Watson v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT WELLINGTON Decision No. 206/99 UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an appeal pursuant to section 91 of the Act BETWEEN CHRISTIAN PAUL WATSON of Dunedin Appellant (Appeal No. DCA 406/98) -. -- - - AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent RESERVED JUDGMENT OF JUDGE A W MIDDLETON ON THE PAPERS The appellant has appealed against the decision of the review officer in which she declined to meet the costs involved in setting up a trust and completing an enduring power of attorney for the appellant. The appellant is now aged 25 and suffered brain injuries in a motor cycle accident on 27 December 1991. A comprehensive needs assessment report carried out by Work-Ability Otago Lid between June 1995 and May 1996 and submitted to the respondent on 16 July 1996 described the appellant's impairment as: "As a result of his brain injury Christian has severe cognitive deficits including global impairments of attention, concentration, energy levels, motivation and initiative, new learning, memory and complex problem solving, literacy and mathematical concepts. He has severely impaired visuo-motor function. His auditory comprehensive is poor. 2 He has word finding difficulties and poor reasoning and idea sequencing ability. Christian has seriously deficient concepts of time and space. He has a complete right homonymous hemianopia. Christian also has weakness in his right upper and lower limbs and bilateral co-ordination difficulties. He also has balance deficits. Cardio- respiratory endurance is also poor. It is likely that a strong contributory factor in this last deficit is Christian's reluctance and inability to do activity that increases cardio respiratory fitness because of his other deficits. Damage to his 'appetite centre' means that Christian does not experience the normal physiological symptoms of hunger." In the same report the assessor noted under the heading "'Business Affairs Management': As a result of his injury Christian is no longer able to manage his financial affairs. Since his injury his parents have taken responsibility for this and will continue to do so. In recognition of Christian's need for lifetime financial affairs management his parents have set up a trust for this." The respondent had accepted that the appellant came under the Complex Personal Injury regime and various assessments had to be carried out with a view to his rehabilitation. In the statement of goals submitted with the comprehensive needs report received on 16 July 1996 was the need "to give Christian secure ongoing financial -. .. .- security". On 1 November 1997 the appellant's mother applied to the respondent to meet the costs of the Deed of Trust which his parents proposed setting up for his future support. There does not appear to be a copy of the Deed of Trust on the file so I propose to note what Mrs Watson submitted to the respondent at that time which was: "Murray and I have, after much thought and in conjunction with our Lawyer recently formed a Trust for Christian. It has been a long and lengthy process with our Lawyer seeking advice from a fellow colleague who deals specifically in this field. It did in fact take several months of careful thought and planning as he not only consulted with us and his colleague, but also spoke at length with Christian and Roger Shave (Clinical Psychologist). We have not taken this step lightly. Christian's brain injury is of such a serious nature that it is considered highly unlikely he will ever be able to manage his own business, financial and/or legal affairs. This Trust has not only been set up for his immediate protection, but (and perhaps more importantly) for his future years when we are no longer here to provide the necessary ongoing support. I believe there is provision under CPI for financial assistance to help Christian with ongoing legal costs and a recommendation was put forward for these costs to be met by the Corporation in Christian's Comprehensive Needs Assessment (May 1996). 3 I am therefore forwarding this bill to the Corporation for consideration." On 20 March 1998, the respondent notified the appellant's mother that the application for legal costs for setting up the trust was declined pursuant to s.26 (Objective and Social Rehabilitation) of the Accident Rehabilitation and Compensation Insurance Act. The stated reason was that "legal fees are considered to be quite a different nature and kind to the categories identified in the definition 'social rehabilitation' in the CPI Regulations" (Complex Personal Injury Regulations). The appellant applied for a review of that decision which was declined. A neuropsychology report prepared by Dr K Peace, of the Department of Psychological Medicine, Otago University, dated 25 September 1998 gives as its conclusions and recommendations: "The results of the present assessment indicate that while Christian continues to have significant and severe difficulties with respect to social interactions, initiating and maintaining behaviours, several aspects of executive functions (such as planning, organisation, allocation of attention etc), self-awareness of deficits, aspects of verbal - . -- - - memory, there are also some significant improvements that have taken place since the last assessment in 1995, notably in mood, loss of suicidal thoughts, improved memory and possibly visuospatial reasoning. The nature of his cognitive deficits, however, continues to necessitate the continuation of 24 hour care, for all of the reasons mentioned in this report and the scoping report of 22.09.98. As mentioned in Barry Longmore" report each of the deficits on their own are not sufficiently severe to prevent activities of daily living but taken together they constitute extreme, profound and complex disability. I would continue to endorse the conclusions recommended by Barry, namely that he needs 24 hour care for both physical and psychological protection, and this should not be decreased until he is safe and secure. This does not appear to be the case at the present time, and he would be at significant risk should the care be in any way decreased. Two issues that I was specifically asked to address were the scope for further gains and methods to achieve this. It is my opinion that Christian has shown some significant gains in the past 3 years, considering the nature and extent of his disabilities. The methods currently being employed are likely to be responsible for much of this gain, and would, in my view, be the best way to maximise future gains. There is currently one area which need to be addressed namely the availability of psychological therapy for Christian. The negative consequences that occurred when the regular sessions with Roger Shave stopped, i.e. the increase in interpersonal friction between Christian and some of the facilitators, and eventual loss of facilitators, suggests that the sessions were of considerable benefit in maintaining Christian within a community setting. As is often the case following severe brain injury therapy serves to maintain people even if it does 4 not lift their level of function. Loss of therapy in this case seems to have led to a deterioration and should therefore be reinstituted." This report was made after the appellant had been set up in his own home with one flatmate and several facilitators who work shifts in order to provide him with 24 hour care. It is quite clear from the reports from the file that this situation is likely to continue indefinitely but is deemed to be an essential ingredient towards his rehabilitation. In the notice of appeal the appellant has requested reimbursement of the legal fees involved in the preparation of the Deed of Trust and an enduring power of attorney and also seeks payment of future legal costs. The question of future costs is not an issue over which the Court has jurisdiction and will have to be dealt with by the appellant as the situation arises. The appellant's advocate in a very full submission set out the reason for the establishment of the trust as follows: "The Trust has been established by Christian's Parents, Murray and Maureen Watson to provide accountability for their sons personal, financial and legal management. The trust has independent status for tax purposes and the ownership of Christian's home is vested with it. This legal mechanism provides the essential legal and personal protection Christian requires as a consequence of his serious brain impairment. The Trust Deed places explicit limitations on future financial decision making and any consequential commercial decisions which could potentially adversely effect Christian's personal security by putting him at financial risk. The Trust also gives clear guidance on the philosophical values which are to underpin Christian's welfare and personal management. The move to form a Trust and incur additional legal and financial administrative expense has not been taken lightly. Many hours of discussion and thought have been put into the Trust development. Christian has been fully consulted during all phases of the Trust's establishment. This consultation has involved slow careful and simple explanation. The Family and Christian's Lawyer have sought the independent advice of Christian's Neuropsychologist who has also discussed the Trust formation with Christian. All discussions have occurred in a setting and manner independent of parental influence. The Neuropsychologist opinion and judgment is that Christian has a proper understanding of the purpose of the Trust's formation on his behalf. The formation of a Trust provides certainty, security and protection both for Christian and his Parents. In the event of the death of his Parents future Trustees have been established who will provide Christian with advice and guidance on matters of personal and financial decision making within the framework of the Trust." The appellant's advocate submits that the need for the trust and therefore the cost of it, comes within the requirements of "social rehabilitation" as defined in s.3 of the Act. 5 The respondent submits that the legal costs incurred in setting up the trust and power of attorney did not constitute social rehabilitation. The respondent submits that the Complex Personal Injury Regulations defines "social rehabilitation" which does not include the provision of legal costs. It is submitted that while the definition seeks to include without limitation various objects for which payment can be made any extension by way of payments for objectives not set out in the list should necessarily be of a similar nature to those set out in the definition. It is submitted that by their very nature the stated objectives are for objectives not wide enough to include the legal costs involved in completion of the Deed of Trust and the enduring power of attorney. Under s.3 "rehabilitation" means "process of active change by which a person who has suffered personal injury regains or acquires and uses the skills necessary for optimal physical, mental, vocational, and social function". Section 26 provides: ""26. Objective of social rehabilitation - (1) The Objective of social rehabilitation is to restore the independence of a person to the extent that the person's independence has been lost by personal injury covered by this Act. -. - -- (2) In this Act, 'social rehabilitation' includes, without limitation, - ) Provision of, or payment for, attendant care; and (b Purchase of, and modifications to, motor vehicles and other means of transport; and (c ) Modifications to residential premises; and (d) Provision of, or payment for, household help; and ( e ) Provision of, or payment for, child care; and Provision of, or payment for, wheelchairs and any other aids and appliances likely to assist independence in daily living; and ( 8) Provision of, or payment for, teacher aides, teacher aide hours, and transport to or form school for a child requiring special assistance as the result of personal injury covered by this Act to enable the child to receive education." And 26A in so far as it applies to this appeal states: "26A. Provision of or payment for social rehabilitation - (1) Subject to subsection (2) of this section, the Corporation may make any provision or payment in respect of social rehabilitation that is required or permitted under this Act and that is consistent with the objective set out in section 26(1) of this Act. (2) The Corporation's power, under subsection (1) of this section, to provide or pay for social rehabilitation - 6 (a) Is exercisable notwithstanding anything in any regulations made under this Act, subject to any direction of a type referred to in section 159(2) of this Act that is for the time being in force; and (b) Is exercisable subject to any direction of any other type for the time being in force under section 159 of this Act. (3) No payment in respect of any item referred to in section 26(2) of this Act may be made by the Corporation other than under this section or section 23 of this Act." In so far as it applies to this appeal "social rehabilitation" has its own definition under the Accident Rehabilitation and Compensation Insurance (Complex Personal Injury) Interim Regulations 1994 as: "Social Rehabilitation' includes, without limitation, - (a) Provision of, or payment for, attendant care; and (b) Purchase of, and modifications to, motor vehicles and other means of transport; and (c) Modifications to residential premises; and -.- -- (d) Provision of, or payment for, household help; and (e) Provision of, or payment for, child care; and () Provision of, or payment for, wheelchairs and any other aids and appliances likely to assist independence in daily living; and ( 8) Provision of, or payment for, teacher aides, teacher aide hours, and transport to or from school for a child requiring special assistance as the result of personal injury to enable the child to receive education; and (h) Provision of, or payment for, training for independent living." Regulation 13 of the Complex Personal Injury Regulations in so far as it applies to this appeal states: "13. Development of social rehabilitation programme - (1) Once a statement of social rehabilitation goals has been submitted to the Corporation, the Corporation shall identify from the statement those goals in respect of which the Corporation may provide social rehabilitation to the claimant. (2) The Corporation shall develop a social rehabilitation programme to assist the claimant to achieve the goals identified by the Corporation under subclause (1) of this regulation." While the respondent has pursued the course that because there is no specific identification of an ability to pay legal costs as such it has no power to do so. I have provided details of the appellant's mother's letter and the submissions made on his behalf to indicate the nature of the appellant's problem and the reasons behind the completion of the Deed of Trust and the power of attorney. While the respondent 7 has a duty to assist with rehabilitation of the appellant with a view to his regaining as much independence as he can, having regard to the nature of the injuries he has suffered, that rehabilitation must look at the overall needs of the appellant. While he has for some years been a very heavy burden on his parents the respondent, with the benefit of numerous specialist assessments, has deemed it wise that the appellant should endeavour to live his own life in his own home. The reports make it clear that even in that situation he requires 24 hour attendant care of some nature. The reports also indicate that he has no ability to manage his financial affairs for which reason his parents have been concerned that in their absence his attempted rehabilitation may founder. They have for that reason, and on legal advice, set up a trust and completed an enduring power of attorney so that in the event that neither of them are available to assist the appellant his financial wellbeing will be protected The fact that the appellant's injuries warrant consideration under the Complex Personal Injury regime indicates to me that the question of his rehabilitation must also be "complex". It is evident that he does not have, and probably will not have the skills to manage his financial affairs so that the provision of his Deed of Trust must constitute an element of his individual rehabilitation programme. It would seem to follow that a person with this category of injury must require a generous and -. ...- sensitive rehabilitation regime in order to achieve the goal of attaining his "optimal physical, mental, vocational, and social function". The appellant is now in a daily living situation divorced from the immediate care of his parents but still requires 24 hour attendant care of some kind. The objective behind that is his social rehabilitation. While the definition of social rehabilitation in the Complex Injury Regulations sets out a list of payments which the respondent can make that list is "without limitation". I consider that while payments can be made for "household help", "child care", "teacher aides" and " training for independent living" in the same vein, provision for "management of financial affairs" for an appellant who has not, and cannot acquire those skills, must surely be a category of payment within the wider scope of that definition. It must be an element of this appellant's "training for independent living". In addition, Regulation 9 of the Complex Personal Injury Regulations requires the respondent to pay the cost of the preparation of the social rehabilitation element of the appellant's Independent Rehabilitation Programme. It is clear that management of his financial affairs has been identified as an essential element in this appellant's programme. I consider that the respondent has taken a far too restrictive interpretation of the definition of "social rehabilitation". I consider that the evidence establishes that in addition to the provision of residential modifications and requirements of that nature the appellant also requires to have his financial situation supervised. For the reasons I have already outlined I consider that, in this particular case, the establishment of 8 the trust and the completion of the enduring power of attorney are essential ingredients in this appellant's rehabilitation. The appeal is therefore allowed and the costs incurred in setting up the trust and in completing the enduring power of attorney are to be met by the respondent. There will be costs to the appellant's advocate of $400. DATED at WELLINGTON this 230 day of July 1999 A W Middleton District Court Judge -.-- - - dca40698.doc(rd)