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Accident Compensation Cases

Richards v Accident Compensation Corporation (DC, 03/10/13)

Judgment Text

Judge D A Ongley
This is an appeal against the decision of a Reviewer refusing an order for payment of costs to an unsuccessful applicant. 
The substantive appeal question was whether the appellant should be entitled to payment of the cost of surgical treatment for a medial epicondylitis. The weight of evidence pointed to a conclusion that medial epicondylitis is usually a gradual process condition and there was no reliable evidence to show that the appellant's injury was from a traumatic cause rather than a gradual process. There has been no appeal against the substantive decision dismissing the review. 
Before deciding whether to award costs to an unsuccessful applicant, a Reviewer is required by s 148 of the Act to consider whether the applicant acted reasonably in applying for review. The expression “acted reasonably in applying for review” could have been intended by the legislature to refer either to the time of filing the application, or to the ongoing process of applying, including the conduct of the review hearing. There are conflicting judgments in this Court concerning that interpretation question. 
A reviewer's finding that an applicant did not act reasonably is a decision made in the exercise of a discretionary power. The grounds for a successful challenge to such a discretionary decision are well understood. For example in Trembath [2005] NZACC 279, Judge Beattie said: 
An appeal in such circumstances is an appeal against the exercise of a discretionary power, and this Court has recognised that such an appeal is of limited scope. That limitation has been well defined by decisions of New Zealand Courts of Superior Jurisdiction, and in particular the Court of Appeal has identified that the test formulated in its decision of May v May [1982] 1 NZFLR 165 at 170 is the preferred formulation. That formulation reads: 
‘An appellant must show that the Judge acted on a wrong principle; or that he failed to take into account some relevant matter or that he took account of some irrelevant matter or that he was plainly wrong. ’”
Recent restatements of this formulation by the Court of Appeal are noted in its decisions on Alex Harvey Industries Ltd v Commissioner of Inland Revenue (CA 36/01) and Harris v McIntosh (CA 279/98). ”
A logical approach is to look at the Reviewer's decision in order to determine the matters that were taken into account. The hearing was conducted by Reviewer Mr Paul Wilson on 5 February 2013, and adjourned part heard to enable the applicant to obtain some explanatory evidence from his medical advisor. Mr Eric Nielson acted as advocate for the applicant at the review hearing and for the appellant in this appeal. The scheme of the relevant parts of the review decision was as follows: 
Mr Richards strained his left elbow when lifting a sheep on 9 November 2009. ACC accepted cover for a sprain of left elbow and forearm, but not for a more specifically diagnosed injury. 
Mr Richards had cover for an earlier sprain of his upper and lower left arm in January 2006. 
In August 2012, orthopaedic surgeon Mr John van Dalen applied for funding for treatment of medial epicondylitis and repair of the common flexor origin. He described the problem as a “gradual process type problem that has evolved during Donald's working life as a Farmer”
In September 2012 Mr van Dalen repeated the same comment in a short email to ACC and added “The injury described above has been an aggravating factor in exacerbating the elbow symptoms and thus not causally linked”
The Reviewer noted that Mr Richards had described the 2009 incident as an experience of a tearing sensation in his elbow. 
In December 2012 Mr van Dalen explained that he had described the injury as an aggravating factor in exacerbating the elbow symptoms, thus not causally linked because of previous symptoms associated with repetitive work. He said “ … although not fully clear as to the onset of symptoms would suggest to me Donald had an injury, either 2006 or 2009 that has indeed been exacerbated by the repetitive jobs demanded on the farm”
In January 2013, ACC's branch medical officer Mr Sexton advised that “The pathology is a chronic condition and an association with a single event is most unlikely”
In January 2013 there was an email exchange between Mr Hibbs of ACC and Mr Nielson on the subject of costs where applying for a review is unreasonable. 
Mr Richards gave evidence at the review, describing the immediate pain when lifting the sheep. 
After the hearing was adjourned, Mr van Dalen wrote, explaining that mild medial epicondylitis was due to gradual process, but that: 
“The problem was then exacerbated or aggravated significantly by the lifting injury. Donald describes a significant injury to the elbow, which is not due to gradual process. The lifting injury has done further soft tissue injury to the common flexor origin to render it an on-going problem that now requires surgical attention. ”
The Reviewer did not find Mr van Dalen's evidence persuasive. He found that it was confused when describing a gradual process, an exacerbation or aggravation, and a significant new injury. The Reviewer said: 
“He did not however identify the significant new injury which he says has occurred. Nor did he provide any specific clinical reasoning. He did not explain why he now excluded any potential effects from the 2006 accident or why his initial diagnosis of medial epicondylitis was incorrect (if indeed his view is that there was a new injury as opposed to an aggravation or exacerbation). ”
The Reviewer preferred the opinion of Mr Sexton. 
The Reviewer decided that the application was not reasonably brought because the evidence from Mr van Dalen simply did not support a claim being lodged for a personal injury caused by accident, and that the evidence was no better when the review hearing opened. 
When considering s 148, it is difficult to say that it was unreasonable to make the review application in the first place, because those applications must be made within a strict time limit. There was a possibility here that further clarification from Mr van Dalen may have identified a degree of new injury that would qualify for cover and entitlement as an ongoing injury rather than a transient soft tissue injury. In my view it was reasonable to make a precautionary application for review. Applicants cannot be expected to hold off, while watching the time limit, until their evidence stacks up for a viable argument on review. 
In Dooley [2012] NZACC 235, I took the view that acting reasonably in applying for the review includes the hearing process. In two earlier cases Storey [2005] NZACC 126 and Mete [2004] NZACC 28, His Honour Judge Beattie tended to the view that the provision applied to the time when the application was made. The respondent did not address argument to the conflicting authority in this Court. I remain of the view that interpretation of the section in context includes the whole process of applying. Otherwise there would be very little sanction in costs for an applicant who chooses to waste resources by arguing a completely futile point on review, or who persistently brings pointless arguments to review. The judicial system generally reserves some kind of sanction in costs for such conduct, and the same principle should apply at review level. My view is influenced by the problem of the time limit, which is likely to justify nearly all but the most undeserving review applications. 
That of course leaves the problem of revisiting the substantive arguments on an appeal when considering the exercise of discretion by a reviewer. In the present case, in my view the outcome on the substantive question at review was a foregone conclusion. The orthopaedic surgeon had probably tried to frame an exposition of injury in a way that would provide the applicant with the basis of an argument. That is not to suggest that the opinion was misleading. Quite the contrary. Mr van Dalen refrained from making a statement that could not be supported. He offered an opinion, unsupported by reasons, and without any challenge to Mr Sexton's statement that medial epicondylitis is generally of gradual process. 
The applicant was able to hang an argument on Mr van Dalen's unvarnished opinion, but it would be fair to say that the argument could not possibly succeed. That was the view taken by the Reviewer. 
On the evidence in this case, I find that it was not unreasonable for the Reviewer to have taken the view that it was futile to proceed with a review hearing on the evidence available to the applicant. Another reviewer might have taken a different view, and considered that more weight could have been given to Mr van Dalen's opinion, or that his letters could have been interpreted in some different way. But on a review of a decision made pursuant to a discretionary power it has to be shown that the Reviewer took a wrong principle into account, or that the ground for making the decision was demonstrable wrong. I find that the evidence at review does not go that far. 
For those reasons, the appeal is dismissed. 

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