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Accident Compensation Cases

Cooper v Accident Compensation Corporation (DC, 31/10/01)

Judgment Text

Judge M J Beattie
The issue in this appeal is whether the respondent's decision of 30 November 2000 constituted the correct acceptance of the appellant's claim for a specified entitlement in accordance with the provisions of Section 66 of the Act. 
The background facts in this matter are not in dispute and may be stated as follows: 
In April 1979, the appellant, then aged 17, suffered injuries in a motor accident when she was a pillion passenger on a motor cycle in collision with a car. She was admitted to Dunedin Hospital because of her injuries, the principal of which was a head injury, and she was admitted initially to the neurosurgical unit. 
The head injury was stated to be a small laceration at the back of her scalp and she had been rendered unconscious. There was a fracture of the occiput which extended down into the foramen magnum. She was subsequently found to have no neurologic deficit. 
In addition to her head injury, the appellant suffered a fractured right great toe, an undisplaced fracturing of her pelvis and lacerations to her left thigh. The appellant was discharged from hospital on 30 May 1979 and she was cleared as being able to return to work on 18 June 1979. 
No claim was made by the appellant at the time of this accident or subsequently for cover and entitlements under the Accident Compensation Act 1972 and it was not until February 1991 that the appellant, now married, lodged a claim for cover and entitlements. 
At the time that the claim for cover was made it seems that the only entitlement sought was lump sum compensation and for this purpose the respondent sought and obtained a report from Mr McMillan, Orthopaedic Surgeon, and it is his report of 12 April 1991 which sets out some of the background medical history. Mr McMillan made a recommendation for an award equivalent to 7.5% in terms of Section 119 and the respondent made an award of $1000.00 in respect of Section 120. This decision was taken on review and the Review Officer increased the award under Section 120 to $6,000.00. 
After payment of that lump sum no further activity occurred on the file until 8 May 2000 when solicitors representing the appellant wrote to the respondent indicating that she wished to make a claim for weekly compensation. The letter advised that at the time the appellant had suffered her accident she was employed at Woolworths in Dunedin and that she did not return to work there. It advised that her best recollection was that she was earning approximately $225.00 a week. The letter concluded by stating as follows: 
“Accordingly we now make a claim for backdated weekly compensation from the date of the accident through to the present day based on earnings of $225.00 a week. Could you please investigate this claim. ”
It is to be noted that the appellant had suffered an injury to her neck and shoulder in 1992 and was in receipt of weekly compensation for certain periods thereafter. As part of her vocational rehabilitation from that accident Career Services Rapuara had prepared a curriculum vitae for the appellant in April 1999 which showed a working career for considerable periods from 1980 onwards. The appellant had been receiving weekly compensation following her neck injury, that weekly compensation being based on her employment at the time of that injury as a caregiver/cook/cleaner at an Old People's Home. 
On 24 May 2000, the respondent wrote to Mr Schmidt, the appellant's solicitor, indicating that it had no evidence that the neck injury was presently a cause of any ongoing incapacity and therefore entitlements for that injury would not be reinstated, but that it was investigating the injuries from the accident of April 1979 to determine whether there was any ongoing incapacity from those injuries. The letter indicated that the appellant would need to have a neuropsychological assessment. 
A neuropsychological assessment was obtained from Ms J Milne, Clinical Psychologist, on 17 October 2000. That report made the following conclusions: 
Mrs Cooper is a 39 year old woman who, in addition [sic] her varied and complex medical history has sustained what appears to have been according to medical records, at the very least a moderate injury to her head when she was involved in a motorcycle crash at 17 years of age. Also, a careful review of her file reveals two reports of being assaulted and receiving some injury to her head, although details regarding her injury and recovery surrounding these incidents are vague. Shortly after a recent assault Mrs Cooper was reported to suffer from seizure activity and has suffered from several seizures subsequent to this. She is now medicated on anticonvulsant medication and followed medically by the Neurology services. 
Mrs Cooper is under the care of the Community Mental Health team with regular contact with a Social Worker and Psychiatrist. She is also prescribed medication for mood, seizure and pain management. 
Unfortunately it was not possible during contact with Mrs Cooper or significant others to gain any further information related to the historical onset and progression of mood, pain and/or cognitive difficulties surrounding her head related injuries. The information she was able to discuss centered on her current symptomatology involving her experience of pain and mood disturbance over the past two years. From this contact it was apparent that Mrs Cooper was suffering from marked mood disorder involving depression and symptoms of panic disorder with increasing levels of social isolation, associated with chronic pain and seizures. There was also evidence of mood disturbance directly related to memories of her involvement in the crash in 1979. Her self-report revealed post-traumatic stress symptoms involving avoidance of reminders and marked hyperarousal and affect associated with discussion of the crash. 
In consideration of the possibility of brain injury status, psychometric assessment was unable to be performed and minimal information was available regarding cognitive abilities, historically or currently. The nature of the injury she sustained to her head in the 1979 crash and indication of subsequent head related injuries suggests that inquiry into the possibility of brain injury sequelae is entirely appropriate. Complicating factors such as Mrs Cooper's marked depression, mental state, anxiety related to any discussion of the crash and presence of acute pain meant that assessment procedures could not be undertaken. Therefore, any conclusions regarding brain injury problems cannot be forwarded from the present assessment. ”
Prior to obtaining this report the respondent sought an extension of time for making a decision on the appellant's claim and an extension was granted until 15 July 2000. No decision had been made by the respondent by 15 July 2000 as it was still making enquiries and seeking to obtain particulars. 
On 15 September 2000 the appellant's solicitor wrote to the respondent and advised that the extension he had granted until 15 July 2000 had expired and that no further extension had been sought. In those circumstances it was contended that the provisions of Section 66 of the Act applied and he requested that the respondent calculate and backdate the appellant's weekly compensation in accordance with her claim as made on 8 May 2000. 
On 30 November 2000 the respondent issued a decision regarding the appellant's claim to an entitlement to weekly compensation. The decision letter to the appellant's solicitor stating, inter alia, as follows: 
“This letter is confirming what I have reported to you by telephone regarding ACC investigation of Mrs Cooper's cognitive effects from her motor bike accident in 1979. Janet Milne the neuropsychologist is unable to complete the testing until her mental state has been stabilised. 
Once Mrs Cooper's doctors are satisfied that she is able to undergo psychometric testing they should notify ACC and a referral to Janet Milne for the neuropsychological assessment will be completed. 
Legal Services have made a recommendation for Mrs Cooper's claims for weekly compensation on this claim. 
Deemed Decision 
A report from Mr McMillan documents that the client was an inpatient in Dunedin Hospital from 6 April 1979 until 30 May 1979 and notes that she was cleared for work from 18 June 1979. Therefore there is contemporaneous evidence of incapacity from 6 April 1979 to 17 June 1979 (inclusive). The next requirement is to establish the loss of earnings, and given the extended delay in seeking weekly compensation, we will no longer be able to obtain this from the employer. Accepting that the client was in all likelihood in full-time employment (35 hours per week or greater) at that time, we would assess weekly compensation based upon the statutory minimum under section 116 of the 1972 Act, ie $60.00 per week. This would be increased by $4.50 per week for a dependant spouse (which from the C1 form there wasn't one) and $2.25 per week for a dependant child (the C1 form identifies 2 dependant children). 
This entitles Mrs Cooper to $69/week for the period outlined above. ACC will reimburse WINZ for any benefits paid to Mrs Cooper over that time. ”
The appellant sought a review of that decision and in a decision dated 27 March 2001 the Reviewer determined that the respondent had fulfilled its obligations under Section 66 of the Act by making the best estimate of weekly compensation that it could at the time and that Section 66 did not permit it to actultra vires so as to grant entitlements for which there was no eligibility. 
It is to be noted that the Reviewer who heard the appellant give evidence, found her to be a wholly unreliable witness and that he did not accept her statement as to the circumstances of her employment at the time of the accident and that nothing that the appellant had said was able to be verified. 
Miss Foley, counsel for the appellant, submitted as follows: 
The provisions of Section 64(4)(5) of the Act are mandatory provisions and Section 66 clearly states the consequences of the insurer failing to comply with those mandatory timeframes. 
When those timeframes are not complied with, Section 66 clearly states that the claim must be accepted. 
Section 66 is a deeming provision, being a provision which creates a statutory fiction, holding something to have happened even if it has not. In this case the Corporation is deemed to have accepted the appellant's claim as it was made. 
Once the deeming provision comes into play the respondent cannot add qualifications to its acceptance of the claim as there is no basis for any limiting of the claim. The words of the statute are clear and unambiguous and there is no room for qualifications to be added. 
If the Act is to work in an equitable manner then claimants are entitled to timely processing of their claims and consequences must flow from the Corporation not adhering to timeframes and those consequences may be that in some cases the Corporation is deemed to have accepted a claim in its entirety even if it may not ordinarily have done so. 
The decision to accept the appellant's claim could not be ultra vires, as Section 66, being the deeming provision, gives authority for it to be so accepted. 
Mr Hlavac, counsel for the respondent, submitted as follows: 
Whilst the respondent accepts that it did not comply with the time limits contained in Section 64, it does not accept that Section 66 requires the Corporation to pay the appellant weekly compensation at the rate of $225.00 per week for the entire period since her accident in 1979. The intention of Section 66 cannot have been to provide an enduring benefit under the Act that would not otherwise be available. 
The interpretation that counsel for the appellant would have the Court accept would require the respondent to act ultra vires. The decision of this Court in Dennis (Decision 225/00) is relevant. 
The appellant's claim is for weekly compensation and the respondent is to be taken as accepting that she has an entitlement but the quantum and duration need to be determined on the basis of further evidence which is sufficient to satisfy the criteria for weekly compensation from time to time. 
The evidence shows that the appellant has been in employment at different times and therefore the claim that the appellant makes cannot be justified on the evidence. Payment under such circumstances would clearly be ultra vires. 
This appeal involves the interpretation to be given to the provisions of Section 64 and Section 66 of the Accident Insurance Act 1998. Section 65 of the Act is also in similar vein but is not relevant for this appeal as that Section applies to steps an insurer is required to take in complicated claims. 
The provisions of Section 64, Section 65 and 66 are new in Accident Compensation Legislation and the only comparable provision in any earlier legislation would seem to be Section 90 (9) of the Accident Rehabilitation and Compensation Insurance Act 1992 which provided that an application for review shall be deemed to have been determined in favour of the applicant where the hearing of the review has not been commenced within three months of the lodging of the application. 
Section 66 of the Act provides as follows: 
Failure to meet time limits, or to decide, is decision to accept — 
At the time when an insurer fails to comply with a time limit under section 64 or section 65, whichever applies, the insured has a decision that the insurer has accepted the claim. 
An insurer to which subsection (1) applies must tell the insured — 
That the time limit has expired without the insurer having made a decision; and 
That the effect is that the insured has a decision that the insurer has accepted the claim. 
The word “claim” is defined in Section 13 of the Act as meaning a claim underSection 54. Section 54 of the Act provides: 
What insured may claim for — An insured may claim against an insurer for - 
Cover for his or her personal injury; or 
Cover, and a specified entitlement, for his or her personal injury; or 
A specified entitlement for his or her personal injury, once an insurer has accepted cover for the personal injury. 
Section 64 of the Act provides: 
Steps insurer takes to action claims— 
This section applies to a claim that is not a claim described in section 65(1). 
The insurer must take the following steps as soon as practicable, and no later than 21 days, after the claim is lodged: 
Investigate the claim — 
At its own expense; and 
To the extent reasonably necessary to enable it to take the following steps in this subsection; and 
Either — 
Make its decision on the claim and give notice of it under section 72; or 
Decide that it cannot make its decision on the claim, or any other decision, without additional information, and ask the insured to agree to an extension of time of a particular length. 
If the insured does not agree to any extension, the insurer must make its decision within 21 days after the claim was lodged. 
If the insured agrees to the proposed extension, the insurer must take the following steps as soon as practicable, and no later than the expiry of the extension: 
Make a reasonable request to the insured, or decide to make a request to another person, for the additional information; and 
If the insurer makes a request to another person for the additional information, tell the insured about the making of the request and its nature; and 
Make its decision on the claim and give notice of it under section 72. 
The insurer and the insured may agree to further extensions after the extension referred to in subsection (4), and that subsection applies to any further extension, but the insurer's decision on the claim must be made within 4 months of the claim being lodged. 
In terms of the statutory wording there can be no question that the appellant, through her solicitor, made a claim within the meaning of Section 54, that is for a specified entitlement. The word entitlement is similarly defined in the Act as meaning — 
a statutory entitlement 
an entitlement under Part 13 
Statutory Entitlement is also defined in Section 13 of the Act as meaning inter alia — 
“Weekly compensation as provided for in Part 2 of Schedule 1 ”
I take it to be from the distillation of the meanings and purpose of the foregoing provisions that Section 66(1) means that the insurer, in this case the Corporation, is taken to have made a decision that the appellant's claim for weekly compensation in terms of Clause 7 of Part 2 of Schedule 1 of the Act has been accepted. 
I further find however that the decision does not mean that the duration of or quantum of that weekly compensation is settled without any recourse to the requirements of Clause 7 and the ensuing clauses which provide the formulae for calculation of same. 
Whilst the letter of claim from the appellant's solicitor may have requested a specified duration and a specified amount for weekly compensation, that aspect of the claim does not come within the definition of the word claim in terms of Section 54 of the Act in that the claim within that meaning must be used in the generic sense as identifying the type of entitlement that is being sought. Indeed of course it can also apply to the question of cover. 
In the context of Schedule 1 the various generic types of claim are set out in the five parts of Schedule 1. Part 2, being weekly compensation, is one of those claims. 
I concur with the submissions of counsel for the respondent when I hold that the meaning of “claim” cannot include the literal wording of the printed document that may have been the claim of the insured as presented to the insurer. Such a document may well have contained aspects of a claim which were beyond the power of the insurer to provide. In the present case the claim for uninterrupted weekly compensation from April 1979 down to the present day at a fixed rate is simply not something which the respondent has the power or authority to provide within the statutory framework of the Act to which it must adhere, unless all the criteria for such an entitlement can be made out. The evidence, as it presently exists, would determine that the necessary criteria cannot be made out. 
Whilst the clear purpose of Section 66 is to encourage administrative efficiency on the part of an insurer, I find that it cannot be seen as providing legal authority to allow for the granting of an entitlement in terms which would offend the principles and the criteria which the Act requires for that entitlement. 
It is for this reason that I find that the submission made by Miss Foley that the appellant's claim, as it was presented, must be deemed to have been accepted both as to chapter and verse cannot be the case. The Accident Insurance Act 1998 must be taken to be a code for the purposes of achieving the objects as contained in its long title. In those circumstances the insurer is required to act at all times within the authority that is granted to it by the Act. All its powers are those provided in the Act, particularly when it comes to the provision of entitlements. Indeed the entitlements are described as Statutory entitlements, which reinforces the notion that the terms of them are governed by the statute. 
I cannot accept that the purpose and meaning of Section 66 was to enable a claimant to have a statutory entitlement in much greater terms than the provisions of the Act would otherwise allow. If that were to be the intention of this provision, I find that a much clearer expression of that intention would need to be provided before it could be accepted, seeing that it would offend against the well settled principles pertaining to intra vires and ultra vires actions of a statutory authority. 
Having said that, however, I do find that the provisions of Section 66 are not as clear as they ought to be as to their consequences and it may well be that a higher jurisdiction may need to consider the precise boundaries which are covered in Section 66. 
An immediate problem that I see is where the claim is for an independence allowance, it being a specified entitlement, which requires an assessment of a minimum of a 10% whole personal impairment. One can only assume that if the insurer fails to comply with the time provisions of Section 64 then the insured is deemed to have an entitlement to an independence allowance, but for what sum? Is the insured then to be assessed in the usual way and if he/she is assessed as having a whole person impairment of less than 10%, is he/she to be nevertheless entitled to the minimum allowance as provided for in the Schedule? 
Those same problems don't arise in the case of this appellant as I find that the extent of the decision which the appellant has in her favour, is the decision that she has an entitlement to weekly compensation but that the quantum and duration of same requires to be determined in the manner which the Schedule to the Act provides. 
I note that the respondent has indeed granted the appellant weekly compensation in conformity with the statutory criteria for the period for which it is satisfied that an entitlement exists. I find it is for the appellant, in conjunction with the respondent, to then provide information which will enable any greater period of weekly compensation to be provided, should there be an eligibility for same. 
Accordingly then I find that the decision which the respondent made, and which is the decision which is the subject of this appeal, was the correct decision for the respondent to make in terms of Section 66. That decision is declaratory of the extent of the acceptance of the appellant's claim for weekly compensation until such time as more information and particulars are provided which may allow for a greater weekly sum and a longer period of entitlement. 
For the foregoing reasons the appeal is dismissed. 

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