Splite v Accident Compensation Corporation [2014] NZHC 2717; [2015] 2 NZLR 744; [2014] NZAR 1309 (3 November 2014)

Last Updated: 30 January 2018

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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2014-485-7329 [2014] NZHC 2717

IN THE MATTER	of an appeal under s 162 of the Accident Compensation Act 2001
BETWEEN	JANIS SPLITE Appellant
AND	ACCIDENT COMPENSATION CORPORATION Respondent

Hearing:	17 September 2014
Appearances:	A T McGurk for the Appellant C J Hlavac for the Respondent
Judgment:	3 November 2014

_{JUDGMENT OF BROWN J}

This judgment was delivered by me on 3 November 2014 at 4 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors: T R Hawkins, Upper Hutt

Young Hunter, Auckland

Counsel: T McGurk, Wellington

SPLITE v ACC [2014] NZHC 2717 [3 November 2014]

[1] In order to determine a claimant’s vocational independence under s 107(1) of the Accident Compensation Act 2001 (“the Act”), the Corporation may require a claimant to participate in occupational and medical assessments.

[2] However s 110(3) sets a threshold for the exercise of the Corporation’s power¹ by providing that the Corporation must not require the claimant to participate in an assessment —

(a) unless the claimant is likely to achieve vocational independence; and

(b) until the claimant has completed any vocational rehabilitation that the Corporation was liable to provide under the claimant’s individual plan.

[3] The procedural path pursued in McGrath to secure compliance with that threshold was an application for judicial review. As the Court of Appeal recorded:²

We understand ACC’s concession that judicial review is available is made on the basis that the review and appeal procedures of the Act do not apply to the decision to require a claimant to undertake a vocational independence assessment but only to the results of any adverse decision after such an assessment.

[4] Although that continues to be the Corporation’s position, the appellant’s contention is that the correct process for securing compliance with the threshold is by statutory review under s 134(1) of the Act. If the appellant’s contention is sound then, notwithstanding the course adopted in McGrath, the consequence of s 133(5) is that judicial review would not be an available remedy.

[5] Hence the issue for determination on this appeal is whether the act of the Corporation under s 110, in requiring a claimant to participate in an assessment of the claimant’s vocational independence, is a decision on the claimant’s claim which

_{is amenable to review under s 134(1) of the Act.}

¹ _{McGrath v Accident Compensation Corporation [2011] NZSC 77, [2011] 3 NZLR 733 at [30].}

² McGrath v Accident Compensation Corporation [2010] NZCA 535 at [32].

Background

[6] The appellant suffered an injury, his claim was accepted by the Corporation and an individual rehabilitation plan was agreed upon. On 26 July 2011 the Corporation wrote to the appellant advising that, as his rehabilitation programme was complete, the Corporation proposed to assess his vocational independence. The letter notified him that he was required to submit to two assessments, an occupational assessment and a medical assessment.

[7] The appellant lodged an application for review pursuant to s 134. In a decision dated 7 February 2012 the reviewer declined jurisdiction on the ground that the Corporation’s letter was not a decision under the Act.

[8] An appeal from that decision was considered by Judge M J Beattie. In upholding the review decision and ruling that the letter could not be the subject of an application for review the Judge said:

[10] In this case the letter from the respondent in issue did not contain a decision affecting the appellant’s entitlements, and as such I find that it is not a letter which can be the subject of review or appeal, but as was identified in the McGrath decision, it could be the subject of an application for judicial review, that is, a procedure outside the provisions of the Accident Compensation Act 2001.

[9] Leave to appeal was granted in a judgment of Judge Roderick Joyce QC dated 16 May 2014 in which his Honour identified a question of law for determination as follows:

Was the District Court wrong to hold that in requiring Mr Splite to participate in an assessment of his vocational independence the Corporation was not making, and did not make a decision, a decision in terms of the Accident Compensation Act 2001 amenable to review under s 134(1) of that Act?

Aspects of the statutory scheme

[10] A person who wishes to claim under the Act must lodge a claim with the Corporation for cover.³ The Corporation must decide if the person has cover and, if so, provide information about the entitlements to which the claimant may be

entitled.⁴ The Corporation must make every decision on a claim on reasonable grounds and in a timely manner having regard to the requirements of the Act, the nature of the decision and all the circumstances.⁵

Vocational rehabilitation and vocational independence

[11] The entitlements provided under the Act to a claimant who has cover for personal injury include weekly compensation and rehabilitation comprising treatment, social rehabilitation and vocational rehabilitation.⁶ Within 13 weeks after acceptance of a claimant’s claim for cover, the Corporation must determine whether the claimant is likely to need social or vocational rehabilitation and, if so, prepare an individual rehabilitation plan in consultation with the claimant.⁷ One of the purposes of vocational rehabilitation is to help a claimant regain or acquire vocational independence.

[12] Vocational independence is defined in s 6 of the Act to mean:

The claimant’s capacity, as determined under s 107, to engage in work —

(a) For which he or she is suited by reason of experience, education, or training or any combination of those things; and

(b) For 30 hours or more a week.

The Corporation must provide vocational rehabilitation for the minimum period necessary to achieve its purpose but, subject to its discretion to extend the period, must not provide any vocational rehabilitation for longer than three years.⁸

[13] The Corporation may determine the vocational independence of a claimant by requiring the claimant to participate in an assessment carried out for the purpose stated in s 107(3) and in accordance with ss 108-110. Section 107(3) provides:

(3) The purpose of the assessment is to ensure that comprehensive vocational rehabilitation, as identified in a claimant’s individual rehabilitation plan, has been completed and that it has focused on the

⁴ _{Sections 50(1)(a) and 50(1)(b)(i).}

⁵ _{Section 54.}

⁶ _{Section 69(1)(a).}

⁷ _{Section 75.}

⁸ See ss 87(2) and 87(2B).

claimant’s needs, and addressed any injury-related barriers, to enable the claimant–

(a) to maintain or obtain employment; or

(b) to regain or acquire vocational independence.

[14] The process for determining a claimant’s vocational independence includes the requirement for a claimant to participate in an assessment of the claimant’s vocational independence. Section 110 provides:

110 Notice to claimant in relation to assessment of vocational independence

(1) The Corporation must give written notice to a claimant required by the Corporation to participate in an assessment of his or her vocational independence.

(2) The notice must—

(a) state the purpose, nature, and effect of the assessment; and

(b) state that the claimant is required to participate in the assessment; and

(c) state the consequences of not doing so; and

(d) state the claimant's right to be accompanied by another person during the assessment.

(3) The Corporation must not require the claimant to participate in an assessment—

(a) unless the claimant is likely to achieve vocational independence; and

(b) until the claimant has completed any vocational rehabilitation that the Corporation was liable to provide under his or her individual rehabilitation plan.

The meaning and purpose of s 110(3), which sets a threshold for the exercise of the Corporation’s power to require vocational independence assessment, was explored by the Supreme Court in McGrath.⁹

[15] If the Corporation determines under s 107 that a claimant has vocational independence, the claimant loses the entitlement to weekly compensation three months after the date of notification of the determination.¹⁰

Decisions on claims

[16] Section 64 provides in material part:

64 Corporation must give notice of decisions

(1) The Corporation must give notice of its decision on a claim to the claimant.

...

(4) Every notice given under this section must—

(a) be written; and

(b) contain the reasons for the decision; and

(c) give the claimant or other person information about his or her rights to apply for review, including details of the time available to do so and an explanation of when applications can be made outside that time

[17] The interpretation section, s 6, contains the following definition of

“decision”:

decision or Corporation's decision includes all or any of the following decisions by the Corporation:

(a) a decision whether or not a claimant has cover:

(b) a decision about the classification of the personal injury a claimant has suffered (for example, a work-related personal injury or a motor vehicle injury):

(c) a decision whether or not the Corporation will provide any entitlements to a claimant:

(d) a decision about which entitlements the Corporation will provide to a claimant:

(e) a decision about the level of any entitlements to be provided:

(f) a decision relating to the levy payable by a particular levy payer:

(g) a decision made under the Code about a claimant's complaint.

Reviews and appeals

[18] Any of the Corporation’s decisions on a claimant’s claim may be the subject of an application for a review by an independent reviewer.¹¹ In the course of conducting a review, the reviewer must hold a hearing unless the application is withdrawn or the applicant, the Corporation and all persons who would be entitled to be present and heard at the hearing agree not to have a hearing.¹²

[19] There is a right of appeal to the District Court against a review decision on the Corporation’s decision on a claim.¹³ An appeal is a rehearing but evidence about a question of fact may be brought before the Court by production of various materials before the reviewer.¹⁴

[20] There is a further right of appeal to the High Court with leave on a question of law.¹⁵ There is a further right of appeal to the Court of Appeal with leave by way of case stated for the opinion of that Court on a question of law only. The decision of the Court of Appeal on such an appeal is final.¹⁶

[21] The right of access to other remedies is confined by the privative provision in s 133(5):

(5) If a person has a claim under this Act, and has a right of review or appeal in relation to that claim, no court, Employment Relations Authority, Disputes Tribunal, or other body may consider or grant remedies in relation to that matter if it is covered by this Act, unless this Act otherwise provides.

[22] As the Court of Appeal explained in Ramsay v Wellington District Court with reference to s 134(4) of the 1998 Act, the drafter was careful to confine the scope of the statutory exclusion of the courts to matters where the claimant has a right to

_{invoke the statutory process of review and appeal.}¹⁷

¹¹ _{Section 134(1).}

¹² _{Section 141(1).}

¹³ _{Section 149.}

¹⁴ _{Section 155(2).}

¹⁵ _{Section 162.}

¹⁶ _{Section 163.}

¹⁷ Ramsay v Wellington District Court [2005] NZCA 196; [2006] NZAR 136 (CA) at [33].

The parties’ cases in summary

[23] The appellant’s case is that a referral for a vocational independence assessment requires the Corporation to assess information and form a view as to whether the claimant is likely to obtain vocational independence, as required by s 110(3), which necessarily involves a “decision” to which review rights attach. In support of that contention the appellant argues:

(a) The definition of “decision” in s 6 is an open one, being expressed in

non-exhaustive terms;

(b) The nature of the restriction in s 110(3), together with the Supreme Court’s characterisation of it as a mandatory requirement before assessment, elevates the determination to the status of a “decision”;

(c) The definitions of “decision” in earlier statutes were broad such that the legislative history indicates that the s 110(3)(a) determination will always be subject to statutory review;

(d) Applications for statutory review will not ordinarily prevent a claimant being required to participate in a vocational independence assessment unless the parties agree otherwise pursuant to s 133(3); and

(e) It is erroneous to reason that as a consequence of the combined effect of s 133(5) and McGrath that there is no right of statutory review.

[24] The Corporation argues that requiring a claimant to undergo a vocational independence assessment is merely the first step in a process which may, but will not necessarily, culminate in a decision under s 107 that the claimant has vocational independence. In support of that contention it argues:

(a) While the definition of “decision” is non-exhaustive, correctly construed it is limited to decisions “which affect substantive rights”;

(b) The vocational independence assessment process is an important administrative tool but does not amount to a decision having a substantive impact on a claimant’s rights. There are parallel assessment requirements under ss 72 and 89. The consequence of accepting the appellant’s contention is that the ACC scheme would be very difficult to manage because the Corporation would not be able to seek any information relating to a claim without the request for information being subject to review;

(c) The High Court, the Court of Appeal and the Supreme Court implicitly held that a determination to require a claimant to undergo a vocational independence assessment is not a “decision”; and

(d) The difficulty in accepting such a referral as a decision is demonstrated by the present case where the appellant completed the assessment process (the validity of which is now challenged) and was found to have vocational independence but did not challenge the (substantive) decision made under s 107.

Analysis

[25] Both parties pray in aid the judgment of the Supreme Court in McGrath. I do not accept the Corporation’s argument¹⁸ that McGrath implicitly holds that a determination to require a claimant to undergo a vocational independence assessment is not a “decision”. Both parties in McGrath proceeded on the basis that such a determination was not a decision, the appellant by bringing judicial review proceedings in the face of s 133(5) and the Corporation by making the concession

noted at [3] above.

[26] Consequently it was common ground in McGrath that there was no right of review or appeal. Furthermore it does not appear that s 133(5) was drawn to the attention of the various Courts. It cannot be said therefore that McGrath determines

_{the present issue in favour of the Corporation.}

¹⁸ At [24](c) above.

[27] In my view the answer to the question must be found in the text and purpose of the Act as explained by the Supreme Court in Commerce Commission v Fonterra Co-operative Group Ltd:¹⁹

[28] The meaning of “decision” in the context of the Act has been the subject of a number of judgments. Mr McGurk drew attention in particular to the observations of Gendall J in Accident Compensation Corporation v Hawea:²⁰

To make a decision is to make up one’s mind, to make a judgement, to come to a conclusion or resolution. Only when a decision has been made can there be a right of review and if no right of review exists then s 122(5) has no application. ... It cannot become a “decision” simply because the ACC may say so. The substance has to be analysed. ...

His Honour went on to observe that many different factual situations will arise and it all depends on the circumstances.

[29] Clearly a determination under s 107 determining that a claimant has vocational independence is a decision reviewable by the statutory process as are determinations under ss 103 and 105 (both of which have a connection with a s 107 determination: see s 111).

[30] Plainly decisions that in some way adjudicate upon a claimant’s claim will constitute “decisions”. Examples are items (a) to (e) in the definition of decision.²¹

_{In Weir v Accident Compensation Corporation}²² _{Miller J ruled that an individual}

rehabilitation plan²³ was a decision made in the context of Mrs Weir’s continuing

claim for cover and weekly compensation. His Honour said:²⁴

In answer to Mr Barnett’s point that this decision would open up ACC’s administration to constant review, several points may be made. The first is that an IRP is not simply an administrative process. The statute prescribes it, and it is of central importance to the statutory goal of rehabilitation. Statutory obligations surround it. Second, it remains the case that only “decisions”, as defined in s 6 and clause 9 of schedule 1, are reviewable. Third, it is impossible to overlook the fact that an IRP is expressly defined as

¹⁹ Commerce Commission v Fonterra Co-operative Group Ltd [2007] NZSC 36, [2007] 3 NZLR

_{767 at [22].}

²⁰ _{Accident Compensation Corporation v Hawea [2004] NZAR 673 (HC) at [18].}

²¹ _{At [17] above.}

²² _{Weir v Accident Compensation Corporation CIV-2003-485-1921, 18 August 2004.}

²³ _{See [11] above.}

²⁴ At [40].

a “decision” in clause 9, which does not distinguish between IRP’s that

provide for or remove entitlements and those that do not.

[31] On the other hand it was the Corporation’s contention that certain actions by the Corporation, such as requiring claimants to take steps in connection with the processing of claims, will not amount to “decisions”. Mr Hlavac drew attention to ss 55, 72 and 89, all of which concern requirements that claimants undertake assessments. In particular he contended that a referral under s 72 for a medical assessment is practically no different in terms of its requirements of a claimant or the potential end result (the loss of weekly compensation) than a vocational independence assessment referral under s 110.

[32] It was not the appellant’s case that every action of the Corporation requiring a claimant to take some step in relation to the claimant’s claim amounted to a decision amenable to review under s 134(1). Indeed I understood Mr McGurk to accept that steps taken by the Corporation under ss 55, 72 and 89 were not decisions. That should allay the concern of the Corporation noted at [24](b) above.

[33] It was his argument that s 107 is quite different from those three sections because the purpose of s 107 is to assess a claimant’s vocational independence at the very end of the rehabilitation process. It therefore signals that existing entitlements are likely to be affected. Sections 55, 72 and 89 are not specifically designed for the purpose of putting a claimant’s entitlements in question whereas a referral under s

107 indicates “a decision to make a decision” about whether compensation payments will continue and, by reason of the restriction contained in s 110(3)(a), that it is likely that compensation payments will not continue.

[34] Mr McGurk’s depiction of the s 107 process as an end point is clearly correct. As the Supreme Court stated in McGrath:²⁵

[34] The prospect to be considered is as at the time the assessment is required. That is consistent with the scheme of the legislation and the language of s 110(3). The legislation is built around rehabilitation. Vocational independence is achieved on successful rehabilitation. It is the end of the process, not part of the rehabilitation programme. Mr Beck was, in our view, right to maintain that the vocational independence assessment is

“not in the nature of a ‘progress report’ on rehabilitation. The medical assessment which is the last step in the vocational assessment is solely concerned with whether the claimant has the capacity to undertake the work identified as being occupationally acceptable for him. Before the point when vocational independence is likely and requires assessment, the Corporation has the ability to obtain medical or occupational assessments that may assist in rehabilitation under responsibilities imposed upon the claimant under s 72. If read in isolation, s 110(3) could perhaps be taken to look to future attainment of vocational independence over a longer timeframe (as the Court of Appeal treated it). But it is clear from s 110 as a whole that vocational independence is achieved through and at the time of the required assessment. Indeed, the Corporation did not support the approach suggested by the Court of Appeal and takes the view, in agreement with the appellant, that vocational independence must be likely at the time of referral, rather than within a longer time frame.

[35] That concession was properly made. The Corporation by s 110(1) gives notice to a claimant “to participate in an assessment of his or her vocational independence”. “Vocational independence” is a defined term. It is capacity for work “as determined under section 107”. Section 107 provides that the Corporation determines vocational independence only “by requiring the claimant to participate in an assessment carried out ... in accordance with sections 108 to 110 ...”. In this statutory context, the restriction of the requirement to participate in vocational independence assessments under s

110(3) to cases where “the claimant is likely to achieve vocational independence” can only sensibly be construed as a likelihood that the

assessment itself will result in the outcome of vocational independence. No

longer timeframe is envisaged by the statutory scheme. And a longer timeframe (which would enable assessments where there is no immediate prospect of vocational independence but where such outcome is likely in the future) would result in unnecessary assessments and would be inconsistent with the policy behind s 110(3) to be found in the statutory history.

[35] That policy was apparent from the Supreme Court’s review of the legislative history:²⁶

[32] The legislative history of s 110(3) suggests that its purpose is to protect claimants from unnecessary assessments where there is no real prospect of vocational independence. Such assessments are intrusive and may be upsetting. The provision was inserted into the Injury Prevention and Rehabilitation Bill on the recommendation of the Select Committee. In its report the Select Committee indicated that the change followed its acceptance of a submission by the Council of Trade Unions and others that the Corporation should “only refer a claimant to the capacity for work assessment procedure if it believes that the claimant has a likely capacity for full-time work”. The Select Committee explained this amendment and others concerned with the procedures for assessing capacity for work as being “to ensure that there is sufficient emphasis on targeted, realistic and achievable rehabilitation to meet the rehabilitation requirements of the bill”.

[33] The Select Committee proposal that a belief in “likely capacity for full-time work” should be required before assessment is the origin of the prohibition in s 110(3) on requiring a claimant to undertake vocational independence assessment “unless the claimant is likely to achieve vocational independence”. Counsel accepted and we agree that “likely” in this context is an outcome reasonably in prospect.

[36] Section 110(3) endeavours to achieve its purpose by introducing two prerequisites or “conditions”.²⁷ Both those conditions require the formation of a view by the Corporation. In respect of the first condition the Corporation must hold the view that the outcome of vocational independence is reasonably in prospect. In the case of the second condition the Corporation must consider that the claimant’s vocational rehabilitation has been completed.

[37] While the satisfaction of those conditions requires a conclusion on the part of the Corporation, such a conclusion is of a threshold²⁸ rather than a final nature. Final conclusions depend upon the outcome of the assessments provided for in s 107(2) and 108, which assessments are to be undertaken by the occupational and medical assessors provided for in clauses 24 and 27 of Schedule 1. The conclusive nature of that assessment process is illustrated by the reference in s 107(3) to the purpose of the assessment being, inter alia, “to ensure that comprehensive vocational rehabilitation ... has been completed”.

[38] I do not consider that by the introduction of the statutory conditions Parliament intended that, within the process for the determination of vocational independence (which one infers is the ultimate objective in relation to all relevant claims²⁹), there should be a discrete intermediate decision-making step entitling a claimant to pursue the statutory review and appeal process.

[39] While the objective of the prohibition in s 110(3) is plainly to confine the vocational independence analysis to appropriate cases, I consider that the application of the whole gamut of the dispute resolution process in Part 5 to an intermediate step in the process would not be consistent with the direction in s 87(2) that the

_{Corporation must provide vocational rehabilitation for the minimum period}

²⁷ _{The word “condition” was adopted by the Supreme Court at [31] in relation to s 110(3)(a).}

²⁸ _{McGrath at [30].}

²⁹ See [12] above.

necessary to achieve its purpose and in any event (but subject to s 87(2B)) for no longer than three years.

[40] The pursuit of the Part 5 disputes process in relation to the instigation of the assessment process could result in delay in the commencement of the assessment procedures. While I recognise that s 112 provides a significant time buffer of three months before the impact of a s 107 determination takes effect (unlike ss 104(a)(i) and 106(a)(i) which are immediate), the pursuit of the disputes process in relation to an intermediate step in the vocational independence inquiry could have the consequence that claimants continue to receive entitlements for a significantly longer period than they should.

[41] Hence, important as the two conditions are in avoiding the imposition of unnecessary assessments, I do not consider that the Corporation’s assessment that the conditions are fulfilled amounts to a resolution of a question which has the status of a “decision”. Such a resolution will occur when the s 107 determination is made and in relation to which the statutory review process will be available.

Decision

[42] For the above reasons I conclude that in requiring a claimant to participate in an assessment of the claimant’s vocational independence, the act of the Corporation in forming the view that the conditions in s 110(3) are satisfied is not a decision by the Corporation on the claimant’s claim within the meaning of s 134(1) which is thereby amenable to the Part 5 dispute resolution process.

_{[43] The respondent is entitled to costs on a 2B basis.}

Brown J