Whiting v Accident Compensation Corporation

IN THE DISTRICT COURT AT CHRISTCHURCH WELLINGTON REGISTRY [2011] NZACC 7 AI 217/08 AI 218/08 UNDER THE ACCIDENT COMPENSATION ACT 2001 IN THE MATTER OF an appeal pursuant to Section 149 of the Act BETWEEN BRUCE WHITING, Barrister, Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent Hearing: 7 July 2010 Appearances: Appellant on his own behalf Mr H A Evans, Counsel for ACC Judgment: 17 January 2011 RESERVED DECISION OF JUDGE PF BARBER [1] Mr Whiting lodged eight review applications (detailed below) against three decisions issued by ACC. Case AI 217/08 relates to a number of review applications. The issue is whether Mr Whiting is entitled to reimbursement of business related expenses as part of his vocational rehabilitation outlay. [2] There is a remaining issue in Case AI 218/08 about Mr Whiting's request that ACC fund his Life Link alarm. This is based on Mr Whiting's concern to guard against the possibility of a third cardiac event. The issue is whether this claim is related to his covered treatment injury. BRUCE WHITING V ACCIDENT COMPENSATION CORPORATION DC CHCH AI 217/08 Background A1217/08 [3] On 25 April 2005, Mr Whiting suffered a myocardial infarction (MI) i.e. a heart attack. On 22 June 2005 he suffered a second MI. A claim was lodged for a treatment injury in respect of a delay in treatment. This was on the basis that the MI on 22 June 2005 was caused by a delay in diagnosis and a lack of treatment which resulted in a more extensive ventricular injury. [4] After an assessment by Dr I Turner, a Psychiatrist, ACC accepted cover for a mental injury in a decision dated 28 December 2006. [5] Since 1994, Mr Whiting has been a self-employed barrister based in Queenstown. He was a practising barrister at the time of his treatment injury and from the date of the second MI was incapacitated from work as a result of it. During his incapacity and rehabilitation he kept his business premises available for him to resume his barristerial work upon his recovery. This involved paying overheads. [6] On 28 February 2007 Mr Whiting submitted three requests for assistance to ACC and made three claims for "fixed cost overhead from keeping office space". These costs related to office rental, cleaning, and telephone and are summarised as follows: 1 November 2005 to 28 February 2006 2,520.00 1 March 2006 to 30 August 2006 3,150.00 1 September 2006 to 28 February 2007 4,056.82 [7] On 6 March 2007, ACC issued a decision letter (incorrectly dated 1 July 1974) declining Mr Whiting's request for assistance. The relevant part of that letter is as follows: "This is because business overheads are not a cost that ACC is able to fund. ACC is paying you weekly compensation and any expenses related to your business should be funded from this entitlement". [8] On 23 May 2007 Mr Whiting submitted an amended claim for the third period referred to above, and claimed from 1 September 2006 but extended the end time from 28 February 2007 to 31 March 2007 and with an amended amount of claim as $4,807.13. ACC responded by letter of 8 June 2007 advising Mr Whiting that his request was declined. [9] On 5 June 2007, a further five requests for assistance for the appellant were submitted for reimbursement under business costs, relating to office telephone connection and associated listings and the cost of obtaining his Practising Certificate. These claims can be summarised as follows: Phone connections and associated costs 1 November 2005 to 31 March 2006 56.25 Phone connections and associated costs 1 April 2006 to 30 September 2006 870.78 Phone connections and associated costs 1 October 200of to 31 March 2007 870.78 Cost of Law Society Practising Certificate 1 November 2005 to 31 January 2006 285.84 Cost of Law Society Practising Certificate 1 February 2006 to 31 January 2007 1,622.25 On 12 June 2007, ACC issued a third decision in relation to those 5 claims of the appellant and declined them all. Dr Barry Miller - General Practitioner - 1 April 2008 [10] Mr Whiting requested his general practitioner, Dr Miller, to provide a report. The relevant part of that report is as follows: "In regards him keeping his professional rooms open from the time of his second infarct. Under normal circumstances one could expect someone to make a return to some sort of work after 3-6 months. There was no way of predicting that Bryce would have suffered such severe side effects from his condition in predicting how long it would take for these to resolve. The first year I would not have said that he was capable of making an appropriate decision but to have closed his business would have had a profound effect on his rehabilitation and he may never have returned to work." In a handwritten note, Dr Miller also said: His decision- making would have been affected by his emotional state. To have closed his business would have removed his incentive to get better. Review hearing [11] A review hearing took place on 8 May 2008 and in a 19 May 2008 decision, all eight of the applications for review were dismissed. The Reviewer (Ms K Stringleman) concluded on page 11 of her decision that all the claims for costs submitted by Mr Whiting were business decisions. She concluded: "I do not consider that they were decisions which related to his vocational rehabilitation. . . . In the ordinary understanding of the concept, vocational rehabilitation would encompass such matters as training and re-training, up-skilling or acquiring new vocational skills and abilities etc. However, where a claimant is incapacitated from his ordinary employment by, in this case, the combined effects of injury and illness, for a period, but is ultimately going to return to his previous profession, it is simply a matter of recovering from incapacity and returning to his profession. Mr Whiting, himself, encompassed this concept when he said that the purpose of maintaining his business base was in readiness for his return to his profession when he got better." That is a helpful assessment of the situation by the Reviewer, Ms Stringleman. The Law [12] The relevant parts of the 2001 Act are as follows: [13] Section 6 (which sets out definitions) defines "rehabilitation" as:- (a) means a process of active change and support with the goal of restoring, to the extent provided under section 70, a claimant's health, independence, and participation; and (b) comprises treatment, social rehabilitation, and vocational rehabilitation. [14] ACC provides rehabilitation through an agreed rehabilitation plan (an IRP). Within 13 weeks after accepting any claim, ACC must determine whether a claimant is likely to need social or vocational rehabilitation and, if so, must prepare the plan under s 75 of the Act. [15] Section 70 of the Act sets out the obligations of both the claimant and ACC in relation to rehabilitation and reads: A claimant who has suffered personal injury for which he or she has cover- (a) is entitled to be provided by the Corporation with rehabilitation, to the extent provided by this Act, to assist in restoring the claimant's health, independence, and participation to the maximum extent practicable; but b) is responsible for his or her own rehabilitation to the extent practicable having regard to the consequences of his or her personal injury. [16] Under $ 79, "social rehabilitation" is designed "to assist in restoring a claimant's independence to the maximum extent practicable". Section 81 lists the key aspects of social rehabilitation which the Corporation is able to provide. They include aids and appliances, attendant care, child care, education support, home help, modifications to the home, training for independence, and transport for independence. Under s 80, the purpose of vocational rehabilitation is to help a claimant maintain or obtain employment or to regain or acquire vocational independence. While a claimant has an entitlement to rehabilitation, he is responsible for his own rehabilitation to the extent practicable. Under s 6 "practicable" "in relation to rehabilitation, means practicable after considering and balancing the following: (a) the nature and consequences of the injury: (b) the achievement of rehabilitation outcomes: (c) costs: (d) cost effectiveness: (e) the availability of other forms of rehabilitation: () other relevant factors. " [17] Section 70(b) (set out above) continues to place on the accident victim, a degree of responsibility for that person's own rehabilitation to the extent possible having regard to the person's condition. Section 80 reads: 30 Purpose of vocational rehabilitation (1) The purpose of vocational rehabilitation is to help a claimant to, as appropriate,- (a) maintain employment; or (b) obtain employment; or (c) regain or acquire vocational independence. 2) Without limiting subsection (1), the provision of vocational rehabilitation includes the provision of activities for the purpose of maintaining or obtaining employment that is- (a) suitable for the claimant; and (b) appropriate for the claimant's levels of training and experience. [18] The objective of vocational rehabilitation is to assist claimants who qualify to maintain or obtain employment or regain or require "vocational independence" which is defined in Section 6 as the capacity to engage in work for which the person is suited by reason of experience, education or training, for 35 hours or more per week. [19] Section 87 is also relevant and $87(1) provides: (1) In deciding whether to provide vocational rehabilitation, the Corporation must have regard to- (a) whether the vocational rehabilitation is likely to achieve its purpose under the claimant's individual rehabilitation plan; and (b) whether the vocational rehabilitation is likely to be cost-effective, having regard to the likelihood that costs of entitlements under this Act will be reduced as a result of the provision of vocational rehabilitation; and (c) whether the vocational rehabilitation is appropriate in the circumstances. [20] In Ten & Boon v ACC (268/01) this Court considered issues relating to the exercise of a discretion by the Corporation in relation to a request for a motor vehicle. The Court held that there was no evidence that a modified vehicle would assist the Appellant in obtaining or retaining employment. The Corporation has to weigh the cost and the relevant benefit to the claimant of the transport sought. At paragraph 54, the Court said: Clearly Parliament intended that the Corporation should take into account the question of costs in balancing its finite resources against the other criteria set out in clause 50 [of the Act]. Discussion [21] Both the appellant and Mr Evans seemed to agree that I have an issue of statutory interpretation before me i.e. do these claimed costs fall within or without the provisions of the Act. Mr Evans seemed to concede that it was sensible of the appellant to have kept himself "in business readiness" to return to work but that concept does not fit with the Act. [22] With regard to the claim for business costs or overheads, the appellant put it that he incurred these due to his own rehabilitation target of getting back into his law practice within two years from the second heart attack, and he did that in 22 months. He had felt it was wise to continue paying the fixed costs of his legal practice four years ago which resulted in him being able to recommence his legal practice after 22 months of illness. [23] Very helpfully, Mr Whiting filed two sets of written submissions and traversed the law. He submits that it was for the purposes of "obtaining employment" that he felt it necessary to "continue to retain an established business premises, and profile within the community and profession ...". He submits that the decision to keep his office open was a "long term rehabilitation strategy decision not a business decision." (his emphasis) Significantly, he then states: From a business perspective the decision was foolish and uneconomic - to incur expenses when no revenue would be generated - and hardly good business practice. However I could foresee the difficulty in re-establishing a business base when my health allowed return to work and equally the difficulty in finding alternative work as an employed lawyer giving my physical and psychological limitations ..." (emphasis added). [24] By Mr Whiting's own admission, his decision to maintain his business premises was uneconomic. I do not accept that there was any real social or vocational rehabilitation involved in that. [25] I understood that the appellant's stroke was rather minor. However, he still suffers its effects by way of numbness on the left side of his body and slower physical reactions in general and still with some difficulties in spelling and arithmetic. [26] I particularly note that one of the consequences of the event of 22 June 2005 was mental injury. [27] A point seems to be that there were delays in the management of that second event which took place on 22 June 2005 resulting in a very extensive area of myocardial damage and necrosis. ACC accepted that the appellant's severely impaired function then was a result of that delay. The delay seemed to amount to medical misadventure because of the delay in management of the second heart attack which was caused by "unexpected stent thrombosis"; so there was a treatment delay in June 2005. [28] Exactly what the treatment injury was has not been spelt out to me. I had thought that it was the failure of the original stent but the appellant seems to be saying there was more to it than that. On the file there is a treatment injury advice template to ACC from a cardiologist as at 11 December 2005 and, in simple terms, the treatment injury seems to have been that, at the outset, a medical registrar at Dunedin Hospital had not recognised the acute myocardial infarction from the information faxed to him or her. This meant that the MI injury of 25 April 2005 was made worse by the non-administration of a thrombolytic as an aid to try to re-open a blocked artery and so minimise myocardial damage. Also, the appellant developed sub-acute stent thrombosis which is a known complication of intra coronary stenting two months later. That is rare because is more likely to occur within 24 - 48 hours so that the sub acute stent thrombosis in this case was regarded as a very rare complication. In any case, the appellant was covered for a treatment injury arising out of these events. [29] ACC's position is that s 80 provides that the purpose of rehabilitation is to maintain or obtain employment or regain or acquire vocational independence. It is submitted for ACC that the payment of business overheads does not fall within s 80. Mr Evans adds that even if it did (which is not conceded), ACC is restrained by and obliged to follow the provisions of s 87 of the Act which requires ACC to consider the cost-effectiveness of the proposed vocational rehabilitation. He puts it that the Ten & Boon case (supra) demonstrates ACC must have careful regard to the issue of costs. Mr Whiting has conceded that to maintain business premises, when he was not receiving any income or generating any revenue from it, was "foolish and uneconomic. " As the appellant also quite properly acknowledges, "to incur expenses when no revenue would be generated (is) hardly good business practice". [30] I agree with Mr Evans that ACC is charged with the administration of public funds and must make decisions which comply with the provisions of the 2001 Act. It is clear that cost effectiveness is an important principle to be applied by ACC. [31] Detailed submissions were put to me on the question of whether or not ACC should reimburse the appellant for business expenses or overheads he continued to incur while ill for 22 months. However, the point of the Act is to provide weekly compensation and costs (as well as rehabilitation) where a covered claimant qualifies for that. Such compensation is generally based on loss of earned income , i.e. in the case of the appellant, on his net income or profit from his practice as a lawyer. That would take into account overheads. It seems to me that any loss to the appellant must be confined to loss of earned income which does not include an expenditure outlay to preserve the capital asset of legal practice goodwill. [32] Accordingly I agree with ACC and the Reviewer, Ms Stringleman that the appellant's request for office overheads is declined. AI 218/08 - The Lifelink Alarm [33] The decision letter is that of 10 October 2007 which confirmed that payments for the item would cease as advised previously. By letter of 18 September 2007, ACC had confirmed that funding for the alarm would be valid for 2 years from July 2005. On 28 December 2006 ACC had written to Mr Whiting advising that ACC would fund the Lifelink alarm for a period of 2 years from July of 2005. For the purposes of the review hearing on 8 May 2008, the letter of 10 October 2007, from ACC to Mr Whiting, was treated as being the decision letter. [34] Mr Whiting's submissions provided further information about a review application he has lodged asking ACC to reconsider the refusal to continue paying for the Lifelink alarm. That review was lodged by Mr Whiting on 27 November 2008. On 4 December 2008 ACC issued a revised claim decision which was a revocation and substitution of the 15 July 2008 cover decision and approved cover for the treatment injury of 22 June 2005 and the stroke of 15 May 2007. The heart attack of 25 April 2005 was excluded from cover. [35] Mr Whiting relies upon a letter of 1 April 2008 from his GP, Dr Valerie Miller, where Dr Miller has confirmed that she recommended that Mr Whiting wear a Lifelink alarm. He also relies upon the report of 14 April 2008 from Mr G T Wilkins, a Consultant Cardiologist, whose view was that the Lifelink device was "entirely justified" for several reasons, namely: (a) ACC accepted that Mr Whiting's severely impaired function was a result of the delay in the management of his second myocardial infarct. (b) Mr Whiting was at risk of heart failure because of his impaired function. (c) Mr Whiting had extensive myocardial damage and had a risk of serious cardiac arrhythmia. (d) Mr Whiting's extensive impaired function put him at risk of recurrent embolic events of which he had already suffered one. [36] Finally, Mr Whiting relies upon a letter of 14 January 2008 from Mr Tim Hull, a Cardiologist based in Christchurch whose opinion was: "I would guesstimate that 20% of the myocardial damage was due to the pre- treatment myocardial infarction and 80% through the repeat instent thrombosis." [37] ACC's decision of 10 October 2007 must be judged on the basis of the information available at the time, and importantly, the cover which ACC had granted to Mr Whiting at that point in time. Reference must therefore be had to the treatment injury claim decision letter of 11 January 2006. The relevant part of that letter is as follows: "You have asked ACC to cover your claim in respect of myocardial infarction of 22 June 2005. ACC has agreed to accept this claim for: Myocardial infarction of 22 June 2005 resulting in a deterioration of cardiac function. Please note that the following condition has not been covered by this claim: . Myocardial infarction of 25 April 2005." (38] ACC extended cover for the second infarction of 22 June 2005 on the basis that it was caused by thrombosis of the coronary stent, and the delay in diagnosis and lack of treatment for the myocardial infarction "resulted in more extensive ventricular injury". Mr Evans sees it as significant that the myocardial infarction of 25 April 2005 was not identified as being related to treatment in that case and did not fall within the covered treatment injury decision. [39] At the initial review hearing, the essence of the submission made by ACC was that the requirement for the Lifelink alarm related solely to Mr Whiting's cardiac problems and not to the treatment injury for which he had cover. [40] Mr Whiting has expressed concern about that and contends that ACC's counsel at the review hearing misinterpreted ACC's decision letter of 11 January 2006. Mr Evans puts it that ACC's position has been consistent. [41] Ms Stringleman, the Reviewer, noted at page 10 of her decision: "I agree with ACC's conclusion that his requirement for the Lifelink alarm is associated with a serious cardiac condition in respect of which his covered injury has a relatively minor role. ... Mr Whiting's fear of another cardiac or associated event is the problem underlying his preference to have the Lifelink alarm. Having reviewed the medical evidence I consider that this fear is clearly the consequence of the delay in providing treatment which is the basis of Mr Whiting's cover for a treatment injury. [42] Mr Evans submits that is a correct statement and position; but it seems to me that the need for the alarm is prudent and results very substantially from the treatment injury. [43] I am conscious of Mr Evans referring to the Reviewer concluding that ACC did not have a liability to provide Mr Whiting with funding for a Lifelink alarm because: The medical evidence shows that his fear of another cardiac or associated event, and thus the requirement for the alarm, is a consequence of having suffered two myocardial infarctioner than the delay in providing treatment following the second event for which he has cover. . He has not been assessed under Section 84 of the Act as needing ...I the key aspect of social rehabilitation. The alarm does not come within the definition of treatment for his covered injury. [44] Section 81(1)(a) provides that an aid or appliance is a key aspect of social rehabilitation, and (under s 81(4)(c)) must be required as a direct consequence of the personal injury for which the claimant has cover. Section 84 of the Act provides for an assessment to be carried out to determine a claimant's need for social rehabilitation and identify the specific social rehabilitation "that the claimant needs". Mr Evans points out that, in the present appeal, no such assessment has been completed, and that the reports from Dr Mill and Mr Wilkins are not assessments in terms of s 84 of the Act. However, I consider they are adequate assessments in a case such as this where the need for the alarm is obvious based on common sense. [45] The Reviewer correctly noted that s6 of the Act defines "treatment" as including physical and cognitive rehabilitation. She then concluded at page 11 of her decision: 'I doubt whether an alarm which could be used by the applicant should he suffer a further cardiac or associated event while he (is) at home alone could be considered physical or cognitive rehabilitation. While the alarm provides Mr Whiting with some "peace of mind" in limited circumstances, he cannot, in my view, be said to be treating, either physically or cognitively, the injury for which he has cover." Those are logical views but I feel that the availability of the alarm can form part of physical and / or cognitive rehabilitation. [46] The appellant emphasised that both heart attacks and strokes happened in his home with a very quick onset and each would have been fatal but for the early intervention of the ambulance and because there was someone else in his house to call the ambulance. When he applied for the alarm, he was in a traumatised condition. He is now much better, but still wears the alarm in his home out of prudence to prevent further harm. He puts it that the availability of the alarm for him is "treatment". He also points to medical evidence that at least 80% of the damage to his heart was caused by the second heart attack which resulted in massive damage to his heart. Presumably, the first attack was the result of heart disease. [47] Mr Evans submitted that the fear of a future medical event is outside the scope of ACC's liability so that it could not be obliged to pay for the alarm. He submits that the short point is that social rehabilitation does not cover providing such an alarm to a covered person. He emphasised that s 84 is the gateway provision and that requires a formal assessment which was not done in this case and so is a barrier in any case. [48] I agree that under s 161(2)(b) the Court has power to require ACC to make a s 84 assessment which would include having ACC decide whether to pay for the alarm for the present and for the past. [49] The appellant took issue with the Reviewer's approach that vocational rehabilitation had to be an active process and could include the provision of the alarm appliance. [50] I record Mr Evan's further point that in the revised decision of 4 December 2008, the scope of cover for the physical injury has been extended; and there is nothing to prevent Mr Whiting from requesting ACC to reconsider his request for a Lifelink alarm, in relation to the extended cover. He put it that there is no guarantee that ACC will provide the funding for that alarm, but Mr Whiting is entitled to ask ACC to consider his request, in light of the revised treatment injury decision. [51] I prefer to find for the appellant on this issue at this stage. As indicated above, the appellant's need for the alarm is prudent (and necessary) and results very substantially from the covered treatment injury. I require ACC to fund the alarm because I consider the need for that to be a direct consequence of the covered injury. [52] Because the appellant succeeds to a fairly minor degree, he will be entitled to an award of costs to some extent. I reserve leave to apply on any consequential aspect and on the basis that any submissions about costs are filed with my Registrar within 28 days of the date of this decision. Judge P F Barber District Court Judge Wellington