Hollis v Accident Compensation Corporation

IN THE DISTRICT COURT AT WELLINGTON DECISION No. 82 /2009 UNDER The Injury Prevention, Rehabilitation and Compensation Act 2001 IN THE MATTER OF an appeal pursuant to section 149 of the Act Appeals No. AI 484/07 and No. 312/08) BETWEEN CLARE HOLLIS Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent Hearing: 15 December 2008 Appearances: Appellant in person Ms C Potter for respondent Judgment: 15 May 2009 RESERVED JUDGMENT OF JUDGE D A ONGLEY [1] These appeals concern two review decisions, which were as follows: 1. Review decision dated 20 November 2007, concerning the respondent's independence allowance decision dated 5 June 2007, which calculated the appellant's whole person impairment at 21%; and 2. Review decision dated 30 July 2008, concerning the respondent's independence allowance decision dated 22 February 2008, which confirmed that the appellant had been reassessed as having a whole person impairment of 24%. The Reviewer also found that ACC was correct in only providing an independence allowance from the commencement of the next quarterly payment of the independence allowance. [2] The first of these two decisions recorded that the independence allowance decision was quashed by consent. It was superseded by the respondent's decision of 22 February 2008. The respondent submits that no live issue remains concerning the first appeal. The appellant has limited her argument concerning the second appeal to the question of backdating the full independence allowance to 1 July 1992. Background [3] On 7 May 1999 Mrs Hollis applied for an independence allowance assessment for shoulder injuries. She had cover for an injury caused in February 1992, when she had injured her left shoulder and neck when standing on a chair taking down curtains, and another injury in February 1996 when she injured her right shoulder. She claims that the second injury was a consequence of the first injury. [4] She was assessed by Dr Michael Antoniadis who gave a combined whole person impairment of 19%. ACC issued a decision accordingly but later agreed with Mrs Hollis to undertake a new assessment. The new assessment, done by Dr Murray, produced an impairment figure of only 10%. Mrs Hollis lodged a review but the review was withdrawn on the condition that the previous allowance of 19% would be re-instated. She was then "re-assessed" on 11 November 2001 by Dr Rosy Fenwicke. She was awarded 14% whole person impairment, which was confirmed by a decision dated 5 December 2001. [5] All those assessments were for physical injuries only. There had been no diagnosis of mental injury. In September 2001, Mrs Hollis requested the respondent to investigate cover for mental injury arising from her physical injuries. She makes the point in this appeal, that mental injury had been raised earlier by Dr Virtue. One of the available documents is a medical certificate furnished by Dr Virtue in May 1999 noting "ongoing stressors at work, challenged fitness culminated in mediation and unemployment". The real date of the application for entitlement for mental injury is not clear. [6] It is relevant to note that the respondent's review submissions recorded that Mrs Hollis was offered the following choices by way of letter dated 27 September 2001: . Stay on your existing level of IA entitlement and not have a reassessment at this time. . Wait for the outcome of the investigation of cover for a mental injury ~ then be reassessed in relation to all your covered injuries at the same time. . Or . Undergo a reassessment in relation to your physical injuries shortly, and a further assessment Those were described by the Corporation as proposed "reassessments". At least the respondent did not contemplate revision of the first assessment. However, whether the final assessment was a first assessment or a reassessment depends on interpreting the legislation. The respondent claimed that Mrs Hollis accepted the final option, that is to have the assessments in two stages. [7] On 11 March 2002, Dr R A Edwards, consultant psychiatrist, provided a psychiatric report advising that Mrs Hollis had an anxiety disorder well prior to the covered shoulder injury of 1992 and that he did not consider that she had "any mental injury arising from her shoulder injuries within the parameters of the definitions" provided to him by the respondent. Dr Edwards thought that the anxiety disorder worsened following a diagnosis of MS in 1995. [8] On 27 March 2002, the Corporation issued a decision declining the appellant's claim for cover for mental injury on the ground that the appellant's anxiety disorder had come about before her injury and was not exacerbated by her injury. Mrs Hollis successfully appealed this decision and the Corporation was directed to review her case and issue a new primary decision. [9] In October 2003 a report was obtained from Mr Fred Phillips, orthopaedic surgeon, and the appellant was referred to Dr John Kerr, occupational health practitioner, for an independence allowance assessment. Dr Kerr provided an assessment dated 21 February 2004, in which he advised that the appellant had a whole person impairment of 17% for both her shoulders and neck. That is the last effective physical assessment. At that time no diagnosis had been accepted by the Corporation to establish that a mental injury had resulted from either of the covered physical injuries. [10] On 9 September 2004, the respondent issued a decision in relation to the independence allowance assessment carried out by Dr Kerr. In this decision, the respondent stated: "ACC has now considered the matter of your entitlement to the independence allowance in respect of your bilateral shoulder and neck impairment. This decision is issued following the direction of the Appeal decision, and the assessment undertaken by Dr Kerr. All former decisions regarding your independence allowance entitlement are revoked under Section 65 of the IPRC Act 2001, and this decision stands as a fresh decision. Your impairment has been assessed as 17 per cent whole body impairment, and this level of entitlement will be backdated to 01/07/1992 You have previously received independence allowance payments since 13/05/1997. ACC has calculated the arrears due to you from 01/07/1992 taking into account the payments previously received." [11] That position obtained until November 2006 when Dr David Codyre, consultant psychiatrist, reported that the appellant was suffering from chronic pain disorder and generalised anxiety disorder. In his opinion those were mental injuries that had evolved following the physical injury and in relation to the aftermath of the injury, and had resulted in permanent impairment. On 11 January 2007, the respondent issued a decision accepting that the appellant's mental condition was clinically significant and had been caused by the personal injury she suffered on 12 April 1992. The mental condition was described as Chronic Pain Disorder and Generalised Anxiety Disorder. [12] Mrs Hollis then applied for an independence allowance assessment and she was referred to Dr Rosy Fenwicke for a mental injury assessment. Dr Fenwicke issued her assessment on 22 April 2007. She found the appellant's overall whole person impairment for mental injury to be 12% and, following an apportionment of 6% for non covered pre-injury factors, she found the appellant to have a final whole person impairment for mental injury of 6%. Dr Fenwicke commented that Mrs Hollis also developed MS at the time of her employment and injury difficulties, and she took into account comments by Dr Codyre about that and other factors including obsessive compulsive personality features which pre-date the injury and may also be contributing to her mental state. [13] ACC combined the physical injury assessment of 17% and the mental injury assessment of 6% and on 5 June 2007 issued a decision based on a total WPI of 21% with independence allowance payments of $22.30 per week. [14] In this appeal, Mrs Hollis advances an argument that this and subsequent assessments were separate attempts to remedy defects in her original assessment. She argues therefore that the increased whole-person impairment that was eventually reached, should be backdated in the same way as the original assessment. The respondent says that the mental injury component was always a consequence of her injury and should have been part of the assessment from the beginning. [15] Mrs Hollis again applied for review. A non-injury factor that was apportioned out of the assessment was the appellant's MS condition which she had before the injury. However she reported that her MS had stabilised before her injury and it was not causing her any impairment. The Corporation requested further advice from Dr Codyre who reported on 24 October 2007 that the appellant's personality change was most unlikely to be secondary to MS or to any single flare of MS. This opinion tended to confirm that the personality change or anxiety state had emerged as a consequence of the appellant's shoulder injury and consequent pressure on her, particularly in her work situation. The respondent accepted that there was a mental injury that was attributable to the injury. [16] ACC asked Dr Fenwicke to review her assessment and Dr Fenwicke provided an amended assessment report on 12 November 2007. The report was still dated 22 April 2007, but the last two pages were amended and produced a final whole person impairment rating of 8%. The change resulted from an apportionment of 4% for non-covered factors instead of the 6% stated in the original report. [17] This second assessment from Dr Fenwicke was presented at the review hearing the following day on 13 November 2007. The Corporation advised the reviewer that it was prepared to quash its decision of 5 June 2007 which had been based on a mental injury impairment of 6%, compared with Dr Fenwicke's most recent advice that the relevant impairment was 8%. The Reviewer recorded that the decision was quashed by consent and the Reviewer issued directions in the following form: 1. Ms Hollis' file is currently managed by ACC Hawkes Bay branch. Therefore a cover decision on the personality disorder issue is to be issued by the branch. 2. If cover is accepted, Dr Fenwick's amended report is to be used as the basis for a fresh decision. 3. Consideration will be given to an arrears payment for mental injury, from the end of 1992 or from the quarterly payment following reassessment in 2002. Ms Hollis was initially uncertain about agreeing to the decision being quashed by consent. It was explained that the alternative was for ACC to revoke its decision of 5 June 2007 and proceed with its own investigation. Ultimately Ms Hollis agreed that the decision would be quashed by consent, providing a fourth direction could be included: 4. That Ms Hollis be permitted to forward a statement of corrections to Dr Fenwick, for consideration." [18] That is the decision of 20 November 2007 which is the first decision challenged by Mrs Hollis in these two appeals. The appellant says that she was given no choice, because ACC was going to quash its own decision and issue another decision anyway. That may be so, but it seems quite likely that the Reviewer would have referred the question back for a further primary decision if the review had been heard. There is no reason to believe that Mrs Hollis did not freely consent to the order. [19] As recorded in the consent order, Mrs Hollis forward a statement of corrections to Dr Fenwicke. The Corporation also wrote to Dr Fenwicke for her to consider a letter from Paul Mason, otolaryngologist, and an audiology report, both obtained in December 2007. Dr Fenwicke had nothing further to add to her report. [20] On 11 December 2007, the respondent issued a decision to the appellant accepting additional cover for pain disorder, generalised anxiety disorder and also personality disorder. This extended the cover that had been given in January 2007 for chronic pain disorder and generalised anxiety disorder. The rationale was that the respondent agreed that the personality disorder was accident related and was not caused by MS. In January 2008 Dr Hancock provided a peer review of Dr Fenwicke's amended impairment assessment report confirming her correct application of the rules. The second decision [21] On 22 February 2008, the respondent issued a decision based on combining 17% physical impairment with 8% impairment from mental consequences of physical injury: "ACC has the results of your reassessment for independence allowance; a copy of the report is attached for your information. You have been reassessed as having the impairment of 24%. This means that your independence allowance payments will be $24.98 per week from the date of your next quarterly payment. The next quarterly payment will be $324.74 and will be paid on 05/05/2008. You were previously assessed on 19.04.2007 at 21% whole person impairment. Due to an amendment of the impairment report, your current impairment rating of 24% has been backdated to 07/05/2007. Therefore, you are also entitled to an arrears payment of $138.45 for the period 07/05/2007 to 04/05/2008." [22] A review was conducted on 11 June 2008, after which the Reviewer issued a careful decision on 30 July 2008 dismissing the appellant's application. The Reviewer, Mr Woodhouse, decided that no material flaw had been identified in Dr Fenwicke's report, and that ACC was correct in only providing an independence allowance from the commencement of the next quarterly payment of the independence allowance. Backdating [23] Section 377 of the 2001 Act was amended with effect from 1 July 2005. The appellant submitted that the amended provision applied to her claim. That appears to be correct because the relevant assessments took place after that date, although the application had been made earlier. The new s 377 states: 377 Independence allowance for personal injury suffered before 1 July 1999 1) On the commencement of this section, sections 441 and 442 of the Accident Insurance Act 1998 cease to have effect. (2) A person who suffered personal injury before 1 July 1999 is entitled to be assessed for an independence allowance under Part 4 of Schedule 1 of the Accident Insurance Act 1998, irrespective of when the claim for cover for the personal injury was or is lodged, subject to the modifications set out in subsection (3). (3) The modifications are that - a) any assessment or reassessment must be done on the basis of whole- person impairment for the combined effect of all injuries suffered before 1 July 1999 for which the person has cover; and b) the percentage of impairment for which any lump sum compensation was received under section 119 of the Accident Compensation Act 1972 or section 78 of the Accident Compensation Act 1982, or both, must be deducted from the percentage of combined whole-person impairment assessed in accordance with paragraph (a); and (c) the independence allowance based on the first assessment is payable as from, - i) in the case of a person who has received lump sum compensation under section 119 of the Accident Compensation Act 1972 or section 78 of the Accident Compensation Act 1982, or both, the date of the application for an independence allowance; or (ii) in any other case, the later of the date on which the claim for cover was lodged or 1 July 1992. [24] Subsection (3)(c)(ii) is the relevant provision backdating the effect of a first independence allowance assessment to the date on which the claim was lodged. The questions that arise in considering whether the independence allowance is to be backdated under subclause (c) are: (a) Whether the 2008 combined assessment was a first assessment for whole- person impairment; (b) Whether the assessment of mental injury was a first assessment for mental injury: [25] The respondent contends that the 2008 assessment was neither of those things, but was a re-assessment that does not have the benefit of backdating to the date of claim for cover. Clause 61 of Schedule 1 of the Accident Insurance Act 1998 deals with reassessment as follows: 61 Reassessment of entitlement to independence allowance . . . (3) The insurer must arrange for an assessor to reassess an insured who produces to the insurer a certificate from a registered medical practitioner indicating that the insured's impairment may have increased since the date of assessment, but this subclause is subject to subclause (4). (4) An insured is not entitled to more than 1 reassessment under subclause (3) in any 12 month period. Under clause 62, an adjustment to the level of entitlement of the independence allowance necessitated by a reassessment under clause 61 takes effect on and from the date of the next quarterly payment. Respondent's submissions 26] Ms Potter for the respondent submitted that the appellant's appeal against the first decision should be struck out because there are no live issues remaining following the Corporation's second decision on 22 February 2008. The legal principle is that an actual controversy must exist at all stages of the proceedings, and that a case is moot when the issues presented are no longer live: Maddever v Umaware School Board [1993] 2 NZLR 478, 502. Ms Potter referred to other authorities to the same effect, but there is no need to deal with the subject at length. She submitted also that the most favourable interpretation of the appellant's notice of appeal is a claim for a declaratory judgment on the limited issues raised. This Court does not have jurisdiction to make a declaratory judgment. [27] In the present appeal, the first decision was a consent decision. By consent, the decision set aside the Corporation's independence allowance decision and gave constructive directions to revisit the assessment and make a new primary decision. That resulted in the new decision on 22 February 2008 which had now been to review and comes before this Court on appeal. No controversy remains in relation to that earlier decision. Clearly the substance of the first appeal was dealt with by an order to which the parties consented, and the purpose of that order has been accomplished by producing a new assessment. The WPI value in the new assessment is higher and the Corporation has agreed to backdate it. I find that there is now no jurisdiction to hear an appeal. (28] In relation to the second appeal, Ms Potter submitted that Dr Fenwicke's assessment was a re-assessment for an independence allowance and that it was not a reconstruction of an earlier assessment. Therefore it is not backdated to the start date of the original assessment, but it commences on the next quarterly date. She submitted that the assessors acted in accordance with the requirements of the AMA Guides and the Users Handbook. Dr Fenwicke took into account all impairments resulting from the appellant's covered mental injuries, and her assessment was approved by the peer reviewer Dr Hancock. Also, Dr Fenwicke amended her report after reading Dr Codrye's further report dated 24 October 2007, showing that she is not entrenched in her position. However, Dr Fenwicke did not believe that her report required amendment following the appellant's comments on her report. [29] Once the process has been followed the Court is not entitled to set aside the assessment unless it is shown to be wrong by reason of a significant error or omission. The appellant's submissions in this appeal have been discursive, referring to various claimed inaccuracies in medical reports, but there is nothing that tends to show a real error. I accept the respondent's submission that the assessment process was correct and there remains no evidence that the assessment was manifestly wrong. Appellant's submissions [30] Mrs Hollis conceded that the point of the appeal concerned only the mental injury assessment, and its backdating. She submits that the mental injury, including personality disorder, is an outcome of the two shoulder injuries. Mrs Hollis did not challenge the apportionment. It would be very difficult to show that the apportionment was manifestly wrong, and this Court does not have the authority to interfere with the assessment or the apportionment unless there is a clear error. On my reading of the material there is not. [31] She submitted that the original assessment was done by Dr Kerr who was not entitled to do a mental injury assessment, therefore the original assessment was not done until a suitably qualified assessor completed it. Ms Potter's response was that the original assessment was solely for physical injury and was done before a mental injury had been diagnosed as a consequence of physical injury. It was therefore complete. It was revised several times, but I find that the first assessment was eventually completed by 9 September 2004 when the Corporation made its final decision concerning that assessment. [32] At that stage a claim for mental injury cover had been refused, so there was no accepted diagnosis. Mrs Hollis argued that the mental injury had occurred by then and it was part of the impairment to be assessed. A basis for that submission was that the mental injury was a consequence of the 1992 injury that was covered under the Accident Compensation Act 1982. Under that statute there was no need to obtain separate cover for a consequent mental injury. Therefore the mental injury was part of the whole-person impairment when Dr Kerr did his assessment. Mrs Hollis argued that the assessment was incomplete and what followed was not a reassessment but was by way of completing the first assessment. Decision [33] By the time of the relevant assessments some difficulties with interpretation of the backdating provisions had been removed by substitution of a new s 377(3)(c) of the 2001 Act, which made the independence allowance based on the first assessment payable as from the date on which the claim for cover was lodged, but not before 1 July 1992. [34] Because Mrs Hollis had not received lump sum compensation, she was entitled to an independence allowance based on her first assessment as from the date on which the claim for cover was lodged. She submitted that the respondent revised the first assessment a number of times, but it remained the first assessment. The respondent's position was that the assessment was a reassessment under cl 61 of the 1998 Act, which does not apply from the date of the claim for cover. Clause 61 provided for reassessments for increased impairment after a certificate from a medical practitioner. 35] The Corporation did not make it clear whether it was acting under the original assessment provisions or the reassessment provisions. But there is no dispute that the physical injury assessments done by Dr Antoniadis, Dr Murray and Dr Kerr were a continuous process of establishing an original independence allowance decision. Mrs Hollis says that the process was not complete until the mental injury was brought into account. [36] The assessment of mental injury did not begin until after Dr Kerr's physical injury assessment had been completed. In my view, that remains the first assessment concerning physical injuries. It was completed and adopted by the Corporation for the purpose of an independence allowance decision in 2004 when the Corporation had not accepted that there was any accident-related mental injury. There was no appeal against that decision and the independence allowance decision process was completed for the time being. There could be no later "first assessment" because the first assessment had been completed. [37] A feature of this claim is that the 1992 injury was covered under the 1982 Act under which mental injury did not require a separate decision about cover. It only required a decision about entitlement. If I understand the appellant's argument, she says that mental injury caused by the 1992 injury was a factor for assessment at the time of Dr Kerr's assessment, whether it had been recognised by ACC or not. So that there was an incomplete assessment that still required further work to incorporate mental injury. That is why it has been important for her to try to demonstrate that the 1997 injury was caused by the 1992 injury. Mental injury caused by the 1997 injury alone would have required a grant of cover, and there was no such grant at the time of Dr Kerr's 2004 assessment. Cover had been refused in 2002 and that did not change until Dr Codyre's opinion in 2006 and the resulting grant of mental injury cover in 2007. [38] On reviewing the documentation, I do not find that it establishes a mental injury consequent on the 1992 left shoulder injury. The possibility of mental injury became apparent in about 1999. In 1998, anxiety was associated with problems at work. The problems were also associated with recuperation from right shoulder surgery. There is no mental injury history connected directly with the 1992 injury. In Mr Phillips' report concerning the relationship between the two shoulder injuries he stated: "Ms Budgen states that in 1992 she had no symptoms referable to her neck or shoulders. She was taking down heavy curtains, undoing the fine hooks and was carrying a lot of heavy curtains in her arms. She stumbled off the chair on which she was standing and then felt pain in her neck and shoulder on the left side. She had physiotherapy and as far as she recalls this included work in the inter scapular area and I think it is because of this that she felt that she had a neck and spine injury. She also states that no xray was taken and she concluded from this that she had not been properly investigated. She has no recall of any physiotherapy work being done on her right shoulder and she has had no recall of pain in the right shoulder at this stage. Eventually symptoms on the left side required standard anterior acromioplasty which is a decompressive operation, which in her opinion was quite successful. She was off work for 5 weeks and returned to work. On her return to work she found that her desk had been changed and all the heavy documentation which she had normally had arranged on the desk had been moved into a store room. This was just before Christmas 1996 and in resetting up her desk (even though she was on light duties), she replaced the heavy documentation. At that stage she felt some pain in her right shoulder but because she was about to go on her Christmas break she decided to ignore it." [39] The nature of the first injury did not present as a potential cause of mental injury. A supporting specialist opinion would be needed before concluding that there was such a causal connection. Dr Codyre's opinion in 2006 associated the onset of reactive depression with the aftermath of the second injury, and thought that was the first indication of mental injury. It is of course possible to isolate various comments in support of the contention that the 1992 injury was an effective cause of later mental injury, but my view is that in reality the symptoms followed a distinct accident and were associated with the consequences of that injury. While that was made worse by the existing consequences of the first injury, it was the second injury that caused the mental injury of chronic pain, increased anxiety disorder and personality disorder. Conclusion [40] Although conclusions about the origin of the mental injury have warranted discussion, the conclusion in this appeal would be the same whether or not the mental injury should be associated with the 1992 physical injury. The determining feature is that the first assessment had been completed, and that was the only assessment that was payable as from the date of the claim for cover. The later independence allowance assessment, including mental injury, was a reassessment, and was not a first assessment. Clause 61(3) permits reassessment on the certificate of a medical practitioner. Dr Codyre's opinion was the certificate that was the effective cause of the assessment done by Dr Fenwicke. Although the claim for mental injury had been advanced in 2001 or earlier, the impetus for Dr Fenwicke's assessment was Dr Codyre's opinion as to mental injury consequent on physical injury. Dr Fenwicke then revised her assessment following further advice from Dr Codyre. The second assessment bore the same date and purported to be a revision of the assessment but I do not think that has any consequence here. I am satisfied that the respondent followed a process that was appropriate for a clause 61 reassessment. [41] That conclusion is consistent with the scheme of the legislation. The legislation provides for an undivided assessment of whole-person impairment. There is no separate assessment for mental injury, although it is calculated as a separate component of whole-person impairment. In this case there was an independence allowance assessment for physical injury, backdated in accordance with the rule that applied to a first assessment. A certificate of increased impairment caused by mental injury resulted in a reassessment. The rule for payment following a reassessment is for the first payment on the next quarterly date. [42] Finally, I note there was a point that was not argued, that is to say that if the mental injury cover was a separate covered injury, would not the re-assessment of whole-person impairment include a first assessment for the mental injury. In that case would the first assessment for mental injury be payable as from the date of the application for cover for the mental injury? That would seem to be clearly arguable under the later legislation, though not under the 1982 Act where mental injury was not regarded as a separately covered injury. I suspect it was not argued because the appellant was intent on bringing the mental injury into the first assessment of physical injury. [43] For those reasons the appeals are dismissed except for the point raised in the preceding paragraph on which leave is reserved. It may be a matter that can be resolved without difficulty or may be a matter for a further primary decision. Judge D A Ongley District Court Judge