the District Court.2 Mr Terry now seeks special leave to appeal to this Court.
[3] He advances the following questions of law which he considers are serious, arguable and of public interest:
(a) Did the District Court apply the correct statutory test for determining incapacity under s 105(2) of the Accident Compensation Act 2001 (the Act)?
(b)Was the manner in which the District Court retrospectively determined incapacity under s 105(2) of the Act fatally flawed?
(c) Was the District Court in error in accepting that ACC had met the requirements of s 117 of the Act as set out in Ellwood?3
[4] As developed in submissions, underlying the first two questions is Mr Terry’s concern that ACC ought to have followed its process for assessing vocational independence even though his entitlement to weekly compensation was being assessed retrospectively. This flawed process led to a decision where there was insufficient information before ACC to determine that he was no longer entitled to weekly compensation from 1 November 2008.
[5] ACC contends the application for special leave does not raise any arguable question of law. It contends ACC had evidence before it which overwhelming supported its decision.
Background facts
[6] Mr Terry sustained injuries to his back and neck from a sand boarding accident on 28 April 2006. He was 17 years old and in his final year at school at the
1 Terry v Accident Compensation Corporation [2015] NZACC 109.
2 Terry v Accident Compensation Corporation [2016] NZACC 130.
3 Ellwood v Accident Compensation Corporation [2007] NZAR 205 (HC).
time. ACC accepted cover under the Act. He was admitted to hospital where he underwent spinal surgery. He remained in hospital for three weeks.
[7] On 27 May 2006 ACC carried out a social rehabilitation assessment to determine whether Mr Terry needed assistance with daily living activities. At that time he was mobilising independently but slowly. He was able to sit for half an hour to one hour before the pain became unbearable. He did not need ACC assistance with household duties because his family were able to carry out his share of those duties. ACC could assist with the provision of equipment to assist with showering and personal care tasks.
[8] Mr Terry turned 18 on 3 June 2006. On 27 June 2006 he was seen by the Auckland Spinal Rehabilitation Unit. He was mobilising well although still had some back stiffness and difficulty walking. No further input was required from the spinal unit and he was to start outpatients’ physiotherapy. He had returned to school.
[9] On 20 November 2006 ACC wrote to Mr Terry informing him that it was closing his file. Mr Terry was told that he should contact ACC if he experienced future difficulties and ACC would advise of any further entitlements at that time. He was not alerted to the possibility of weekly compensation for potential loss of earnings.
[10] In September 2007 Mr Terry worked a one-off job over a weekend selling hammocks at the Auckland Home Expo. In or around the first two weeks of November 2007 he worked at a nursery carrying out light duties. He only lasted two weeks because of his back pain. On various dates in 2007 and 2008 he was seen by his general practitioner, Dr Foster for his back pain. On 26 November 2008 Dr Foster noted that Mr Terry needed an ACC impairment/lump sum form completed for ongoing back pain. Dr Foster noted that Mr Terry suffered back pain at times, including lower back pain if he lifted heavy things.
[11] On 12 February 2009 Mr Terry was assessed by Dr Watts for his lump sum compensation claim. Dr Watts noted that, since Mr Terry’s injury, he had worked in a nursery but was only able to do weeding in a sedentary position for two to three
hours a day and he had a short unsuccessful stint as a dishwasher in a café. He was currently on the sickness benefit. He had occasional dysaesthesia (pins and needles) in his legs and his legs were not as strong as they used to be. He also had ongoing back pain which was exacerbated by lifting or bending. He was assessed as having
25 per cent whole person impairment. As a result of this assessment Mr Terry received $10,559.48 as a lump sum compensation.
[12] Between August and December 2009 Mr Terry travelled with a friend through South America and the United States. He later enquired with ACC about his eligibility for loss of potential earning capacity compensation. ACC replied to that enquiry on 8 December 2009 indicating that Mr Terry met some of the criteria but further information was needed.
[13] Mr Terry provided information confirming the date he had left school and the occasional odd jobs he had worked since then. He also provided notes of his appointments with Dr Foster. The last of these was dated 15 June 2010. It noted that Mr Terry had been gardening doing light duties for about two to three days a week but “pains in back come on and seem to prohibit him really doing more than that.” He also provided medical certificates from Dr Foster dated 18 November 2010, certifying he was unfit for work from 19 December 2007 (when he left school) until
90 days from 18 November 2010 (that is, 8 February 2011). The certificates from
18 March 2008 also note his work capacity is for “light duties only”.
[14] On 3 February 2011 Mr Terry was assessed by Dr Walls, an occupational medicine specialist. Dr Walls considered Mr Terry had suffered “a very significant injury” which had left him with “real and significant problems.” His functional limitations meant he needed to avoid the following:
(a) heavy work, work related lifting and force of movements, the adoption of awkward postures and whole body vibration;
(b)work as a corrections officer or mental health worker as they involved calming and restraint or control and restraint activities which may require sudden great force; and
(c) anything involving prolonged standing or sitting without variation. [15] Dr Walls’ opinion was as follows:
(a) from 28 April 2006 until 30 October 2007 Mr Terry was totally unfit for work;
(b)from 1 November 2007 until 30 April 2008 Mr Terry was fit for approximately 20 hours of work per week in an appropriate job;
(c) from 1 May 2008 until 30 October 2008 Dr Wall “would have expected” a slow increase of hours of work to full time, averaging “for example” 30 hours of work over this period of time; and
(d)by 1 November 2008 Dr Wall “would propose” that Mr Terry was able to sustain between 35 to 40 hours of work per week in an appropriate job.
[16] Dr Walls acknowledged his assessment was “rather arbitrary”. In reaching his conclusions he noted Mr Terry’s period of travel overseas in August 2009. He considered this to be the equivalent of full time work in a light capacity. He considered that from May 2008 until the time he went overseas, he would have expected Mr Terry to have been able to increase his hours of work steadily, so as to have been able to work full time in appropriate work before travelling.
[17] On the basis of Dr Walls’ advice, by letter dated 22 July 2011 ACC advised
Mr Terry that he was entitled to weekly compensation for the period from 15
December 2006 to 31 October 2008. By letter dated 14 September 2011 ACC confirmed its decision that Mr Terry was incapacitated until 1 November 2008 and was not entitled to weekly compensation from that date.
[18] On 23 September 2011 Mr Terry applied for a review under the Act. He expressed his dismay at a decision which considered he could be totally unfit for work one day then be able to work 20 hours a week the next day, let alone be able to work full time two years on from having had a serious spinal injury, especially when
he had not received a rehabilitation plan, ongoing physiotherapy, social support or substantial monetary support. He noted that Dr Walls had met him for just 10 to 20 minutes. He said he was still unfit to work full time.
[19] Mr Terry had also obtained two further medical certificates from Dr Foster. The first certificate certified Mr Terry as fit to perform light duties for 30 hours a week for the period from 7 September 2011 to 7 December 2011. The second certificate certified Mr Terry as fit to perform light duties for 20 hours from
1 December 2011 to 1 March 2012. Dr Walls referred to this in a letter dated
15 December 2011. He said the information did not change his opinion about Mr Terry’s work capabilities although he “would suggest awaiting the orthopaedic surgeon’s report.”
[20] The reviewer gave her decision on 15 March 2012. She referred to the Ellwood test4 and considered ACC had not carried out an adequate investigation before issuing its decision. A comprehensive assessment from an orthopaedic surgeon was required. She therefore quashed ACC’s decision of 14 September 2011 and directed ACC to carry out a further investigation.
[21] On 12 June 2012 an initial occupational assessment report was completed. This assessed suitable jobs for Mr Terry as at that date. It identified suitable job options as including library assistant, café worker and kitchen hand (dishwashser).
[22] ACC referred Mr Terry to Mr Clayton Chan, an orthopaedic surgeon, for assessment. Mr Chan assessed Mr Terry on 26 July 2012 and provided his report that day. Mr Terry continued to have pain. The most significant discomfort was in his left shoulder/scapula region, left arm and neck. There was no causal relationship between his injury and the pain in these areas. Overall it was Mr Chan’s opinion that Mr Terry had an excellent result, having been left with little objective neurological deficit. Mr Chan saw no reason to disagree with Dr Walls’ findings. He also saw no reason why Mr Terry could not be employed in a full time capacity if an appropriate job was found. However, as Mr Terry had been in a paid employment for a total of
seven weeks over four different jobs since 2005 “the prognosis for his return to work
4 Ellwood v Accident Compensation Corporation above n 3.
is somewhat guarded.” He saw “no reason why [Mr Terry] cannot begin on a graduated return to work programme and gym based strengthening program as of now”. He went on to say “I do however believe that he is fit for full time employment in a suitable job.”
[23] ACC sought Dr Walls view on the job types identified in the June 2012 initial occupational assessment report. Dr Walls forwarded his report to ACC on 2 October
2012. He identified the following work options as suitable for Mr Terry for 30 hours of work or more per week: gardener, kitchen hand (dishwasher), call or contact centre operator, café worker, general clerk, bank worker, enquiry clerk, library assistant, sales assistant (art, art supplies, framing and glazing), rental salesperson (video, dvds), service station attendant, and car detailer.
[24] ACC sought advice from Dr Walls on whether these work options would have been sustainable as at 1 November 2008. On 30 October 2012 Dr Walls advised that all but the gardening work would have been sustainable at that date. Dr Walls considered the gardening option would have been sustainable from 26 July
2012, after Mr Terry had received the reassurance provided by the Spinal Unit and
Mr Chan at that time.
[25] On 12 November 2012 ACC gave its decision again declining Mr Terry’s claim for loss of potential earnings from 1 November 2008. It relied on Mr Chan and Dr Walls’ advice. Mr Terry sought review of the decision. On 20 May 2013 the reviewer upheld ACC’s decision. The reviewer did so because Mr Terry had not produced any cogent evidence to refute the evidence of the advice relied on by ACC.
District Court
[26] Mr Terry brought an appeal to the District Court. In support of his appeal he filed an affidavit dated 23 December 2014 in which he explained the difficulties he faced with working. He had made five employment attempts since his injury. Each was short-lived due to Mr Terry’s pain and difficulties arising from his injury. He did not manage to retain a job for longer than a few weeks. This was not due to laziness or any problems with Mr Terry’s work ethic. He just could not cope with
working more than a couple of hours at a time. This discouraged and depressed Mr
Terry.
[27] Mr Terry further explained in his affidavit that he did not work or earn money when he was overseas in 2009. He did not do anything more than if he had been at home. He did not climb mountains, camp in jungles or hike for great distances with a back pack. Dr Walls had not asked him about the details of his trip before treating it as the equivalent of working full time in a sedentary role. On his return he continued to experience pain which significantly limited his physical abilities, as it had before his trip. He did not receive any vocational help or rehabilitation assistance from ACC.
[28] The District Court dismissed Mr Terry’s appeal on 7 May 2015.5 The Judge considered that the purpose of vocational rehabilitation assistance included to regain or acquire vocational independence. Generally vocational assistance could not extend beyond three years, although ACC has discretion to extend this. Given the time at which the loss of earnings entitlement was being considered the practicalities of belatedly organising a vocational rehabilitation plan were not obvious. Dr Walls’ backdated assessment posited a graduated reintroduction to work. Dr Walls was aware of Mr Terry’s attempts at work which were in effect “informal work trials”.
[29] In relation to ACC’s decision that Mr Terry was not entitled to loss of potential earnings after 1 November 2008, the Judge considered Dr Walls carried out a fairly comprehensive overview of the information available to him. A retrospective analysis was the unsatisfactory reality. Mr Chan indicated without reservation that he agreed with Dr Walls’ view. There was no countervailing expert medical opinion. Mr Terry’s own personal assessment and the medical certificates from his doctor, which were confusing, were not sufficient to overcome the medical evidence from Dr Walls and Mr Chan. ACC’s decision was a reasonable one in accordance with
Ellwood.6
5 Terry v Accident Compensation Corporation above n 1.
6 Ellwood v Accident Compensation Corporation above n 3
[30] The District Court dismissed Mr Terry’s application for leave to appeal on
5 May 2016.7 Of relevance for present purposes, Mr Terry contended the District
Court erred in the following ways:8
(a) in finding the limitations in s 87 of the Act on ACC’s liability to provide vocational rehabilitation as relevant in determining incapacity for work under s 105;
(b)in finding the retrospective decision declining to pay further compensation was made on reasonable grounds; and
(c) in misinterpreting the test under s 105(2) of the Act.
[31] The Judge rejected the first question because ACC was assessing Mr Terry’s capacity for work and s 87 and the time period for vocational rehabilitation was not relevant to that decision. He rejected the second question because there was evidence to support ACC’s decision and no contrary evidence was advanced on Mr Terry’s behalf. He rejected the third question on the basis that, if a rehabilitation determination was required under s 105, the legislation would have specifically said so.
The legislation
[32] On receiving a claim for cover for personal injury ACC must decide whether it accepts the person has cover.9 If it accepts the person 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.”10 Entitlements under the Act include “rehabilitation, comprising treatment, social rehabilitation, and vocational rehabilitation”, weekly compensation and lump sum compensation for
permanent impairment.11
7 Terry v Accident Compensation Corporation above n 2.
8 Other proposed questions of law were advanced but these are not pursued on this application for special leave.
9 Sections 48 and 50.
[33] A claimant is entitled to be provided by ACC with rehabilitation “to assist in restoring the claimant’s health, independence, and participation to the maximum extent practicable”.12 ACC is required to determine, within 13 weeks of accepting cover, whether a claimant is likely to need social or vocational rehabilitation after the
13 weeks have ended.13
[34] If social or vocational rehabilitation is likely to be needed an individual rehabilitation plan is to be prepared.14 Before an individual rehabilitation plan is prepared, ACC is liable to provide the claimant with social and vocational rehabilitation which ACC considers is suitable for the claimant and necessary or appropriate having regard to the purposes of the rehabilitation entitlement.15 The purpose of vocational rehabilitation is to help a claimant maintain or obtain employment, or acquire vocational independence.16
[35] ACC is liable to provide vocational rehabilitation to a claimant who has suffered personal injury and is entitled to weekly compensation.17 In deciding what vocational rehabilitation is appropriate to achieve its purpose, ACC must consider (as relevant for present purposes) whether it is reasonably practicable to help the claimant use as many of his or her pre-injury skills as possible to obtain employment.18 An assessment of a claimant’s vocational rehabilitation needs must consist of an initial occupational assessment to identify the types of work that may be appropriate for the claimant and an initial medical assessment to determine whether those types of work are likely to be medically sustainable.19
[36] A person who has cover and who lodges a claim for weekly compensation is entitled to receive it if (as relevant for present purposes) ACC determines the
claimant is incapacitated as set out in s 105(2) of the Act and if the claimant is
12 Section 70.
13 Section 75.
14 Section 75.
15 Section 76.
16 Section 80.
17 Section 85.
eligible under clause 47 of Schedule 1 for weekly compensation.20 There is, therefore, an eligibility criteria and an incapacity test:
(a) As relevant for present purposes the eligibility criteria under clause 47 of Schedule 1 is where a person has an incapacity resulting from a personal injury, was a potential earner before their incapacity, is 18 years or older, is not engaged in full time study or training, and does not have earnings in excess of the amount of the defined minimum weekly earnings. Mr Terry met this criteria when he finished school at the end of 2006.
(b)The incapacity test under s 105(2) requires ACC to determine “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”.
[37] A person may lose their entitlement to weekly compensation through the operations of sections 103 to 112 of the Act.21 There are two pathways under these sections: the incapacity determination22 and a vocational independence determination.23
[38] As to the first, ACC is able to determine a person’s incapacity under s 105(2) from time to time.24 In determining that question 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.25 If ACC determines the person is able to engage in work for which he or she is suited in accordance with this test, the person immediately loses any entitlement to weekly compensation and cannot be subject to a vocational
independence test.26
20 Section 100(1)(d).
21 Section 100(3).
22 Sections 103 to 106.
23 Sections 107 to 112.
24 Section 102(1).
25 Section 102(2).
[39] As to the second, while a person is receiving weekly compensation ACC may determine from time to time whether the person is vocationally independent.27
Vocational independence means the claimant’s capacity to engage in work for which they are suited by reason of experience, education or training for 30 hours or more a week.28 ACC must have an occupational assessment and a medical assessment when assessing a claimant’s vocational independence.29 If ACC determines that a claimant has vocational independence, the claimant loses their entitlement to weekly
compensation three months after the date on which they are notified of the determination.30
My assessment
[40] This was an unusual case because Mr Terry’s entitlement to weekly compensation was assessed retrospectively. The District Court Judge considered this was partly due to Mr Terry’s detachment from the process after his initial good recovery and his absence overseas. However, as Mr Terry submits, this was also due to ACC having failed to provide information to Mr Terry about his potential right to compensation for permanent impairment or weekly compensation when it accepted his claim for cover.
[41] Because Mr Terry’s entitlement to weekly compensation was assessed retrospectively, by which stage it was determined that he had capacity to return to work, it appears that ACC did not consider whether Mr Terry was likely to need vocational rehabilitation. The District Court Judge effectively treated Dr Watts’ assessment, that for a period of time Mr Terry’s capacity would have been 20 hours a week, as akin to receiving vocational rehabilitation which could have included work trials and gradual reintroduction to work. Whether that was the correct approach when Mr Terry had not in fact had the benefit of a gradual reintroduction to work is seriously arguable. ACC arguably could still consider whether vocational
rehabilitation might assist Mr Terry’s return to work now. It is arguable that the
27 Section 100(2)(d).
28 Section 6.
29 Section 108.
absence of any vocational rehabilitation is relevant to determining Mr Terry’s
incapacity under s 105(2) or his vocational independence under s 107.
[42] The Judge also relied on Mr Chan having “indicated without reservation that he did not disagree with” Dr Walls’ view. It is arguable whether that accurately captured Mr Chan’s views. As the Judge said, Mr Chan appeared to be referring in the present tense when referring to a graduated work programme. He also referred to gym strengthening work and the prognosis for his return to work as being somewhat guarded given that he had essentially not worked since 2005.
[43] The Judge considered the only evidence to counter the medical evidence was Mr Terry’s own assessment and the “slightly ambivalent” medical certificates from Mr Terry’s doctor. It is also arguable that these considerations were entitled to more weight as the assessment was being carried out retrospectively, Dr Watt acknowledged his assessment was “rather arbitrary” and based on Mr Terry’s overseas travel, and Mr Chan had given a “guarded” prognosis. It is arguable that Mr Terry’s description of his limited activities during his travel was relevant and needed to be given some weight. It is also arguable that the evidence from Mr Terry’s doctor needed to be given some weight. He had seen Mr Terry on a number of occasions covered by the dates at which Dr Watt assessed Mr Terry as able to work for 20 hours a week and the date Dr Watt assessed Mr Terry to have been able to sustain between 35 to 40 hours. His notes, together with his medical certificates and the fact that Mr Terry had not in fact been able to sustain light duties for any length of time, were at odds with Dr Watt’s assessment. It is arguable that to the extent the medical certificates were unclear, ACC ought to have sought clarification.
[44] I therefore conclude that special leave should be granted for Mr Terry to appeal. It is arguable that the Judge failed to take to into account relevant considerations when concluding that ACC was able to be satisfied that Mr Terry was no longer entitled to weekly compensation from 1 November 2008.
Result
[45] The application for special leave to appeal is granted. The proposed questions of law require recasting as follows:
(a) Was it open to ACC to determine Mr Terry’s capacity under s 105, rather than his vocational independence under s 107, when the assessment was being carried out retrospectively, Mr Terry had worked for brief periods only and Mr Terry had not received a vocational rehabilitation plan, and therefore did the District Court err in finding that no vocational rehabilitation plan was needed;
(b)Did the District Court fail to take into account relevant considerations in relation to the s 105 assessment and therefore did it err in finding that it was open to ACC to find that Mr Terry had capacity from 1
November 2008.
Mallon J
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