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Accident Compensation Cases

ALLEN v ACCIDENT REHABILITATION & COMPENSATION INSURANCE CORPORATION (DC, 21/12/95)

Headnote - Brookers Accident Compensation Reports

Judgment Text

JUDGE IMRIE:
I have decided that the appeal succeeds. 
The issues 
The issue in this appeal is whether the appellant is entitled to an independence allowance. The application by the appellant for an independence allowance was declined on the basis that after deducting from her disability assessment the percentage disability of the defendant on which a lump sum payment had been under the 1972 Act the resulting percentage was less than 10 percent and no independence allowance was payable. 
The relevant provision in the Act is s 54 and the relevant Regulations are the Accident Rehabilitation and Compensation Insurance (Independence Allowance Assessment) Regulations 1993. 
Introduction 
On 1 May 1993, the appellant fell down steps on to a concrete floor and suffered bruising, a fractured left wrist, and a fractured and dislocated left elbow. Home help was assessed and paid. The appellant was not entitled to attendant care. By July 1993, she had developed atrophy with non-functional grasp in her left hand and restricted wrist and shoulder movement. 
The appellant completed a functional limitations profile questionnaire on 25 April 1994, which resulted in an assessed disability of 19 percent. In 1976 the appellant had received a lump sum under s 119 of the 1972 Act in respect of a disability in her left leg. Lump sum compensation was based on a disability of 18.75 percent. 
By decision letter dated 30 June 1994, the Corporation advised that the 18.75 percent disability on which the previous lump sum had been based had to be subtracted from the current level of disability of 19 percent, leaving a disability of 0.25 percent. As the resulting level of disability was less than 10 percent the Corporation advised the appellant that she was not entitled to an independence allowance. 
The appellant applied for a review of the decision stating that she could not accept that the damage done to her left hand and arm was worth only 0.25 percent She asked the Corporation to take a realistic view of her disability, and in particular mentioned that it cost her $11 per week to get her hair set. 
The review was held on 25 May 1995. The review officer issued his decision on 31 May 1995. In his decision the officer reviewed the history of the claim, and the submissions that Mrs Allen made through her husband. He referred to s 54(14) and upheld the Corporation's decision stating that s 54(14) required deduction of the 18.75 percent lump sum from the 19 percent disability allowance and the resulting 0.25 percent yielded no weekly rate of independence allowance. 
In her notice of appeal dated 8 June 1995, the appellant sought some relief towards paying $13 per week to have her hair done, a job she did herself before the accident. 
Appeal hearing 
At the hearing of the appeal on 17 October, Mrs Allen appeared with her husband. Mr Allen advised that Mrs Allen is deaf, but she did not want an interpreter. He spoke for her.[(1995) 1 BACR 155, 157] 
Mr Allen read a note which referred to the accident, and the injuries suffered by Mrs Allen. He said that because of the points system Mrs Allen could not claim for loss of movement in her arm. He said there was no relationship between the injury to her leg and the injury to her arm. Mrs Allen wanted the disability from the injury to her arm to be assessed separately. She has to have her hair done at a cost of $13, which is a form of loss of income. She said it was not a trivial matter. She takes pride in her appearance. She said that in addition there were many other things that she could not do, and she thought that the points system was unfair. 
In her submissions Ms Saxton set out the background to the appeal, and she referred to s 54(1) and (14) in particular. She submitted that s 54(14) provides that a disability for which any payment was made under the 1982 or 1972 Acts must be deducted from the disability assessed under the 1992 Act. She submitted that the reasoning behind s 54(14) is clear. Section 119 of the 1972 Act and s 78 of the 1982 Act provided compensation for permanent loss or impairment of bodily function. The payment was based on a percentage assessment of total disability suffered. Likewise, independence allowances are based on a total bodily disability assessment. If the disability assessed under the earlier Act was not deducted under the 1992 Act, double compensation would result. She said that when the deduction is applied in practice the result may seem anomalous because assessments under the 1992 Act are calculated in a different way from those under the 1982 Act and are often not comparable. The two assessment methods may provide significantly different percentage results for the same injured complainant. 
Ms Saxton submitted that s 54 and the Accident Rehabilitation and Compensation Insurance (Independence Allowance Assessment) Regulations 1993 provide a rigid procedure for calculating independence allowances. The wording of the section is mandatory in nature. The Court does not have jurisdiction to order that different questionnaire forms be used or that problems the appellant has suffered may be taken into account other than pursuant to the procedure set up by the regulations. 
Ms Saxton also submitted that s 54(14) must be strictly applied. She said that an example of the application of s 54(14) is the case of Hart (Appeal No 100/95) where an initial assessment of 25 percent for a back injury was deducted from a 100 percent disability assessment after a further injury to the claimant's back. Therefore, 75 percent of the maximum independence allowance was granted. 
In the present case she submitted that the deduction under s 54(14) must be applied. While it may seem from the deduction that the subsequent injury amounts to disability of only 0.25 percent, this is not correct. What seems to be an unrealistic result has occurred because of the change in the way disability is assessed under the 1992 Act. 
I referred to Ms Saxton the wording in s 54(14): 
“ … the person's disability assessed under subsection (5) of this section shall be reduced by the percentage or percentages of permanent loss or impairment of bodily function upon which any payment or payments under s 119 of the Accident Compensation Act 1972 were based. ”
I said that 18.75 percent of 19 was 3.5625 and that if 19 was “reduced by” 18.75 percent the result was 15.4375. I said that if the Legislature had wanted the percentage of 18.75 percent to be deducted from the figure of 19 it could simply have said so.[(1995) 1 BACR 155, 158] 
Ms Saxton sought leave to make further submissions and leave was given to the Corporation to file and serve further submissions on or before 27 October. Mr Allen was given leave to file and serve a reply on or before 6 November. 
Further submissions 
Ms Saxton filed further submissions dated 3 November 1995. In summary she submitted that s 54(14) contemplates a deduction of the appropriate percentage rather than a reduction by the appropriate percentage. In support of this submission she referred to three points: 
(1)
This interpretation sits with the policy and the purpose for which compensation is provided; 
(2)
This interpretation would mean that s 54(14) was consistent with other provisions in the Act, and would provide a consistent approach to calculation of independence allowances under the 1992 Act; and 
(3)
The interpretation has already been adopted by the District Court in the decision of Hart
In connection with policy she submitted: 
(i)
Pursuant to s 54(13) and reg 6 the assessment for an independence allowance disregards any disabilities that do not result from personal injury by accident, but takes into account all disabilities that have resulted from any personal injury by accident that has been accepted under the 1972 or 1982 Acts. The final disability assessment takes into account disabilities from all personal injuries by accident, regardless of whether the injured person has already been compensated for the injuries under the 1972 or 1982 Acts. In this case the appellant was assessed taking into account both the disability resulting from her recent personal injury by accident, and her disability resulting from the accident for which she received compensation in 1976. Ms Saxton submitted that the functional limitations profile questionnaire dated 25 April 1994 clearly takes into account the appellant's knee injury. As examples she referred to the positive answers to questions 5, 7 and 10. 
(ii)
The concept of compensation has changed in the 1992 Act. In particular the former Acts provided compensation for permanent loss or impairment of bodily function and for loss of capacity for enjoying life and for pain and suffering. The disability assessment under the 1992 Act does not provide compensation for permanent impairment. 
(iii)
If s 54(14) is not interpreted as requiring a deduction calculation double compensation will result. In the questionnaire no allowance is made for the fact that compensation has already been received in respect of former injuries. 
With regard to her submission that s 54(14) requires deductions to be consistent with other provisions in the Act, Ms Saxton referred to: 
(i)
Regulation 11(4) of the Regulations which provides that any entitlement to an independence allowance is subject to s 148 of the 1992 Act in any case where the person has received lump sum compensation under the 1972 or 1982 Acts. 
(ii)
Section 148(1) provides that except as provided in that section “where any person has received any payment” under the 1972 or 1982 Acts “that person shall not be entitled to any independence allowance under this Act in respect of that personal injury”
(iii)
Section 148 relates to cases of deterioration. Section 148(3) contemplates the case where a person suffers an increased degree of permanent loss or impairment of bodily function resulting from the personal injury by accident. It provides:[(1995) 1 BACR 155, 159] 
“Any such independence allowance shall be calculated by deducting from any degree of disability assessed under that section any percentage permanent loss or impairment of bodily function in respect of that personal injury by accident in respect of which a payment has been made under s 119 of the Accident Compensation Act 1972 or s 78 of the Accident Compensation Act 1982. ”
(iv)
Section 54(14) compliments s 148 and provides for disability arising out of a personal injury by accident different from the injury for which compensation has been paid under the former Acts. 
(v)
The same calculation of independence allowance should apply to claimants who suffer additional disability caused by an existing injury and those who suffer additional disability caused by a fresh injury. The claimants in both cases will be assessed using the functional limitations profile which will take into account all disabilities of the claimants arising from any personal injuries by accident. There is no reason for the calculation to be done in different ways for these groups of claimants. The word “reduced” in s 54(14) is capable of being interpreted as requiring a deduction calculation. It should be interpreted so as to provide a consistent approach to cases where previous cases of compensation have been received. 
In her reply to Ms Saxton's submissions, Mrs Allen made the following points: 
(1)
Many of the questions in the questionnaire she completed on 25 April 1994 were not relevant to the injuries she suffered in May 1993. 
(2)
The 1972 and 1982 Acts should be separate from the 1992 Act. 
(3)
To deduct the disabilities resulting from the injuries to her knee from those resulting from her injuries suffered in the accident in May 1993 was likely deducting apples from oranges. 
Consideration and decision 
Subsections (13) and (14) of s 54 read: 
“(13) An assessment of disability under this section shall not include as disability any impairment, handicap, incapacity, or inability to do any thing that does not result from personal injury covered by this Act or personal injury by accident in respect of which a claim has been accepted under the Accident Compensation Act 1972 or the Accident Compensation Act 1982. 
(14) Where any person who has received a payment under section 119 of the Accident Compensation Act 1972 or section 78 of the Accident Compensation Act 1982 is assessed for the purposes of establishing an entitlement to an independence allowance, the person's disability assessed under subsection (5) of this section shall be reduced by the percentage or percentages of permanent loss or impairment of bodily function upon which any payment or payments under section 119 of the Accident Compensation Act 1972 or section 78 of the Accident Compensation Act 1982 were based. ”
I consider that the words in s 54(14) should be given their plain meaning. I do not consider that I should read the words “the person's disability assessed under subsection (5) of this section shall be reduced by the percentage … of permanent loss or impairment of bodily function … ” should be read as “the percentage … of permanent loss or impairment of bodily function” should be deducted from the person's percentage disability assessed under subsection (5).[(1995) 1 BACR 155, 160] 
This interpretation involves something less than double compensation. Mrs Allen's disability is 19 percent but she will receive an independence allowance based on a degree of disability of 15.4375. 
Another way of stating this point is as follows. As a result of the permanent loss or impairment of bodily function which was fixed under the 1972 Act Mrs Allen was regarded as having a bodily function of 81.25 percent, that is her bodily function was reduced by the 18.75 percent disability to 81.25 percent. She now has a disability resulting from both accidents assessed at 19 percent. Nineteen percent of 81.25 percent is 15.4375 percent. In this way some allowance is made for the disability resulting from the earlier accident, and the compensation she received for it. 
A further factor is that, as Ms Saxton points out in her submissions, assessments under ss 119 and 120 of the 1972 Act (and ss 78 and 79 of the 1982 Act) are different from independence allowance assessments under the 1992 Act. Also of course, some would consider the weekly rates for independence allowances minimal. For example, the weekly rate for a percentage degree of disability of 40-49 is $7. The result is that it is not appropriate to talk about double compensation. To adopt Mrs Allen's metaphor, the result is an apple and an orange with a bite out of it, not two apples. 
The issue in the Hart appeal was whether the refusal of the Corporation to backdate an independence allowance was correct. Further, it appears to be a case where s 148 applied rather than s 54(14). 
My conclusion in this case is that the degree of disability of 19 percent is reduced by 18.75 percent giving a degree of disability of 15.4375. That means that the appellant is entitled to an independence allowance and the appeal is allowed. 
At the hearing of the appeal on 17 October, I explained to Mr and Mrs Allen that even if I found that the correct degree of disability for Mrs Allen was 15.4375, the disability allowance was only $4 per week. Mr Allen said that was better than nothing, and the appeal involved a matter of principle. 

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