Davis v Accident Compensation Corporation [2016] NZHC 1789 (3 August 2016)

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UNDER	the Accident Compensation Act 2001
IN THE MATTER	of an appeal to the High Court pursuant to s 162 of the Act
BETWEEN	RAMON DAVIS Applicant
AND	ACCIDENT COMPENSATION CORPORATION _Respondent

Hearing:	22 June 2016
Counsel:	T McGurk for Applicant D Tuiqereqere for Respondent
_Judgment:	_{3 August 2016}

[1] Mr Davis appeals with leave a decision of the District Court which upheld a decision of the respondent (ACC) to assess his claim under the Accident Compensation (Apportioning Entitlement for Hearing Loss) Regulations 2010 (the

2010 Regulations).¹Mr Davis contends that the regime which applied prior to these

[2] The practical difference between the two propositions is that if ACC is correct, Mr Davis is entitled to receive a partial contribution to the cost of hearing aids. If Mr Davis is correct, ACC will meet the full cost. Prior to the hearing ACC indicated it would pay the full cost, without conceding the correctness of Mr Davis’ argument. Counsel for Mr Davis contends the matter is of wider application, and submitted the Court should hear the matter anyway. I doubt this is correct, but having heard argument I will proceed to issue judgment.

[3] Mr Davis was a seaman who has developed a partial hearing loss. In March 2010 he sought cover under the Accident Compensation Act 2001 (the Act). In support he referred to an assessment that confirmed hearing loss and referred to a history of noise exposure over the 25 years he worked as a seaman.

[4] Various assessments have subsequently been undertaken. Reflecting the ACC scheme, their purpose has been to identify both the total extent of Mr Davis’ hearing loss, and the amount of loss that is attributable to causes covered by the Act. The results have not been consistent:

(a) May 2010 – 24.8 per cent total hearing loss, with a one per cent loss attributable to occupation;

10.9 per cent, effectively being halfway between the 2011 estimates. The last three occupation-related percentages are from the same specialist.

[5] Mr Davis applied for cover in March 2010. Consequent upon the May 2010 advice noted above, ACC accepted Mr Davis for cover, but assessed his entitlements at nil, due to the low level of impairment (one per cent) that was work-related. Mr Davis sought a review of the entitlements decision, and both parties submitted further assessments.

[7] On 3 June 2011 the reviewer quashed the decision declining entitlement, and directed ACC to obtain further assessments and make the decision again. So at this point in time, the decision granting cover stood, but the decision on consequent entitlements cover, having been made, needed to be redone.

[8] As part of the reassessment of entitlements, Mr Davis had the last three tests set out above at [4]. It was the last 10.9 per cent figure that was accepted by the District Court as the correct measure of work-related hearing loss. The Court concluded the current, rather than the previous, entitlement regime should then be applied to that figure.

[9] It is common ground that if this figure had emerged at the outset, under the old regime ACC would have provided Mr Davis with hearing aids. However, the

Do the Injury Prevention, Rehabilitation and Compensation (Liability to Pay or Contribute to Cost of Treatment) Regulations 2003 continue to apply to Mr Davis’ entitlement to compensation?

[11] The question is incorrectly focused. I accept the submissions of Mr Tuiqereqere that these 2003 Regulations were never the applicable legislation. Mr Davis’ entitlements under the former regime were instead controlled by the provisions of the Act itself, not these 2003 Regulations. The question is better phrased:

Is Mr Davis’ entitlement to be assessed according to s 81 of the Accident Compensation Act 2001, which applied at the time of the original entitlement decision, or according to the Accident Compensation (Apportionment Entitlement for Hearing Loss) Regulations 2010 which were in force by the time Mr Davis’ hearing loss was finally determined?

[12] At the time Mr Davis applied in March 2010, s 81 governed his case once it had been determined he was entitled to cover. Section 81 was part of the social rehabilitation provisions of the Act, of which s 79 stated:

[13] Section 81(3) then provided that ACC was liable to provide “a key aspect of social rehabilitation” to a claimant if certain conditions as set out in s 81(4) were met. Key aspects of social rehabilitation were defined to include numerous matters, but including aids and appliances, which obviously covers hearing aids. It is worth noting that s 81(3) is indicative of the Scheme. Whilst the focus here is on hearing aids, there are all manners of assistance that a person with cover might be entitled to. Each needed to be assessed in terms of the s 81(4) criteria.

81 Corporation’s liability to provide key aspects of social rehabilitation

(b) the provision of the key aspect is in accordance with the Corporation's assessment of it under whichever of clauses 13 to 22 of Schedule 1 are relevant; and

(iii) is necessary and appropriate, and of the quality required, for that purpose; and

(d) the provision of the key aspect has been agreed in the claimant's individual rehabilitation plan, if a plan has been agreed.

[15] It can be seen there are several limbs, each requiring an assessment. If all are answered in the claimant’s favour, then the key aspect of social rehabilitation must be provided – here, the hearing aids. Thus, s 81 set up an all or nothing response: in Mr Davis’ case, were hearing aids needed as a direct consequence of the matter for which he had cover? If so, he got the hearing aids; if not, he got nothing in terms of hearing aid assistance.

[16] Recalling that at this point ACC’s advice was that only one per cent of Mr Davis’ hearing loss was attributable to work-related matters, ACC determined that hearing aids were not required to address a one per cent loss and so Mr Davis had no entitlement to aids. When the final figure of 10.9 per cent was subsequently determined, the issue became whether a work-related hearing loss of that amount satisfied the requirements of s 81(4). ACC accepts it would have provided hearing aids in that situation.

[17] The new scheme established by the 2010 Regulations is quite different, and in particular the all or nothing situation has been removed. The Regulations deal with each aspect of the process and detail what amounts will be paid for the various

steps – assessment, device consultations, devices, fittings, and subsequent service. Concerning devices, the Regulations divide the contribution into three bands:³

0.1 – 29.9	$458.00
30.0 – 59.9	$916.00
60.0 – 100	$1,527.00

[18] It can be seen that under the current approach Mr Davis’ position would be unchanged through all his different assessments – none have assessed his covered loss as being above the 29.9 per cent top of the first band.

[19] The appellant contends the answer lies in the well known presumption against retrospective effect. While I doubt that is so, I set out the relevant principles.

[20] The starting point is s 7 of the Interpretation Act 1999 which states that an enactment does not have retrospective effect. It is an important principle of interpretation but perhaps misleading in the absolute terms in which it is expressed. Some legislation is expressly retrospective, and it is accepted some can impliedly have that effect. It is, however, a fundamental starting point.

[21] The following passage from Burrows and Carter captures the basic situation:⁴

Nevertheless the matter is one of construction, in which the language of the text, the purpose and scheme of the legislation, and the desirability or otherwise of giving it retrospective effect will all play their part. As the Court of Appeal has said:

The ultimate question is one of the construction of the statute. It involves weighing retrospectively concerns in determining the intention of Parliament as reflected in the scheme and language of the legislation.

⁴Burrows and Carter: Statute Law in New Zealand (5^thed, LexisNexis, Wellington, 2015) at

[22] Considerations that are relevant to the interpretation are whether: the new legislation is declaratory in purpose, is procedural or substantive in character, and imposes a new or greater penalty.⁵It is clear that it is ultimately a matter of construction.

[23] The appellant also places reliance on the repeal provisions in ss 17–22 of the Interpretation Act 1999. In particular, s 18(1) provides that the repeal of an enactment does not affect the completion of a matter or thing, or the completion of proceedings that relate to an existing right. Likewise, s 18(2) provides that a repealed enactment continues to have effect as if the repeal had not happened in order to allow the completion of the process.

[24] This provision was interpreted in Foodstuffs (Auckland) Ltd v Commerce Commission as being limited to the enforcement of rights already acquired.⁶In that case an application for approval of a merger was underway, but not determined, when new legislation came into force. Section 18 was held not to apply, and that any clearance of the merger would be governed by the new scheme.

[25] The 2010 Regulations set out a comprehensive scheme. It is plain that some aspects will of necessity govern future decisions concerning people with existing cover. Examples of this are recurring matters such as service, repairs and replacement. It is inconceivable that the old scheme would continue to apply for 10 or 20 years into the future notwithstanding the establishment of a new system.

[26] The purpose of the 2010 Regulations is to “prescribe the costs the Corporation is liable to pay for entitlements for covered hearing loss”. They are regulations which have a very specific ambit, and impose a scheme where none

_{existed before. Prior to these Regulations, the eligibility for hearing
aid assistance}

⁵See generally the discussion in Burrows and Carter above n 3, at 622–632; and Laws of New Zealand Statutes (online ed) at [56]–[60] . Also, Accolade Autohire Ltd v Aeromax Ltd [1998] 2 NZLR 15, at 16–17.

⁶Foodstuffs (Auckland) Ltd v Commerce Commission [2001] NZCA 294; [2002] 1 NZLR 353 (CA). The decision was reversed in the Privy Council, but on grounds not involving this aspect of the interpretation of the Interpretation Act 1999. A transitional provision was given a different interpretation, meaning the prior law applied.

fell to be determined by the application of very general criteria which were equally applicable to a huge range of matters. “Key aspects of social assistance” was defined to include not only aids and appliances, but also modifications to houses, home help, attendance care, child care, education support and training.

[27] The one area where the general criteria yielded to specific rules were the Accident Compensation (Liability to Pay or Contribute to Cost of Treatment) Regulations 2003. These regulations covered a broad range of situations and prescribed maximum rates payable to health professionals. The Schedule prescribed costs for counsellors, dentists, medical practitioners, nurses, nurse practitioners, radiologists, and specialists. Within each of these groups, the type of work they might do was then identified and a maximum hourly rate prescribed for each.

[28] Another sector covered by the Schedule to these 2003 Regulations was audiologists. It is this one aspect (the audiology test) of the process initiated by Mr Davis’ application that these 2003 Regulations applied to. The new 2010

Regulations repealed that part of the Schedule to the 2003 Regulations that dealt with audiologists. For audiologists one now looks to the 2010 Regulations. The

[29] It is for this reason that the repeal provisions of the Interpretation Act 1999 are irrelevant, and the question of law posed by the District Court is incorrect. Audiologists’ costs are not in dispute here. Further, except for that minor change to the Schedule, the 2003 Regulations remain in force. They are not repealed and nor has there been an amendment to or repeal of s 81 of the Act. Rather, a new specific regime for hearing issues has been created, thereby making the general s 81 methodology no longer the route by which entitlement applications for hearing loss are to be assessed. There is no relevant repeal.

[30] The issue of retrospective applicability of ACC amendments has been considered on several occasions. In Dean v ACC it was argued unsuccessfully by

it was argued unsuccessfully by a claimant that a more beneficial entitlement scheme should be backdated in the sense that prior decisions should be revisited. It was common ground that the new scheme applied to any fresh assessments of an existing claimant.⁸In Withers v ACC it was held that the latest statutory manifestation of the power to cancel compensation was the provision applicable to a claimant whose cover and entitlement was first assessed under previous Acts.⁹

[31] What emerges from these cases is that it is the proper construction of the new legislation that determines the outcome, and that transitional provisions can be significant. Here there are no transitional provisions, so it is a matter of construing the enactment having regard to the presumption against retrospectivity.

[32] The purpose of the 2010 Regulations is to prescribe the costs the Corporation is liable to pay for entitlements for covered hearing loss. The Regulations therefore presume cover, and fix fees for the entitlement process. The Regulations are expressed to take effect on 1 January 2011, and the ordinary reading is that steps taken after that date will be paid at the prescribed rate. For most steps the Regulations say what will be paid for the service. It is only as regards hearing aids that one gets the partial contribution formulation depending upon the level of impairment.

[33] As earlier noted, some provisions will have continued effect well into the future – service, repairs and replacement are three examples. It is not to be expected that for people who already have cover, a regime other than this one will continue to apply many years hence.

[34] In policy terms, the situation is very much one of swings and roundabouts. The old system was all or nothing as regards a contribution to hearing aids. It follows that those in the “all” group who have an impairment less than the

60 per cent will be worse off, as they will now only get a contribution rather than all

_{the cost. However, everyone in the nothing group will be at least in
the first band}

[35] In general terms, therefore, I am satisfied that the 2010 Regulations applied to all decisions taken after they came into force. That is their ordinary reading. The only thing vested in a claimant who had been confirmed as having cover but whose entitlement had not yet been determined was to have that entitlement assessed against the applicable criteria. Under s 81 there were still a number of assessments to be made, and a considerable amount of discretion. Cover itself gave no established entitlement to anything.

[36] The one gloss that Mr Davis’ case brings is that his post-2010 Regulations decision on entitlement is a revisiting of a prior decision. This came about because a reviewer quashed the initial decision. When that was done, the reviewer could either substitute a decision by the reviewer, or “require the Corporation to make the

[37] I consider it does not breach the retrospectivity principle if that new decision falls to be decided under the new scheme. It is a fresh decision being taken after the commencement date of the 2010 Regulations. It may have been, of course, that the new evidence confirmed the old, in which case determination under the new scheme would have produced a more favourable outcome for Mr Davis. As it happened the opposite occurred.

[39] The answer is that the 2010 Regulations was the applicable enactment and the appeal is dismissed.

High Court of New Zealand Decisions

Davis v Accident Compensation Corporation [2016] NZHC 1789 (3 August 2016)

High Court of New Zealand

Davis v Accident Compensation Corporation [2016] NZHC 1789 (3 August 2016)