Dean v Chief Executive of the Accident Compensation Corporation [2007] NZCA 462; [2008] NZAR 318 (24 October 2007)

Last Updated: 30 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA22/06

[2007] NZCA 462

BETWEEN ALBERT RONALD DEAN
Appellant

AND THE CHIEF EXECUTIVE OF THE ACCIDENT COMPENSATION CORPORATION
Respondent

Hearing: 26 July 2007

Court: William Young P, O'Regan and Arnold JJ

Counsel: C S Henry for Appellant
D K L Tuiqereqere for Respondent

Judgment: 24 October 2007 at 4 pm

JUDGMENT OF THE COURT

A The appeal is allowed.

B The order striking out Mr Dean’s claims is quashed.

100. The matter is remitted to the High Court for hearing of the issues which remain unresolved.

D Costs in the High Court should be determined in that Court.

5. In this Court, the appellant is entitled to costs of $3,000 plus usual disbursements.
   

REASONS OF THE COURT

(Given by O’Regan J)

Background and issues

[1] Mr Dean became involved in a dispute with Accident Compensation Corporation (ACC) that had its origins in the suspension by ACC of his compensation payments. A convoluted process of decisions and reviews ensued. Mr Dean then commenced judicial review proceedings against ACC, seeking an order, the effect of which would be to compel ACC to recommence payment of compensation. He also sought a declaration that the conduct of ACC in the course of the review process breached the New Zealand Bill of Rights Act 1990 (the Bill of Rights) and compensation in respect of that breach.
[2] ACC applied to strike out Mr Dean’s claims. It said that s 133(5) of the Injury Prevention, Rehabilitation, and Compensation Act 2001 (the Act) applied. That provision says that if a person has a claim under the Act, and has a right of review or appeal in relation to that claim, no court may consider or grant remedies in relation to that matter if it is covered by the Act, unless the Act otherwise provides.
[3] The strike out application was heard in the High Court by Ellen France J. She determined that Mr Dean did have a right of review under certain review provisions in the Act, and that the Court could not therefore consider or grant a remedy in relation to either of Mr Dean’s causes of action. She therefore struck out his claim.
[4] Mr Dean now appeals. The essential issue for determination by this Court is whether, in the unusual circumstances of this case, Mr Dean had a right of review or appeal in relation to his claims against ACC. Mr Dean accepts that, if he did, then his judicial review claim was rightly struck out.
[5] Since the hearing in the High Court, ACC has now agreed to pay Mr Dean the suspended compensation payments. It argues that the appeal is therefore moot. The second issue for determination is whether that is so.

Does Mr Dean have a right of review?

[6] The starting point for the consideration of this issue is the decision of this Court in Ramsay v Wellington District Court [2005] NZCA 196; [2006] NZAR 136. That case concerned s 134(4) of the Accident Insurance Act 1998, the predecessor of s 133(5) of the Act. This Court made it clear that exclusion of judicial review applies only if the intended applicant has available to him or her an opportunity to apply for review or to appeal under the relevant statutory provisions. In giving the judgment of the Court, McGrath J said at [33]:

In the case of s 134(4) the drafter has been careful to confine the scope of the statutory exclusion of the courts to matters where the person has a right to invoke the statutory process of review and appeal. Accordingly, if the perceived error or invalidity cannot be fitted within that procedure, then the exclusion of other remedies will not apply ... . It will accordingly be sufficient...for the appellant to maintain [his] judicial review proceeding if he can show that the grounds on which he relies in seeking judicial review remedies could not be determined under the statutory process. But if they are amenable to decision under the statutory scheme, the effect of s 134(4) is that the Court is barred from granting relief in the separate judicial review proceedings.

The review and appeals regime

[7] Before embarking on the exercise of determining whether review or appeal rights could have been exercised by Mr Dean in the present case, it is necessary to establish exactly what those review and appeal rights are. Part 5 of the Act contains a comprehensive review and appeals regime, which can be briefly summarised as follows:

(a) A claimant may apply to ACC for a review of any of ACC’s decisions on the claim;

(b) Reviews are conducted by reviewers engaged by ACC for the purpose. However, the reviewers are required to act independently of ACC;

(c) The review process is intended to be informal but to be undertaken in accordance with the principles of natural justice. A hearing is required to be held unless the parties agree otherwise. A written decision must be issued within 28 days of the hearing and must contain information as to possible rights of review or appeal;

(d) The reviewer is required to put aside ACC’s decision and look at the matter afresh, and also to put aside the policy and procedure followed by ACC. Where the review relates to a decision made by ACC, s 145(3) requires the reviewer to dismiss the application, modify ACC’s decision or quash ACC’s decision. If the reviewer quashes ACC’s decision, s 145(4) requires that the reviewer must substitute the reviewer's decision for that of ACC or require ACC to make the decision again in accordance with directions the reviewer gives;

(e) Both the claimant and ACC have a right to appeal to a District Court against a review decision. The District Court judge is required to determine such an appeal by dismissing it, modifying the review decision or quashing the review decision;

(f) Any party to the District Court appeal who is dissatisfied with the District Court decision as being wrong in law, may, with the leave of the District Court (or with special leave of the High Court) appeal to the High Court;

(g) The party to the High Court appeal who is dissatisfied with the decision of the Court as being wrong in law may, with the leave of the High Court (or special leave of this Court) appeal to this Court by way of case stated for the opinion of this Court on a question of law only. The decision of this Court is final.

What happened in the present case

(i) ACC’s decision to suspend compensation payments

[8] Mr Dean was receiving weekly compensation for loss of income from ACC, because he had been injured in a motor vehicle accident. In 2003 – 2004, Mr Dean was assessed by an orthopaedic surgeon and a musculoskeletal and pain specialist, both of whom said he was ready to return to the work force. On 17 May 2004, ACC wrote to Mr Dean, informing him that ACC found that his current condition was “no longer the result of the injury ... for which cover was accepted” and that his compensation payments would be suspended 28 days from the date of the letter (16 June 2004).

(ii) The first review

[9] This was a decision which attracted a right of review, and Mr Dean exercised that right. This led to the first review. Prior to that review Mr Dean was examined by another orthopaedic surgeon, who expressed the view that he had not fully recovered from the injury sustained in the motor accident and the surgery which followed it. Faced with the conflict in the medical evidence, the reviewer decided that a further specialist opinion was required to settle the matter. She therefore quashed ACC’s decision, and directed ACC to make arrangements for another specialist opinion to be obtained. She said once that had occurred, ACC was to issue another decision with review rights.

(iii) The post review clarification

[10] There was some doubt as to what the effect of this decision was. The confusion appears to have been as to whether the decision which was quashed was the decision to suspend compensation payments to Mr Dean, or the decision that his current condition was no longer the result of the injury for which cover was accepted. Mr Dean’s ACC case officer sought clarification of this from the reviewer, without reference to Mr Dean or his representatives. In response to an email asking whether ACC was to reinstate Mr Dean’s weekly compensation while the further opinion was sought, the reviewer responded by email:

No – the decision did not state that ACC is to reinstate Mr Dean’s weekly compensation while a further opinion is sought.

[11] The ACC case officer then wrote to Mr Dean on 8 December 2004 to arrange for the examination by an additional medical specialist, as the first reviewer had directed. At the end of the letter she wrote that she had clarified with the reviewer that it was not the intention of the reviewer’s decision to have ACC reinstate weekly compensation.

(iv) ACC’s letter of 30 December 2004

[12] Subsequently, on 30 December 2004, the case officer wrote another letter, again informing Mr Dean that she had clarified the reviewer’s decision with the reviewer, and continuing:

As a result I have to advise that ACC will not be reinstating weekly compensation at present.

This letter advised Mr Dean that if he was not satisfied he could ask for an independent review of the decision.

(v) The second review

[13] Mr Dean took up the review option, and a second review took place in February 2005. The second reviewer defined the issue before him as:–

[W]hether an ACC letter dated 30 December 2004 declining to re-instate weekly compensation was a reviewable decision, and, if it was, whether weekly compensation should be re-instated.

[14] Mr Dean’s advocate submitted to the reviewer that the 30 December letter did record a reviewable decision and that the reviewer did have jurisdiction. He sought reinstatement of the compensation.
[15] The second reviewer took the view that the first reviewer’s email “did little if anything more than reiterate the review decision she had already issued”. However, he found that the email correspondence could not be taken into consideration, because the reviewer did not have power to correct her initial decision, and, in any event, there was no ambiguity in that decision. He put it this way:

... the reviewer did not have to decide that weekly compensation should be re-instated. There was nothing in the legislation requiring her to do so. Nothing went wrong in her decision ... .

[16] The second reviewer concluded that the 30 December 2004 letter was not a reviewable decision, contrary to what was said in the letter itself. However, he expressed the view that Mr Dean could appeal (to the District Court) against the first reviewer’s decision, seeking a decision that ACC be directed to reinstate compensation payments.

(vi) ACC’s letter of 3 June 2005

[17] After the second review was completed, Mr Dean was examined by another specialist, as the first reviewer had directed. The specialist reported that Mr Dean’s symptoms were predominantly consequences of degenerative change, and said that he did not consider that Mr Dean’s incapacity was substantially due to the injuries suffered in the motor accident. On 3 June 2005, ACC determined that weekly compensation payments should not be reinstated. Again, it wrote to Mr Dean telling him of the decision and advising him of his rights of review. Mr Dean did not seek to review this decision.
[18] Accordingly, the amount in dispute between ACC and Mr Dean is now limited to the amount of the compensation payments which would have been paid to Mr Dean between 17 June 2004 and 3 June 2005 (we will call this the “interim period”), if ACC had reinstated his weekly compensation payments after the first review.

(vii) These proceedings

[19] Mr Dean then commenced the present proceedings.

Review/appeal options

[20] In the High Court, ACC identified three separate avenues which it said would have provided a way for Mr Dean to pursue his claim within the review/appeal provisions in the Act. These three avenues were:

(a) An appeal to the District Court against the first reviewer’s decision;

(b) An appeal to the District Court against the second reviewer’s decision;

(c) A review of ACC’s decision of 3 June 2005.

[21] We will deal with the first and third options, then consider the second, which was the focus of the argument before us.

(a) Appeal against first reviewer’s decision?

[22] Ellen France J accepted the submission put to her on behalf of Mr Dean that, on its face, the first review decision appeared to quash ACC’s decision to suspend compensation payments. She found that, as that was what Mr Dean had sought, he could not appeal the decision. Mr Turqereqere did not press the argument that the first option was a real possibility. However, we think it is necessary to evaluate it, bearing in mind that the second reviewer effectively recommended it to Mr Dean, but Mr Dean chose not to pursue it.
[23] If the first reviewer’s decision had clearly stated that (a) she quashed ACC’s decision that Mr Dean’s condition was no longer the result of the injury for which he had cover but (b) she declined to direct ACC to reinstate compensation payments, it would have been open to Mr Dean to appeal against (b), seeking a ruling from the District Court that compensation payments be reinstated. Once the second reviewer had expressed the view that the first reviewer’s decision was to the effect of (a) and (b) above, therefore, it is arguable that an appeal against the first reviewer’s decision would have been the proper course to take.
[24] Evaluation of that argument requires consideration of what the actual effect of the first reviewer’s decision was. Mr Henry argued that the only reasonable interpretation of the first reviewer’s decision was that the quashing of ACC’s decision must have meant that ACC became bound to reinstate compensation payments, because the decision to suspend compensation payments was what was quashed. Even if the first reviewer quashed only the finding that Mr Dean’s condition was not caused by the injury for which he had cover, the quashing of that finding removed the substratum for the suspension of compensation payments, and thus a resumption of compensation payments was the inevitable result of the first reviewer’s decision. He argued that it was therefore not reasonable to require Mr Dean to appeal against the decision which on any proper interpretation, achieved what Mr Dean sought.
[25] We agree with Mr Henry’s assessment. As noted at [7](c) above, s 145(3) provides limited options to a reviewer when undertaking a review of a decision by ACC. In the present case, the only real options open to the reviewer were to modify ACC’s decision or quash it. She clearly chose the latter. Under s 145(4) she then had to choose between substituting her own decision for that of ACC or requiring ACC to make it again. Again, she clearly chose the latter. She did not differentiate between (a) and (b) in [23] above: it was the “decision” contained in the letter of 17 May 2004 that was quashed. That supports the view that the whole decision, including the decision to suspend payments was quashed. Even if that were not so, the analysis in [24] above supports the view that quashing (a) had the inevitable effect of removing the basis for (b), placing ACC in the position that it should have recommenced compensation payments.
[26] In short, we are satisfied that the true effect of the first reviewer’s decision was to require ACC to recommence compensation payments. Mr Dean was successful. As Ellen France J found, it was not for him to appeal against the first reviewer’s assessment (though that course would have been open to ACC). Having said that, it may well be that, if Mr Dean had appealed against the first assessment (perhaps in conjunction with an appeal against the second assessment), the District Court judge could have ruled on the substance of the dispute between ACC and Mr Dean, even if he or she simply stated the true effect of the first reviewer’s decision and dismissed the appeal. It is perhaps unfortunate that Mr Dean did not do so. However, that is a view based on pragmatism rather than legal rights and obligations. The correct legal position is as stated by Ellen France J.

Review of ACC’s decision of 3 June 2005?

[27] In respect of the third option, the Judge found that review of the decision of 3 June 2005 was certainly available, but a review of that decision would not address the issue of the entitlement to reinstatement of compensation payments for the interim period. Thus she ruled this option out as well.
[28] Although counsel for ACC, Mr Tuiqereqere, pursued again in this Court his argument that the third of those options was available to Mr Dean in the circumstances of this case, we are satisfied that the Judge’s analysis was correct. A review of the 3 June 2005 decision would have been shooting at the wrong target, given that Mr Dean has accepted that he is not entitled to weekly compensation payments after 3 June 2005 (ie he does not dispute the ACC decision of that date). Rather, Mr Dean contends that he is entitled to weekly compensation payments for the period before 3 June 2005. Mr Tuiqereqere argued that a review of the 3 June 2005 decision could also have addressed the time of the suspension of weekly compensation payments. We disagree: there was no basis for any review to be initiated unless the 3 June 2005 decision was, itself, under challenge. It was not.

Appeal against second reviewer’s decision?

[29] That means that the main focus of the argument was on the second option, namely an appeal against the decision of the second reviewer. Ellen France J considered that this was a viable option for Mr Dean. She considered that such an appeal would enable Mr Dean to challenge ACC’s decision of 30 December 2004 confirming that ACC would not reinstate his compensation payments for the interim period.
[30] Mr Henry took issue with this conclusion on a number of bases. His first argument was that no right of appeal existed against the second reviewer’s decision, because the second reviewer simply declined jurisdiction, but did not dismiss the application for review. Mr Dean’s right of appeal under s 149 applies to “a review decision” (s 149(1)(a)). The decision of a reviewer must do one of the things set out in s 145(3) (see [7](d) above), and a finding of a lack of jurisdiction is not one of the matters mentioned in that sub-section.
[31] We do not accept that submission. Conventionally, a judicial body which determines that it has no jurisdiction to deal with the case before it dismisses the case. That is the effect of what happened in this case. Although the second reviewer expressed his decision in terms of lack of jurisdiction, he noted in the last paragraph of the decision that the review was unsuccessful and was “dismissed”. The second reviewer’s decision expressly referred to the existence of a right of appeal to the District Court.
[32] Mr Henry’s second argument was that an appeal against the second reviewer’s decision would have been contrary to Mr Dean’s interests. He said the outcome of the second review was what Mr Dean sought: a finding that the clarification of the first review decision had to be ignored, ie that the first review decision had to be interpreted without reference to the subsequent clarification. His argument was that the real effect of the first reviewer’s decision was that Mr Dean was entitled to reinstatement of compensation payment. So the second reviewer’s decision that there was no jurisdiction to revisit the first reviewer’s decision vindicated Mr Dean’s position.
[33] The difficulty with that argument is that the second reviewer’s decision appears to interpret the first reviewer’s decision as not requiring resumption of compensation payments. It included a finding in the following terms:

In this case, the review decision did not re-instate weekly compensation. Mr Darke [Mr Dean’s advocate] argued that weekly compensation entitlements automatically resumed because Mr Dean remained incapacitated, but the reviewer did not have to decide that weekly compensation should be re-instated. There was nothing in the legislation requiring her to do so. Nothing went wrong in her decision ... .

[34] Another difficulty is that, although Mr Henry now says Mr Dean contended for the finding that the second reviewer had no jurisdiction, Mr Dean’s advocate in fact argued strongly before the second reviewer that the second reviewer did have jurisdiction. Thus, the second reviewer’s decision that he did not have jurisdiction was contrary to what had been contended for by Mr Dean.
[35] We do not therefore accept that an appeal against the second reviewer’s decision was contrary to Mr Dean’s interests, as they were perceived at the relevant time.
[36] Mr Henry renewed the argument that he had made in the High Court to the effect that the 30 December letter was not a “decision” which triggered review rights. He said it was therefore a nullity, and any review or appeal from a decision which is a nullity is itself a nullity. Ellen France J rejected this argument. She said that as ACC was bound by the first reviewer’s decision (by virtue of s 147(1)(a)), the question on appeal from the second reviewer’s decision would be whether ACC had, in the letter of 30 December 2004, complied with s 147(1)(a) in declining to reinstate compensation payments given the first reviewer’s decision to quash.
[37] That analysis is predicated on the assumption that the 30 December 2004 letter is, in fact, a decision which triggers a right of review. The 30 December 2004 letter said it was, but that is not determinative: Accident Compensation Corporation v Hawea [2004] NZAR 673 at [15] and [18] (HC). The second reviewer saw difficulties with that analysis: he said that if it were correct, it raised the theoretical possibility that, after a review decision had replaced a primary decision, ACC could issue another decision changing the first reviewer’s decision, with new review rights. We accept the validity of that analysis.
[38] While we do not doubt that ACC had genuinely considered in this case (after the guidance received from the first reviewer) that it was not obliged to reinstate compensation payments, what would be the position if that were not so? If the first reviewer had clearly stated that compensation payments must be reinstated, but ACC had otherwise acted as it did in this case, could it really be suggested that ACC’s letter of 30 December 2004 was a “decision” triggering review rights? In such a case it seems clear to us that a claimant in Mr Dean’s position would be justified in simply enforcing the first reviewer’s decision by court action, and would not be forced to go down the track of the statutory review/appeal processes.
[39] In the present case, where Mr Dean did, in fact, attempt to resolve the matter within the statutory framework (by initiating the second review), only to be rebuffed by the second reviewer’s decision as to lack of jurisdiction, he was left in something of a “Catch 22” position. While the second reviewer recommended an appeal against the first review, the reality was that Mr Dean believed, and had good reason to believe, that the first review decision had yielded the result he sought, and so he had no reason to appeal against that decision. If he had exercised a right of appeal to the District Court against the second review decision, it is quite possible that the District Court would also have concluded that it did not have jurisdiction, as the 30 December 2004 letter was not a decision triggering review rights. That would still not have provided him the remedy that he sought − the reinstatement of compensation payments.
[40] Our overall assessment is that, in this case, the simple, cheap and effective review process mandated by the Act went off the rails, because of the lack of clarity in the first reviewer’s decision. It can be said with the benefit of hindsight that, if she had wished to put the ACC’s decision as to the cause of Mr Dean’s symptoms “on hold” without requiring reinstatement of compensation payments, it was not appropriate to quash ACC’s decision. It is not clear that any of the menu of options available under s 145(3) lends itself to what the first reviewer sought to achieve: perhaps a better course would have been to adjourn the hearing while the additional medical report was obtained, and for the first reviewer then to make the substantive decision herself, taking into account that additional report.
[41] Another possibility was that ACC ought to have appealed against the first decision if it considered that the quashing of its decision was incorrect, and that would have allowed a District Court Judge to review the whole matter afresh.
[42] In circumstances where none of those steps happened, and the parties reached something of a stand-off, we think it is best to acknowledge that the statutory review/appeal processes failed to deliver in this case, and that the supervisory jurisdiction of the High Court was properly brought into play by Mr Dean. In the very unusual circumstances of this case, we conclude that there was no effective step within the statutory appeal/review process open to Mr Dean, and, that being the case, s 133(5) did not bar his recourse to the High Court.

Breach of natural justice claim

[43] Mr Tuiqereqere argued that all of the three options identified at [21] above could have provided a remedy to Mr Dean in relation to his claim under the Bill of Rights. We disagree. What Mr Dean sought was Bill of Rights compensation, which was not a remedy that was available in the District Court in the context of an appeal under the Act. Under s 161(1) the District Court must determine an appeal by dismissing the appeal, modifying the review decision or quashing the review decision. This provides no room for an award of compensation under the Bill of Rights.
[44] However, we should not be taken to be encouraging the claim under the Bill of Rights, which appears to us to be without merit.

Conclusion: strike out

[45] We conclude that s 133(5) of the Act did not preclude Mr Dean from pursuing a judicial review claim in this case. His claims should not therefore have been struck out.

Is the appeal moot?

[46] After the hearing in the High Court, but before the hearing in this Court, ACC paid Mr Dean the amount he was owed in relation to compensation payments for the interim period. It also offered to make a contribution to his costs. This payment was not conditional on the withdrawal of the appeal, though it seems likely that ACC anticipated that that would be the result, as Mr Dean had achieved what he initially sought, namely to have his compensation payments reinstated. Mr Dean did not, however, reach agreement with ACC on costs, and chose to continue with the conduct of this appeal.
[47] ACC now argues that the appeal is moot, but this is resisted by Mr Henry on behalf of Mr Dean. Mr Henry said Mr Dean wished to pursue the appeal not only for its precedent effect, but also because it would affect the award of costs for the High Court proceeding. He also indicated that Mr Dean may wish to pursue his claim for compensation under the Bill of Rights, though he acknowledged that that claim could well be resolved between the parties once this appeal was determined.
[48] In the High Court, Ellen France J made an order that costs would lie where they fell. However, in view of the conclusion we have reached, essentially sustaining Mr Dean’s argument, a claim for costs on his behalf for the High Court proceeding may be open to him. Accordingly, there is a remaining dispute between the parties which, notwithstanding that it is minor in nature, makes the present appeal not moot.

Result

[49] We allow the appeal. The order striking out Mr Dean’s claims is quashed. The matter is formally remitted to the High Court for hearing of the issues which remain unresolved (though we anticipate any remaining issues will be resolved without the need for a High Court hearing).

Costs

[50] Costs in the High Court should be determined in that Court, if the parties are unable to reach agreement on them. That could occur at the end of the substantive hearing, if there is one. In this Court, Mr Dean is entitled to costs of $3,000 and usual disbursements.

Solicitors:
Witten-Hannah Howard Auckland for Appellant
Legal Services ACC, Wellington for Respondent