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Accident Compensation Cases

O'Neill v Accident Compensation Corporation (HC, 14/12/09)

Judgment Text

Heath J
On 27 October 2006, the District Court dismissed an appeal brought by Mr O'Neill, arising from declinature of his claim for cover under the accident compensation legislation. Cover had been sought for personal injury suffered through medical misadventure. On 29 June 2009, Asher J gave leave for Mr O'Neill to appeal to this Court against the District Court decision. 
Asher J granted leave to appeal on two questions: 
Did s 142 of the Injury Prevention, Rehabilitation and Compensation Act 2001 (the Act) [set out at para [40] below] permit counsel for Professor Windsor and the Auckland District Health Board to be present and make submissions at the review hearing? 
If not, what are the consequences of this, and, in particular, should the appeal be allowed and the review decision modified or quashed? If so, what indications of effect should be given under s 161(2) of the Act? 
It is clear that Asher J was mistaken when he referred only to “the review hearing” in both of those questions. The issue also relates to the appeal hearings before the District Court. I proceed on that basis. 
As will become apparent, the history of this proceeding, from the time at which the Accident Compensation Corporation (ACC) made its initial decision to decline cover, does not reflect well on the administration of justice in this country. A series of systemic procedural irregularities have brought about significant jurisdictional problems, at almost every stage in the proceeding. It has not been easy to untangle the procedural web in which Mr O'Neill has been caught. 
Sadly, my deliberations have led me to the view that I cannot resolve the appeal at this stage. Further submissions will be required on three points on which the parties have not yet had an opportunity to be heard. 
A procedural quagmire 
Mr O'Neill was unwilling, at the hearing before me, to limit his submissions to the points on which Asher J gave leave to appeal. At that stage, I had not appreciated fully the reasons why Mr O'Neill felt it necessary to go beyond those points. Having now reviewed the evidence more thoroughly, I am glad that I gave Mr O'Neill the opportunity to address me on wider issues because they have assisted me in my overall consideration of his appeal. 
In order to understand how Mr O'Neill's claim for cover reached this Court, I must set out the background in some detail. My summary is necessarily broad and incomplete. It does not deal explicitly with many of the material facts or submissions on which Mr O'Neill addressed me. Given the nature of the issues on which I shall be seeking further submissions, I have stated the factual background as neutrally as possible. 
On 14 December 1994, Mr O'Neill was seen by Professor Windsor in the outpatient department of Auckland Hospital. Dr Sood, Mr O'Neill's general practitioner, had referred his patient to a specialist as, in 1994, he had developed quite significant symptoms of gastritis and heartburn for which he was requiring regular medications. Professor Windsor was asked to determine whether surgical intervention may treat Mr O'Neill's condition better. 
On 3 March 1995, at Auckland Hospital, Mr O'Neill underwent a laparoscopic fundopolication and posterior curoplasty operation. He was discharged from hospital four days later. 
After initial improvements, Mr O'Neill began suffering “significant bloating symptoms”. Having been referred back to his surgeon, it was considered that the surgery was “too tight”. In March 1997, a balloon dilation of the area of surgical reduced narrowing, at the site of the fundoplication, was undertaken. A further operation, to similar effect, was performed on 9 September 1997. Neither relieved Mr O'Neill's symptoms. 
A third operation was carried out on 17 April 1998. This operation discovered a rupture of the original fundoplication. The surgeon opined that Mr O'Neill suffered from oesophagael dysmotility, a condition known to be resistant to treatment. 
In 2002, Mr O'Neill lodged a claim seeking cover for personal injury caused by medical misadventure. Greater detail was provided in a letter sent to ACC on 22 November 2002. ACC investigated Mr O'Neill's claims and obtained reports from other health professionals on the treatment given by Professor Windsor and the Auckland District Health Board during the period that Mr O'Neill was under their care. 
On 12 March 2003, an authorised officer wrote to Mr O'Neill to advise that his “claim [had] been declined because it [did] not meet the criteria for medical misadventure”. A more detailed report was sent to Mr O'Neill, together with copies of relevant documents used by ACC to reach that opinion. Mr O'Neill was advised that he had three months within which to seek a review of ACC's decision. 
Although the surgery and post-operative care of which Mr O'Neill complained was carried out at a time when the Accident Rehabilitation and Compensation Insurance Act 1992 was in force, the claim fell to be determined under the Injury Prevention, Rehabilitation and Compensation Act 2001 (the Act). Part 5 of the Act deals with dispute resolution, in relation to a decision by ACC on any particular claim. 
On 25 May 2003, Mr O'Neill sent an email to the authorised officer of ACC indicating he was unable to meet the deadline for seeking a review because of the length of time required to collate necessary evidence. He sought an indefinite extension of time to seek a review. 
On 27 May 2003, ACC responded to Mr O'Neill's communication, advising that there was no power to grant an indefinite extension of time but that his email of 25 May 2003 had been referred to its Review Unit, to be processed as an application for review of ACC's decision to decline cover. Section 138(1) requires that a reviewer must act “independently”, when conducting a review. 
Mr R M Carter was appointed as the Reviewer. On 9 July 2003, he wrote to Mr O'Neill, with copies being sent to ACC and Professor Windsor, indicating that he wished to consider, as a preliminary point, whether he had jurisdiction to determine the “application” for review. He described the issue as “whether or not the application for review form dated 22 June 2003 can be accepted, even though it was outside the three months, because there are extenuating circumstances under s 135(3)” of the Act. As an alternative, Mr Carter indicated he would consider whether the email of 25 May 2003 could be accepted as an application to review ACC's decision. He added: 
I will set down a hearing date of this preliminary matter shortly. I will ask a member of our staff [Dispute Resolution Services] to seek [Mr O'Neill's] ACC's and Mr Windsor's agreement to that date. Alternatively, the preliminary hearing can be conducted by way of teleconference, with the agreement of the parties. 
After the hearing of this preliminary matter, I will issue a written decision, either confirming that I have jurisdiction to consider the substantive issue of medical misadventure or declining jurisdiction. 
If I decide that I have jurisdiction, then a further hearing on the substantive issue will take place. ”
(my emphasis)
Section 135 of the Act sets out the procedure to seek a review. A review application must comply with s 135(2). Section 135(2) provides: 
“135 How to apply for review 
The application must— 
be written: 
whenever practicable, be made on the form made available by the Corporation for the purpose: 
identify the decision or decisions in respect of which it is made: 
state the grounds on which it is made: 
if known by the applicant, state the relief sought: 
be made within 3 months of— 
the date on which the claimant has a decision under section 58; or 
the date on which the Corporation gives notice under section 64; or 
in the case of a decision under the Code, the date on which the claimant is notified of the decision: 
in the case of a review application relating to a claim for entitlement, not be made less than 21 days after the date the claim for entitlement is made. 
The obligations of a Reviewer are set out in s 145. Section 145(1) and (3) provide: 
“145 Review decisions: substance 
In making a decision on the review, the reviewer must— 
put aside the Corporation's decision and look at the matter afresh on the basis of the information provided at the review; and 
put aside the policy and procedure followed by the Corporation and decide the matter only on the basis of its substantive merits under this Act. 
The reviewer must— 
dismiss the application; or 
modify the Corporation's decision; or 
quash the Corporation's decision; or 
direct the Corporation to make a decision within a time frame specified by the reviewer if the Corporation has not made the decision in a timely manner as contemplated by sections 54 and 134(1)(b); or 
make the decision for the Corporation if it has not made a decision in a timely manner as contemplated by sections 54 and 134(1)(b). 
The hearing on the preliminary issue took place on 29 July 2003. In a decision given on 13 August 2003, Mr Carter determined that the email of 25 May 2003 did not contain the information required by s 135(2) of the Act and was, therefore, invalid. 
ACC's response to Mr Carter's decision was to forward a further letter to Mr O'Neill, dated 21 August 2003, in which it stated that Mr O'Neill's claim had been “reconsidered”. Once again, the reason for declining the claim was stated to be “because it does not meet the criteria for medical misadventure”. Expressly, the author of the letter said: 
“ … This is a new decision letter. ”
Mr O'Neill was, again, given notice of the requirements to seek a review. 
On 13 November 2003, Mr O'Neill sought a review of the decision of 21 August 2003. Receipt of his application was acknowledged, on 17 November 2003. ACC's letter of that date indicated that Mr O'Neill would be “advised of the date, time and location of the hearing should the matter proceed to a review hearing”
The second review was heard by Mr M J Dunn, on 12 February 2004. He gave a decision on 23 February 2004. He declined to review the “new decision” because ACC had not received any new medical information on which a fresh decision could be based. Mr Dunn held that there was no “new” decision that could be reviewed. 
Before Mr Dunn, Mr O'Neill had submitted that the procedural flaws that resulted in Mr Carter's decision had given rise to a “deemed decision” in his favour, under s 146 of the Act. Mr Dunn held that Mr O'Neill was not entitled to a “deemed decision” because Mr Carter's finding that the original review application was invalid precluded the operation of s 146. Section 146 is set out at para [50] below. 
Notwithstanding his view on the jurisdictional issues, Mr Dunn went on to express opinions on the substantive question of medical misadventure. He concluded that there was no basis for Mr O'Neill to challenge ACC's decision. That part of his decision was, however, prefaced with the following remarks: 
“For the sake of completeness, and because the parties have devoted considerable time preparing and presenting their respective cases on the substantive issue, I go on to set out my views concerning the merits of Mr O'Neill's medical misadventure claim. I reiterate, however, that I have no jurisdiction to make a decision in this regard. My views on the substantive issue are, therefore, not binding, and have no consequences for any of the parties. ”
(my emphasis)
Mr Dunn, in considering the substantive issue, focussed on whether Mr O'Neill had suffered a personal injury as a consequence of medical misadventure, either through medical error or medical mishap. As I read his decision, Mr Dunn took the view that ACC's position was justified because Mr O'Neill's medical condition was not caused by medical error. 
Mr O'Neill appealed against Mr Dunn's decision. In a letter dated 14 June 2004, to the Registrar of the District Court responsible for accident compensation appeals, present counsel for ACC (Mr Tuiqereqere) confirmed, in relation to Mr O'Neill's appeal against Mr Dunn's decision, that ACC continued to concede the question of jurisdiction, in relation to the substantive claim for cover. 
In doing so, ACC accepted that Mr Dunn's decision of 23 February 2004 was correct, to the extent that ACC's letter of 21 August 2003 did not represent a decision from which an application for review could be brought. Counsel suggested that ACC was able to treat the application for review of 13 November 2003 as a late application for review, there being “extenuating circumstances” to permit that: s 135(3). 
The appeal was heard before Judge Beattie, on 12 November 2004. The Judge observed that the events leading to the appeal had “followed a tortuous path”. He added that in “considerable measure [Mr O'Neill was] justified in feeling aggrieved at the way that events have gone against him”
Having recorded that counsel for ACC, Professor Windsor and the Auckland District Health Board had conceded that the District Court had jurisdiction to hear a substantive appeal from the decision of 12 March 2003 declining Mr O'Neill's claim for cover for personal injury by medical misadventure, the Judge observed that Mr O'Neill had not been prepared to argue the appeal on that basis. Mr O'Neill's position remained that the effect of the decision-making processes to that time had resulted in a “deemed” decision in his favour under s 146 of the Act. 
Judge Beattie considered whether it was open to Mr Dunn to determine the “deemed decision” point. He was satisfied that it was. In the Judge's view, that meant the point was one the District Court could consider, in exercising its appellate jurisdiction under s 149 of the Act. 
Judge Beattie held that Mr O'Neill's submission that Mr Carter's decision was a “nullity or invalid” lacked merit. The Judge considered that Reviewer was seized of the issue of jurisdiction and was entitled to rule on it. Judge Beattie found that the way in which Mr Carter undertook his review did not give rise to a deemed decision. 
Having reached that point, Judge Beattie observed that the substantive question about cover remained unargued and undetermined, on appeal. He directed that the Registrar administer the appeal before him with a view to having substantive issues resolved as soon as practicable, notwithstanding Mr Dunn's finding that he (as Reviewer) had no jurisdiction to review the Corporation's decision. 
The Registrar set the appeal down for hearing before Judge Barber, in October 2006. While unorthodox, the only conclusion I can draw is that Judge Beattie and Judge Barber each heard part of the one appeal. That means that Mr O'Neill's application for leave to appeal to this Court, from the District Court's appeal judgment, necessarily encompassed both decisions given in that Court. 
Judge Barber did not consider whether he had jurisdiction to hear an appeal from Mr Dunn's observations on the merits. On one view, given the comments that Mr Dunn made in relation to jurisdiction (see para [24] above) the observations were gratuitous and had no legal effect. It is unfortunate that the Judge did not deal expressly with the jurisdictional point. Jurisdiction can never be conferred by consent. 
Judge Barber dealt only with the substantive issue. After reviewing evidence and relevant provisions of the statute, Judge Barber found that Mr O'Neill's “suffering” arose from some other cause than “any physical injury as a result of his medical treatment”. Further, the Judge found that the claim did not meet the criteria for “medical error” or “medical mishap”
So far as the “physical injury” finding is concerned, Judge Barber's finding was the first to deal with that point. It is questionable whether ACC ever rejected the claim on the grounds of lack of a qualifying “personal injury”, as opposed to an absence of proof of causation by medical misadventure. 
I also record, as neutrally as possible, that Mr O'Neill indicated to Judge Barber that he did not have sufficient information available to argue the substantive issue at that time. From a practical perspective, the District Court did not receive full argument on the issues before it and no witnesses were called to be cross-examined. As in this Court, Mr O'Neill represented himself in the District Court. 
Counsel for Professor Windsor and the Auckland District Health Board appeared at both appeal hearings, before Judge Beattie and Judge Barber respectively. 
The question of standing 
The legislative framework 
Although the alleged medical misadventure occurred in 1994, 1995 or 1998, the question of cover fell to be determined under the Act. Sections 142 and 155 prescribe the parties who may attend and be heard at review and appeal hearings. 
Prior to 1 July 2005, ss 142 and 155 provided: 
Persons entitled to be present and heard at hearing 
The following persons are entitled to be present at the hearing, with a representative if they wish, and to be heard at it, either personally or by a representative
on every review, the applicant and the Corporation; 
if the review relates to a decision to accept or decline cover for personal injury caused by medical error, any registered health professional or organisation whose action or inaction was the ground of the claim
if the applicant is a treatment provider, a registered health professional or an organisation referred to in paragraph (b), the claimant
if the review relates to a decision to accept or decline cover for a work-related personal injury, - 
the claimant; and 
the claimant's employer; and 
in the case of a claim for cover for personal injury under section 30, any employer whose name the reviewer receives from the claimant or from the claimant's employer or from the Corporation so that notice can be given under section 141(3), if the name is that of any other employer of the claimant or any former employer of the claimant. (my emphasis) 
Hearing of appeal 
The following persons are entitled to appear at the hearing of the appeal and to be heard at it, either personally or by a representative: 
the appellant: 
any other person who had a right to be present and heard at the hearing of the review. 
An appeal is a rehearing, but evidence about a question of fact may be brought before the court under section 156(2). ”
Section 142 was amended by the Injury Prevention, Rehabilitation and Compensation Amendment Act (No 2) 2005. The purpose of the 2005 Amendment was to eliminate the need for ACC to make a finding of medical error. Instead, relevant claims were reclassified as being made for “treatment injuries”. Section 142(b) and (c) was repealed to remove standing for a registered health professional or organisation whose action or inaction was the ground of the claim. Once the need for the Corporation to find a particular “medical error” was removed, there remained no reason for a health professional or organisation to be heard. Reputational and disciplinary issues that might have flowed from a finding of medical error had been removed by the amendment to the law. While s 142 is directed solely at reviews, only those people who can appear at a review are entitled to be heard on appeal: s 155(1)(b). 
The circumstances in which a health professional or organisation might be permitted standing, notwithstanding repeal of s 142(b) and (c), is addressed by a transitional provision, inserted by s 13 of the 2005 Amendment. That provision, now s 34 of the Act, deals with cover for personal injury caused by medical misadventure before 1 July 2005. Section 34 provides: 
“34 Cover for personal injury caused by medical misadventure before 1 July 2005 
This section applies to— 
claims for cover for personal injury caused by medical misadventure that were lodged with the Corporation before 1 July 2005, but have not been determined; and 
claims for cover for personal injury caused by medical misadventure that were declined by the Corporation before 1 July 2005, but are lodged again on or after that date as claims for cover for treatment injury (and not lodged as claims referred to in subsection (4)). 
Claims lodged in the circumstances described in subsection (1) must be determined under the relevant provisions in force immediately before 1 July 2005. 
Reviews and appeals must be dealt with under the relevant provisions of Part 5 in force immediately before 1 July 2005, if the decision being reviewed or appealed— 
was made before 1 July 2005; or 
is one to which subsection (2) applies. 
Subsection (1)(b) does not apply in relation to a claimant if,— 
before 1 July 2005, the Corporation declined the claimant's claim for cover for personal injury caused by medical misadventure because there was no personal injury; and 
on or after 1 July 2005, the claimant lodges a claim for cover for treatment injury in respect of a personal injury that— 
occurred after the decision to decline the earlier claim (whether before or after 1 July 2005); and 
arises out of the circumstances on which the earlier claim was based. ”
Section 34 appears in Part 2 of the Act, which deals with the circumstances in which cover may be granted. 
Mr Tuiqereqere and Mr Lewis (for Professor Windsor, whom I gave leave to interview) submitted that s 34(3) ought to be afforded primacy over s 34(1) to give the medical practitioner standing before the District Court. They supported that submission, with references to ss 7, 17(1)(b) and (c) and 18(2) of the Interpretation Act 1999; dealing with the question of validity (or invalidity) of retrospective legislation. 
Section 34(1) is directed to the original ACC decision to allow or refuse cover. Mr O'Neill's claim does not fit within either s 34(1)(a) or (b). Only those claims that fall within s 34(1) continue to be dealt with under the pre 1 July 2005 law: s 34(2). 
Notwithstanding the problems arising out of jurisdictional issues with which both reviewers and the District Court were concerned, the original claim for cover was lodged with ACC before 1 July 2005 and has been determined. At this stage, no separate claim has been made, on or after 1 July 2005, for “treatment injury” (as that term is defined by s 32 of the Act), so s 34(1)(b) does not come into play. 
In interpreting legislation, Courts are required to determine its meaning by reference to the text of the provision read in light of its purpose: s 5(1) Interpretation Act 1999. Taking account of the purpose of s 34, Parliament must have intended that rights of hearing for medical practitioners and relevant organisations would remain, in respect of any claims dealing with medical misadventure but would be jettisoned in respect of claims for treatment injuries, under the new regime. That interpretation is consistent with the terms of s 34(1). 
Section 34(3) is the only part of the transitional provision that applies to reviews or appeals. The policy underlying the sub-section is clear. Health professionals and relevant organisations who would have had standing to be heard on a review or appeal from a decision made before 1 July 2005 continue to enjoy that right in respect of reviews or appeals that have not been concluded by that date. On that basis, it is clear that Professor Windsor and the Auckland District Health Board were entitled to be heard at the review and appeal hearings that followed ACC's decision to decline cover to Mr O'Neill. There is no conflict between s 34(1) and (3) when the statute is properly interpreted. 
For those reasons, Mr O'Neill's appeal fails, on the point on which leave was granted by Asher J. 
A deemed decision? 
The circumstances in which a “deemed decision” is given on review are set out in s 146 of the Act: 
“146 Deemed review decisions 
The reviewer is deemed to have made a decision on the review in favour of the applicant if— 
the date for the hearing has not been set within 3 months after the review application is received by the Corporation; and 
the applicant did not cause, or contribute to, the delay. 
The date of the deemed decision is 3 months after the review application is received. ”
Asher J did not give leave to appeal on whether a “deemed decision” had been given under s 146 of the Act. He said: 
“The deemed decision 
It was very difficult to understand Mr O'Neill's submission on this point. In so far as he appears to rely on a deemed review decision, that was not something that was before Judge Barber, or that he determined. He was unable to point to any specific error of Judge Barber in this regard. I am not satisfied that there is any point of law that arises under this head. ”
Understandably, Asher J did not appreciate that Judge Beattie's finding on whether a deemed decision had been given was made in the same appeal on which leave to appeal was sought. Had the Judge appreciated that point, as well as the nature and importance of the legal issue to Mr O'Neill, I consider that leave to appeal was likely to have been given. 
There seem to be arguable points in relation to the s 146 issue. For example, Mr Carter (expressly) did not set a date for the substantive review at all: see para [16] above. It is distinctly arguable that s 146(1) applies to a substantive review only: see s 145(1) and (3), set out at para [18] above. 
At the hearing before me, I indicated to Mr Tuiqereqere that I did not wish to hear from him on the “deemed decision” point. As I now regard the issue as seriously arguable and it arose out of the same appeal from which leave to appeal was given by Asher J, I wish to consider whether the appeal should be expanded to cover the deemed decision point. ACC and Professor Windsor (as intervener) are entitled to be heard on that issue, should they wish to do so. Counsel may wish to consider r 1.9(2) of the High Court Rules in relation to the possible expansion of grounds for appeal. 
Substantive issues determined by Judge Barber 
Having reviewed the information more carefully, there are two potential appeal points arising out of Judge Barber's decision on substantive issues. They are: 
Did Judge Barber have jurisdiction to deal with a substantive appeal, given the observations made by Mr Dunn set out at para [24] above? 
If Judge Barber did have jurisdiction, did he err in his approach to the appeal by considering whether a “personal injury” had been suffered, when that point had not been relied upon in either of ACC's purported decision letters? 
If Judge Barber did not have jurisdiction to deal with substantive issues or erred in his approach, it is conceivable that Mr O'Neill could re-lodge a claim under the “treatment injury” regime, which would mean it is unnecessary for him to prove any personal injury was caused by a particular medical error or mishap: see s 34(1)(b) and (4). 
I am not prepared to dispose of the appeal at this stage. I wish to hear submissions on whether the grounds of the appeal should be expanded, having regard to the points I have raised. 
The appeal is adjourned until 9am on 12 February 2010 (for a hearing of not more than one hour) for oral submissions to be made on the following questions: 
Should leave to appeal be extended to the “deemed decision” point, on which Judge Beattie held against Mr O'Neill in his judgment of 17 November 2004? 
Did Judge Barber have jurisdiction to deal with the purported substantive appeal? 
If Judge Barber had jurisdiction to deal with substantive issues, did he err in determining the appeal on the basis that Mr O'Neill did not suffer a “personal injury”, rather than focussing only the reason given for declinature, that “medical misadventure” had not caused any injury? 
Brief submissions in writing (not more than five pages) shall be filed and exchanged no later than five working days before the hearing, to deal only with the question whether the appeal grounds should be expanded. If I were to expand the grounds of appeal, I will give directions about whether a further oral hearing should be held or submissions made in writing. I indicate that I may also consider whether to appoint amicus curiae [counsel to assist the Court on legal issues], if the appeal points were enlarged. 

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