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Accident Compensation Cases

Grogan v Accident Compensation Corporation (DC, 21/05/01)

Judgment Text

RESERVED JUDGMENT OF JUDGE M J BEATTIE 
Judge M J Beattie
[1]
The issue for determination in this appeal is the respondent's decision of 21 July 1999 to cease payment of entitlements to the appellant on the grounds that his ongoing back condition was due to degenerative changes in his back and not causally connected with the injury to his back for which he had been granted cover. 
[2]
The facts which are relevant to the determination of this issue, as I find them to be, are as follows. 
[3]
The appellant, then aged 38, suffered a lumbar strain when he fell down a bank whilst scrub cutting. This accident occurred on the 2nd of February 1999. At the time the appellant was a self-employed farmer. 
[4]
The appellant's back condition prevented him from continuing to work as a farmer and he moved to Auckland. 
[5]
In May 1999 the appellant was seen by Mr G R C Howie, a spinal surgeon. In his report to the appellant's GP, Dr Kent, Mr Howie noted from the appellant's history that he had had previous episodes of back pain in the past associated with spasm but that the recent episode following the falls had been more severe. Mr Howie noted that other members of the appellant's family also had back problems. Mr Howie also noted “His plane radiograph shows changes of lumbar Scheuermann's Disease in the films of 1995, and the more recent films. There has been no significant interval change. He shows loss of disc height and peripheral osteophyte formation, particularly at L2/3 and L3/4 while L4/5 shows a little reduction in height”
[6]
Mr Howie recommended an MRI scan in order to evaluate his condition further and such a scan was taken on the 3rd of June 1999. That scan noting “degenerative disc disease in disc bulges at L2/3, L3/4 and L4/5. These findings are most pronounced at L2/3 and L3/4 where there is compression of the dural sac but no focal nerve root compression is demonstrated”
[7]
Mr Howie reported to the appellant's GP having reviewed the MRI scan and confirming the findings. He went on to state that there were no indications for surgical intervention because of the extensive nature of these changes. 
[8]
In a letter to the respondent of 24 June, Mr Howie stated as follows: 
“The widespread changes in this man's make is strongly suggestive of an underlying disc disorder and cannot be held predominantly due to trauma. Continuing incapacity is likely. He is unlikely to return to work as a farmer. ”
[9]
Following receipt of that advice the respondent sought the opinion of Mr O R Nicholson, orthopaedic surgeon, and Mr Nicholson was provided with all the medical reports and information including the x-rays and MRI scan. 
[10]
In his report of 19 July 1999 to the respondent, Mr Nicholson stated as follows: 
“It is accepted that any joint which is affected by degenerative changes is more likely to be strained than a normal joint, and once strained, symptoms may be slow to resolve. 
It is to be appreciated that the X-ray demonstration of degenerative changes does not mean that inevitably symptoms will be experienced, nor can the extent of the changes be related directly to the symptoms. 
Some with marked changes in the X-rays may have no symptoms, while others with minor changes and even with normal X-rays may have significant problems. 
Although the majority of acute back strains resolve, although not necessarily completely over a period ranging from a few weeks to a few months, on occasions, an injury seems to initiate the development of persisting symptoms of a varying degree. 
In a case such as this, where the degenerative changes are marked, it is my opinion that the slow resolution is due to degenerative changes, i.e. were it not for these changes, it is likely that a more rapid resolution would have occurred. 
In my opinion this man's continuing symptoms are due substantially to the ageing process. 
I do not think it is going too far to say this was in fact stated in Mr Howie's letter, when he said that the continuing symptoms ‘cannot be held predominantly due to trauma’, i.e. they must therefore be due to degenerative changes. ”
[11]
Upon receipt of Mr Nicholson's advice the respondent determined that the appellant's entitlements should cease and it duly advised the appellant of this by its letter of 21 July 1999. 
[12]
As this letter is the subject of some comments by Mr Miller in his submissions, I set out the relevant passages of that letter: 
“ACC has considered your claim for the back injury that you sustained on 1 February 1999. 
I am sorry to inform you that, based on the information provided, your claim for cover has been declined. The reason this claim has been declined is because specialists' opinions are that the slow resolution of your ongoing back problems is due to degenerative changes. This means that if it were not for these changes, your injury would have resolved sooner. As the cause of your ongoing problems is not accident related, ACC is unable to extend cover further. 
This decision was made under section 29(4)(a) of the Accident Insurance Act 1998: 
‘28.
Personal injury (4) “Personal injury” does not include — (a) Personal injury caused wholly or substantially by the ageing process; or ’
Consequently ACC is unable to pay for any further medical treatment or compensation costs. Your current medical certificate is due to expire on 15 August 1999. You will be paid weekly compensation until August 15, but we will not be accepting further medical certificates. ”
[13]
The appellant sought a review of that decision and for the purposes of that review his GP referred him to Mr Brian Otto, orthopaedic surgeon, for assessment and report. Mr Otto reported to the appellant's GP on 2 September 1999 and after noting the history and identifying the x-rays and MRI scan, Mr Otto advised that he should not consider any surgical management. He went on to state — 
“My opinion is that the changes in his spine are from repetitive activity, and most likely to have come from his shearing activities over a long period of time and represent the effects or hard farming activity on his spine. The injury when he was scrub cutting served to make him aware of those changes, but he does have the right to be restored to his pre-accident level of comfort … . ”
[14]
The reviewer confirmed the respondent's decision in his decision dated 20 April 2000 and it is from that decision that the appellant now appeals to this Court. 
[15]
For the purposes of this appeal, the appellant has obtained a further report from Mr Otto. In his report of 24 August Mr Otto states as follows: 
“As you know he was free of symptoms until he fell with a scrub cutter latched onto his side over a bank nearly two metres in height in February 1999 and there is no doubt that he has injured one of the discs, probably the L4/5 level in his spine and this is where the bulk of the symptoms are emanating from at the present time. 
The issues that I see that Paul has to face are these: 
1.
Prior to the accident he had no back pain and was carrying out full farming duties. So there has been an event which tipped the scales and has produced additional pain and I think that he has had an additional tear in one of the discs, perhaps the L4/5 level which has in the healing process allowed nerve fibres to come in on the blood vessels and produced a sensitive disc which is causing the ongoing symptoms. 
2.
He is an experienced Farmer and holds a Bachelor of Agriculture degree, but cannot do the physical work on his property, and yet as part of a rehabilitation programme it would be appropriate for him to use his expertise and have at least one labour unit on the property carrying out the manual and physical aspect of his work as commodity prices on the farm are good at the present time and he could be fully independent and productive if in fact this was acceptable to Accident Compensation. 
3.
He has certainly not been restored to his pre-accident level of comfort, so the component of the injury is still responsible for the ongoing symptoms, and it is easy to dispense his back problem as being all due to disc degenerative disease, but my own feelings knowing that shearers do tend to work for long periods in a stooped posture, is that much of the change that we see at the L3/4 level is established from his shearing activities and does not reflect a prior Scheuermann's condition or pathological change within the disc and the concern I expressed is in fact that the L4/5 level has been injured and it is likely to be that level that is predominantly causing his symptoms. 
It is very easy to dispense the whole issue as being one of degenerative change and yet that does not fit in well with the pre-accident level of performance and the devastating change that the injury has produced in terms of his function. My own opinion is that there is a contributing portion of his dysfunction now which is accident related and it is quite unfair to dispense with all of his present predicament as just from disc degenerative disease alone. ”
Submissions 
[16]
In his written submissions Mr Miller, counsel for the appellant, was critical of the respondent's decision letter, purporting as it did to decline cover to the appellant. He submitted that such an important step should be done exactly as required by Parliament and it should not be left to the Court to second-guess the Corporation as to whether they actually intended to decline cover or to suspend entitlements. Counsel referred to the decision of the English Court of Appeal in Ex-Parte Hook [1976] 3 All ER 452
[17]
On the substantive question counsel submitted that the Court must determine what is meant by the word “substantially” as it appears in s 29(4)(a). He submitted that it was not sufficient for the medical experts to simply state that word without stating what in fact they meant by it. It is only then that the Court can determine whether that meaning of substantially accords with what the law would mean by that word. 
[18]
Counsel further submitted that in a case where the statutory entitlements of a claimant were in jeopardy, it is not appropriate that the wording be left unspecified, but rather a percentage should be placed on the experts' assessment of what part the continuing effects of the personal injury by accident are playing in the cause of the incapacity. 
[19]
Ms Scott, counsel for the respondent, submitted that the Court must look at the substance of the decision letter and determine what its intention was. In this case it is clear that there was no intention to revoke cover but simply to cease entitlements. 
[20]
Counsel further submitted that it was not necessary for the medical evidence to provide percentages as the Court is able to make findings of fact from the evidence to determine whether “substantially” has or has not been made out. 
Decision 
[21]
The decision made by the respondent which is the subject of this appeal was made in its letter of 21 July 1999. Thus it was a decision made after the coming into force of the Accident Insurance Act 1998 and under the transitional provisions of that Act, entitlements in respect of appellant's injury were to be determined in accordance with the provisions of that Act, irrespective of the fact that cover had been granted to him under the provisions of the 1992 Act. 
[22]
The decision letter issued by the respondent is certainly less than helpful and, as Mr Miller submitted, is not in accord with the provisions of the Act. It purports to advise that the appellant's claim for cover has been declined and it then goes on to advise that the Corporation would not be paying any further medical treatment or compensation costs. 
[23]
This is one of a considerable number of decision letters which are the starting point in the appeal process which are less than satisfactory and this Court has on a number of occasions made critical comments of those decision letters and of how they do not conform with the statutory powers which are vested in the respondent by virtue of the Act. 
[24]
I say again that the respondent powers under the Accident Insurance Act 1998 to interfere with the statutory entitlements of a claimant are provided in s 116 and that the power so given to the Corporation is a power to suspend a statutory entitlement. Whilst the former provision of s 73 of the 1992 Act did give a power to cancel an entitlement, that power does not continue on under the new Act. 
[25]
The other main power given to the respondent is that in s 452 which is the power to revise by amendment or revocation an original decision and it is that section which would need to be used if indeed the respondent were seeking to revoke cover. 
[26]
However that power does not apply in this case as the respondent was not seeking to revoke cover, nor indeed was it seeking to decline cover because cover had already been granted. Thus the wording of the letter was entirely inappropriate. 
[27]
Having said that, I have ruled on previous occasions and consider it to be appropriate that the Court must look at the substance of the letter and see what it is purporting to do rather than see what it says it is doing. 
[28]
In this case there is no ambiguity in that the respondent is contending that the appellant no longer qualifies for entitlement and is therefore suspending it. It is on that basis that I now consider the substantive issue raised by that decision. 
[29]
The power to suspend in s 116 is able to be exercised when there is evidence which satisfies the respondent, on the balance of probabilities, that the claimant no longer has an entitlement to that statutory entitlement. In the present case that translates into the contention that the respondent has medical evidence which satisfies it that the present symptoms of injury which the appellant is displaying can no longer be said to be the symptoms of the personal injury by accident for which he was granted cover but rather are from a different cause, namely the degenerative disease of his lumbar spine. 
[30]
The provisions of s 29(2) and (4) indicate that personal injury which is caused by disease or wholly or substantially by the ageing process is not included in the definition of personal injury and therefore cover and entitlements for same cannot be had. 
[31]
In the case of this appellant it is contended by the respondent that the effect of his lumbar sprain has gone or is no longer of any significance and that the degenerative condition of his lumbar spine is now wholly or substantially the reason for his ongoing back problems and the cause of his incapacity. 
[32]
The question is whether the medical evidence does establish that the appellant's condition, as it now presents, is wholly or substantially caused by disease and/or the ageing process. 
[33]
In Mr Howie's first report he identifies the 1995 radiograph as showing degenerative changes described as Scheuermann's Disease and that those changes did occur in the lumbar spine. 
[34]
The MRI scan obtained by Mr Howie did not identify any discrete injury save for the identification of the degenerative disc disease that was present in the lumbar spine. The scan specifically indicated that there was no nerve root compression. 
[35]
There is no evidence that any of the features that were identified in that MRI scan were caused by the falls and the back strain which the appellant suffered in February 1999. 
[36]
In Mr Howie's report to the respondent on 24 June he advised that the widespread changes, and I take him to mean the degenerative changes, were strongly suggestive of an underlying disc disorder and that this could not have been caused by trauma. Mr Howie went further to indicate that there ought not to be surgical intervention because of the extensive nature of those degenerative changes. 
[37]
When Mr Otto examined the appellant in September 1999 his opinion was the same as Mr Howie's, namely that there should be no surgical intervention. It was his view that the discs will go on to dehydrate further and stabilise. It was his view that the changes in the appellant's spine were due from the repetitive activity, most likely to have been from his shearing activities, over a long period of time and represent the effects of hard farming activity on his spine. He noted that the injury from the fall while scrub cutting served to make him aware of those changes. In his later report he noted that the fall was the event which “tipped the scales” and produced additional pain, and he considered the precise cause to be nerve fibres coming in on the blood vessels at L4/5 level and producing a sensitive disc and which is causing the ongoing symptoms. Mr Otto identifies that it was the L4/5 level that had been injured and that it was this disc which was causing the symptoms. He is of the opinion that there is a contributing portion of the appellant's dysfunction which is accident related and that it is unfair to put all of his present predicament as being from disc degenerative disease alone. 
[38]
It is to be noted that Mr Otto's report is to the appellant's GP, Dr Kent. Whilst the Court does not have details of any referring letter that Dr Kent may have written to Mr Otto, if indeed he did at all, it is clear that Mr Otto's letter is not one which is being requested to address the issue of “wholly or substantially” although it is clearly written with the purpose of endeavouring to persuade the Corporation to reconsider its decision. 
[39]
Mr Nicholson's opinion was asked in response to the appellant's case manager's letter which letter said: 
“Can you please give your opinion based on the material provided insofar as the continuing cause of this man's incapacity in relation to the accident. Dr Percival has recommended that this man's ongoing cover be declined under s 10 of the 1992 Act or s 29 of the new Act. ”
[40]
This Court can take judicial notice of the fact that Mr Nicholson knows the contents of those provisions. 
[41]
In his report Mr Nicholson notes that the fact that degenerative changes do not necessarily mean that symptoms will be experienced, nor that the extent of the changes necessarily correlate to the level of symptoms experienced. Mr Nicholson then notes that in the case of this appellant where the degenerative changes are marked this causes a slow resolution and I take it from that that he is referring to the resolution of the injury by accident, as he says “Were it not for these changes it is likely that a more rapid resolution would have occurred”
[42]
I find that this statement is in accord with the statement made by Mr Otto in his report of 24 August when he talks about the component of the injury still being responsible for ongoing symptoms. 
[43]
It seems that Mr Nicholson is going from saying that the degenerative condition of his back has meant that the healing process is much slower but then saying his continuing symptoms are due substantially to the ageing process. He is, in those words, using the precise words of the statute. 
[44]
In this case I am inclined to agree with Mr Miller's submission that really more needs to be asserted by the specialist as to what he means by “substantially” in the circumstances that are presented by the facts of this man's lumbar spine. 
[45]
This is not such a case as has often been presented to this Court in appeals where the medical evidence has established that the effects of injury have gone or have resolved and that all that is left is the continuing symptomatic state of the degenerative lumbar spine. Mr Otto is clear that there is still the residuum of injury and even Mr Nicholson is saying that this appellant's back strain has taken, or is taking longer to resolve because of the degenerative condition of it. That, I find, is a different proposition than stating that a person's symptoms are due substantially to the ageing process. To my mind the two statements made by Mr Nicholson are difficult to reconcile if he is contending that the appellant's injury condition has not resolved He is certainly not saying that it has. Furthermore, Mr Nicholson seems to agree with Mr Howie's advice that the continuing symptoms cannot be held predominantly due to trauma and therefore they must be due to the degenerative changes. Again I do not find that that latter proposition necessarily follows the former. 
[46]
In view of that evidence I find that I cannot rule, on the balance of probabilities, that this appellant's condition as it presented at the time the respondent made its decision was wholly or substantially due to disease or the ageing process. Such cannot be so when there are statements from experts which indicate to the contrary. 
[47]
For these reasons therefore I rule that the respondent was not entitled to suspend the appellant's entitlements under the Act and those entitlements must be restored to him as from the date of suspension. I allow the appellant costs which I fix at $1,000.00 together with any costs associated with the obtaining of Mr Otto's August 2000 report. 

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