HORNBY V ACCIDENT COMPENSATION CORPORATION HC WN CIV 2008 485 763

HORNBY V ACCIDENT COMPENSATION CORPORATION HC WN CIV 2008 485 763 10 September 2008IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV 2008 485 763UNDER the Injury Prevention, Rehabilitation and Compensation Act 2001 BETWEEN SHARON ROBYN HORNBY Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent Hearing: 20 August 2008 Counsel: A C Beck for appellant C J Hlavac for respondent Judgment: 10 September 2008RESERVED JUDGMENT OF DOBSON J[1] This appeal raises the question of the scope of "mental injury" for the purposes of cover under the Injury Prevention, Rehabilitation and Compensation Act 2001 ("the Act"), s 26 of which defines "personal injury" for the purposes of cover under the Act as extending to:(c) Mental injury suffered by a person because of physical injuries suffered by the person:[2] The specific question of law on which leave has been granted to appeal is:Whether a finding of indirect causation is sufficient to satisfy the requirements for cover for the claimed mental injury.[3] The decision of Judge Cadenhead adopted the approach to the scope of cover in the following terms:[54] In all three statutes the appellant has the burden of proof on a balance of probabilities, of showing that on the facts of the case, there was a causal relationship between the physical injury suffered with the mental injury that is now alleged as its outcome. There has to be a direct causal link between a physical injury and the mental condition alleged. An indirect link is not sufficient.[4] That approach is consistent with numerous earlier decisions including those of the same Judge in ACC v Geerders DC WN 188/04 8 July 2004 and Robinson v ACC DC WN 230/03 17 September 2003. On the basis of these and other decisions, the law on the point is treated as well settled. See, for example, the commentary on the legislation in Brookers' Personal Injury in New Zealand at para IP26.04(1). In the factual context I will shortly describe, it was argued for the appellant that the notion of "because of physical injuries" simply requires some causal link between the physical injury and the mental injury. By way of example, it should arguably extend to application of the "but for" test for causation adopted at common law.Factual background[5] In March 2000, the appellant broke her left arm while getting out of a car. It appears there were two complications in her recovery from that injury. First, the fracture itself did not heal appropriately and further surgery was required. Secondly, she suffered pain from a pinched nerve in the area of the break. In 2002, the appellant underwent a comprehensive pain assessment at the Dunedin Community Rehabilitation Centre, leading to an extensive report in May 2002. That included a psychological assessment which disclosed a history of depression and panic attacks prior to the accident in March 2000 for which the appellant had undergone counselling and had been prescribed medication. The 2002 report noted that while some of her difficulties were evident before the injury, the stress involved in managing pain and reduced function mobility exacerbated the issue. Sources of stress included managing her pain, ongoing disputes with the Accident Compensation Corporation ("ACC"), marital problems and behavioural difficulties with her son.[6] Thereafter, there were contested assessments of the extent of her whole person impairment, leading to a review of an assessment of a 10 percent impairment being dismissed in June 2004. [7] In January 2004, the appellant approached ACC to indicate that she was suffering from a mental injury as a direct result of the physical injury sustained in the accident in which she broke her arm in March 2000. A report from the appellant's general practitioner to ACC dated 28 February 2004 included the following observations:Diagnosis of Mental Injury: Exacerbation of pre-existing anxiety and depression Physical Injuries: Fractured left humerus with radial nerve bruising. Causal Link: Due to difficulty managing because of weakness and pain in the dominant left upper limb, a significant drop in mood and increase in anxiety occurred. Other medical practitioners or specialists consulted: Mrs Hornby has been seen on several occasions by Psychiatric staff at Dunedin Hospital for her anxiety and depression, generally in the context of a difficult marriage and then during the period of marital separation. These visits took place prior to the date of the above accident and to the best of my knowledge, Mrs Hornby has not seen anyone in this area since her accident of 10.3.2000 Medications taken prior to the injury of 20.3.2000: Mrs Hornby has required medication for depression and anxiety with panic attacks for some years prior to the accident in question[8] On the basis of that and a report from a psychiatric registrar at Dunedin Hospital who reported on treating the appellant in 40 sessions of psychotherapy during 2003, the respondent decided in April 2004 that the appellant's claimed mental injury was the result of exacerbation of a pre-existing anxiety and depressive condition and declined her claim for cover for mental injury. An application for review of that decision was dismissed in April 2006 and the appeal to the District Court from that review decision was dismissed in a reserved decision delivered in October 2007. On 18 February 2008, Judge Beattie granted leave to appeal that decision on the question of law set out in paragraph [2] above. [9] The reports from the appellant's general practitioner to the respondent included the following views, first in May 2004:The appellant had developed "a prolonged period of anxiety and an exacerbation of her depressive illness as a result of the suffering and incapacity related to the [broken arm] in addition to her pre-existing anxiety/depression which in my view was not as severe as her mental state is currently.[10] Then in February 2005, the general practitioner concluded:[The appellant's] accidents have significantly increased the level of her anxiety and depression, which would appear to amount to mental stress arising from physical injuries.[11] Then in December 2005, the general practitioner concluded:Both from observations of her during the last 15 years and from perusing the psychiatric records which you have provided I am able to confirm that she has had a long-standing pre-existing problem with anxiety, depression and panic attacks prior to the accident of 10/3/00, and that her time in Dunedin has included a series of crises of which her arm accident comprises but one.[12] It was accepted that the appellant's condition constituted a "mental injury" for the purposes of s 26 of the Act. The issue was whether that was caused by the physical injuries. [13] The case for the appellant before the District Court relied on the opinions of Dr Wisely. That doctor's reports suggested that previous episodes of depression could be distinguished from a mental injury suffered as a result of the March 2000 accident. Dr Wisely opined that the mental injury following on from the broken arm could be attributed to the trauma of breaking the arm; it was unnecessary to look at the patient's prior history in attributing the cause of her depression following the broken arm. I acknowledge I have not captured the subtlety of the doctor's analysis in this short summary of it, but that was the essence of it, as relied on in the argument of the appeal before the District Court. [14] For the respondent, a report was obtained from a consultant psychiatrist, Dr Stoner, who (without examining the appellant) opined that the anxiety and depression symptoms were "possibly exacerbated by the physical injury suffered on 10 March 2000, but were not caused by the injury itself". That doctor's opinion was clearly influenced by the appellant's history of depression which was seen as a "chronic relapsing illness which is episodic in nature".[15] Judge Cadenhead preferred Dr Stoner's analysis and an evident frustration on this further appeal is that the question of law does not permit the appellant to challenge the perceived unreasonableness of that factual finding. The present appeal is accordingly pursued on the basis that if Judge Cadenhead's application of the law in requiring a direct causal link is wrong, then the matter would be remitted, for re- argument including an attempt to have Dr Wisely's view accepted as to the cause of the mental injury.Approach to interpretation of section 26[16] Cases on the approach to interpretation of the Act, and its predecessor legislation, reflect a common appreciation of the policy behind this legislation. SeeHarrild v Director of Proceedings [2003] 3 NZLR 289:[19] The policy of the legislation is to provide comprehensive cover to compensate for personal injury, including mental injury which results fromphysical injury, in replacement of the remedies previously available under the common law. I agree with Keith and McGrath JJ that the legislative policy is not to be undermined by an ungenerous or niggardly approach to the scope of the cover provided. (emphasis added)And Accident Compensation Corporation v Ambros [2008] 1 NZLR 340:[25] It is not the aim of the accident compensation regime to assign blame. At the broadest level of generality, its aim is to promote distributive rather than corrective justice by spreading the economic consequences of negligent conduct over the whole community and to provide compensation for injury (regardless of fault) (see Royal Commission of Inquiry,Compensation for Personal Injury in New Zealand (Report December 1967), para [88] ("the Woodhouse Report")). This is often described as a social contract: in return for the loss of the right to sue for personal injury, the community shares the costs of the injury[17] Although not explicitly recognised in either of those decisions, one factor relevant to issues on the scope of cover is that, as the legislative schemes have evolved, so has a focus on defining predictable boundaries on the scope of what will be covered. This is relevant, among other things, for the actuarial requirements in projecting the costs of cover that need to be charged to, and paid by, those sectors of the economy seen as appropriately levied to recover such costs.[18] Where a narrower or more direct connection is required, then the scope of cover may also be relatively easier to project, in actuarial terms, than if those required to project the future consequences of the interpretation of cover have to project the wider range of imponderables introduced by a partial, rather than sole, cause of the consequences of injury. [19] The appellant in the present case sought to rely on the Court of Appeal observation in Harrild, viz. that the scope of cover should not be "ungenerous or niggardly". For the respondent, it was argued that that observation cannot mandate any different approach to statutory interpretation applying just to the Act, and that the usual principles of statutory interpretation should apply where the scope of application provided for in the Act is in issue. I accept the respondent's point, and see the caution to guard against an "ungenerous or niggardly" approach as one urging a reasonable analysis of the facts in any particular case, once the legal issue as to the scope of cover has been determined. [20] Perhaps more significant in the quotation from Harrild is the Court of Appeal's replacement of the critical words "because of" (physical injuries) with the words "results from". That choice of words must be deliberate, reflecting a practical way of testing the link that is required between a mental injury for which cover is claimed, and the physical injury which preceded it. [21] The argument for the appellant was that any degree of causal link between the mental injury and the preceding physical injuries suffered by the claimant is sufficient. The additional requirement stipulated by the Judge in this and other cases that the mental injuries have to be directly related to the preceding physical injuries was treated as an unwarranted gloss on the statute. In terms of consistency of approach, I would treat the notions of "directly caused by" and "results from" as being the same when analysing the nature of the required connection between physical injuries and subsequent mental injury. [22] The argument for the appellant drew an analogy with paragraph [24] in theAmbros decision. That commented on a causation test where, absent the physical injury, it needed to be more likely than not that the claimant would have avoided themental injury. What Mr Beck's argument overlooks is that paragraph [24] appears in a part of the Court of Appeal judgment reviewing the traditional tests for causation, particularly in tort law. That review of developments on causation at common law recognised that there are situations in which the "but for" test is inadequate, so that the concept of a material contribution to the harm arising will sometimes suffice to establish causation in proceedings in tort. The judgment went on to treat the approach at common law and in particular the notion of a material contribution to injury as not being applicable in New Zealand so far as the assessment of causation under the Act is concerned. There is nothing in Ambros that contradicts the requirement as expressed five years earlier by the Court of Appeal in Harrild, for a degree of connection that establishes the mental injury results from the preceding physical injury. [23] It was submitted for the appellant that the policy behind the Act is to provide comprehensive cover, and that an interpretation requiring "direct" causation was inconsistent with that as excluding situations deserving of cover. However, the Act has other indications that the scope of cover focuses on the cause of injury, not a contribution to the cause which may be sufficient at common law. For instance, s 26(2) provides that personal injury is excluded where it is caused wholly or substantially by a gradual process, disease, or infection. Although that exception is itself subject to defined exceptions, it does involve the notion that a personal injury contributed to by other causes, including implicitly by accident, will be excluded from cover where a substantial cause of the injury is, for example, disease. [24] It was also argued for the appellant that a restrictive requirement for "direct causation" would be to adopt an approach that has been rejected by the Court of Appeal, implicitly on the basis that it is ungenerous or niggardly. It was also argued that it amounts to a categorisation of "some mental injury as more worthy of compensation than others, when the legislation makes no such distinction". [25] I agree with the respondent's response to this point, namely that the Judge did not in any way seek to diminish the effects of the mental disorder suffered by the appellant, but rather focused on what has caused that mental injury. The outcomeresulted from the finding that this was a mental injury which was not caused by physical injury, but rather pre-dated it. [26] The respondent likens the present analysis to that undertaken in Cochrane v ACC [2005] NZAR 193:[25] An appellant may not establish causation simply by showing that the injury triggered an underlying condition to which the appellant was already vulnerable (the "eggshell skull" principle) or that the injury accelerated a condition that would have been suffered anyway (the "acceleration" principle): McDonald v ARCIC [2002] NZAR 970. The question is simply whether the necessary causal nexus continues to exist between the injury and the condition. [][27] In Cochrane, the question was described as "whether the evidence as a whole justifies a conclusion that the necessary nexus between injury and incapacity exists" (para [26]). [28] Here, the preferred medical evidence treated the appellant's pre-existing depression as asymptomatic at the time of her physical injury in March 2000. The accident triggered her pre-existing mental injury resulting in it becoming symptomatic. However, that is not sufficient to establish causation, because the mental injury does not result from the physical injury suffered in the accident. To make such a finding is to ignore her pre-disposition to that consequence, arising from the mental injury which she had previously suffered from. [29] I respectfully adopt the phrase "results from" as used in the Court of Appeal decision in Harrild as the appropriate mode of testing the connection. That is consistent with the approach adopted here, and I am accordingly satisfied that the test as to whether the mental injury was suffered because of the physical injuries of March 2000 has been correctly addressed. The specific question of law posed on this further appeal is answered in the negative, namely that a finding of indirect causation is not sufficient to satisfy the requirements for cover.Scope of appeal[30] In oral argument, Mr Beck raised for the first time a separate concern, as to the way in which the District Court had confined argument when granting leave for a further appeal. This had been done by defining the specific question of law on which leave was granted. He argued that the obligation on a party wishing to appeal a District Court decision to identify some aspect in which the District Court decision can arguably be treated as wrong in law does not necessarily involve the granting of leave by the District Court on terms confined to the particular error of law which might warrant a further appeal. Granting of leave was seen as a "gateway" rather than a device to limit the extent of the appeal, and that an appellant should not be limited to appealing on a specific question of law merely because the grant of leave required the appellant to identify a respect in which the decision below is claimed to be wrong in law. Where the powers of the High Court on a further appeal extend to reversing the outcome in the District Court entirely, or declaring what the correct legal position is on terms remitting the case back for reconsideration in the District Court, the appeal should not be confined by the specific issue of law identified when leave is granted as the justification for doing so. [31] Mr Beck was critical of the practice of the District Court in confining the scope of appeals by defining its own view of the potential error of law, and confining the scope of the appeal to argument on that point. He contrasted the terms of s 162 of the Act where an applicant for leave has to contend that the District Court decision was "wrong in law" with the narrower scope of any further appeal to the Court of Appeal, where s 163 is explicit that that can be on "a question of law only". [32] For the respondent, Mr Hlavac had not had an opportunity to take full instructions on this, as a point of general importance. Responding to what had been raised orally, he submitted that it could not have been the intention of Parliament to permit any wide-ranging re-argument of all issues on a second appeal. It is clear from the terms of s 162 that leave will only be obtained where there is an arguable point of law. If appellants wish to argue a clear error of fact, then they should seek special leave from the High Court to do so, this being a course he suggests has been adopted.[33] Mr Hlavac acknowledged a recent trend for District Court judges to define the question of law on which leave is granted, but added that some leave decisions do not define what may be argued. He submitted that it cannot be in excess of the District Court's jurisdiction when granting leave, to articulate the question of law on which that leave is based. The heading of s 162 does specify "Appeal to High Court on question of law", with subs (3) providing that if the District Court refuses to grant leave, the High Court may grant special leave to appeal. If some only of the points of law which a prospective appellant wished to re-argue were the subject of a grant of leave by the District Court, then it is always open to the appellant to pursue special leave on the remaining questions of law. [34] Although the headings to ss 162 and 163 are the same in referring to appeals on questions of law, the processes provided for are different. An application to the High Court under s 163 is for leave to appeal by way of case stated to the Court of Appeal on a question of law. In practice, the applicant for such leave will formulate the question for the case stated and that may be amended as a result of argument. In contrast, s 162 is similar in scope to numerous provisions that provide for the prospect of leave from the Court whose decision is sought to be challenged, on a question of law. There is no power specified in s 162 for leave to be granted on conditions. Section 162(5) imports, with necessary modifications, the general provisions relating to appeals from the District Court as set out in ss 74 to 78 of the District Courts Act 1947. [35] On the wording of s 162, there is certainly an argument that the power of the District Court is simply to grant or decline leave, and to go further by formulating the question or questions of law that the appellant is to argue constitutes the imposition of a condition on the grant of leave, for which there is no jurisdiction. However, I am loath to determine this point of general importance, when it was raised as it has been in this case. The specialist Bench of the District Court dealing with all the primary appeals has an appreciation of the context in which leave arguments are advanced. That makes it desirable for those Judges to consider any challenge of this type first. No doubt the Corporation, as a party to such applications, would also appreciate the opportunity to consider its response to the argument Mr Beck raised, with somewhat more notice than was afforded in this case.[36] It may well be that the criticism of the narrowness of the question of law on appeal in this case has arisen in part because of the frustration at not being able to criticise the refusal to accept the opinion of Dr Wisely. It is absolutely clear that this Court will resist any attempt to dress up allegedly aberrational factual findings, as if a question of law as is sometimes entertained in judicial review. There would be no prospect of any broader questions of law extending to the rejection of Dr Wisely's view in this case. More generally, I do not consider there were other issues of law that could have been raised, which might arguably have altered the outcome. Accordingly, there has been no prejudice to this appellant, if indeed the constraint imposed by the District Court's formulation of the question was done without jurisdiction.Summary[37] Appeal dismissed. There is no order as to costs.Dobson JSolicitors: Peter Sara, Dunedin for appellant Young Hunter, Christchurch for respondent