Ives v Accident Compensation Corporation [2012] NZHC 3442 (17 December 2012)

Last Updated: 8 January 2013

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-004977 [2012] NZHC 3442

BETWEEN CHRISTINE IVES Appellant

AND ACCIDENT COMPENSATION CORPORATION

Respondent

Hearing: 5 December 2012

Appearances: H Peart for Appellant

D Tuiqereqere and E Bergin for Respondent

Judgment: 17 December 2012

_{JUDGMENT OF VENNING J}

This judgment was delivered by me on 17 December 2012 at 2.30 pm, pursuant to Rule 11.5 of the

High Court Rules.

Registrar/Deputy Registrar

Date...............

Solicitors: Schmidt & Peart Law, Auckland

Medico Law Limited, Auckland

IVES V ACCIDENT COMPENSATION CORPORATION HC AK CIV-2012-404-004977 [17 December 2012]

Introduction

[1] Ms Ives appeals to this Court from a decision of the District Court on the following question of law:

Whether under the Accident Rehabilitation and Compensation Insurance Act

1992 (the 1992 Act) a mental injury within the terms of s 4(1) of that Act can stand as a personal injury in its own right and thus take for entitlement

purposes a different date of injury from that of the causative physical injury?1

Background

[2] I take the background largely, but not exclusively, from the summary of

_{Judge Beattie and his factual findings in the decision under appeal:}2

On 31 July 1990 the appellant, then aged 35 years, suffered an injury to her

_{neck and back in a motor accident when her car was struck by another car.}

The appellant consulted her GP in relation to pain she experienced in her neck and her back. The GP identified the injury and associated pain as a consequence of the accident. The appellant undertook treatment by way of

_{physiotherapy.}

In November 1991 the appellant lodged a formal claim in relation to the injuries she had suffered in the accident. The injuries were identified as neck and spinal whiplash. The appellant received cover under the Accident

_{Compensation Act 1982 (the 1982 Act) for the injuries.}

As the appellant was not working at the time of the accident she was not entitled to weekly compensation. However, from 18 April 1993 onwards the

_{appellant was employed as a loans officer with Countrywide Bank.}

1. Leave was granted by District Court in Ives v Accident Compensation Corporation [2012] NZACC 261 (Judge Roderick Joyce QC).

2 Ives v Accident Compensation Corporation [2011] NZACC 48.

Save for medical reports from Mr A N M McAuslan, orthopaedic surgeon, in April 1992 and Mr Colin Hooker, orthopaedic surgeon, in December 1993, the appellant’s ACC file was effectively dormant until April 1997, when a

_{claim for treatment expenses was made in relation to her covered injuries.}

On 2 September 1997 the appellant’s GP, Dr Corbett, issued an ARC 18 medical certificate, identifying that the appellant was unfit for work consequent upon her back strain injuries and that she would be unfit for a

_{three month period.}

Dr Corbett also referred the appellant to Dr Berke, a consultant psychiatrist for assessment of depression and panic attacks. On 3 September 1997 Dr Berke confirmed a diagnosis of:

Axis I 1. Dysthymic disorder

2. Adjustment Disorder with depressed mood

Axis II Deferred

_{Axis III Chronic pain syndrome.}

At the time Dr Corbett issued the ARC 18 certificate and the appellant was diagnosed with a recognised psychiatric disorder, the appellant was still

_{employed at Countrywide Bank.}

The respondent sought clarification of the ARC 18 from Dr Corbett. It asked, inter alia, what the main cause of her being unfit for work was. It also asked if it was due to the physical injury or psychological factors or a psychiatric complaint.

Dr Corbett clarified that the main cause for the appellant’s unfitness for work

was a mixture of chronic back pain and psychological factors and that the

_{appellant’s depression was related to the injuries sustained on 31 July 1990.}

The respondent also obtained an independent medical opinion as to the

appellant’s condition. Then, by decision dated 11 September 1997, it advised

that it rejected the ARC 18 certificate submitted by Dr Corbett and that it was

_{declining the appellant’s request for weekly compensation.}

The appellant sought a review of that decision. In the review decision, Review Officer R M Carter determined the medical certificate of 2

September 1997 should be accepted by the Corporation and implemented and that compensation should be paid for a three month period of incapacity

_{suffered by the appellant.}

As a consequence of Mr Carter’s decision the appellant received weekly compensation commencing from 2 September 1997. Further medical certificates were provided to the respondent for the period post 2 December

1997 so that weekly compensation continued to be paid to the appellant

_thereafter.

The appellant remained in receipt of weekly compensation until the respondent, by a decision of 4 September 2009, determined to revoke the decision for weekly compensation. The weekly compensation was to cease

_{on 3 December 2009.}

The appellant sought a review of the 4 September 2009 decision. The reviewer accepted the respondent’s submission that, in light of the decision of the District Court in Giltrap v Accident Compensation Corporation,3 a claimant who is not an earner at the time of suffering the personal injury was not a person who was eligible for weekly compensation. The reviewer found the appellant was unable to establish she was an earner at the time of her

1990 accident. He applied the decision of Giltrap and confirmed the

_{respondent’s decision. Ms Ives then appealed to the District Court.}

3 Giltrap v Accident Compensation Corporation DC Wellington Decision No 141/2006, 9 June

2006.

The District Court decision

[3] Judge Beattie found as a matter of fact that the appellant was not an earner at the time of her motor accident in July 1990. He therefore confirmed the reviewer’s decision on that issue.

[4] Mr Peart also submitted that the appellant obtained cover for a separate and new injury in September 1997, namely the mental injury diagnosed by Dr Barker as chronic pain syndrome and the adjustment disorder with depressive features. Mr Peart submitted that was a mental injury which had arisen as a consequence of the appellant’s physical injury suffered in 1990, but as it only arose in September 1997 at a time when the appellant was working, the appellant was entitled to cover. He submitted that the appellant’s eligibility for weekly compensation was established.

[5] Judge Beattie rejected the submission that the diagnosis the appellant was suffering from chronic pain syndrome and depression was a fresh personal injury arising at the time of the diagnosis in 1997. The Judge considered the evidence to be clear the appellant’s chronic pain syndrome and resulting depression was a downstream consequence of her covered personal injuries of back and neck strain and, in terms of the definition of personal injury in s 4 of the 1992 Act, it was a mental injury suffered by the appellant which was an outcome of the physical injuries sustained by her in 1990.

[6] Judge Beattie found, both as matters of fact and law, the appellant’s medical condition as it pertained in September 1997 and in September 2009 were medical conditions consequent upon the personal injuries suffered by her in the motor accident of July 1990 but, because she was not in employment as at the date of suffering those personal injuries, she was not eligible for weekly compensation. The

Judge noted that in ACC v Vandy4 Gendall J in the High Court had held when

considering the 2001 Act, that to be eligible for cover a person in the position the appellant was required to have been engaged in employment when the personal

4 Accident Compensation Corporation v Vandy [2011] 2 NZLR 131 (HC).

injury occurred. Judge Beattie confirmed the respondent’s decision to revoke its decision granting weekly compensation and dismissed Ms Ives’ appeal.5

The appellant’s case

[7] Mr Peart’s submissions can be summarised into the following principal

points:

(a) The appellant’s application for compensation in 1997 fell to be

determined under the 1992 Act (ss 135, 4 and 37A).

(b) Under the 1992 Act the date of cover for a mental injury, as an outcome of a physical injury, is the date the mental injury first satisfies the definition of the term “mental injury” under the Act. That is the date when the injury was diagnosed or suffered, in this case on 3

September 1997.

(c) The appellant qualifies for weekly compensation because the injury giving rise to her incapacity in 1997 was not the original physical injury but rather was her subsequent consequential mental injury. That arose from her chronic pain syndrome experienced as a result of the initial physical injuries. Accordingly, she qualified for backdated and ongoing weekly compensation. He referred to Rackley v ACC where Judge Beattie found that a claimant had cover for a consequent mental

injury from November 1998, following a physical injury in 1994.6

The respondent’s case

_{[8] Mr Tuiqereqere’s submissions can be summarised as follows:}

5 _{Ives v Accident Compensation Corporation [2011] NZACC 48.}

6 Rackley v Accident Compensation Corporation DC Wellington (117/2008) 9 June 2008.

(a) The appellant had cover for the relevant condition which was her chronic pain condition under the Accident Compensation Act 1982 (the 1982 Act). The 1992 Act does not apply.

(b) If the 1992 Act applied, the provisions in that Act neither expressly nor implicitly supported a consequential mental injury under s 4 having its own date of personal injury. The term “personal injury” used throughout the 1992 Act means the personal injury for which the cover was originally granted, not a consequential condition that may subsequently manifest itself or develop. The relevant date for determining when a personal injury occurred is always that of the original physical injury. Identifying the date of personal injury is pivotal to the operation in the 1992 Act and the provision of

entitlements generally.7

(c) The appellant’s construction is internally inconsistent with the scheme and operation of the 1992 Act. There are a number of difficulties with the appellant’s construction:

– requiring a claimant’s employment status to be reconsidered under s 37A(2) each time a claimant suffers further symptoms or downstream consequences of the original personal injury is both complex and impractical;

– consequential mental injury is not a discrete category of cover under s 8 of the Act;

– if the date of the mental injury is taken as the date of diagnosis a claimant would not be entitled to any costs or loss of earnings prior to that date;

– if a consequential mental injury is held as having its own date of personal injury, problems could arise in determining the

7. For example s 63(2) requires a claimant to lodge his or claim for cover within 12 months after the date on which the personal injury is suffered.

relevant date under s 37A(2) in circumstances where a claimant suffers from multiple conditions (of a consequential nature) causing the incapacity.

(d) Finally, even if the appellant was correct, and the mental injury was covered under s 4, the condition was not suffered on 3 September

1997, as it was based on a chronic pain condition which was present well before the appellant commenced employment with the Countrywide Bank in 1993.

The scope of the appeal

[9] A number of points counsel sought to raise go beyond the question posed for determination by this Court. Mr Tuiqereqere’s submission that the 1982 Act rather than the 1992 Act applies falls into that category. So do the submissions directed at determining precisely when the mental injury was sustained, and whether, in this case, it was sustained when the chronic physical pain was initially diagnosed.

[10] This is an appeal on a question of law.8 It is not a general appeal. While this Court has jurisdiction to extend or amend the grounds of appeal if such a course is in the interests of justice9 the interests of justice do not support such an extension in the present case. Both the respondent and the appellant have been represented throughout. The application for leave was the subject of detailed submissions in the District Court and resulted in a careful and considered judgment by an experienced District Court Judge who identified the question for this Court to determine. Further, the judicial resources of this Court should not be applied to ever expanding issues for

which leave has not been granted. I propose to restrict my consideration to the

_{question posed for this Court.}

8 _{Accident Rehabilitation and Compensation Insurance Act 1992, s 97.}

9 O’Neill v Accident Compensation Corporation (No. 2) HC Auckland CIV-2008-404-8482, 31

March 2010 at [15].

Statutory framework for the question

[11] In order to answer the question, it is, however, necessary to put it into its statutory context. The appellant sustained personal injury in 1990. At the time the relevant Act was the 1982 Act. The 1982 Act was replaced by the 1992 Act as from

1 July 1992.

[12] The relevant transitional provision in the 1992 Act reads:

135 Relationship of this Act and former Acts

(1) Any person who has had a claim accepted for personal injury by accident within the meaning of the Accident Compensation Act 1972 or the Accident Compensation Act 1982 suffered before the 1st day of July 1992 shall be deemed to have suffered personal injury that is covered by this Act.

As the appellant had a claim accepted for personal injury under the 1982 Act, she is deemed to have suffered personal injury covered by the 1992 Act.

[13] There is another pathway to compensation under the 1992 Act. Section 8 provides:

8 Cover for personal injury occurring in New Zealand

(1) This Act shall apply in respect of personal injury occurring in New Zealand on or after the 1st day of July 1992 in respect of which there is cover under this Act.

(2) Cover under this Act shall extend to personal injury which—

(a) Is caused by an accident to the person concerned; or

(b) Is caused by gradual process, disease, or infection arising out of and in the course of employment as defined in section 7 or section 11 of this Act; or

(c) Is medical misadventure as defined in section 5 of this Act;

or

(d) Is a consequence of treatment for personal injury [covered by this Act].

[(3) Cover under this Act shall also extend to personal injury that is mental or nervous shock suffered by a person as an outcome of any act of any other person performed on, with, or in relation to the first person (but not on, with, or in relation to any other person), being—

(a) An act that is within the description of any offence listed in

Schedule 1 to this Act; and

(b) An act that was performed in New Zealand, or outside New Zealand where the person on, with, or in relation to whom the act was performed was ordinarily resident in New Zealand when the act was actually performed (even if the person is ordinarily resident in New Zealand on the date on which the personal injury is deemed to have been suffered).]

To the extent the mental injury can be said to be a fresh or new personal injury sustained in September 1997, and thus is not the personal injury for which the claim was accepted as referred to in s 135, the appellant would be entitled to cover under s 8(1) and s 4. However, cover on this basis is dependent upon the question being answered in the appellant’s favour.

[14] The relevant provisions in relation to weekly compensation under the 1992

Act are ss 39 and 37A. Pursuant to s 39 of the 1992 Act a claimant is entitled to weekly compensation for loss of earnings payable to an earner who is incapacitated as a result of personal injury. The relevant definition of incapacity is contained in s 37A(2). Section 37A(2) reads:

Determination of incapacity in relation to earners generally

...

(2) The object of a determination of incapacity under this section is to determine whether or not the person is, by reason of his or her personal injury, for the time being unable to engage in employment in which the person was engaged when the personal injury occurred.

[15] The incapacity must thus arise from personal injury. Personal injury is defined in s 4(1) of the 1992 Act as:

... the death of, or physical injuries to, a person, and any mental injury suffered by that person which is an outcome of those physical injuries to that person, and has the extended meaning assigned to it by section 8(3) of this Act.

[16] Mental injury is itself separately defined as, “a clinically significant behavioural, psychological or cognitive dysfunction”.10

10 Accident Rehabilitation and Compensation Insurance Act 1992, s 3.

[17] The appellant’s short point is that the mental injury, which she was diagnosed with in 1997, was an outcome of the physical injuries she sustained in 1990, so that there was the required causative link, but that the mental injury itself was not suffered or sustained until 1997.

[18] The issue is whether the personal injury referred to in s 37A is divisible into both physical and the mental injury. The plain application of the definition of personal injury in s 4 seems to provide for that, as the definition provides four categories of personal injury: death, physical injuries, mental injury caused by those physical injuries, and the extended definition in s 8(3).

[19] In his careful and thorough submissions Mr Tuiqereqere made the point that a number of anomalies would arise if there was a separate category of cover for consequential mental injury under the 1992 Act. It would place the consequential mental injury in a preferred status to a consequential but distinct physical injury. For example, a claimant who was not working when they sustained a leg injury in an accident which affected their posture could later, (once her or she had commenced work), develop a distinct (but consequential) back condition resulting in incapacity. That claimant would not be entitled to weekly compensation under s 37A(2), whereas the appellant would. I accept the point Mr Tuiqereqere makes, but it is the nature of the legislation that there are potential anomalies in the scheme which arise out of the particular circumstances of each case. Such anomalies as there may be cannot be determinative of the correct interpretation of the statutory provision.

[20] Mr Tuiqereqere also noted there are the deeming provisions in respect of particular types of mental injury, and gradual work related injury within the Act. For example, where the personal injury is suffered as a consequence of work related gradual process, s 7(5) provides the date for personal injury will be when the person first received treatment or became incapacitated as a result of the personal injury, whichever occurs first. Similarly, s 63(3) provides that personal injury in terms of the extended definition under s 8(3), which includes mental or nervous shock suffered as an outcome of certain criminal acts, is deemed to have been suffered on the date on which the person first received treatment for that personal injury. He

noted there is no such deeming provision in relation to when a consequential mental injury, referred to in the s 4 definition of personal injury, is sustained.

[21] However, the work related gradual process and the mental or nervous shock provide for extended definitions of injury in special circumstances outside the general definition of personal injury under s 4. The mental or nervous shock provided for in s 8(3) is of a quite different nature to the mental injury under s 4.

[22] Both counsel addressed the effect of s 36(2) of the Accident Compensation

2001 (the 2001 Act). That section provides:

36 Date on which person is to be regarded as suffering mental injury

...

(2) The date on which a person suffers mental injury because of physical injuries suffered by the person is the date on which the physical injuries are suffered.

[23] If s 36(2) of the 2001 Act applied it would be an answer to the appellant’s claim in this case. However, no equivalent provision to s 36(2) is to be found in any of the previous ACC legislation. The 1992 Act is silent on the issue. Mr Peart contended that s 36(2) was enacted because Parliament recognised that, under the previous legislation (including the 1992 Act), a consequential mental injury could take a different date to the originating physical injury and Parliament felt the need to address that issue. As might be expected, Mr Tuiqereqere took a different view. He submitted that s 36(2) of the 2001 Act simply clarifies the law that existed under the

1992 and 1998 Acts, and was consistent with Parliament’s desire to promote certainty and consistency in the administration of the Act and general compensation scheme.

[24] The first issue that arises is the extent to which subsequent legislation can aid in the construction of repealed legislation. Clearly the 2001 legislation has no retrospective effect.11 In Golden Bay Cement Co Ltd v Commissioner of Inland

_{Revenue the Privy Council confirmed that subsequent legislation cannot be invoked}

11 Interpretation Act 1999, s 7.

in order to construe an earlier Act unless the earlier Act is ambiguous.12 In the subsequent decision of Commissioner of Inland Revenue v Chester Trustee Services Ltd the Court of Appeal was required to determine the proper construction of s 57(3) of the Goods and Services Tax Act 1985 as it read prior to an amendment effective from 10 October 2000.13 Baragwanath J, with whom Tipping and Hammond JJ agreed, observed:14

[38] I do not rely on the point advanced by the Commissioner, that the provisions of the subsequent amendment (paragraph [37] above) are consistent with his argument. The Privy Council rejected a similar submission in Golden Bay Cement Co Ltd v Commissioner of Inland Revenue [1999] 1 NZLR 385, 392-3, at least in the absence of ambiguity. While subsequent legislation may offer a possible interpretative option for consideration when construing its predecessor, to treat the later legislation as indicating a particular legislative policy could be said to beg the essential question of whether the amendment was intended to confirm or to change the earlier policy as deduced on conventional principles. ...

(emphasis added)

[25] That is precisely the point in the present case. The 2001 amendment could have been intended to either confirm or change an earlier policy. I prefer to interpret the provisions of the 1992 Act on usual principles. In my judgment, the correct approach is to focus on the relevant wording of the 1992 Act in the context of the purpose and the scheme of the Act as a whole. The Court should adopt an expansive and purposive approach to the accident compensation legislation, as suggested by the

Chief Justice in the Supreme Court decision of Allenby v H & Ors.15

[26] Both counsel referred to ACC v Vandy,16 as did the Judge.17 That case (which was under the 2001 Act), was determined on the basis that at the time the injury occurred, Ms Vandy was not in employment. It did not address the issue in this case, which arises from the particular nature of the definitions of personal injury and

_{mental injury under the 1992 Act.}

12 _{Golden Bay Cement Co Ltd v Commissioner of Inland Revenue [1999] 1 NZLR 385 at 392 (PC).}

13 _{Commissioner of Inland Revenue v Chester Trustee Services Ltd [2003] 1 NZLR 395 (CA).}

14 _{At [37].}

15 _{Allenby v H & Ors [2010] NZSC 33 at [24].}

16 _{Accident Compensation Corporation v Vandy [2011] 2 NZLR 131 (HC).}

17 Ives v Accident Compensation Corporation [2011] NZACC 48 at [29]–[31].

[27] I find it helpful to read the definition of personal injury in s 4 of the Act into the reference to personal injury in s 37A(2). A plain reading of the definition of personal injury contemplates the mental injury may well be suffered at a date later than the date the physical injuries were initially sustained. It refers to a mental injury suffered as an outcome of the original physical injuries. Importantly mental injury is separately defined in the Act as “a clinically significant behavioural or psychological or cognitive dysfunction”. An outcome will normally follow an event. For example, a person may, perhaps as the appellant has in this case, suffer serious back injuries as a consequence of the initial accident. She may, again perhaps as in this case, put up with, or try to cope with those injuries and either continue or start working. However, at some point, perhaps some years after the initial accident, those injuries might lead to a mental injury as a result of which the claimant is unable to continue his or her employment.

[28] In my judgment, in those circumstances, the mental injury suffered, provided it has the necessary causative link and is an outcome of the previous physical injuries sustained by that person, is itself a personal injury in terms of the definition in the Act. Provided the person was working at the time of sustaining that particular mental injury, s 37A(2) would apply. There is a distinction between requiring the mental injury to be the outcome of the original physical injury and determining the date on which the mental injury is sustained. There is no need to deem that mental injury to have been sustained on the date of the physical injury. It is the occurrence of the mental injury at the later date which has caused the person who was engaged in employment at the time that the particular personal injury (mental injury) occurred to be incapable of carrying on working.

[29] The date on which the original physical injury within the definition of s 4 is suffered involves a finding of fact. Normally it will be a readily ascertainable fact. There is no reason in logic or principle why the same approach should not be taken to determining when the mental injury is first suffered by a complainant. It will be a finding of fact informed by expert medical opinion evidence. Logically the mental injury must have been suffered at least by the date it is diagnosed but it may have been suffered at an earlier date. It will be a matter of evidence in each case.

[30] The person seeking cover will still have to establish that they have sustained a mental injury (as defined), that it was an outcome of the earlier physical injuries and that he or she was engaged in employment at the time they sustained the mental injury.

[31] To interpret the relevant provisions of the 1992 Act in this way is consistent with the clear purpose of the weekly compensation provisions under s 37A, which is to provide compensation for those who are incapacitated by a personal injury and therefore unable to continue working. In the present case, subject to proof that the reason the appellant was unable to continue to work was that she had sustained a mental injury after she commenced work with Countrywide Bank, which was itself an outcome of the earlier physical injury, the appellant would be entitled to cover under ss 39 and 37A(2) of the 1992 Act.

Result

[32] The answer to the question stated is yes.

Costs

_{[33] The appellant is entitled to costs on a 2B basis for the appeal.}

Venning J