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Accident Compensation Cases

ACCIDENT REHABILITATION & COMPENSATION INSURANCE CORPORATION v WALSH (HC, 24/05/96)

Headnote - Brookers Accident Compensation Reports

Judgment Text

SALMON J:
On 27 July 1994 the respondent, Mr Walsh, had a fish bone lodge in his throat during lunch. Later in that day because he felt unwell he visited his doctor. The doctor completed an Accident Compensation Corporation (“ACC”) form and said that the best place to go was the Mercy Hospital, and he (the doctor) telephoned and made an immediate appointment for Mr Walsh to see a surgeon, Mr Dunn, for a gastroscopy. Mr Walsh drove from his home at Bucklands Beach to the Mercy Hospital and within 10 minutes was in the theatre.[(1996) 1 BACR 250, 251] 
Neither the doctor, nor the hospital, nor the surgeon advised Mr Walsh of any need to obtain the prior approval of the ACC before the operation was undertaken. He was given an account for $483 by the hospital and the hospital said it was up to him to take the matter up with the ACC. 
Subsequently, Mr Walsh telephoned the Corporation at Manukau City and in due course after the Corporation had received his claim form from his doctor he received a letter stating that he was accepted for cover. That, of course, occurred after the operation was undertaken and can have no effect on an interpretation of the legislation applicable to the events immediately preceding the operation. 
In the event, when he presented the account for the operation to the Corporation for payment, payment was declined. The reason given was that reg 11(1) of the Accident Compensation (Specialists Costs) Regulations (No 2) 1990 prohibited the Corporation making any payment in respect of certain specified procedures unless the treatment is provided in a licensed hospital and the prior approval of the Corporation has been obtained. The full text of the regulation is as follows: 
“(1) The Corporation shall not make any payment in respect of any procedure specified in Part II of the Schedule to these regulations unless— 
(a)
The treatment is provided— 
(i)
In a licensed hospital; or 
(ii)
In the case of items marked in the Schedule with an asterisk(*), in the registered specialist's rooms; and 
(b)
The prior approval of the Corporation to the performance of the procedure has been obtained. 
(2) Except as provided in subclause (3) of this regulation, the Corporation shall not give the approval referred to in subclause (1) of this regulation unless it is satisfied that it is necessary for the due restoration of the claimant to his or her principal economic activity or would enable the claimant to undertake remunerated employment that the treatment be provided. 
(3) The Corporation shall give the approval referred to in subclause (1) of this regulation where— 
(a)
The procedure is specified in Part II of the Schedule to these regulations under the heading ‘Plastic Surgical Procedures’; and 
(b)
The Corporation is satisfied, after obtaining such assessments as the Corporation considers necessary (which assessments shall be obtained at the expense of the Corporation), that without the completion of the procedure the claimant would not be able to participate in the normal social activities that might be expected for that claimant. 
(4) Nothing in this regulation shall apply in respect of— 
(a)
Any procedure in Part II of the Schedule to these regulations that is marked with a cross (+); or 
(b)
Any procedure that is discovered to be necessary to perform, and is performed, during the course of any approved treatment. ”
The Mercy Hospital is a licensed hospital and the issue in this case revolves around the requirement for prior approval of the Corporation. 
After his application had been declined Mr Walsh sought a review of the decision to decline. The review officer declined the application. From that decision Mr Walsh appealed to the District Court. In a decision dated 16 May 1995 [Walsh v ARCIC (1995) 1 BACR 122] the District Court allowed Mr Walsh's appeal.[(1996) 1 BACR 250, 252] 
Effectively, the District Court held that reg 11 must be read so as to provide for emergencies. The learned District Court Judge said that to avoid absurdity reg 11(1) must be read as if it began with words such as, “Except in a case of personal injury that is an emergency … ”
For the purpose of this appeal Mr Barnett, who appeared for the Corporation, did not contest that there was an emergency. He, however, argued that the words of the regulation are perfectly clear and that emergency or not, payment was barred unless the prior approval of the Corporation was obtained. He pointed out that the public hospital system provides an accident and emergency service which is available at no charge to persons who need such a service. And, indeed, it seems clear to me that if Mr Walsh's doctor and the Mercy had had a proper appreciation of the provisions of the regulation they should have directed him to that service. 
It will be seen from what I have just said that I find myself obliged to accept the submission of Mr Barnett for the appellant, as to the interpretation to be placed on the regulation. In my view the words are perfectly clear. This does not seem to me to be a case where it is appropriate to read words into the statute such as was done by the learned District Court Judge. The principles that apply to such a case have been referred to by our Court of Appeal in R v Wall [1983] NZLR 238, 240 and Has Cases Citing which are not known to be negative[Green] are set out in more detail in two decisions of the House of Lords. In Stock v Frank Jones (Tipton) Ltd [1978] 1 WLR 231; [1978] 1 All ER 948Has Cases Citing which are not known to be negative[Green]  Lord Scarman said at p 239; p 955: 
“If the words used by Parliament are plain, there is no room for the ‘anomalies’ test, unless the consequences are so absurd that, without going outside the statute, one can see that Parliament must have made a drafting mistake. If words ‘have been inadvertently used,’ it is legitimate for the court to substitute what is apt to avoid the intention of the legislature being defeated: per MacKinnon LJ in Sutherland Publishing Co Ltd v Caxton Publishing Co Ltd [1978] Ch 174, 201. This is an acceptable exception to the general rule that plain language excludes a consideration of anomalies, ie mischievous or absurd consequences. If a study of the statute as a whole leads inexorably to the conclusion that Parliament has erred in its choice of words, eg used ‘and’ when ‘or’ was clearly intended, the courts can, and must, eliminate the error by interpretation. But mere ‘manifest absurdity’ is not enough: it must be an error (of commission or omission) which in its context defeats the intention of the Act. ”
In Jones v Wrotham Park Settled Estates Ltd [1980] AC 74Has Cases Citing which are not known to be negative[Green] , in considering the circumstances which may justify reading words into a provision, Lord Diplock at p 105 said in reference to an earlier decision where words had been read in that: 
“First, it was possible to determine from a consideration of the provisions of the Act read as a whole precisely what the mischief was that it was the purpose of the Act to remedy; secondly, it was apparent that the craftsman and Parliament had by inadvertence overlooked, and so omitted to deal with, an eventuality that required to be dealt with if the purpose of the Act was to be achieved; and thirdly, it was possible to state with certainty what were the additional words that would have been inserted by the craftsman and approved by Parliament had their attention been drawn to the omission before the Bill passed into law. Unless this third condition is fulfilled any attempt by a court of justice to repair the omission in the Act cannot be justified as an exercise of its jurisdiction to determine what is the meaning of a written law which Parliament has passed.[(1996) 1 BACR 250, 253] ”
As indicated above, I am satisfied that this is not an appropriate case for reading words into the statute. The tests are not met. Furthermore, there is no ambiguity. The conclusion I have come to is in accordance with other decisions of the Accident Compensation Appeal Authority, the District Court, and the High Court. I refer to: Thompson v ACC ACA 67/93; Wellwood v ARCIC (1994) 1 BACR 18Has partially negative history or cases citing, but has not been reversed or overruled[Yellow] ; Tree v ARCIC ACA 173/95; Dravitski v ARCIC (1994) 1 BACR 12Has Cases Citing which are not known to be negative[Green] . Accordingly, the appeal is allowed. 
In my view Mr Walsh has justification for feeling upset at what has occurred in relation to his claim. He could hardly have been expected to know the provisions of the regulations. He was entitled to be guided by his general practitioner. During the course of the hearing Mr Barnett appeared to accept that there was some justification for a recommendation to the Corporation that in the circumstances of the case some way should be found of making a payment to Mr Walsh despite the fact that legally, for the reasons I have set out above, he is not entitled to payment. 
Mr Barnett expressly conceded that he did not seek costs against Mr Walsh because this was in the nature of a test case. There is, accordingly, no order as to costs. 

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