Newman v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT DUNEDIN Decision No. 138 / 97 UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an appeal pursuant to section 91 of the Act BETWEEN JOHN ERNEST NEWMAN of Dunedin Appellant (Appeal No. DCA 312/96) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 18th day of June 1997 APPEARANCES W J Wright for appellant P A McBride for respondent DECISION OF JUDGE A W MIDDLETON I he issues in this appeal are: ( a) The date of the appellant's incapacity; and ( b ) The basis upon which relevant earnings should be fixed. The appellant who is now aged 62 lodged a claim for cover with the respondent on 28 September 1995. It was established that he had been a self employed builder for many years and was found to have suffered right fibrothorax requiring decortication due to exposure to asbestos since 1968 in his occupation. 2 On 27 September 1995 the respondent confirmed that the appellant's claim for cover was accepted as it met the criteria for personal injury by accident caused by gradual process disease or infection arising out of and in the course of employment, such criteria being specified in s.7 of the Accident Rehabilitation and Compensation Insurance Act 1992. The appellant submitted his annual accounts in support of an application for weekly compensation and the appellant obtained verification from the Inland Revenue Department. The income tax returns as at 31 March in the years 1990 to 1995 respectively were as follows: 1990 $17,437.00 1991 $23,109.00 1992 $25,294.00 1993 $20,411.00 1994 $21,419.86 1995 $16,827.00 The respondent obtained a report from Dr Yelavich, the appellant's General Practitioner, who said that the appellant's condition had been diagnosed by him on 28 October 1994. He said that he had seen the appellant on occasions in the previous 5 to 6 months when he had had a persistent cough which he thought had been attributable to flu caught at the end of May. However, a chest x-ray produced the definitive diagnosis. Dr Yelavich said that he had been consulted by the appellant on 20 December 1993 at which time he had been coughing for 3 to 4 weeks and thereafter treatment with antibiotics appeared to have cleared that condition because he did not see him again until October 1994. Dr Yelavich reported also that he had seen the appellant in March 1990 because of a cough and congestion in the chest which had resolved spontaneously when treated with antibiotics. Dr Yelavich concluded his report: "It may be possible to attribute the episode in December 1993 to his asbestos related condition, however, I would be less sure of the previous consultation being related. The difficulty here being that we did not have a chest x-ray to compare with since 1974." Dr Yelavich was asked whether he would have certified the appellant as being impaired for work and Dr Yelavich stated: 'Mr Newman did not take time off initially, because he ran a one man business and could not afford to do so. However, he has been off work since the time of his surgery in April 1995. I feel that his health was impaired for some considerable time prior to this and that as he was unable to work to full capacity, he did not earn as much from his business as he had done previously. I would be unable to speculate as to the date from which his health began to deteriorate on the basis of his chest condition, as I did not see him from July 1990 to December 1993." 3 As a result of the consultation with Dr Yelavich on 28 October 1994, the appellant had been referred to Mr Wong, a Respiratory Physician, who conducted a CT scan and reported to Dr Yelavich on 19 December 1994: 'I am uncertain as to the cause for this man's contracted right lower lobe. It would be unusual for asbestos related lung diseases to present in this manner but this is a possibility that needs to be considered ..." The respondent concluded that the date of personal injury and incapacity was October 1994, being the date of consultation with Dr Yelavich. On that basis weekly compensation was assessed, having regard to the return of income for the year ended March 1994. The appellant applied for a review of both those decisions. In his application for review, the appellant stated that the asbestos poisoning was the result of exposure during the 1960s and that his diagnosis was determined in October 1994. He said that his incapacity had occurred prior to the date of diagnosis as a result of which his earnings had been reduced gradually over a number of years as a result of the incapacity arising from the asbestos poisoning. He requested that his earnings related compensation be calculated on a more realistic income having regard to the date of his disability rather than the date of diagnosis. The review officer found that the appellant was able to continue his employment even though he was coughing in 1993. She found that Dr Yelavich was not supportive of the December 1993 episode as being related to the condition which was subsequently diagnosed. On that basis the review officer considered that in terms of s.7(5)(b) the date of incapacity was August 1994 when the appellant had first found it necessary to take time off. She noted also that the acceptance of that date was to the appellant's benefit because of the higher earnings in the tax year immediately prior to that date. The appellant has appealed against that decision. At the hearing of the appeal Mr Wright provided a further report from Dr Yelavich dated 4 June 1997 which insofar as it applies to the appeal states: "The asbestosis would have probably lain dormant for many years and its onset and effect on Mr Newman would have been a very gradual process. He consulted me on 28 October 1994 with at least a five month history of cough which was sometimes quite severe and on one occasion caused a brief blackout. He was coughing up copious amounts of phlegm. Further investigation of this problem led to his referral to the Chest Clinic and subsequent surgery. Prior to October 1994 I had not seen him since 20 December 1993 when he had consulted me with a bronchitis-like episode of coughing, productive of clear phlegm. It is my opinion, in retrospect, that his asbestos related problem was already present at that time. I had seen him for a similar problem in March 1990, however, it would be hard to say whether that episode was also related as I did not see him for over three years. After that episode nevertheless, I believe that by 1993 it was clear that he was having symptoms related to his asbestos related condition, and these would have been affecting, amongst other things, his ability to work as effectively 4 as he had done in the past. It is very possible that these symptoms may have been present for some time prior to December 1993. The exact determination of the time of onset of his disease is made difficult also by the absence of a chest x-ray for about 20 years prior to onset." Mr Wright adopted written submissions previously supplied and made some additional submissions in relation to the application of s.41(3). The appellant's basic submission is: 1. That while s.11(1) deems the appellant's condition to have occurred on or after 1 July 1992, or such later date as is determined under s.7(5) of the Act, the adoption of the dates provided in s.7(5) creates problems for the appellant. That s.7(5)(a) creates an injustice because the appellant did not receive treatment for his problem until 1995. While in terms of s.7(5)(b) the question is raised as to when the personal injury first resulted in incapacity, that the effects of asbestos exposure were difficult to assess because the appellant worked on his own and had to carry on irrespective of how he felt. He sometimes had feelings of loss of energy and strength, but carried on working until his condition worsened to the point when he was unable to complete a full day's work. That the appellant's incapacity therefore commenced when the symptoms of asbestos related disease had affected his productivity so that in a case of this nature it is not necessary to show some physical absence from work. 2. That while s.3 defines "incapacity" as "incapacity for employment" and includes absence from employment, the latter words limit the width of the phrase 'incapacity for employment". That if the definition is interpreted in this way it will create an injustice between a person who suffers a conventional accident and a person who suffers a disease of gradual process. The disease sufferer may continue working the same number of days and hours as he worked prior to the onset of the disease, but with reduced efficiency. 3 . That the appellant's income tax returns show a declining income so that the yardstick is to ascertain how the onset of the problem affected the appellant's earnings. 4. That the respondent has incorrectly applied the provisions of s.41(3). 5 . That s.41(3) provides three separate possibilities by which the appellant's income tax return might have been influenced by his condition. Account should be taken of the extent of the influence of the incapacity or the effects or likely effects of the incapacity on the income of the appellant. 6. That raises the question as to by how much the appellant's returns of income were affected by his problem. 5 7. That the respondent has failed to take that issue into account and has merely relied on the provisions of s.7(5) as to when the appellant first sought treatment and has failed to consider the affect of the disease on the actual income received. 8. That the answer is to find a fair starting date and thereafter consider how the income over the succeeding years have been affected by the problem. Mr McBride submitted: 1. That in terms of s.7(5)(a) the personal injury is deemed to have occurred in December 1994 because that was when the appellant first received treatment from a registered health professional for that problem. It was at that time that what had been a possible diagnosis was confirmed by a CT scan. 2. That it was open to the review officer in terms of s.7(5)(b) to accept the date of incapacity as being August 1994 because that was when the appellant took time off work because of the injury. 3. That on the basis of Dr Yelavich's reports it may be possible to use December 1993 as the date of incapacity, being the date when the appellant attended Dr Yelavich with a history of coughing for some 3 to 4 weeks. 4. That on the wording of s.11(1) as August 1994 is later than 1 July 1992, August 1994 must be the date of incapacity. 5. That for the purpose of assessing entitlement to weekly compensation for this appellant as a self employed person, s.41(2) requires the calculation to be based on the appellant's earnings in the most recent income year last ended before the commencement of incapacity. 6. That in relation to s.41(3) Dr Yelavich's comment in relation to December 1993 does not meet the test for "likely". 7 . That there is little evidence that the appellant was incapacitated by his personal injury in the tax year ended March 1993 There is no doubt that that the appellant's problems arose gradually over many years through his association with the building trade and the use of asbestos in various buildings. The provisions of s.11(1) clearly qualify the appellant as being entitled to cover under the Act and the date of injury is therefore required to be either the first day of July 1992 or such later date as is determined under s.7(5) of the Act. Section 7(5) provides: 6 " The date on which personal injury caused by gradual process, disease, or infection arising out of or in the course of employment is suffered shall be the date on which - (a) The person first received treatment from a registered health professional for that personal injury as that personal injury; or (6 ) That personal injury first resulted in the incapacity of the effected person - whichever first occurs. In order to consider whether s.7(5)(b) applies, one must refer to the definition of incapacity in s.3 which is: "'Incapacity' means incapacity for employment; and includes absence from employment by reason of necessary health care treatment or service of a kind for which the Corporation is required or permitted to make payments either directly or indirectly (irrespective of whether or not it makes any payment in the particular case) in respect of personal injury covered by this Act." The evidence which was accepted by the review officer indicated that the only time the appellant had been away from work because of his injury was in August 1994 which the review officer accepted in terms of s.7(5)(b) as being the first period of incapacity as a result of the injury. I agree with that finding. That then raises the issue of calculation of weekly earnings. The appellant has submitted that his earnings declined over a period because of the effects of the injury upon him. That however, does not appear to be reflected in the figures in that there is very little variation in his returns in the years between 1991 and 1994. Mr Wright suggested that the provisions of s.41(3) require the respondent to have regard to the effects of the injury on the appellant's capacity to earn during that period. While the figures do not demonstrate a reduction in earnings over the period of 4 years which I have mentioned, the appellant's evidence has been that he struggled to continue to work because of the effects of the injury and had to force himself to continue. However, it appears that he has continued to work and produce relatively stable income figures. While it appears that the injury probably developed over a very long period, there is no base figure from which the respondent or the Court can assess the effects or likely effects of the incapacity caused by the problem until the appellant actually ceased work. I consider that that is why in assessing the date of incapacity in respect of a gradual process problem, the first date of receipt of medical attention is used to provide a starting point. A person suffering from such a problem may continue working thereafter but the date of incapacity has been fixed. I do not accept that Mr Wright's argument that it is open to the respondent in this case to take an averaging of accounts or to make a discretionary assessment as to the possible percentage effect of the injury on his returns of income. This appellant continued to work, apparently full-time albeit with some difficulty, to maintain a very regular pattern of income. 7 While Mr Wright has emphasised the provisions of s.41(3) I do not consider that the acceptance of a long term illness by itself can be a demonstration of a "likely effect" on the appellant's income. I consider that the provisions of the subsection are there to enable the respondent to make an adjustment in an assessment of income when there is evidence that because of injury preventing an appellant from working the income for the year has been affected by that inability to actually work. That is not the position here. The appellant suggests only that had it not been for his illness he probably would have earned more. I am not therefore persuaded that the review officer was wrong in her decision and has in fact provided the appellant with the best possible outcome on the figures which are available. The appeal is dismissed. DATED at WELLINGTON this day of July 1997 A W Middleton District Court Judge dc31295.doc(rd)