Matthews v Accident Compensation Corporation [2020] NZCA 449 (25 September 2020)

Last Updated: 29 September 2020

IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA

CA665/2019 [2020] NZCA 449

	BETWEEN	MAYBELLE KAPETA MATTHEWS Applicant
	AND	ACCIDENT COMPENSATION CORPORATION Respondent

Court:	Clifford and Courtney JJ
Counsel:	A C Beck for Applicant A S Butler for Respondent
Judgment: (On the papers)	25 September 2020 at 2.30 pm

JUDGMENT OF THE COURT

The application for leave to appeal is granted on the questions of law at [44].
____________________________________________________________________

REASONS OF THE COURT

(Given by Clifford J)

Introduction

• [1] Maybelle Kapeta Matthews applies pursuant to s 163 of the Accident Compensation Act 2001 (the Act) for leave to bring a second appeal. Ms Matthews has been substituted, with the consent of the respondent, Accident Compensation Corporation Ltd (ACC), in these proceedings in place of her late husband Auerua Aria.^[1] Mr Aria was tragically killed in a boating accident in 2016.
• [2] We have decided to grant leave for a second appeal. We note, however, the facts are complicated and the law difficult. Given those considerations, and the history of this matter, we consider it appropriate to explain our reasoning for granting leave in those terms in greater detail than would normally be called for in a decision granting leave.

Background^[2]

• [3] In 1974 Mr Aria, then aged 17, had a motorcycle accident that caused permanent damage to his right leg: thereafter he could not fully extend his right knee and had only a limited ability to flex his right foot. Mr Aria was not employed at the time of that accident. The relevant legislation at that time was the, original, Accident Compensation Act 1972. It is not clear whether Mr Aria filed an ACC claim at the time. Nor have we seen any consideration of Mr Aria’s entitlements under that legislation or, if any, their nature. Notwithstanding the impact of his injuries on his mobility, Mr Aria obtained and continued employment as a boner in a freezing works for 33 years from 1975 until May 2008. One of the effects of Mr Aria’s 1974 injury was arterial damage, causing a loss of circulation. That predisposed Mr Aria to the development of ulcers on his affected lower right leg.
• [4] The dispute which Mr Aria had with ACC, and which is now continued by his wife, relates to the circumstances which brought his ability to work as a boner to an end in May 2008.
• [5] Mr Aria suffered an insect bite at work on 25 April 2007. The wound became infected. On 6 June 2007 Mr Aria’s GP filed an ACC injury claim form on the basis of that workplace accident. Weekly compensation was not claimed. The materials we have reviewed would not appear to include the outcome, at the time, of that application. We infer Mr Aria continued working.
• [6] Ulcers developed in the affected area. Mr Aria received treatment for those ulcers, but they did not heal. Mr Aria’s general health was affected. As a result, Mr Aria was admitted to hospital on 20 May 2008.
• [7] A scan on 22 May revealed a blocked artery in Mr Aria’s lower leg. He was operated on on 29 May to remove dead and infected tissue, and on 6 June to address the blockage of the artery. He was discharged on 23 June 2008.
• [8] Mr Aria’s GP filed a second injury claim with ACC, based on the 1974 motorcycle accident, on 26 June 2008. The GP certified Mr Aria as unfit for work on 20 May 2008, being the day Mr Aria was admitted to hospital, and claimed weekly compensation for Mr Aria from that date through to 3 July 2008.
• [9] The 6 June surgery was not a success. Mr Aria was in hospital for local treatment of the ulcers from 22 to 25 July. From 19 to 27 August he was in hospital for further surgical cleansing of his wound, in preparation for a further attempt to relieve the arterial blockage or, if unsuccessful, for the amputation of his lower leg. Vascular surgery on 3 September 2008 was successful, and the ulcers began to heal.
• [10] Over that same period ACC responded to Mr Aria’s 26 June 2008 claim, based on his 1974 accident. On 9 September 2008 Mr Aria’s vascular surgeon, Mr Caldwell, wrote to ACC advising, among other things, that Mr Aria’s “ulceration and problems with his right leg are predominantly related to past trauma”.
• [11] ACC wrote to Mr Aria on 30 September accepting his 26 June 2008 claim, confirming his 2 August 1974 injury was “covered by ACC” and that he would receive weekly compensation for his incapacity from 20 May onwards. On 13 October Mr Aria’s employer provided ACC with a certificate of his earnings. On 17 October, we infer in response to that certificate, ACC wrote to Mr Aria advising him he was owed $17,088.20 for weekly compensation underpaid between 27 May 2008 and 21 October 2008.
• [12] In early 2009 Mr Aria’s employment was formally ended. The occupational health assessment process — which had begun earlier — continued. Medical and occupational health reports were provided to ACC in late May and September that year:

(a) the late May report, by which time it would appear the ulcers had healed, confirmed that Mr Aria remained not currently fit for any work standing, walking around, heavy work or other activities, and noted that his lack of mobility (permanent equinus) in the right ankle had increased from before the successful arterial surgery; and

(b) the September report confirmed the ulcerated areas had healed, noted that “[s]ince his operation Mr Aria has had to walk with crutches for balance and support” and assessed his whole person impairment at 42 per cent.

• [13] On 28 September 2009 ACC wrote to Mr Aria, advising him his weekly compensation was to be stopped. ACC advised it had made a mistake. When granting weekly compensation for his 2008 incapacity, as claimed on the basis of his 1974 accident, ACC had erroneously understood weekly compensation could be paid to someone who was not earning at the time of the injury that led to their claims. A 2006 District Court decision had, however, said that approach was wrong.^[3]
• [14] Mr Aria immediately reviewed that decision. His application was heard on 8 March 2010. ACC relied on the 2006 decision, Giltrap; Mr Aria relied on a subsequent decision, Vandy.^[4] The Reviewer summarised the position thus:

Giltrap says a person who was not an earner at the time of injury is not entitled to weekly compensation even if he was an earner at the time of a later incapacity. Vandy says the opposite — a person who was not an earner at the time of injury but was an earner at the time of later incapacity is entitled to weekly compensation.

(Citations omitted.)

• [15] Preferring the Giltrap reasoning, the reviewer upheld ACC’s decision. Mr Aria appealed.
• [16] While that appeal was pending the High Court reversed the District Court’s Vandy decision and adopted the Giltrap reasoning.^[5] Mr Aria then accepted that, as he was not employed in 1974, he was not entitled to weekly compensation following the onset of insect-bite ulceration by reference to his 1974 injury. Rather, he argued, the ulcers had been occasioned by a workplace accident, the minor abrasion (the insect bite); and the combination of that abrasion, the ulcers and the infection were the cause of his incapacity in May 2008.
• [17] ACC agreed to re-investigate Mr Aria’s 2007 claim, and his appeal was placed on hold. During that re-investigation further medical evidence was obtained by Mr Aria and by ACC relating to the causal role of the insect bite and the consequent infected ulceration for his post May 2008 incapacity.
• [18] Following that re-investigation ACC wrote to Mr Aria on 18 November 2015:

(a) noting its, by then unchallenged, decision that Mr Aria was not entitled to weekly compensation for his 2008 incapacity based on his 1974 injury, as that injury did not happen at work;

(b) advising, however, it now accepted his earlier 6 June 2007 claim as a basis for weekly compensation during the period of incapacity which began in May 2008, attributable to ulceration resulting from the insect bite accident; and

(c) advising that Mr Aria’s incapacity to work as a boner from 29 December 2009 onwards, by which time his ulcers had healed and when his weekly compensation had been stopped, was caused by his 1974 injury and hence he was not entitled to further weekly compensation from that date.

• [19] Mr Aria reviewed that decision in February 2016. On 16 February the reviewer confirmed ACC’s decision. Having posed the question “Does the medical evidence causally link Mr Aria’s incapacity to his injury on 25 April 2007?” the reviewer said:

I find the answer to this question is ‘No’. It follows I find there is insufficient medical evidence to show that Mr Aria’s incapacity from 28 December 2009 to the present day is causally related to his covered April 2007 injury. I find the medical evidence as a whole clearly links Mr Aria's incapacity to his 1974 injury. On this basis his application cannot succeed.

• [20] Mr Aria then re-engaged with his 2007 appeal. He did so on the basis that his continuing incapacity, after the ulcers had healed, was caused — at least in part — by the 2007 insect bite accident. Mr Aria relied on medical evidence from the 2015 investigation which he said suggested his incapacity in 2009 was caused by the combined effect of the 1974 and the 2007 injuries.
• [21] Judge Mathers phrased the issue before her as “whether the 2007 covered injury was the cause of Mr Aria’s incapacity to return to work after 2009 or whether his incapacity arose from the deformity of his ankle and hence [was] caused by the 1974 accident”.^[6] Dismissing the appeal, Judge Mathers found the latter to be the case, reasoning:

[39] Whether or not there was a combined effect, that in my view ceased to apply from 2009 when the abrasion injury and ulcer were successfully treated. What the late Mr Aria was unfortunately left with was the result of the 1974 injury.

• [22] Mr Aria’s estate then applied to the District Court for leave to appeal on a point of law pursuant to s 182(1) of the Act. On 17 May 2018 Judge GM Harrison declined that application.^[7] He characterised Judge Mathers’ decision, encapsulated above at her [39], as one of fact not of law. Special leave of the High Court was then sought for a second appeal on a question of law pursuant to s 162(3) of the Act.
• [23] Granting leave, Collins J summarised what had happened to Mr Aria after the May 2008 discovery of arterial blockage in the following way:^[8]

Bypass surgery was carried out in July 2008 in an attempt to overcome the obstruction, but unfortunately it failed. In September 2008, further bypass surgery was successfully carried out. After the second surgery, the ulcers on Mr Aria’s leg fully healed, but the knee flexion deformity — inability to bend the knee — became worse.

• [24] Collins J then summarised the errors of law that Mr Beck, by then counsel for Ms Matthews, said were involved in the District Court decision which merited a further appeal:^[9]

(1) First, he submitted the Judge did not consider whether Mr Aria would not have been incapacitated but for the 2007 injury. He submitted it was not necessary that the 2007 injury was the sole cause of incapacity and that it would be sufficient if it was a contributing factor.

(2) Second, the Judge did not apply the evidentiary burden of proof established in Thompson v Accident Compensation Corporation.^[10]

• [25] Noting “there was no dispute that issues of causation raise questions of law”,^[11] the Judge set out the relevant statutory provisions which encapsulate the causal relationship required between personal injury and incapacity to establish an entitlement to weekly compensation, namely cl 32 of sch 1 and s 103 of the Act, then concluded:

[13] Because I am granting the application for special leave, it is not appropriate for me to delve in any depth into the facts and legal issues raised by the application for special leave to appeal. Suffice for present purposes to record that Judge Mathers appears to have focused on the fact that the ulcers had healed, without considering in much depth the implications of the exacerbated knee and ankle deformities. I am satisfied that, with respect to those injuries, this case does raise an arguable question of law involving causation, namely whether aggravation of a pre-existing condition acts as an absolute bar to causation.^[12]

[14] I believe there are two questions of law that this Court should address, namely:

(1) Can a further physical injury that aggravated a pre-existing physical injury be a cause of incapacity under cl 32 of Schedule 1 and s 103 of the Act?

(2) If so, was Mr Aria’s inability to return to work caused by the aggravation of his pre-existing knee flexion and/or ankle equinus (as opposed to the original injuries themselves)? (Original emphasis)

• [26] As can be seen, the focus of Collins J’s grant of leave was on the causal significance of what the Judge called the “aggravation of a pre-existing condition” (here the consequences of the 1974 accident) by a subsequent accident (here the 2007 insect bite).^[13]
• [27] The common sense rationale for that question would appear to be that, notwithstanding the pre-existing injury, Mr Aria worked for some 33 years as a boner in a freezing works and it was only after the insect bite and the associated surgery that, notwithstanding the healing of the ulcers, he was unable to continue in that employment.
• [28] Grice J dismissed the appeal (1 July 2019) and subsequently declined an application under s 163(1) to bring a second appeal on a point of law to this Court (28 November 2019).^[14]

This application

• [29] Ms Matthews now applies pursuant to s 163(2) for special leave. The relevant threshold was explained by this Court in Cullen v Accident Compensation Corp:^[15]

[5] This Court has power to grant special leave to appeal under s 163(2) of the Act. The principles applicable to an application for leave under s 67 Judicature Act 1908 apply equally to an application under s 163 of the Act. The Court will exercise this power if satisfied that there is a serious question of law capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of a further appeal. Other relevant considerations include the desirability of finality of litigation and the overall interests of justice. The primary focus is on whether the question of law is worthy of consideration.

• [30] In making this application, Ms Matthews says Grice J erred in the High Court when dismissing her appeal: she did not determine the point of law on which leave was granted by Collins J, but rather upheld the District Court decision on a wrong basis.
• [31] On appeal, and having reviewed the evidence, Grice J — as relevant for these purposes — summarised her assessment in the following terms:^[16]

[33] Once the ulcers had healed the only knee/ankle incapacity was that caused by the 1974 personal injury. The 2008 surgery was triggered by damage caused by the 1974 injury and any aggravation flowing from the 2008 surgery was from the 1974, and not the 2007, injury.

...

[35] In my view the Judge made no error in reaching her conclusion that the incapacity from Mr Aria’s knee and ankle problems were due to the 1974 personal injury. Once the ulcers had healed there was no other contribution to the incapacity.

• [32] On that basis she determined the appeal by concluding:

[36] Following my findings above, neither ground of appeal for which leave was granted arises. Both points are moot and it is not necessary to consider them further.

• [33] It is to be noted, however, that given the legal issue recognised by Collins J, and the factual basis for it, those conclusions of the Judge are in tension with her earlier observation that following the successful arterial bypass:^[17]

The ulcers ultimately healed, but the deformity causing an inability to flex Mr Aria’s knee became worse and the skin was rendered more delicate.

• [34] In her decision declining leave, Grice J in essence reasoned that because she had concluded the District Court Judge was correct in finding the 1974 injury was the sole cause of the ongoing incapacity then, as before, the questions of law were moot.
• [35] The Judge’s task, Mr Beck argued, had been to answer the question of law. Namely, could the causal connection required for entitlement to weekly compensation following incapacity be met in circumstances where, as would appear to have been the accepted medical position, a subsequent accident suffered by an earner results in the aggravation or worsening of the injury caused by an earlier accident suffered by that person when they were not an earner? If the answer to that question of law was yes, then the matter should, Mr Beck further argued, have been returned to the District Court for the facts to be assessed in that light.

Analysis

• [36] There is no debate that Grice J did not answer the questions of law posed by Collins J. Nor, on the evidential record available — essentially as referred to by Collins J in the passage set out above at [24] — is it clear to us that the issue was moot.
• [37] Collins J would appear to have had in mind the possibility of multiple causality. That concept was referred to by this Court in granting leave, coincidentally also on Mr Beck’s application, to appeal a decision of the High Court considering questions of causality in the context of mental injuries suffered because of physical injuries.^[18] In granting special leave, on the question of whether the High Court had approached causality correctly, this Court explained:

[4] There are, analytically, three possible situations. First, there might be mental injury arising out of an “accident” and resultant physical injuries. This relates to what could be termed “accident trauma”. Secondly, a pre-existing mental condition may be aggravated somehow, solely because of the physical injury. Thirdly, the physical injuries may have been a contributing cause — though not the only contributing factor to — the resurgence of a prior mental affliction.

[5] Counsel accept that categories one and two come within s 26(1)(c) of the Injury Prevention, Rehabilitation, and Compensation Act 2001.

[6] The third fact pattern — which is that presently before the Court — is more problematic. The answer given by a District Court Judge on an appeal to that Court, and then subsequently by Dobson J in the High Court, is that this third fact pattern is not within the statutory provision.

[7] On any view of the matter, this is a question of law. The issue has not previously been before this Court for consideration. Further, it is a question of law of considerable practical importance, with significant downstream consequences for the operation of the accident compensation legislation.

• [38] In our view, that third type of possible causal link is the one Collins J in granting leave recognised as being possible.
• [39] The difficulty we see with the approach taken by Grice J is that she determined causality without having answered that question of law, and therefore without having reviewed the facts on the basis of what she determined was the answer to the question Collins J posed. The correctness or otherwise of her conclusion of mootness at least arguably would appear to require an answer to that question of law first, and then an assessment of the evidence.
• [40] We therefore grant leave on the following two questions of law:

(a) Was the High Court wrong to conclude that the first question of law posed by Collins J was moot and, accordingly, to decline to answer it?

(b) If so, can treatment for a physical injury suffered by an earner in 2007, which aggravates the effect of an earlier physical injury suffered by that person in 1974 when they were not an earner, be a cause of incapacity under cl 32 of sch 1 and s 103 of the Accident Compensation Act 2001?

• [41] Mr Beck’s further challenge to Grice J’s approach is that she was wrong to determine the issue of legal and factual causation herself. Rather, the first question of law posed by Collins J having been answered, she should have remitted the matter to the District Court.
• [42] That was not the approach Collins J envisaged, as reflected in his second question. Nor was it the approach this Court adopted when granting leave in the Hornby case on questions, analogously, on all fours with those posed by Collins J.^[19] It may be, we acknowledge, that on the second appeal for which we are granting leave this Court may reach the conclusion, as it did in the case of Ambros (on which Mr Beck also relied), that it would not be appropriate to go beyond answering the general questions of law.^[20] But that will not necessarily be the case.
• [43] Accordingly, and in line with the second question posed by Collins J and this Court in Hornby, we also grant leave on the following, third, question:

(c) If so, was Mr Aria’s inability to return to work caused by the aggravation of his pre-existing knee flexion and/or ankle equinus (as opposed to the original injuries themselves)?

Result

• [44] We therefore grant special leave on the two questions Collins J granted leave albeit slightly rephrased in view of our reasons for which we have made that decision:

(a) Was the High Court wrong to conclude that the first question of law posed by Collins J was moot and, accordingly, to decline to answer it?

(b) If so, can treatment for a physical injury suffered by an earner in 2007, which aggravates the effect of an earlier physical injury suffered by that person when they were in 1974 not an earner, be a cause of incapacity under cl 32 of sch 1 and s 103 of the Accident Compensation Act 2001?

(c) If so, was Mr Aria’s inability to return to work caused by the aggravation of his pre-existing knee flexion and/or ankle equinus (as opposed to the original injuries themselves)?

• [45] Costs on the application are reserved pending determination of the substantive appeal.

Solicitors:
Hazel Armstrong Law, Wellington for Applicant

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^[1] Matthews v Accident Compensation Corp [2018] NZHC 2769.

^[2] We note we consulted the hearing bundle from the High Court file, CIV-2008-404-1087, in the course of preparing this judgment.

^[3] Giltrap v Accident Compensation Corp [2006] NZACC 141.

^[4] Vandy v ACC [2010] NZACC 23.

^[5] Accident Compensation Corp v Vandy [2010] NZHC 2453; [2011] 2 NZLR 131 (HC).

^[6] Aria v Accident Compensation Corp [2017] NZACC 38 [District Court appeal] at [37].

^[7] Aria v Accident Compensation Corp [2018] NZACC 73 [District Court leave application].

^[8] Matthews v Accident Compensation Corp [2018] NZHC 2769 [High Court special leave application] at [5] (emphasis added).

^[9] At [10].

^[10] Thompson v Accident Compensation Corp [2015] NZHC 1640, [2015] NZAR 1163 at [39].

^[11] High Court special leave application, above n 8, at [11].

^[12] See Johnston v Accident Compensation Corp [2010] NZHC 1726; [2010] NZAR 673 (HC) at [26]–[27]; and Hornby v Accident Compensation Corp HC Wellington CIV-2008-485-763, 10 September 2008 at [28]. Compare W v Accident Compensation Corp [2018] NZHC 937, [2018] NZAR 829 at [60] and [62].

^[13] High Court special leave application, above n 8, at [13].

^[14] Matthews v Accident Compensation Corp [2019] NZHC 1509 [High Court appeal]; and Matthews v Accident Compensation Corp [2019] NZHC 3125 [High Court leave application].

^[15] Cullen v Accident Compensation Corp [2014] NZCA 94 (footnotes omitted).

^[16] High Court appeal, above n 14.

^[17] High Court appeal, above n 14, at [8].

^[18] Hornby v Accident Compensation Corp [2009] NZCA 33, (2009) 19 PRNZ 236.

^[19] The questions posed in Hornby (at [10]) were:

(a) Did the High Court adopt the wrong test to determine whether mental injuries are suffered “because of physical injuries” pursuant to s 26 of the Injury Prevention, Rehabilitation, and Compensation Act 2001?

(b) If so, is the appellant entitled to cover on the correct test?

^[20] Accident Compensation Corp v Ambros [2007] NZCA 304, [2008] 1 NZLR 340 at [109]–[112].