MATTHEWS v ACCIDENT COMPENSATION CORPORATION [2020] NZCA 449

MATTHEWS v ACCIDENT COMPENSATION CORPORATION [2020] NZCA 449 [24 September 2020]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA665/2019[2020] NZCA 449BETWEEN MAYBELLE KAPETA MATTHEWSApplicantAND ACCIDENT COMPENSATIONCORPORATIONRespondentCourt: Clifford and Courtney JJCounsel: A C Beck for ApplicantA S Butler for RespondentJudgment:(On the papers)25 September 2020 at 2.30 pmJUDGMENT OF THE COURTThe application for leave to appeal is granted on the questions of law at [44].____________________________________________________________________REASONS OF THE COURT(Given by Clifford J)Introduction[1] Maybelle Kapeta Matthews applies pursuant to s 163 of the AccidentCompensation Act 2001 (the Act) for leave to bring a second appeal. Ms Matthewshas been substituted, with the consent of the respondent, Accident CompensationCorporation Ltd (ACC), in these proceedings in place of her late husbandAuerua Aria.1 Mr Aria was tragically killed in a boating accident in 2016.1 Matthews v Accident Compensation Corp [2018] NZHC 2769.[2] We have decided to grant leave for a second appeal. We note, however, thefacts are complicated and the law difficult. Given those considerations, and the historyof this matter, we consider it appropriate to explain our reasoning for granting leavein those terms in greater detail than would normally be called for in a decision grantingleave.Background2[3] In 1974 Mr Aria, then aged 17, had a motorcycle accident that causedpermanent damage to his right leg: thereafter he could not fully extend his right kneeand had only a limited ability to flex his right foot. Mr Aria was not employed at thetime of that accident. The relevant legislation at that time was the, original, AccidentCompensation Act 1972. It is not clear whether Mr Aria filed an ACC claim at thetime. Nor have we seen any consideration of Mr Aria's entitlements under thatlegislation or, if any, their nature. Notwithstanding the impact of his injuries on hismobility, Mr Aria obtained and continued employment as a boner in a freezing worksfor 33 years from 1975 until May 2008. One of the effects of Mr Aria's 1974 injurywas arterial damage, causing a loss of circulation. That predisposed Mr Aria to thedevelopment of ulcers on his affected lower right leg.[4] The dispute which Mr Aria had with ACC, and which is now continued by hiswife, relates to the circumstances which brought his ability to work as a boner to anend in May 2008.[5] Mr Aria suffered an insect bite at work on 25 April 2007. The wound becameinfected. On 6 June 2007 Mr Aria's GP filed an ACC injury claim form on the basisof that workplace accident. Weekly compensation was not claimed. The materialswe have reviewed would not appear to include the outcome, at the time, of thatapplication. We infer Mr Aria continued working.2 We note we consulted the hearing bundle from the High Court file, CIV-2008-404-1087, in thecourse of preparing this judgment.[6] Ulcers developed in the affected area. Mr Aria received treatment for thoseulcers, but they did not heal. Mr Aria's general health was affected. As a result,Mr Aria was admitted to hospital on 20 May 2008.[7] A scan on 22 May revealed a blocked artery in Mr Aria's lower leg. He wasoperated on on 29 May to remove dead and infected tissue, and on 6 June to addressthe blockage of the artery. He was discharged on 23 June 2008.[8] Mr Aria's GP filed a second injury claim with ACC, based on the 1974motorcycle accident, on 26 June 2008. The GP certified Mr Aria as unfit for work on20 May 2008, being the day Mr Aria was admitted to hospital, and claimed weeklycompensation for Mr Aria from that date through to 3 July 2008.[9] The 6 June surgery was not a success. Mr Aria was in hospital for localtreatment of the ulcers from 22 to 25 July. From 19 to 27 August he was in hospitalfor further surgical cleansing of his wound, in preparation for a further attempt torelieve the arterial blockage or, if unsuccessful, for the amputation of his lower leg.Vascular surgery on 3 September 2008 was successful, and the ulcers began to heal.[10] Over that same period ACC responded to Mr Aria's 26 June 2008 claim, basedon his 1974 accident. On 9 September 2008 Mr Aria's vascular surgeon, Mr Caldwell,wrote to ACC advising, among other things, that Mr Aria's "ulceration and problemswith his right leg are predominantly related to past trauma".[11] ACC wrote to Mr Aria on 30 September accepting his 26 June 2008 claim,confirming his 2 August 1974 injury was "covered by ACC" and that he would receiveweekly compensation for his incapacity from 20 May onwards. On 13 OctoberMr Aria's employer provided ACC with a certificate of his earnings. On 17 October,we infer in response to that certificate, ACC wrote to Mr Aria advising him he wasowed $17,088.20 for weekly compensation underpaid between 27 May 2008 and21 October 2008.[12] In early 2009 Mr Aria's employment was formally ended. The occupationalhealth assessment process — which had begun earlier — continued. Medical andoccupational health reports were provided to ACC in late May and September thatyear:(a) the late May report, by which time it would appear the ulcers hadhealed, confirmed that Mr Aria remained not currently fit for any workstanding, walking around, heavy work or other activities, and noted thathis lack of mobility (permanent equinus) in the right ankle hadincreased from before the successful arterial surgery; and(b) the September report confirmed the ulcerated areas had healed, notedthat "[s]ince his operation Mr Aria has had to walk with crutches forbalance and support" and assessed his whole person impairment at42 per cent.[13] On 28 September 2009 ACC wrote to Mr Aria, advising him his weeklycompensation was to be stopped. ACC advised it had made a mistake. When grantingweekly compensation for his 2008 incapacity, as claimed on the basis of his 1974accident, ACC had erroneously understood weekly compensation could be paid tosomeone who was not earning at the time of the injury that led to their claims. A 2006District Court decision had, however, said that approach was wrong.3[14] Mr Aria immediately reviewed that decision. His application was heard on8 March 2010. ACC relied on the 2006 decision, Giltrap; Mr Aria relied on asubsequent decision, Vandy.4 The Reviewer summarised the position thus:Giltrap says a person who was not an earner at the time of injury is not entitledto weekly compensation even if he was an earner at the time of a laterincapacity. Vandy says the opposite — a person who was not an earner at thetime of injury but was an earner at the time of later incapacity is entitled toweekly compensation.(Citations omitted.)[15] Preferring the Giltrap reasoning, the reviewer upheld ACC's decision.Mr Aria appealed.3 Giltrap v Accident Compensation Corp [2006] NZACC 141.4 Vandy v ACC [2010] NZACC 23.[16] While that appeal was pending the High Court reversed the District Court'sVandy decision and adopted the Giltrap reasoning.5 Mr Aria then accepted that, as hewas not employed in 1974, he was not entitled to weekly compensation following theonset of insect-bite ulceration by reference to his 1974 injury. Rather, he argued, theulcers had been occasioned by a workplace accident, the minor abrasion (the insectbite); and the combination of that abrasion, the ulcers and the infection were the causeof his incapacity in May 2008.[17] ACC agreed to re-investigate Mr Aria's 2007 claim, and his appeal was placedon hold. During that re-investigation further medical evidence was obtained byMr Aria and by ACC relating to the causal role of the insect bite and the consequentinfected ulceration for his post May 2008 incapacity.[18] Following that re-investigation ACC wrote to Mr Aria on 18 November 2015:(a) noting its, by then unchallenged, decision that Mr Aria was not entitledto weekly compensation for his 2008 incapacity based on his 1974injury, as that injury did not happen at work;(b) advising, however, it now accepted his earlier 6 June 2007 claim as abasis for weekly compensation during the period of incapacity whichbegan in May 2008, attributable to ulceration resulting from the insectbite accident; and(c) advising that Mr Aria's incapacity to work as a boner from29 December 2009 onwards, by which time his ulcers had healed andwhen his weekly compensation had been stopped, was caused by his1974 injury and hence he was not entitled to further weeklycompensation from that date.[19] Mr Aria reviewed that decision in February 2016. On 16 February the reviewerconfirmed ACC's decision. Having posed the question "Does the medical evidencecausally link Mr Aria's incapacity to his injury on 25 April 2007?" the reviewer said:5 Accident Compensation Corp v Vandy [2011] 2 NZLR 131 (HC).I find the answer to this question is 'No'. It follows I find thereis insufficient medical evidence to show that Mr Aria'sincapacity from 28 December 2009 to the present day is causallyrelated to his covered April 2007 injury. I find the medicalevidence as a whole clearly links Mr Aria's incapacity to his 1974injury. On this basis his application cannot succeed.[20] Mr Aria then re-engaged with his 2007 appeal. He did so on the basis that hiscontinuing incapacity, after the ulcers had healed, was caused — at least in part — bythe 2007 insect bite accident. Mr Aria relied on medical evidence from the 2015investigation which he said suggested his incapacity in 2009 was caused by thecombined effect of the 1974 and the 2007 injuries.[21] Judge Mathers phrased the issue before her as "whether the 2007 coveredinjury was the cause of Mr Aria's incapacity to return to work after 2009 or whetherhis incapacity arose from the deformity of his ankle and hence [was] caused by the1974 accident".6 Dismissing the appeal, Judge Mathers found the latter to be the case,reasoning:[39] Whether or not there was a combined effect, that in my view ceasedto apply from 2009 when the abrasion injury and ulcer were successfullytreated. What the late Mr Aria was unfortunately left with was the result ofthe 1974 injury.[22] Mr Aria's estate then applied to the District Court for leave to appeal on a pointof law pursuant to s 182(1) of the Act. On 17 May 2018 Judge GM Harrison declinedthat application.7 He characterised Judge Mathers' decision, encapsulated above ather [39], as one of fact not of law. Special leave of the High Court was then soughtfor a second appeal on a question of law pursuant to s 162(3) of the Act.[23] Granting leave, Collins J summarised what had happened to Mr Aria after theMay 2008 discovery of arterial blockage in the following way:8Bypass surgery was carried out in July 2008 in an attempt to overcome theobstruction, but unfortunately it failed. In September 2008, further bypasssurgery was successfully carried out. After the second surgery, the ulcers onMr Aria's leg fully healed, but the knee flexion deformity — inability to bendthe knee — became worse.6 Aria v Accident Compensation Corp [2017] NZACC 38 [District Court appeal] at [37].7 Aria v Accident Compensation Corp [2018] NZACC 73 [District Court leave application].8 Matthews v Accident Compensation Corp [2018] NZHC 2769 [High Court special leaveapplication] at [5] (emphasis added).[24] Collins J then summarised the errors of law that Mr Beck, by then counsel forMs Matthews, said were involved in the District Court decision which merited afurther appeal:9(1) First, he submitted the Judge did not consider whether Mr Aria wouldnot have been incapacitated but for the 2007 injury. He submitted itwas not necessary that the 2007 injury was the sole cause of incapacityand that it would be sufficient if it was a contributing factor.(2) Second, the Judge did not apply the evidentiary burden of proofestablished in Thompson v Accident Compensation Corporation.10[25] Noting "there was no dispute that issues of causation raise questions of law",11the Judge set out the relevant statutory provisions which encapsulate the causalrelationship required between personal injury and incapacity to establish anentitlement to weekly compensation, namely cl 32 of sch 1 and s 103 of the Act, thenconcluded:[13] Because I am granting the application for special leave, it is notappropriate for me to delve in any depth into the facts and legal issues raisedby the application for special leave to appeal. Suffice for present purposes torecord that Judge Mathers appears to have focused on the fact that the ulcershad healed, without considering in much depth the implications of theexacerbated knee and ankle deformities. I am satisfied that, with respect tothose injuries, this case does raise an arguable question of law involvingcausation, namely whether aggravation of a pre-existing condition acts as anabsolute bar to causation.12[14] I believe there are two questions of law that this Court should address,namely:(1) Can a further physical injury that aggravated a pre-existingphysical injury be a cause of incapacity under cl 32 ofSchedule 1 and s 103 of the Act?(2) If so, was Mr Aria's inability to return to work caused by theaggravation of his pre-existing knee flexion and/or ankleequinus (as opposed to the original injuries themselves)?(Original emphasis)9 At [10].10 Thompson v Accident Compensation Corp [2015] NZHC 1640, [2015] NZAR 1163 at [39].11 High Court special leave application, above n 8, at [11].12 See Johnston v Accident Compensation Corp [2010] NZAR 673 (HC) at [26]–[27]; and Hornby vAccident Compensation Corp HC Wellington CIV-2008-485-763, 10 September 2008 at [28].Compare W v Accident Compensation Corp [2018] NZHC 937, [2018] NZAR 829 at [60] and[62].[26] As can be seen, the focus of Collins J's grant of leave was on the causalsignificance of what the Judge called the "aggravation of a pre-existing condition"(here the consequences of the 1974 accident) by a subsequent accident (here the 2007insect bite).13[27] The common sense rationale for that question would appear to be that,notwithstanding the pre-existing injury, Mr Aria worked for some 33 years as a bonerin a freezing works and it was only after the insect bite and the associated surgery that,notwithstanding the healing of the ulcers, he was unable to continue in thatemployment.[28] Grice J dismissed the appeal (1 July 2019) and subsequently declined anapplication under s 163(1) to bring a second appeal on a point of law to this Court(28 November 2019).14This application[29] Ms Matthews now applies pursuant to s 163(2) for special leave. The relevantthreshold was explained by this Court in Cullen v Accident Compensation Corp:15[5] This Court has power to grant special leave to appeal under s 163(2)of the Act. The principles applicable to an application for leave under s 67Judicature Act 1908 apply equally to an application under s 163 of the Act.The Court will exercise this power if satisfied that there is a serious questionof law capable of bona fide and serious argument in a case involving someinterest, public or private, of sufficient importance to outweigh the cost anddelay of a further appeal. Other relevant considerations include thedesirability of finality of litigation and the overall interests of justice.The primary focus is on whether the question of law is worthy ofconsideration.[30] In making this application, Ms Matthews says Grice J erred in the High Courtwhen dismissing her appeal: she did not determine the point of law on which leavewas granted by Collins J, but rather upheld the District Court decision on a wrongbasis.13 High Court special leave application, above n 8, at [13].14 Matthews v Accident Compensation Corp [2019] NZHC 1509 [High Court appeal]; and Matthewsv Accident Compensation Corp [2019] NZHC 3125 [High Court leave application].15 Cullen v Accident Compensation Corp [2014] NZCA 94 (footnotes omitted).[31] On appeal, and having reviewed the evidence, Grice J — as relevant for thesepurposes — summarised her assessment in the following terms:16[33] Once the ulcers had healed the only knee/ankle incapacity was thatcaused by the 1974 personal injury. The 2008 surgery was triggered bydamage caused by the 1974 injury and any aggravation flowing from the 2008surgery was from the 1974, and not the 2007, injury.[35] In my view the Judge made no error in reaching her conclusion thatthe incapacity from Mr Aria's knee and ankle problems were due to the 1974personal injury. Once the ulcers had healed there was no other contribution tothe incapacity.[32] On that basis she determined the appeal by concluding:[36] Following my findings above, neither ground of appeal for whichleave was granted arises. Both points are moot and it is not necessary toconsider them further.[33] It is to be noted, however, that given the legal issue recognised by Collins J,and the factual basis for it, those conclusions of the Judge are in tension with her earlierobservation that following the successful arterial bypass:17The ulcers ultimately healed, but the deformity causing an inability to flexMr Aria's knee became worse and the skin was rendered more delicate.[34] In her decision declining leave, Grice J in essence reasoned that because shehad concluded the District Court Judge was correct in finding the 1974 injury was thesole cause of the ongoing incapacity then, as before, the questions of law were moot.[35] The Judge's task, Mr Beck argued, had been to answer the question of law.Namely, could the causal connection required for entitlement to weekly compensationfollowing incapacity be met in circumstances where, as would appear to have been theaccepted medical position, a subsequent accident suffered by an earner results in theaggravation or worsening of the injury caused by an earlier accident suffered by thatperson when they were not an earner? If the answer to that question of law was yes,16 High Court appeal, above n 14.17 High Court appeal, above n 14, at [8].then the matter should, Mr Beck further argued, have been returned to theDistrict Court for the facts to be assessed in that light.Analysis[36] There is no debate that Grice J did not answer the questions of law posed byCollins J. Nor, on the evidential record available — essentially as referred to byCollins J in the passage set out above at [24] — is it clear to us that the issue was moot.[37] Collins J would appear to have had in mind the possibility of multiple causality.That concept was referred to by this Court in granting leave, coincidentally also onMr Beck's application, to appeal a decision of the High Court considering questionsof causality in the context of mental injuries suffered because of physical injuries.18In granting special leave, on the question of whether the High Court had approachedcausality correctly, this Court explained:[4] There are, analytically, three possible situations. First, there might bemental injury arising out of an "accident" and resultant physical injuries. Thisrelates to what could be termed "accident trauma". Secondly, a pre-existingmental condition may be aggravated somehow, solely because of the physicalinjury. Thirdly, the physical injuries may have been a contributing cause —though not the only contributing factor to — the resurgence of a prior mentalaffliction.[5] Counsel accept that categories one and two come within s 26(1)(c) ofthe Injury Prevention, Rehabilitation, and Compensation Act 2001.[6] The third fact pattern — which is that presently before the Court — ismore problematic. The answer given by a District Court Judge on an appealto that Court, and then subsequently by Dobson J in the High Court, is thatthis third fact pattern is not within the statutory provision.[7] On any view of the matter, this is a question of law. The issue has notpreviously been before this Court for consideration. Further, it is a questionof law of considerable practical importance, with significant downstreamconsequences for the operation of the accident compensation legislation.[38] In our view, that third type of possible causal link is the one Collins J ingranting leave recognised as being possible.18 Hornby v Accident Compensation Corp [2009] NZCA 33, (2009) 19 PRNZ 236.[39] The difficulty we see with the approach taken by Grice J is that she determinedcausality without having answered that question of law, and therefore without havingreviewed the facts on the basis of what she determined was the answer to the questionCollins J posed. The correctness or otherwise of her conclusion of mootness at leastarguably would appear to require an answer to that question of law first, and then anassessment of the evidence.[40] We therefore grant leave on the following two questions of law:(a) Was the High Court wrong to conclude that the first question of lawposed by Collins J was moot and, accordingly, to decline to answer it?(b) If so, can treatment for a physical injury suffered by an earner in 2007,which aggravates the effect of an earlier physical injury suffered bythat person in 1974 when they were not an earner, be a cause ofincapacity under cl 32 of sch 1 and s 103 of the AccidentCompensation Act 2001?[41] Mr Beck's further challenge to Grice J's approach is that she was wrong todetermine the issue of legal and factual causation herself. Rather, the first question oflaw posed by Collins J having been answered, she should have remitted the matter tothe District Court.[42] That was not the approach Collins J envisaged, as reflected in his secondquestion. Nor was it the approach this Court adopted when granting leave in theHornby case on questions, analogously, on all fours with those posed by Collins J.19It may be, we acknowledge, that on the second appeal for which we are granting leavethis Court may reach the conclusion, as it did in the case of Ambros (on which Mr Beckalso relied), that it would not be appropriate to go beyond answering the generalquestions of law.20 But that will not necessarily be the case.[43] Accordingly, and in line with the second question posed by Collins J and thisCourt in Hornby, we also grant leave on the following, third, question:19 The questions posed in Hornby (at [10]) were:(a) Did the High Court adopt the wrong test to determine whether mental injuries are suffered"because of physical injuries" pursuant to s 26 of the Injury Prevention, Rehabilitation, andCompensation Act 2001?(b) If so, is the appellant entitled to cover on the correct test?20 Accident Compensation Corp v Ambros [2007] NZCA 304, [2008] 1 NZLR 340 at [109]–[112].(c) If so, was Mr Aria's inability to return to work caused by theaggravation of his pre-existing knee flexion and/or ankle equinus (asopposed to the original injuries themselves)?Result[44] We therefore grant special leave on the two questions Collins J granted leavealbeit slightly rephrased in view of our reasons for which we have made that decision:(a) Was the High Court wrong to conclude that the first question of lawposed by Collins J was moot and, accordingly, to decline to answer it?(b) If so, can treatment for a physical injury suffered by an earner in 2007,which aggravates the effect of an earlier physical injury suffered by thatperson when they were in 1974 not an earner, be a cause of incapacityunder cl 32 of sch 1 and s 103 of the Accident Compensation Act 2001?(c) If so, was Mr Aria's inability to return to work caused by theaggravation of his pre-existing knee flexion and/or ankle equinus (asopposed to the original injuries themselves)?[45] Costs on the application are reserved pending determination of the substantiveappeal.Solicitors:Hazel Armstrong Law, Wellington for Applicant