SPP v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT Decision No. 109 197 HELD AT WELLINGTON IN THE MATTER of The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an Appeal pursuant to Section 91 of the Act BETWEEN SPP Appellant (Appeal No. DCA 299/96) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 21st day of May 1997 APPEARANCES J S Petris for appellant A R Davie for respondent DECISION OF JUDGE D A ONGLEY . This appeal concerns the requirements of reg 5 of the Accident Compensation (Specialists Costs) Regulations 1990 (No. 2) which provides that the Corporation may pay the cost of any non-scheduled surgical procedure if it is satisfied before the procedure is performed that the procedure is necessary and appropriate for the claimant and is likely to be more effective than any scheduled procedure. In this case, the Corporation did not decide that it was so satisfied, in fact at the time the procedure was performed the Corporation had rejected the claim for cover. The claim for cover had been lodged in February 1992 relating to medical misadventure in January 1992 resulting in damage of the claimant's fallopian tubes - 2. and severely impaired fertility as a result of an ectopic pregnancy. The medical misadventure claim was not accepted until a review decision was issued in the claimant's favour on 14 June 1995. Meanwhile, the appellant had undertaken private in-vitro fertilisation treatment in 1992 and 1994 without satisfying the Corporation in accordance with reg 5. For the purposes of this appeal, there is no dispute about the fact that the treatment could not reasonably be delayed, principally because of the appellant's age. There is also no suggestion that the procedure might not have been necessary. While the claim for cover was still under consideration, the appellant's husband wrote to the Corporation on 21 January 1993 enclosing an invoiced copy of medical expenses for in-vitro fertilisation amounting to $4,725. He wrote: "Would you note in your file that this amount is to be included in our claim for medical treatment required as a result of the personal injury in question. As part of the ongoing treatment, two further payments of $5000 will be made during this year, which in the absence of any formal determination from the ACC on this claim will also be referred to the ACC for disbursement." The claimant was active in pursuing her claim for cover and entitlements and she made a written application and election to receive lump sum compensation during March 1993. She was compelled to proceed with in-vitro fertilisation treatment for eminently valid reasons. The Corporation did not act on her letter enclosing the first invoice. Counsel for the Corporation now suggests that the appellant should have obtained a negative decision from the Corporation and lodged a review at that stage in order to preserve her rights. It is difficult to say whether that would have been effective, however it would have been a far from obvious course to take, at least without legal advice or a thorough understanding of the Act and regulations. A further invoice was forwarded to the Corporation under cover of a letter of 28 January 1994 for $5,444. The Corporation issued a written decision on 20 March 1996 refusing payment for the procedures because the claim did not qualify unless prior approval had been obtained. Regulation 5(a) is as follows: 5. Corporation may make payment if procedure not in Part II of schedule - Where the only reason that the Corporation does not pay any costs under these regulations is that the procedure is not specified in Part II of the Schedule to these regulations, the Corporation may nevertheless pay those costs in accordance with the following rules: (a) The Corporation must be satisfied, before the procedure is performed and having sought the comments of the appropriate professional group for the specialty concerned, that the procedure is necessary and appropriate for the claimant, and is likely to be more effective than any procedure specified in Part II of the Schedule to these regulations: - 3 - A similar question was argued in relation to Regulation 11(1) of the Specialists Costs Regulations in Walsh v ARCIC 1 BACK 250. In the District Court, the regulation in question had been read in a manner modified to avoid absurdity. Salmon J. allowed the appeal, relying on such authorities as R v Wall [1983] NZLR 238, 240 and Stock v Frank Jones (Tipton) Lid [1978] 1 WLR 231; [1978] 1 All ER 948 in which Lord Scarman said, p 239; p 955: "If the words used by Parliament are plain, there is no room for the 'anomalies' test, unless the consequences are so absurd that, without going outside the statute, one can see that Parliament must have made a drafting mistake. If words 'have been inadvertently used,' it is legitimate for the court to substitute what is apt to avoid the intention of the legislature being defeated: per Mackinnon LJ in Sutherland Publishing Co Lid v Caxton Publishing Co Ltd [1978] Ch 174, 201. This is an acceptable exception to the general rule that plain language excludes a consideration of anomalies, ie mischevous or absurd consequences. If a study of the statute as a whole leads inexorably to the conclusion that Parliament has erred in its choice of words, eg used 'and' when 'or' was clearly intended, the courts can, and must, eliminate the error by interpretation. But mere 'manifest absurdity' is not enough: it must be an error (of commission or omissions) which in its context defeats the intention of the Act." Delegated legislation is interpreted in the same way as an Act of Parliament, and Salmon J applied the same principles to the regulations, holding that the Courts cannot read words into the reg 11(1) in order to achieve a fair and just result. There can be no significant difference in dealing with reg 5(a). The Walsh case involved an emergency in which it was practically impossible to obtain prior approval. This case is different, but it is one of a predictable category of cases where the obtaining of prior approval, or in the words of reg 5, satisfying the Corporation of the necessity and appropriateness of the procedure, will be impossible for practical purposes. The wording of the regulation is clear and there is no ambiguity that can possibly be resolved in favour of admitting an ex post facto approval. It appears, although it makes no difference to the result, that the invoices were presented without any prior application for approval under reg 5(a), so that by the time the Corporation was aware of the treatment, it could not even have dealt with the matter by issuing a decision of refusal in order to provide the claimant with rights of review. Counsel for the appellant raised a separate argument that the regulations should be , considered void for unreasonableness amounting to ultra vires. That argument was not developed. It was not considered in Walsh and it appears to be untenable. Extensive argument would have been required in relation to the purposes of the Act, the regulation making power and the effect of the regulations. These regulations were already in force at the time the Act came into force and it is to be inferred that Parliament was aware of the regulatory provisions and adopted them. In addition, the appellant would have had to establish, at the very least, that there was no means by which she could have endeavoured to satisfy the Corporation of the justification for the procedure. As I have mentioned, counsel for the Corporation contended that a - 4 - submission for approval could have been made and an appeal lodged against the Corporation's refusal. The appeal cannot succeed and it is dismissed. DATED at WELLINGTON this 6 day of June 1997 D A Ongley District Court Judge