Ellwood v Accident Compensation Corporation

IN THE DISTRICT COURT AT AUCKLAND [2012] NZACC 195 AI 489/00 UNDER THE ACCIDENT COMPENSATION ACT 2001 IN THE MATTER OF AN APPLICATION FOR LEAVE TO APPEAL UNDER SECTION 162 BETWEEN MICHAEL ERNEST ELLWOOD Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent Determination on the papers (submissions from Andrew Beck for Mr Ellwood and Chris Hlavac for the respondent) Judgment: 13 June 2012 JUDGMENT OF JUDGE RODERICK JOYCE QC MICHAEL ERNEST ELLWOOD V ACCIDENT COMPENSATION CORPORATION DC AK [2012] NZACC AI 489/00 [13 June 2012] Application []] This was an application for leave to appeal to the High Court on the basis that the 13 May 2011 judgment of Judge Beattie was wrong in law. [2] Counsel's submissions were completed in early September 2011 when that application was referred to Judge Barber. Unfortunately he was unable to deal with the application before his acting warrant expired so the application was recently referred to me. [3] That state of affairs has served to prolong what was already a proceeding with a lengthy history, I particularly note that Judge Beattie mentioned in his 13 May 2011 judgment that it was in response to a court-directed rehearing of an appeal first heard by him in August 2001. [4] Mallon J had allowed an appeal on a point or points of law and sent the matter back to this Court for rehearing in terms including that attention should be given to the obtaining of further medical evidence as might serve better to enable this court to reach a clear conclusion on the merits. [5] That evidence was obtained (in the form of answers to specific questions put to the leading specialists on each side of the case) whereafter the rehearing of the appeal in this Court went ahead on 30 March 2011. [6] In his 13 May 2011 judgment, Judge Beattie had found the Corporation's decision in question (one to suspend entitlements on account of the absence of a causal link between current symptoms and the originally covered injury) was correct as Mr Ellwood's ongoing pain in his cervical spine was not caused by, or attributable to, his covered injury, Thus Mr Ellwood's appeal had been dismissed. Points of Law [7] If granted leave to appeal to the High Court from that 13 May 2011 judgment, Mr Beck would wish to argue for Mr Ellwood that judge had erred in law by: (a) Failing to apply the correct statutory test; (b) Failing to apply correctly the judgment of Mallon J; (c) Reaching a decision that was in conflict with the evidence; (d) Failing to take all relevant evidence into account; and (e) Failing to apply the correct approach to causation, Background [8] As set out in Mr Beck's submissions for leave, the essential background to the proceeding is that: (a) Mr Ellwood suffered neck injuries as a result of accidents in 1992, 1993, 1995 and 1998; (b) A neurosurgeon operated on his neck in 1995 and 1997 and following the second operation he was relatively pain free; (c) The accident in question (that responsible for the injury sustained for which Mr Ellwood has cover) occurred on 9 November 1998 when he was struck by a barbecue trolley and immediately experienced significant and ongoing pain in his neck; (d) The Corporation subsequently undertook a review of Mr Ellwood's position and following a report from Dr Drewery decided on 11 October 1999 to terminate Mr Ellwood's entitlements pursuant to s 116 of the Accident Insurance Act 1998. (e) A review of that decision being unsuccessful Mr Ellwood had appealed to the District Court. (f) The medical reports before the Judge on that appeal disclosed disagreement amongst experts as to the cause of Mr Ellwood's ongoing pain; (8) Holding that the onus of proof was upon Mr Ellwood and noting the conflict of expert medical opinion, Judge Beattie found that the medical evidence did not establish that Mr Ellwood's condition (as it presented when the Corporation made its decision) was attributable to or caused by the 1998 injury, so the appeal had been dismissed; (1) In the High Court, and in reference to s 116, Mallon J had held that - and here I refer to what Her Honour actually said beginning at [64] of her judgment - Before entitlements are suspended at ACC's initiative (or that suspension is upheld by a reviewer or the District Court) ACC should take steps to clarify the position one way or the other. The claimant is not present at the first stage so the obligation must be on ACC at this stage to obtain sufficient evidence. Mr Beck's proposed test of asking whether there is a sufficient basis on which entitlements should be suspended (in effect, terminated) is a reasonable one. If there is an insufficient basis then the test of "is not satisfied" is not met. If there is a sufficient basis then ACC can be "not satisfied" of the right to entitlements. As the reviewer and the District Court apply the same test the same approach should be taken at each stage. ... I therefore consider that s 116 combined with the requirement in s 62 on ACC to make reasonable decisions requires ACC to have a sufficient basis before terminating benefits. If the position is uncertain then there is not a sufficient basis. The "not satisfied" test is not met in these circumstances. [9] What s 116 materially says is this: 116. Insurer may suspend or decline statutory entitlements - (1) An insurer may suspend a statutory entitlement if not satisfied, on the basis of the information in its possession, that an insured is entitled to continue to receive the statutory entitlement. [10] I now turn to the arguments on each side of the application. I will use as headings the legal error points raised by Mr Beck, summarising thereunder the arguments each way before turning to my discussion of those arguments. My conclusions and the result will then follow. Application of the correct test [11] Here Mr Beck said that in his 13 May 2011 judgment, the Judge had held that "it had to be identified whether there was a 'continuing physical injury' that was caused in the accident". Given leave, he would argue that this was not the correct test. [12] He would point out that the Act contains no reference to a "continuing physical injury" and contend that in order to justify terminating entitlements the Corporation had to show that Mr Ellwood's ongoing pain was caused "wholly or substantially" by gradual process or disease. [13] Before turning to the Corporation's response, I note that what Judge Beattie had said (at [18]) was this: Particular legal principles which apply to cases such as this present one require it to be identified whether there is or is not a continuing physical injury which was caused in the accident and to consider whether or not the ongoing symptoms being displayed are being caused by that injury. (I pause to note that as I read it, this sentence does not purport to touch upon any issue of onus or burden.) [14] Mr Hlavac said that he would argue that what the Judge said represented a correct statement of the law relating to causation. He would contend that eligibility for entitlements required a causal connection between a claimant's ongoing symptoms and the covered injury. [15] He would contend that the onus of proving that connection rested with the claimant. He would particularly argue that Mallon J's judgment did not shift that (contended by counsel to be the) onus other than to recognize that before the Corporation could suspend entitlements under s 116 it would have to have a "sufficient basis" for so doing. [16] He would argue too that the Corporation did not have to "establish (on the balance of probabilities) that a claimant's ongoing symptoms are caused wholly or substantially by a condition which is expressly excluded from cover under the Act (such as gradual process or disease)." [17] Here I note that (on both sides of this particular argument and no doubt inadvertently in each case) there has been confusing conflation of the onus of proof when cover is first sought and the position when the Corporation is looking at whether suspension is justified. [18] In any event, he would propose that the Judge's reference to a "continuing physical injury" was no more than an acknowledgement of the need for there to be an ongoing causative link between the covered physical injury and the need for entitlements. Failure to follow the High Court direction [19] In this context Mr Beck first of all pointed to the common ground that there had been substantial conflict between the evidence of the experts on each side of the case, He then offered his summary of the points of difference. [20] From that he submitted that, on the evidence most recently before Judge Beattie (by now of course including the response of the leading experts to the posed - post Mallon J's judgment - questions) there had remained substantial uncertainty as to the real cause of Mr Ellwood's pain so that "the requirements laid down by the High Court in Ellwood were (not satisfied)". (21] Hence he would contend that it was seriously arguable that the Judge did not have a "sufficient basis" for reaching the conclusion that he did. [22] In response, Mr Hlavac reviewed the history of evidential conflict and rehearsed that the High Court finding arising from the first appeal was that the Judge had preferred one set of experts over the other without providing a rational basis for doing so (Mallon J at para [35]). [23] Mr Hlavac made the undisputed (so I understand) point that the then existing evidential difficulties in identifying a basis for a legitimate preference had been the reason why the High Court invited the parties to put agreed questions to the principal experts, as had later occurred. [24] On Mr Hlavac's analysis the result had been that Professor Theis had made clear his opinion that the 1998 accident was not significant enough to have caused serious injury to the nerve roots so that the ongoing symptoms were most likely to be related to degenerative processes. [25] Mr Hlavac would argue that there was a sound basis for his reaching, and thus for the court accepting, that conclusion resting in the prior medical history of Mr Ellwood. [26] He would argue that the evidence was that Mr Finnis had accepted that nerve root impingement was secondary to osteophyte development or degenerative changes as opposed to any acute structural change caused by the injury, such as a prolapsed disc, See also [63] below. [27] He would contend, therefore, that there was every justification for the Judge's finding that: ... (The appellant did commence to experience pain following the trauma of the accident but .. there is no evidence of nerve root radiculopathy (compression) and therefore the pain which the appellant is experiencing is not that of nerve root radiculopathy, and if it is not from that cause then it must be from the degenerative condition of the appellant's cervical spine. ... Whilst it is the case that the factual matrix would indicate that the injuring event triggered the onset of pain from that degenerative condition, that triggering is not in law causative of a physical injury which is giving rise to the pain, but rather it is the pre-existing degenerative state of the cervical spine which has now been rendered symptomatic and is the source of the appellant's ongoing pain. (See paras [34] - [35] of the judgment) [28] This, as identified by Mr Hlavac, is the context in which he would assert that the Judge had clearly and justifiably preferred the evidence of the professor over that of Mr Finnis and, crucially, provided a detailed and rational basis for that preference. (More on this point will emerge as I work through counsel's arguments under the other headings.) [29] In short he would argue that there was no ultimate "uncertainty" and the Judge was entitled to be satisfied that the Corporation had correctly suspended entitlements. [30] In his reply, Mr Beck simply rehearsed the contention that "at the end of the day, it (was) abundantly clear that no expert could determine the exact cause of the appellant's pain" [31] Mr Beck then went on to contend that for the Corporation to be "satisfied" required that it cross a "high threshold" and that "it would be inappropriate for a termination decision to be made on the basis of a finely balanced judgment. The absence of entitlement (had to be) quite clear before termination (was) justified".! [32] That is how he would argue this part of the case and how he would maintain that the Judge did not correctly follow the High Court directions. Although counsel did not cite the case, this submission might be read as if a reflection of R v Dental Complaints Assessment Committee which is discussed at [74] infra. Findings against the evidence [33] Here Mr Beck said that the Judge had held there to be no evidence of nerve root radiculopathy when that was simply not the case because Mr Finnis had expressed the opinion that there was "left C7 radicular pain and radiculopathy secondary to C7 nerve root impingement at the C6/7 foramen", [34] Mr Beck also said that the Judge had held that there was no physical injury other than a shoulder sprain and that, counsel said, was also wrong. Mr Finnis had expressed the view that in the accident the "Co and C7 nerve roots were injured in the neural foramina", in other words there was a physical injury, and the professor had agreed that was so. [35] So here too counsel would argue that the Judge had reached a conclusion conflicting with the evidence before him. [36] The response of Mr Hlavac was that Mr Beck had taken a non contextual approach in so criticising the judgment. [37] He would argue that the Judge's finding at [34] that "there was no evidence of nerve root radiculopathy (compression)" was supported by the evidence because there was none to support the position that Mr Ellwood's pain was caused by actual and ongoing compression of the nerve root within the neural foraminae, [38] Mr Hlavac contended that Mr Finnis' diagnosis of nerve root impingement was not the same as nerve root compression. Indeed Mr Finnis (he said) had accepted that any nerve root impingement was secondary to osteophyte development or degenerative changes - see [26] above and [63] below. [39] As to Mr Beck's second, the physical injury, point Mr Hlavac referred to paragraph [31] of the judgment where the judge said that he found: ... no evidence which identifies a physical injury having been suffered by the appellant save for what might be described as a shoulder strain. (40] This, counsel would argue, had to be read along with the preceding paragraph [30] where it had been said that; In cases such as this, the Court must look for indisputable facts as a starting point before considering the opinions of specialists on the issue which is at the heart of this appeal. [41] Here Mr Hlavac would argue that the Judge had simply identified the absence of objective evidence (as might be got from examination or radiology) of any discrete injury so that it was then necessary to consider expert opinion as to what might be the cause of the ongoing pain symptoms. [42] Here too he rehearsed his earlier contention that Mr Finnis had accepted that impingement was secondary to osteophyte development or degenerative changes rather than any acute structural change arising from injury, such as a disc prolapse, Again see also [63] below. [43] In his rejoinder Mr Beck complained at counsel's drawing of a distinction between "nerve root impingement" and "nerve root compression" saying there was no expert evidence of such a distinction before the Court and it was surely unacceptable on a leave application to seek to promote such a distinction from the Bar. 44] On this and the physical injury (beyond a shoulder strain) point he rehearsed his assertion of a seriously arguable case on account the Judge reaching a conclusion not in accord with the evidence. Evidence not taken into account [45] Mr Beck began here by submitting (and there can be no contrary argument but that) the Court was required to consider the evidence as a whole in order to determine the appeal. [46] Counsel then complained that although the Judge had referred to the evidence of Mr Finnis, Professor Theis, Dr Bishara and Dr Burry, he had (said counsel) made no mention of the other medical evidence at all. [47] Thus, so Mr Beck would argue, it must follow that his conclusions could not be regarded as based on a comprehensive review of the evidence. [48] Moreover, he said, there had been a selective citation of the evidence that was specifically identified. [49] For example, there had been no reference to the conclusions reached by Dr Burry or 'the other evidence' and the evidence of Dr Burry had shown that Mr Ellwood suffered a number of accidents prior to the one for which he was granted compensation. [50] Mr Beck would contend that evidence of Dr Burry concerning ongoing consequences from previous accidents had thus not been taken into account. But he did not descend to any indication of how that evidence might have affected the outcome. [51] Responding Mr Hlavac first referred to paragraph [4] of the judgment where the Judge said this; [4] In this decision I do not propose to restate the medical evidence which has been presented to the Court for the first appeal, although reference will be made to such evidence where I consider it relevant. Rather, I propose to confine my decision to the recent reports introduced specifically for this rehearing, firstly from Mr Nicholas Finnis, neurosurgeon, on behalf of the appellant, and secondly, Professor J C Theis, orthopaedic surgeon, on behalf of the respondent. [52] Mr Hlavac went on to say that the focus at the rehearing - written and oral - was on that further evidence. And he noted paragraph [40] of the applicant's then submissions when Mr Beck, writing under the heading "earlier reports", had said: While the main emphasis must be on the expanded reports prepared subsequent to the High Court decision, it is still instructive to consider what was said in the earlier reports. [53] Mr Hlavac then foreshadowed submissions obviously designed to add weight the Corporation contention that, on appeal the evidence had been duly weighed - submissions including references to the evidence of Dis Drewery, Burry and Borawczyk, before turning to that of Professor Theis. [54] Here Mr Hlavac would contend that it was clear from paragraph [4] of the judgment that other earlier medical evidence had not been ignored or disregarded. Here too he noted that there had in fact been mention of elements of the other evidence - Dr Bishara at [21], [23] and [24] and Dr Burry at [26]. [55] Hence he would submit that the Judge's approach was acceptable and understandable, particularly given the High Court's observations as to the equivocal nature of the earlier evidence and the agreed focus (in light of its decision) on getting further (and hopefully) clarifying evidence from Mr Finnis and the professor. [56] In response, Mr Beck was critical of what he called an "extremely brief" judgment given the lengthy history of the matter and submitted (thus given leave would obviously argue) that: Where the principal issue before the Court is whether there can be certainty as to cause of the appellant's ongoing pain, it is of the utmost importance for all material to be addressed. To leave material out of consideration may give the impression that there is certainty when in fact there is considerable doubt. (The language chosen is intriguing, given the law's inevitable inability in the civil (or even criminal) context to give certainty.) Failure to apply correct approach to causation [57] Mr Beck began under this heading with the contention that Mr Ellwood did not have a normal neck on 9 November 1998, rather a narrowed foramina such that an incident like that which had occurred here would be likely to damage the nerve roots. Part of the reason for the abnormalities in his neck, he contended, comprised the previous accidents and corrective surgery. [58] Counsel then rehearsed that the Judge had said: Whilst it is the case that the factual matrix would indicate that the injuring event triggered the onset of pain from that degenerative condition, that triggering is not in law causative of a physical injury which is giving rise to the pain, but rather it is the pre-existing degenerative state of the cervical spine which has now been rendered symptomatic and is the source of the appellant's ongoing pain. See paragraph [35] of the judgment. [59] Here Mr Beck signalled the argument that the Judge had fallen into the trap identified by Wigley et al in the New Zealand Medical Journal of 27 May 2011: It is important to distinguish immutable risk factors such as sex, age and genetic which predispose to injury but do not cause injury. An accident or other environmental change is necessary to cause the injury, [60] On this score Mr Beck's submissions, forecasting obviously what, given leave, he would argue on appeal were that: (a) It was common ground that the pre-existing" degeneration did not cause pain; (b) To say that it was "rendered symptomatic" did not take the matter further than as if to say "something happened"; (c) What the Courts had to decide was what had happened to cause Mr Ellwood's pain; and (d) Mr Finnis had explained what happened: There was an accident as a result of which damage occurred to nerve roots. [61] And he added what in effect was a 'thin skull' argument in saying that; While the accident was unlikely to cause such damage to a person with a normal neck, the appellant did not have a normal neck (and had to be) taken as he was. [62] Responding, Mr Hlavac foreshadowed the contention that there was no evidence that Mr Ellwood's neck abnormalities, nor either the consequential corrective surgery, arose from his previous accidents. Before the accidental injury. [63] He referred to this description from Mr Finnis himself at paragraph 6.8 of his 2 September 2009 report: In Mr Ellwood's case he has foraminal stenosis sufficient to cause impingement on the nerve roots. Although often itself asymptomatic, occasionally this can give problems of pain and neurological symptoms. It is not infrequent that this is initiated by some accident which causes a sudden neck movement such as twisting. In this situation there is no new structural change in the spine itself such as a disc prolapse which has caused the problem, but it is the irritation in the nerve root channel which has caused the problems. If the pre-existing foraminal narrowing was not present then the symptoms may not have been initiated ... [64] Mr Hlavac went on to foreshadow the submission that this was not descriptive of an accident causing a discrete injury resulting in pain injuries, but one of an "irritation" of the nerve roots related to a pre-existing condition. [65] Thus, counsel would submit, the Judge had applied the correct principles of causation and provided a proper reasoned basis for doing so, [66] Here he emphasised that it was not enough that an accident caused incapacity the accident must have caused a discrete injury which in turn was responsible for the ongoing incapacity - see Johnston v ACC. [67] In his rejoinder Mr Beck signalled these points: (a) Dr Burry and Mr Finnis had expressed the view that the previous accidents were a cause of the abnormalities - see BOD 11 pp 3-4 and 22, para 7.7; (b) The important fact was that the twisting accident caused nerve root damage in narrowed foramina which resulted in ongoing pain; (c) Degeneration had not caused the injury (by which counsel seemingly meant the ongoing pain), the accident was responsible for that. Narrowing of a normally larger opening. [2010] NZAR 673 (HC) [68] Once again, said Mr Beck, there was a serious argument available that the Court had taken an incorrect approach to causation leading to a wrong conclusion. Discussion [69] I first of all, and respectfully, observe that it is perfectly plain to me that nothing in Mallon J's judgment is suggestive of an instruction to this Court to depart from the conventional approach to the weight of evidence required in a civil case to establish facts in issue. [70] At para [63] of Her Honour's judgment, albeit in the necessary context of s 116, she clearly takes an entirely conventional approach in terms including (in the context of burden) a recognition that, were the evidential scales in equipoise, none of the decision-makers concerned could find in favour of the Corporation. [71] It also seems to me that when, at [64],' she goes on to speak of an obligation (inquisitorial in nature) on the Corporation to take steps to clarify what may be unclear, Her Honour's reference to "a sufficient basis" is not some re-statement of the standard of proof rule so much as a reference to the sufficiency of the evidence gathering for the decision making purpose. [72] Here I think it to be the case that Mr Beck has inadvertently fused together the matters of the standard of proof and the - preceding its application - quality or sufficiency of the evidence gathering. 73] Certainly, I would suggest, there is no warrant at all for Mr Beck's apparent submission (see [56] above) that there must be certainty as to the cause of the applicant's pain. For that would be to promote a standard of proof surpassing that, even, of proof beyond reasonable doubt. [74] In fact the Supreme Court settled the question of the correct approach to the civil standard of proof in R v Dental Complaints Assessment Committee [2008] NZSC 55 when it held that; See [8](h) above. Allowing the civil standard to be applied flexibility has not meant that the degree of probability required to meet this standard changes in serious cases. Rather, the civil standard is flexibly applied because it accommodates serious allegations through the natural tendency to require stronger evidence before being satisfied to the balance of probabilities standard. [75] And it added that: ... the rule is long established, sound in principle, and that in general it should continue to apply to civil proceedings in New Zealand. [76] It does not seem to me that: (a) The particular terminology of s 116 could possibly be construed so as to change the general rule; or that, with respect, (b) Mallon J has suggested that it did. [77] What is certain, so I would suggest, is that entitlements should only cease on the basis of evidence matching the potentially serious consequences of cesser. Equally certainly, when that match is made out, the purse of the Corporation should be relieved of the, by then apparent as no longer warranted, obligation. [78] At the risk (which I will take) of over-simplification of the issues, it would seem to me that Judge Beattie was, on the referral back, required to determine whether on the basis of duly pursued and obtained responses from the lead experts on each side (then to be considered against, and in the light of all, the other - including temporal - evidence) whether, in terms of the flexible civil standard, this court was or was not led to the conclusion that it was not satisfied that the applicant was entitled to continue to receive statutory entitlements. [79] Here, at least as I read his words in the given context, that was all Judge Beattie was saying in a shorthand way when he spoke of "a continuing physical injury" [80] In the end it is my apprehension that what, in essence, Mr Beck really seeks to argue is that: (a) There was insufficient evidence, however it might be read, to justify the judge's decision; or at least (b) That it is clear from his judgment that the result was not adequately explained by reference to the evidence. [81] Given the background history, I would have thought it unreasonable to suggest that a judge who (as here) was with the case throughout should have to rehearse in quite a complete way the evidence identified or discussed first appeal time round. Hence, and understandably, his para [4] remarks. 82] By way of corollary, I would suggest Mallon J would surely (and with respect rightly) have expected the principal (but not of course the sole) focus to have been on the Finnis/Theis responses to the post High Court questions - as indeed appears to have become the case, [83] Undoubtedly, so it seems to me, what has contributed to make this case problematic is the clumsy wording of's 116. [84] The flexibly to be applied civil standard of proof rule (as reinforced by the Supreme Court) must nevertheless apply when the decision maker in question is determining whether or not (after due evidential inquiry and thus evidence gathering has been concluded) the state of the evidence is such that it should not be satisfied of ongoing entitlement. [85] It seems to me from what he wrote that Judge Beattie was conscious of that and that he reached his conclusion (with no significant overlooking of prior medical evidence or the temporal factor) on bases including: The absence of objective evidence of any significant injury at the time of the accident principally in question; The success of prior surgical interventions in remedying earlier accidental injuries; That Professor Theis was not alone in ruling out nerve compression; That Professor Theis made sense when he opined that the known facts did not fit a nerve compression on account the accident; and thus that The culprit for the pain was the degenerative condition. [86] Mr Beck's submissions read, I thought, rather more like those on an appeal by way of rehearing and, notwithstanding the effort plainly put into them, I am unable to recognise a seriously arguable legal question, or questions, such as should be sent up for the High Court's consideration. Result [87] Leave to appeal refused. Roderick Joyce QC District Court Judge