Accident Compensation Corporation v Calver [2021] NZCA 211

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In a recent decision, the Court of Appeal has confirmed that mesothelioma is a personal injury caused by an accident, and that people with mesothelioma are therefore entitled to ACC cover, whether or not it was contracted at work.


Mesothelioma is a dreadful lung cancer, which is inevitably fatal. It results from the inhalation of asbestos fibres, asbestos being a substance which was widely used in the construction industry due to its fire-retardant qualities, and which was only finally banned in New Zealand in 2016. Inhaled fibres lodge in the lungs. After a lengthy period, sometimes as long as forty years, the fibres cause cancerous growth in the lungs, and symptoms will develop within a further short period. Fitting the disease into established legal concepts is problematic for two main reasons.

First, there is a causation issue. The length of time between exposure and onset of the disease makes it at best difficult, and in many cases impossible, to ascertain the source of the fatal exposure. Where the victim has been exposed to asbestos by only one employer, there may be an overwhelming presumption that that period of employment was the source. By contrast, where the victim has been exposed to asbestos over a lengthy period of time by different employers, it is impossible to identify the contribution of each to disease.

In England, where personal injury actions have not been abolished, the House of Lords took the view in the famous but controversial decision in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22 that if it is impossible to prove causation then – in order to secure a remedy for the victim – every exposure is deemed to be causative. The Compensation Act 2006 took the law a step further: every person exposing the victim to asbestos is potentially 100% liable to the victim.

Secondly, there is an issue as to the date of the illness. The common law treats injury or damage as a detrimental physical change that is more than minimal. Asbestos in the lungs may cause a thickening (pleural plaques) but that cannot of itself be classified as injury or damage. If there is nothing further, the victim is regarded by the common law as one of the “worried well”, and the injury is regarded as having occurred when the lungs begin to develop a cancer.

Again, to ensure that the victim or the victim’s family will always recover full damages, the UK Supreme Court has ruled that a typical employers’ liability insurance policy responds to the exposure and not to the onset of damage.

The position in New Zealand

In New Zealand the legal context of the questions posed by mesothelioma is quite different. Compensation for the victim depends entirely upon how the disease fits into the structure established by the Accident Compensation Act 2001 (Act).

The operation of the Act was at stake in Accident Compensation Corporation v Calver [2021] NZCA 211. The victim was Deanna Trevarthen, who died from mesothelioma at the age of 45. Her exposure appears to have been from contact as a young girl with her father, an electrician, who had himself been exposed to asbestos. Contracting the disease from fibres on clothing is a well-documented phenomenon. ACC determined that the illness was not the result of a work exposure, and that conclusion was upheld by the District Court ([2018] NZACC 60). Recovery was thus possible only if there was an alternative head of recovery independent of injury at work.

The starting point is section 26(1), which defines personal injury as “(a) the death of a person; or (b) physical injuries suffered by a person.” Section 26(2) excludes “personal injury caused wholly or substantially by a gradual process, disease, or infection unless it is personal injury of a kind described in section 20(2)(e) to (h).” Section 20 provides that there is cover for “personal injury” if it falls within any of the heads in section 20(2). Those heads, as far as material, are:

(a) personal injury caused by an accident to the person …

(e) personal injury caused by a work-related gradual process, disease, or infection suffered by the person:

(f)  personal injury caused by a gradual process, disease, or infection that is treatment injury suffered by the person:

(g) personal injury caused by a gradual process, disease, or infection consequential on personal injury suffered by the person for which the person has cover;

(h) personal injury caused by a gradual process, disease, or infection consequential on treatment given to the person for personal injury for which the person has cover …

The term “accident” as used in section 20(2)(a) is defined in broad terms by section 25(1) of the Act. By section 25(1)(a) an accident is a specific event or series of events, other than a gradual process” that involved the application of a force … external to the human body”. By section 25(1)(b) an accident is “the inhalation of any … foreign object on a specific occasion”.

The question for the Court of Appeal was: “Does mesothelioma, not caused by a work-related exposure to asbestos, amount to a ‘personal injury’ under section 26 of the Act?”

Legal analysis

ACC argued that section 26(2) excluded disease from cover other than in the cases listed in section 20(2)(e)-(h) of the Act. The only possible applicable head was (g), as this was not a work-related injury under (e) and there were no treatment injuries under (f) and (h). ACC’s position was that “personal injury” was the physical manifestation of a disease and not the disease itself nor the external cause of the disease. As a result, the physical manifestations of mesothelioma not caused by work-related exposure to asbestos could amount to personal injury only if section 20(2)(g) applied.

As a basis for its reasoning, ACC relied upon various changes to the legislation over time which it says have narrowed cover for disease. The earlier legislation excluded damage to the body caused exclusively by disease from the definition of personal injury, distinguishing between diseases that arose by accident (which were covered) and diseases that were idiopathic (which were not). ACC’s view is that under the current legislation (the 2001 Act) disease with an external cause is covered only where they fall within s 20(2)(g).

The claimant’s response was that mesothelioma had an exposure trigger and the onset of illness was indivisible from the trigger. The trigger was an “accident”, namely the inhalation of asbestos, and on that basis there was “personal injury” within section 26(1) caused by an accident so as to bring section 20(2)(a) into play. Section 26(2) played no part, as that section was concerned with damage caused by a disease rather than disease caused by an accident. The combined effect of sections 26(2) and 20(2)(e)-(g) was to provide coverage for diseases that would otherwise be excluded. That was essentially the reasoning that had been adopted by Justice Mallon in the High Court ([2019] NZHC 1581).

The Court of Appeal concluded that the claimant’s analysis was correct and that the question of law should be answered, “yes”. The “tortuous” drafting history of section 20(2)(e)-(h) did not justify a finding that section 20(2)(a) should be limited in its meaning.

The Court of Appeal agreed with the claimant that section 20(2)(e)-(h) was to be regarded as extending cover for disease and not restricting it, and in particular it did not block coverage if it could be established under section 20(2)(a). The only question, therefore, was whether section 20(2)(a) applied. The Court of Appeal confirmed that a “personal injury” was the victim’s condition as a whole. If there was a triggering accident giving rise to disease, then there was personal injury. In the absence of a triggering accident in the form of a known external event, as where there was an onset of disease from an unknown cause, section 26(2) excluded coverage other than in the cases set out in section 20(2)(e)-(g).  


In the case of disease contracted at work, the Act is straightforward. There is personal injury within section 26(1). Personal injury caused wholly or substantially by a gradual disease is excluded by section 26(2), but cover is reinstated by section 20(2)(e). However, there is no saving in section 20(2) for personal injury caused by a disease not contracted in the workplace. Calver has filled the gap, confirming that the position is governed by section 20(2)(a) so that if there is an accident leading to personal injury – whether or not in the form of disease – there is coverage.

The Calver analysis is equally applicable to a person contracting a disease at work following an accident, so there is no longer any need to rely upon sections 26 and 20(2)(e). The relevant distinction is now between an accident that triggers a disease, and a disease that develops without any external event.

The Court of Appeal was not required to consider the meaning of the word “accident”, although the Court stated that “the personal injury was caused by an accident to the person in terms of section 25(1)(a), namely the accidental inhalation of asbestos fibres.” That is arguably a generous interpretation of an already wide definition. There is undoubtedly a specific event or series of events rather than a gradual process, in that each inhalation is an event. However, the events must involve “the application of force … external to the human body.” It is not easy to see how breathing in asbestos strands constitutes the application of an external force. Justice Mallon had not found it necessary to deal with this question but felt that the claimant might be in some difficulty in bringing mesothelioma within its terms.

The provision dealing with accident by inhalation, section 25(1)(b), requires – in stark contrast to section 20(2)(a) – inhalation “on a specific occasion” rather than by reason of a specific event or series of events”. Justice Mallon relied upon this provision to hold that there was an accident on the basis of the reasoning in Fairchild that each inhalation was potentially a causative event. In addition to doing some violence to the wording of the provision, the latest medical evidence has discarded the view that mesothelioma can be caused by a single strand and instead requires some form of accumulation. However, Justice Mallon’s view of the evidence was that a single inhalation could be sufficient to trigger the disease.

This long process of obtaining ACC cover is now at an end. There are no further rights of appeal, as the Act provides that the decision of the Court of Appeal is final. Anyone dealing with mesothelioma, whether contracted within work or outside of it, will now be able to make an ACC claim.

If you have any questions about this decision, please contact a member of our litigation and dispute resolution team.


Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.

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