Borst v Accident Compensation Corporation

IN THE DISTRICT COURT AT AUCKLAND [2015] NZACC 299 ACR 147/14 UNDER THE ACCIDENT COMPENSATION ACT 2001 IN THE MATTER OF AN APPEAL UNDER SECTION 149 OF THE ACT BETWEEN NOEL BORST Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent Hearing : 8 June 2015 Appearances: Mr M Darke advocate for the Appellant Ms Mclachlan for the Respondent Judgment: 29 September 2015 RESERVED JUDGMENT OF JUDGE DENESE HENARE [1] The appellant, Mr Borst has cover for serious injuries he suffered in a motor vehicle accident in May 1977. Mr Borst's fiancee was killed in this accident. [2] In 2001 Catalyst Insurer Services Limited (Catalyst), a third party provider took over Mr Borst's case management. A Catalyst representative met with Mr Borst to discuss his attendance with an occupational physician and then wrote to him advising that if he did not attend the appointment, his statutory entitlements would be suspended. Mr Borst did not attend the appointment and his weekly compensation was suspended on 15 November 2001. [3] This appeal arises as a result of a decision by the Corporation dated 28 December 2012 declining to back-date weekly compensation to the date of non- compliance from 15 November 2001 to 25 July 2012. Mr Borst argues that "exceptional circumstances" exist which would make it inequitable for the Corporation to refuse to backdate his entitlements to 2001. [4] A preliminary issue arose regarding the late filing of the Notice of Appeal. The review decision issued on 3 October 2013 and the Notice of Appeal dated 5 February 2014 was filed on 10 February 2014. Mr Darke submitted the responsibility for late filing lay with him. He went overseas and completed the Notice of Appeal on return, but omitted to send it in. He admitted agency responsibility. Ms Mclachlan accepted there was no prejudice to the Corporation. Given these circumstances, at hearing I agreed pursuant to s 151 (3)(c), to allow the longer time for bringing the appeal, being 10 February 2014. Background [5] Two months after the accident in 1977, Mr Borst developed gas gangrene in his left leg which resulted in an above the knee amputation. In September 1978 Mr Borst worked for the Ministry of Works, but found work difficult to sustain due to his injuries. [6] In 1980 Mr Borst moved to Australia and returned to New Zealand in 1985 and unsuccessfully applied to have his weekly compensation payment reinstated. In 1990 the Corporation concluded it should accept the termination of Mr Borst's employment with the Ministry of Works in 1980 resulted from his disability, and earnings related compensation be granted. [7] In 1999 the Corporation issued a decision following an investigation into Mr Borst's work capacity, determining he had a capacity for work. A review of this decision was lodged by Mr Borst. At review, Mr Darke on behalf of Mr Borst submitted that an Individual Rehabilitation Plan (IRP) required the Corporation to refer Mr Borst to Colleen Hyde, a pain management specialist and to Dr Dryson, an occupational specialist. Mr Darke submitted the assessment process should start again as the proper procedure had not been followed. At the hearing the Corporation's decision to cease weekly compensation was quashed with the consent of the parties. [8] In July 2000 Mr Borst met with his case manager Mr MacRae. A letter following that meeting recorded the areas discussed at the meeting including the accident and the aftermath, the difficulties Mr Borst encountered with the Corporation, and Mr Borst's long term goal of completing his psychodrama training. [9] A case conference took place in July 2001 which was facilitated by Mr MacRae. The note of this case conference referred to a review to be undertaken by an occupational physician and also recorded that following the assessment, further pain management strategies would be provided. A full note of the meeting recorded: Case conference with Noel, C Hyde and G Watson 05/07/2001 1. Hyperbaric medicine specialist at Devonport base to establish any long-term consequences of the treatment he had, as Noel seems to have fears that his function will diminish in future years due to his treatment, an up-to-date report in this regard would be a useful step forward. 2. A review by an occupational physician to establish the functional consequences currently of his injuries and what he is capable of doing at present. 3. A full overview by an orthoptist of Noel's orthotics and how the chafing he is getting can best be resolved. Also input on posture and how this may be affecting the chest/hip pain he gets. Noel noted that he is currently working voluntarily at both the pie factory assisting his mother and by seeing some psycho-drama clients. The issue is now he can turn these hours in to some paid work and in this way reduce his dependence on ACC, as he has quite an emotional response to the organization and this may impact on his pain. It would not be possible for ACC to pay for Noel's costs to complete his psychodrama course, as he has other transferable skills, for example in the area of bone carving. Transferable skills would need to be clearly established. Gill suggested that she await the outcome of the reports of the specialists on Noel, before initiating any functional activity program. Colleen suggested that we await these before proceeding any further with Noel on the pain management route as well. Colleen has given him some pain eduction, offered him some strategies to manage pain, but he did not feel that he had made progress in these areas, he will not do so, until he is reassured in regard to the issues mentioned above. 10] In August 2001 Mr Borst's case management was taken over by Catalyst. A Catalyst case manager met with Mr Borst on 30 October 2001. The note of that meeting records discussion about referral to an occupational physician. [11] Catalyst notified Mr Borst on 30 October 2001 of the appointment with Dr Ruttenberg scheduled for 14 November 2001: You stated in our meeting today that you are not going to attend this arranged appointment. I must bring to your attention sections 115... and 116 (attached) of the Accident Insurance Act of 1998. Failure to attend this appointment will be seen as non-compliance and will lead to Catalyst declining to provide your statutory entitlement. [12] On 15 November 2001, Catalyst wrote to Mr Borst advising him that his entitlements were suspended because he had not attended the appointment with Dr Ruttenberg, and had not provided reasons for his non-attendance. It was also noted Mr Borst had been given 14 days notice of the appointment and the location for the appointment was in Mr Borst's home town. [13] In a review decision dated 22 April 2002, the Reviewer determined that Catalyst's letter of 30 October 2001 was not a decision letter, but rather a warning letter. The Reviewer found the actual decision letter was issued on 15 November 2001. The Reviewer also found it was reasonable for Catalyst to request Mr Borst attend an appointment with Dr Ruttenberg in light of the fact the claim had only recently been taken over by Catalyst. The Reviewer stated that Catalyst were correct in advising Mr Borst of the likely consequences should he fail to attend the arranged appointment and noted that it was open for him to have his entitlements reinstated should he wish to cooperate and comply with Catalyst's request. [14] A late application for review was lodged against the 15 November 2001 decision. In a decision dated 6 September 2002, the Reviewer found there was no jurisdiction to consider the application, as the review had been lodged out of time. [15] Mr Borst filed other reviews in 2003. A review was lodged on 4 April 2003 against a decision of the Corporation of 11 June 1987. The subject matter of the decision letter of 11 June 1987 was Mr Borst's earning related compensation payments. In a review decision dated 23 September 2003, the Reviewer declined jurisdiction to consider the matter as the review had been lodged out of time. The matter was appealed to the Accident Compensation Appeal Authority (the Appeal Authority). The Appeal Authority decision of 2009 (ACA 11/05) determined Mr Borst had entitlement to weekly compensation from 1980 to 1985. [16] On 2 December 2011, mediation between Mr Borst and the Corporation took place. At the mediation, it was agreed Mr Borst would attend his GP to obtain a certificate for a mental injury assessment, a specialist orthopaedic update of the injuries and then, once those reports were obtained, he was required to attend an occupational physician for assessment. [17] Mr Borst was seen by Dr Kahan, Occupational Medicine Specialist, in July 2012. Following this assessment, the Corporation wrote to Mr Borst on 17 August 2012 advising his entitlements were being reinstated from 25 July 2012 being the date of the assessment by Dr Kahan. [18] Mr Borst applied for a review of that decision. The Reviewer declined jurisdiction because the Corporation had not provided full reasons regarding the decision to backdate weekly compensation. The Corporation then issued a decision on 28 December 2012 informing Mr Borst that reinstatement of weekly compensation to 15 November 2001 was declined on the basis of his non- compliance, which was upheld at review by decision dated 2 October 2013. [19] Concurrent with these proceedings, Mr Borst was assessed by Dr Wilkinson, Psychiatrist, to determine whether he had any mental health conditions. Dr Wilkinson determined Mr Borst did not present with any mental health conditions and cover was declined by the Corporation. Mr Borst obtained an opinion from Dr Codyre Psychiatrist dated 30 October 2012 who took a contrary view to Dr Wilkinson. 20] The matter went before the Accident Compensation Appeal Authority (the Appeal Authority). In a decision of 31 March 2014, the Appeal Authority determined Mr Borst should have cover for post traumatic stress disorder, major depressive disorder and pain disorder (secondary to physical and psychological factors) as mental consequences of his injuries sustained in the accident of 26 May 1977 and "of the accident" Borst v Accident Compensation Corporation [2014] NZACAA 8; [2014] NZACA 8 (31 March 2014) The Legislation [21] A claimant in receipt of entitlements has a number of obligations and responsibilities. Section 72 of the Accident Compensation Act 2001 (the Act) provides: 72 Responsibilities of claimant who receives entitlement (1) A claimant who receives any entitlement must, when reasonably required to do so by the Corporation,- (a) give the Corporation a certificate by a registered health professional or treatment provider that deals with the matters and contains the information that the Corporation requires: (b) give the Corporation any other relevant information that the Corporation requires: (c) authorise the Corporation to obtain medical and other records that are or may be relevant to the claim: (d) undergo assessment by a registered health professional specified by the Corporation, at the Corporation's expense: e) undergo assessment, at the Corporation's expense: (f) co-operate with the Corporation in the development and implementation of an individual rehabilitation plan: undergo assessment of present and likely capabilities for the purposes of rehabilitation, at the Corporation's expense: (h) participate in rehabilitation [22] The Corporation may suspend a claimant's entitlements where a claimant unreasonably fails or refuses to comply with his/her obligations. Section 117(3), (3A) & (3B) provides: 117 Corporation may suspend, cancel, or decline entitlements . . . (3) The Corporation may decline to provide any entitlement for as long as the claimant unreasonably refuses or unreasonably fails to- (a) comply with any requirement of this Act relating to the claimant's claim; or (b) undergo medical or surgical treatment for his or her personal injury, being treatment that the claimant is entitled to receive; or (c) agree to, or comply with, an individual rehabilitation plan. (3A) If the Corporation declines, under subsection (3), to provide an entitlement for any period, the Corporation must start providing the entitlement again if satisfied that- (a) subsection (3) no longer applies to the claimant; and b) the claimant is eligible to the entitlement. (3B) The Corporation is not required to make any payment of the entitlement for the period during which it was declined under subsection (3), even though it may have started providing the entitlement again under subsection (3A). However, the Corporation may make such payment if the Corporation believes that- (a) exceptional circumstances exist; and (b) it would be inequitable to refuse to do so. [23] Following the hearing Ms Mclachlan provided a copy of the Explanatory Note to ss (3A) and (3B) of the Injury Prevention Rehabilitation and Compensation Amendment Bill Number 3 (2005), which introduced these provisions. The Explanatory Note provides: Entitlements to restart after period of non-compliance by claimant ACC may decline to provide any entitlement during a period in which a claimant unreasonably refuses or unreasonably fails to comply with requirements of the Act, to undergo treatment, or to comply with an individual rehabilitation plan. The intention was that on re-compliance, entitlements may recommence but would not be backdated over the period of non-compliance. The High Court has held that ACC is required to repay entitlements in respect of a prior period of non-compliance, so this change restores the policy intent that entitlements are not retrospectively paid. ACC has discretion to pay for the period of non-compliance if to do so would be equitable and exceptional circumstances exist. The Case for Mr Borst [24] Mr Darke submitted the Reviewer fell into error by re-litigating the decision in 2001 and undertaking an analysis of whether the request to attend the meeting was reasonable and whether the refusal by Mr Borst was unreasonable. The Reviewer needed to step back and look at all the circumstances in the case, and when looked at, in Mr Darke's submission, there were exceptional circumstances and it would be unfair not to pay the weekly compensation. (25] Mr Darke submitted the Corporation never addressed the issue of mental consequences until it was specifically requested to do so in 2012. Mr Darke submitted the exceptional circumstances which exist here are: . Catalyst viewed Mr Borst as stubborn by his refusal to s Dr Ruttenberg. However later information established that Mr Borst suffered substantial mental problems. Had Catalyst realised this in 2001, the approach would have been very different. . Concerns about Mr Borst's mental issues were made in specialist reports before the Corporation, which did not investigate them. Mr Borst suffered these mental conditions and refused to comply with the request from Catalyst. . The medical evidence establishes Mr Borst would have been incapacitated from 2001 to 2012 on the basis of both his physical and mental injuries. The purpose of the suspension provision is to ensure the Corporation can obtain relevant reports necessary for treatments/rehabilitation and "Dr Ruttenberg could not have completed the proper assessment because he would not have known about the mental condtions". . The circumstances of Mr Borst are that he has suffered financially from a reduction in income through suspension of his weekly compensation and having to eek out an existence on an invalid's benefit. Given the information now known, the continued suspension becomes highly questionable and his reduction in income patently unfair. Discussion and Analysis [26] It is clear that under section 117(3B) of the Act, the Corporation may provide entitlements for the period during which it was declined if the Corporation believes that exceptional circumstances exist and it would be inequitable to refuse to do so. 27] Mr Darke and Ms Mclachlan agreed that the threshold for exceptional circumstances is a substantial test, as noted in the following decisions. [28] In Cortez," the Court of Appeal discussed the meaning of 'special circumstances' as being wide, comprehensive and flexible. [29] Exceptional circumstances under the Accident Compensation legislation were considered by the District Court in Nesbit where Cadenhead DCJ held that: [14] Section 117 (3B) sets out the threshold for exercising the discretion to backdate. By the usage of 'exceptional circumstances' the threshold is high [15]....out of the ordinary course, or unusual, or special, or uncommon. To be exceptional, a circumstance need not be unique, or unprecedented, or very rare: but it cannot be one that is regularly or routinely, or normally encountered [30] In Awa Hammond J stated that the facts of each case considering exceptional circumstances need to be approached "in a quite fact specific way". [31] In Woolley v ACC" Beattie DCJ considered s 117(3B) in the context of a suspension of entitlements for non-compliance with assessments as part of the vocational independence process. Beattie DCJ held: [31] I find it is also relevant to note that the provisions of section 117(3B) would allow for the Corporation to reinstate payment from the date of cessation if it were to find that exceptional circumstances existed and that it would be inequitable to refuse to do so. Thus it would be the case that if, after the commencement of cancellation, the appellant had contacted the respondent and had given a proper reason for his failure to attend, then no loss would have been incurred by him. [32] The appellant did not seek to give any explanation as to why he failed to attend, and the whole situation was one of complete silence from the appellant from the date when compensation actually ceased until mid-2010, when he elected to re-commence compliance with the respondent's requirements for his rehabilitation. [32] At the outset, it is clear that the accident and Mr Borst's injuries have caused him 'anguish, anger, frustration and a sense of hopelessness' as described by the Appeal Authority. The consequences of the accident particularly the loss of his Cortez Investments Limited v Wybrants Olphert and David Bryan Collins CA [1984] 2 NZLR 434 Nesbit v Accident Compensation Corporation [2008] NZACC 16 Awa v Independent News Auckland Limited [1996] 2 NZLR 184 [2012] NZACC 146 fiancee and the multiple trauma suffered by Mr Borst are explained in Dr Codyre's two reports of 2012 and 2013. Dr Codyre reported Mr Borst's struggles to adjust to his disability, the periods of unresolved grief and the personal suffering he endured over the years. As a result of Dr Codyre's report, the Appeal Authority determined the covered mental health conditions: [66] Mr Borst has cover under the Accident Compensation Act 1972 for Post Traumatic Stress Disorder, Major Depressive Disorder and Pain Disorder (secondary to physical and psychological factors) as mental consequences of his injuries sustained in the accident he suffered on 26 May 1997 and of the accident. [33] I start my analysis considering the factual context leading to non-compliance in this case. First, Mr Darke represented Mr Borst at his review hearing in 2000, as recorded in the decision of 4 April 2000. Mr Darke submitted that certain specialist referrals had not been completed as required by Mr Borst's then Individual Rehabilitation Plan. The Reviewer accepted Mr Darke's submissions. As a result, the Corporation's decision in December 1999 that Mr Borst had a capacity to work and was no longer entitled to receive weekly compensation, was quashed by consent of the parties. [34] Mr MacRae wrote to Mr Borst in July 2000 about their discussion regarding the objectives for Mr Borst's vocational rehabilitation. Mr Borst told me of his understanding of this letter in his evidence on appeal: Transcript: I was told by my case manager go and have a look and find the appropriate course, bring us the costs and then what we're going to do is we'll send you to a hyperbaric specialist, an orthopaedic specialist and there were two others, a renal specialist and lungs I think.. . ..And then all of a sudden it was no, you're off to Catalyst. 35] I agree with the Reviewer that the case conference in July 2001 which Mr Borst attended, established a 'way forward'. A clear outcome of the meeting as recorded in the note of 5 July 2001 is that Mr Borst was to be referred to an occupational physician to consider the functional consequences of his injuries. There is no record that Mr Borst objected to this proposal at the case conference. [36] Mr Borst then appears to have had a change of mind when he met his new case manager and 'dug his toes in' as recorded in Mr Killian's note of 10 October 2001, when he was told of the referral to an occupational specialist. [37] I find Catalyst's request was reasonable given the case management meeting of July 2001. Further, Mr Darke had made plain at review in 2000, that there had not been a proper assessment by occupational physician, Dr Dryson. It is recorded at the review hearing leading to this appeal, that Mr Borst objected to Dr Ruttenberg. However, there is no evidence that Mr Borst's objection to Dr Ruttenberg was the reason given in 2001 for his non-attendance at the appointment on 14 November 2001. [38] Mr Darke submitted that Dr Ruttenberg could not have completed a proper assessment because he would not have known about Mr Borst's mental conditions. This is speculative. The fact is there was no claim lodged for mental consequences in 2001. The purpose of the assessment as stated at the July case conference was "to establish the functional consequences currently of his injuries and what he is capable of doing at present". [39] Mr Darke submitted that a claimant has to wear the consequences where a clear choice has been made not to comply. Mr Darke submitted where there is mental impairment the position is to be treated differently. [40] There is no medical evidence that Mr Borst's covered mental health conditions affected his capacity to comply with the request for attending the assessment. Dr Codyre's reports do not record that Mr Borst's mental conditions meant that his impairment was such that he had difficulty with making decisions or understanding decisions. [41] I find Mr Borst was clear about the reason for his decision not to attend the appointment with Dr Ruttenberg. Mr Borst stated at the appeal hearing: Transcript: Yes my new case manager for Catalyst. Now he told me that he was going to make an appointment for me to see a rehab specialist by the name of Ruttenberg and I had a half hour appointment and the outcome of that was he would make a decision whether or not I could work. I said what about all the other reports, my orthopaedic surgeons and people that far outweigh this man's knowledge. Not our problem. This is our path and I said well I can't play this game anymore. You've sent me to functional capacity assessment after functional capacity assessment. They're all wrong. It's been proved wrong and you're still carrying the same agenda out. Your agenda is to throw me off because we'd been hearing about stock and tail and if you're on ACC for so long you will stop. Once you become permanent you become tail. Once you were tail anyway they could flick you off they would. [Emphasis added] [42] It is clear Mr Borst faced one assessment after another and he thought the Corporation wanted to get him back into work. Indeed, Mr Borst has been consistent in his statements for not attending the appointment. The Appeal Authority recorded: [27] Mr Borst's claim was transferred to Catalyst in 2000/2001, and another Occupational Medicine assessment was arranged with Dr Ruttenberg. Mr Borst refused to attend because he felt that ACC had a "wealth of reports", all virtually saying the same thing, and his weekly compensation was suspended. . [43] I find there is no evidence that Mr Borst's covered mental health conditions prevented him from complying with Catalyst's request to attend the appointment with Dr Ruttenberg. Simply, there had been many reports and Mr Borst thought he was being treated as "tail". [44] Mr Borst was informed by Catalyst that the door was open to him and his entitlements would be reinstated if he wished to co-operate. There was no period of silence as shown by the evidence. There were many reviews in progress and many interactions between Mr Borst and the Corporation in the period of non-compliance. Mr Borst was represented before, during and since the period of non-compliance. Furthermore, Mr Borst lodged a review against the Catalyst decision of 15 November 2001. [45] In summary, for the reasons outlined, I find the threshold for exceptional circumstances has not been reached in this case. I see no reason to interfere with the Corporation's discretion. Whilst Mr Borst has cover for certain mental health conditions, I find no evidence that Mr Borst's decision making process was impaired when he made the decision not to attend the appointment with Dr Ruttenberg. Mr Borst's mental health conditions did not impair his ability to make and understand decisions, and he was clear about his reason for refusing to attend the appointment with Dr Ruttenberg. [46] I do not find the circumstances in this case are exceptional and it was not inequitable for the Corporation to decline to pay backdated weekly compensation to Mr Borst for the period November 2001 to 25 July 2012. Result [47] Accordingly, the appeal is dismissed. Denese J. Here Judge D L Henare District Court Judge