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Accident Compensation Cases

Cox v Accident Compensation Commission (NZSC, 04/07/80)

Judgment Text

Davison CJ
There are two questions raised in this appeal. They are: 
On the hearing of an appeal to the Accident Compensation Appeal Authority pursuant to s 162(a) of the Accident Compensation Act 1972 against a decision of a Hearing Officer on an application for review under secs 153 and 154 of the Act is the Appeal Authority required by law to hear the appeal de novo? 
What is the true construction of the expression “reasonable costs” in s 154(14) of the Act? 
Question (a): Is the appeal to be heard de novo? 
This question arises in the present appeal because of the observation of Blair J. in his decision that “I must guard against substituting my own opinion for that of a Hearing Officer who heard the appeal”
For the appellant it was said that this was a wrong approach and that the Appeal Authority was required to hear appeals de novo in the sense that it approached the matters with an open mind and with no presumption in favour of the decision of the Hearing Officer. This approach has already been considered by the Appeal Authority in Re Sharland (Decision 48) 1 NZAR 288 where the Appeal Authority said at p 292: 
“Because of the terms of that Act (Accident Compensation Act) and the operation of procedures carried out at Review Hearings, I do not think that the Appeal Authority is required to hear appeals de novo. As stated I accept that the Appeal Authority can in an appropriate case come to its own opinion on the merits as well as the law but this is something which should be done with some circumspection. ”
It is the opinion expressed in the present case and that observation made in Sharland's case which are challenged by the appellant on appeal. 
For the appellant it was submitted that the proper approach which the Appeal Authority should adopt on appeal is to approach the matter with an open mind with no presumption in favour of the decision appealed against. In support of such proposition reference was made to three authorities to which I now refer. First, Hammond v Hutt Valley Milk Board [1958] NZLR 720Has Cases Citing which are not known to be negative[Green]  at pp 725-731; second, Ross v No 2 Town and Country Planning Appeal Board [1976] 2 NZLR 206Has Cases Citing which are not known to be negative[Green]  at pp 210, 217 and 220; and third, New Zealand Milk Board v Beatson [1980] Recent Law p.2. 
A consideration of each of those cases, however, shows that they were decided in relation to statutes providing rights of appeal in a different form from that which is provided under the Accident Compensation Act. Hammond's case involved an appeal to a Magistrates Court from a decision of a Milk Authority, an administrative body, and it was held that the Magistrate must form an opinion of his own as to the merits of the matter and he is entitled to substitute his opinion for that of the administrative body. The reason why that procedure was stated to be appropriate in Hammond's case, however, was that the appeal which came from the decision of the administrative body called for a hearing afresh for the purpose of determining the merits of the matter because there had previously been nothing in the nature of a formal hearing by the Board and there were no published reasons for its decision and no record of the proceedings for examination on appeal. 
Ross's case although under a different statute was to similar effect. It concerned the practice to be followed by a Town and Country Planning Appeal Board on appeal from the decision of a Local Body. Speight J. had previously held that a hearing de novo by an Appeal Board, although described in the Act as the hearing of an appeal, is in substance an exercise by the Board of an original jurisdiction to determine the application or objection completely afresh on the basis of the evidence before it and in the light of the circumstances prevailing at the time of the decision. That view was upheld by the Court of Appeal. 
In the New Zealand Milk Board case White J. found that the Magistrate being obliged to hear the evidence on appeal de novo received evidence which the Board had not heard and that he was therefore entitled to substitute his opinion for that of the Board. 
It will be seen that in each of those three cases there are factors which distinguish the practice of the body appealed against from the practice which prevails with a hearing before a Review Officer under the Accident Compensation Act. The practice followed by such Review Officer is usefully set out by Blair J. in Sharland's case at p 290 as follows: 
“It is perhaps desirable to state my conception of the extent of my powers as regards an appeal from the Review Hearing. In the first place the nature of a Review Hearing must be examined. This is not a judicial enquiry in the strict sense. Its purpose, as its name suggests, is to have a fresh look at the administrative decision made by the Commission while giving the appellant the opportunity to dispute the decision and introduce any new evidence of information which may be relevant. Evidence can be received whether or not it is admissible in a Court of Law. The only limitation on evidence is that it should be relevant and that it should be available to the claimant. Proceedings are conducted more or less informally. The Hearing Officer attempts both to give information to the claimant and to obtain information from him which will throw light on his case. ”
When the matter comes before the Appeal Authority, the evidence before the Appeal Authority is given in accordance with s 164(1) of the Act which provides: 
“Every appeal against a decision of the Commission or a Hearing Officer shall be by way of rehearing; but where any question of fact is involved in any appeal, the evidence taken before or received by the Commission or Hearing Officer bearing on the subject shall, subject to any special order, be brought before the Authority as follows: 
As to any evidence given orally, by the production of a copy of the notes of the Commission or Hearing Officer or of a written statement read by a witness while under oath, or of such other material as the Authority thinks expedient: 
As to any evidence taken by affidavit and as to any exhibits, by the production of the affidavits and such of the exhibits as may have been forwarded to the Authority by the Commission or Hearing Officer, and by the production by the parties to the appeal of such exhibits as are in their custody. ”
It will be seen then that there is before the Appeal Authority a full written record of matters which have transpired before the Hearing Officer but in addition to that record the Appeal Authority may, if he so decides, in accordance with s 164(2)“rehear the whole or any part of the evidence, and shall rehear the evidence of any witness if the Authority has reason to believe that any note of the evidence of that witness made by the Commission or Hearing Officer is or may be incomplete in any material particular”
It will be seen that the practice adopted under the Accident Compensation Act provides for the Appeal Authority to be furnished with a complete record of what has transpired before the Hearing Officer. He is in addition allowed to rehear evidence if he decides that the record is or may be incomplete and he has before him a copy of the decision of the Hearing Officer appealed against. In this respect he is in quite a different position from the Appeal Bodies referred to in the three cases to which reference has just been made. 
Although it is sometimes helpful to refer to the manner in which an appeal is dealt with under other statutes, primarily one must consider the procedure laid down in the statute under consideration. The Accident Compensation Act s 164(1) provides that “every appeal against a decision of the Commission shall be by way of rehearing”. That is an expression well recognised and commonly found in statutes providing powers of appeal. As Richmond J. said in Ross v Planning Appeal Board, however, in dealing with an appeal under the Town and Country Planning Act at p. 210: 
“There is no requirement in our Town and Country Planning Act that the appeal be by way of rehearing, not that the presence of that often-used phrase would help greatly, for it has been given various meanings in various statutes. ”
The nature of the rehearing will be dependent on the nature of the hearing which preceded the appeal and the extent of the record that is available for consideration by the Appeal Authority. In the present case the Appeal Authority has the complete record and decision as I have earlier referred to. 
Counsel for the appellant did criticise the earlier hearing before the Hearing Officer, however, on the basis that the Hearing Officer was not necessarily a person of legal training and that he was a member of the Accident Compensation Commission and bound to give effect to the policy of the Commission. Furthermore, it was said that the Hearing Officer is not bound to reach a decision himself but may report to the Commission on the completion of the hearing, and the Commission after considering the application is required to give a decision thereon: thus the ultimate decision might be made by the Commission which itself did not see and hear the witnesses or persons who appeared before the Hearing Officer. This is so but in my view the record transmitted from the review hearing to the Appeal Authority does provide an accurate and detailed record of what transpired and what was the basis for the decision given either by the Hearing Officer or by the Commission. 
The appellant would have the Appeal Authority completely disregard the views of the Hearing Officer and form his own opinion de novo on the material before him. That, in my view, is not appropriate when the Appeal Authority is dealing with an appeal under the Accident Compensation Act. Even in cases where there is an unrestricted right of appeal, the Appeal Authority should not ignore the original finding as Lord Goddard, C.J. said in Stepney Borough Council v Joffe and Others [1949] 1 All E.R. 256 at p 258: 
“If there is an unrestricted right of appeal, it is for the court of appeal, in this case the metropolitan magistrate, to substitute its opinion for the opinion of the borough council. That does not mean to say that the court of appeal ought not to pay great attention to the fact that the duly constituted and elected local authority have come to an opinion on the matter and ought not lightly to reverse their opinion. It is constantly said (although I am not sure that it is always sufficiently remembered) that the function of a court of appeal is to exercise its powers where it is satisfied that the judgment below is wrong, not merely because it is not satisfied that the judgment was right. ”
Blair J. appears to have expressed a similar comment in Sharland's case where he said: 
“I accept that the Appeal Authority can in an appropriate case come to its own opinion on the merits as well as the law but this is something which should be done with some circumspection. ”
And again where he said in the present decision under appeal that he must guard against substituting his own opinion for that of a Hearing Officer. 
The Accident Compensation Act s 164(7) gives to the Appeal Authority the power in the determination of any appeal to confirm, modify, or reverse the decision or revocation appealed against. But in my view that does not allow the Authority to disregard completely the decision under appeal. The Appeal Authority is after all an Appeal Tribunal considering an appeal from a written decision of a Hearing Officer or of the Commission and having before it the material transmitted to it from the Reviewing Officer In my opinion, the Appeal Authority has come to the correct conclusion in Sharland's case and in the present decision under appeal as to the manner in which he should exercise his powers as Appeal Authority. 
Question (b): The meaning of reasonable costs. 
Section 154(14) of the Act provides: 
“Where on an application for review a decision is given in favour of the applicant, or where the Commission considers that the applicant has acted reasonably in applying for a review, the Commission may allow him reasonable costs. ”
The Appeal Authority held that subs 14 was not authority for the Commission to make an order awarding costs on a solicitor or client basis according to the scales of the New Zealand Law Society, but rather that the subsection was phrased in such a way that the Commission may apply its own standards of reasonableness to any particular case. 
For the appellant it was submitted that what is reasonable will depend principally on two factors: 
Was it reasonable for the claimant to seek legal assistance at all? 
Are the legal expenses claimed reasonable in the circumstances bearing in mind the nature of the difficulty that had arisen, the issues calling for consideration, and the time involved? 
It must be remembered that not every applicant in a review has legal representation and in considering the costs of a person who does not have such representation then the Commission exercises its own standard of reasonableness having regard to the expenses which have been incurred by the applicant in presenting his application. 
The problem which arises in this appeal concerns those cases where a solicitor or counsel appears and makes a charge to his client for the legal services rendered. It is suggested that as long as there were reasonable grounds for obtaining assistance then reasonable legal expenses should be awarded. 
When dealing with costs when legal assistance has been sought, I think it is proper, as appellant suggests, that the first inquiry that should be made is whether it was reasonable for the claimant to seek legal assistance at all. If it was not then the costs should be awarded on the basis of compensating only the applicant and not making any contribution to legal assistance. It is in respect of the second proposition of the appellant that the problem arises. If it was proper to obtain legal assistance then by what yardstick are the costs of that legal assistance to be measured? 
On behalf of the respondent it was suggested that there are five possible tests to be applied: 
Costs should be assessed on a flexible basis at the discretion of the Commission. 
Party and party costs on a legal scale should be paid. 
Costs should be based on the legal aid scales. 
Costs should be based on Law Society scales. 
Full solicitor and client costs should be paid. 
It was pointed out, however, that items 2, 3 and 4 are really based on an adversary system of conduct which does not exist in applications before the Commission, and that item 5 relating to full solicitor and client costs is normally only applicable when an unsuccessful party is to bear them and with claims from the Commission there is no unsuccessful party. 
If one reverts to the wording of the statute, the only assistance gained from subs 14 is that the Commission may allow an applicant reasonable costs. I do not think that there is any justification for the Commission adopting any fixed scale or method of charging costs on the part of solicitors. If it was intended that such should be so then I would have thought the statute would have specified how such costs were to be charged. By leaving the matter in the realm of reasonable costs, the decision is left entirely to the Commission and it appears to me that the only basis on which it can make such awards where solicitors are involved in proceedings is to inquire first whether the engagement of the solicitors was justified in the first place, and then if it was to fix a reasonable sum having regard to the complexity of the issues, time spent, and the amount of compensation recovered. I recognise that this formula leaves it somewhat uncertain for solicitors to know on what basis costs will be awarded to them by the Commission. But, on the other hand, there is no warrant whatever in the legislation for my directing that the Commission shall adopt any fixed practice in assessing the costs which are reasonable under the subsection. Certainly there is no warrant for my directing that any particular scales be applied. 
It may be thought that this is an unsatisfactory situation but such can be remedied only by an amendment to the Act or by the Law Society negotiating with the Commission a basis upon which the Commission will normally determine what it will allow for reasonable costs in any particular type of case. The Commission has a complete discretion as to what it will allow in terms of the subsection and I am not prepared to fetter the Commission with any direction as to how that discretion shall be exercised. Parliament has, it appears to me, phrased the subsection in such a way as to allow the Commission to establish its own standards of reasonableness. Whether it makes the decision separately in respect of each case or whether it lays down guidelines is a matter for discussion with the Commission. 

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