Sutton v Accident Compensation Corporation

IN THE DISTRICT COURT AT WELLINGTON [2014] NZACC 344 UNDER The Accident Compensation Act 2001 IN THE MATTER OF an appeal pursuant to section 149 of the Act (Appeal ACR 340/10) BETWEEN PAUL SUTTON Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent Hearing: 24 October 2014 Appearances: Mr W Forster for appellant Mr C Light for respondent Judgment: 19 December 2014 RESERVED JUDGMENT OF JUDGE D A ONGLEY [1] This appeal was brought against a review decision in which the Reviewer declined to order costs to the application on the review. In response to the notice of appeal, the respondent conceded that costs should have been ordered but contested the appellant's further argument that two assessments of costs should be made. The appellant had asked for two separate awards of costs because the review was brought against two separate decisions by the Corporation. [2] The decisions in question were made under the Code of Claimants' Rights. When reviewing decisions made under the Code, no appeal can be brought against the Reviewer's substantive decision but the Court has jurisdiction to decide whether the appellant should have had an award of costs. Review issues [3] The appellant has cover from ACC for organic neurotoxicity and hand-arm vibration syndrome. The review hearing was held on 22 April 2004. Mr Forster appeared as counsel for Mr Sutton. The review concerned two complaints made by the appellant to the ACC Complaints Service. [4] The first review concerned a complaint by Mr Sutton that his ACC case manager had failed to handle a referral to ACC's Toxicology Panel. Mr Sutton was concerned that the Panel decision would be based on unreliable information. He requested a copy of the case manager's referral and asked for an opportunity to present his case to the Panel. The appellant said that neither of those requests were met by the time the Panel competed its recommendations without any participation by the appellant. ACC later informed the appellant that there was no referral letter to the Panel [5] The second review concerned a complaint that the same case manager failed to provide the appellant with a choice of assessor for a particular medical assessment. The assessment arose out of the Panel recommendations. The complaints were dealt with in a single letter from the Complaints Investigator. The Rights that were considered were set out in the Investigator's letter: Right 1: You have the right to be treated with dignity and respect; Right 2: You have the right to be treated fairly, and to have your views considered; Right 4: You have the right to a support person or persons; Right 5: You have the right to effective communication; and Right 6: You have the right to be fully informed. [6] The Court does not have a copy of the review application, but it appears that the review was constituted on the basis of a single review application. [7] The Reviewer issued a decision on 10 May 2010 in which he identified the questions relating to each of the complaints and discussed the questions and ACC's responses. He found that the Investigator's conclusions were justified and he dismissed the review. [8] The background to the complaints and the review was complicated because there was a history of difficulty between the appellant and the ACC. The difficulties were associated with the consequences of the appellant's injury and the Corporation's responses to the appellant's concerns about the management of his claims and entitlements. The complex background added to the task of preparation and presentation of the review, and it is reasonable to accept that the work involved in presenting the review on behalf of the appellant was comparable to preparation and presentation of two separate review cases. But the decision in this appeal concerns the application of the legislation and the question whether the Reviewer had jurisdiction to award more than one amount in respect of the cost of preparing and presenting the review case [9] Section 148 of the Act provides: 148 Costs on review (1) The Corporation is responsible for meeting all the costs incurred by a reviewer in conducting a review. (2) Whether or not there is a hearing, the reviewer - (a) must award the applicant costs and expenses, if the reviewer makes a review decision fully or partly in favour of the applicant (b) may award the applicant costs and expenses, if the reviewer does not make a review decision in favour of the applicant but considers that the applicant acted reasonably in applying for the review: c) may award any other person costs and expenses, if the reviewer makes a review decision in favour of the person (3) If a review application is made and the Corporation revises its decision fully or partly in favour of the applicant for review before a review is heard, whether before or after a reviewer is appointed and whether or not a review hearing has been scheduled, the Corporation must award costs and expenses on the same basis as a reviewer would under subsection (2)(a). (4) The award of costs and expenses under this section must be in accordance with regulations made for the purpose. (5) If any costs and expenses are awarded against the Corporation under this section, the Corporation is liable to pay them within 28 days of the decision to award them. [10] In his decision, the Reviewer stated that he was not satisfied that the application was reasonably brought, but that did not accord with the views that the Reviewer expressed at the hearing. Pages 51 to 52 of the transcript recorded the following remarks from the Reviewer: I mean, I'm perfectly happy the application, whatever the outcome, has been brought appropriately. So an award of costs per se isn't an issue. Now, whether I could award two sets of costs, I'm not entirely clear. My view on it would be, "I'm dealing with one review, which breaks into two parts, so I can't". Now, if you could refer me to any authorities or case law which suggest I should, I certainly wouldn't have a problem doing that. But on a preliminary reading - and I will think of it further - I think it's probably just one set of costs. ... I am entirely happy, Mr Forster, that it has been brought appropriately. I'm quietly happy. There's obviously a vast amount of work gone into this on your part. So if I can properly award two sets of costs I would have no difficulty doing that. Can I ask you just to do me a short additional submission relating to the issue of costs. [11] In this appeal, Mr Light properly conceded that the Reviewer should have approached the costs question in line with his own comments that the applicant acted reasonably in applying for the review. The respondent therefore accepts that the appeal should be allowed to the extent that the appellant has one order of costs, as on a single review. But the respondent denies that the appellant should have two orders for costs as on two reviews. [12] Regulation (4) of The Injury Prevention, Rehabilitation, and Compensation (Review Costs and Appeals) Regulations 2002 (referred to in s 148), provides: 4. Awards of costs and expenses on review (1) A reviewer's award under section 148 of the Act to an applicant for review or another person must be - a) only for the costs and expenses of an item described in column 1 of Schedule 1; and (b) the only award to the applicant for review or other person for those costs and expenses. (2) The amount of the reviewer's award for costs and expenses of an item described in column 1 of Schedule 1 must - (a) not exceed the amount specified (opposite the description) in column 2 of that schedule; and (b) be calculated in accordance with the rate (if any) specified (opposite the description) in column 3 of that schedule. 3) Amounts and rates specified in Schedule 1 are inclusive of goods and services tax (if any). [13] Mr Light submitted that Reg 4 sets out a prescriptive system of awarding costs as set out in Schedule 1 and that there is no room for flexibility. He submitted that only the costs set out in Schedule I can be granted and there can only be one award of costs. He submitted that the Reviewer does not have a discretion as to the amount of costs that can be awarded. If the Reviewer awards costs, it must be in accordance with the Regulations, which do not allow for adjustments in cases where a Review is particularly complex or otherwise. The Regulations are clearly directed at there being one set of costs for each discrete review application that leads to a discrete review hearing. [14] In Nielsen [2006] NZACC 190, Judge Cadenhead considered a similar question. The Corporation had notified two decisions in one decision letter. There was one application to review both decisions. The Reviewer considered that there was only one review and refused to award two separate amounts for preparation of the case. Judge Cadenhead expressed the view that "... having regard to the complexity of this case it is appropriate that costs be granted in respect to both issues argued before the review officer having regard to the preparation in respect to those issues". He did not make an order but stated that he "... would expect that the respondent and the appellant should be able to negotiate the adjustment that I have made to the review costs". The judgment in Nielsen did not refer to argument concerning the meaning and application of the Regulations. [15] It is common for reviews to cover more than one substantive issue. This case began with several complaints made by the appellant in two letters of complaint. The points that went to review were the two major questions contained in the two letters of complaint. They were both complaints of code breaches by the same case manager. They concerned two distinctly different allegations, one of failure to permit participation in a referral to the Toxicology Panel, and the other of failure to give an effective choice of health assessors. Much of the background material was relevant to both complaints. [16] Mr Forster for the appellant presented comprehensive submissions concerning the reasonableness of the appellant's review application. That point was however conceded on the part of the appellant. The appellant submitted that the substance of the proceeding before the Reviewer consisted of two separate reviews or reviews of two separate decisions by the Investigator. [17] The appellant could have set the scene from the beginning by making two separate review applications in relation to the two relevant Rights decisions that were decided by the Investigator. Mr Forster submitted that ACC or the Investigator cannot dictate the process by notifying a claimant of multiple decisions in the same letter. The appellant contends therefore that costs should be available on the basis of the number of decisions that were considered in the same review proceeding [18] Mr Forster submitted that s 148 applies to decisions of a reviewer, not to the application for review. The argument is that a decision on multiple questions contains more than one review decision and qualifies for more than one costs award. I do not think that the argument follows logically, because the wording of the section does not attach the costs to a decision. The decision is only an event, which either "must" or "may" precede a costs order, depending on the other factors in s 148. The section does not state that costs are awarded in connection with the hearing, or the decision. [19] The entitlement for costs is described in the Regulations, specifically Reg 4 which limits the award to "only for the costs and expenses of an item" and "the only award". Schedule 1 begins with "preparation and lodging of application for review" and refers to items which concern case conferences, preparation, and hearing in relation to a review. There is no allowance for more complex reviews except for extended hours of hearing. There is a maximum of $350.83 for preparation, leaving a Reviewer with discretion to order less, but not more. (20] Nothing in the legislation suggests that hearing and deciding separate review questions can be regarded as separate reviews for the purposes of cost awards. The costs provisions appear to be intended for mechanical application subject to the discretion in s 148(1)(b) and (c) and the discretion to order less than the maximum amounts. [21] Whether a claimant can increase the availability of costs by making separate review applications is not a question raised by this appeal. Certainly any unreasonable division of review questions could be met by the Reviewer's exercise of discretion. The appellant here says that he could have made separate review applications and that he should not be prejudiced by a matter of form over substance. That is not unreasonable, but I find that the legislation does not enable one review to be treated as multiple reviews. [22] Mr Forster drew support from the United Nations Convention on the Rights of Persons with Disabilities. The Convention states in Article 13 with reference to Access to Justice 1. States Parties shall ensure effective access to justice for persons with disabilities on an equal basis with others, including through the provision of procedural and age-appropriate accommodations, in order to facilitate their effective role as direct and indirect participants, including as witnesses, in all legal proceedings, including at investigative and other preliminary stages. [23] The argument for application to accident compensation processes is that persons with disabilities should not be denied reasonable entitlements to recover the cost of proceedings reasonably brought. The UN Committee on the Rights of Persons with Disabilities has published an unedited version dated 3 October 2014 of a document entitled "Concluding observations on the initial report of New Zealand" in which it is recorded that: 23. The Committee notes that in New Zealand persons who acquire a disability through injury only have recourse to compensation via the Accident Compensation Corporation. The Committee notes that persons who have suffered injuries are concerned over the lack of access to justice in pursuing their claims. There is concern over the limited amount of legal aid funding which is available and over the exercise of the discretions to award legal costs. There is also concern that the Accident Compensation Corporation machinery lacks a human rights focus. 24. The Committee recommends that the State party examine the processes for assessing compensation by the Accident Compensation Corporation to ensure that adequate legal aid is available and that its processes are fully accessible to all claimants, and finally to ensure that this mechanism has a human rights focus [24] The Convention and Committee Observations are cited here because the observations on the initial report of New Zealand are relatively new and important. They do not however alter the outcome of this appeal which is decided on the basis of the plain meaning and context of the legislation. [25] For the foregoing reasons this appeal is dismissed. No order is made for costs. Judge D A Ongley District Court Judge