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Accident Compensation Cases

Borst v Accident Compensation Corporation (ACAA, 08/03/12)

Judgment Text

DECISION 
Member R Bedford
[1]
This is an application by the appellant, by his advocate, for leave to appeal to the High Court from NZACA 4/2009, only in so far as concerns the decision that the appellant was not entitled to compensation under s 114 of the Accident Compensation Act 1972. 
[2]
The appellant also applied for leave to bring the application out of time, being a matter of days only outside the 21 days allowed, and as the Corporation has indicated through the submissions of counsel that it does not oppose the application, the extension is granted. 
[3]
Applications for leave to appeal against the decisions of the Authority are made pursuant to s 111 of the Accident Compensation Act 1982, which permits the Authority to grant leave to appeal on a question of law or where in the Authority's opinion the question involved in the appeal is one which by reason of its general or public importance or for any other reason ought to be submitted to the High Court for decision. 
[4]
With respect to questions of law, the relevant principles are as discussed by the District Court in O'Neill (decision number 250/2008) by Cadenhead DCJ at paragraphs [23] — [40], and approved by the Authority in Langhorne v ACC [2010] NZACA 2. See also Judge Cadenhead's comment in Saipe v ACC (Decision No 21/2008), concerning the relevance of ensuring a proper use of scarce judicial resources. 
Background to the Section 114 Assessment Appeal 
[5]
On 26 May 1976 the appellant was seriously injured in a motor vehicle accident; he was an earner and for a period he received earnings related compensation (ERC), returning to work in another occupation in September 1978. 
[6]
In July 1980 the appellant had another period of incapacity and in September 1980 he was forced to leave his employment for reasons primarily to do with his injuries. Following his unsuccessful attempts to have his ERC reinstated, he left New Zealand for Australia in November 1980, and returned in March 1985. The appellant then applied for reinstatement of his ERC and an assessment of permanent incapacity under s 114 of the 1972 Act. 
[7]
On 11 June 1987, the Corporation notified the appellant that he was not entitled to reinstatement of his earnings related compensation and therefore, he was not entitled to an assessment under s 114 of the 1972 Act. 
[8]
The decision letter stated that as at the time of his second period of incapacity the appellant was not an earner, he therefore had no diminution of earning capacity, but should it transpire at a later date that he was placed in employment and then suffered diminished incapacity to earn, then the Corporation would be in a position to reconsider a s 114 entitlement. 
[9]
Review rights were given, but the appellant did not lodge a formal review application, instead concentrating on the reinstatement of his ERC through “representations” made personally and through his doctor and ACC appointed specialists direct to the Corporation between 1987 and 1990, and complaints by telephone and in writing to the Corporation via the Minister of Health, in early 1990. 
[10]
On 1 November 1990, following a review by the Corporation of the appellant's claims for compensation (but excluding the s 114 assessment claim), the appellant's ERC was reinstated back to March 1985. The Corporation did not revisit the s 114 assessment, and no review rights were given in the decision notified to the appellant. 
[11]
In late November 1990, the appellant made a further written complaint about the level of his compensation to the Corporation via the Minister of Labour, in which he also asked for information concerning review rights. The letter was also passed on to the Corporation, but the follow-up action is unclear and there is no indication that the Corporation reconsidered the s 114 assessment, or provided the review information. 
[12]
In 2003 the appellant instructed counsel on several related claims and a late application for review was formally lodged in respect of the Corporation's decision of 11 June 1987, along with the other two late applications for review that were under appeal. The issue stated by the appellant was that the s 114 assessment was refused because the appellant was not on weekly compensation, and when compensation was reinstated, the s 114 issue should have been dealt with at the same time. 
The Issue on Appeal 
[13]
At a preliminary hearing the Authority requested supplementary submissions from both parties regarding the specific effect of s 368(4) of the Accident Compensation Act 2001, as the respondent had raised the section in substantive submissions as a statutory bar to a s 114 assessment, and the appeal was effectively decided on these submissions. 
[14]
The Authority and counsel referred interchangeably to a s 114 assessment under the 1972 Act and a s 60 assessment under the 1982 Act, which was in force when the Corporation made the s 114 decision under appeal, and my decision repeats this. 
[15]
Mr Crabb (then counsel for the appellant) sought to discount the effect of s 368(4) by attempting to distinguish the High Court decision in White v Accident Compensation Corporation CIV 2005-409-629 (unreported, Christchurch registry, Randerson J, 21 July 2005), as relied upon by the respondent. 
[16]
In essence, Mr Crabb argued that, unlike the appellant in White (supra) who knowingly abandoned his rights after being given notice of them, in the present instance, the appellant was essentially entitled to a new decision in 1991 regarding permanent incapacity under s 60 of the 1982 Act, with rights of review, as soon as the Corporation revised its decision that the appellant was not an earner at the time of his second incapacity and granted continuous compensation from the date of accident. 
[17]
The appellant had accepted the Corporation's advice that he was not entitled to a s 114 assessment because he had no entitlement to compensation because he was not an earner on his return from Australia in 1985 and had focused on rectifying that situation, with letters to the Corporation and ultimately, to the Minister, which led to the revision of the earnings related compensation decision and reinstatement. 
[18]
Mr Crabb also relied upon Barker J's obiter comments in King v Accident Compensation Corporation [1994] NZAR 159Has partially negative history or cases citing, but has not been reversed or overruled[Yellow] , to the effect that acceptance of the Corporation's position would result in an injustice caused by the corporation's refusal to consider the appellant's claim until the new Act came into force, which then precluded such consideration. 
[19]
Mr Crabb accepted that for the purposes of the appeal, the provisions s 138(1A) of the 1992 Act have the same effect as s 368(4) of the 2001 Act, with the same cut off date — 1 October 1992. 
[20]
Mr Crabb then submitted that the many representations made between 1987 and 1990 could constitute an application for review of the 1987 decisions and also directed the Authority to s 390 of the 2001 Act and urged the Authority to order the Corporation to revise its decision denying the s 60 assessment. 
[21]
For the Corporation, it was argued that s 368(4) of the 2001 Act applied by virtue of the timing of the appellant's late application for review, and under that section, the appellant was not entitled to receive compensation under s 114 of the 1972 Act, unless an assessment had been completed by 1 October 1992, which was not the case, or alternatively, a review from a decision about an assessment was lodged before 1 October 1982. 
[22]
Mr Tui relied upon the decision in White (supra) as confirming that there were only two options available under s 368(4), being that an assessment had been completed before 1 October 1992, but payments had not commenced, or, if no assessment had been completed prior to 1 October 1992, this was only because an application for review of a decision about the assessment has been lodged under the 1982 Act before 1 October 1992. 
[23]
Mr Tui argued that, as in White, the appellant did not meet the statutory criteria as there was no assessment and there was no pending review application as at 1 October 1992, and the appeal should be dismissed. 
Related Findings: First Appeal: Weekly Compensation — 1980 - 85 
[24]
At paragraphs [157] to [158] the Authority made it clear that he accepted that the three late applications for review should be decided on their merits. 
[25]
The Authority allowed the first appeal and the relevant findings are: 
Paragraph [156]: In 1991 the Corporation relented under repeated pressure from the appellant and his doctor, and undertook to determine two findings: 
The appellant's capacity to work in 1980 when he left the Ministry of Works; and his capacity to work at the time in 1991. Both found that the appellant was incapacitated to work, and that a continuum stretching back to his original injury had been established for a period of 13 years. Not only was established the appellant's right to ERC, but also this was done on the basis of having had established a long-term stabilised injury that was unable to be rehabilitated leading to a permanent incapacity to work. 
Paragraph [161]: … The Authority agrees with Mr Crabb that in 1991 the Corporation should have clearly found that there were absolutely no doubts over ongoing incapacity. ”
[26]
In my view, the effect of the first appeal decision, which the Corporation has not sought leave to appeal, would seem to be that the Corporation knew firstly, the appellant had been continuously incapacitated by his injury since 1980; secondly, the injury had stabilised; thirdly, there was no rehabilitation that would alter the appellant's capacity to work, and fourthly, the appellant's situation was permanent. 
[27]
On the face of it, this would seem to meet the criteria for triggering a s 114 or s 60 assessment, and, coupled with the appellant's challenges to the decision of 11 June 1987 and the decision of 1 November 1990, would seem also to raise a reasonable argument as to whether there was a live application for review of the decision declining the s 114 assessment, which was pending as at 1 October 1992. 
The Decision at issue: Third Appeal: 11 June 1987 — Section 114 Permanent Incapacity Assessment 
[28]
The Authority confined his consideration to the application and effect of s 368(4) of the 2001 Act as a statutory bar to a s 114 assessment being undertaken after 1 October 1992. 
[29]
The Authority first recorded Mr Tui's submissions that the appellant was statute barred under s 368(4) of the 2001 Act, because of not having had an assessment completed under s 60 of the 1982 Act, or having lodged an application for review against the Corporation's decision about an assessment, prior to 1 October 1992, and his reliance upon the decision in White (supra). 
[30]
The Authority recorded Mr Crabb's submissions distinguishing the appellant's case from that of the facts in White (supra) and his contention that the Corporation was aware of the errors made in respect of the s 60 assessment, and that as soon as s 59 of the 1982 Act was applied, a review of s 60 entitlements and other entitlements should have been forthcoming. At the very least, a full s 60 assessment was required to meet their statutory obligations and by virtue of the Corporation not doing this, the appellant was disadvantaged by being taken outside the ambit of the Act. 
[31]
The Authority also recorded Mr Crabb's' submission that the Corporation was aware that the appellant had always disagreed with the decisions made in 1987, but did not record the submission that this “disagreement” amounted to an application for review of the decision declining the s 114 assessment. 
[32]
The Authority agreed with Mr Crabb's submission that the Corporation was aware of the s 60 issue in 1990 but deliberately decided not to address it, but found that this did not assist the appellant's case that he was denied the right of a decision letter and the opportunity to review this. 
[33]
Finally, the Authority agreed that the later invoking of s 368, which was a transitional provision designed to protect existing rights, to deny a clear right to an assessment and prevent a statutory duty being fulfilled, when that duty existed prior to the provided cut-off date, will lead to an injustice against the appellant. 
[34]
However, the Authority felt obliged to uphold Mr Tui's submissions for disallowing the appeal in respect of an assessment under s 114 of the 1972 Act. 
[35]
The reasons for this were that the decision declining to assess the appellant for permanent incapacity under s 114 was made on 11 June 1987, the late review application of that decision was lodged in 2003 by which time the 2001 Act was in force, and although weekly compensation paid under the previous Acts before 1 April 2002 continued to be payable under the 2001 Act, s 368(4) provided that no compensation is payable unless: 
“(a)
an assessment of compensation has been made under section 114 of the Accident Compensation Act 1972 or section 60 of the Accident Compensation Act 1982; and 
(b)
the assessment was completed — 
(i)
before 1 October 1992; or 
(ii)
on or after 1 October 1992 only because an application for review of a decision about the assessment was lodged before 1 October 1992 under Part 1X of the Accident compensation Act 1982. ”
[36]
In dismissing the appeal, the Authority held that the appellant was not entitled to receive compensation under s 114 of the 1972 Act unless an assessment had been completed, or a review from a decision about an assessment was lodged before 1 October 1992. 
[37]
No assessment had been undertaken and further, the present review proceedings were lodged in 2003, well after 1 October 1992, therefore s 368(4) precluded the payment of compensation under s 114 of the 1972 Act. 
The application for leave to appeal 
[38]
The grounds in support of leave are set out in the appellant's submissions in support, filed by his advocate, Mike Darke: 
“(a)
The Authority erred by holding that the bar in s 368 of the Accident Compensation Act 2001 applies; and/or 
(b)
The Authority erred in finding that the Corporation could disadvantage the appellant to the extent where he then became barred from exercising his right to an assessment. ”
[39]
Mr Darke, advocate for the appellant, relied upon the Corporation's 1987 refusal to send the appellant for a s 114 assessment as a necessarily implied assessment with the Corporation declining to make payment, and the 1990 decision reinstating compensation as an assessment, but with the Corporation refusing to issue a decision. 
[40]
Also following King (supra) Mr Darke argued that it could not be correct that an agency could behave to the detriment of a claimant and then hide behind a transitional or new provision to avoid action it should have taken. It should be remembered that this is social legislation and should not be interpreted in a narrow manner, and to do so in this case would be an affront to justice. 
[41]
Mr Darke also referred the Authority to Robertson v Minister of Pensions [1948] 2 ALL ER 767, where, having given an undertaking that Robertson had suffered war injuries, the Crown was estopped from later trying to refuse pension entitlements on the basis that he could not prove a war injury. 
[42]
Such cases, Mr Darke said, demonstrate that in administrative law, unfair or unconscionable behaviour cannot be tolerated to the disadvantage of the citizen. 
[43]
Mr Darke filed further submissions in reply to the Corporation's submissionss opposing leave, to the effect that legislative provisions such as s 368(4) are enacted on the presumption that a statutory Authority will act in good faith, and cited the approach taken by Court of Appeal in Kearney v Accident Compensation Corporation [2010] NZCA 327Has Litigation History which is not known to be negative[Blue] , where the court held that an unlawful decision obligated the Corporation to pay interest, where the statutory provision apparently did not permit it. 
The Corporation's Opposition to the Application 
[44]
The Corporation opposed the application on the same grounds as before, and Mr Tui argued that despite the Authority's agreement that the Corporation's actions may have disadvantaged the appellant, pursuant to s 368(4)(b)(ii) of the 2001 Act, in order for the appellant to be entitled to compensation under s 114 of the 1972 Act, the appellant's application for review had to be lodged before 1 October 1992; White (supra). 
[45]
Mr Tui had a further right of reply and essentially relied upon the same basic argument and the strict interpretation of s 368(4). 
Conclusion 
Section 368(4) of the 2001 Act and the Statutory Bar 
[46]
In my respectful opinion, while the Authority was obliged, as he determined, to consider the appeal under s 368(4) of the 2001 Act and whether the appellant was precluded by the statutory bar, it appears to be arguable (as the Authority also determined) that the Corporation had not completed an assessment by 1 October 1992, or alternatively, that the pre-condition to achieving an assessment under s 114 after the cut-off date by having a review application pending, was not met. 
[47]
Following Barker J's obiter comment in King (supra) as to an alternative approach to the one he ultimately took in that case, the appellant's representations to the Corporation between 1987 and 1990 and the two related written complaints could amount to a valid application for review of the decision not to undertake a s 114 assessment when the Corporation's stated pre-condition to such an assessment had been met, or alternatively, of an implied nil assessment, which Barker J found was equally possible. 
[48]
Accordingly, I consider that there is an arguable question as to whether or not the appellant was entitled under s 368(4) of the 2001 Act to a s 114 assessment after the cut-off date of 1 October 1992, because of having a valid review application of a decision from a completed assessment, or of a decision about an assessment, pending as at that date. 
[49]
The Authority did not consider this in his decision, perhaps because his focus was more directed to the absence of a formal review application being made until 2003, however, the status of the appellant's representations and complaints is the determining factor, if s 368(4) is to be strictly construed irrespective of any possible injustice that may result, and leave is therefore granted to appeal to the High Court on this question. 
The Injustice That May Result From Denying the Appellant the Right to a Section 114 Assessment 
[50]
Although the Authority acknowledged the injustice that could be done to the appellant, he felt constrained to construe s 368(4) strictly as propounded by Mr Tui and disallow the appellant the right to a s 114 assessment. 
[51]
The Authority on appeal may, or may not, ultimately have the jurisdiction to depart from the approach taken in White (supra), but the Authority on this application has a broad discretion to look at how the interests of justice or the public good may best be served, by granting leave to appeal to the High Court in respect of questions the Authority believes should be resolved by a higher court. 
[52]
I am persuaded of the merit in Mr Darke's submissions, at least to the point where I consider it possible that the High Court on appeal could exercise its discretion to follow the principles enunciated in King (supra), Robertson (supra) and Kearney (supra) and decide the appeal on the basis of what the court considers to be fair and just in the appellant's circumstances, and in light of the Corporation's actions, the prescriptive wording of s 368(4) notwithstanding. 
[53]
I have also had regard to another of Barker J's decisions on appeal from the Authority under the 1982 Act, concerning the claim that a non-taxable car allowance should form part of the appellant's relevant earnings. In Accident Compensation Corporation v Lewis (1994) NZTC 11,235, p11), Barker J expressed the view that compensation statutes are not to be interpreted strictly, and in appropriate cases, the Court should err in favour of the citizen, rather than the statutory corporation which administers the accident compensation scheme. 
[54]
Accordingly, leave is also granted in respect of the question of whether, under the specific circumstances that pertain to the appellant, if there is no valid application for review, should the prescriptive wording of s 368(4) be applied to deny the appellant the right to a s 114 assessment after the statutory cut-off date, despite any injustice that may result. 
[55]
Finally, as a housekeeping matter, the Authority commented at paragraph [169] that a substantial award of costs was warranted on the successful first appeal, and invited counsel to make submissions to the Authority if agreement on costs could not be reached. 
[56]
The Authority reserves leave to the parties to make submissions on costs if no agreement has been reached, as there is nothing on the court file to assist the Authority in this matter. 

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