Accident Compensation Corporation v D - [2025] NZCA 373

The answer to the question of law set out at [2] of the judgment:

Did the High Court err in finding, at [10]-[13], that D had cover under s 26(1)(c) of the Accident Compensation Act 2001 for a mental injury suffered by D because of physical injury suffered by D because: 

(1)    it held that s 36(2) of the Accident Compensation Act 2001 deems the personal injury to have been suffered on the date, but not at the location, of his physical injury; and
(2)    although D was not resident in New Zealand when his physical injury was suffered, he was resident in New Zealand when his mental injury was "suffered"?

is "yes". 

The appeal is allowed and the High Court decision is set aside. 

There is no order as to costs. 

D was born in Russia in August 2001 and was a Russian citizen when he was physically assaulted as a young child. In August 2004, D was adopted by New Zealanders and emigrated to New Zealand. In November 2019, D was diagnosed with severe post-traumatic stress disorder attributed to the physical injuries he suffered in Russia. 

ACC declined to accept D's claim for cover for his mental injury, a decision that was confirmed on review in February 2020. On appeal, the District Court concluded that D's mental injury was covered because it was suffered in New Zealand. That decision was upheld by the High Court on appeal on a point of law. It is the same point of law which has now been referred to this Court. 

The question on appeal is whether in order to receive cover, the causative physical injury must occur in New Zealand or if it is only the resultant mental injury that must occur in New Zealand. 

Did the High Court err in finding that D had cover under the Accident Compensation Act 2001 for mental injury? 
Held: Yes. 

Causation 
The language of the Act emphasises the importance of causation in respect of cover for mental injury. 

Section 26(1)(c) provides that mental injury is covered if suffered by a person because of physical injuries suffered by the person. That phrase has been addressed in a number of decisions which have reaffirmed the requirement to establish causation. 

The requirement of a causal link is also borne out by the two other forms of mental injury covered by the Act - mental injury caused by certain criminal acts (s 21) and mental injury caused by work ­related gradual process, disease or infection (s 218). 

Territorial restrictions 
The Act requires that any coverable personal injury, whether physical or mental, be caused in New Zealand or, if caused overseas, to a person ordinarily resident in New Zealand. 

The Act provides that in relation to ss 21 and 218 mental injuries, it is irrelevant whether or not the person was ordinarily resident in New Zealand on the date they suffer the mental injury. There is no corresponding provision for mental injury suffered because of physical injuries. The reason why the Act so provides so becomes clear when considering s 36(1), which deems the date of a s 21 or a s 218 mental injury to be the date on which the person first receives treatment for that mental injury. But the cause of that injury (the qualifying crime or the relevant event for a work-related mental injury) must have occurred in New Zealand or when the person was ordinarily resident in New Zealand. 

Consistency with that approach requires a physical injury which has caused mental injury to have occurred in New Zealand or when the person was ordinarily resident in New Zealand. 

The social contract 
The social contract underpinning the Act - that people who are injured and whose injuries are covered by the Act forgo the right to sue in return for certainty of entitlements - reinforces the territorial limits of the Act and the focus on causation. 

The Act cannot be interpreted as intending to provide cover for injuries caused overseas to people who are not ordinarily resident in New Zealand. Such an approach would mean the scheme was required to fund the consequences of events outside its jurisdiction and over which it could have no influence. 

Does s 36(2) of the Act deem the mental injury to have been suffered at the location as well as the date of the physical injury? 
Under s 36(2), the date a mental injury is suffered because of physical injuries is the date of the causative physical injuries. 

Section 36(2) enables the date a mental injury is suffered to be fixed. Causation remains the primary consideration, and it is the physical injury which is the root of the mental injury (as the Act requires). It is therefore the date and, in our view, the location, of that physical injury which is the key to whether cover is available under the Act. That is the logical conclusion from a plain reading of s 36(2). 

Reliance on this Court's decision in Accident Compensation Corporation v TN was misplaced. That case dealt with entitlements to compensation rather than cover. This Court held that s 36(1) did not apply when determining entitlement to loss of potential earnings compensation. The alternative interpretation would mean that those who suffered sexual abuse as children but did not receive treatment for mental injury caused by that abuse until they were adults were precluded from receiving compensation. That would be a complete reversal from the position under the previous legislation, and there was nothing to suggest that Parliament intended to perform such a volte-face. 

The reasoning in Accident Compensation Corporation v TN does not apply to s 36(2). There is not the same purposive and contextual rationale for taking a different interpretation, in the context of determining cover, from the one which the wording on its face suggests. There is no clear statement of policy to the contrary of the plain meaning. The purpose and text are aligned. 

NZBORA: D's suggestion that NZBORA and the right to be free from discrimination were relevant as an aid in interpretation was rejected given Parliament's clear intention.