Estate of Puddle v Accident Compensation Corporation

IN THE DISTRICT COURT AT WELLINGTON DECISION NO. 188/2007 UNDER The Injury Prevention, Rehabilitation and Compensation Act 2001 IN THE MATTER OF an appeal pursuant to section 149 of the Act (Appeal No. AI 166/05) BETWEEN ESTATE OF NEVILLE PUDDLE Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent Hearing: 13 June 2007 Appearances: Mr B Thompson for appellant Mr A D Barnett for respondent Judgment: 14 August 2007 RESERVED JUDGMENT OF JUDGE D A ONGLEY [1] The question in this appeal concerns the proper construction of cl 54 of Schedule 1 of the Injury Prevention, Rehabilitation, and Compensation Act 2001 which allows lump sum compensation upon conditions, including the condition that the claimant is alive when assessed under cl 59. Mr Puddle suffered mesothelioma and died before he could be assessed for lump sum compensation. The Corporation made a decision on 3 September 2004 declining payment of lump sum compensation for permanent impairment. [2} The Corporation's liability is under cl 54 which reads: 54 Lump sum compensation for permanent impairment ESTATE OF NEVILLE PUDDLE V ACCIDENT COMPENSATION CORPORATION DC WN DECISION NO. 188/2007 [14 August 2007] (1) The Corporation is liable to pay the claimant lump sum compensation in accordance with this schedule, if - (a) the claimant has suffered personal injury, after the commencement of this Part, for which he or she has cover; and b) the claimant - (i) has survived the personal injury for not less than 28 days; and ii) is alive when assessed under clause 59; and c) an assessment carried out under clause 59 establishes that the claimant's personal injury has resulted in a degree of whole-person impairment of 10% or more. 2) To avoid doubt, there is no entitlement to lump sum compensation in respect of personal injury suffered before 1 April 2002 or in respect of any subsequent consequences of any such personal injury. [3] The natural meaning is that there are three main conditions, the second of which is a survival condition subdivided into two parts, first that the claimant must survive the personal injury for not less than 28 days, and secondly that the claimant must be alive when assessed, that is to say that he must survive until an assessment is done. The entitlement may fail if the claimant does not survive to meet both conditions. If the provision is taken at its natural meaning, a claim can be defeated by the death of a claimant even if the claimant has survived almost to the day on which the condition would be fulfilled. [4] Mr Thompson for the appellant submitted that a literal interpretation of cl 54 is unduly narrow and fails to give effect to the purpose of the legislation, and that the statutory provisions are legitimately capable of being interpreted in a way which fulfils the purpose of the legislation, and which would thereby confirm the appellant's entitlement to lump sum compensation. Background [5] In August 2002, Mr Puddle developed a bad cough, and his general health began to deteriorate. In September 2002, he underwent drainages for fluid which had built up on his lungs, and had numerous biopsies at Whangarei and Kawakawa Hospitals. No diagnosis was reached and on 13 November 2002 he was told by a doctor at Whangarei Hospital that nothing more could be done because no diagnosis had been arrived at. His condition began to deteriorate more rapidly. He suffered alarming weight loss and his lungs were constantly filling with fluid. [6] On 13 December 2002 Mr Puddle presented to Andrew Dr Veale at Mercy Hospital in Auckland and on 14 December 2002 he was diagnosed with mesothelioma. Although Dr Veale said that he might have anywhere between 11 months and 8 years to live, sadly Mr Puddle died 6 weeks later on 30 January 2003. On 24 March 2003 Mr Puddle's widow lodged a claim for cover and ACC paid the funeral and survivor's grants. On 30 August 2004, Mrs Puddle applied for lump sum compensation. In a letter dated 3 September 2004, the Corporation notified her: "The criteria for payment of a lump sum is that the claimant must be diagnosed and have first sought treatment for the injury after the Ist of April 2002, the date of last exposure to the agent causing the disease must also be after the Ist of April 2002. The claimant must also have applied and been assessed for compensation before the date of death. Unfortunately Mr Puddle's circumstances do not meet the legislative criteria for payment of lump sum compensation, and as such the estate is not eligible for any compensation." [8] The question of the date of injury was later resolved at review in favour of the appellant. Under $37 of the Act, the date on which a person is to be regarded as suffering personal injury caused by a work-related gradual process injury is the earlier of the date of first incapacity or the date of first medical treatment for that personal injury as that personal injury. The date of first treatment was after diagnosis and the Reviewer decided that the date of incapacity was in August 2002. The Court of Appeal in Priddle v ACC (CA 223/05, 19 October 2006) decided that the provision in cl 55(2) requiring the date of last exposure to be after 1 April 2002 does not apply to mesothelioma which is a scheduled category of work-related injury that is not caught by the otherwise disqualifying combination of $30 of the Act and cl 55 of Schedule 1. There is no need to set out those provisions because that question has been settled and the only question for this appeal concerns the requirement for survival until assessment in cl 54(1)(a) (ii). [9] In the review proceedings, Mrs Puddle filed an affidavit stating that the six weeks leading up to her husband's death were extremely traumatic, and that there was no time to come to grips with the situation, or to think anything through. She deposed that a doctor at Kawakawa Hospital told her in January 2003 that she should be able to get some help from ACC for funeral and medical expenses. She was not told about a lump sum claim and she had too much on her mind to apply to ACC for at that time. Appellant's submissions [10] Mr Thompson submitted that one of the purposes of the legislation is to ensure that claimants receive fair compensation for loss from injury, including lump sums for permanent impairment. He submitted that the purpose of cl 54 is to provide lump sum compensation for claimants who are forced to live with a permanent impairment for more than a nominal period of time. The deceased lived for many months with an ever-worsening level of impairment and should have an entitlement. The strict grammatical meaning of the relevant provisions should therefore yield to the purpose of the legislation, which is sufficiently definable. Mr Thompson referred to the purpose of the legislation expressed in s3 as follows: 3 Purpose The purpose of this act is to enhance the public good and reinforce the social contract represented by the first accident compensation scheme by providing for a fair and sustainable scheme for managing personal injury that has, as its overriding goals, minimising both the overall incidence of injury in the community, and the impact of injury on the community (including economic, social, and personal costs), through - . .. (c) ensuring that, where injuries occur, the Corporation's primary focus should be on rehabilitation with the goal of achieving an appropriate quality of life through the provision of entitlements that restores to the maximum practicable extent a claimant's health, independence and participation; d) ensuring that, during their rehabilitation, claimants receive fair compensation for loss from injury, including fair determination of weekly compensation and, where appropriate, lump sums for permanent impairment. [11] The following s68 was that which was in force at the time the respondent made its decision to decline lump sum compensation: 68 Corporation liable to provide entitlements (1) The Corporation is liable to provide entitlements to claimants in accordance with this Act. (2) Where this Act provides that the Corporation is liable to provide an entitlement, this means this is the extent to which the Corporation is to provide the entitlement. [12] Mr Thompson argued that s68(2) is capable of more than one meaning, and that the meaning best suited to the purpose of the legislation is that the "extent to which the Corporation is to provide the entitlement" refers to the quantum of entitlements, that is to say it does not prohibit the Corporation from providing an entitlement, but limits the Corporation's liability in terms of the extent of the entitlement. The consequence of this interpretation of section 68(2) is said to be that the Corporation has no power to increase the quantum of an entitlement above that provided in the legislation, but claimants would not be barred from entitlements merely because a particular condition is not met when that condition does not prejudice the respondent's ability to provide the entitlement fairly. [13] Mr Thompson submitted that s5(1) of the Interpretation Act 1999 requires that the meaning of an enactment must be ascertained from its text and in the light of its purpose. Mr Thompson referred to Statute Law in New Zealand, J F Burrows, 3rd edition, at page 130: There are still found cases where artificially narrow interpretations are given to statutory provisions. However, these cases are the exception, and the modern trend is towards a 'purposive' interpretation where the words of the legislation are read to their fullest context, and with a view to giving effect to the purpose of the legislation. and at page 138: Sometimes, however, Courts do depart from the natural and ordinary meaning, and attribute to the words of the statute secondary, less ordinary, even strained, meanings. The established orthodoxy even in these cases is that the natural and ordinary meaning must be the starting point, only to be displaced if a less usual meaning is required better to fulfil the purpose of the legislation, or if the wider context of the Act or other factors require it. In such a case consideration of purpose, context, or values predominate over the usual conventions of language. [14] Mr Thompson cited in support Mckenzie v Attorney-General [1992] 2 NZLR 14, Robinson v ACC (HC, CIV-2005-485-127); Ryan (199/05); Feuerstein (191/05) and Estate of Priddle v ACC (CA223/05, date). [15] Mr Thompson submitted that "extent' is defined in the Concise Oxford Dictionary (10th ed.) as 'the size or scale of something'. This definition shows that the wording of section 68(2) can readily be taken to refer to the quantum of entitlements, rather than the associated conditions. By way of contrast, Mr Thompson argued that 'extent' does not refer to the conditions set out in the Act, in relation to an entitlement, in this case the condition that the claimant should survive until assessed for lump sum compensation. Therefore, the Corporation is not strictly precluded from paying lump sum compensation and the legislative intention is not frustrated. 16] Mr Thompson submitted that the purpose of the legislation is frustrated by a strict interpretation and the alternative interpretation is available. It does not give the words a meaning they can not legitimately bear. An alternative interpretation is best suited to the prime purpose of the Act to provide for fair compensation for those who suffer coverable physical injuries. In cases where a claimant is forced to live with a significant level of permanent impairment for more than a nominal period of time, Parliament has decided that the fairest method of compensation is by way of a lump sum payment. This is particularly so when the physical injury ultimately causes the claimant's death. [17] Mr Thompson submitted that cl 54(1)(b) states that if both (i) and (ii) (inter alia) are fulfilled, the respondent is liable to pay a lump sum, that is it must. But it does not state that the respondent must not pay lump sum if either (i) or (ii) remain unfulfilled, therefore there is no prohibition against the respondent paying lump sum compensation in such a case, if such payment is in accordance with the purpose of the legislation. If Parliament had intended to strictly exclude payment of lump compensation to every claimant that did not meet all the requirements of clause 54, that could have been easily and unambiguously achieved by stating that the respondent 'must not' pay lump sum compensation, unless all those requirements are fulfilled. [18] It was submitted that a purposive interpretation does no damage to the general function of cl 54 because there are clearly circumstances when, even on a strict interpretation, a lump sum payment will go to the claimant's estate. If a claimant dies immediately after surviving for 28 days and being assessed, then the whole of the lump sum will accrue to the estate. That may happen to a claimant who dies much sooner after diagnosis than Mr Puddle did. There is no requirement for the claimant to be alive when the lump sum is actually paid. Clause 62 states that if a claimant dies after the completion of the assessment of the degree of permanent impairment, but before payment of the lump sum, the Corporation is liable to pay the lump sum to the deceased claimant's estate. If there is a strict interpretation, the claimants who will fail, will be those like Mr Puddle who are in such dire circumstances that a claim for lump sum compensation is far from their minds. [19] It was submitted that death is not a barrier to proper assessment in the case of mesothelioma because the Corporation routinely ensures that entitlements are calculated on the basis of a whole-person impairment level of at least 80% as a matter of course. 20] Mr Thompson distinguished two cases of Walls (10/06) and Cromb (3/05). Both concerned decisions declining to provide a claimant with a motor vehicle. In both cases it was held that the words 'not liable' in s68(2) did not leave the Corporation with a discretion to provide that which it is otherwise not liable for. Mr Thompson submitted that the cases could be distinguished because they concerned cl 22 of the Schedule which dealt with conditions under which the Corporation was "not liable". Clause 54 in contrast sets out conditions under which the Corporation is liable. Furthermore, the claimants in those two cases had received entitlements and the question was whether they should have replacement vehicles. The conditions concerned the circumstances in which it was fair or reasonable to confer an entitlement for a replacement vehicle. Respondent's submissions 21] Mr Barnett submitted that where the meaning of the text is plain the Court cannot ignore that to fill some actual or perceived gap or unfairness in the scheme. Tarr v ARCIC AP 24/95 McGeghan and Doogue JJ. [22] The meaning of clause 54 is plain and requires that each of the requirements in clause 54(1)(a), (b) and (c) must be met to establish the entitlement. The appellant's argument requires the Court to ignore clause 54(1)(b)(ii) both as a pre-condition to the entitlement and as having any relevance to ascertaining the purpose of clause 54. In short, the appellant's argument asks more of the purposive approach than it can possibly deliver. The purposive approach does not permit a clearly expressed provision to be ignored. It is not a question of the respondent adopting a strict interpretation, but of the plain words of the clause. (23] Mr Barnett submitted that the "purpose of an enactment" is not just the purpose of the Act as a whole, but of any relevant sections or clauses. The purpose of clause 54 is to compensate by way of lump sum payment for a covered personal injury which has resulted in a permanent "whole-person impairment" where the degree of the impairment is 10% or more, and where the impairment has been assessed in accordance with the mechanism provided in clause 59, and that the assessment is made on a person who is alive. 24] The appellant is selective in identifying only some of the conditions of clause 54(1) as indicative of purpose and/or as pre-conditions to liability. But there is nothing in clause 54(1) or elsewhere to support that selectivity. [25] The purpose of the Act as provided for in section 3 does not assist in overcoming the plain meaning of clause 54. Indeed, the one reference to lump sum entitlements in section 3 is at paragraph (d) which promotes as a purpose the payment of lump sum compensation for claimants "during their rehabilitation". This purpose contemplates the provision of lump sum compensation during the life of the claimant and that is consistent with the requirement of clause 54 that the assessment be made when the claimant is alive. [26] That cl 62 provides for the payment of lump sum compensation to a deceased's estate but this applies if a claimant "dies after the completion of the assessment" but before the payment has been made. A completed assessment is a condition of payment under cl 62 just as it is under cl 54. [27] The respondent relies on s68(2) and submits that the extent to which the Corporation is to provide an entitlement must refer to both the conditions of liability and the quantum (if any) of the liability. To confine the meaning of "extent" to quantum, as the appellant argues, would simply not work for many forms of entitlement, particularly so in the realms of rehabilitation and treatment where quantum may well not be relevant. (28] Mr Barnett advanced a further argument based on the amended form of s68. A later amendment is usually not helpful as a guide to interpretation of the earlier provision. Suffice to say that reference to the later amendment does not appear to assist the appellant. [29] The respondent submits that the Corporation is only liable if the Act so provides. There is no liability in the Act for lump sum payments if it is not found in clause 54. There is no general purpose of fair compensation to authorise a payment that is not provided in the legislation. Decision [30] The cases under cl 22, under which the Court in Walls and Cromb held that the Corporation had no discretion when the legislation directed that it was not liable, were rather different. The Corporation was liable under other provisions in the Schedule but was not liable in the circumstances described in cl 22 which is plainly intended as a bar to entitlement. [31] Under cl 54 there is not a conferment and an exclusion. But that does not really help the appellant because in cl 54 there is a conferment of entitlement subject to conditions. [32] The purposes of the Act in s3 include: (d) ensuring that, during their rehabilitation, claimants receive fair compensation for loss from injury, including fair determination of weekly compensation and, where appropriate, lump sums for permanent impairment: [33] Section 69 states that the entitlements provided under the Act include lump sum compensation for permanent impairment [34] Clause 56 governs the amount of lump sum compensation for permanent impairment that the Corporation is liable to pay to a claimant: 56 Amount of lump sum compensation for permanent impairment 1) The amount of lump sum compensation for permanent impairment that the Corporation is liable to pay to a claimant is the appropriate amount specified in regulations made under this Act. 2) The regulations apply subject to subclauses (3) to (5). 3) The minimum lump sum compensation for permanent impairment that the Corporation is liable to pay to a claimant is- (a) $2,500; and (b) payable to a claimant whose degree of whole-person impairment is 10%. (4) The maximum lump sum compensation for permanent impairment that the Corporation is liable to pay to a claimant is- (a) $100,000; and ) payable to a claimant whose degree of whole-person impairment is 80% or more. . . . (35] It is difficult to reconcile the appellant's argument that s54 is intended to govern quantum when that is specifically provided for in cl 56. If the Corporation is liable for lump sum compensation, the quantum is governed by regulations and is not less than $2,500 and not more than $100,000. The only meaning that cl 54 can have is to set the conditions under which the Corporation is liable for payment of lump sum compensation to a claimant. It could not have been intended to limit the quantum when that is provided for in cl 56. [36] To adopt a purposive construction would require such strain to the natural meaning of cl 54 that the exercise could not possibly be justified. I accept Mr Barnett's submission that the purpose is to be found in s3 and in cl 54 without recourse to general purposes of compensation. Section 3 has a purpose of lump sum compensation during rehabilitation and cl 54 has a purpose of payment to persons who survive for a stipulated period after the personal injury. Clause 56 enables calculation of an amount pursuant to regulations under the Act, and cl 62 extends the entitlement to payment to the deceased person's estate if the provisions in cl 54 are met. [37] Those provisions are self contained and a payment to the appellant's estate when he was not assessed before his death is not a payment provided by the legislation. The legislation does not contain discretions as to payment or part payment in cases of early death or delays in assessment. It is understood that the Corporation may make ex gratia payments outside these provisions in some cases where it is at fault in causing a delay in assessment, but this set of provisions suggests that the legislation follows a policy of certainty, rather than conferring a discretion. That is achieved by the use of mandatory conditions of entitlement with possibly arbitrary cut-off dates. The Act contains other provisions in which there is no discretionary relief for unfortunate cases, for example the weekly compensation earnings assessment provisions. Mr Barnett cited Tarr v ARCIC as a judgment in which the High Court refused to remedy an unjust result by adopting a purposive departure from the literal meaning of mandatory provisions. [38] I find therefore that the natural meaning of cl 54 must prevail. The Corporation correctly applied the provisions and the appeal is therefore dismissed. Judge D A Ongley District Court Judge