Chittock v Accident Compensation Corporation

IN THE DISTRICT COURT AT WELLINGTON DECISION No. 122 /2009 UNDER The Injury Prevention, Rehabilitation and Compensation Act 2001 IN THE MATTER OF an appeal pursuant to section 149 of the Act (Appeal No. AI 300/08) BETWEEN ANDREW CHITTOCK Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent Hearing: 9 April 2009 Appearances: Appellant in person Mr P A McBride for respondent Judgment: 22 July 2009 RESERVED JUDGMENT OF JUDGE D A ONGLEY [1] This is an appeal against the decision of a Reviewer approving the Corporation's offer to the appellant of $17.80 for level 1 attendant care and $20.50 per hour for level attendant 2 care. The appellant has been a C5/6 paraplegic since a motor accident in 1993. He arranges for his own carers and seeks parity with the rates paid by the Corporation to agencies managing care providers. The reason for that is that those rates would meet the costs that he has to face to provide himself with proper care, and that the rates would be subject to increases without his having to make repeated applications for that purpose. The Reviewer rejected the claim for parity with agency rates. [2] Level 1 care is funded for basic care functions. Level 2 care is funded for more expert nursing care. The primary decision was contained in a letter of 20 November 2007 in which the Corporation declined to pay rates of $15 for level 1 care and $20 for level 2 care. The letter followed mediation and was a response to the appellant's claim that those amounts would be fair. There was no dispute about the fairness of those rates in November 2007 and the Reviewer backdated the slightly higher rates that the Corporation eventually proposed during the course of the review. That removes from this appeal the challenge to the actual rates appropriate in November 2007. [3] The issue in this appeal concerns parity with agency rates. The appellant wants to gain the security of having suitably indexed rates for attendant care. Otherwise his funding lags behind his costs, for example the hourly rates that he received in November 2007 were $13.82 and $16.59 respectively, which were significantly lower than those which he eventually secured. Meanwhile he had to pay carers out of the lower rates until securing an increase through taking the question to review. If he has to repeat that process, he would need a reserve fund to meet under-funded attendant care costs for long periods. Also he has no security of knowing whether his funding will increase. [4] The essence of the appellant's argument for rates higher than guideline rates for carers is that his injury related needs are much better served by arranging his own carers. He says that the cost of doing so is no less that the costs incurred by an employer. The advantage to him is that the care that he can secure through his own direct management of carers is more expert, more flexible and more reliable than agency care, and is better adapted to his circumstances. [5] Attendant care from a commercial provider has disadvantages. The training of carers may not suit the appellant's particular circumstances. If a carer does not turn up the agency may not be able to locate another person in time, or may not be able to provide another person with the required level of training. The appellant does not have direct intervention in training of agency carers and there is no ongoing personal relationship. In order to manage his own carer's, the appellant has various expenses, including holiday pay and other supplementary payments, fees, ACC levies, training cost, advertising, administration and some overlapping payments. He estimates that 35% of a gross payment is absorbed before payment of a wage to carers. There is no expert evidence to compare the appellant's situation with agencies on a cost accounting basis. The appellant's approach is to offer a broad estimate of a margin that needs to be added to actual wages to arrive at the sum required to produce a wage equivalent to that paid by agencies to caregiver. [6] The costs are not based on analysis of cost, either a cost for the appellant's own management, or a comparison with the likely cost structure of an agency. The cost structure of a typical agency is not known. Another factor here is that the basis on which the Corporation calculates comparable rates paid to agencies, or paid to other claimants, is also unknown. Therefore there is an unsatisfactory starting point. The appellant is attempting an exercise that would require analysis of valid data in order to show that the Corporation acts unreasonably in striking a lower rate for payment of the appellant when compared with the rate for payment of agencies. [7] But the Corporation's approach to this claim is also arguable. The Corporation makes two significant points, first that its decision is the exercise of a discretion and is reviewable only on narrow grounds, and secondly that the Corporation is only liable to pay compensation that has the effect of cushioning the appellant's loss. Discretionary decision [8] The discretionary decision was made by the Corporation, not by the Reviewer. Mr Mcbride for the Corporation submitted that the decision of the Reviewer properly paid regard to the discretionary nature of the issue, and made proper findings on the facts of the appellant's case, and that the Corporation's discretion was demonstrably exercised on the facts of this case, as demonstrated by the departure from its own policy guidelines and payment to the appellant of a sum in excess of the amounts he initially asked for. [9] The Reviewer adopted the principle that, in an appeal against the exercise by the Corporation of a discretionary power to fix the appellant's attendant care rates, the appellant would have to show that ACC either took into account something it should not have, or failed to take into account something it should have. That is the principle contained in May v May (1982) 1 NZFLR 165, 170. [10] But the principle is difficult to apply where the discretionary decision-maker has not disclosed what reasons or what information it took into account. There have been a number of judgments in this Court adopting the May v May principle, but they have been cases in which the relevant facts were documented by assessments, medical reports and rehabilitation plans. This is a different situation in which reasons for the Corporation's decision are not known, apart from the proposition that there is insufficient evidence for parity between the appellant's attendant care payments and rates paid to agencies. In a case where the Corporation has elected not to disclose that information, the Reviewer and the Court may have to consider the matter afresh, at least where there is an arguable case. [11] The respondent is correct in submitting that the Corporation exercised a discretion to decide under clause 14 of Schedule 1 of the 2001 Act whether to provide or contribute to the cost of attendant care. Attendant care is included under s 81 as a key aspect of social rehabilitation. The Corporation is liable to provide attendant care if the appellant meets the conditions listed in s 81(4), which include the s 79 purpose of assisting in restoring a claimant's independence to the maximum extent practicable, as is necessary and appropriate and required as a direct consequence of the personal injury. Under cl 14 there are six matters that the Corporation is bound to take into account. 14 Attendant care In deciding whether to provide or contribute to the cost of attendant care, the Corporation must have regard to - a) any rehabilitation outcome that would be achieved by providing it; and (b) the nature and extent of the claimant's personal injury and the degree to which that injury impairs his or her ability to provide for his or her personal care; and (c) the extent to which attendant care is necessary to enable the claimant to undertake or continue employment (including agreed vocational training) or to attend a place of education, having regard to any entitlement the claimant has to education support; and d) the extent to which household family members or other family members might reasonably be expected to provide attendant care for the claimant after the claimant's personal injury; and (e) the extent to which attendant care is required to give household family members a break, from time to time, from providing attendant care for the claimant; and (f) the need to avoid substantial disruption to the employment or other activities of household family members. [12] We do not know how the Corporation weighed those factors, for example whether rehabilitation outcomes included the appellant's activities in the community or not, and whether input from family members was a factor or not. [13] A second point made in the respondent's argument is that compensation is intended to have a cushioning effect and is not full commercial compensation. That principle was stated in the Court of Appeal in ACC v Nelson [1979] 2 NZLR 464, 466 (CA) and applied, for example, in the High Court in ACC v Bertelsen [1994] NZAR 145 and ARCIC v Campbell [1996] NZAR 278. Campbell was a case concerning hourly rates for attendant care. The High Court considered that the Corporation could not dictate a lesser number of hours than the full entitlement which the words "constant personal attention" involved under the 1982 Act, but the discretion could extend to the cost of the 24 hour care as to hourly rate. In that respect the Corporation would have to embark on an exercise as to what was reasonable and could fix the number of hours which the Corporation would accept as its responsibility and those that would be met by the individual who could afford them against the level of weekly income being earned. The Court said "we are inclined to the view that the discretion contained cannot take into account the provision of voluntary resources which the individual may be able to call upon. We think that the discretion is restricted to other compensation paid and to the amount to be paid for care." [14] Under clause 14 voluntary family resources are now to be taken into account. There is no evidence whether that was a factor in the Corporation's decision here. In the present appeal, the cushioning principle is met by adjusting hourly rates to provide for different levels of attendant care, but it is clear from Campbell that the cushioning principle does not operate to reduce the contribution for attendant care below that which is required by a claimant who has no other resources to make up the shortfall. I do not think that the cushioning principle is shown to be relevant in this appeal. The appellant does not take issue with a differential structure of hours for varying levels of care quality. It is a case of a serious disability where the prime considerations are likely to be those in clause 14 (a) and (b). The argument only concerns the rates that are required in order to secure proper attendant care. What therefore is the Corporation required to take into account in fixing the rates for the four levels of care that it has applied in the appellant's case? [15] Having made the decision to provide care for those levels, the Corporation must fund the care in a reasonable manner, otherwise the appellant would have to cut back the number of hours of care in order to meet the cost out of an inadequate resource. In my view, the decision concerning cost is discretionary only to a limited extent within a range of funding that would secure the necessary care that has already been decided upon. [16] There is no independent or expert evidence of the range that is at stake. The Corporation as respondent has not provided any evidence of the data on which it made its decision in the appellant's case. The appellant has given only an estimate of the margins between the rate received from the Corporation and the resulting amount available to pay carers. The parity question [17] Even if there should be jurisdiction to review the Corporation's decision where it has provided no supporting information, there is no practical question to decide in this case concerning the actual amounts fixed. That is because the Corporation reconsidered its position and agreed to pay slightly more than the appellant had claimed. The appellant is not therefore able to contend that, at the time of the primary decision, the amount awarded on review would have been inadequate. [18] The appellant's contention is that the rates for level 1 and level 2 care should be increased from time to time with reference to agency rates until there is a change in circumstances that would require further consideration. [19] The Court does not have power to bind the Corporation in that way. The Corporation must fix a reasonable rate but cannot be required to limit the factors which it will take into account by indexing it to an agency rate. The Corporation is bound only to provide or contribute to the cost of attendant care, to take account of the clause 14 considerations, and to act reasonably. Summary [20] For the foregoing reasons, I have decide that it is not necessary in this appeal to decide the extent of the jurisdiction of this Court in reconsidering the Corporation's exercise of a discretionary power to decide whether to provide or contribute to the cost of attendant care, nor to decide whether there is any constraint on reconsidering the Reviewer's decision. The appellant has not been able to make out a case for parity with rates paid to agencies providing attendant care, and there is no challenge to the rates that the Corporation eventually paid to the appellant for Level 1 and Level 2 care after revising its November 2007 decision. [21] The appeal is therefore dismissed. Judge D A Ongley District Court Judge