Skip to Content, Skip to Navigation

Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters

Accident Compensation Cases

Howard v Accident Compensation Corporation (HC, 16/06/03)

Judgment Text

Hon Justice John Hansen
All three Respondents applied to strike out the Applicant's judicial review proceedings. 
In 1989 the Applicant cut his finger while opening a can of sardines. He apparently damaged nerves in the process. In 1994 accident compensation payments from the Accident Compensation Corporation (ACC) commenced. In 2002 ACC required the Applicant to provide “daily activity notes” in accordance with powers under the Injury Prevention, Rehabilitation and Compensation Act 2001 (the Act). Allegedly this was not complied with and the First Respondent determined to stop weekly compensation payments. On 27 August that year a further decision was made by ACC pursuant to ss 72(1)(f) and 117(3)(a) of the Act to decline to provide weekly compensation because the Applicant allegedly refused to attend a case conference with ACC for the purpose of resolving an injury rehabilitation plan. 
The Applicant applied for reviews of both of these decisions pursuant to the statutory right provided under the Act. 
Pursuant to s 260 of the Act the First Respondent has delegated its review function to the Third Respondent, which is a fully owned subsidiary of the First Respondent. The Second Respondent is a person engaged by the Third Respondent to conduct statutory reviews. 
On 2 September 2002 the Applicant requested an urgent hearing, and on 6 September Mr Winter was engaged as a reviewer. On 20 September he advised the Applicant that his next circuit visit to Greymouth was not until December 2002 and another reviewer would be assigned. That was a Mr John Greene, and the hearing of the review was allocated for 29 October 2002. 
On 25 October 2002 the Third Respondent advised that due to unforeseen circumstances Mr Greene could not hear the review. It appears the reason for that is that Mr Greene may have had some previous dealings with the Applicant's file. 
A new hearing date of 13 November 2002 was allocated which was confirmed on 1 November 2002. On 7 November 2002 the Applicant advised a Mr King of the Third Respondent that he could not attend the hearing of 13 November 2002 due to prior engagements, but that his wife would deliver his submissions. No formal application for adjournment was made. 
On 13 November 2002 the Second Respondent conducted the review hearing. At the commencement the Applicant's wife provided written submissions and she then left. 
On 16 November 2002 Mr Barker issued his decision declining the Applicant's review. 
On 21 November 2002 the Applicant faxed the First Respondent a letter concerning the review decision and asking for agreement to a rehearing. Later he requested a rehearing again and also asked the decision be varied in his favour. This was declined in a letter dated 6 December 2002. 
The Applicant appealed the decision to the District Court. The First Respondent proposed to him, in an open letter, a settlement of the present application for judicial review filed in December 2002 as a pragmatic solution but without admission of liability. The First Respondent proposed that it consent to an order in the District Court for a rehearing of the Applicant's review proceedings and that the present proceedings, and no doubt the appeal, be withdrawn. This would have meant that a further hearing could have been held at which the Applicant could have made himself available and presented his case. He refused this. The appeal has been heard in the District Court, the decision reserved and as at the date of this hearing has not been delivered. 
These were issued on 18 December 2002. The statement of claim is a lengthy document running to no fewer than 92 clauses. The cause of action is said to be under the New Zealand Bill of Rights Act 1990, and it is alleged the three Respondents were under an obligation to uphold the Applicant's right to the observance of the principles of natural justice in respect of his rights, obligations or interests protected or recognised by law. The breach is said to have occurred in the following: 
“91 In breach of the Natural Justice Obligation: 
the First Respondent failed to ensure that the Second and Third Respondents properly and fairly carried out their delegated statutory functions or duties in accordance with the principles of natural justice under Section 27(1) of the New Zealand Bill of Rights Act 1990 and failed under Section 137(1) of the Act to engage or ensure sufficient numbers of persons to be reviewers; 
the acts and/or omissions of the Second and Third Respondents were high-handed and unreasonable and prevented the applicant from receiving a statutory entitlement being weekly compensation that he may have had reinstated but for the flawed processes and procedures and a full and fair review and/or hearing pursuant to the Act; 
the Second Respondent failed to properly consult with the applicant pursuant to Section 141(2) of the Act but falsely wrote in his decision that the hearing had been set up in accordance with s 141; 
failed to act in a manner sympathetic to the fact that the applicant was without weekly compensation from the 20 August 2002; 
when the applicant presented reasons and raised concerns and issues, failed to listen to or alter determinations as a reasonable response and/or was recklessly indifferent to them; 
stubbornly and unreasonably persisted despite indications they ought not to; 
there has been a miscarriage of justice, arbitrariness, a denial of procedural and substantive fairness, lack of full and fair hearing, non disclosure, lack of fair opportunity to adduce additional material of probative value which may have deterred the reviewer from making the decision he did. The applicant continues to be prejudiced. ”
Before turning to the submissions, for the sake of completeness I record that at the hearing of this strike out application Mrs Howard attended at Court. She advised her husband was unwell and could not attend. She indicated, however, that she was prepared to make submissions on his behalf and spoke to her written submissions. Indeed, in the course of the hearing it became apparent that the submissions and research had in large part been prepared by Mrs Howard. 
At the end of the hearing she indicated to me there was a matter that had slipped her mind. She has subsequently supplied the Court with a further written submission dealing with that matter which will be turned to in due course. 
I also asked Mrs Howard to attempt to succinctly state the Applicant's complaints. This was because, like counsel, I found the statement of claim prolix and difficult to follow. I recorded her complaints as follows: 
The reviewer insisted on going ahead with the review hearing on 13 November despite being told the Applicant had other commitments and was not available. 
The reviewer refused to order an exchange of submissions before the hearing. 
There was bias on behalf of the review officer. 
In relation to the first I note that while a letter was lodged stating the Applicant would be unavailable, no formal application for adjournment was made. 
In relation to the allegation of bias, this is said to have arisen because at an earlier stage the review officer spoke to the Applicant and he identified himself as a Dispute Resolution Services Ltd manager. The Applicant alleges there was a strained conversation on 1 October when issues raised in his letter of 27 September, which seems to relate to his requirement for an investigative approach, were not resolved. He apparently was advised that he would be required to give evidence on oath at the hearing. 
The principles applicable to applications to strike out statements of claim are now well settled. Pursuant to r 186 it is for an applicant to establish that the statement of claim discloses no reasonable cause of action; is likely to cause prejudice, embarrassment, or delay in the proceeding; or is otherwise an abuse of process of Court. The applicable criteria were summarised in Attorney-General v Prince and Gardner [1998] 1 NZLR 262 at 267 as follows: 
Assume the pleaded facts are true. See, for example, Collier v Panckhurst (CA 136/97, 23/9/99); 
The causes of action are clearly untenable, R Lucas & Son (Nelson Mail) Ltd v O'Brien [1978] 2 NZLR 289
It is a jurisdiction to be exercised sparingly and only in a clear case where the Court is satisfied it has the requisite material, Gartside v Sheffield, Young & Ellis [1983] NZLR 37
The jurisdiction is not excluded because difficult questions of law require argument and decision, see Gartside (supra); 
One would add: 
Where there is a novel claim, particularly those relating to duty of care, the Court should be slow to strike out, Bryan v Philips NZ Ltd [1995] 1 NZLR 632
Southern Ocean Trawlers Ltd v Director-General of Agriculture & Fisheries [1993] 2 NZLR 53 (CA) is authority that the same principles apply to strike out applications in judicial review decisions. 
One would add that generally where a pleading may be saved by amendment such should be granted. 
Both Mr Barnett and Mr Stephens carefully took me through the statutory provisions relating to the hearing of reviews. However, essentially their argument is that s 133(5) is a complete answer to the Applicant's judicial review proceedings. 
It is quite clear that ACC has the power to delegate its functions pursuant to s 260 of the Act and in fact has delegated those review functions to the Third Respondent. The Second Respondent was engaged by the Third Respondent to conduct the statutory review. The Act provides to a dissatisfied claimant a right of review against the decision of the ACC in respect of entitlements. The Act further provides a right of appeal to the District Court Judge to a person dissatisfied with the review decision. From there, there is an appeal on a point of law to this Court. 
Section 137(1) requires the ACC to “engage as many persons as it considers necessary to be reviewers under this Part”. Subsection (2) requires “As soon as practicable after receiving an application for review, the Corporation must arrange for the allocation of a reviewer to the review … ”. Subsection (3) requires the Corporation to allocate a new reviewer “as soon as practicable after becoming aware of the need to allocate a new reviewer”
Section 138(1) provides that “A reviewer must act independently when conducting a review”. There is a specific, but limited, obligation in s 139 on the First Respondent to ensure the independence of the reviewer. Subsection (1) provides “The Corporation must not engage as a reviewer a person who is currently employed or engaged by the Corporation to make decisions on claims in a capacity other than that of reviewer”. In subsection (4)“The Corporation must not allocate a claim to a reviewer who discloses to the Corporation any previous involvement in a claim other than as a reviewer”. No breach of this appears to be claimed. 
Importantly s 133(5) reads: 
If a person has a claim under this Act, and has a right of review or appeal in relation to that claim, no court, Employment Relations Authority, Disputes Tribunal, or other body may consider or grant remedies in relation to that matter if it is covered by this Act, unless this Act otherwise provides. ”
Clearly all Respondents have difficulty in understanding what exactly the complaints of the Applicant were. However, based on the pleading, as they were understood, the following were their submissions. 
Firstly, it appears it is alleged the First Respondent failed to ensure the Second Respondent properly and fairly carried out its delegated statutory functions and duties. It is submitted on behalf of the First Respondent that the review officer has no statutory functions that are delegated to him/her under the Act, and in any event is required to act independently. 
The second claim appears to be that the First Respondent failed to ensure that the Third Respondent properly and fairly carried out its delegated functions. The functions said to be breached are not pleaded. However, Mr Barnett submitted that under s 137(2) and (3) the functions are to allocate a reviewer or replacement reviewer and no failure in this regard is alleged against the First Respondent. He pointed out that once the delegation has been made the process is independent. 
Next, it is expressly pleaded that the First Respondent is in breach of s 137(1) which requires it to engage as many persons as it considers necessary to be reviewers. No particulars of the breach are pleaded. One can possibly infer from this pleading that the review hearing did not occur as soon as the Applicant had hoped for. 
In any event, there is an implied obligation on the First Respondent under the Act to set review hearings within three months of review applications. This arises because pursuant to s 146 if the review hearing has not been heard within three months after the review application, and the applicant has not caused or contributed to that delay, there shall be a deemed decision in favour of the applicant. In this case it appears the starting date for such applications would be the First Respondent's letter of 30 August, so it can be seen by the date of the hearing the end of the three month period was being approached. 
The next complaint against the First Respondent appears to be an allegation of failure to observe the principles of natural justice. Mr Barnett submitted that the Act is a code and provides its own remedies by way of review, appeal to the District Court with a further appeal with leave to the High Court and to the Court of Appeal. He relied on s 133(5) set out above and submitted the Applicant has his remedies under the Act and is barred from pursuing this present claim. 
He pointed out, correctly in my view, that the decisions of 12 and 27 August to decline the Applicant's entitlements on the basis of unreasonable refusal or failure to comply with the requirements of the Act were made pursuant to s 117(3) of the Act. They are decisions which the Applicant has the right of review under the Act and right of appeal. Furthermore, he submitted that the review officer has a wide discretion to receive any evidence in making his/her decision and in terms of s 145(1) is required to “look at the matter afresh and put aside any policy and procedure followed by the Corporation”. He also pointed to the fact that the reviewers are required to comply with principles of natural justice pursuant to s 140(c). There is wide power to dismiss or modify or quash a decision or to make directions to the First Respondent (s 145(3)). 
He referred to the decision of Goddard J in ACC v Wellington District Court [2001] NZAR 265 where the statutory scheme of review and appeal were considered. That was an application to strike out a claim by ACC for judicial review of three decisions of the District Court. The Corporation had concurrently appealed to the High Court the three decisions of the District Court. Goddard J considered the review and appeal provisions of the Accident Insurance Act 1998 which for all material purposes are the same as we are concerned with in this case. In that case ACC asserted there had been a breach of natural justice in that the District Court had not given the ACC an opportunity to be heard on crucial aspects of his judgment and that the Judge had recalled in his decision in one appeal, relying on evidence he had heard in two other appeals. The ACC argued the matter in issue was “a process of decision making by the District Court Judge, not the substantive merits of the decisions themselves” Goddard J did not accept that a failure to observe natural justice could not equally amount to an error of law. 
Reference was also made to the decision of France J in Denzel v ACC (HC Wellington, CP135/02, 29/10/02). Having reviewed the statutory regime the Judge went on to consider the decision of Goddard J mentioned above. At paragraph 26 she noted that Goddard J decided that to allow the review proceedings to continue, either in tandem or consolidated with three separate appeals, would be to permit the statutory processes of appeal to be circumvented. The Judge agreed with the conclusion of Goodard J. 
In relation to the Second and Third Respondents, there are the further allegations they were high-handed and unreasonable and prevented the Applicant from receiving the weekly compensation that may have been reinstated but for four processes. There is an alleged failure to properly consult with the Applicant pursuant to s 141(2) of the Act. There is an allegation of a failure to act in a manner sympathetic to the fact the Applicant had been without weekly compensation since August 2002, presumably an allegation against the Second Respondent. There is then a further allegation, again presumably against the Second Respondent, that the Applicant's reasons and concerns and issues were not reasonably listened to or responded to. Then it is alleged, again presumably against the Second Respondent, that he stubbornly and unreasonably persisted despite indications they ought not to. The use of the word “they” may suggest this is an allegation against all three Respondents or the Second and Third Respondents. Finally there is a catch-all that there has been a miscarriage of justice, arbitrariness, a denial of procedural and substantive fairness, lack of full and fair hearing, non-disclosure, lack of fair opportunity to adduce additional material of probative value which may have deterred the review from making the decision he did. The Applicant continues to be prejudiced. 
In addition to submissions supporting those advanced by Mr Barnett, Mr Stephens spent some time addressing the defective nature of the pleadings. Quite clearly the submissions, expounded on in his written submissions, are undoubtedly correct given the statement of claim in this case. However, in view of the conclusion I have reached it is unnecessary to address them or the r 477 application. 
As indicated earlier, Mrs Howard, on behalf of the Applicant, spoke to written submissions lodged and also following the hearing submitted further written material. 
As noted above, the major thrust of the complaints seem to be threefold. Mrs Howard first referred to the fact that it was the duty of the First Respondent pursuant to s 165(1)(e) to administer Part 5 of the Act which deals with dispute resolution. It is then argued that pursuant to s 262 it is for the Corporation to carry out its duties in s 165. Further it is argued that while it may use a subsidiary corporation, that merely delegates the duties of the First Respondent but does not relieve the Corporation from ensuring that those duties are properly met. Mrs Howard complained that the First Respondent did not ensure that the review process was carried out in accordance with the Act. She complained of the actions of the Second Respondent who had previously been involved in a strained telephone conference conversation with the Applicant. The claim is that he should not have been a reviewer. They were not notified that he was to be the reviewer, and this only became apparent when Mrs Howard attended to deliver the written submissions on behalf of her husband that day. She said they had asked for other dates and that the actions of ACC were contrary to their own booklet. She submitted the Applicant had requested the reviewer to order an exchange of submissions but this had been declined. She said it appeared at one stage it had been offered but there had been no response to their letter of 4 October. She did accept that no formal application had been made for an adjournment. 
In relation to the Third Respondent she said it was vicariously responsible for the actions of the Second Respondent and was responsible for a perception of bias in that the Second Respondent was an ex ACC manager. She submitted the Act did not provide for any breach of natural justice and therefore these review proceedings were justified. She said for that reason s 133(5) had no application. Further she said that there were many disputes of fact. 
In further submissions Mrs Howard responded to an inquiry made by me in the course of the hearing. I asked if she would be happy with a rehearing which had earlier been offered, without admission of liability, by the Corporation. She replied in a letter dated 9 June 2003: 
“We have already had a rehearing of the ACC primary decision by way of appeal heard at the District Court on 13 May 2003. Section 155(2) of the [Injury Prevention, Rehabilitation, and Compensation Act 2001] provides; ‘An appeal is a rehearing … ’ (of ACC's primary decision only) It is not a de novo hearing. ”
She stated that a rehearing was not what the Applicant wanted. She said this would lead to some considerable delay and it may be months before a remedy could be provided. She said this would be unsatisfactory and she requested the Court to declare on this review that there be a “deemed decision” pursuant to s 146 in the Applicant's favour. She said judicial review remedies under the New Zealand Bill of Rights Act were broad and may include damages, compensation or declaration or some future looking relief. 
This, of course, overlooks the fact that if the application of a rehearing had been taken and been successful the weekly compensation entitlement could have been backdated. 
In ACC v Wellington District Court (supra) Goddard J set out at para [21]: 
… The question is whether there is an available remedy to correct such error. In the present case there is such a remedy by virtue of the right of appeal to this Court on a point of law, and subsequently to the Court of Appeal. And whilst it is vital that the supervisory jurisdiction of the High Court never be lightly ousted - where tailor-made appeal rights exist but are unused or unexhausted, the Court should not exercise its discretion to grant relief by way of judicial review. To do so is to unnecessarily allow the introduction of civil proceedings into a prescribed regime which clearly regards the delays and procedural complications of civil proceedings involved as undesirable. ”
France J reached a similar conclusion to Goddard J in Denzel v ACC (supra). She referred with approval to para [27] of Goddard J's decision, where the Judge said: 
The Act provides a complete statutory process by which to challenge decisions in respect of ACC claims, including a right to review by way of full rehearing in the District Court, followed by two further rights of appeal on points of law. Thus there is a comprehensive statutory framework of remedies available to ACC and to claimants by which to test decisions about cover. The effect of the privative clause is to ensure that this prescribed process is not circumvented or derailed by the introduction of other proceedings. For this reason, the wording of the privative clause, s 89(7) and of the 1992 Act (and its counterpart s 134(4) under the 1998 Act) is absolute. ”
France J went on to say at para [36]: 
The supervisory jurisdiction of this Court is not to be lightly ousted (see, for example, the discussion in Bulk Gas Users Group v Attorney-General [1983] NZLR 129 at 133-136; and Fulcher v Parole Board (1997) 15 CRNZ 222 at 245 per Thomas J, and 259-60 per Keith J). However, the nature of s 134(4) is such as to exclude judicial review where the alleged abuse of power can be resolved under the statutory processes. In addition to the District Court case which is authority for this proposition, Works Civil Construction Ltd v Accident Rehabilitation and Compensation Corporation [2001] 1 NZLR 721, decided in relation to s 89(7) of the 1992 Act, is to the same effect. King v ACC is distinguishable from the present case on the basis that in King no decision had been made at all so there was nothing to trigger the review/appeal processes. (The King approach was commended in Graham v ACC (M193-SW01, High Court Auckland, 15/2/02, Harrison J) in relation to s 101(4) of the 1982 Act.) It is necessary then to briefly consider the nature of the review/appeal process and what is in issue in this case. ”
It is important to note the proper distinguishing of King from cases such as the present made by France J. 
In Pearce v ACC (1991) 5 PRNZ 297 where Penlington J was considering the effects of s 101(4) of the 1982 Act and the ability of the plaintiff to bring a claim in negligence, there was reference with approval to the English decision of Jones v Dept of Employment [1988] 1 All ER 725 (CA). Dealing with a similar provision Glidewell LJ said at page 734 and 736: 
“The present action, if it were to proceed, would necessarily involve a challenge to the correctness of the adjudication officer's decision. That would be a challenge to its finality, by a route other than that provided by the statutory provisions themselves. In my view, this is prohibited by s 117 of the 1975 Act … Accordingly, on this ground I would allow the appeal. 
… in my view, it is a general principle that, if a government department or officer, charged with the making of decisions … is subject to a statutory right of appeal against his decisions, he owes no duty of care in private law. Misfeasance apart, he is only susceptible in public law to judicial review or to the right of appeal provided by the statute under which he makes his decision. ”
Penlington J concluded at page 318: 
“ … the combined effect of ss 27(3), 101(4), and the hierarchy of rights of review and appeals available under the Act excludes any right of action at common law for alleged negligence … . To allow the plaintiff to sue the defendant in negligence … would be to allow him to circumvent the statutory review and appeal provisions contained in [the 1982 Act]. ”
In Works Civil Construction Ltd v ARCIC [2001] 1 NZLR 721 Goddard J succinctly summarised the position at para [41] where she said: 
“In the present case Works should have moved to exercise its statutory rights of review and appeal if not satisfied with the outcome of Mr Howell's review. However, it chose not to do so and is now out of time. I am unconvinced by Mr Murray's submissions that the remedy Works now seeks would not have been obtainable through the prescribed review process. As I further observed in Accident Compensation Corporation v Wellington District Court, it is difficult to accept that any profound procedural error, such as failure to observe natural justice or the fettering of a discretion, does not equally amount to an error of law. Such allegations could therefore have been tried on a rehearing in the District Court, and then by way of appeal to the High Court and Court of Appeal if necessary. I am, therefore, of the view that the very matters now advanced as the subject of this review proceeding fell within the ambit of the statutory process. ”
I respectfully concur in the reasoning of Goddard J and France J set out in the passages above. I accept that in the earlier cases the Court was dealing with the Accident Rehabilitation and Compensation Insurance Act 1992 and the Accident Insurance Act 1998. However, for present purposes there is no significance between the privative clauses. I accept it is an expanded form of s 89(7) in the 1992 Act, but I am satisfied it carries the same meaning. Section 134(4) of the 1998 Act has other small variations, but again I am satisfied for present purposes it carries the same meaning. I accept that this Court's supervisory jurisdiction will not be lightly ousted, but I agree with those Judges that the effect of the privative clause is to exclude judicial review where the alleged abuse of power can be resolved under the statutory processes. 

From Accident Compensation Cases

Table of Contents