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Accident Compensation Cases

Brundell v Accident Compensation Corporation (ACAA, 29/01/90)

Judgment Text

DECISION 
P J Cartwright Judge
This appeal is against a decision of Review Officer, Mr R L Bailey, dated 25 November 1988 declining an application by the deceased's spouse for earnings related compensation pursuant to s 65, lump sums under s 82, travelling expenses for daughter and sons to attend the funeral under s 80(2)(b) and compensation for loss of services under s 80(2)(a). I shall consider each claim separately. 
The hearing was concluded on the basis that further information would be sought by Ms Templeton in respect of an insurance policy. Receipt of this information recently and further submissions from both Counsel now enable me to deliver this decision. 
Claim under s 65(2)(a)(ii) 
The appellant's husband was aged 62 years of age when he died on 3 August 1987 as a result of injuries sustained when he fell down a partially open lift shaft in Albert Street, Auckland. At the time of his accident the deceased was working for NZI Finance Limited as a courier. The evidence given by the appellant at the review hearing was that the deceased was earning $300.00 per week at the date of his death and in receipt of National Superannuation. The appellant gave evidence that she too was earning around $300.00 per week. A budget of weekly household income and expenses had been supplied to the Corporation, the correctness of which was confirmed by the appellant at the review hearing. This budget showed a post-accident surplus of $17.25 as against a pre-accident surplus of $284.75. It was submitted that the appellant was partially dependent upon the deceased at date of death 3 August 1987 because approximately 50% of the household income was derived from him. 
Section 65(2)(a)(ii) provides: 
“Subject to this Act, where an earner dies as a result of personal injury by accident in respect of which the earner has cover, the Corporation shall pay earnings related compensation - 
(a)
To the deceased's spouse, if she or he was dependent on the deceased person immediately before the time of the accident until the date on which earnings related compensation ceases under section 66(2) of this Act to be payable to the spouse on account of age or until her or his sooner death, marriage, or remarriage, - 
(ii)
While she or he would, in the opinion of the Corporation, have been partially dependent on the deceased person if that person were living, at such lesser rate as the Corporation thinks proper having regard to the degree to which, in the opinion of the Corporation, the spouse would be so dependent: ”
Section 85 introduces a rebuttable presumption, subject to which dependency is a matter of fact. 
On 23 September 1987 $83,460.00 was received by the Estate Solicitors from NZI Corporation as a discretionary payment to the deceased's widow under an insurance policy effected by NZI. Various payments were made from this fund for which reimbursement claims have been made (which I will deal with later in this decision) leaving $44,947.00 in the Solicitor's trust account at the time the review hearing was conducted on 16 August 1988. 
By letter dated 20 April 1988 the Corporation advised that taking into account Mrs Brundell's income from earnings and investments “ … she is no longer dependent upon her deceased husband.” Entitlement to earnings related compensation was accordingly declined. This decision was confirmed on review. In arriving at his decision Mr Bailey quite clearly took into account the payment of the insurance money from NZI Corporation and the income potential from the investment of the balance of those funds. In taking into account insurance monies Mr Bailey relied on s 65(8)(a) which states that for the purposes of subs (7) of s65 in considering questions relating to dependency and relative needs the Corporation shall have regard to all relevant factors and may whenever it considers that it is just take into account any gain to any person that is consequent on the death of the deceased person. 
At the appeal hearing Mr Anderson argued that the Review Officer erred by misconstruing subs (8) of s65 as applying to s 65 as a whole whereas in fact subs (8) is expressly limited to subs (7) of s65. I accept that argument and I hold that subs (8) does not apply and may not be resorted to in deciding the degree if any of the appellant's dependency. 
Mr Anderson also argued that the Corporation pursuant to s 65(2)(a)“ … if she or he was dependent on the deceased person immediately before the time of the accident … ” (emphasis mine) ought to have determined the question of dependency as at 3 August 1987 and at the very least paid earnings related compensation for the period from 3 August 1987 to 23 September 1987 being the date the payment was received from NZI Corporation. 
For the respondent Ms Templeton relied mainly on Lomas (725) and its approval in Coley (129/86) for her substantial submission that if the Corporation can look at the reality of the dependency situation and make an appropriate reduction in the quantum of earnings related compensation with regard to a person who is totally dependent, then that discretion must apply equally to a person who is partially dependent. Applying the Lomas principle to this case Ms Templeton argued that there had been a change of circumstances, ie, the payment of the insurance monies, which meant that as a matter of fact the appellant was no longer partially dependent. 
In Lomas the widow had been recognised as a total dependent until she entered into a stable de facto relationship at which time the quantum of her earnings related compensation dependency was reduced by one half. On appeal it was argued that there was no jurisdiction to do this but Judge Blair held that it was implicit in the wording of subs (2)(a) that the Corporation can, from time to time, look at the reality of the dependency situation and adjust payments according to the practical position. 
Admittedly Lomas was concerned with a person in a total dependency situation but in my view the implicit nature of the wording of subs (2)(a) means it can be applied equally to a person in a partial dependency. 
In the present case I hold that the Corporation, without recourse to subs 8 of s65 of the Act, does have jurisdiction to take into account the balance of the insurance monies when considering the reality of the dependency situation. Ms Templeton submitted that if the Corporation was to assess the appellant on the basis of no income apart from earnings at 45% dependent on the deceased that her entitlement to earnings related compensation would be approximately $70.00 per week ($321.00 x 80% x 60% x 45% = $69.34). This figure was not challenged by Mr Anderson at the hearing of the appeal. Assuming $44,000.00 was invested for a comparatively modest return of say 12% the yield would be $101.00 per week which is more than sufficient to cover the earnings related compensation calculation based on no income apart from earnings of $70.00 per week. 
Accordingly the only possible entitlement which can exist under s 65(2)(a)(ii) is in respect of the period from 3 August 1987 until receipt of funds from NZI Corporation on 23 September 1987. To assertains Mrs Brundell's state of dependency at the time of her husband's death it was agreed at the appeal hearing that it would be necessary to determine exactly when the policy put in place by NZI on behalf of the deceased became payable. It was agreed between counsel that Ms Templeton would seek a copy of the NZI policy under which the payment was made with leave reserved to both counsel to make further submissions, should they wish, on receipt of this policy. As the policy and further submissions from both counsel are now to hand I am able to complete this decision. A letter from NZI Bank Limited under the signature of F J Balchin, Senior Personnel Manager, which accompanied a copy of the policy sent to Ms Templeton stated that the policy was not payable as of right on the date of death of the deceased and was subject to payment at the discretion exercised by the Company as Trustee. The policy is a document of several pages. Notwithstanding that the Insured is NZI Bank Limited the policy states that it shall cover all salaried employees in New Zealand of NZI Bank Limited and its subsidiary companies, NZ Guardian Trust Company Limited, NZI Investment Services Limited and NZI Share Registry Services Limited. The deceased was working for NZI Finance Limited as a Courier. It is not known if NZI Finance Limited is a subsidiary company of NZI Bank Limited. The amount of death cover is $2 million and likewise Permanent Disability Cover is $2 million. In clase 3 of the policy it is stated that if the Limit of Liability is insufficient to fully indemnify all Insured Persons entitled to indemnity under this Policy the distribution of the total amount of the Limit of Liability among such Insured Persons shall be at the discretion of the Insured. (Emphasis mine). Ms Templeton, in what I consider was a concession as to the discretionary nature of the policy, submitted there was no reason to assume that the monies would not have been paid. I prefer Mr Anderson's counter submission, that there is no reason to assume that the discretion would have been exercised. I hold that the appellant was partially dependent from 3 August 1987 until 23 September 1987. The appeal in respect of this claim, for the period stated, is allowed. 
Claim under s 82(a)(ii) 
This section states that where a person dies as a result of personal injury by accident in respect of which the person has cover that the Corporation shall pay to the deceased person's spouse who would have been totally or partially dependent on the deceased person immediately before that person's death if that person had not suffered the injury such lesser sum as the Corporation thinks proper if she or he would, in the opinion of the Corporation, have been partially so dependent on the deceased person. It is to be noted that the maximum sum for a totally dependent widow is $4,000. If she was “partially dependent” she may be paid “such lesser sum as the Corporation thinks proper”
As is the case with s 65 this section too provides that the time at which the determination of dependency is to be made is immediately before the person's death. 
The Review Officer gave no reasons for his finding that compensation was not available under s 82. 
Mr Anderson submitted that the review officer again may have relied on the s 65(8)(a) provision of “any gain to any person that is consequent on the death of the deceased person” as being the disentitling factor to a lump sum award to a partially dependent person under s 82(a)(ii). 
For the respondent Ms Templeton, in conceding that the Corporation is required to assess dependency “immediately before” the spouse's death, argued that in the circumstances of this case the Corporation was correct in declining to pay lump sums. Miss Templeton said that the appellant immediately before the death of her spouse, as well as her income, had some discretionary funds at her disposal probably in excess of what she would have been entitled to pursuant to s 82(a). 
Having held that Mrs Brundell was partiall dependent in respect of her claim under s 65(2)(a)(ii) consistency requires that I hold likewise in respect of this claim. In Winning 866/79 (Vol 3) Judge Blair said that the intention of this section is to provide a lump sum payment by way of solatium. The appeal in respect of this claim is allowed. 
Claim under s 80(2)(a) 
The section reads: 
“Where a person suffers personal injury by accident in respect of which he has cover, or where a person dies as a result of personal injury so suffered, the Corporation, having regard to any other compensation payable, may - 
(a)
Pay to any member of the household of which the injured or deceased person was a member on the date of the accident such weekly compensation as the Corporation thinks fit for any quantifiable loss of service of a domestic or household nature which was previously provided on a regular basis and which is proved to have been suffered by the person to whom the payment is made as a result of the injury or death for such period as the Corporation thinks fit, not being longer than the period for which that member could reasonably have expected to receive the service: ”
At the review hearing evidence was given of certain things the deceased used to do around the house, particularly lawn mowing, house maintenance and the like. A few carpentry jobs around the house had to be completed professionally after the deceased's death. There was an allowance of $43.00 per week in the post-accident weekly budget of household income and expenses for house maintenance. 
The Corporation disallowed the claim under this section on the basis that in the future sufficient monies would be available to cover such expenses. 
Mr Anderson argued that it would be erroneous to take the NZI payment into account because it is not compensation as defined by s 2. 
Ms Templeton argued that the Corporation has a clear discretion as to whether to pay compensation under this section. 
In deciding that in the future sufficient monies would be available to cover services of a household or domestic nature I do not consider that the Corporation confused the NZI monies as being in the nature of “other compensation payable.” I cannot find any evidence to show that the Corporation's decision not to pay this claim was a wrongful exercise of its discretion. The appeal in respect of this claim is dismissed. 
Claim under s 80(2)(b) 
This section provides that the Corporation may pay to any person such compensation as the Corporation thinks fit for any identifiable actual and reasonable expenses incurred by the person in giving help to the injured person while he is suffering from incapacity resulting from the injury or in taking any necessary action following and consequential upon the death of the injured person. (emphasis mine) 
The claim by the appellant under this section was for reimbursement of airfares for a daughter to return from Australia for her father's funeral and for two sons to come home later in the year to comfort her, one from France, the other from England. Total travel costs were approximately $10,000.00. 
It is to be noted that payment under this section is discretionary. 
In Worthy (1980) 2 NZAR 206 an attempt was made to recover legal and medical costs incurred in attending an inquest to see if a sudden death was caused by accident and therefore entitling relatives to compensation. In the course of his decision Judge Blair said: 
“It seems to me that, read in its context, the ‘necessary action’ has a limited scope and contemplates the necessary practical steps which have to be taken after a death. The purpose of the paragraph as a whole is to ensure that persons are reimbursed who suffer expense either by giving help to an accident victim or, if he dies, by doing the necessary things that must be done. For example, after a death someone will have to arrange for the removal of the body. If the death occurred, say, on a mountain, some expense might be incurred by sending a doctor up or a stretcher party to bring the body out. I consider the paragraph is aimed at these kinds of situations and does not extend to action taken after the death for the purpose of assisting the deceased's dependants to obtain compensation. In the present case the ‘action’ by Mr O'Brien and the attendance of the solicitors at the inquest was to find the cause of death. Put bluntly, I consider that the ‘necessary action’ contempated by the subparagraph extends no further than ‘clearing up’ after a death. I have already indicated that the purpose of the paragraph read as a whole is to cover costs incurred by those impelled by the circumstances of an accident to do what is necessary for the victim either before or after his death. I do not think that the cover extends to the more indirect consequences of his death such as attending an inquest for the benefit of dependants. I cannot regard this action as ‘necessary action’ in terms of the paragraph. ”
Accepting that the nature of the claim in this case is different from that in Worthy nevertheless I consider that the principle articulated by Judge Blair in Worthy has equal application on a consideration of the facts of this case. I can readily appreciate how important and comforting it was for the appellant to have her children return home consequent upon the tragedy of their father's death. Unfortunatley, however, I am obliged to find that the claim for reimbursement of travel expenses for the children to return to New Zealand is beyond the scope of this section. The appeal in respect of this claim must be dismissed. 
To the extent that the appeal has been allowed the file should be returned to the Corporation to make the necessary assessments and payments. 

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