Gough v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT Decision No. /°'w HELD AT \VELLit\GTON UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an Appeal pursuant to Section 91 of the Act BETWEEN IVAN STANLEY GOUGH 74/ 98 / 1087 Appellant (Appeal No. DCA 58/93) AND. ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 28th day of April 1994 APPEARANCES Appellant in person Mr A G Blair for respondent DECISION OF JUDGE D A ONGLEY This appeal concerns a contribution claimed towards vocational rehabilitation under s 22 of the Accident Rehabilitation and Compensation Insurance Act 1992. The appellant suffered back injuries on 8 March 1981 and on 2 December 1984. He also suffered a left knee injury in January 1986, a right knee injury in November 1987 and a hernia in June 1988 and he has undergone a number of surgical procedures in relation to the various injuries. He then suffered a heart attack in June 1993, suffers from angina and has taken steps for management of his heart condition. He reports that he has also suffered mental stress and depression. Permanent disability was assessed initially at 10% and eventually increased to 3 5% taking the later occurrences into account. Mr Gough was employed as manager of the sea-rail service between Wellington and Picton and hefore that in industrial relations work. Earnings related compensation commenced in March 1990 and in that year he went to Wales to begin a law degree at ' - - Cardiff Uni\·ersity \Yith a \·iew to qualifying himself for employment in a field in \vhich he felt he could eventually gain an income. Mr Gough's attempt to study in Wales was fraught with difficulty and he returned to Ne\v Zealand at the end of the same year. His earnings related compensation had been cancelled after three months overseas and he incurred considerable costs. On his return he obtained assistance from the Accident Compensation Corporation to study for a bachelor of laws degree at Victoria University in 1991 and he has continued that course until now \Vith reasonable success. The relief sought in this appeal is a contribution to expenses of study in the sum of S5,43 3 .00 made up as follows: ½ fees for second half of 1993 781.00 ½ fees for first half of 1994 992.00 Allowance of$100 per \veek for travel costs 1/7/93 to 9/11/93 and 28/2/94 to 30/6/94 3.660.00 Total 5,433.00 Mr Gough's present condition is little different from that reported by Mr G Martin, neurosurgeon on 28 September 1992 when he suggested an increase of disability to 25%: "Mr Gough now has pain in the back and down the left leg. It is the back pain \,"hich is worse, starting in the lumbar spine and spreading from there up and out to both shoulder blades. It is episodic and two to three time a week he will get an attack lasting five minutes or so. these tend to occur in groups, but may particularly occur \.vhen he is lying dov,:n. There is pain going down the left leg, down the outer side of the thigh an into the lateral border of the foot. Curiously this does not affect the calf or shin. He is worse after \.valking and after 20 minutes to half an hour has to rest. Sitting is uncomfortable and it is better to stand or kneel and he often works in the kneeling position (he does not yet have a kneeling chair but I understand that is being arranged). If he has to sit, he sits with his weight off the right buttock, carrying his paid on the painful side. He can sit through a lecture for minutes because he can wriggle around, but sitting for three hours for an exam is impossible and last year he took his exams lying on the floor. To the surprise of his staff he used to work in his office like that also." As to Mr Martin's opinion of Mr Gough's capacity to work, he said: "I do not think there are many jobs that Mr Gough would be fit for. It is quite clear he would not be fit for a labouring job, not fit for a clerical job because of the prolonged sitting, and fit only for a few jobs where standing and walking around and sitting are intermittent, and one's timetable is variable rather than dictated by the clock. It may seem that Mr Gough is extraordinarily privileged in being allowed to do law whilst being supported by the ACC. All the same, there are many people with Mr Gough's degree of disability on Earnings Related Compensation who simply cannot return to work because the range of jobs they are capable of is too limited and they simply mope around at home. I suspect, in reality, it would be difficult to find a job that Mr Gough could physically cope with as he is now, without some special re-training. At least in this situation there is some appreciable end to his period in Earnings Related Compensation. - _) - The l1nly problem I can see with Court \\l1rk is that it does require sitting for periods l)f up w t\\O hours at a time. He \\0tild be alright fl)r standing and I imagine ka\'e to stand up during prncedures could be arranged. Mr Gough's weekly earnings related compensation is the maximum permitted by the Act. $1,179 per \Yeek. On 14 January 1991 the Accident Compensation Corporation granted rehab ii itation assistance for the 1991 academic by payment of tuition fees and £ 100 per \reek contribution to traYel expenses. The letter did not indicate any continuing commitment by the Corporation after that. It was accompanied by a form of agreement which Mr Gough amended and signed. IVAN STANLEY GOUGH of 82 PO\,vnall Street, Masterton accept that the Accident Compensation Corporation will pay my Course fees to enable me to attend a Rehabilitation Training Programme being a full-time course of study leading to a LLB degree at the Victoria University of Wellington. I also agree that if I withdraw from the Course for reasons other than those related to my injury , I ,viii refund in full the Course fees paid by the Corporation. I also agree that I will accept the cost of any text books and stationery required to enable me to undertake the Course. The words in italics were added by Mr Gough. The deletion of text books is not relevant to this appeal. Mr Gough was anxious to record that the course which was contemplated was a complete law degree. There was no document indicating that the Corporation extended assistance beyond the first year but it was plain to both parties that Mr Gough \Vas likely to apply for further assistance if he was successful in his first year of study. At the same time the Corporation drew up an Individual Rehabilitation Programme. It is odd that it was not signed by Mr Gough. In fact he said he did not see it until the hearing before the Review Officer. The rehabilitation programme dated 23 January 1991 can be regarded as recording the Corporation's view. It stated in the relevant parts: Vocational Retired.from Sea Rail Ferries - March 1990 as medically unfit. Planned to do consultancy work but there was none available. Would like to retrain in Law so eventually he will be able to work in the Wairarapa. At present overqualified to obtain employment in the Wairarapa. Other relevant information Current situation/needs (Please see Rehab Report to Pete Barker) -A decision to study Law in the United Kingdom was made as it took 1 year less to complete. - He was under the impression that ACC would continue to pay his ERC while he was over there. ERC was continued for 3 months only. - He could not afford to continue his studies in the UK so returned to NZ. States he lost $60- 80,000 - Would now like to study law at Victoria University Wellington and for ACC to fully fund this. Rehabilitation Goals Target dates long term Employment as a family solicitor Dec 95 4 short term Complete Lem Dugrt'<! at I 'ic toria C11i1·asiry Nov 95 ill fre//i11gto11 He passed all fiye subject in 1991 and the Corporation issued a further decision date 23 December 1991: Re: Retraining Proposal - Law Degree TUITION FEES The Corporation has agreed to fund total fees up to the extent of $1,086.00. for year t\\"O of your Law Degree. If you are informed of any change in the tuition fees, that you provided me with, please notify the Accident Compensation Corporation. RETRAINING ALLOWANCE Your current level of Earnings Related Compensation will continue, subject to appropriate medical certification. In addition, a retraining allowance of$ I 00.00 a week, will be paid for the duration of your 1992 university study. It is expected that this allowance will assist towards your travelling and/or accommodation costs. Beyond 1992, continued support of retraining can not be guaranteed, due to changes in legislation. Mr Gough did not sign the rehabilitation proposal. The assistance continued during 1992 on that basis. His results were disappointing but he did pass three out of four subjects. At the end of 1992 several meetings took place which are crucial to Mr Gough's submissions on this appeal. They were: 26 August 1992 - meeting between Mr Gough and Ann Rutene his Rehabilitation Co-ordinator 24 December 1992 - meeting between Mr Gough and Ms Rutene - he signed a new Individual Rehabilitation Programme - Mr Gough's letter of application for vocational rehabilitation assistance up until 30 June 1994 - reply from Lisa Tonkin, Senior Rehabilitation Co-ordinator 17 February 1993 - Retraining Report signed by Anne Rutene 19 February 1993 - meeting - Mr Gough with Anne Rutene and Lisa Tonkin At the meeting on 26 August Ms Rutene discussed with Mr Gough the provisions of the 1992 Act and in particular s 23 which is as follows: 23. Limitations of, or payment for, vocational rehabilitation by Corporation - (I) Except as provided in section 24 of this Act, the Corporation shall not provide or meet the costs of any vocational element of an individual rehabilitation programme that are incurred in respect of any period more than I year after the commencement of the vocational element of the programme unless it is satisfied that further provision of, - 5 - or payment for, vocational rehabilitation is expected to result in the employment of the person w \\ hom the programme applies. (2) No such further provision granted under subsection (I) of this sectil1n shall continue for a period exceeding I year. - - Mr Gough's O\Yn note of the meeting was that Ms Rutene agreed with the suggestion .......... that the Corporation fund the degree course for two years from I July 1992 and that he would support himself through the final half year. Then at the meeting on 24 December 1992 he was told that from 1 July 1993 he would have to meet his own university expenses, although he would continue to receive earnings related compensation. He then signed an Individual Rehabilitation Programme in the following terms: Commencement Date of Vocational Element: I July I 992 Completion Date of Vocational Element 30 June 1993 "I understand the Section 18 of the ARCI Act requires me to take personal responsibility for my O\Vn rehabilitation." This means I will actively participate in carrying out the plan which has been developed with my Rehabilitation Co-ordinator. The Corporation's role is to provide assistance in assessment of need linking to an funding services considered necessary. For any vocational element of this plan I will receive a Vocational Rehabilitation Allov.:ance. This allowance will be at the same rate as I have been receiving my weekly compensation. I understand vocational rehabilitation assistance will be available to me for a maximum of 1 year. OUTCOME GOALS: Date to be achieved {l) To be qualified as a lawyer 199./ (Dec): (2) Total independence from ACC 1995 IMMEDIATE GOALS: (1) Retraining The reason that the starting date was 1 July 1992 is to be found in s 136(4) (4) Where a person is in receipt of vocational rehabilitation immediately before the 1st day of July 1992, the limitations on the provision of or payment for vocational rehabilitation under section 23 of this Act shall apply as if the provision of or payment for that rehabilitation had commenced on the I st day of July 1992. The programme made it clear that the assistance was limited to one year. The Corporation' letter of 24 December, signed by Lisa Tonkin, stated: "The Corporation has received your request for an extension of your Vocational Rehabilitation Allowance till the 30 June 1994. The Corporation is unable to consider this request until March 1993, which is three months prior to your first years vocational rehabilitation allowance ceasing." The draft retraining report of 1 7 February 1993 signed by Anne Rutene contained a recommendation to cease the vocational rehabilitation allowance on 30 June 1993. The grounds for the recommendation \Vere stated as follows: "I. The extensive assistance that Ivan has received throughout 1991 and 1992 from ACC for his studies at Victoria University. - 6 - 2. For an e:-..tensiL)n of a VocatiL)tial Rehabilitation Alkl\\ance it is deemed necessary to han"! a posiri,·e employment outl.'.L)J11e. If the Rehabilitation ,-\llo,,ance ,,·as extended to the 30 June 199-L Ivan ,,·ould still have a further 5 months study to attain a Law degree. During this time he would therefore not be available for job search. and there is 1lQ guarantee of employment. 3. Ivan has been receiving the maximum weekly compensation paid by ACC being (Gross) $1,179.00. In my opinion. it could be possible for Ivan to meet his own retraining expenses. considering his present income." At the meeting on 19 February 1993 Mr Gough received a copy of the draft retraining report and he protested at the recommendations. He was told that it would be approved as a formality. The immediate decision of the Corporation was conveyed in a letter dated 19 February 1993 which was postmarked 2 March. The Corporation continued vocational rehabilitation with 50% tuition fees and $100 per week contribution to travel expenses to 3 0 June 199 3. Mr Gough applied for review of the decision to the extent that it failed to address the 1994 academic year. On 15 March he wrote to Mrs Tonkin. Amongst other things he suggested that the recommendations in the draft retraining report were inconsistent with the Corporation's approval of his law study as a means of obtaining employment, that the Corporation was adopting a narrow and incorrect interpretation of s 23, and that taking his earnings related compensation into account was an unfair and improper basis to refuse vocational rehabilitation assistance. On 7 April Mr Gough met with Mrs Tonkin and on 14 April 1993 he \\Tote to her with particular reference to the way in which the draft retraining report had been handled. He repeated other points made in his earlier letters and complained that rehabilitation officers refused to consider any representations once the draft retraining report had been prepared and that the Corporation's decision was pre-empted by the report. The Corporation then issued a decision dated 14 April 1993 which was the subject of review and which is the subject matter of this appeal. It stated: "Section 23 of the ARCI Act 1992 states "Except as provided in section 24 of this Act, the Corporation shall not provide or meet the costs of any vocational element of an individual rehabilitation programme that are incurred in respect of any period more that one year after the commencement of the vocational element of the programme, unless it is satisfied that further provision of, or payment for, vocational rehabilitation is expected to result in employment of the person to whom the programme applies. As you will not have completed your study by the end of your requested extension, to I July 1994, the Corporation can not show that the extension period will result in employment. Therefore your request for an extension of your rehabilitation and contribution towards course related expenses beyond 30 June 1993 is declined." This is a convenient point to consider questions of interpretation of s 23. The section limits assistance to a period of not more than 2 years from the commencement of a vocational element of a rehabilitation programme. The test for compensation in the second year is that the vocational arrangements are expected to result in employment. The letter of 14 April put the reason for refusing assistance on the basis that the course of study would not be completed by the end of the second year. The test which the Corporation appeared to apply was that employment should result immediately following the extension period of one year. That is an unnecessary restriction to read - 7 - into the section. The only test in s 13 is that employment is expected to result. lt is consistent with the purposes of the statute that employment should result ,vi thin a reasonable time and having regard to any expectations expressed in the rehabilitation program. The restrictive interpretation was not accepted by the re\·ie,\· officer and ,vas not advanced by counsel on the appeal. Counsel for the respondent left the point on the basis that if it is arguable it does not have to be examined in this case. In the review officer's decision it is implicit that he considered s 22(3) of the Act: (3) The Corporation shall not make any provision or payment in respect of vocational rehabilitation unless it is satisfied that the provision or payment is necessary to enable the person to obtain or maintain employment, and is expected to be cost-effective for the Corporation. He considered whether a law degree was necessary to enable Mr Gough to obtain employment and concluded that it \Vas not. But the Corporation must be assumed to have already decided that question in favour of the appellant when it determined the individual rehabilitation programme dated 24 December 1992. That was the first programme that had been agreed between Mr Gough and the Corporation under the 1992 Act and it is to be assumed that the test in s 22(3) was applied when the Corporation determined that vocational assistance would be available to enable Mr Gough to obtain a law degree. It is to be inferred that the Corporation accepted this provision was necessary to enable him to obtain employment. In the circumstances of the case it was clearly a decision by the Corporation that a particular kind of qualification was necessary, having regard to the claimant's incapacity, and that a law degree fulfilled the requirements. So far as I can ascertain, that issue should have been regarded as common ground bet\:veen the parties at the review hearing and the review officer should not have embarked on a new examination of the question whether a lavv degree was necessary to enable Mr Gough to obtain employment. The review officer did go on to consider the separate question under s 23(2), whether the vocational programme was expected to result in employment, but he dealt with it in short order and the reasoning which he applied turned on his view of the necessity issue. Mr Gough filed a 47 page submission on appeal and a supplementary submission following the hearing. I have taken care to read and understand the arguments which he advances. A good deal of his submission was directed to the argument that the decision of 14 April 1993 was predetermined by the draft retraining report. I have to agree with the reviev,: officer that it was not necessary to examine that question. The question of pre-determination bears on the performance of a duty to act judicially. Mr Gough accepted that the rehabilitation officer was not required to act judicially. All the evidence to which Mr Gough refers amounts to nothing more than a record of an administrative process of examining and determining a claim. The Corporation and its officers were entitled to hold a particular view and to indicate in advance the likely outcome of the claim. It was reasonable for the rehabilitation officers to express their views to Mr Gough and the fact that the retraining report had already been prepared before the meeting of 19 February 1993 did not invalidate the Corporation's decision. - 8 - More important \\·as the e\·idence that the Corporation operations documents included a document \\·hich ,ms referred to as Team Brief Number 21 relating to claimants ,Yho commenced tertiary training as part of their vocational rehabilitation programme before 1 July 1992. It stipulated that extension of vocational rehabilitation under s 23 applies only to claimants who are nearing the end of their training and are due to complete training by 3 1 December 1993 and that ACC must be satisfied that an extension ,viii result in placing the claimant in employment. That document overstated the test of expectation of employment and stated an incorrect date which could well have disadYantaged Mr Gough iC as it is likely, it had been taken into account in considering his case. Although in another part of the document it was correctly stated that a programme may be continued for a maximum of 24 months from 1 July 1992, the general tenor of the document ,vas to apply automatic restrictions beyond 1993. It is open to this Court to reconsider the merits of the application on appeal, having regard to the unduly restrictive approach to s 23 which appears to have been adopted by the Corporation. In my view the vocational assistance should be extended to 30 July 1994. The principles of necessity and cost effectiveness were accepted by the Corporation when it approved the programme and accepted that the degree course ,vas necessary to enable the claimant to obtain employment. Section 23 demands a re-assessment of the effectiveness of the course if the Corporation is asked to contribute to a further year's study. The test is slightly different. A claimant may need vocational training to get employment, but where there are other considerations indicating that employment can not realistically be expected then the Corporation must discontinue assistance. For practical purposes the question of expectation is almost identical with the question under s 22(3) where the Corporation has already decided that the vocational training is necessary and cost effective for the Corporation. In Mr Gough's case there are no new factors. His expectation of employment is no less than it was in July 1992. He has done well in his degree course despite his incapacity and family disruption. He gives the impression of being a resolute person who is determined to complete his degree and tum it to profit. The outcome depends on his becoming fit enough to work regularly. While he has had setbacks, he appears to be overcoming them. The other consideration which the Corporation took into account was that he could pay his own vocational training costs from earnings related compensation. There is no statutory ground to disqualify Mr Gough on that basis, and if it has any bearing on the general discretion exerciseable by the Corporation it should be balanced against the substantial personal and financial resources that he has already put into obtaining a lmv degree. His earlier attempt to study in Wales may have been ill-advised, but it was directed to the same end and the Corporation should at least recognise the cost of that ill-fated venture. Despite differences of opinion, it should be mentioned that Mr Gough, in his submissions, expressed gratitude to the Corporation staff for their help and understanding in dealing with his case. In 21 January 1994 a file note was signed by Mrs Tonkin and Mr Bruce-Smith in the following terms: "The ACC has invested a lot into Mr Gough's law study over the past years through his vocational rehabilitation, and being so close to completion of a degree it would in our - 9 - view be pointless for the ACC to require \Ir Gough to change his direction. 1 -k has ahvays satisfied his Individual Rehabilitation Programme requirements. When the ACC ceased to contribute towards study costs beginning I July 1993. Mr Gough continued his study which indicates his commitment. Mrs Tonkin and I acknowledge that Mr Gough is indeed taking responsibility for his own rehabilitation. and should be encouraged to pursue his present course of study to achieve the outcome of legal \.vork." That note was recorded at Mr Gough's request in case his weekly compensation might be reconsidered if he became fit for selective work before completing his degree. It is also relevant to the issues on this appeal. Under the 1992 Act a claimant cannot get vocational assistance for more than t\vo years in the first instance. There is further provision in s 24 for resumption of vocational rehabilitation after obtaining full time employment. A claimant \Vho has had earlier support under the Accident Rehabilitation and Compensation Insurance Act 1982 stands in the same position as any other claimant as at 1 July 1992. The fact that he or she may have already had assistance for more than one year is not a disqualifying consideration but only a factor to be taken into account. In view of the above findings it is unnecessary for me to consider some of the other arguments advanced on the appeal. There is one other important matter. Mr Gough submitted that the period of two years should be calculated over term times only. The limitation in s 23(1) is expressed as "in respect of any period more than 1 year after the commencement of the programme". The natural meaning of those words is to exclude provision after the anniversary of the commencement of the programme. The meaning for which the appellant contends is that the limitation only applies after the Corporation has provided for the vocational element of a programme for a period or periods totalling 12 months. The end of the last period may therefore be more than one year after the commencement of the programme. That is a strained interpretation 546 and cannot be adopted in preference to the natural meaning. The reference in subsection (2) to a further period of one year must be given a similar meaning. The appeal is allowed. The District Court has jurisdiction only to confirm, modify or revoke the decision appealed against. The decision to refuse further vocational rehabilitation costs is therefore revoked but the Court does not have power to order the payments sought by the appellant. Unless there is an appeal, the Corporation vvill no doubt accept the views expressed in this decision and provide the assistance for which the appellant has applied. The appellant does not seek costs but will be entitled to $75 as an approximate sum for photocopying and other expenses. DATED at WELLINGTON this I b day of September 1994 DA Ongley District Court Judge