ACC V SIMPSON HC WN CIV-2005-485-717

ACC V SIMPSON HC WN CIV-2005-485-717 3 November 2005IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV-2005-485-717UNDER the Accident Compensation Act 1982 IN THE MATTER OF an appeal under s 111 of the Act BETWEEN ACCIDENT COMPENSATION CORPORATION Appellant AND THE ESTATE OF SYDNEY CLAUDE SIMPSON Respondent Hearing: 18 October 2005 Appearances: P A McBride for Appellant J Miller for Respondent Judgment: 3 November 2005JUDGMENT OF GODDARD J[1] The Accident Compensation Corporation appeals against a decision of the Accident Compensation Appeal Authority dated 30 January 2004. Leave to appeal from that decision was granted on 24 March 2005. Two grounds of appeal are advanced: first, that the Authority lacked jurisdiction to determine the appeal before it; second, that the Authority erred in determining that the proper interpretation of s 121(2)(b) of the Accident Compensation Act 1972 encompassed compensation for historical estimates of the value of assistance gratuitously provided by a family member to a claimant.First ground of appeal[2] The first ground of appeal can be shortly disposed of. The Corporation's argument is that the respondent's notice of appeal to the Authority did not state with particularity the grounds of appeal and the relief sought, contrary to the requirements of s 108(1) of the Accident Compensation Act 1982. That section provides:(2) The notice of appeal shall state with particularity the grounds of appeal and the relief sought.[3] The respondent's notice of appeal, as drafted, simply challenged the decision of the review officer on appeal in the following terms:That no claim for attendant care/home help was made.[4] At the hearing before the Authority, counsel for the Corporation made a similar challenge to the scope of the appeal before the Authority and questioned the Authority's jurisdiction to entertain the appeal beyond its pleaded scope. The Authority found, however:[13] [Counsel for the respondent] made preliminary submissions to the effect that the Authority has no jurisdiction to advance the appellant's appeal on the grounds stated. While the position advanced by [counsel] in this regard is technically correct, the Authority considers that the essence of the point on appeal is of such importance that a more general review of the Review Officer's report and recommendation is warranted.[5] On appeal to this Court, the Corporation submitted that in adopting the above approach the Authority had embarked upon a consideration of issues that were outside those properly before it and had thus exceeded its jurisdiction in determining and allowing the respondent's appeal. [6] In his written submissions to this Court, Mr Miller conceded that the wording of the appeal notice had been brief and that the stated ground should have included the word "out", to make it clear that what was being challenged was the reviewer's decision that "no claim for gratuitous attendant care or home help had been madeout".[7] There is no doubt that the reviewer's decision, from which the appeal to the Authority was brought, was directly concerned with the authorisation of payment for gratuitous attendant care or home help and whether there was statutory authority for such payment. Therefore the appeal could only sensibly have been in the terms contended for by Mr Miller. Thus, despite his rather shorthand statement of the grounds of appeal, the true scope of the appeal was evident by reference to the reviewer's decision appealed from. The Authority's common-sense approach to this was therefore correct. [8] This ground of appeal must fail.Second ground of appeal[9] The second ground of appeal has rather more substance. It concerns the interpretation of s 121(2)(b) of the 1972 Act, subsequently re-enacted as s 80(2)(b) of the 1982 Act. Section 121(2)(b) provided:Compensation for Pecuniary Loss not Related to Earnings121 Compensation for pecuniary loss not related to earnings (2) Where a person suffers personal injury by accident in respect of which he has cover under this Act, or where a person dies as a result of personal injury so suffered, the Commission, having regard to any other compensation payable, may— (b) Pay to any person, or to the administrator of the person, such compensation as the Commission thinks fit for any identifiable actual and reasonable expenses [or losses] incurred by the person in giving help to the injured person while he is suffering from incapacity resulting from the injury or in taking any necessary action following and consequential upon the death of the injured person.[10] The provisions of the immediately prior section, s 120 of the 1982 Act, made provision for lump sum payments. Relevantly subsection (8) of s 120 provided:No compensation other than that specified in this section and in section 119 of this Act shall be payable to any person under this Act in respect of non- economic loss.The issue[11] The issue here on appeal is whether the plain words of s 121(2)(b) of the 1972 Act required identification of pecuniary losses or expenses actually incurred before the Corporation could exercise its discretion under the section to pay compensation; or whether historical estimates of care, said to have been provided, required the discretion to be exercised in favour of compensation irrespective of any proved pecuniary loss or expenses.Background facts[12] There is no contest as to the material factual background. In 1974 Mr Simpson, then aged 54 years, was injured in a motorcycle accident and suffered fractures to his right leg and arm. Ultimately his right leg was amputated below the knee. He claimed for, and was provided with, ACC cover. In 1976 Mr Simpson returned to work for his former employer. In December 1983 he had a fall and injured his left shoulder. He retired from work in 1984 at the age of 64 years. In 1994 he was assessed as able to drive a motor vehicle, able to walk unaided inside and to walk with the assistance of a stick or crutch outside. He was independent in his personal care needs. He died in 1994 at the age of 74 years. From the time of his accident in 1974 until his death in 1994 Mr Simpson received compensation under the Act. However, in March 2001, his Estate submitted an application for "retrospective attendant care" in respect of "the great deal of assistance [Mrs Simpson] had given her husband over the years which was not recognised by ACC". [13] The claim was made under s 121(2)(b) of the 1972 Act and declined by the Corporation on the basis that the statutory prerequisite to the exercise of a discretion in s 121(2)(b) had not been established; namely, the identification of expenses or losses actually incurred. [14] On review, the Corporation's decision to decline the application was upheld. The reviewer found there was no evidence of pecuniary loss or expenses actuallyincurred and therefore no basis for establishing a claim under s 121(2)(b) or otherwise. The Estate then appealed to the Authority under s 107(ff) of the 1982 Act. The appeal was heard by the Authority on 3 September 2003 and the following determination made:1. The gratuitous provision of personal care by a family member can still be compensated under s 121(2)(b) of the 1972 Act. 2. Mrs Simpson suffered an identifiable actual and reasonable loss in terms of s 121(2)(b) of the 1972 Act by providing care for her husband on a daily basis over a period of 20 years. 3. The respondent is directed to assess compensation payable pursuant to s 121(2)(b) of the 1972 Act. In this regard Mr Miller's submissions at paras 3.1-3.5 may assist.[15] The essential reasoning underpinning the above determination was reliance on the decision of a Full Court of the High Court in Mollgaard v ARCIC [1999] 3 NZLR 735. The following five cases, referred to by counsel for the Corporation, were distinguished: Re Harcombe [1979] 2 NZAR 190; Re Worthy [1979] 2 NZAR 206; Re King [1987] 7 NZAR 16; Re Alcock [1989] 7 NZAR 517; and Brundell v ACC [1990] 8 NZAR 121. The ratio of the Authority's decision was:The findings made in all five of these decisions do not, however, detract from Mr Miller's proposition that Mrs Simpson's loss is identifiable; it can be measured in time, as it would be if Mrs Simpson had instead paid someone to care for her husband over the same period. The care provided by Mrs Simpson apparently averaged six hours a day (subject to necessary verification), and in the same way, the loss can be quantified in terms of money by using an hourly rate equivalent to what the respondent would have paid a caregiver at the time.The Corporation's argument[16] On behalf of the Corporation, Mr McBride submitted that the Authority had erred in equating the alleged value of "help" said to have been given by Mrs Simpson with the mandatory requirement of "identifiable actual and reasonable expenses [or losses] incurred" in giving such help. He emphasised the three prerequisites to the exercise of discretion under s 121(2)(b) as: the giving of help to an injured claimant; the identification of losses incurred in the giving of that help; and proof that those losses were pecuniary.[17] In relation to the information that had been placed before the Authority by Mrs Simpson as to the estimates of the help she claimed to have given, Mr McBride submitted that this did not represent even "a scintilla of evidence or other information" as to any "identifiable actual and reasonable expenses [or losses] incurred" in giving that help. [18] The schedule of help and personal care that had been submitted by Mrs Simpson identified the help she had given her husband as including such matters as twice daily hospital visits to him whilst he was in hospital; assisting with his recuperation after discharge by, for example, assisting him in walking and balancing himself, shaving and supervising him in the shower or bath, bandaging his leg and altering his clothes to fit his prosthesis; and help in the form of managing all household maintenance and gardening chores in addition to her normal household duties. [19] Mr McBride submitted that the decision of the Court of Appeal in ACC v Broadbelt [1990] 3 NZLR 169 was highly relevant to Mrs Simpson's case and distinguished the decision in Mollgaard as not applicable on the basis that it was an extreme factual situation. [20] The decision in Broadbelt, although not concerned with an identical fact situation to the present case, did involve interpretation of the same elements of s 121(2)(b) (by then s 80(1) of the 1982 Act). The Court of Appeal found that the Accident Compensation legislation made a clear distinction between rehabilitation and compensatory purposes and dealt with them separately, the distinction being preserved in s 80(1). The following passage from the judgment at 172 is relevant:Compensation does not have a technical meaning: it means any compensation or benefit paid or provided by the Corporation under ss 59 to 82 of the Act (s2(1)). Section 80 is a reimbursing provision and it is both necessary and sufficient (i) that the expenses and losses reimbursed necessarily and directly result from the injury; (ii) that in the case of such expenses they are "actual and reasonable" expenses and the losses are "proved"; and (iii) that they are not of a kind excluded under the specific exclusionary paragraphs.[21] The claim for compensation in Broadbelt was for the cost of a wheelchair and house alterations, both necessarily and directly required as the result ofMr Broadbelt's injury, and for interest (or loss of use of money) on the delay in reimbursing him by the Corporation. In a further relevant passage from the judgment, at 173, the Court held: Section 80(1) is clearly wide enough to extend to interest expenses incurred as a result of delay in payment on the part of the Corporation. If the costs of the wheelchair and alteration are within the statutory formulation then the associated expenses stemming from the delay in payment and reflecting the time value of money may properly be regarded as actual and reasonable expenses necessarily and directly resulting from the injury. They are no different in character from such expenses forming part of the total outlay had the respondent paid for the wheelchair and alterations by time payment over that period. But we are not persuaded that the section covers the alternative situation where a claimant has drawn on his or her own resources to pay the costs. In that case the claimant has not incurred "expenses". Even if the inability to employ his or her own funds profitably could be regarded as "proved losses necessarily and directly resulting from the injury", which we doubt (except perhaps where the claimant has realised a particular investment to meet the costs), the claim in that regard would fall directly within the exclusion under para (d) of the loss of an opportunity to make a profit.[22] Turning to the decision of the High Court in Mollgaard, Mr McBride submitted that liability in that case was founded on David Mollgaard's mother's statutory responsibility as his welfare guardian (at [40]) and on the doctrine of necessitous intervention (at [42]). His mother had been appointed his welfare guardian after he suffered profound brain damage as a result of a failed suicide attempt. As Mr McBride pointed out, however, the High Court expressly limited the decision in Mollgaard to its own facts, as is evident in the following passage at para 46 of the judgment:If the question was to be asked, could Mrs Kelleher have sued David for the cost of her services for the relevant period of time, it seems to us that the answer must be in the affirmative. We emphasise that this does not mean every mother is entitled to a sum for caring for a sick child. The circumstances of this case are very unusual, because the statute put Mrs Kelleher into a legal relationship with David.[23] As Mr McBride submitted, the focus in Mollgaard was on expenses incurred, not by the mother as caregiver, but by the injured person. In the present case the situation is the reverse, as the purported losses claimed by Mrs Simpson were those said to be incurred by her as the caregiver. There is however no suggestion that Mrs Simpson was her husband's welfare guardian or that the doctrine of necessitous intervention applied. Mr McBride pointed to a number of further distinguishingfactors in Mollgaard. First, that Mollgaard was concerned with a different legislative provision with different wording. Second, the factual circumstances inMollgaard differed markedly, the injuries being of a different and infinitely more grave type (severe brain damage resulting in spastic quadriplegia requiring 24 hour nursing care). Third, in Mrs Simpson's case, substantial payments had already been paid to Mr Simpson's estate in respect of identified losses resulting from the help he required in the relevant period; in contrast, in Mollgaard, the issue was whether there was any power to make any payment at all. [24] A further and significant factor pointed to by Mr McBride is that the decision in Broadbelt was not referred to, nor relied upon, nor distinguished by the Court inMollgaard. The assumption therefore is that the fact situations were so fundamentally different that the interpretation of s 80(1) of the 1982 Act inBroadbelt could not have assisted the High Court in its interpretation of the words "expenses actually incurred" in the legislation which it was required to interpret and apply; namely, reg 17(b) of the Accident and Compensation Insurance (Complex Personal Injury) Interim Regulations 1994 (SR 19994/116). [25] Mr McBride referred also to the subsequent decisions of Brown-Sharpe v ACC (188/89, 15 August 1989) and Teviotdale v ACC [1993] NZAR 79, which did not follow or apply Mollgaard and thus clearly distinguished it. In Brown-Sharpe v ACC the Authority interpreted and applied s 80(2)(b) as follows:Section 80(2)(b) refers to "any identifiable and reasonable expenses or losses". It appears that the appellant's contention is that the lost holiday is an identifiable and reasonable loss, as it is not suggested that it was an identifiable and reasonable expense. The terms "expenses or losses" has a monetary connotation, and has been so interpreted since its enactment. Over the lost holiday period Miss Brown-Sharpe lost a holiday but no money, as she received holiday pay. I find that over this period the appellant suffered no identifiable monetary loss, and that the Corporation has, therefore, no jurisdiction to make her any payments pursuant to s80(2)(b) of the Act.[26] In Teviotdale v ACC, Doogue J considered the interplay between s 80(1) and s 80(2)(b) and concluded that compensation could not be provided under s 80(2)(b) in circumstances where such compensation was proscribed by s 80(1). He found thatthe rights provided for under adjacent subsections clearly coloured the scope of s 80(2)(b).The respondent's argument[27] For the Estate, Mr Miller referred to the decision of the High Court inCampbell v ACC [1996] NZAR 278 in which it was held that where a person was in need of "constant personal attention" and therefore qualified under s 80(3) of the 1982 Act, the Corporation was obliged to provide for 24 hour care for that person. The Court approached the case on the basis that "constant personal attention" equates to 24 hour care, regardless of the availability of voluntary care from family or friends. This despite the discretionary language of the section. The fact that persons so "shockingly injured" as the five appellants in Campbell "occupy a small space at the top of the pyramid which represents all those suffering personal injury by accident" was relevant . The Court found it "implicit in the scheme of the Act that considerable resources should be directed to such persons" and that s 80(3) not be interpreted to allow "a make-shift care arrangement to be countenanced". [28] Mr Miller referred also to the generous and purposive interpretation to be given to accident corporation legislation, applied in the decision of the Court of Appeal in Queenstown Lakes District Council v Palmer [1999] 1 NZLR 549 where the Court rejected a restrictive approach to the interpretation of s 14(1) of Accident Rehabilitation and Compensation Insurance Act 1992 at 553, stating:The subsection must be interpreted as a whole having regard, not only to the language that is used, but also to the context of the subsection, to the scheme and purpose of the Act, with reference if that is necessary, to the history and policy of the legislation and to the consequences of the interpretation which is under consideration. When that is done Parliament's intention becomes clear.[29] Mr Miller referred also to the decision of the Court of Appeal in ACC v Mitchell [1992] 2 NZLR 436 (reaffirmed in Harrild v Director of Proceedings[2003] 3 NZLR 289), where Richardson J said at 438-9: a generous unniggardly interpretation of personal injury by accident is in keeping with the policy underlying the Accident Compensation Act of providing cover for all those suffering personal injury by accident in NewZealand wherever, whenever and however occurring, and to do so in place of common law remedies.[30] In relation to s 121(2)(b), Mr Miller submitted that the Corporation's approach to compensation for gratuitous care only where such care is required on a 24 hour basis under s 121(3) or its equivalent (as in Campbell) is an affront to common-sense and an avoidance of the main purpose of the compensation scheme, which is to provide for the care and rehabilitation of the injured. He said to exclude from the compensatory scheme those who care for seriously injured claimants on a less than 24 hour basis is to discourage persons from providing assistance to injured family members and could lead to "the distasteful situation of requiring the injured person and the family carers to engage lawyers to draw up contracts to pay or reimburse family members for assistance". In contrast to such a distasteful situation, the approach taken by the Authority in the present case is an encouragement to families and others to care for the seriously injured. [31] Mr Miller distinguished the decisions in ACC v Broadbelt, Teviotdale v ACCand Brown-Sharpe v ACC as not applicable to the present case, either on their facts or on the application of s 121(2)(b)/s 80(2)(b).Discussion[32] As in every case, the interpretation of a legislative provision turns on the plain meaning of its words and on its context. In the case of s 121(2)(b) of the 1972 Act those words are clear and unambiguous. [33] Some contextual meaning is derived from its predecessor sections, ss 119 and 120, and in particular s 120(8) which advise that no compensation is payable under the Act for non-economic loss except as specified under those sections. That advice provides interpretative guidance for s 121. [34] The general heading to s 121, Compensation for pecuniary loss not related to earnings, clearly envisages economic loss. Within the meaning of that, the "pecuniary loss" contemplated by s 121(2)(b) must be "identifiable actual and reasonable expenses [or losses] incurred". Such expenses or losses, if incurred, mustalso have been reasonable. These specific criteria cannot lead to any interpretation of s 121(2)(b) other than as a reimbursement provision. In this regard, the approach of the Court of Appeal to the interpretation of s 80 of the 1982 Act in Broadbeltassists, even though the wording of the sections there under consideration differed slightly. There is however no material difference between the phrase "identifiable actual and reasonable expenses [or losses]" in s 121(2)(b) and the phrase "actual and reasonable expenses and proved losses" in s 80(1) of the 1982 Act, for present interpretative purposes. [35] As noted, the decision in Campbell v ACC, referred to by Mr Miller, concerned the application of s 80(3) of the 1982 Act (which replaced s 121(3) of the 1972 Act) relating to the Corporation's obligation to pay for care required on a 24 hour basis, including gratuitous attendant care provided by family members. Although the Court in Campbell recognised gratuitous family help as pecuniary loss for s 121(3) purposes, that interpretation directly related to the specific requirement of "constant personal attention" to which s 121(3) was directed, and to the permanency of injury that requires "constant personal attention". [36] Mr Simpson's injury did not require "constant personal attention" within the meaning of that phrase in s 121(3) and nor does the schedule of help provided by Mrs Simpson come within the definition of that. What her schedule does establish is that she carried out the moral obligations and usual duties to be expected of a spouse in such a situation. The nature of much of the care she provided (for instance, visiting her husband while he was in hospital) is of a type that would not sensibly be hired out to a paid employee and thus would, in any case, fall foul of the reasonableness requirement in s 121(2)(b). [37] I am satisfied that when the ordinary canons of construction are applied to the operative words in s 121(2)(b) of the 1972 Act, what is required is proof of actual monetary loss before a claim for reimbursement can be established. The schedule of help that Mrs Simpson gave is not evidence of tangible monetary loss to her and nor has she otherwise claimed to be out of pocket as a result of the help and care that she gave to her husband in his recuperation. I therefore find no evidence that she suffered any pecuniary loss and thus no evidence of any "identifiable actual andreasonable expenses [or losses] incurred" by her. In this regard, I must respectfully differ from the Authority in his finding that Mrs Simpson's loss was identifiable because it could be measured in time as it would be if she had instead paid someone else to care for her husband over the same period. [38] The very grave injuries suffered in Mollgaard and the interpretation and application of the Complex Personal Injury Regulations to those injuries clearly renders that case distinguishable from the purpose and application of s 121(2)(b) to Mr and Mrs Simpson's situation.Conclusion[39] The appeal is allowed.Solicitors: Broadmore Barnett, Wellington, for Appellant John Miller, Wellington, for Respondent Delivered at 12pm on Thursday 3 November 2005.