ACCIDENT COMPENSATION CORPORATION v TERRY [2018] NZCA 236

ACCIDENT COMPENSATION CORPORATION v TERRY [2018] NZCA 236 [4 July 2018]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA148/2018[2018] NZCA 236BETWEEN ACCIDENT COMPENSATIONCORPORATIONApplicantAND HAMAL TERRYRespondentHearing: 11 June 2018Court: Winkelmann, Clifford and Williams JJCounsel: D A Laurenson QC and F L Becroft for ApplicantA J McGurk for RespondentJudgment: 4 July 2018 at 10.30 amJUDGMENT OF THE COURTA The application for leave to appeal is granted.B The question of law for which leave is granted is whether Cull J erred infinding that ACC's decision was flawed because on retrospectively acceptingMr Terry for weekly compensation, ACC failed to update Mr Terry'srehabilitation plan and to follow the vocational rehabilitation procedures setout in ss 75, 80, 87 and 89 of the Act.C Mr Terry is to advise the Registry within 10 working days of the date of thisjudgment whether he wishes to be represented with full argument on thisappeal.____________________________________________________________________REASONS OF THE COURT(Given by Winkelmann J)[1] The Accident Compensation Corporation (ACC) applies for special leave toappeal a judgment of Cull J in which she held that the process followed by ACC inundertaking a retrospective assessment of Mr Terry's entitlement to weeklycompensation was flawed.1Background facts[2] Mr Terry suffered an injury to his spine in 2006 while still at school. ACCaccepted him for cover under the Accident Compensation Act 2001, an acceptancewhich triggered for ACC and Mr Terry a number of statutory obligations andentitlements respectively. Relevantly, ACC had obligations to determine whetherMr Terry was likely to need social or vocational rehabilitation (s 75), if that was likely,assess Mr Terry's need for social and vocational rehabilitation (ss 84, 87 and 89),create a rehabilitation plan (s 77), provide the planned rehabilitation (ss 70 and 76)and update the plan from time to time to reflect the outcome of assessments done andprogress made under the plan (s 78).[3] ACC prepared a social rehabilitation plan for Mr Terry but did not update it.They did not prepare a vocational rehabilitation plan.[4] In 2009, Mr Terry made a claim for weekly compensation. ACC respondedrequesting further information be provided. In 2011, after reviewing retrospectiveassessments by medical doctors of Mr Terry's incapacity, ACC accepted that he wasentitled to weekly compensation from 15 December 2006, when he left school, to31 October 2008. ACC also determined on the basis of the medical assessments,which again were necessarily retrospective on this point, that after 31 October 20081 Terry v Accident Compensation Corporation [2017] NZHC 2352 [High Court judgment].Special leave under s 163 of the Accident Compensation Act 2001 is required because Cull J hasdeclined ACC leave to appeal: Accident Compensation Corporation v Terry [2018] NZHC 268[Leave judgment].Mr Terry was no longer incapacitated; a determination as to incapacity under s 105(2)of the Act. Mr Terry sought review of that decision.[5] ACC's initial decision was quashed on review. But in November 2012,following consideration of further reports, ACC reached the same view — that from1 November 2008, Mr Terry was no longer incapacitated. Mr Terry challenged thatnew determination.2High Court appeal[6] The issues addressed by Cull J on appeal were as follows:3(1) Whether ACC's determination of s 105(2) of the Act on12 November 2012, that Mr Terry was no longer incapacitated, wasflawed?(2) Did the District Court fail to take into account relevant considerationsin relation to the s 105 assessment and therefore did it err in findingthat it was open to ACC to find that Mr Terry had the capacity from1 November 2008?[7] Cull J found that ACC's determination under s 105(2) of the Act was flawedbecause ACC relied on inadequate medical evidence to support its conclusions andbecause of defects in the procedure followed. In the course of her reasoning the Judgesaid that when ACC decided Mr Terry was entitled to weekly compensation from15 December 2006, it had accepted his claim for cover. At that point of acceptanceACC had an obligation to follow the statutory procedures under ss 75, 78, 80 and 87,and 89 of the Act.42 That decision was upheld by an ACC reviewer, and on subsequent appeal to the District Court:Terry v Accident Compensation Corporation [2015] NZACC 109. The District Court declinedMr Terry leave to appeal: Terry v Accident Compensation Corporation [2016] NZACC 130.On 9 February 2017 Mallon J granted Mr Terry special leave to appeal: Terry v AccidentCompensation Corporation [2017] NZHC 118.3 High Court judgment, above n 1, at [16(1)].4 At [100]. Cull J also held that the District Court Judge had failed to take into account relevantconsiderations in relation to the s 105 assessment in dismissing the earlier appeal, and had erredin finding it was open to ACC to find Mr Terry had capacity from 1 November 2008. That findingis not the subject of ACC's application for special leave.Arguments on leave application[8] ACC does not seek, on appeal, to challenge the finding as to the adequacy ofthe medical evidence. Rather it wishes to challenge the finding that it failed to followrequired statutory procedures. ACC argues that Cull J found, and was wrong to find,that ACC was under an obligation to carry out a vocational rehabilitation assessmentfollowing its conclusion Mr Terry was entitled to weekly compensation. The Judgewas wrong in this because, under the statutory scheme, it was the acceptance ofMr Terry for cover immediately following his accident that triggered the obligation tocreate and update rehabilitation plans, and not the retrospective acceptance for anentitlement to weekly compensation — an entitlement that was already spent by thetime of the assessments. And in any case, it is illogical to require ACC to undertakethese assessments when it had concluded that Mr Terry had ceased to be incapacitatedsome years earlier.[9] Mr McGurk for the respondent contends that Cull J did not hold that beforedeciding whether Mr Terry was incapacitated under s 105(2), ACC had a statutoryobligation to update Mr Terry's individual rehabilitation plan under s 89 following theprocedures under the provisions referred to.[10] Mr McGurk can point to Cull J's decision refusing leave to appeal to supporthis argument. Cull J declined ACC's application for leave to appeal the flawedprocess. In doing so she clarified that the vocational rehabilitation statutoryprocedures are not prerequisites under s 105(2) when determining incapacity, and"the judgment was not about determining whether the rehabilitation provisions neededto be followed before determining capacity under s 105(2)".5[11] Cull J also said that the judgment is fact specific — while ACC failed to updateMr Terry's individual rehabilitation plan under s 78 and failed to assess hisrehabilitation needs under s 89, those failures of themselves did not mean the processwas flawed. Rather, the process was flawed because ACC's determination thatMr Terry was no longer incapacitated was based on unsatisfactory medical evidence.65 Leave judgment, above n 1, at [18].6 At [23].Principles applicable to grant of a second appeal[12] The principles that apply to the grant of leave to bring a second appeal werediscussed in Cullen v Accident Compensation Corporation:7The Court will exercise [its s 163] power if satisfied that there is a seriousquestion of law capable of bona fide and serious argument in a case involvingsome interest, public or private, of sufficient importance to outweigh the costand delay of a further appeal. Other relevant considerations include thedesirability of finality of litigation and the overall interests of justice.The primary focus is on whether the question of law is worthy ofconsideration.(footnotes omitted)Analysis[13] We agree with Mr McGurk that it would not be appropriate to grant leave inthis case if this were simply a matter of an imprecisely expressed judgment, but wewere nevertheless satisfied that the Judge had not made the finding ACC contends shemade. If this was simply a case of an imprecisely worded judgment we could refuseleave to appeal, but clarify in a judgment declining leave what the judge's finding was.[14] We are however satisfied that leave to appeal should be granted. This isbecause, on our reading of the judgment, Cull J did find that ACC's failure to updateMr Terry's rehabilitation plan before deciding on his incapacity was an error ofprocedure. This reading is reinforced not least by the fact that when summarising herreasons as to why the appeal was allowed, Cull J expressed them in terms of a failureto update Mr Terry's rehabilitation plan and to follow the statutory procedures forassessing a claim as to his vocational rehabilitation needs.8 The leave judgment alsoincludes statements to the effect that once Mr Terry was granted weekly compensation(as opposed to cover), ACC needed to follow the statutory vocational rehabilitationprocesses, and that by conflating the two decisions, ACC failed to meet its statutoryobligations in relation to vocational rehabilitation.97 Cullen v Accident Compensation Corporation [2014] NZCA 94 at [5].8 High Court judgment, above n 1, at [100(b)].9 Leave judgment, above n 1, at [17], [19] and [20].[15] Because of the lack of clarity on this particular point in the judgment, we aresatisfied that it is capable of bona fide and serious argument that the Judge erred infinding that ACC's decision was flawed because on accepting Mr Terry for weeklycompensation, ACC failed to update Mr Terry's rehabilitation plan and to follow thevocational rehabilitation procedures set out in ss 75, 80, 87 and 89 of the Act.[16] This is an issue of some public importance. ACC advises us that retrospectiveclaims are made reasonably frequently and that clarity on this issue is important. Weaccept that is so. It is not clear cut just what procedures are to be followed forretrospective claims. There is no statutory framework as to how ACC is to deal withretrospective claims.[17] We also weigh that the grant of leave will not create uncertainty or delay in thereceipt of compensation for Mr Terry. ACC does not seek to challenge the finding ofthe Judge that its decision in relation to incapacity could not stand in light of theinadequacy of the medical evidence upon which it relied. ACC also advises us thatMr Terry has received retrospective compensation and that the proposed appeal wouldhave no bearing upon his claim. We acknowledge that the resolution of Mr Terry'sclaim could be said to render the appeal moot. However, given the importance of thequestion of law involved in the proposed appeal, we are satisfied that leave to appealshould be granted.10[18] If Mr Terry does not wish to instruct counsel to act or to advance full argumentin opposition to the appeal (because the outcome of the appeal will have nosignificance for his entitlements), it may be necessary to appoint counsel to assist theCourt by putting the contrary view to that contended for by ACC. We therefore askthat Mr Terry advise within 10 working days of the date of this judgment whetherMr Terry will wish to be represented with full argument on this appeal.Result[19] The application for leave to appeal is granted.10 See Gordon-Smith v R [2008] NZSC 56, [2009] 1 NZLR 721 at [14]–[15]; Smith vAttorney-General [2018] NZCA 24 at [23]–[24].[20] The question of law for which leave is granted is whether Cull J erred in findingthat ACC's decision was flawed because on retrospectively accepting Mr Terry forweekly compensation, ACC failed to update Mr Terry's rehabilitation plan and tofollow the vocational rehabilitation procedures set out in ss 75, 80, 87 and 89 of theAct.[21] Mr Terry is to advise the Registry within 10 working days of the date of thisjudgment whether he wishes to be represented with full argument on this appeal.Solicitors:Medico Law, Auckland for ApplicantJohn Miller Law, Wellington for Respondent