Hornby v Accident Compensation Corporation

IN THE COURT OF APPEAL OF NEW ZEALAND
CA781/2008
[2009] NZCA 33
BETWEENSHARON ROBYN HORNBY

Applicant

ANDACCIDENT COMPENSATION COMMISSION

Respondent

Hearing:17 February 2009

Court:William Young P, Hammond and Robertson JJ
Counsel:A C Beck for Applicant

C J Hlavac for Respondent

Judgment:26 February 2009 at 4 pm

JUDGMENT OF THE COURT

A The application for special leave to appeal to this Court is granted.
BThe questions for determination on the appeal are:
(a) Did the High Court adopt the wrong test to determine whether mental injuries are suffered “because of physical injuries” pursuant to s 26 of the Injury Prevention, Rehabilitation and Compensation Act 2001?
(b)If so, on the correct test is the appellant entitled to cover?

CCosts are reserved.

REASONS OF THE COURT
(Given by Hammond J)
[1]       This is an application, pursuant to s 163(2) of the Injury Prevention, Rehabilitation and Compensation Act 2001, for special leave to appeal to this Court from a judgment of Dobson J given on 10 September 2008: Hornby v Accident Compensation Corporation CIV-2008-485-763.
[2]       Ms Hornby applied to the High Court for leave to appeal to this Court on certain questions of law, but leave was declined by Dobson J on 10 December 2008.
[3]       The appeal raises the question as to the proper test to be applied under s 26 of the Injury Prevention, Rehabilitation, and Compensation Act 2001 to determine whether mental injuries are suffered “because of physical injuries” suffered by a person in an accident.
[4]       There are, analytically, three possible situations. First, there might be mental injury arising out of an “accident” and resultant physical injuries. This relates to what could be termed “accident trauma”. Secondly, a pre-existing mental condition may be aggravated somehow, solely because of the physical injury. Thirdly, the physical injuries may have been a contributing cause – though not the only contributing factor to – the resurgence of a prior mental affliction.
[5]       Counsel accept that categories one and two come within s 26(1)(c) of the Injury Prevention, Rehabilitation, and Compensation Act 2001.
[6]       The third fact pattern – which is that presently before the Court – is more problematic. The answer given by a District Court Judge on an appeal to that Court, and then subsequently by Dobson J in the High Court, is that this third fact pattern is not within the statutory provision.
[7]       On any view of the matter, this is a question of law. The issue has not previously been before this Court for consideration. Further, it is a question of law of considerable practical importance, with significant downstream consequences for the operation of the accident compensation legislation.
[8]       Accordingly, we consider this is an appropriate case for special leave to be granted. There is a procedural complication in that appeals to this Court are by way of case stated (see s 163(1)). This Court cannot itself directly undertake a case stated from the High Court: it has to come from the court below. It was likely for this reason that Mr Beck submitted that this Court should, in the event that the application is successful, direct that a case be stated putting the following questions of law to this Court for determination:
(a)What is the correct test to determine whether mental injuries are suffered “because of physical injuries” pursuant to s 26 of the Injury Prevention, Rehabilitation, and Compensation Act 2001?
(b)Is it sufficient for the purposes of cover that the physical injuries suffered by a person are one of the causes of the mental injuries suffered?

[9] It would be very awkward, and give rise to further expense if this matter has to be remitted to the High Court. We consider that s 163(2) and s 163(3) are wide enough to enable this Court to settle the appropriate questions.
[10] Accordingly, we allow the application for special leave, on the following questions. We think these should focus on whether Ms Hornby was entitled to cover, that is:
(a)Did the High Court adopt the wrong test to determine whether mental injuries are suffered “because of physical injuries” pursuant to s 26 of the Injury Prevention, Rehabilitation, and Compensation Act 2001?

(b) If so, is the appellant entitled to cover on the correct test?

[11] Costs are reserved. As we apprehend it, Ms Hornby has applied for legal aid but a determination on that issue has not yet been made.
Solicitors:
Peter Sara, Dunedin for Applicant

Sharon Robyn Hornby applied to the New Zealand Court of Appeal for special leave to appeal a decision of the High Court in relation to her claim for accident compensation. The primary issue was the interpretation of section 26 of the Injury Prevention, Rehabilitation and Compensation Act 2001, which governs the circumstances under which mental injuries may be compensated if they arise because of physical injuries. The High Court had previously declined to grant leave to appeal, but the Court of Appeal granted leave on the specific questions of whether the High Court had applied the wrong test for determining the compensability of mental injuries and, if so, whether Hornby was entitled to compensation under the correct test. The appeal centred on the third scenario where physical injuries are a contributing, but not sole, cause of mental injuries.

The Court of Appeal considered the three distinct scenarios where mental injuries might arise from physical injuries: when mental injury results from the trauma of an accident and physical injuries, when a pre-existing mental condition is aggravated by physical injuries, and when physical injuries are a contributing factor to the resurgence of a prior mental affliction. Both parties agreed that the first two scenarios fall within the statutory provision for compensation. However, the third scenario, which was the case before the Court, had previously been ruled as not covered by the statutory provision. The Court recognised this as a significant question of law with considerable practical importance. The Court noted that the issue had not previously been considered by the Court of Appeal, and it had the potential to significantly affect the operation of the accident compensation legislation. The Court concluded that the matter was appropriate for special leave to appeal, as it involved a question of law of public importance.

The Court of Appeal allowed the application for special leave to appeal, focusing on the two central questions of whether the High Court had adopted the wrong test for determining whether mental injuries are suffered "because of physical injuries" under section 26 of the Act, and if so, whether Hornby was entitled to compensation under the correct test. The Court believed that addressing these questions would directly impact the legal framework governing accident compensation claims and help clarify the scope of the statutory provision. Costs were reserved pending a determination on Hornby's application for legal aid.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established