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Accident Compensation Cases

NEW ZEALAND SOCIETY OF PHYSIOTHERAPISTS INC v ACCIDENT COMPENSATION CORPORATION (HC, 26/05/88)

Judgment Text

JUDGMENT OF ELLIS J 
ELLIS J
This is an application for an order in the nature of mandamus, directing the Defendant forthwith either: 
(a)
To increase the physiotherapists annotation line for a routine ordinary hour's service to $16.00 (inclusive of GST) and the other physiotherapists annotation lines and allowances proportionately: 
(b)
If it wishes to continue using the “bulk-billing” provisions of Section 76(6) of the Accident Compensation Act (1982) to pay the physiotherapists direct to the physiotherapists in accordance with Section 75(1)(b) of the Act as interpreted in the judgment of the Honorable Mr Justice Quilliam delivered in this proceeding on 3 February 1988. The Plaintiff also seeks the costs of this application. 
This action sought review of decisions of the Accident Compensation Corporation (the Corporation) in respect of fees payable to physiotherapists under the Accident Compensation Act 1982. That issue concerned whether the Corporation was discharging its statutory duty to pay the cost of physiotherapy treatment for people covered by the Accident Compensation claim. The application was heard by Quilliam J, who delivered his judgment on 3 February 1988. The Judge made a declaration that the Corporation was in breach of its statutory duty to pay physiotherapists fees, which are reasonable by New Zealand standards and so was in breach of its statutory obligations as defined by Section 75(1)(b) of the Act. 
At the conclusion of the hearing before Quilliam J, Mr Upton gave an undertaking on behalf of the Defendant that it would act upon a simple declaration and that it was unnecessary for the Judge to grant any specific relief. He accordingly reserved leave for the Plaintiff to apply further, should that become necessary. 
Instead of accepting the declaration and proceeding in accordance with it, the Defendant filed an appeal and an application for stay of judgment on 15 March 1988, and 16 days later filed an affidavit in support of its application. The application was heard by Eichelbaum J on 5 May 1988 and he delivered his judgment, refusing a stay the following day. It is not necessary to canvass the reasons for the decision except to say that I respectfully agree with him. It must follow that the Plaintiff is entitled to immediate relief in terms of the judgment. 
Nor is it appropriate to traverse the matters fully set out in the judgment of Quilliam J. 
In August 1981 the Corporation established a system for paying physiotherapists and the significant features of this decision summarised in the judgment of Quilliam J (page 6) are: 
“(1)
The basic feature was to be a set fee for a routine or standard service. 
(2)
The routine or standard service was to be a 15 minute treatment on a one-to-one basis. 
(3)
Any claim for a fee up to the set fee (or annotation line) for a routine or standard service would be met without further enquiry. 
(4)
Any fee claimed in excess of the annotation line required to be justified by an annotation describing the treatment given. 
(5)
Where there was appropriate annotation and the fee charged was reasonable by New Zealand standards it would be met. 
(6)
The annotation line would be reviewed on a regular basis. ”
In August 1985 the annotation line was fixed by the Corporation at $11.50 and certain changes were introduced. These too are summarised in the judgment of Quilliam J (page 8): 
“(1)
The Corporation insisted that the large majority of services were to be regarded as routine or standard: an estimated 95% of such. 
(2)
The limitation of fees above the annotation line were reduced to three stated categories: namely, multiple pathologies, emergency out of hours treatment and domiciliary services. ”
It is common ground that these changes were designed to try and curb an increasing burden on the Corporation. 
These proceedings arose out of the fact that the annotation line so fixed has remained unchanged ever since, with only isolated exceptions. 
In summary, the Plaintiff's position is that the annotation line should at the present time be in the order of $15.91 (including GST). This figure is not contested on the affidavits. The Managing Director of the Corporation however deposes that an increase to $15.20 would cost the Corporation in the order of $2.3 million over the four months 1 April to 31 July 1988. That date being chosen as the possible time span for the disposal of the appeal against the decision of Quilliam J. 
Mr Upton submitted that the relief granted at this stage should be in a form that would oblige the Corporation to receive claims for physiotherapy fees from patients treated which the Corporation would then be obliged to meet, subject to its assessment under Section 75(1)(b) as to what was reasonable by New Zealand standards. This suggestion could not be faulted as a matter of law by Mr Wild, but he immediately drew attention to the other considerable administrative difficulties that would be involved and the hardship that could be caused to individual claimants, involving time trouble and delay in the patients actually being reimbursed for his or her outlay and that this was to be viewed against the purpose of the Act to provide treatment to those injured by accident, free of cost to them and in a way that facilitated treatment and recovery from injury. 
On my short acquaintance with the facts of this case, there is much to be said for Mr Wild's submission. 
On the other hand, I understood from Mr Upton that the Board of the Defendant is to meet on 1 June to consider the recently published report of the Law Commission and a proposal put to it by Mr Morel, the Deputy Managing Director of the Corporation, involving a revised approach to the method of payment to achieve the statutory purpose of Section 75 of the Act. Mr Upton submitted that I should adjourn the present application for a fortnight to await the Board's decision on Mr Morel's recommendations. Mr Wild would not agree to such an adjournment and submitted that he could not anticipate any relief being forthcoming for his clients from that particular meeting. Again, I refer to my limited acquaintance with this matter, but I think that on this point too, there is ample support for Mr Wild's reservations. 
The position is further complicated by the fact that the remuneration of physiotherapists is linked in indirect ways with payment for other services made by the Corporation pursuant to its statutory function. It is impossible for the Court to assess the full ramifications of this on the present motion, but it does give considerable weight to Mr Upton's submission that the Court should not be involved itself in the fixing of physiotherapists remuneration, which is so patently a matter within the competence of the Corporation. 
In my view there are therefore weighty considerations on either side, but in my view on the present application I should continue the thrust of the decision of Eichelbaum J that the Plaintiffs are entitled to relief now, notwithstanding the pending appeal. I do not consider the proposals put forward by Mr Upton on behalf of the Corporation are satisfactory, as they simply involve an extension of the present dispute and probably would do nothing but exacerbate the problem raised by the proceedings. On the other hand, I can see that simply increasing the annotation line to $16,100 may have repercussions that I can not fully appreciate at this moment. 
I therefore make the following order: 
I direct the Defendant forthwith either: 
“(a)
To increase the physiotherapy annotation line for a routine ordinary service to $15.50 (inclusive of GST) and the other physiotherapy annotation lines and allowances proportionately. 
OR 
(b)
To pay the physiotherapists fee direct to the physiotherapists, in accordance with Section 75(1)(b) of the Act, as interpreted in the judgment of Quilliam J, delivered herein on 3 February 1988. ”
This order is to lie in Court for 7 days from today's date in the hope that the Corporation will be able to come to an accord with the Plaintiff in the meantime. 
The Plaintiff will be entitled to costs of this application, which I fix at $750.00. 
I expressly reserve leave to the parties to apply to vary the terms of the order I have made, as circumstances may well require modification. 

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