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Accident Compensation Cases

NEW ZEALAND SOCIETY OF PHYSIOTHERAPISTS v ACCIDENT COMPENSATION CORPORATION (HC, 08/03/89)

Judgment Text

JUDGMENT OF GALLEN J 
GALLEN J
On 3 February 1988, Quilliam J gave a decision on an application for review of certain decisions of the Accident Compensation Corporation with respect to fees payable to physiotherapists under the Accident Compensation Act 1982. He concluded that the applicants were entitled to a declaration that the Accident Compensation Corporation was in breach of its statutory duty to pay physiotherapy fees which were reasonable by New Zealand standards. Quilliam J was concerned with the interpretation to be given to s 75 of the Accident Compensation Act 1972 and in particular, whether a decision made by the Corporation on 1 August 1985 and decisions dependent upon that decision, were made in accordance with the provisions of the Act. Mr Wild has referred to 2 passages in the judgment where direct reference was made to those decisions. They are as follows:— 
“I consider that the decision of 1 August 1985 was made upon an improper basis and amounted to a refusal by the Corporation to exercise its statutory power and was accordingly bad. ”
(P.34 and further at 9.36); 
“It was conceded by Mr Upton that if the decision of 1 August 1985 is invalid then so must be the individual decisions made under it. My previous finding therefore makes it unnecessary to deal with this issue, but in any event the view I have formed as to the relief which ought to be granted also makes it unnecessary to do so. ”
The prayer for relief is set out in the statement of claim. It was in the following terms:— 
“6. RELIEF 
The relief sought in the statement of claim is— 
‘(a)
A declaration that the Corporation is in breach of its statutory duty to pay physiotherapy fees which are reasonably by New Zealand standards. 
(b)
An order quashing the 1.8.85 decision. 
(c)
An order quashing the decisions. 
(d)
An order directing the Corporation to reconsider the 1.8.85 decision and the fee decisions upon the correct statutory criteria. 
(e)
An order directing the Corporation to base its future fee decisions upon the correct statutory criteria. 
(f)
An order quashing the Corporation's decisions of 11 April 1986 and 19 May 1986 and all subsequent decisions consequent upon them, not to pay the cost of silicon gel and silicon oil. 
(g)
The costs of and incidental to this proceeding. ’”
As I have already indicated, the declaration sought by sub-para.(a) was granted. Quilliam J was asked to grant relief in terms of the other relief sought and his view on this aspect of the matter appears on p.37 of the decision. 
“In this case, however, Mr Wild has strongly urged that the other orders (apart from an order for reconsideration of the decision of 1 August 1985 which was abandoned) should be made because the plaintiff is not confident that the Corporation would act upon the basis of a declaration alone. In particular he sought an order setting aside the individual fee decisions. 
I do not think this course is appropriate. I can understand the plaintiff's apprehension in view of the contemptuous attitude of the Corporation to the decision of the Appeal Authority already referred to. Mr Upton has, however, given an undertaking that the Corporation will, on this occasion, act on the basis of a declaration alone and I am prepared to accept that undertaking. In view of what has happened prepviously, however, I think I should reserve the plaintiff's position in case that should become necessary. 
With regard to the individual decisions it would be a practical impossibility to direct a reconsideration. There have been many thousands, perhaps millions, of such decisions. Probably only a very few of those, if reconsidered, would result in benefit to the particular physiotherapists because, for the most part, the physiotherapists have received their full fees and it was the patient who was disadvantaged by having to pay the surcharge. To attempt to retrieve that situation would result in an administrative morass and I can see no reason why it should be attempted. It was suggested that there should be an order for reconsideration limited to those cases where the person or persons affected requested it. I do not think that would be appropriate. Perhaps only a very few would become aware of the right to make the request and this would seem to be unfair to the vast majority who did not. Alternatively, some person or group may make it their business to mount a campaign to persuade people to apply and the result would be chaotic. I think it is better to let matters rest where they are. ”
One matter remains outstanding, arising out of the dispute between the parties. At the time of the application and the judgment, a number of disputes as to fees affected by the judgment were extant, either subject to an application for review pursuant to s 101 of the Accident Compensation Act 1982 or under appeal to the Accident Compensation Appeal Authority pursuant to s 107 of the Act. 
Mr Wild contends that those disputes should be determined in accordance with the judgment of Quilliam J and on the basis that the decision of 1 August 1985 and implementing decisions thereunder, are invalid and do not determine the issue. The Corporation taking into account the reasons given by Quilliam J for not making the subsidiary orders sought in the relief, contends that the judgment must be read as not being retrospective in nature and submits that the applications and appeals concerned should be determined on the basis of the criteria in force at the time they were initiated, that is, before the judgment of 3 February 1988. 
In expressing the views which he did, Quilliam J was clearly influenced by practical considerations. It was said that some millions of individual decisions had been made under the regime which was called in question and it would have been impossible administratively to review all of these. I do not think however that that means that the judgment was to be considered as operating in futuro only. The Judge has concluded that as a matter of law, certain approaches to the determination of fees could not stand. For practical reasons, he was not prepared to go so far as to say that all decisions made on that wrong basis should be quashed. I do not overlook that he rejected the suggestion that there should be an order for re-consideration limited to those cases where the person or persons affected requested it. He was not prepared to make such an order because he considered that that would be unfair as between those persons who were aware of the situation and those who were not. In my view however, there is a considerable distinction between those persons who may after the event, consider the possibility of retrieving the situation and those whose refusal to accept wrong conclusions are extant and awaiting determination. The policy decision out of which the outstanding disputes arise, has been specifically held to be bad. To allow it therefore to determine outstanding matters, is to perpetuate a wrong decision and to conclude disputes on an approach held to be incorrect. 
In my view therefore, the outstanding applications and matters under appeal, should be determined on the correct basis as defined by the judgment of Quilliam J delivered on 3 February 1988. That is, that the decision of 1 August 1985 was wrong. 
Mr Upton submitted that because there is specific statutory power vested in the Corporation to re-open earlier decisions under s 100 (3) of the Act, the Corporation might very well be faced with a very large number of applications to re-open previous decisions and that such a course is directly contrary to the conclusion of Quilliam J who was not prepared to limit an order for reconsideration to those cases where the person or persons affected requested it. I appreciate the significance of the submission and the difficulties which might arise, but I do not think that this conclusion is contrary to the views expressed by Quilliam J. What he was not prepared to do, was to make a general decision in advance that all persons who requested reconsideration of the decisions which affected them, should have those decisions reconsidered on the basis of the law as defined by the Judge. 
I do not think that the Court would have had any power to make such an order. It would be to intrude upon the province of the Corporation itself. Equally however, I do not see how the Court could have had power to conclude that a wrong decision should have an effect, albeit limited by time, for purely practical reasons. 
There will therefore be orders that the defendant reconsider upon the correct criteria, those fee decisions which at the date of judgment were either — 
(a)
Subject to an application for review pursuant to s 101 of the Accident Compensation Act 1982; or 
(b)
Under appeal to the Accident Compensation Appeal Authority pursuant to s 107 of the Act. 
Counsel may make submissions as to costs. 

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