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Accident Compensation Cases

ABC5 v ACCIDENT REHABILITATION & COMPENSATION INSURANCE CORPORATION (DC, 02/05/96)

Headnote - Brookers Accident Compensation Reports

Judgment Text

JUDGE IMRIE:
I have decided to allow the appeal. 
Introduction 
The issue is whether the Corporation was correct to decline to reimburse the appellant for the costs of surgical treatment. In particular, the appeal concerns the Accident Rehabilitation and Compensation Insurance (Specialists Costs) Regulations 1990 and the Supplementary Treatment Costs Regulations (No 2) 1993. 
Because it is necessary and appropriate to protect the privacy of the appellant I make an order under s 96 forbidding publication of the name, [(1996) 1 BACR 177, 178]address or occupation of the appellant or of particulars likely to lead to her identification. 
The appellant is entitled to cover as a result of treatment by a general surgeon over a period of time into 1991, 1992 and 1993. She underwent a number of operations for excision and resection of her breasts. On 28 October 1993 the appellant lodged at her local office of the Corporation an M46 form of claim for cover and treatment expenses. The form states that the injury was caused by incompetent surgery after a mastectomy resulting in post-operative sinus and infections. The date of injury was given as February 1993. The chronology shows that the operation - bilateral subcutaneous mastectomy - was carried out on 25 March 1993. 
By letter dated 5 November 1993 the local office of the Corporation wrote to the appellant advising that it was unable to confirm whether cover would apply. The Corporation required further information before the application could be decided and the appellant would be notified of its decision. The letter says in part: 
“No medical treatment fees or other compensation can be paid until your application has been accepted and it has been confirmed that Accident Compensation cover applies. If your application is accepted you will then need to make a written application for any payment which you wish to be considered. If our decision is that your claim cannot be accepted, or if there is anything which you claim for which cannot be paid in full, we will write to you and explain the decision …  ”
There is on the Corporation file a standard form letter dated 11 November 1993 to the appellant asking her to complete and return to the case manager of the Medical Misadventure Advisory Unit of ACC a questionnaire. 
By letter dated 1 December 1993 the client officer of the Medical Misadventure Advisory Unit in Wellington wrote to the appellant setting out its procedures. The letter said in part: 
“Decision on cover. 
Once the Committee has finalised its view it will advise the Corporation accordingly. The Corporation will then decide whether to accept your claim as being medical error or medical mishap, or it may decline cover. ”
The file shows that by letters dated 10 January 1994 the client officer of the unit wrote to the general surgeon who had carried out the surgery complained of, and to the doctor who had been advising the appellant after that surgery. 
The general surgeon who had carried out the surgery complained of wrote to the unit by letter dated 5 February 1994 setting out the history of his treatment of the appellant. The appellant's doctor wrote to the Corporation by letter dated 7 February 1994 setting out his treatment of the appellant. 
The Medical Misadventure Advisory Committee in Wellington first considered the appellant's claim on 14 July 1994. Its initial recommendation was that the claim for cover be accepted on the grounds that there had been a medical mishap. By letters dated 29 July 1994 the client officer of the unit wrote to the general surgeon and the appellant advising of the initial recommendation and giving the opportunity for further comment by 22 August 1994.[(1996) 1 BACR 177, 179] 
There is a file note dated 7 September 1994 referring to certain entitlements. I understand that this note was made in the Corporation's local office. In part the note reads: 
NB Due to nature of injury and associated on-going treatment, she could only have surgery privately. Therefore she could try for reimbursement of these too - tricky! ”
The conclusion of the Committee in Wellington was that the appellant had cover for medical misadventure resulting from medical mishap and it advised the Corporation of that. 
By letter dated 14 September 1994 the client officer of the unit advised the appellant that cover had been accepted on the basis of medical mishap and she was asked to telephone her local branch of the Corporation to discuss any entitlement. 
The local branch of the Corporation received on 15 September 1994 advice from the unit that the claimant had been advised to call at the office in the next few days to discuss any entitlements for which she may be eligible. 
By an application form dated 21 February 1995 and lodged with her local office of the Corporation on 23 February 1995 the appellant sought reimbursement for the following private treatment which had been provided as remedial procedures: 
Pharmacy 
7.50 
Doctor 
95.00 
(The private) Hospital 
710.40 
Surgeon - Operation 
1,200.00 
Anaesthetist 
795.00 
Hospital 
1,857.00 
Surgeon - Prosthesis 
3,500.00 
Surgeon - Consultation 
50.00 
Surgeon - Consultation 
100.00 
Hospital 
2,437.00 
Pharmacy 
150.25 
Sub-total 
10,887.15 
Original Medical Adviser 
1,800.00 
Anaesthetist 
800.00 
Total 
$13,487.15 ”
By letter dated 28 February 1995 the Corporation wrote to the appellant advising that it was unable to pay the private hospital treatment costs because no approval had been obtained prior to surgery taking place. It appears that the Corporation later reimbursed the appellant for some of the consultation fees and prescription charges. 
The appellant applied for a review of the decision declining to reimburse her for treatment costs. The application was dated 2 April 1995 and received by the Corporation on 6 April 1995. 
As part of her application for review the appellant included a written memorandum which reads as follows: 
“I have waited for the past two years for a decision on my medical misadventure case. I have come up against brick walls all the way and to say that ACC are trying to offer a fair deal is most certainly untrue.[(1996) 1 BACR 177, 180] 
I wish to have my case reviewed and my private medical I expenses looked at again please. 
During the past two years in the time after the initial surgery I performed by (my doctor), I have approached the (local) office for support and advice. I was told they could do nothing or knew nothing because the file was in Wellington and I just had to wait. I went ahead and had further surgery because I could not wait for another 2 years to pass by to possibly be told that my claim was not accepted. I have my life to get on with too, and the psychological trauma of having to look at myself every day with such horrific scars was too much. I would also have had to purchase many new clothes as my other clothes now hung like sacks. Also during that waiting time I needed attendant care, and a weekly allowance as I could do nothing for myself. No district nurse was arranged for me and I had to ask my friends and family to help dress and shower me, to drive me around and to do my housework. I was unable to receive any help because my case was in Wellington and as no one here knew anything about it and a decision was so long in coming, I received no help. The staff in (the local office) were aware of this and yet I still could not get any help. 
Now 2 years on I have been told that I am not able to claim for anything because I am deemed to be able and well. What happened to the help I needed? Even now I am unable to do any gym weight work that involves upper body workouts. I am unable to lie on my stomach to sleep and I am unable to sleep well on my back, and I cannot have my arms extended above my head. 
The surgery I needed cannot be performed anywhere else except a private hospital. The ACC staff at (the local office) knew this and when I asked for advice on what to do, I was once again given the standard answer of ‘I don't know, you'll just have to wait’. Why was I not given an application form to apply for permission for private hospital surgery? I am not psychic nor am I aware of the formal ACC procedures. I still believe that it is splitting hairs since I am receiving different answers as to why I am being refused payment for medical expenses since the operation can only be done either privately or privately. It seems a very hollow victory to wait two years to be told that I am successful in my medical adventure suit, and then be told that I am unable to claim anything. I was under the impression that ACC were there to help those who needed it, and by having ACC, the right to sue has been removed. I am prepared to fight this case through a lawyer if I need to, but I would hope that some arrangements can be made as it will be expensive for both parties. ”
The review was heard on 6 July 1995. The appellant attended the hearing with her solicitor. The appellant gave evidence at the hearing. In evidence the appellant covered the background to her claim. She said she did not file any forms for approval of the private hospital treatment before she underwent it. She said she went to the local office of the Corporation several times and probably harassed the staff because it was getting past the 4 months stage and she was “really wondering what the hell was going on”. She said she went to the Corporation's office and said that she was thinking about surgery and asked about attendant care and all the other things that she needed, and she was just told “We don't know anything about it - you'll just have to wait”. There was reference to the fact that the file was in Wellington and the local branch had a cover file. The appellant said that she was not given any forms. The staff in the local office were aware she was contemplating surgery. There was reference to the letter dated 1 December 1993 from the Medical Misadventure Unit acknowledging receipt of her claim for cover. She said that the major reason that she went ahead with the surgery was the pain and she had been waiting so long and asked how much longer she was supposed to wait. She was a student during 1995 and if she had waited any longer for the treatment she might have had to give that year [(1996) 1 BACR 177, 181]away. She asked about further claims and the Review Officer suggested she check things out thoroughly and if her case manager had not explained things clearly to her she should ask for another one. She said that when she came into the Corporation's office to complain she got a new case manager. She said that the Act had taken away her right to sue and there had to be something in its place. 
The Review Officer issued a written decision dated 10 August 1995. In his decision he set out the background to the claim, and the correspondence from the Corporation and recorded that “due to pain and the psychological trauma of the scarring (the appellant) went ahead with further plastic surgery in January 1994 in a private hospital”. The officer said: 
“(The claimant) applied for a review on 2.4.95 with an accompanying letter stating that she was told by (the local office of the) ACC in Tauranga that there was nothing they could do because the file was in Wellington and she just had to wait. It explained why she went ahead with the further surgery in detail and also talked of her on-going problems. (The claimant) said the surgery she needed could not be performed anywhere (except in) a private hospital and that although the local ACC staff knew this, they had not given her an application form to apply for private hospital cost. 
(The claimant) repeatedly requested help from ACC informing them that she was in constant pain. However, she was told she would ‘just have to wait’. (The claimant) did not wait, nor sought prior approval for surgery although she knew that the M.M.A.C. were in the process of making a decision. ”
The officer also said: 
“LAW 
Regulation 11 of the Accident Compensation (Specialist Costs) Regulations (No. 2) 1990 states ‘the Corporation shall not make any payment in respect of any procedures specified in Part II of this Schedule to these Regulations unless, the prior approval of the Corporation to the performance of the procedure has been obtained.’ 
Prior approval under these Regulations is essential. If it has not been obtained, the Corporation has no discretion to approve payment afterwards. 
Prior approval will not be given unless the treatment is necessary: 
For the due restoration of the claimant to his or her principle economic activity or; 
To be done to enable the claimant to participate in the normal social activities that might be expected of that claimant. 
The Accident Rehabilitation and Compensation Insurance (Supplementary Treatments Costs) Regulations (2) 1993 apply to treatment that occurred after the 1.7.93. Regulation 5 says the Corporation shall not make any payment in the respect of any treatment specified in the Schedule to these Regulations unless the treatment is provided as the necessary adjunct to treatment that has been approved under the Accident Compensation (Specialist Costs) Regulations. Prior approval under these Regulations is also essential. 
DECISION 
ACC (in the local office) staff were awaiting the M.M.A.C result before they could say to (the claimant) that she had cover. It was inappropriate to take any action until cover was confirmed under Medical Misadventure. 
I acknowledge that, in the circumstances, the M.M.A.C did take a long time to make their decision.[(1996) 1 BACR 177, 182] 
Unfortunately for (the claimant), I am bound by law and policy and I am unable to change the Corporation's decision that owing to the fact that prior approval had not been obtained, it is unable to reimburse (the claimant). Should (the claimant) require any further surgery, she must obtain prior approval, which is a procedure that needs to be worked through before she embarks on a further course of treatment. 
This review is unfavourable. ”
In her notice of appeal dated 30 August 1995 the appellant said that the ACC should meet her expenses having given her a positive answer to her medical misadventure claim, and she sought full payment of medical expenses and for any other treatment needed. 
With a letter dated 9 October 1995 the appellant lodged a further written submission in support of her appeal. In part that submission reads: 
“I do not believe I have [been] correctly and sufficiently serviced by ACC. As can be seen by the enclosed dates/events, the decision made by ACC regarding whether medical misadventure had occurred was unacceptably long. Even (the Review Officer's) comments ‘I acknowledge that in the circumstances, the M.M.A.C did take a long time to make their decision’
During that initial wait time I was unable to claim for any assistance financial or otherwise as a decision was still forthcoming. However, once a decision had been made and my file transferred to (the local office), I was supposed to contact them re any entitlements. Unfortunately no such entitlements were available as they could not be backdated and my assessable condition in comparison to over a year ago was dramatically different, and I could not be assessed on my present good health. 
Also during this waiting period, I went ahead and had subsequent reconstructive surgery performed in the private system as this is the only alternative available. Deemed ‘cosmetic surgery’ and with quotas etc, public hospitals have neither the time, skill or financial facilities to perform this surgery. 
I went ahead with the surgery because of the emotional, psychological and physical pain I was experiencing. It was not just a case of having implants inserted under the skin … , but due to the ineptness of (my doctor) I was left with a body badly infected and horribly scarred. As all body fat and muscle tissue had been removed from my chest wall, my nipples relocated several times, and there were many existing scars, I had a sunken chest barely covering my skeletal frame with two flaccid blobs of flesh where my breasts used to be. My surgery performed by (my surgeon), over a 12 month period, was a long and arduous process because of the previous butchery I had undergone. I was not prepared to wait any longer for a decision as the promises by ACC regarding a quick decision were not forthcoming. I too have my life to get on with and for me to have to wait around for a decision from ACC when I needed assistance then, was unacceptable. 
During the aforementioned time, I harassed the (local office) staff wanting to know what was happening with my file. I also told them I was thinking about having surgery and at no time was it mentioned that I needed to fill in a permission/application form. At no time did a case manager contact me to let me know where my case was at. At no time did I receive help or advice from ACC. I accept that I did not follow the correct procedure as per ACC policy, but as I am not an ACC staff member, but merely a member of the public, my psychic powers re their procedures obviously need working on. I believe ACC are supposed to act on behalf of the New Zealand people, hence our inability to sue individuals in this country, not act with the initial perpetrators and tie the victims up in red tape. 
As ACC eventually agreed that medical misadventure had occurred I believe had I follow[ed] the correct procedure my expenses and medical bills would have been covered. ”
[(1996) 1 BACR 177, 183]
The appellant also referred to Regulation 11 and her present medical situation and closed by saying: 
“What a shallow victory to have been awarded medical misadventure and yet be unable to claim anything. ”
With a letter dated 29 November 1995 Mr T P Cleary acting as counsel for the respondent filed written submissions. He referred to the history of the claim and said: 
“3. SUBMISSIONS 
3.1
The treatment provided to the Appellant comprised surgery, associated anaesthetists' costs, and associated private hospital care. 
The payment for each of these treatments are covered respectively by the Specialist Costs Regulations (No 2) 1990); the Anaesthetists Costs Regulations 1990 and the Supplementary Treatment Costs Regulations (No 2) 1993. 
The starting point is to consider the Specialist Costs Regulations as the entitlement to licensed hospital costs and the cost of the anaesthetic follow if the costs of the specialist are approved. 
3.2
Clause 11 of the Specialist Costs Regulations (No. 2) 1990 provides in part: 
(1)
The Corporation shall not make any payment in respect of any procedure specified in Part II of the Schedule to these regulations unless— 
(a)
The treatment is provided 
(i)
In a licensed hospital; or 
(ii)
… and, 
(b)
The prior approval of the Corporation to the performance of the procedure has been obtained 
 
(4)
Nothing in this Regulation shall apply in respect of 
(a)
(b)
Any procedure that is discovered to be necessary to perform, and is performed, during the course of any approved treatment. 
The procedures undergone by the Appellant are provided for in Part II of the Schedule, namely: 
Breast reconstruction 
335.
Augmentation with implant. 
336.
Reconstruction, latissimus dorsi or TRAMHap, including repair of secondary defect. 
The appellant accordingly required approval prior to the surgery before the Regulations could authorise the payment of the costs. 
There are numerous decisions before the Accident Compensation Appeal Authority and the District Court which establish that the Regulations admit no discretion. If prior approval is not obtained, payment cannot be made. In Dravitski (20/94), Judge Ongley had no difficulty in concluding that in the absence of prior approval for a procedure found in the Second Schedule, payment for the costs of that treatment could not be made. Likewise Judge Middleton in Wellwood (36/94), arrived at the same conclusion. 
3.3
The same considerations apply to the anaesthetists' costs pursuant to the Anaesthetists Costs Regulations 1990. Clause 10 provides in part:[(1996) 1 BACR 177, 184] 
(i)
The Corporation shall not make any payment in respect of any treatment specified in the Schedule to these Regulations unless 
(a)
The treatment is provided as a necessary adjunct to treatment that has been approved under the Accident Compensation (Specialists Costs Regulations) (No 2) 1990 …  
Thus as the surgical procedure has not been approved the anaesthetists' costs cannot be met. 
3.4
The same applies in respect of the private hospital treatment costs. These costs are covered by the Supplementary Treatment Costs Regulations (No 2) 1993 and they apply from 1 July 1993. 
‘Clause 5(1) allows for licensed hospital costs to be met if they are a “necessary adjunct” to treatment that has been “approved” under the Specialists Costs Regulations. ’”
3.5
That the Review Officer's decision must be upheld. ”
At the hearing of the appeal on 22 March 1996 the appellant appeared in person with her mother and Ms Smith appeared for the Corporation. The respective submissions were discussed. The appellant and her mother gave evidence, and I reserved my decision. In summary the appellant said in evidence that she underwent the remedial surgery because she was in pain from infection and other problems associated with the surgery complained of. 
She informed the Corporation at its local office that she was thinking of going ahead with surgery but was told that the file was in Wellington and that the local office had no idea of what was going on and she would just have to wait until someone contacted her. At no time was she told she needed prior approval for the surgery or given a form to fill in. She had her life to get on with, she was attempting to complete a diploma, she was finding it more and more difficult with the pain and the emotional scarring and she thought it was time she made a positive attempt to do something. She was also concerned that the Corporation was prepared to pay some of her expenses for which she had not obtained prior approval but not others. In cross-examination the appellant agreed that when she had the remedial surgery done she knew that her claim had not been accepted. She also said that her medical adviser did not insist that the remedial surgery be done then but she was told that it would probably be better to carry on with it while the scars were still fresh. 
In summary the appellant's mother said in evidence that for a young person her daughter's condition must have been a really awful thing and that in the same position she would have wanted the operation as soon as possible because of the pain and disfigurement. 
On the evidence contained on the Corporation's file and given at the review hearing and at the appeal hearing the appellant has established that she had to undergo when she did the treatment for which she seeks payment and that it was not possible for her to obtain from the Corporation prior approval for that treatment. 
Consideration 
Prior to the commencement of the Accident Compensation Act 1992 [1982] the appellant would have had the right to sue her general surgeon for general and special damages. If a decision had not been made on her action [(1996) 1 BACR 177, 185]before she underwent the treatment for which she seeks reimbursement she would have been able to undergo the treatment before her claim was heard and claim the cost of that treatment as special damages. 
The Accident Compensation Acts of 1972 and 1982 removed the right to sue for general and special damages and in the Accident Rehabilitation and Compensation Insurance Act 1992 s 14 excludes the appellant's right to claim from her general surgeon the cost of remedial treatment as special damages. That section reads in part as follows: 
14. Application of Act excludes other rights—(1) No proceedings for damages arising directly or indirectly out of personal injury covered by this Act or personal injury by accident covered by the Accident Compensation Act 1972 or the Accident Compensation Act 1982 that is suffered by any person shall be brought in any Court in New Zealand independently of this Act, whether by that person or any other person, and whether under any rule of law or any enactment. 
(2) For the avoidance of doubt, it is hereby declared that nothing in this section shall be affected by 
(a)
The failure or refusal of any person to lodge a claim for any treatment, service, rehabilitation, related transport, compensation, grant, or allowance under this Act or those Acts; or 
(b)
Any purported denial or surrender by any person of any rights under this Act or those Acts; or 
(c)
The fact that a person who has suffered personal injury covered by this Act or personal injury by accident covered by the Accident Compensation Act 1972 or the Accident Compensation Act 1982 is not entitled to any treatment, service, rehabilitation, related transport, compensation, grant, or allowance under this Act. ”
The loss of the right at common law to sue for special damages has been offset by the provisions in the 1972, 1982 and 1992 Acts for payment by the Corporation of treatment costs. However, under the 1992 Act in this case the Corporation says that the appellant has no right to recover her treatment costs. 
Section 27(1) reads: 
27. Treatment and physical rehabilitation—(1) Where a person requires any treatment, service, physical rehabilitation, related transport, or certificate in respect of that person's personal injury that is covered by this Act (in this section called a ‘specified service’), the Corporation shall contribute to the cost of that specified service to the extent required or permitted by regulations made under this Act. ”
Section 167 contains the power to make regulations. The section runs to nearly four pages. 
One would expect the regulations to allow the appellant in this case to recover the cost of treatment from the Corporation as she no longer has a right to claim for damages against the doctor. 
However, reg 11 provides that the Corporation shall not make any payment in respect of any procedure specified in Part II of the Schedule unless the prior approval of the Corporation to the performance of the procedure has been obtained. (It is noted that the Referred Treatment Costs Regulations 1990/242 which are to a certain extent comparable to the Specialists Costs Regulations do not contain such a provision.) Regulation 11 of the Specialists Costs Regulations reads in part as follows:[(1996) 1 BACR 177, 186] 
“(1) The Corporation shall not make any payment in respect of any procedure specified in Part II of the Schedule to these regulations unless 
 
(b)
The prior approval of the Corporation to the performance of the procedure has been obtained. ”
The appellant did not get the prior approval of the Corporation to the treatment. As I have already set out she needed to undergo the treatment and the Corporation could not give her approval because it had not decided whether she was entitled to cover. 
This is one of many cases where the scheme of the legislation is shown to be flawed because of the lack of discretion given to the Corporation. The Act requires compensation to be paid only to the extent required or permitted by the regulations but in many cases the regulations on first reading do not permit payment of valid claims. The reason for the problem is obvious. It is not possible to foresee and to cover in regulations many of the claims which will arise. The numbers of human experiences leading to personal injury by accident and the injuries arising and the types and circumstances of treatment needed are countless and cannot be foreseen and reduced in advance to writing. That is so no matter how many regulations are made under s 167. The regulations overlook that. The 1972 and 1982 Acts give the Corporation discretions such as the discretion in s 149(2) of the 1972 Act relating to the time for making claims. The 1992 Act or regulations made under it should give the Corporation discretions too. Regard should be paid to the part of s 167(7) which reads: 
“(7) Without limiting the Acts Interpretation Act 1924, no Order in Council or regulation under this Act shall be invalid because it leaves any matter to the discretion of the Minister of the Corporation or any agent of the Corporation …  ”
It is inconceivable that Parliament intended to deprive a person like the appellant of any entitlement to the costs of treatment in a case like this. The appellant had to undergo the treatment. It was not possible to obtain the prior approval of the Corporation because it had not accepted her claim for cover. Regulation 11(1)(b) must be read as if words such as “Except in a case where the Corporation has not yet decided to accept the claim for cover” appeared at the beginning so that the regulation reads: 
“(b)
Except in a case where the Corporation has not yet decided to accept the claim for cover the prior approval of the Corporation to the performance of the procedure has been obtained. ”
On that basis the appellant is entitled to recover payment in accordance with the regulations despite the fact that she did not obtain the prior approval of the Corporation to the treatment and the Corporation should deal with her claim on that basis. 

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