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Accident Compensation Cases


Headnote - Brookers Accident Compensation Reports

Judgment Text

D A Ongley Judge
This appeal is against a decision following a review heard at Palmerston on 2 March 1993. The review officer decided that the purchase cost of a spa bath and a hoist did not come within the Accident Rehabilitation and Compensation Insurance (Social Rehabilitation - Modifications to Residential Premises) Regulations 1992“the Modifications Regulations”, and further that Regulation 11 of the Modifications Regulations would, in any case, limit the total provision available to the appellant to the sum of $10,000. 
The appellants personal circumstances are not in dispute. She was seriously injured in a motor vehicle accident on 7 January 1981. As a result of the injuries she is a high level paraplegic. In late 1989, alterations were undertaken to her house in Palmerston North including the widening of doors, wheelchair access, installation of a wet shower area and kitchen alterations. The total cost of $31,000 was financed by a suspensory loan from the Accident Compensation Corporation. In February 1992 Miss Hayward developed a chest infection (Bornholms Disease) and following this had an x-ray in the course of which she suffered a further injury which rendered her skin sensitive to damage and infection. At her home she had been showering using a commode chair and sliding board transfers to move in and out of the wet area shower. After the recent injury the Corporation paid $120 per week for the appellant to travel regularly from Palmerston North to her father's home in Fielding so that he could assist her bathing. On 15 July 1992 a district nurse at Clevely Health Centre, Fielding recommended the installation of a spa bath to assist the appellant's recovery from her most recent injury. In a letter of 1 September 1992 Mr Max Lovie, plastic surgeon, at the Wellington Surgical Clinic supported the recommendation. 
The Corporation accepted the need for a spa bath and hoist. It declined to contribute the full cost of $13,051.75 for the purchase and installation of both items but instead granted $5000. This grant was stated by the Corporation to be the maximum entitlement available during any 3-year period for the purchase of equipment under the Accident Rehabilitation and Compensation Insurance (Aids and Appliances) Regulations 1992“the Aids and Appliances Regulations”
The review officer's decision was partly favourable for the appellant. It allowed $3,118.94 for installation under the Modifications Regulations and it allowed a contribution of the maximum under the Aids and Appliances Regulations of $5000 for the cost of purchase, the total purchase cost being $9,932.81. This left the appellant with a shortfall of $4,932.81 which the Corporation did not agree to meet under either set of Regulations. The reasoning of the review officer was that there is a distinction between the Aids and Appliances Regulations and the Modifications Regulations. While the Modifications Regulations were sufficiently wide to provide for installation of items which would become fixtures, the items in question were of a kind for which purchasing provision was already made under the Aids and Appliances Regulations and are therefore subject to the limitations in the Aids and Appliances Regulations restricting payments to a ceiling of $5000 in any 3-year period. 
In examining the Corporation's authority to make these payments it is common ground that no payments can be made except where permitted by Regulations. S 26 of the Act provides: 
“26. Social rehabilitation - 
In order to ensure - 
Consistency of provision of social rehabilitation; and 
Certainty of entitlement to social rehabilitation - 
no provision of, or payment in respect of, social rehabilitation shall be made by the Corporation in respect of any person except as required or permitted by regulations made under this Act. 
The objective of social rehabilitation is to restore the independence of the person that has been lost by personal injury covered by this Act. 
Any regulations referred to in subsection (1) of this section shall apply in respect of all persons, conditions, or items that are of the same class or category. 
In this Act, ‘social rehabilitation’ includes, but is not limited to, - 
Modifications to residential premises; and 
Provision of, or payment for, wheelchairs and any other aids and appliances likely to assist independence in daily living; and 
The Corporation may provide or meet the cost of modifications to residential premises or purchase of or modifications to motor vehicles in respect of any rehabilitation programme at intervals of - 
Not more frequently than 5 years; or 
Less then 5 years only if the Corporation is satisfied that such purchase or modifications are necessary to enable the disabled person to obtain or maintain employment, and are expected to be cost-effective for the Corporation. 
Nothing in subsection (5) of this section shall be so construed as to oblige the Corporation to provide or meet the cost of any purchase or modifications within or outside any 5-year period. 
No payment in respect of any item referred to in subsection (4) of this section may be made by the Corporation other than under this section. ”
The categories of social rehabilitation are separately provided for by the Modifications Regulations which cover rehabilitation provision under s 26(4)(c) and the Aids Regulations in respect of s 26(4)(f). 
The appellant seeks to have the whole provision made under the Modifications Regulations. Regulation 2(1) defines the expression “modification” as follows: 
‘Modifications’ means alterations to residential premises to remove structural barriers or to add features which will assist a claimant to live as independently as possible having regard to the claimant's disability. ”
It is clear enough that the installation of the hoist and spa bath were alterations adding features to assist the claimant to live as independently as possible having regard to her disability. There is no dispute about that. The claimant, for practical purposes, does not want to use up her eligibility under the Aids and Appliances Regulations, in case she finds herself, during the next three years, confronted by the need to make further application for aids and appliances. Incidentally, wheelchairs are not caught by the limitations, and while that is the most likely article for which she would claim, she would nevertheless like to keep her eligibility in reserve. These considerations are not relevant to the question to be determined on appeal, but they explain the appellant's reasons for advancing the matter on the basis that the whole cost should be met under the Modifications Regulations. Under the Modifications Regulations limits are also prescribed by Regulation 11 as follows: 
“11. Maximum amounts payable - 
Subject to subclause (2) of this regulation, the Corporation shall not .. meet the cost for the total modifications to any residential premises in exess of $10,000 within the period referred to in regulation 6(4) or regulation 6(5) of these regulations, as the case may be. 
In the case of a claimant who is receiving or likely to receive the maximum weekly entitlement to attendant care under the Accident Rehabilitation and Compensation Insurance (Social Rehabilitation-Attendant Care) Regulations 1992 (S.R. 1992/00) or is likely to require permanently the use of a wheelchair for mobility, the Corporation shall not, and an exempt employer shall not be required to, meet any costs of modifications in excess of $40,000 for the total modifications to any residental premises within the period referred to in regulation 6(4) or regulation 6(5) of these regulations. ”
The limits in regulations 6(4) and 6(5) repeat the provisions of s 26(5) of the Act. 
The questions which arise therefore are firstly, whether all or part of the the purchase component as well as the installation component can be met by the Corporation under the Modifications Regulations, and secondly, whether the choice of the Regulation to be used in authorising provision by the Corporation can be made at the instance of the appellant. 
As to the second question, if the Corporation is empowered to meet the cost under either Regulation, then the choice of Regulation should usually rest with the appellant. The appellant should be able to apply for provision under an appropriate regulation. The Corporation may either grant or refuse the applicant, but there is no reason why the Corporation should have a discretion to refuse an application only on the ground that it would prefer to have the provision met under another regulation, thereby imposing limitations beyond those already contained in the legislation. In this case, the Corporation is satisfied with the merit of the application and the only difficulty is that it takes the view that the cost of purchase may not be met under the Modifications Regulations as a matter of proper construction of the Regulations. 
The appellant submits that the term “modification” is not limited to installation costs but may also include purchase of equipment. The first schedule of the Modifications Regulations includes items which incorporate both the purchase price of equipment and the cost of installation. In particular it includes access ramps or lifts, smoke detectors and locks and security systems. There is a contrary indication in regulation 5(7). Regulation 5 contains the procedure for purchase of modifications following assessment of need and sub-clause (7) gives the Corporation an option of approving the purchase and installation of equipment and appliances, “where such purchase and installation is a cost-effective alternative to a modification” of a kind described in the first schedule to these Regulations. However, the distinction drawn in subclause (7) between “purchase and installation” as opposed to “modification”, while it may have practical application as an alternative to some kinds of modifications under the first schedule, does not materially affect the meaning to be given to the expression “modifications”. Counsel for the appellant submits that purchase and installation of a spa bath is no less a modification than installation of, for example, safety rails (which are expressly stated to be modifications). In the case of safety rails, as with the spa bath and hoist, the items which are purchased are not free-standing and cannot be used for their proper function until they are installed. The degree of alteration of the premises does not appear to be a kind of overriding factor. It is likely that safety rails can often be installed with little or no alteration to the surrounding area. A hoist bears a similarity with safety rails because, as with safety rails, there may be no need to remove linings or to construct any special framework for the hoist and its accompanying electrical apparatus to be installed. A spa bath may of course involve more alteration connected with plumbing relining and sealing. 
The review officer correctly focused on the question whether the installation would become a “fixture” in the established legal sense, so that it would form part of the residential property with consequences which would follow in the case of sale or mortgage of the property. The expression “features” and “fixtures” are not the same but the general meaning of those expressions is sufficiently analogous that it is likely that an installation which becomes a fixture is intended by the regulations to fall within the concept of a feature of the residential premises. That interpretation is preferable to another possible interpretation restricting the meaning to reconstructions of the framework and finishing of the premises. The latter construction would be plainly inconsistent with the particular first schedule modifications to which Mr Keys referred, namely lifts, rails, smoke detectors, locks and security systems. 
The interpretation question is a narrow one, not turning to any great extent on the purposes of the Act, but on the plain meaning of the Act and the two sets of regulations read together. The respondent's position is that the specific provisions of the Aids and Appliances Regulations override the general provisions of the Modifications Regulations. The Aids and Appliances Regulations in the first schedule lists hoists as a specific item. Does it follow therefore, that the purchase and installation of a hoist must be excluded from the operation of the Modifications Regulations. 
In determining the construction of the regulations, each set of regulations should first be examined on its own, read together with the Act. Specific inclusion of authority for the Corporation to meet expenses under one set of regulations does not necessarily prevent the same provision or overlapping provision being made under the other regulations. Counsel for the respondent referred to McDonald v AGC (NZ) Ltd [1990] 1 NZLR 243 as authority for the contrary view invoking the maxim generalia specialibus non derogant. That principle applies only when it is necessary to resolve a conflict between two provisions. In this case no conflict exists. The various set of regulations are promulgated under s 26(4) of the Act which refers to six different categories of social rehabilitation, but there is no rule of construction requiring firm lines to be drawn between the categories to achieve a result that avoids any possible overlapping. In the end, the question whether the installation of a hoist and spa bath is a modification of residential premises is a question of fact having regard primarily to the definition in the Modifications Regulations. The natural meaning of alterations to residential premises to add features must logically include alterations incorporating substantial items of hardware or joinery which are first purchased ready-built or intact. Some items listed in the schedule of the Modifications Regulations are of that type. No assistance is to be gained from the second schedule which contains a mix of items including real estate fees which could not possibly amount to modifications. At best, the second schedule may be said to exclude items in cases of doubt as well as items which would clearly amount to modifications but which are excluded for policy reasons. 
I conclude that the “alteration of residential premises” to add features is a phrase which comprises the whole of the supply and work. It is artificial to divide the work and the supply of materials into separate components unless that is plainly indicated by the regulations. The latter approach could obviously lead to difficulty, for example, in cases where joinery is purchased and installed. The natural meaning of the expression in the context of the regulations is to include the complete work as the modification, including also the cost of purchase of materials. 
It follows that the two sets of regulations overlap, particularly in the case of hoists. There is nothing inimical to the purposes of the Act and regulations for provision to be able to be made under either regulation in some cases. However, there is some illogicality in accepting that work amounts to a modification but at the same time excluding the cost of purchase of items incorporated in the modification. In this particular case, the result is that there is some flexibility in allocating the provision between the regulations. That flexibility is controlled by overriding provisions restricting the amount of the cost which can be met by the Corporation and the frequency. Those controls are contained in s 26(5) of the Act, Regulations 6 and 11 of the Modifications Regulations and Regulations 6, 7, 8 and 11 of the Aids and Appliances Regulations. 
The appellant's claim is caught by Regulation 11(2) of the Modifications Regulations imposing a limit of $40,000 within the period specified by regulations 6(4) and 6(5) of the Act. Regulations 6(4) and 6(5) in turn restate the limits in s 26(5) of the Act which limits the Corporation in providing or meeting the cost of modifications to residential premises at intervals of less than 5 years, except: 
Less than 5 years only if the Corporation is satisfied that such purchase or modifications are necessary to enable the disabled person to obtain or maintain employment, and are expected to be cost-effective for the Corporation. ”
In this case the appellant has a suspensory loan of $31,000 which was granted in 1989 and secured by a mortgage. The conditions of the loan are set out in a letter of 2 October 1989 from the Accident Compensation Corporation stating that provided the appellant complies with the conditions of the mortgage, she will be entitled to call upon the Corporation to release the mortgage without payment of the principal sum. The appellant submitted that the loan did not amount to “meeting costs” of modifications. The expression “to provide or meet the cost” occurs frequently in the Act. “Meeting the cost” is an expression which is naturally wider than direct payment. The Corporation is accustomed to providing suspensory loans and the expression naturally includes that kind of provision. The only apparent difference with a suspensory loan is that it can be adjusted by repayment. If the claimant chose to repay part of the loan then the Corporation would no longer have met that part of the cost. Otherwise, in the case of a suspensory loan, the Corporation must be regarded as having met the cost of the purchase or modification at the time of disbursement of the loan money. 
The limitation applies only to the cost in excess of $40,000, which in this case is $4,051.75 if the whole provision is made under the Modification Regulations. There is evidence of cost-effectiveness. If the modifications had not been made the Corporation would have had to continue paying $120 per week for alternative bathing arrangements. It can be seen that the excess amount would be saved by the Corporation in less than nine months. Cost-effectiveness is therefore established. 
The remaining barrier is the prerequisite that the modifications are “necessary” to enable the claimant to obtain or maintain employment. The word “necessary” has often been the subject of legal interpretation. It has been held to mean “essential”, “reasonably required”, “convenient and proper”. It is a word which, in its broad sense, permits shades of meaning tending towards expedience, that is to say the appropriate and practical means of accomplishing an object. It is used repeatedly in the Accident Rehabilitation and Compensation Insurance Act 1992 in provisions which define the circumstances in which the Corporation may assist a claimant. Having regard to the purposes of rehabilitation and compensation expressed in the statute it is appropriate to avoid a narrow or absolute interpretation of the word “necessary” where it is used as a test for eligibility for benefits and to adopt a purposive approach to construction in accordance with s 5(j) of the Acts Interpretation Act 1924. 
In this case the bathing facilities needed by the appellant are demonstrably necessary for her to establish a convenient daily routine independent of outside assistance. It must be extremely troublesome for her to have to travel and to depend on her father's help. Where there is a reasonable and convenient solution at hand it is unfair to expect her to maintain employment and to devote inordinate time and trouble to the routine of daily washing. I am satisfied that this is a case where suitable bathing facilities are reasonably necessary for the appellant to maintain employment with ordinary comfort and dignity consonant with the purposes of the Act. 
For those reasons the appeal is allowed. It would be possible to leave the provision fo $5,000 under the Aids and Appliances Regulations undisturbed and to provide the balance of $8,051.75 under the Modifications Regulations. Having reached the conclusion that the whole sum may be provided under the Modifications Regulations, I consider that is also the most appropriate course to take in the circumstances and the review officer's decision is therefore modified by cancelling the provision of $5,000 under the Aids and Applicances Regulations and increasing the provision under the Modifications Regulations to the sum of $13,051.75. The appellant will be entitled to costs which are fixed at $600. 

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