Arthur v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT WELLINGTON Decision No. 1 40 198 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 VANESSA LEE ARTHUR DCA 343/97 Appellant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 17th day of June 1998 APPEARANCES: Ms W L Aldred for appellant Mr A R Davie for respondent DECISION OF JUDGE M J BEATTIE The issue in this appeal is whether the Corporation's decision of 10 July 1996 to cease the appellant's entitlement to weekly compensation was correct. 2 BACKGROUND The appellant was a psychiatric nurse employed by Capital Coast Health at Porirua Hospital. In 1987 she suffered an injury to her back involving damage to her lumbar sacral disc. At the time of this accident she took some time off work but then resumed her employment at Porirua Hospital until early 1995 when her back injury deteriorated and which involved her being hospitalised for four weeks. Her injury was such that Dr Rao, orthopedic surgeon, indicated that it was his opinion that she would not be able to return to her previous employment which involved a considerable amount of physical work and possible confrontation with clients. In his report of December 1995 Dr Rao indicated that he thought that she should, in the medium to long term, that is within the next six months to a year, be able to return to a less strenuous occupation in the same area at Porirua Hospital. He indicated that she would not be able to perform any activities which involved any prolonged bending, stooping or lifting. , During this time the appellant was in receipt of weekly compensation and at the time that Dr Rao gave his opinion she was seven months pregnant with her second child. In March 1996 a meeting took place between the appellant, representatives from Capital Coast Health and her ACC case manager to discuss the appellant's rehabilitation and employment with Capital Coast Health. At that meeting it was resolved that possible long term job opportunities as a nurse aide or ward clerk on the wards were a possibility, particularly the latter which was not a physical position. It was determined that there be another meeting once the appellant had given birth which was expected in March 1996. In late March 1996 the appellant was forwarded job descriptions for nurse aid and ward clerk that had been prepared by Capital Coast Health. It was considered that the 3 more desirable position would be that of ward clerk but that that would require some re-training to enable her to perform the duties required of that position. The appellant gave birth to her child on 4th of March 1996. By ARC18 medical certificate the appellant's GP Dr Rowland certified that she was not fit to return to work and that this certificate was effective until 22nd of June 1996. However the certificate did indicate an ability for restricted work which did not involve heavy lifting, pulling or carrying or which carried the risk of physical confrontation. In a letter dated 24th May 1996 the appellant's case manager, Caroline Fuge, wrote to the appellant and this letter relates the sequence of events which had occurred down to the date of that letter as considered by Miss Fuge. "... on the 27/02/1996 you attended a meeting with Capital Coast Health, PSA and ACC. Long term job vacancies were discussed and Capital Coast Health were able to offer Ward-Clerk or Nurse-Aid positions at Kenepuru Hospital. You stated that you would prefer to work at the local hospital - Kenepuru. It was agreed that they would obtain Job descriptions and we would meet after you had given birth to discuss this. Your baby was born on the 04/03/1996. I sent you copies of these job descriptions and contacted you on the 09/04/1996 re-skills required and any training issues. It was anticipated that you would commence a return to work programme the beginning of June. You would be three months post-partum which would be a reasonable time period to allow you to recover from the birth of your child. Your present medical certificate states that you cannot do work that involves heavy lifting, pulling or carrying, or risk of physical confrontation with a client. The Nurse-aid and Ward-Clerk positions comply with these restrictions. You advised that you would call me however by mid May you had not. On the 13/05/1996 I rang and you said that you were thinking of resigning. I advised that if you did this this would jeopardise your entitlement to continued weekly compensation and we agreed we would meet to discuss this on the 15/05/1996. Unfortunately you did not show up for this meeting. On the 21/05/1996 we discussed by phone the situation. You stated that you did not want to return to work because you wanted to remain at home with your baby. I advised that if this was the case then your inability to return to work was due to your baby and not your injury. In this circumstance your continued entitlement to Weekly Compensation would cease under Section 73 of the 1992 ARIC Act as you are failing to comply with a proposed return to work programme. You stated you would discuss this with your PSA representative. I have tried to contact you for the past two days. As you are aware I will be on holiday from the 27/5/1996 to the 03/06/1996. I have advised Capital Coast Health that as of the 04/06/1996, which was the expected date that you would commence a return to work programme, to withhold further compensation payments till this situation is resolved. If you could please ring me on 237 1181 the week beginning the 04/06/1996 with your decision." On or about the 21st of June 1996 the appellant resigned from her position at Capital Coast Health, such resignation being effective from the 27th of June 1996. The Corporation heard nothing further directly from the appellant and therefore on the 10th of July 1996 it again wrote to her, which letter stated as follows: "As you are aware I sent a letter to you on 24.5.96 which clarified your medical status and our correspondence to date. As I understood on 21.5.96 you had stated that you did not want to return to work as you wanted to remain at home to care for your baby. I advised verbally and per the letter sent 24.5.96 that if this was the case your non- compliance with a return to work programme was due to your baby and not your injury. In the circumstances your continued entitlement to Weekly Compensation would cease under Section 73 of the 1992 Accident Rehabilitation and Compensation Insurance Act as you would fail to comply with a proposed return to work programme. You stated that you would discuss this with your PSA representative. I requested that you ring me the week beginning 4.6.96 with your decision. To date I have not heard from you. On 21.6.96 Joy Collins rang to advise that you had resigned from Capital Coast Health. You were advised on 21.5.96 that earnings related compensation would cease if you resigned from Capital Coast Health as alternative work was available that complied with your physical limitations. You chose to resign and therefore ACC will not carry on with earnings-related compensation as per the date of your resignation under Section 73 of the 1992 Accident Rehabilitation and Compensation Insurance Act. If you are not satisfied with this decision, or if there is something you do not understand, you should contact us immediately and discuss your concerns. Our staff will explain the decision and will explain your right to ask that the decision be reviewed. If you do want the decision to be reviewed a request must be made in writing using a special form which is available from our office. The written request for a review must be received within three months from the date of this letter." The Corporation's file discloses that on the 9th of July, that is the day before that letter was written to the appellant, it had received a further ARC18 medical certificate from Dr Rowland certifying the appellant as not fit to return to work, that certificate being for the period to the 23rd September 1996. That certificate further indicated that work restrictions for her would include walking, sitting, bending, heavy lifting, pulling or carrying. In a letter to the appellant's solicitors of 19th July 1996, Mrs Fuge stated: "As Vanessa resigned from Capital Coast Health a letter was sent on 10.7.96 to advise that ACC would not continue with weekly compensation payments as due to her resignation she had failed to comply with a return to work programme. This was in accordance with Section 73 of the 1992 Act. Vanessa had begun negotiations with ACC and Capital Coast Health in terms of her continuing employment. By resigning she has removed herself from the negotiations. Vanessa's G.P has indicated that Vanessa's condition has deteriorated. This is contrary to Mr Rao's report of December 1995. The Corporation would request a review of her present physical state by Mr Rao. If Vanessa had not resigned from Capital Coast Health then ACC would have continued with Weekly Compensation. Her capacity for work in the short term was not in question. Her resignation is the reason that Section 73 applies." On 5th August 1996 the Corporation did request Mr Rao to reassess the appellant and to revisit his report of 19 December 1995 and whether his opinion as then expressed still pertained. Mr Rao examined the appellant on the 25th of November 1996. At the conclusion of his report Mr Rao stated: "I feel that from the work perspective, although Vanessa is keen to look after her child and I think this is entirely reasonable, if Vanessa was to return to work I would not favour that she do any heavy work but would certainly be suitable for very light duties such as in the position of ward clerk etc. At this stage, however, I would not be keen for her to resume any work until her back is a lot stronger, i.e. in the next month or two." The Corporation's file would indicate that no further discussion has taken place between the appellant and the Corporation, initiated by either party, on any rehabilitation of the appellant and that aspect seems to have been put to one side because of the application for review which the appellant lodged and thereafter the review proceedings and then the appeal from the review decision. The statutory provisions under which the Corporation purported to act is section 73 which states: "73. Suspension, cancellation, or refusal of compensation and rehabilitation---(1) The Corporation shall, if not satisfied on the basis of the information in its possession that a person is entitled to continue to receive any treatment, service, rehabilitation, related transport, compensation, grant, or allowance under this Act, suspend or cancel that payment for treatment, service, or related transport, or the payment of compensation, grant, allowance, or provision of rehabilitation. (2) The Corporation shall, upon the unreasonable refusal or failure of any person to-- (a) Comply with any requirement made under any provision of this Act relating to any claim; or (b) Undergo medical or surgical treatment in respect of personal injury (irrespective of whether the Corporation is required or permitted to contribute towards the costs of that treatment); or (c) Agree to, or comply with, an individual rehabilitation programme, -- decline to make any payment under this Act. " In correspondence both with the appellant and her solicitors, the Corporation have used various terminology to describe the state of affairs viz a viz the appellant's weekly compensation but the effect of the Corporation's decision is that her entitlement to weekly compensation has ceased. It is to be noted that at the review hearing the appellant gave evidence of the circumstances of and the reasons for her resignation from Capital Coast Health. This evidence stated that she was told by ACC that it would give her only until the end of June to decide whether to undergo a re-training course or resign. She advised that her physical condition did not permit her to undergo a re-training course at that time and in addition she could not afford the creche fees that would be needed and there was no offer to pay these by ACC. She said that because she was unfit to resume her normal job, her only course was to resign. She said she was not physically capable of doing a ward-clerk's job and she contended that at the time she was being asked to do so she was unfit for work. Ms Aldred, counsel for the appellant, submits that the effect of the Corporation's decision was to cease or terminate her weekly compensation and that the only power to do so is that contained in section 73(1) of the Act. In the circumstances of the facts of this case there was no evidence that the Corporation was in possession of information that the appellant no longer had an entitlement to continue to receive weekly compensation. In support of that submission she cites the decision of this Court in Hyde Decision 14/98. Furthermore counsel for the appellant submits that the Corporation did not have grounds to suspend payment of weekly compensation pursuant to section 73(2) and indeed she contends that the appellant was given no notice of the likelihood of that. Counsel further submitted that the appellant's act of resigning from her position as a psychiatric nurse was simply that, and was not necessarily to be taken as an indication that the appellant was no longer interested in some re-deployment within the hospital. She contended that the medical evidence, which was in the possession of the Corporation at the time that the review hearing was conducted, was that the appellant was still unfit for any work including that of the variety that was envisaged in the ward-clerk role. Mr Davie for the respondent submitted that this Court should treat the decision made by the Corporation, affirmed as it was by the Review Officer, as being suspension pursuant to section 73(2)(c). He also refers to the decision of Hyde in support of his submission. It is his contention that the appellant unreasonably refused or failed to agree to an individual rehabilitation programme. In support of that submission he refers to the following acts or omissions by the appellant: i. Failure to respond to the respondent's letter 20/12/95. ii. Failure by the appellant to contact the respondent by mid-May 1996. iii. Failure to attend a meeting with the respondent's case manager on 15 May 1996. iv. Advice by appellant on 21st May that she wished to remain at home with her baby. V. Advice by the appellant on 21st May 1996 that she would get in touch with her PSA representative. vi. Failing to make contact with the respondent after receipt of the respondent's letter of 24th May. In addition to the foregoing, counsel submitted that the appellant's resignation from her position as the hospital was unequivocal evidence of a refusal or failure to agree to an individual rehabilitation programme. DECISION Counsel for the respondent submitted to this Court that it should treat the decision made by the respondent as being one of suspension or refusal to make payment of 10 compensation pursuant to section 73(2) of the Act. In so doing counsel more or less accepts that the Corporation had no right to cancel or "cease" weekly compensation as it had in fact done. The difficulty with that submission is that where there is a suspension or a declinat to make any payment, there need also to be an associated request for compliance with some requirement by the claimant and the claimant is in a state of unreasonable refusal or failure to so do. In the present case, because there was in effect a cancellation, the Corporation has not made any request of the appellant to comply with any requirement as is envisaged by subsection 73(2)(a), (b) or (c). The Corporation stated that the appellant's entitlement to weekly compensation had ceased. This cessation of entitlement was made despite the fact that the Corporation was in possession of evidence which established that the appellant was unfit for work. The appellant's case manager acknowledged so in the letter of 19th July 1996 to the appellant's solicitor, The reason for the decision was the fact of her resignation. The medical evidence makes it clear that the appellant was never going to be able to return to her former employment of psychiatric nurse. It was that position which she was still technically available for whilst on weekly compensation. She resigned from that position thereby no longer holding herself out as being able at some further date to carry out the duties of a psychiatric nurse as she had formerly been able to do. This Court has seen no evidence, certainly none was given to the Review Officer, that the resignation by the appellant from her position as a psychiatric nurse somehow affected the employment opportunity to be employed in some other capacity at Porirua Hospital. The file does not disclose the precise period of the appellant's employment at Porirua Hospital but she had certainly been employed there for nine years from the time of her initial injury to the date when she finally had to give up her job because of her deteriorating physical condition. One would have thought that an experienced person such as the appellant would have been welcome in the hospital environment in some 11 other capacity, that had certainly been the indications by representatives from Capital Coast Health in correspondence and discussions which had been had earlier. A further matter which I find to be of concern is the rigidity of the view of the case manager in determining that the earliest possible date stated by Mr Rao back in November 1995 namely six months from that date, as being the date when the appellant was taken to be fit and able to return to work. In fact Mr Rao's advice was a period "within six months to a year". Furthermore, the appellant had given birth to a child on the 4th of March and the Corporation considered three months from the date of birth was sufficient for her and that she ought to be ready, willing and able to submit herself for re-training three months after the birth. I find that the Corporation made decisions in May and June 1996 on a paucity of medical information, some of it not sufficiently up to date and had no regard for the appellant's actual physical circumstances as she had stated them to be in May 1996. I find that it is not unnatural for the appellant to be wishing to be with her baby at this comparatively short time after its birth and I find that there was unseemly haste on the part of the Corporation to get the appellant back into the workforce. It is noted that under the provisions of the Parental Leave and Employment Protection Act 1987 the appellant would have been entitled to maternity and extended parental leave for a considerably greater period than that which the Corporation were using as its benchmark. Having regard to the provisions of section 73 of the Act I find that the Corporation did not possess any information which would entitle it to form the view that the appellant was no longer entitled to continue to receive weekly compensation and therefore the cancellation of her entitlement under that section was not possible. Insofar as section 73(2) is concerned, it is not contended by counsel for the Corporation that (a) or (b) were applicable in this case and I agree with that assessment. Insofar as (c) is concerned it was found as a fact by the Review Officer that the appellant had not been yet called upon to agree to or comply with an 12 Individual Rehabilitation Programme. One had been prepared but it had not been put to her. In that regard I note page 9 of the Review Officer's decision: 'Notwithstanding the fact that a written rehabilitation programme had not been agreed to by the claimant and the Corporation I consider that the history of contact between the claimant, the Corporation and the employer indicates that a programme requiring Miss Arthur to maintain a contractual relationship with her employment was being formulated." There may well have been failures by the appellant as set out in counsel for the respondent's submissions but the fact is that those failures or omissions did not amount to a failure or refusal to comply with matters stipulated in section 73(2)(a), (b) or (c), and it is only those matters which have as a consequence of a refusal a right to decline to pay compensation. This case is another instance of the Corporation taking precipitate action without first establishing the factual basis to fit within the statutory framework to enable the decisions it ultimately made. It seems that the fact of resignation was all that the Corporation considered. It did not determine whether that rendered any further employment opportunity with Capital Coast Health unlikely or impossible. As I have previously noted the indications were certainly that that was unlikely to be the case. It was the act of resignation coupled with the fact that it was perceived that the appellant desired to spend time at home with her baby, that in some way signaled that this appellant had some how come to the end of the road insofar as entitlement was concerned. All the while it was known that the appellant was unfit to return to any form of employment. This Court notes that despite the fact that the Corporation obtained a further medical report from Mr Rao in November 1996 and that clearly reinforced the position as it was in June 1996 when these decisions were being made, nevertheless this fact was studiously overlooked by the Review Officer, which I find most surprising. 13 The process of review is to revisit the original decision in the light of all the facts that may then have been known or are known at the time of the review. I find that this review has not been carried out with that purpose and it has simply looked at the matter through another pair of eyes applying the same reasoning which was considered to be relevant when the initial decision was made. Furthermore the Review Officer, like the officers of the Corporation before him, has misunderstood the meaning of and differences between section 73(1) and (2) of the Act. For the foregoing reasons I find that the decision to cancel the appellant's entitlement to weekly compensation was wrong and the Corporation's actions in so doing cannot be treated as a refusal to pay within the meaning of section 73(2) as there was no basis for such a decision at the time that it was made. It follows that the appellant continued to have an entitlement to weekly compensation. The fact that the Corporation has not sought to implement any rehabilitation since its decision to "cease" weekly compensation means that her entitlement to weekly compensation cannot be affected for any period subsequent to that initial decision unless it can be established she did not continue to have an entitlement by reason of no longer being incapacitated. The decisions of the Corporation and the Review Officer are hereby revoked. The appellant is entitled to costs which I fix at $800. DATED at WELLINGTON on this 3M day of July 1998 Death M J Beattie District Court Judge Arthur.doc KD