MATTHEWS v ACCIDENT COMPENSATION CORPORATION [2022] NZCA 8

MATTHEWS v ACCIDENT COMPENSATION CORPORATION [2022] NZCA 8 [3 February 2022]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA665/2019[2022] NZCA 8BETWEEN MAYBELLE KAPETA MATTHEWSAppellantAND ACCIDENT COMPENSATIONCORPORATIONRespondentHearing: 25 November 2021Court: Kós P, French and Brown JJCounsel: A C Beck and P G Schmidt for AppellantD A Laurenson QC and A S Butler for RespondentJudgment: 3 February 2022 at 9 amJUDGMENT OF THE COURTA We answer the first question submitted for determination by the Court unders 163 of the Accident Compensation Act 2001:Was the High Court wrong to conclude that the first question of lawposed by Collins J was moot, and accordingly, decline to answer it?Answer: No.B The appeal is dismissed.C We make no award of costs.____________________________________________________________________REASONS OF THE COURT(Given by French J)Introduction[1] Ms Matthews is the personal representative of her deceased partner Mr AueruaAria. Before his death, Mr Aria lodged a claim with the Accident CompensationCorporation (ACC). The claim which was lodged as long ago as 2007 has been thesubject of various decisions in both the District Court and High Court. Its proceduralhistory can fairly be described as something of a quagmire.[2] It came before us as the result of Ms Matthews being granted special leaveunder s 163 of the Accident Compensation Act 2001 (the Act)1 to appeal a decision ofGrice J in the High Court. Grice J's decision was itself an appeal from theDistrict Court.2 Grice J held the appeal was moot.3[3] As we will explain, it became apparent at the hearing in this Court that thequagmire was largely due to the fact the claim has morphed over time. It also becameapparent that there was a way out of the quagmire which we are hopeful this judgmentwill facilitate.Background[4] In 1974, shortly after the Accident Compensation scheme first came into force,Mr Aria was injured in a motorcycle accident. He sustained serious soft tissue andvascular injuries to his right leg and required surgery to try and correct some of theinternal damage. He was left with a fixed flexion deformity being unable to fullyextend his right knee and with an ankle that remained in a fixed position (ankleequinus). This meant he had to walk on the tips of his toes on his right foot.[5] At the time of the accident, Mr Aria was only 17 and not working and sotherefore not eligible for weekly earnings compensation. He did not make any claimto ACC.1 Matthews v Accident Compensation Corporation [2020] NZCA 449 [Court of Appeal special leavejudgment].2 Aria v Accident Compensation Corporation [2017] NZACC 38 [District Court substantivejudgment].3 Matthews v Accident Compensation Corporation [2019] NZHC 1509 [High Court substantivejudgment] at [36].[6] In 1975 Mr Aria gained employment at a meat processing plant. Despite hislimp, he worked full time for almost all of the ensuing years until 2008.[7] On 25 April 2007, he was bitten by an insect resulting in the right leg becominginfected and ulcerating. He had to take time off work. In June 2007, Mr Aria filed aclaim form with ACC relating to the infected leg. The form recorded the date of theaccident as the date of the insect bite.[8] Unfortunately, the ulceration would not heal. It was eventually discovered thatthe popliteal artery in the leg which had been damaged in the 1974 accident was almosttotally occluded. Surgery was required to restore circulation. It is common groundthat the circulation problems were entirely the result of the 1974 accident.[9] Then followed two operations.[10] The first operation was undertaken in May 2008. The following month,Mr Aria filed another ACC claim form relating to the leg ulcer. This time the claimform identified the relevant accident as the motorcycle accident on 2 August 1974.[11] Unfortunately, the operation was unsuccessful. The existing ulcers did not healand new ones appeared on Mr Aria's ankle. Mr Aria was advised that if the nextattempt at restoring some circulation was also unsuccessful, his lower leg might needto be amputated.[12] A second operation was undertaken in September 2008. This time the surgeonwas able to bypass the damaged artery and the ulcers ultimately healed.[13] Mr Aria never returned to work and his employment was eventuallyterminated.[14] The claim he had lodged following the first operation based on the 1974accident was accepted and ACC paid him weekly compensation commencing fromMay 2008. However, in September 2009, ACC considered it had made thosepayments in error because Mr Aria had not been employed in 1974 when he hadsuffered the injuries to his leg. ACC stopped the payments in December 2009.[15] Mr Aria unsuccessfully sought a review of the decision to stop the payment.[16] He lodged an appeal to the District Court but the appeal was subsequentlywithdrawn because the position taken by ACC was upheld in other proceedings.[17] Then in 2015, Mr Aria sought cover on a different basis, namely that thepersonal injury that was causing his ongoing incapacity was the 2007 injury ratherthan the 1974 injury. If that were correct, it would make a significant differencebecause at the time of the insect bite Mr Aria had been an earner.[18] ACC investigated this new basis and further medical reports were obtained.One report opined that Mr Aria had been unfit to work since 1974 and that his rightleg deformity meant he should never have undertaken the work he did.[19] In November 2015, ACC concluded that Mr Aria was entitled to compensationin relation to the 2007 injuries but that the period of cover was only temporary becausethose injuries had fully healed by December 2009. Any ongoing incapacity after 2009was caused by the earlier 1974 injury in respect of which there was no cover. ACCtherefore reaffirmed its earlier decision to stop payment in December 2009.[20] Mr Aria then applied for a review of the November 2015 decision and whenthat was unsuccessful, appealed to the District Court. Tragically before the appeal washeard, he died in a boating accident in November 2016.[21] The litigation was then carried on by Ms Matthews.[22] The appeal was heard by Judge Mathers. The Judge who dismissed the appealidentified the issue before her as being:4 whether the 2007 covered injury was the cause of Mr Aria's incapacity toreturn to work after 2009, or whether his incapacity arose from the deformityof his ankle and hence caused by the 1974 accident.[23] Judge Mathers held it was the latter.54 District Court substantive judgment, above n 2, at [37].5 At [38].[24] Ms Matthews sought leave to appeal from Judge Mathers' decision to theHigh Court but was refused leave.6 Undaunted, she applied to the High Court forspecial leave to appeal which was granted by Collins J.7[25] In granting special leave to appeal to the High Court, Collins J held there weretwo questions of law relating to causation that should be addressed:8(a) Can a further physical injury that aggravated a pre-existing physicalinjury be a cause of incapacity under cl 32 of sch 1 and s 103 of theAct?(b) If so was Mr Aria's inability to return to work caused by the aggravationof his pre-existing knee flexion and/or ankle equinus (as opposed to theoriginal injuries themselves)?[26] The leave judgment contains a statement that after the second surgery in 2008,the knee and ankle deformities had become worse than they were before the surgery.There was evidence to that effect in one of the medical reports. In light of the Judge'sstatement, it is arguable the leave questions were intended to raise issues about thecausative effect of the surgery on incapacity as opposed to the causative effect of theinjuries caused by the insect bite. But that is not clear. A claim about injuries causedby surgery would be a treatment injury claim, requiring a new inquiry as to whetherthe injury was covered under s 20(2)(b) of the Act. Mr Aria's claim was not and neverhad been a treatment injury claim.[27] Certainly, when the matter came before Grice J to answer those questions, shedid not interpret them as being about the effects of the surgery. And nor it would seemdid counsel. As recorded by the Judge, what was argued in the High Court was thattwo elements of the 1974 injury (the knee/ankle deformity and skin fragility) werepotentially aggravated by the 2007 injury.96 Aria v Accident Compensation Corporation [2018] NZACC 73 [District Court leave judgment].7 Matthews v Accident Compensation Corporation [2018] NZHC 2769 [High Court special leavejudgment].8 At [14].9 High Court substantive judgment, above n 3, at [26].[28] Grice J held that both questions before her were moot because Judge Mathershad made a finding of fact that once the ulcers had healed, the only incapacity was thatcaused by the 1974 accident. There was no other contributor. Grice J consideredwhether Judge Mathers' finding of fact was supported by the evidence and concludedthat it was.10[29] As Grice J noted, skin fragility was a new argument raised for the first time inthe High Court.11 It was not part of the two questions on which leave had been given.Although not required to, Grice J considered the point but rejected it on the groundsthe evidence did not support a claim that the skin problems caused incapacity otherthan the need for Mr Aria to take particular care of the skin on his right leg.12[30] Grice J therefore dismissed the appeal and subsequently refused to grant leaveto bring what would be a third appeal to this Court.13[31] As already mentioned, this Court did however grant special leave to appeal.Leave was granted on the same two questions in respect of which Collins J had grantedleave (albeit slightly rephrased) with an additional third question.[32] The three questions were:14(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 when they were in 1974 not an earner, be a cause ofincapacity under cl 32 of sch 1 and s 103 of the AccidentCompensation 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)?10 At [33] and [35]–[36].11 At [22]–[23].12 At [34].13 Matthews v Accident Compensation Corporation [2019] NZHC 3125 [High Court leavejudgment].14 Court of Appeal special leave judgment, above 1, at [44].Discussion[33] With the benefit of fuller argument, it has become apparent that these questionsare problematic.[34] The right of appeal to this Court under the Act is limited to questions of law.15Question 3 however is a question of fact.[35] More fundamentally all three questions are premised on the basis that what isin issue is an argument about the effects of the surgery, something which as alreadymentioned was never part of the claim.[36] To demonstrate how the goal posts have kept changing, in her leave decisionGrice J recorded that one of the questions of law which Mr Beck wanted to raise inthis Court was that she had erred in finding the incapacity was caused by thecirculatory surgery rather than either the 1974 injury or the 2007 injury.16 Grice J didnot accept that she had made any such finding. Mr Beck persisted in this argumentabout an error in his written submissions in this Court. However, as the oral argumentunfolded it became apparent that the causative effects of the surgery were now a mainplank of the appellant's case.[37] Mr Beck argued that important and general legal principles relating tocausation were raised by this proceeding. He also emphasised that the Act is sociallegislation and that it would be unjust were Mr Aria's claim to be defeated bytechnicalities especially after all these years. He suggested there was sufficientevidence in the various medical reports to enable us to answer questions about thecausative significance of the surgery.[38] We acknowledge that the Act must be interpreted liberally having regard to thepurpose of the legislation.17 However, that does not mean it is appropriate for newclaims to be raised on appeal especially an appeal limited to questions of law. There15 Accident Compensation Act 2001, s 163(1).16 High Court leave judgment, above n 13, at [31].17 Harrild v Director of Proceedings [2003] 3 NZLR 289 (CA) at [19] per Elias CJ and [130] perMcGrath J; and Accident Compensation Corporation v Mitchell [1992] 2 NZLR 436 (CA) at 438per Richardson J.has to be some rigour to the analysis. Contrary to Mr Beck's submission, we are alsonot persuaded there is sufficient evidence in the trial record to enable us to properlyand fairly make any factual findings about the causative effect (if any) of the surgeryon Mr Aria's incapacity even if we had the jurisdiction to undertake such an inquiry.[39] While some of the medical reports certainly identify a worsening of the flexiondeformities after the surgery, it is not clear that the condition was permanent. There isa suggestion for example that it was thought it would or had improved. Crucially, theexperts were never asked to address the question which is now being asked of us.[40] In the absence of any lower court decision about the causative significance ofthe surgery and any evidence directed to the issue, we are satisfied that the claim muststart afresh before the focus can properly shift to the impact of the 2008 and 2009treatment.[41] As Mr Laurenson QC submitted on behalf of ACC, if that is to be the newfocus, it would be open to Ms Matthews to seek to establish entitlement to weeklycompensation on the basis that the relevant personal injury for the purpose of s 103 ofthe Act is either:(a) a claim for treatment injury under ss 20(2)(b) and 32 of the Act; or(b) a claim under s 20(2)(d) that the worsening of the equinus and flexiondeformity is a personal injury that is a consequence of a treatment for apersonal injury for which he has cover being either the 1974 injury orthe 2007 injury.[42] These new pathways would require ACC to undertake further investigations.However, Mr Laurenson advised that if Ms Matthews would like to pursue a new claimbased on those new pathways, ACC is willing to re-engage and would do so with anopen mind and as we understand it without raising any time limitation issue. AsMr Laurenson further pointed out, Ms Matthews would also have the benefit of fullreview and appeal rights.[43] The decision is of course for Ms Matthews to take but it does appear to us thatthis is the most appropriate way forward.[44] Where then does all this leave the proper disposition of the current appeal?[45] First, in our view, the answer to the first question of law for determination mustbe "no". As Grice J understood the question (that it referred to the causative effectsof the 2007 injury), she did not err in finding it was moot on the basis of the factualfindings in the District Court. If the question she was asked to determine was intendedto mean treatment injury then it may not have been moot but that was not the thenbasis of the claim.[46] The first question being answered in the negative, the remaining two questionsfall away and the appeal must be dismissed.[47] It is however appropriate to record the ACC position in regards to the secondquestion. ACC conceded that in principle the answer to question two as posited in thisCourt's leave decision was "yes". That is to say, ACC accepted that in principle,treatment for a physical injury suffered by an earner which aggravates the effect of anearlier physical injury suffered by that person when they were not an earner can be acause of incapacity under cl 32 of sch 1 and s 103 of the Act.[48] Finally, as regards costs, these were not sought by ACC. We therefore makeno award.Outcome[49] We answer the first question submitted for determination by the Court unders 163 of the Act:Was the High Court wrong to conclude that the first question of lawposed by Collins J was moot, and accordingly, decline to answer it?Answer: No[50] The appeal is dismissed.[51] We make no award of costs.Solicitors:Hazel Armstrong Law, Wellington for AppellantAccident Compensation Corporation, Wellington for Respondent