BEFORE THE ACCIDENT COMPENSATION APPEAL AUTHORITY [2013] NZACA 6 ACA 002/11 IN THE MATTER of the Accident Compensation Act 1982 AND IN THE MATTER BETWEEN of an appeal pursuant to s.107 of the Act JAMES ALGIE AND OTHERS Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent HEARING On the papers by consent AUTHORITY Robyn Bedford COUNSEL J Miller for appellant; P McBride for respondent/applicant DECISION GRANTING APPLICATION FOR LEAVE TO APPEAL TO THE HIGH COURT AND SUBMISSION IN SUPPORT OF AUTHORITY S RIGHT TO BE HEARD [1] The Corporation seeks leave pursuant to s111 of the Accident Compensation Act 1982, to appeal to the High Court against the part of 30 January 2013 decision of the Authority ([2013] NZACA 1) that a claim for payment for gratuitous attendant care is permitted under ss 121(1) of the Accident Compensation Act 1972 and 80(1) of the Accident Compensation Act 1982. [2] Following the provisions of s 111 the grounds are first, that a serious and arguable question of law is raised as to the proper interpretation of ss 121(1) and 80(1) and their application to the appellants, and secondly, that the question is such that by reason of the general and public importance and wide potential application, the question ought to be submitted to the High Court for decision. [3] The appellants have indicated through Mr Miller that they will abide by the decision of the Authority.
2 The Authority s right to be heard [4] As the Authority is not a District Court, under Rule 20.17 of the High Court Rules, it is entitled as the decision maker, to be represented and heard at the hearing of an appeal in the High Court on all matters arising, unless the court orders otherwise. [5] As the appellants have not made any submissions in respect of the application, and the matter is of public and general importance, this decision is intended to be the means for the Authority to be heard at the appeal hearing in the High Court and is therefore more detailed than would otherwise be the case. The Authority does not at this stage seek leave to appear or be represented at the hearing, but asks to be noted as an interested party. The substantive decision Background facts [6] At [2], I explained the information gathering process and at [4] to [18] I set out what I saw as the relevant facts taken from the schedule and three bundles of supporting documentation Mr Miller sourced from each appellant s ACC file and the schedule filed in reply by Mr McBride. [7] Mr McBride s summary of the facts at paragraph 3 of his submissions in support of the application is correct as far as it goes, although he has generally omitted facts that I thought important to my consideration of the legal issues and he seems to suggest that Mr Greene s recommendation and report was treated as the decision, when the appeal was brought against the decision made by the Corporation on 12 July 2010, confirming the report and recommendation. The Corporation s decision was issued with the right of appeal to the Authority. [8] At point 4 of the Points of Law, Mr McBride said that the issue before the Authority was one of law, and that the facts were not the subject of hearing or argument either at review or on appeal. This is slightly understating the situation, at least as far as the appeal is concerned, as both counsel made submissions on fact where necessary to support their respective legal arguments and both had the opportunity to comment on the very extensive evidence filed by Mr Miller, which Mr McBride did, albeit in brief. [9] Mr McBride did not take issue with Mr Miller s schedule, which was consistent in most respects with his own schedule, but he submitted that the appellants had selected supporting documentation said to represent the circumstances of each appellant and that ACC does not, without more, accept that this was a full and complete account of each individual s circumstances. Mr McBride also submitted that there was no financial outlay by any appellants and that in many, if not most, cases, there was no actual provision of the services and attendances in respect of which money is now claimed. [10] The appeal was founded on there being no financial outlay, but the services had to be actual to have any chance of coming within ss 121(1) and 80(1). There was no evidence whatsoever to suggest that the Corporation had ever formed the view that the services and attendances were not performed, and the wording of the standard form decision letters and the payment of attendant care by the same
3 caregivers for 18 of the appellants under the later legislation bore this out, as per Mr McBride s own schedule. Mr McBride s other challenge, being that there was no power for the Corporation to now make any payments under the repealed Acts, to an extent also influenced the choice of facts that I thought relevant. [11] I recorded Mr McBride s objection at [3], and qualified the background facts by saying that I had chosen to assume that the information I relied on was accurate in so far as it goes and that I took the information only from the documentation prepared by the Corporation. I made this point as Mr Miller had included his own correspondence, in most cases comprising application letters with supporting submissions. [12] As the wording of the subsections stipulates that the expense for which the injured person seeks payment must be reasonable as well as actual, I decided that the identification of the basic facts common to the appellants was necessary to my determination, and also for any directions I made, or for the High Court, if the decision was appealed as seemed likely from the outset. The decision [13] The question of law on appeal, though phrased slightly differently following counsel, was whether injured persons are entitled to compensation under ss 121(1) and 80(1) of the 1972 an 1982 Acts, or the rehabilitation provisions of the Acts, in the form of payment for attendant care on less than a 24 hour basis, that was performed by their family members, but was not paid for at the time. [14] In concluding that payment to an injured person for gratuitous attendant care was permitted under ss 121(1) and s 80(1), I did not, strictly speaking, dismiss the claim in respect of the rehabilitation provisions as Mr McBride submitted in paragraph 3 of his submissions. I did not make a separate finding on the rehabilitation provision claim, as I did not consider it was a true alternative, but instead, operated in conjunction with the compensation provisions. [15] Following ACC v Broadbelt 1, and as left open by Mackenzie J in Matthews v ACC 2, and the Court of Appeal in Estate of Simpson & Matthews v ACC, 3 I rejected both the separation of the rehabilitation and compensation provisions and I treated the purpose of the Acts and the Corporation s obligation to provide rehabilitation to meet that purpose, and the rehabilitation provisions which put this into effect, as all being integral to the proper interpretation of ss 121(1) and 80(1) and their application to the compensation sought by the appellants. [16] I did not consider that Estate of Simpson and Matthews should be followed in preference to the other cases to which I had been referred, as it concerns quite different applications altogether to those under ss 121(1) and 80(1), being applications by caregivers under s 121(2)(b) for attendant care that had been provided gratuitously to the injured person. The Court of Appeal clearly distinguished this claim from the claim brought by the injured person himself in Mollgaard v ACC 4 1 [1990] 3 NZLR 169 2 HC Wellington, 31/3/06 CIV 2004-485-214 at [36]; see my decision [38] [40]. 3 [2007] NZAR 496 4 [1999] 3 NZLR 375 (HC)
4 and, as Mr Miller had submitted, excluded the consideration of ss 121(1) and 80(1) from their decision. [17] Another factor that guided me, was that in Estate of Simpson & Matthews it is clear that the compensation at issue was for a loss, and the part of the decision Mr McBride relied upon on appeal and for the application, makes it clear that the analysis of subsections (1) and (2) relates to restrictions on the sort of losses for which an injured person, or the person giving aid to the injured person, can claim. [18] Estate of Simpson & Matthews turned on the interpretation of the words used in subsections (2)(b), and the use of the word incurred in respect of the losses claimed by the caregiver in giving aid to the injured person. Here, the appellants are not seeking compensation for a loss that must be proved in light of the exclusions in paragraphs (a) to (g) of the 1972 Act and (a) to (h) of the 1982 Act, but, following Broadbelt and Mollgaard, for a rehabilitation expense, which must, under subs (1), be actual and reasonable. [19] The fact that it was the injured persons seeking compensation also brought into play the purpose of the Acts and the Corporation s obligation to provide rehabilitation to injured persons and the operation and interpretation of rehabilitation provisions to deliver that rehabilitation, as well as the statutory mechanism for payment when the rehabilitation is not provided at the relevant time. This suggested that quite different considerations had to be taken into account when determining applications by injured persons, as opposed to their family members to whom no obligations whatsoever are owed under the Acts. [20] For these reasons, I decided that Broadbelt and Mollgaard were the most applicable to interpreting ss 121(1) and 80(1), because Broadbelt concerned an application by an injured person for reimbursement of a rehabilitation expense under s 80(1). Although Mollgaard dealt with slightly different statutory wording, it concerned an application by an injured person for payment for gratuitous attendant care under a form of rehabilitation provision, which had replaced the relevant 1982 Act rehabilitation provisions and used similar, though more stringent wording in relation to expenses claimable by the injured person. [21] Mr McBride relied upon Broadbelt to support his contention that rehabilitation expenses were excluded from payment under ss 121(1) and 80(1), as these are compensation provisions. After re-phrasing the questions on appeal at [77] to take into account the compensation sought as an expense and the issues I saw arising from Mr McBride s submissions on Broadbelt, at [78] to [88] I discussed the application of the case to the payment sought by appellants. [22] I interpreted Broadbelt as meaning that the compensation provisions and rehabilitation provisions were separate but not mutually exclusive, as Mr McBride submitted and that payment for a rehabilitation expense could be made under s 80(1), though it was strictly speaking a compensation provision, as this was the nature of the payment at issue in Broadbelt and this was the exact finding on the point. [23] As expressed by Richardson J, the main consideration was the purpose of the 1982 Act under s 26; rehabilitation is a primary function of the Corporation as shown by s 36, and the Corporation had a statutory obligation to discharge that function in respect of incapacitated persons who have cover. The Court held that Mr Broadbelt
5 was such a person; his claim included payment of compensation for a rehabilitation expense, and the Corporation was duty bound to pay him. I thought the same should therefore apply to the appellants, if the making of an actual payment for the expense at the time was not an essential element. [24] Mr McBride s submissions were founded on Richardson J s comments concerning the other payment sought by Mr Broadbelt, which was an interest payment. That payment was also accepted by ACC and recorded by Richardson J, as coming within s 80(1) based on actual interest costs on money borrowed to pay for the rehabilitation, but the alternative option pursued by Mr Broadbelt and relied on by Mr McBride, was excluded under paragraph (d) as a loss of opportunity to make a profit and did not qualify as an interest expense actually incurred because it was a loss of use of money claim. [25] In [89] I said that the court in Broadbelt was not required to determine whether an injured person could claim under s 80(1) for compensation for expenses not actually paid at the time they were incurred, but that was the situation dealt with in Mollgaard, where the High Court considered the meaning of the words expenses actually incurred by the injured person, used in the Accident Rehabilitation and Compensation Insurance (Complex Personal Injury) Interim Regulations 1994 (the Regulations). [26] I chose to follow Mollgaard over Estate of Simpson and Matthews in this context also, because, possibly following the arguments made by counsel, the Court of Appeal only considered the second of the three alternative decisions in Mollgaard, being the one that addressed Mrs Kelleher s legal obligations as Mr Mollgaard s statutory guardian, and distinguished the case on that basis, as no legal obligation was identified attaching to Mrs Simpson or Mrs Matthews. [27] At [90] to [99], I discussed all three of the Court s alternative decisions, and I expanded the possible legal duties as specifically left open in Mollgaard, as noted at [93], to include an analogous legal duty imposed on the appellants caregivers under the Crimes Act 1961 vis a vis the appellants as seriously injured adults or children in their care. [28] In the first decision, which Mr Miller relied upon to underpin the common law damages analogy he also argued before me and which I considered applied to the appellants, the High Court rejected the Corporation s submission that while a written contract was not necessary, an agreement to pay was, and accepted Mr Miller s submission, which I recorded at [47] regarding the meaning of expenses actually incurred as used in the Regulations: that the phrase does not require money to be actually paid when the attendant care is provided to the injured person. It is sufficient if the injured person renders himself liable to pay at a future time The obligation to make payments (the expenses) accrued (were actually incurred) when the attendant care was provided. [29] The High Court held that policy considerations mitigated against requiring a formal contract (as between family members) and actual payment to be made, as did the preferred principles of statutory construction of compensation legislation, which made the stilted and restrictive approach urged by the Corporation s counsel inappropriate.
6 [30] In this context, I said at [91] that the case for the appellants was even more compelling, as the wording of ss 121(1) and 80(1) was less stringent as the expenses do not have to be actually incurred, but actual and reasonable, and if in Mollgaard the performance of the services was sufficient to render Mr Mollgaard liable to pay for them, then it must also be sufficient to render the services actual, as no payment could be made otherwise. [31] Mr McBride criticised the first decision because under s 27, the 1982 Act was a code and claiming for common law damages is statute barred; therefore, the argument accepted by the High Court was not applicable. However, I took the view that as the High Court had accepted Mr Miller s argument, the Authority was not in the position to reject it as bad law. And, as the first of the three alternative decisions, I thought that the High Court in fact accorded this decision some prominence over the other two. [32] The second decision, which, with modification in terms of the legal duty at issue, I thought also applied to the appellants, was expressed in the alternative in case the first decision was in error, and was based on Mrs Kelleher s legal obligations as one of the possible obligations under this head, as her adult son s Welfare Guardian to care for him on his release from an institution and the care and the obligations involved being entirely congruent with the objects of the Regulations. This is the decision distinguished on the particular facts by the Court of Appeal in Estate of Simpson V Matthews and relied upon by Mr McBride for this application. [33] At [96] to [99] I compared Mrs Kelleher s legal obligations as Welfare Guardian with the very similar obligations imposed by ss 151 and 152 of the Crimes Act 1961 on everyone who has the care of a vulnerable adult or is a parent or guardian of a child under the age of 18 years, which I thought fell on the appellants caregivers by virtue of the seriousness of the appellants injuries, as soon as the appellants were discharged from hospital into their care in the family home. [34] At [100] I applied both Broadbelt and Mollgaard in respect of the congruence of the care provided by the appellants caregivers with the purpose of the Acts and the objectives of the rehabilitation provisions, and the fact that such care was endorsed in the present case by the Corporation through the Corporation paying the caregivers to continue the attendant care under the later legislation. [35] I drew upon the ACC documentation and the schedules to support my conclusions as to the seriousness of the appellants injuries and ACC s endorsement of the care provided to the appellants. I also considered the appropriate definition of gratuitous in the context of any other relevant duty that may fall on the appellants caregivers. [36] The courts and counsel in the cases I was referred to, and the same counsel on appeal before me, have uniformly applied and used the ordinary, dictionary definition of gratuitous as meaning without payment, but the legal definition is more akin to without obligation, as in, for example, gratis dictum : a statement made by a party but not obligatorily. 5 5 Garner s Legal Dictionary (Third Edition)
7 [37] To describe the unpaid care given by the appellants caregivers as gratuitous instead of as without payment at the time the services were performed, wrongly suggests that some choice was involved and the caregivers had chosen to donate their time, in the full knowledge that they could have charged for it, or that they could have obtained payment for the care if they had in turn, employed other people to carry it out. [38] Secondly, it completely overlooks the caregivers moral duties to care for their seriously injured husbands and children once they were discharged into their care, which seemed to underpin the decisions in Watson v Port of London Authority 6 and Cunningham v Harrison 7, which Mr Miller had relied upon both in Mollgaard and on appeal, as discussed at [42]. [39] On its own, the moral duty may not have qualified in the context of statutory compensation versus common law damages, so I turned to the Crimes Act 1961 and ss 151 and 152 and the crime of failing to provide necessaries to vulnerable adults and children in one s care and to take reasonable steps to protect them from injury. [40] Under s 150(2) of the Act, a person is criminally liable for omitting to discharge or perform a legal duty under s 151 and 152, only if, in the circumstances, the omission is a major departure from the standard of care to be expected of a reasonable person to whom that duty applies. This is criminal equivalent of the moral duty that attached to the appellants caregivers and as under s 25 of the Act, ignorance of the law is no excuse for any offence committed, the caregivers did not need to specifically turn their minds to the legal consequences of not providing the care at issue. [41] The third decision in Mollgaard, also expressed in the alternative in case the second decision was also incorrect, was based on the doctrine of necessitous intervention, which I found did not apply, because the necessary element of expectation of payment at the time the services were provided was not present because unlike Mrs Kelleher, the appellants caregivers did not know that they could be paid. My Findings [42] At [72]: A claim for gratuitous care can be made under the Acts, as witness the historical claims accepted under ss 121(3) and 80(3) for attendant care that was not paid for at the time it was performed. [43] At [100]: When the appellant s claims are properly considered in light of Broadbelt and Mollgaard, although there is no specific provision in the 1972 and 1982 Acts for payment for attendant care that was originally provided on a gratuitous basis, such a payment is permitted under ss 121(1) and 80(1) on application by the injured person, as such care is congruent with the purposes of the Act and the objectives of the rehabilitation provisions. [44] At [101] to [103]: The ACC Policy Committee document dated 14/9/04 in respect of payments to be made following the Campbell and Handley judgement confirmed that back payments for attendant care could be made under ss 121 and 80 6 [1969] 1 Lloyds Rep 95 7 [1973] QB 942
8 while the 2001 Act is in force, by virtue of the transitional provisions in the 1992, 1998 and 2001 Acts. [45] At [104]: It would be unjust and anomalous to treat one set of claimants as qualifying for backdated payments in lieu of rehabilitation whatever the Act that was in force when the payments were made, and deny other claimants the same treatment, particularly where some favoured claimants had not applied for cover until after the repeal of the 1972 and 1982 Acts. [46] At [105]: The appeal is successful to the extent that a claim for payment for gratuitous attendant care is permitted under s 121(1) of the 1972 Act and s 80(1) of the 1982 Act, and nothing in the later legislation prevents the Corporation now making such payment to the appellants who qualify by virtue of the attendant care they received from their caregivers. The question of law proposed by the Corporation [47] The application describes the question of law as being the interpretation of ss 80(1) and 121(1) and their application to the appellants. [48] The supporting submissions describe the issue of law in respect of ss 121(1) and 80 as similar to that considered by the Court of Appeal in Estate of Simpson & Matthews, and allege that the Court concluded that there was no material difference in the wording as between s 121(1) and subs. (2)(b), or s 80(1) and subs. (2)(b); and, that actual expense was required, which was clearly a point of law. [49] The alleged error of law is that the Authority preferred to apply Mollgaard, which the Court of Appeal had distinguished in Estate of Simpson & Matthews in respect of claims under ss 121(2)(b) and 80(2)(b) and had also concluded that there was no material difference (in legal terms) between those subsections and in the wording in s 121(1) and 80(1). [50] No errors of law are alleged in respect of the application of Broadbelt to the interpretation of ss 212(1) and 80(1) and the ability to pay compensation for a rehabilitation expense under those subsections, and nor is any error alleged with respect to the classification of the payment at issue as an expense rather than as a loss. [51] No error of law is alleged with respect to the finding that the payment of backdated attendant care under the 1972 and 1982 Acts could be made under the 2001 Act. [52] The question in the Simpson appeal (at A) was: Whether s 121(2)(b) requires proof of actual monetary loss or expenses incurred by a person in giving help to a person who has suffered personal injury by accident before the Corporation can exercise its discretion to pay compensation and whether the Authority erred by determining that the proper interpretation of the subsection encompassed compensation for historical estimates of the values of assistance gratuitously provided by family members to a claimant. The answer was, yes.
[53] The related question in the Matthews appeal (at C) was: To the extent that Mrs Matthews has provided services: 9 (a) (b) (c) in giving help to the injured person by reason of the injury; which have not already been compensated for by the previous reimbursement of lost wages; and which were reasonable, Is this an identifiable and reasonable expense or loss incurred by Mrs Matthews in terms of s 80(2)(b)? The answer was, no. [54] At [27] and [28] the Court said: Mr Miller frankly accepted in his oral submissions that his contention was that the Act should be interpreted so that where a family member provided care or assistance (which might otherwise have to be contracted for) compensation should be available. We make no comment on the underlying philosophy of this submission, but the clear wording of the sections of the respective Accident Compensation Acts relied upon by the appellants do not permit such an approach. Nor do we determine whether, under s 121(1) of the 1972 Act or s 80(1) of the 1982 Act, the injured person could maintain a claim for compensation in respect of such services. It is not the manner in which these cases have been advanced at any stage and given the limits of the case stated inquiry we are not able to express any view on the point. (emphasis mine) [55] I do not, therefore, accept that the question of law identified by Mr McBride is similar to the question of law in Estate of Simpson & Matthews, or that the Court of Appeal in that case made any finding in relation to ss 121(1) and (80(1) that would render the failure of the Authority to follow and apply that case in preference to Mollgaard, an error of law that requires the determination of the High Court to correct. [56] I do, however, agree that the application involves a question of law and that the matters arising from that question are of public or general importance because of the Corporation s potential liability to the appellants and other claimants, and the application is therefore successful. [57] Leave is granted to the Corporation to appeal against the decision of the Authority delivered on 30 January 2013 under [2013] NZACA 1 on a question of law. Decision [58] The question of law for which leave is granted is: Whether, in light of: (a) (b) the questions before the Court of Appeal in Estate of Simpson & Matthews; the findings made by the court in respect of the meaning of the words used in ss 121(2)(b) and 80(2)(b);
10 (c) (d) the court s refusal to make a finding in relation to ss 121(1) and 80(1) of the 1972 and 1982 Acts respectively; and the Authority s conclusions and findings made following Broadbelt. Was the Authority correct to apply and follow Mollgaard in preference to Estate of Simpson and Matthews to determine that a claim for payment for gratuitous attendant care is permitted under s 121(1) of the 1972 Act and s 80(1) of the 1982 Act? DATED at WELLINGTON this 1 st day of May 2013