Auckland City Council v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT Decision No. 46 | 95 AT WELLINGTON DCA No. 225/94 UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND 39/ 94/ 04 71 IN THE MATTER of an appeal pursuant to Section 91 of the Act BETWEEN THE AUCKLAND CITY COUNCIL APPELLANT AND THE ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION RESPONDENT Heard at Auckland on: 20 February 1995 H. Wild as counsel for the appellant A.D. Barnett as counsel for the respondent Date of Decision: a May 1995 RESERVED DECISION OF JUDGE J. W. IMRIE I find that the appeal fails. 2. Introduction: The issue in this appeal is whether an employee of the appellant, Mr Adam, suffered a work injury on 14 September 1992. In this decision reference is made to Contract Operations or Contract Services. That is a trading venture of the appellant. I also refer to written statements of Mr Adam. When these are quoted some spelling errors are corrected. Mr Adam lodged a claim dated 14 September 1992 with the Corporation. It related to an accident on 14 September 1992. In the panel for a description of how the injury was caused it reads:- "Bent over to pick rubbish bin and slipped over, twisted back." That form was completed in consultation with Dr C.D.C. Bennett who diagnosed the injury as "low back strain" and advised that on 14 September 1992 he had referred Mr Adam to a chiropractor for treatment as required. Mr Adam was certified unfit for work for two days. By letter dated 16 September 1992 the Corporation wrote to the manager of Contract Operations advising that Mr Adam had applied for compensation for a sprain or strain to his lower back/spine. The Corporation asked if Contract Operations agreed that this was a work injury. Contract Operations returned a work injury report dated 24 September 1992 advising that it did not accept that Mr Adam's injury was a work injury, 3 . and changing the nature of the injury from lower back/spine sprain or strain to left knee sprain or strain. The Corporation received that form on 30 September. On 12 October the Corporation wrote to Mr Adam seeking further information about the accident. The questions asked in the letter dated 12 October were:- 1. Date and time of the accident. 2. Reasons for delay in seeking treatment. 3. Who was the injury reported to and how was it reported. 4. Are you aware of the accident reporting procedures and did you follow them. Mr Adam replied:- "Regarding the injury on the 14/9/92 at 7.30 a.m. I was on my work site in Newmarket. At about 11.30 a.m. I rang my employer and told her I was going to the doctors because I had bad back pain in lower left side of back and knee. He then referred me to a chiropractor (two visits) as Dr Bennett said it could be coming from the knee injury. As I had only the one day off I felt I need not mention it again to my employer. I have since seen the doctor again and it could all be related to my left knee being out of line putting pressure on my back. Regarding the accident reporting procedures I was unsure at the time what was happening." 4. In response to a letter dated 12 October 1992 Contract Services wrote to the Corporation advising that the wages department reported that Mr Adam was paid for work days 14 and 15 September, and for sick leave days 16, 17 and 18 September, it had a procedure in place for reporting work accidents, and staff were aware of these procedures. Its reasons for disputing that Mr Adam had a work injury were:- ( i) The accident was not reported to either the supervisor or the communications officer at the time. ( ii) The supervisor was later advised that the injury was an old knee injury (no back injury was mentioned). (iii) Mr Adam phoned his manager saying the reason for sick leave was due to an old knee injury and he wanted two months leave without pay (granted) to give the knee time to heal. By letter dated 15 October the Corporation wrote to Mr Adam asking whether he hurt his back at work or if he hurt his knee. He replied:- "Regarding the injury I reported the injury to the foreman stating I had hurt myself. Until I could seek proper medical advice I thought I had done something to the left side of the lower hip- back. But on seeing the chiropractor and an orthopaedic surgeon the injury is to do with the left knee, loss of anticular cartilage in the medical compartment of the knee joint with prominent subchondral sclerosis and osteophytes. I have told Contract Services and told of the report. I have permanent pain in the lower back and knee since the injury." 5. The Corporation wrote again to Mr Adam by letter dated 1 November 1993 asking for further particulars about the accident. Mr Adam replied by letter received on 8 November 1993 as follows:- "I was working as a street cleaner in Newmarket where I worked alone. One morning I came across a rubbish bin pulled out of the ground. I went to pick it up and slipped on green mould on the path. I fell on my left side. As I worked alone no-one witnessed the fall. In doing so I had pain in the lower back and leg. I carried on working until later in the morning. I then rang my employer who was out and I was passed on to a lady standing in whose name was Polly? telling her what I thought I had done and was going to seek advice. In doing so (seeking advice) it was not till later date that it was thought that I had hurt my knee not my back. I have had major surgery five times and last time got a knee infection after the operation and spent three weeks in hospital. I have since spoken to Robert Aull and told him that it was my knee not my back, that was at first thought. It seems to me that there is a misunderstanding between Contract Operations and myself. I now have a 30 percent disability in the knee which is now very painful and I now have an imbalance on the left side which puts pressure on the lower back and I walk with a limp. On the day I hurt myself I had no car to go to my employer whose office is in Mt Eden. I was going to work by train. Since the start of my injury I have not worked since and I have now lost my job." By letter dated 11 November 1993 the Corporation wrote to Contract Services advising that it had received further information from Mr Adam explaining the circumstances of his accident on 14 September, and providing 6. the reason his back injury may have caused confusion, and whom he contacted regarding the accident. The letter said that the Corporation had identified that Mr Adam sustained a back injury while doing an employment task for Contract Services, and asked if it accepted that the injury was work related. By letter dated 12 November 1993 the general manager of Contract Services advised as follows:- "When Mr Adam first came to Contract Services in 1991 he was employed in the Watersupply Division. I was instrumental in having him transfer to the Sanitation Division at his own request because his knee troubled him so much he could not perform his duties as a waterworker. Sanitation duties would be less physically demanding. He told me when he asked for a transfer that he had injured his knee in sport long before he came to Contract Services. Our records show that Mark Adam did not notify anyone that he had slipped and injured himself during working hours nor did he fill out the accident register we keep. Given that he has already admitted to me, to Robert Aull (his direct manager) and to several of his fellow workers that he injured his knee before taking up employment with us, we do not accept this injury as work related." By letter dated 18 November the Corporation wrote to Contract Services advising that:- "Mr Adam has lodged a claim for an injury to his lower back, not for a knee injury. Mr Adam bent over to pick up a rubbish bin and he slipped over injuring his back. Could you please 7. advise if you accept his back injury of 14 September 1992 as being work related? If not, please give your reasons why. Thank you." By letter dated 22 November Contract Services replied as follows:- "I refer you to my letter dated 12 November 1993 in which the last paragraph quite categorically states that Mark Adams did not fill out an accident report form nor did he ask anyone else to do it on his behalf. All of our employees are advised (and continuously reminded) that all accidents, no matter how minor, are to be logged in the Accident Register. We have no such entry for Mark Adams and so do not accept either his story or liability for the injury." By letter dated 15 December the Corporation advised Contract Services that it had decided that the injury was work related. By letter dated 1 February 1994 the personnel manager, health and safety, for the Auckland City wrote:- "We disagree that the above claim is a work injury and request that you review this claim. Mark sustained an injury to his knee in 1979 and a cartilage was subsequently removed. Since then, he has developed traumatic arthritis in the knee. This is likely to give him some on-going problems such as pain and swelling in the knee if he works on uneven ground or has to get down to low levels frequently. In the opinion of his orthopaedic surgeon Mr G Farr, his knee is going to let him down in the type of work he was doing for Contract Services. 8. By his own admission, Mark now has an "imbalance" which has put pressure on his lower back. He now walks with a limp. Contract Services has had an accident notification system in place for a considerable time. We have previously indicated to you that Mark did not notify anyone including his work-mates that he injured himself during working hours. Neither did he complete the accident register. All staff are well aware that they must notify accidents. We do not consider that the claim relating to a back injury is a work related injury. We consider that if there is a lower back injury it is a consequence of the knee injury which occurred in 1979 and has resulted in a limp which by his own admission has caused lower back pain. Would you please reconsider your decision." By application dated 22 February 1994 the Auckland City Council applied for a review of the decision. The reasons for the application were given as:- "Mark Adam was employed by Auckland City in 1991. In 1979 he injured his left knee which has caused him considerable discomfort since. He has been advised not to work on uneven ground or get down to low levels by his orthopaedic surgeon. By his own admission he now has an "imbalance" on his left side which puts pressure on his lower back, and he walks with a limp. The City has an accident reporting system yet his injury was not notified." The City thought that the injury claim was not work related but a consequence of an earlier injury and requested that the claim be moved off the City's experience rating. 9. The review was heard on 17 May 1994. By letter dated 27 June 1994 the Corporation wrote to Dr Bennett as follows:- "We are currently considering Mr Adam's claim via a review hearing, and would be grateful if you could provide us with a medical report on his injury which covers the follows: 1. What exactly was the injury sustained on the 14th of September 1992 - Mr Adam's back or knee? 2. Was Mr Adam's injury caused by his fall? If not, what caused the injury? 3. Please provide copies of any medical or xray reports in respect of this injury. . . . Dr Bennett's reply received by the Corporation on 12 July 1994 reads:- "As (1) on 14.9.92 Mr Adam injured his lower back. It is noted Mr Adam has recurrent old injuries to his (L) knee also, which troubles him every day, even until now. (2) The injury of 14.9.92 was due to a fall ('slipped over at work'. (3) I have made no X-rays or specialist referrals regarding the low back injury, and my records show I was only consulted or made note of this only once on 14.9.92. He has a concurrent severe disability (L) knee problem, 10. and septic arthritis following knee surgery in November 1992 and this is much more severe and disabling than his back problem. His back problem I feel requires further formal assessment to determine about this. Does ACC wish me to arrange this? Please reply." The Corporation sent a copy of Dr Bennett's report to the appellant and in a letter dated 4 August 1994 to the Review Officer it commented on that report. The review decision was dated on 23 August 1994. In her decision the officer sets out the history of the claim, and much of the correspondence including the letter dated 4 August from the appellant, and refers to the appellant's submissions. The decision concludes:- "The injury details provided on the M46 form and the claimant's letters show that the injury occurred while an employment task was being performed at a place of employment that is while he was picking up a rubbish bin as part of his task as a street cleaner. To summarise, although the reports clearly show that the applicant has a pre-existing left knee problem which is severe and disabling, the medical report from Dr Bennett confirms that the applicant has sustained a back injury on 14/9/92 which is covered under the 1992 Act. The definitions of 'arising out of employment' and 'arising in the course of employment' have both been satisfied so the Corporation was correct to classify and accept this claim as a work injury. I therefore find this application unsuccessful." 11. There is a report dated 10 October 1991 from Mr G.F. Farr of the Eastwood Orthopaedic Clinic which relates to Mr Adam's left knee. It reads:- "Mr Mark Adam has asked me to write to you to outline my opinion concerning his knee. He has recently undergone an arthroscopy of his knee. He sustained an injury to his knee in 1979 and a cartilage was subsequently removed. Since then he has developed traumatic arthritis in the knee. I have removed several loose fragments of loose articular cartilage from the knee but there is considerable irregularity of the joint surface which is not repairable. This is likely to give him some ongoing problems and he is really going to continue to get pain and swelling in the knee if he works on uneven ground or has to get down to low levels frequently. His knee is clearly going to let him down in the sort of work that he has been doing I would be grateful if you would consider finding him alternative work which does not involve working on uneven ground or having to get down to low levels frequently." Appeal Hearing: At the appeal hearing Ms Wild presented written submissions and a folder of documents. In her written submissions she reviewed the background to the appeal, and said that the issue is whether the personal injury arose out of and in the course of employment. She said part of that issue raises the" question as to the degree of injury, if any, arising out of the accident, as opposed to pre-existing injury. She submitted that expert medical assessment and opinion was required to resolve this question prior to finding whether a work injury had occurred. She said that Mr Adam had a pre-existing significant left knee injury arising out of an injury in 1979 which developed 12. into traumatic arthritis. She said there has been no specialist medical referral in relation to the claim with which the appeal was concerned, despite recommendations that that should be obtained. She referred to the term "work injury" as defined in s.6 of the Act and submitted that there has been no work injury in this case because it did not "arise out of employment" for two reasons:- (a) The existence and cause of any injury - the "but for" test of causation is not met. There is no expert medical evidence to establish that any back injury arose out of the particular fall, or to establish the nature of the injury and distinguish it from any other cause relating to the claimant's pre-existing condition. (b) The relationship between the injury and employment - any injury was incidental to rather than "arising out of employment". The submissions then referred to the "but for" test in greater detail. Ms Wild said that if the medical evidence establishes that Mr Adam's knee injury was such that it was inevitable that his knee would give way, then there would not have been a work injury. She said that it is important to note that the "but for" causative link must exist between the employment and the injury, rather than the accident. If the injury would have happened just the same, then it would not be a work injury. She summarised the medical evidence on the file and submitted that:- 'In summary, all that has been established is that, although the original claim referred to back injury, the claimant himself now acknowledges that the injury is a left knee injury, which was 13. already permanently disabled and the subject of significant surgical procedures both before and after the accident. There has been no investigation into the extent, if any, to which there is a "back injury", and if so, its connection with the knee injury." She said that given those factors the Review Officer was in no position to conclude that a work injury had occurred, in the absence of expert evidence to satisfy the "but for" test and this was acknowledged by the Review Officer during the hearing. Following on from the review hearing, Dr Bennett's letter was obtained by the Corporation, which also confirmed that a specialist opinion be obtained, although there is no indication that this was ever followed up. In relation to the words "arising out of employment" Ms Wild submitted that the alleged injury occurred when the claimant slipped on mould on the footpath. It did not occur as a result of lifting a rubbish bin, or any other specific task inherent in Mr Adam's employment. "Arising out of employment" requires more than simply being at work or a contract of employment to exist. It necessitates a causative link between the type of work performed and the injury. In support of this submission she made the following points:- 1. Otherwise there is no difference between the two tests of arising in the course of employment and "arising out of employment" which are clearly separate requirements. 14. 2. The terms "due to the nature of employment" (used in other sections and under the 1972 and 1982 Acts) and an injury "arising out of and in the course of employment" are not identical formulae. 3. The term "employment" in this context is not in the sense of a contract of employment, but rather in the sense of work being performed. 4. For reasons of public policy there must be a distinction between what directly arises out of a particular service and what is incidental to it. The words "arising out of" require a meaningful, rather than incidental, connection with the work. Otherwise employers would be penalised for injuries over which they have no control. 5. Section 121 shows that Parliament did not intend employers to be penalised for matters outside their control. Section 121 creates a "subsequent work injury account" which comes equally from the funds of all other accounts, and as such the employer is not penalised where a "subsequent work injury" occurs. It was submitted that the injury itself was such that it was not caused by a risk of Mr Adam's work performance, but rather a risk of every day life, and could have happened in any event. What evidence there is indicates that the fall was due to mould on the footpath and not the physical exertion of rubbish collecting. . It could have happened at any time. The employer should not have to bear that burden. In conclusion Ms Wild said:- 15. "It is impossible to conclude that a work injury occurred in the absence of any specialist medical evidence. That being the case it is submitted that the Court must allow the appeal in whole, whether or not a personal injury occurred, it was not a work injury. It should not be referred back to the Corporation because:- (a) The Court's powers on appeal are limited to confirming, modifying or revoking the decision or dismissing the appeal (s.91) (8). (b) The Corporation chose not to seek further evidence on review." In her verbal submissions Ms Wild said that the ground of the appeal is not so much that Mr Adam did not suffer an injury, rather that he did not suffer a work injury. Mr Barnett presented written submissions on behalf of the Corporation. Those submissions include a review of the history of the claim. Mr Barnett submitted that the issue on the appeal is confined to whether Mr Adam suffered a "work injury" in terms of the Act. He submitted that whether or not Mr Adam's on-going incapacity is the result of an earlier knee injury is not the issue. The issue is a question of cover, not a question of on-going entitlements to compensation. He referred to the definition of "work injury" in s.6 of the Act:- "... 'work injury', in relation to any person, means personal injury arising out of and in the course of employment of that person ..." 16. He submitted that there are two broad requirements to be established first, that there was a personal injury and secondly, that it arose out of and in the course of employment. In his submissions Mr Barnett then examined the evidence relating to whether or not there was an injury and submitted that the evidence establishes, at the very least on the balance of probabilities, that Mr Adam suffered a back injury on 14 September 1992. It is irrelevant whether Mr Adam's continuing incapacity is due to the prior knee injury or the later back injury. That would be relevant to the question of on-going entitlements, but not to cover. Mr Barnett said that on the subject of whether the injury arose out of and in the course of the employment, Ms Wild advised that it is not disputed that Mr Adam fell over at work. Ms Wild said that the points were:- (1) There is no evidence that there was any injury in the accident. (2) If there was any injury did it result from the fall rather than from the pre-existing injury. In his submissions Mr Barnett reviewed the evidence and submitted that it showed that in the accident on 14 September 1992 Mr Adam suffered a back injury. In respect of the claim by the appellant that the accident was not reported to the employer, Mr Barnett examined the evidence and submitted that it explained any lack of a report to the employer. 17. Mr Adam made a statement to the Court. Generally what he said was consistent with what is on the file and it is not necessary for me to set out what he said. In reply Ms Wild made three points:- 1. Section 121 makes it clear that where there has been a pre-existing personal injury and a work injury subsequently occurs, the matters need to be medically assessed so that an employer is not unduly penalised by the Corporation finding that a work injury has occurred. 2. The words "arising out of employment" must be given a meaning separate and distinct from the words "in the course of employment". 3. If there was no back injury the appeal must succeed and the opinion of Dr Bennett was that a further specialist medical opinion was required, but none has been obtained. Consideration and Decision: I accept Mr Adam's explanation for not filling out an accident report form. The fact that he did not fill out a form does not raise any doubt that he had the accident. I accept Mr Adam's explanation for questioning whether it was his back or his knee that was causing his ongoing problems following the accident. I am satisfied on the evidence that he suffered some injury i.e. lower back strain in the accident. The degree of that injury is not something I 18. have to decide in this appeal, but it was an injury. That Mr Adam suffered a lower back strain is established by the evidence of Mr Adam and by the letter of Dr Bennett received by the Corporation on 12 July 1994. In answer to the question "What exactly was the injury sustained on the 14th of September 1992 - Mr Adam's back or knee?" Dr Bennett wrote "... on 14.9.92 Mr Adam injured his lower back." It is correct that in his letter Dr Bennett referred to Mr Adam's 'concurrent severe disability (L) knee problem and septic arthritis following knee surgery in November 1992" and said "This is much more severe and disabling than his back problem" and went on to say "His back problem I feel requires further formal assessment to determine about this." However, I understand that he was suggesting further assessment of the back problem, and not suggesting that Mr Adam did not suffer a back injury in the accident on 14 September 1992. Cover is provided under s.8(2)(a) where there is personal injury caused by accident. Section 8 reads in part:- "8. Cover for personal injury occurring in New Zealand - (1) This Act shall apply in respect of personal injury occurring in New Zealand on or after the Ist day of July 1992 in respect of which there is cover under this Act. (2) Cover under this Act shall extend to personal injury which (a) Is caused by an accident to the person concerned; or . .. 19 "Personal injury" is defined in s.4(1) as:- "4. Definition of 'personal injury' - (1) For the purposes of this Act, 'personal injury' means the death of, or physical injuries to, a person, and any mental injury suffered by that person which is an outcome of those physical injuries to that person, and has the extended meaning assigned to it by section 8(3) of this Act." As I have already set out, I am satisfied that Mr Adam suffered personal injury on 14 September 1992 when he slipped and fell. "Accident" is defined in s.3(1) as:- " Accident' means- (a) A specific event or series of events that involves the application of a force or resistance external to the human body and that results in personal injury, but does not include any gradual process; and the fact that a personal injury has occurred shall not of itself be construed as an indication or presumption that it was caused by any such event or series of events; or The force that results in personal injury will often be the force of gravity. Mr Adam suffered the injury to his back when falling or landing on the path. 20. It is a logical inference from the evidence that falling on his left side involved "the application of a force or resistance external to the human body" within the meaning of those words as used in the definition of "accident" in s.3(1), the "force external to the human body" being the force of gravity which forced his body to the ground causing low back strain or the "force or resistance external to the human body" being the contact with the path causing low back strain. "Work injury" is defined in s.6:- "6. Definition of 'work injury' - (1) for the purposes of this Act, 'work injury', in relation to any person, means personal injury arising out of and in the course of employment of that person: and "Arising out of employment" is defined in s.3 as:- "' Arising out of employment', in relation to a personal injury, means an injury that would not have occurred but for the person being in that person's place of employment, and it shall not be relevant that - (a) The person may be acting in contravention of any Act or regulations applicable to the employment, or in contravention of any instructions, or in the absence of instructions; or (b) The person may be working under an illegal contract; or 21. (c) The person may have indulged in or been the victim of misconduct, skylarking, negligence, or been the victim of any force of nature:" I am satisfied on the evidence that the injury would not have occurred but for Mr Adam being in his place of employment. The injury in question is not simply an injury to Mr Adam's back, it is the injury Mr Adam suffered to his back when he fell at work on 14 September 1992. Clearly Mr Adam would not have suffered that injury had he not been in his place of employment. To say that Mr Adam could have twisted his back at any time because of the state of his knee does not take the claim outside the definition in s.3 of the phrase "arising out of employment". Although s.3 uses the phrase "an injury," when the definition is applied to a particular case it is concerned with the injury that actually occurred. In this case the injury that actually occurred was the injury to Mr Adam's back when he fell on the path on 14 September 1992. That injury would not have occurred but for Mr Adam being in his place of employment. Accordingly, it is "an injury that would not have occurred but for Mr Adam being in his place of employment" within the meaning of those words in s.3 "Arising in the course of employment" is defined in s.3 in part as:- "' Arising in the course of employment', in relation to a personal injury, means an injury that occurs - (a) While any employment task is being performed at a place of employment; or 22. . . . Clearly the injury to Mr Adam's back occurred while he was performing one of his employment tasks, i.e. street cleaning, at a place of his employment, i.e. on the footpath. The result is that the evidence proves that Mr Adam suffered a work injury within s.6 to his lower back in the accident on 14 September 1992. That affects the appellant's premium - see the Experience Rating Regulations 1993/310. The next question is whether s. 121 affects the position. Section 121 reads: - "121. Source and application of funds - (1) For the purposes of meeting the costs of subsequent work injury, as defined in subsection (5) of this section, the Corporation shall derive its funds from the following sources: (a) The Employers' Account; and The Motor Vehicle Account; and (c) The Earners' Account; and (d) The Non-Earners Account. (2) The contributions from each of the Accounts referred to in subsection (1) of this section shall be pro rata according to the amounts payable from each Account sufficient to meet the payments out of the Subsequent Work Injury Account. 23. (3) Funds derived under subsection (1) of this section shall be held in an account to be known as the Subsequent Work Injury Account. (4) The Corporation shall apply the funds in the Subsequent Work Injury Account in - (a) Paying public health care costs under section 32A of this Act and section 54 of the Accident Rehabilitation and Compensation Insurance Amendment Act (No 2) 1993; and (b) Paying for treatment, services, rehabilitation, related transport, compensation, grants, and allowances provided for under this Act - in respect of subsequent work injury, as defined in subsection (5) of this section. (5) For the purposes of this section, a 'subsequent work injury' is a work injury which - (a) Occurs on or after the Ist day of July 1992 to a person who had an incapacity resulting from personal injury covered by this Act or personal injury by accident covered by the Accident Compensation Act 1972 or the Accident Compensation Act 1982 and who had been incapacitated by that personal injury or personal injury by accident for more than 3 continuous months; and (b) Causes an incapacity or disability which is substantially greater by virtue of the combined effects of the previous personal injury, and the subsequent work injury, than that which would have resulted from the subsequent work injury alone; and (c) Occurs within 12 months after the person enters or re- enters employment following the previous personal injury or personal injury by accident." 24. I have already summarised counsel s'submissions relating to s. 121. It would be preferable if the Corporation had been asked to decide if the injury to Mr Adam's back was a "subsequent work injury". However, on the evidence I am satisfied it was not. Assuming it comes within s. 121(5)(a) and (c), the evidence shows that the back injury did not cause an incapacity or disability which is substantially greater by virtue of the combined effect of the previous knee injury and the subsequent back injury than that which would have resulted from the subsequent back injury - s. 121(5)(b). Clearly the back injury was minor. It is the previous knee injury which is the cause of Mr Adam's incapacity or disability. Conclusion: The appeal is dismissed because the evidence establishes that the back injury was a work injury and was not a subsequent work injury. Leave is reserved to the Corporation to apply for costs if necessary. -(J.W. Imrie DCJ)