Watson v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT Decision No. / 25 /95 HELD AT ROTORUA IN THE MATTER of The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an Appeal pursuant to Section 91 of the Act 57 / 94 / 3113 BETWEEN BRIAN DAVID WATSON Appellant (Appeal No. DCA 152/95) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 10th day of October 1995 APPEARANCES Mr J P Smith for appellant Mr T P Cleary for respondent DECISION OF JUDGE D A ONGLEY This is an appeal against a refusal of vocational rehabilitation. The grounds for refusing the appellant's claim for vocational rehabilitation were that he was not eligible for weekly compensation at the time of his incapacity. The Review decision was given on 18 January 1995 and the appeal was filed out of time on 11 July 1995. The Corporation neither consented nor objected to the late filing of the appeal and the appellant seeks leave accordingly. The right to vocational rehabilitation is found in s 22 of the Accident Rehabilitation and Compensation Insurance Act 1992: "22. Right to vocational rehabilitation - (1) Vocational rehabilitation shall be available to - (a) Those persons who are entitled to compensation for loss of earnings under sections 38, 39, and +4 of this Act: (b) Those persons who are entitled to compensation under section 45 or section 46 of this Act: (c) those persons who are likely, without rehabilitation, to be entitled to compensation for loss of potential earning capacity under section 46 of this Act upon the attainment of 18 years. (2) The objective of vocational rehabilitation is - (a) To restore the person, to the extent practicable, to his or her former capacity for work in the occupation engaged in prior to the commencement of incapacity or a similar occupation; or (b) In any other case, to enable the person to have a capacity for work." Section 22(1)(b) and (c) do not apply in this case and the appellant has to show that he is entitled to compensation for loss of earnings. The objective stated in s 22(2)(a) of restoring a person to his or her former capacity for work has a potentially wider application than is allowed by the restricted eligibility criteria in s 22(1). The restriction is clear and eligibility turns on entitlement for earnings compensation. That is governed by s 38 of the Act and the accompanying sections of the Act that refer to calculation of earnings. In the appellant's case the calculation can only relate to earnings as an employee during the 12 months immediately preceding the date of his incapacity. The appeal is directed at the date of incapacity and the appellant's work history before the date of incapacity. The respondent's view is that there is no proven incapacity. The appellant's history, details of which are still in dispute, is broadly as follows. He was employed by Doonans as a factory foreman between 1979 and 1985 or 1986. He experienced back problems for most of his term of employment and he undertook physiotherapy but continued working. He left when he had a knee injury which he attributed to exerting excessive strain on his knee in the process of avoiding back strain. The appellant's work history was not fully described to the Review Officer and it is a central consideration in deciding this appeal. The primary facts considered on review were that the appellant had been employed by Doonan Industries in Wellington from about 1979 to about 1986 when he left and went on an unemployment benefit from 22 August 1986. There was an inference that he was "fit for work" at that time, because he did not go on a sickness benefit and, as well, he had been certified by Dr Singh on 12 May 1986 as fit to resume normal work. The Review Officer therefore considered that any incapacity must have occurred near the time of his claim against the corporation which was not made until 18 February 1991. If he had been unemployed for 12 months prior to 18 February 1991 he had no entitlement to earnings compensation, and hence no entitlement to vocational rehabilitation. On the hearing of the appeal the appellant obtained leave to introduce further evidence to the following effect. He began to suffer back problems during his employment with Doonans. He described the trouble as an "injury" that he suffered at work from stacking bales on to a truck over a number of years and he found that it was exacerbated by his driving long distances. He saw a chiropractor and a physiotherapist in Wellington and he consulted a doctor in Tauranga where he used to visit his family. He found that manipulation and physiotherapy relieved his acute symptoms. An important aspect of the appellant's evidence that was not made clear at the review was that he was unable to - 3- continue lifting and was transferred to supervisory duties for a period but was later returned to heavy duties including the lifting to which he attributed his back problems. Before he left Doonans he suffered a knee injury, caused in his view by his habit of using his knees for lifting in order to reduce back strain. He stopped work when his knee accident occurred in February 1986 and he did not return. His employment was terminated on 30 March 1986 while he was still incapacitated and receiving compensation for his knee injury. The knee injury improved in about May 1986 and he then obtained a driving job for a smallgoods company. The appellant says therefore that he was already incapacitated within the meaning of s 37 of the Act because he was not able to engage in the employment in which he had been engaged before his back symptoms developed. The material on the Corporation's file included a report from the chiropractor, Mr Williams, referring to symptoms generally consistent with the appellant's continuing cervical spinal problems. The same general symptoms were noted by the appellant's general practitioner, Dr Singh, and mentioned in the report of a orthopaedic surgeon, Mr C J Dawe, in 1991. Mr Dawe found it difficult to correlate the severity of the appellant's pain and his symptoms with x-ray findings but considered it most likely that he is suffering from fibromyalgia syndrome. He recommended assessment by a rheumatologist. Mr A N Graham, rheumatologist, agreed with fibromyalgia as a diagnosis of exclusion and he proposed physiotherapy to control symptoms. Dealing first with the application for leave to appeal out of time, the delay was almost five months, but the appellant was not represented on the review and the questions to be decided are not so self evident that he should have understood the ground on which an appeal could be argued. The appellant consulted a solicitor who was not familiar with accident compensation matters and the appellant apparently thought that the solicitor would have attended to filing his appeal. He later instructed Mr Smith and also applied for legal aid. The appellant took active steps to pursue his appeal and I find that the delay is excusable. The respondent is not prejudiced by the delay. Leave should be granted provided the appeal has merit and I will turn to the merits of the appellant's argument. Mr Smith submitted that the Review Officer posed incorrect questions when he said that the appellant had to establish "an entitlement to weekly compensation dating back to the time he ceased employment" and that "at the time of leaving the employment .. he .. was incapacitated from carrying out his normal work". More correctly the questions were whether the appellant's present disability was caused or contributed to by an injury or gradual process suffered during the course of his work, and whether he is unable to engage in employment in which he was engaged when the personal injury occurred. I accept that the matters to which the Review Officer referred comprised only an indirect test of entitlement. Of course the way the Review Officer expressed the questions depended on a view of the evidence, that is to say that the incapacity could not have occurred after he left his employment, and that view of the evidence is not in dispute. The real problem is that the appellant contends that he had already suffered incapacity and had been reduced to lighter duties before leaving his employment. He did not tell the Review Officer about that although he described the onset and the persistence of his symptoms. I do not find any fault with the questions posed by the Review Officer in the context of the case as the appellant put it on review, but the case is now being put - 4- differently and the review may have overlooked the essential questions of whether the appellant experienced cervical spinal symptoms by reason of which he was no able to continue with his customary work. On the evidence that the appellant now asserts, that occurrence may have preceded his knee injury and the termination of his employment in early 1986. He may then have had an entitlement to compensation as soon as his earnings ceased, quite independently of the knee injury for which he was also receiving compensation for several months in 1986. Mr Smith submitted that the evidence of gradual process injury had not been considered. The statutory prerequisites in s 7 are that the appellant's employment task or environment had a particular property or characteristic, not found in his non- employment activities or environment, which caused or contributed to his back injury by gradual process. In addition, the risk of suffering that personal injury must be significantly greater for persons performing the employment task in that environment than for persons who do not perform that task in that environment. I accept for present purposes that there is evidence that supports a gradual process enquiry, whether or not it can be regarded as conclusive. If a gradual process injury might have occurred, Mr Smith then submitted that the tenor of the Review Officer's decision was that the fact that the appellant continued working precluded any claim for earnings related compensation. The correct enquiry is to regard the continuation or resumption of work along with all the other evidence in considering the principal question of capacity to engage in pre-accident employment. I accept that the Review Officer gave undue weight to the continuation of employment without enquiring about the nature of the work. That line of enquiry avoids the question of extent of the appellant's work fitness, particularly whether he was fit for the work he did before his alleged injury. Also misleading was the assumption that when the appellant was in receipt of an unemployment benefit he was therefore fit for work and not eligible for weekly compensation. The case was not put that way on review. The appellant was given the opportunity to explain his alleged incapacity in the following passage in the transcript: "we are not disputing [whether the appellant saw Dr Gray] at all but what we are disputing is whether you can work or not you see and we've got to be satisfied that you couldn't. Plenty of people go along and have physio and all they do is take time off from work to go and have it and go back to work ... but what we would be looking for really from the physio is something that says in their opinion your back was in such a state that you couldn't work you see, that you are unable to work but you see the treatments (inaudible) difficult with the first one, 1981 was the first one or was it 1981, was November and then there were, looks like I, 2, 3, 4, 5, 6, 7, 8, - 9 treatments then and then nothing until July '84 and then there's 1, 2, 3, 4, 5, 6, 7, 8, 9 - 15 about 15 appointments then and then in August '84 there was another 1, 2, 3, 4, 5, 6 another 8 - 9" The appellant did not think to enlarge the question by referring to evidence of reduction of heavy work but instead he answered that enquiry by speaking about the doctors he visited and the temporary relief of his symptoms. That was an important concern to him because the Corporation had been seeking clinical notes from Dr Gray who had attended him over the relevant time but those notes had been destroyed or could not be located. The appellant was naturally concerned that his claim was rejected, or at the - 5 - very least prejudiced, by the loss of medical notes over which he had no control. Perhaps because of preoccupation with that issue no consideration was given to workplace evidence tending to show that he could not continue with the work that he had done before. It can fairly be assumed that the Review Officer did not deal with the possibility because it was not part of the material before him. That is why he focused on whether incapacity occurred at the time of finishing employment. It followed, so Mr Smith submitted, that the question of temporary incapacity caused by the appellant's knee injury tended to obscure the real enquiry. If injury by gradual process is considered on appeal, then the appellant submits that there is sufficient evidence by way of records of treatment and the records relating to the termination of his employment in order to determine his eligibility for earnings related compensation. Mr Cleary for respondent first took a point of construction of the transitional provisions of the Act and submitted that because the appellant did not lodge a claim for vocational benefits until 26 February 1993 the Corporation cannot look at a date of incapacity earlier than the commencement of the 1992 Act. He submitted that by requesting vocational assistance the appellant made an indirect claim for weekly compensation and he made that claim under the 1992 Act. Under s 135(3) any person who suffered personal injury by accident before 1 July 1992 and who has lodged a claim with the Corporation shall have the acceptability of that claim determined under the 1982 Act as if it had not been repealed. Continued entitlement is then assessed as appropriate. The appellant did lodge an advice of injury form Cl on 18 February 1991 and had it accepted for purposes of lump sum awards. The respondent submits that was not a claim for earnings related compensation and the appellant is no longer entitled to have that claim determined under the 1982 Act. It must then be treated as a claim under the 1992 Act and his entitlement cannot commence earlier than 1 July 1992. Mr Cleary said that if a claim was able to be made before 1 October 1992 (the closing date for claims under the earlier Acts) it did not follow that it still fell under the earlier Act if it was made after 1 October 1992; it would then fall to be considered only under the 1992 Act. He submitted that there could then be no entitlement to weekly compensation because there were no earnings within s 40 of the 1992 Act. The submission is based on the often cited observation of Hardie Boys J concerning s 135 in Childs v Hillock [1994] NZAR 97, 101: 'It is not a section creating rights but rather one that ameliorates the consequences of the change from a more generous to a less generous compensation scheme. Under the new Act certain eventualities occurring after I July 1992 are no longer covered. The earlier Acts have been repealed as at I July 1992, unclaimed cover under those Acts in respect of those eventualities would come to an end unless preserved. Subsection (5) preserves them for three months. If the opportunity is not taken to lodge a claim, then the cover is lost." In King v ACC (1994) NZAR 159, Barker J said: "Section 135(3) of the 1992 Act applies to claims lodged before I October 1992 ... Despite the contentions of the respondent to the contrary, it is my view that the word 'claim' must apply to the whole range of claims possible under the 1982 Act. - 6- The words 'acceptability of the claim' are wide and there is no warrant for restricting their meaning to the initial decision as to whether the claimant has or has not suffered personal injury by accident and thereby becomes qualified to make one or more of a variety of claims available under the Act. I consider that's 135(3), given a full, large and liberal interpretation is sufficiently broad to include an injured person's entitlement to have a claim for a s 60 assessment considered." I do not accept that submission. What Childs v Hillock decided is that there is no continued right to the benefit of a claim under the former Acts except to the extent that the right is preserved under the 1992 Act. Cover is lost if a claim was not lodged by 1 October 1992 because the right to cover is not preserved by s 135(3) unless the claim is lodged by that date. There are special rules relating to lump sum compensation which is lost if certain other requirements under s 147 are not made by stipulated dates. The observations in King v ACC relate to a different question, that is to say the interpretation of the expressions "claim" or "acceptability of the claim" as they are used in s 135. The expressions relate to the claim for cover rather than distinct claims for different kinds of compensation and they are sufficiently wide so that a determination of acceptability of the claim made under s 135 qualifies the claimant for continued entitlement for rehabilitation, compensation, grants and allowances under s 135(4) which states: "(4) Where subsection (3) of this section applies, the continued entitlement of the person to rehabilitation, compensation, grants, and allowances shall be determined under those Acts, as appropriate, but subject to this Part of this Act." The appellant in this case falls within that category because he claimed for cover in due time and his claim was accepted. I cannot read into Barker J's judgment the meaning for which the respondent contends, that is to say that claims for cover and entitlements made from 1 October 1992 can only be dealt with under the 1992 Act. The source of jurisdiction will be only the 1992 Act but subs (4) contemplates that some questions of entitlement will be referable back to provisions of the former Acts. Turning back to the original claim, there are a series of links between the present claim and the question of initial eligibility for weekly compensation. Section 22 of the 1992 Act raises the question whether the appellant is a person who is entitled to compensation for loss of earnings under s 39 of the Act. There is a potential conflict here because the enquiry is connected expressly with s 39 of the 1992 Act, which is different from s 59 of the 1982 Act under which compensation would have been determined if the claim had been made earlier. I will refer to that shortly. Section 39 in turn refers to 80% of "weekly earnings". Weekly earnings is in turn calculated as required by s 40 which states: "40. Calculation of weekly earnings where earner had earnings solely as an employee during the 12 months before commencement of incapacity - (1) this section applies only to earners who are earners immediately before the commencement of the incapacity and who, during the 12 months immediately preceding the commencement of the period of incapacity, had earnings as an employee and who did not also have earnings other than as an employee. - 7- Section 40 refers to the commencement of incapacity. Commencement of incapacity is a question of fact which cannot be artificially limited by the commencement of the 1992 Act. The enquiry under s 40 is whether during the 12 months immediately preceding the commencement of incapacity the appellant had earnings as an employee (and not other than as an employee) and the calculations in the remaining subsections then have to be made. The question then arises whether the question to be determined is the "commencement of incapacity" as it was defined by the 1982 Act or as it is now defined by the 1992 Act. Section 135(4) authorises an enquiry under the former Acts "as appropriate". I consider that it is not appropriate when applying s 22 because s 22(1)(a) refers expressly to those persons who are entitled to compensation for loss of earnings under sections 38, 39, and 44 of this Act, it does not refer to persons entitled to earnings compensation under the former Acts. Therefore the question of entitlement is one of entitlement under the 1992 Act, not under the 1982 Act. That is also consonant with the purposes of the Act. In this appeal the decision about entitlement is governed by s 22 and is to be made under the 1992 Act, employing 1992 Act definitions but dealing with whatever period of time is relevant, including the period of the appellant's employment from 1979 to 1986. Having taken the reasoning that far, I have to reject a further submission of the respondent that an analysis is necessary for present purposes to decide whether the appellant would have been entitled to earnings related compensation under s 59 of the 1982 Act, the reason being that any entitlement during a period before 1 July 1992 is not relevant for the purposes of s 22. The question is whether he is now entitled, not whether he has been entitled in the past. It should be noted that if there is a claim for backdated earnings related compensation the enquiry will not be restricted by the specific provisions of s 22 and different considerations may well apply. The respondent's submission then is that the appellant has not shown any such entitlement because there is insufficient evidence that he suffered incapacity either while he was working or at any subsequent time. The respondent's submissions were directed at the question of loss of earning capacity because of the argument that s 59 of the 1982 Act had to be applied. I must apply those submissions with suitable modification to address the question whether there is any evidence of incapacity as defined in s 37 of the 1992 Act which is rather more favourable to the appellant because it is a definition of a functional incapacity that survives a revival of earning ability Mr Cleary submitted that the appellant continued to work for Doonan's Industries for over 6 years periodically seeking treatment to relieve symptoms which manifested as pain rather than loss of function. He made a compensation claim, but it was for his knee injury not for his back injury which raises a real question of the effect of his back injury, being an injury for which he did not think to make a compensation claim although he was aware of his general entitlement to make a claim. He not only continued to work for Doonans but he was able to move to another job working as a driver for Reids Smallgoods. When leaving Doonans he did not express reasons connected with back problems but said that he was moving to Tauranga, or on one account that he was suffering from cancer. He then did not apply for any compensation or sickness benefit which is inconsistent with his present claim to have been suffering incapacity preventing his carrying out employment tasks that he was formerly able to do. There is no clear medical connection between his present condition and the lifting work that he says he was required to do and after such a lapse of time, occasioned through the appellant's own delay in making a claim, it is now very difficult to - 8- investigate whether there were circumstances giving rise to a gradual process injury claim. Finally, Mr Williams did not venture an opinion that he was no longer able to perform the worked he had been accustomed to doing and there is no objective medical view supporting the appellant's claim. Mr Dawe and Dr Graham diagnosed fibromyalgia and attributed 20% of the appellant's current symptoms to his work, which is not sufficient to establish the requirements of a gradual process injury. Dr Gray, whose records could not be located, wrote that he could not understand why the appellant had not worked since 1987. Mr Cleary said that it was "overwhelmingly unclear" that the appellant suffered an injury resulting in incapacity and that the Corporation is prejudiced in having to address the question of causation after such an inordinate delay in making a claim. In reply Mr Smith addressed some of the statutory questions that I have now dealt with and he submitted that the appellant meets the test of incapacity under s 37 unless none of his prevailing condition is due to personal injury by accident. If there is any incapacity caused by the injury then the appellant is entitled to earnings related compensation. To that it may be added that the reason that he did not make a claim for his back may well be a very simple one, that is that he did not suffer a loss of earning capacity until his knee injury occurred. Until then, it is alleged, he was able to move to supervisory duties and was not immediately troubled by a loss of earning capacity. It was not until his knee stabilised and when he had to consider re-entering the work force that the effect of his back injury manifested in loss of earning capacity. A key point of the appellant's claim for vocational rehabilitation was that the Corporation had already accepted his claim for cover and assessed permanent disability, so that acceptance of statutory incapacity followed almost inevitably from the combined features of his previous employment involving heavy lifting and his present disability preventing performance of heavy work. If incapacity has occurred, then the appellant says it can only be reasonably supposed to have occurred at the time when he was working, so that it follows that he was an earner and eligible for compensation. I consider that there is proper ground for granting leave to appeal because there is a serious question to be addressed on appeal. I have then to consider whether the Review Officer failed to address the appropriate questions or decided against the weight of evidence, or whether there is further evidence available on the appeal which should be taken into account. The Review Officer apparently did not have the evidence that is now available concerning the date the appellant left Doonans and the material relating to his knee injury claim. He said: "Mr Watson has maintained that he has been incapacitated from the time that he left Doonan Industries but no firm leaving date has been established nor has there been any firm evidence that satisfies the Corporation that Mr Watson's reason for leaving Doonan Industries was as a result of the accident." Accordingly the decision was based on uncertain evidence. As I have said, the Review Officer touched on aspects of gradual process injury but obtained no relevant information from the appellant, who was then unrepresented. In his decision he focused on the practical question of whether any incapacity from a back injury was evident at the time the appellant ceased working, the underlying premise being, no doubt, that if it manifested more than a year later it would not qualify the appellant for earnings compensation because there would have been no earnings during the relevant period. 9 - There was no evidence at all relating to incapacity occurring at some time after termination of employment so that possibility was quite properly discounted. In stating the practical question the Review Officer did not accurately state the correct legal question, but there is no reason to doubt that he had it in mind. Unfortunately, either because of the appellant's own failure to address the correct issues or because no evidence was available, the review process failed to enquire directly about the possibility of injury having developed before the appellant's employment ended and consequently about his pre-injury duties and post-injury capacity. The importance of enquiring about those questions has been demonstrated on the appeal, but there is still insufficient evidence to resolve them. I think there is sufficient threshold evidence to show that further enquiry is necessary. For those reasons the appeal is allowed and the Review Officer's decision is revoked. The primary decision will be considered again by the Corporation on the material that the appellant can make available now that he is represented. DATED at WELLINGTON this 25 day of October 1995 D A Ongley District Court Judge