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Accident Compensation Cases

Accident Compensation Corporation v F (HC, 25/09/90)

Judgment Text

JUDGMENT OF HOLLAND, J. 
Holland J
This appeal brought by the Accident Compensation Corporation raises the issue as to whether a person suffering mental illness by way of a reactive depression or neurosis consequent upon what would ordinarily be described as an accident to another, is entitled to compensation under the Accident Compensation Act 1982. 
Section 27 of the Act provides that the Act is a code. The section prohibits proceedings being brought in any Court in New Zealand where any person “suffers personal injury by accident” or death by accident for damages arising directly or indirectly out of such injury or death. The Act defines “personal injury by accident”. In general, the scheme provides that if a person is injured in circumstances in circumstances whereby a claim for compensation might be made under the Act, that person is barred from claiming damages for that personal injury. If the claim is not one for personal injury by accident as defined in the Act there is no bar to the claimant exercising whatever rights the common law or any other statute might give. 
The facts in this case are relatively straightforward and not in dispute. In 1983 the respondent's wife underwent gynaecological surgery as a result of which sexual relations between the respondent and his wife became impossible. It is common ground that the respondent's wife suffered personal injury by accident by medical misadventure. 
The respondent's claim for compensation was presented to the Corporation on the basis that he had sustained a “psychological reaction and mental suffering from, his wife's disability”. It was not in issue on the appeal before this Court nor does it appear to have been at issue at any stage that the respondent's emotional suffering is the sequelae of the gynaecological procedure suffered by his wife in 1983. 
The claim was declined by the Corporation on the ground that the respondent had not suffered “personal injury by accident”. This decision was upheld by a Review Officer but reversed on appeal to the Accident Compensation Authority in a reserved decision delivered on 5 October 1989. 
The Corporation, with leave granted by the appeal Authority at the time of delivery of its decision, appeals to this Court. 
There have been many cases involving the question of what is meant by the phrase “personal injury by accident” in the Act but the appears to be the first time that this court has been asked to consider whether a person suffering mental illness as a result of a physical accidental injury to another is eligible to receive compensation. 
The scheme of the Act is unique. It was first introduced by the Accident Compensation Act 1972 following a report of a Royal Commisssion of Inquiry made in December 1967 followed by much public debate both in and out of Parliament. In many matters of detail and some of policy the Act departed from the recommendations of the Royal Commission. 
Although there is now an extended definition of “personal injury by accident” in the Act, it is a phrase which has no exclusive definition in the statute. In delivering the judgment of the Court of Appeal in Willis v Attorney-General (1989) 3 N.Z.L.R. 574, Cooke P. said at p577:- 
‘Personal injury by accident’, is an integrated phrase, to be seen and applied as a whole and without an unnatural breaking down which would rob it of the impact it makes as a whole. Perhaps it can be called holistic, in that the sum is more than the parts. But we are concerned with the ordinary use of language, not philosophical concepts. ”
One must assume that the lack of an exhaustive definition in this Act itself described as a code was deliberate, leaving it to the Courts to define he extent and limits of the phrase in its context, no doubt influenced to some extent by policy consideration as well as legal principle. 
Section 2 of the Act provides that “personal injury by accident”. unless the context otherwise requires:- 
“(a)
Includes - 
(i)
The physical and mental consequences of any such injury or of the accident: 
(ii)
Medical, surgical, dental, or first aid misadventure: 
(iii)
Incapacity resulting from an occupational disease or industrial deafness to the extent that cover extends in respect of the disease or industrial deafness under sections 28 and 29 of this Act: 
(iv)
Actual bodily harm (including pregnancy and mental or nervous stock) arising by any act or omission of any other person which is within the description of any of the offences specified in sections 128, 132, and 201 of the Crimes Act 1961, irrespective of whether or not any person is charged with the offence and notwithstanding that the offender was legally incapable of forming a criminal intent: 
(b)
Except as provided in the last preceding paragraph, does not include - 
(i)
Damage to the body or mind caused by a cardio-vascular or cerebro-vascular episode unless the episode is the result of effort, strain, or stress that is abnormal, excessive, or unusual for the person suffering it, and the effort, strain, or stress arses out of and in the course of the employment of that person: 
(ii)
Damage to the body or mind caused exclusively by disease, infection, or the ageing process: ”
In construing the phrase it must be interpreted in its context in this particular and unique statute. There is danger in relying on definitions of the words in the context of claims for personal injuries decision of the appeal 
Authority in this case deals with decisions of the Courts in such cases, no doubt because the argument of counsel for the respondent relied substantially on such authorities. 
At common law a claim by a person in the position of to respondent would fall to be determined under the principles commonly described as remoteness of damage or the extent of the duty of care owed by an alleged wrongdoer. I have not been persuaded that there is any good reason to determine the question of the limit or extent of the phrase in this Act in exactly the same manner as a Court would adopt in determining the limit or extent of the liability of a wrongdoer causing injury directly or indirectly to another. 
Sections 65 and 82 of the Act make specific provision for payments of compensation of varying types to dependant spouses, children and other dependent spouses, children and other dependants “where an earner dies as a result of personal injury by accident in respect of which the earner had cover”
I am not able to find anything else in Act which indicates an intention to compensate any person other than the person who has “suffered” the accident or who has provided services to such a person and who should be paid for those services such as doctors, physiotherapists and the like. The special provisions in the case of death, of course, relate primarily to the financial loss of the dependants and bear no relation to personal injury to the dependant. 
In the present case the respondent is suffering mental consequences flowing from an accident to his wife. It is significant that the words used in s2(l)(a)(i) are:- 
“(i)
physical and mental consequences of any such injury or of the accident. ”
(The underlining is mine)
It was submitted by counsel for the appellant that the use of the word “the” as distinct from the word “an” must indicate that the accident is the accident which caused the personal injury. He then submitted that as physical and mental consequences only come within the statutory definition by virtue of the enlarged definition in s.2(a)(i), the phrase “personal injury by accident” must be defined as having its ordinary natural or primary sense. This is what was held by the Court of Appeal in Willis v Attorney-General (supra) where it is said at p576:- 
“Section 2(l) of the Act has a definition of ‘personal injury by accident’ in an enlarging or what lawyers sometimes call an extensory form. By para (a)(i) the expression includes ‘The physical and mental consequences of any such injury or of the accident’ but the particular wording of subpara (i) is such that these consequences are not brought in unless there has been ‘personal injury by accident’ in the first place. The other extending provisions, for instance the clause covering medical misadventure, are not relevant in the present case. One is thrown back therefore on the basic phrase ‘personal injury by accident’. This is undefined and so left to bear its ordinary and natural meaning in the context of the Act. ”
Mr Squire, for the appellant, advanced this argument further to submit that personal injury by accident in its ordinary natural or primary sense excludes reference to physical and mental consequences and cannot include accidents, the only consequences of which are emotional or mental ones. I am not persuaded that this problem can be resolved by adopting such a narrow restricted meaning of “personal injury”
In Auckland City Council v Blundell (1986) N.Z.L.R. 732 Cooke P., in giving the judgment of the Court of Appeal, said at p738:- 
“If compensatory damages were being claimed for the alleged false imprisonment and arrest, either in the City Council building or in the police station, it may be that a question would have arisen whether or not that was a claim for damages arising directly or indirectly out of personal injury by accident. Such a question might then have had to be referred to the Accident Compensation Corporation under s.27(3) and (4), although counsel voiced some scepticism about the practical value and the expedition of a reference in this kind of case. 
We think it very arguable - no more need be said for present purposes - that a claim for what Mr Temm described as the emotional effects of an injury or accident falls within the first part of the non-exhaustive definition of ‘Personal injury by accident’ in s.2(1) of the 1982 Act. That is to say, within para (a) such consequences may well be ‘mental’ consequences if they are not physical ones. The words ‘The physical and mental consequences of any such injury or of the accident’ may have been intended by the legislature as a comprehensive expression covering all consequences to the victim's person. ”
When the matter aqain came before the Court of Appeal in Green v Mathieson (1989) 3 N.Z.L.R. 564, Cooke P. said at p572:- 
“On the other hand, having heard the point fully argued, we adopt definetly the opinion indicated provisionally in Blundell at p738 739 that, once there is a personal injury by accident within the scope of the Act, all the emotional or psychological effects fall within the statutory words ‘The physical and mental consequences of any such injury or of the accident’. Those words are not limited to mental consequences identifiable by some particular medical or psychiatric description, nor to what is often called shock or trauma. Parliament cannot have intended fine distinctions in this area. We adopt the following passage in the judgment of Henry J. in Dandoroff v Rogozinoff (1988) 2 HZLR 588 at p598: 
‘ … I find it difficult as well as artificial to attempt to isolate out from the effects of an intentional tort those elements of humiliation, embarrassment, wounded feelings, righteous anger, on the one hand, and any other mental consequences of an injury or an unwanted or untoward event on the other hand. Precise classification of feelings and of mental consequences is not feasible, and there must nearly always be the elements of overlap which do not allow for finite distinction, an exercise which in my view would be quite unrealistic and one I very much doubt was envisaged by the legislature as being a residuary function of the Court in its common law jurisdiction. ’
The thrust of the Judge's words is just as applicable to unintentional torts as to intentional ones. ”
In Blundell's case and in Green's case, and indeed in Dandoroff's case, the Courts were dealing with claims where the accident was one directly causing damage to the plaintiff even although there may have been no physical injury. However Henry J. in Dandoroff's case made observations of some significance to this case when he said at p599:- 
“Part of the philosophy is to provide for the compensation of injured persons whether or not the injury arises from a wrongful or tortious act of another. It is concerned with injury resulting from some incident or happening which can itself be classed as an accident, and understandably includes mental as well as physical consequences, the former having long been recognised as being a legitimate component of general damages recoverable in tort. To confine the inquiry solely to whether the injury was unwarranted from the viewpoint, of the person injured is in my view erroneous: the injury must be one which has resulted from an accident, properly so described. 
It is not practical to attempt to define the phrase any further, an exercise which the legislature has not undertaken, and the words must be given their ordinary and natural meaning but in the context of the Act and its purposes. The facts of a particular case must be ascertained, and the inquiry then made whether the person has suffered personal injury as the result of an accident. In some cases such as battery the answer must obviously be in the affirmative, in others such as defamation it must equally obviously be in the negative. In cases of doubt, that is, where a question arises, the resolution is undertaken by the Accident Compensation Corporation (s.27(4)). I do not think it relevant to ascertain whether the person will or will not receive an award or payment from the corporation. There may well be some consequences, physical or mental, which are not ccmpensatable under the Act (see s.79), but s.27(1) nevertheless effectively bars common law proceedings for recovery of damages for those consequences. A major purpose of the Act is to substitute in its area of concern a new regime for the common law right to claim general and aggravated damages for tort, one which provides its own formula for compensation, both as to nature and extent. ”
Section 26 of the Act defines its purposes, one of which is stated in s.26(1)(c) as being:- 
“To make provision for compensation of persons who suffer personal injury by accident and certain dependants of those persons where death results from the injury. ”
Section 26(2) provides that all persons who suffer injury by accident in New Zealand or to a limited defined extent outside New Zealand shall have cover under the Act. The bar to common law proceedings contained in s.27 applies to “any person who suffers personal injury by accident … or dies as a result of personal injury so suffered … ”
The compensation provisions contained in ss.57, 59 and 63? do not specifically state that the claimant must have suffered personal injury by accident but many of the other compensation provisions do and in particular ss.78, 79 and 80 which provide for lump sum compensation for non-economic losses. 
What is meant by “personal injury”? The position has to some extent been clarified by the decisions of the Court of Appeal last year in Green v Matheson and in Willis v Attorney-General. Neither case, however, deals directly with the point presently before the Court. In Green v Matheson, it was confirmed that claims for exemplary damages arising out of personal injury by accident were not debarred by the Act. It was also held in that case that claims for damages for what was really medical misadventure severally described as trespass of the person, breach of fiduciary duty or negligence were, in so far as they sought compensatory damages, within the words “the physical and mental consequences of any such injury or of the accident”, and were barred by the Act. 
Willis v Attorney-General was a different matter. The claim that was brought there was false imprisonment, malicious prosecution, and negligence, arising from the detention of the appellants by customs officers following the seizure of cars imported by them into New Zealand. The Court there held that claims for damages for false imprisonment,or abuse of rights amounting to false imprisonment,(which the Court considered added nothing) were not barrel by the Act. 
At first sight there is some difficulty in applying this decision in the light of the contemporaneous judgment in Green v Matheson referred to in the decision. 
In Green v Matheson the Court of Appeal held that whether there has been a personal injury by accident must be judged from the point of view of the victim. It had earlier held at p571: 
“In the context of an Act dealing with compensation for personal injuries, it is obvious that ‘personal injury by accident’ refers to a mishap causing harm to the person. It cannot include harm to financial or property interests or reputation, even though the damages recoverable for that kind of harm may include include in some cases redress for injured feelings or disappointed expectations. For instance the Act can have no bearing on actions for damages for breach for damages for breach of ordinary commercial contracts or for defamation. No one would normally describe such events or their consequences as personal injuries by accident and the purpose of the Act clearly does not warrant a strained interpretation bringing them within that description. ”
With respect, it would appear that the unjustified detention of the appellants of the appellants by the customs officers in Willis v Attorney-General was a “mishap causing harm” to the appellants. The Court of Appeal appears to have considered that any personal injury of a mental nature suffered by the appellants in those circumstances was merely peripheral, as a matter of policy should be excluded from the Act. Cooke P. said at p579:- 
“Accordingly we hold that claims for damages for false imprisonment or abuse of rights amounting to false imprisonment (which appears to add nothing) are not bared by the Act. If a plaintiff were to claim damages (other than exemplary) for assault or battery, the position would be different. Such claims are barred, but they are not made by the plaintiffs here. If the detention of a plaintiff has been accompanied by physical injuries, damages cannot be claimed for those or for the pain and suffering they have caused. 
No doubt there is a grey area, in which it can be argued that distress or humiliation or fear for which a plaintiff alleging false imprisonment seeks damages amounts to or overlaps with personal injury by accident. But to make the Act work as Parliament must have intended (cf New Zealand Labourers' Union v Fletcher Challenge Ltd (1988) 1 NZLR 520; Northland Milk Vendors Association Inc v Northern Milk Ltd (1988) 1 NZLR 530) we think that the clear rule must be adopted that any claims for any kind of damages for false imprisonment alone and for any distress, humiliation or fear caused thereby are outside the scope of the accident compensation system and unaffected by the Act. If such mental consequences have been caused by both false imprisonment and assault or battery, a plaintiff can still claim damages for them. It is enough if the false imprisonment has been a substantial cause. 
Trial judges will adopt a common sense approach, guided by what is within the broad spirit of the accident compensation system and what is outside it. Any difficulties are likely to be more theoretical than practical. ”
In adopting what it described as a clear rule in Willis v Attorney-General the Court of Appeal appears to have adopted a policy point of view in deciding the limits of the accident compensation system. I am satisfied that such a limit is required to be imposed in the present case. The question must be asked as to whether parliament, in adopting the accident compensation scheme as amended in 1974, intended to provide compensation for persons who suffered mental injuries arising from as accident which caused no physical injury to that person but arose from an “accident” to another. 
One cannot help but have considerable sympathy for the respondent in his situation, but the indirect consequences on the mental health of many persons who merely were observers of accidents, or are otherwise associated with the victims of accidents, make it highly unlikely that Parliament intended such persons to be compensated. If the mental injury is suffered as a result of the actions of a wrongdoer it is possible that in some circumstances a right of action might exist at common law but compensation under the Accident Compensation Act is not available. 
In my view the injury suffered by the respondent is reactive depression or neurosis due to his wife's inability to have sexual relations with him. Such an event was “an unlooked-for mishap”, or, as was said in Green v Mathieson at p571:- “a mishap causing harm” to the respondent. In this case the wife's inability was caused by an “accident” to her but the same effect might have occurred to the respondent if his wife had, for psychological or even deliberate reasons, failed or refused to permit him to have sexual relations. I am convinced that in the latter events the respondent would not be regarded as having suffered a personal injury by accident. I can find no logical or persuasive reason to distinguish those occurrences from what actually occurred in this case. The respondent's wife suffered personal injury by accident because of the physical injury to her. If she had developed mental consequences she would have been entitled to compensation because they would have been consequences of such injury of the accident. 
The respondent may have suffered personal injury in his reactive depression or neurosis. It may be that literally this was a consequence of an “accident” to the extent that he could not have sexual relations with his wife. Such an accident was not, however, one of the type included in the holistic definition of the phrase in the sense that the phrase may be more than or different from the parts (see Willis v Attorney-General at p577). 
The conclusion I have reached is supported by the use of the word “the” instead of “an” in s.2(1)(a)(i). The “personal injury” referred to must mean a physical injury of some kind. If the claimant has suffered a personal physical injury by accident will be compensatable, but where as here there has been no physical injury to the respondent, even by the merest physical touch, he cannot be said to have suffered personal injury by accident so as to allow his mental illness to be compensatable. In other words, the mental consequences must be parasitic on a contemporaneous or earlier physical injury to the claimant. 
The notice of motion on the appeal seeks an order quashing the determination appealed against and directing that the matter be reheard by the Appeal Authority on the basis of the correct principles. Section 111(5) of the Act empowers the Court to confirm, modify or reverse the order or decision appealed against. 
The decision of the Appeal Authority allowing the appeal by the respondent against the decision of the Corporation and its Review Officer declining the respondents' claim is reversed and an order is made that the Corporation was correct in declining the respondents' claim. There is no point in referring the matter back to the Appeal Authority. 
This was a different matter involving novel issues relating to the interpretation of the Act. In the circumstances I make no order as to the costs of this appeal. 

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