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Accident Compensation Cases

Wallace v Accident Compensation Corporation (DC, 01/04/03)

Judgment Text

Judge M J Beattie
The issue in this appeal is whether the appellant is entitled to interest on backdated weekly compensation which accrued during the period it had been cancelled by the respondent, which cancellation was ultimately determined as having been wrongly made. 
The issue in this appeal raises a seemingly novel point of law in this rapidly expanding area of jurisprudence arising from the provisions of section 72 of the 1992 Act and section 101 of the 1998 Act whereby a right of interest on late payment of weekly compensation is given to a claimant in certain circumstances. 
The facts relevant to the determination of the issue in this appeal are not in dispute and may be stated as follows: 
In March 1985 the appellant suffered an injury to his right elbow. This injury required surgical treatment to remove loose bodies. 
The appellant continued to suffer a significant loss of range of motion and he was incapacitated thereby and in receipt of earnings related compensation, subsequently weekly compensation. 
In 1997 a medical case review of the appellant's condition was undertaken and the respondent sought advice from Mr Colin Hooker, Orthopaedic Specialist. 
Mr Hooker's report of 27 October 1997 advised that the appellant's current incapacity was predominantly caused by degenerative changes due to the appellant's pre-existing condition rather than it being as a consequence of the accident. 
As a consequence of Mr Hooker's advice the respondent did, on 3 December 1997, cancel the appellant's entitlement to weekly compensation, such cancellation being effective as from 9 February 1998. 
The appellant sought a review of that decision and the appellant was advised that a review hearing had been scheduled for 18 February 1998. 
The appellant had counsel representing him for the purposes of the review and the appellant's counsel sought an adjournment of the hearing on the grounds that he was endeavouring to obtain further medical evidence regarding the appellant's condition. 
Further adjournments of the review hearing were sought and obtained by the appellant and his counsel until medical evidence was to hand. 
That medical reports dated 14 August 2001, 19 August 2001 and 4 September 2001 having been obtained, the appellant sought a review hearing and which hearing took place on 31 October 2001. 
By review decision dated 15 November 2001, the Reviewer accepted the medical evidence as contained in the three reports presented by the appellant that the appellant's present condition was attributable to the injury for which he had been given cover and as a consequence thereof weekly compensation was reinstated to the appellant as from the date it was ceased. 
The appellant's weekly compensation was restarted on 23 November 2001 and all arrears dating back to 9 February 1998 were paid. 
By letter dated 29 November 2001, the appellant's counsel sought interest on that backdated weekly compensation for the whole of the period in which it had accrued. 
By decision dated 29 November 2001, the respondent stated that it did not consider that the appellant had any entitlement to interest as the weekly compensation had been reinstated and paid within one month of the date of the review decision. 
In a review of that decision the Reviewer determined that the Corporation had not been responsible for the delay in having the decision to cancel weekly compensation reviewed, it being solely for reasons created by the appellant and his counsel. The Reviewer found that the respondent had acted promptly and that payment was not late within the meaning of section 101 of the Act. That review decision was given on 8 February 2002. 
For the purposes of the appeal hearing the Court has been provided with the medical reports which swayed the Reviewer from accepting Mr Hooker's report, and it has to be noted that Mr Hooker gave his opinion without benefit of any x-rays. The advice from the Radiologist was that the degenerative changes were secondary to trauma. It was also the advice of Dr Hancock and Dr Doube that the appellant's elbow, suffering as it was from degenerative changes, was nevertheless in that condition as a direct consequence of his elbow injury. 
In her submissions, Miss Clarkson, counsel for the appellant, submitted that the appellant deserved better than the report which Mr Hooker had provided and that the Corporation in so acting on the Hooker report had been less than fair. She highlighted the submission by comparing the nature and depth of Dr Hancock's report to that of Mr Hooker. 
Counsel submitted that the decision of the High Court in Barnett (AP64-SW02 Auckland Registry) is on point, particularly para [31] thereof. It should be noted that the Barnett decision was considering the 1992 Act provision which does have slightly different wording in a crucial part from that in section 101 of the 1998 Act but that difference in wording is not relevant in this appeal. In para [31] of his decision His Honour Justice Paterson stated: 
Emphasis was placed by counsel on the term ‘all information necessary’. The Corporation's position is that the determination of whether the claimant has cover under the Act is an essential pre-requisite. Counsel submitted that if all necessary information was not provided until after the issue of cover had been determined, then the interest entitlement could not commence until after cover had been granted. On the other hand, if the Corporation denies cover, but nevertheless at that time has had supplied to it all necessary information for it to determine cover, and cover is subsequently granted on review or appeal, the claimant would be entitled, from the date that the Corporation had all necessary information, to interest irrespective of the fact that cover was not granted until some time later. I accept that this is a correct submission. The question of the entitlement to interest is not determined by the date on which cover is granted. It is determined by the date that the Corporation had all information necessary to determine whether cover should be granted. If the Corporation declines cover, and an appeal subsequently grants cover, on the same information which the Corporation had at the time it declined, interest commences from the date on which the Corporation received the necessary information. ”
Miss Clarkson considered that at the very latest the Corporation had all the necessary information on 22 August 2001, being the date on which it was provided with the Radiologist's report and the report from Dr Hancock. 
Mrs Gillies, counsel for the respondent, submitted that the delay from the lodging of the application for review to the date of the review hearing was not the fault of the respondent but entirely that of the appellant and / or his legal advisers. She further submitted that in terms of the Barnett decision, entitlements were not reinstated to the appellant on the basis of the same information which the Corporation had had all along but rather the decision was made entirely on the new information which had been provided at a late stage by the appellant. Counsel further submitted that at the time that further medical information was to hand a review hearing had been scheduled and it was quite open to the respondent to have the matter proceed through the review process. 
The substance of the review decision which reversed the respondent's primary decision to cancel entitlements was that the medical information contained in the reports of Dr Hancock, Dr Shine (Radiologist) and Dr Doube, Consultant Rheumatologist, were to be preferred to the earlier opinion of Mr Hooker. 
Mr Hooker's opinion, upon which the respondent based its decision, stated: 
“In my opinion Mr Wallace's ongoing incapacity is predominantly related to the degenerative changes in his right elbow, and not any longer more than minimally related to the injuries sustained in March 1985. The degenerative change in the right elbow in my opinion was a pre-existing condition. ”
On the basis of that opinion from an Orthopaedic Specialist I find that the respondent was, in the absence of evidence to the contrary, entitled to accept that opinion and act upon it in whatever manner the law relating to continuation of entitlements or otherwise allowed. It must be the case that the respondent acted properly when it made its decision to cancel / suspend entitlements in December 1997. 
It was not until the appellant's counsel had provided the medical reports of Dr Shine and Dr Hancock to the respondent, did it become apparent that doubt could be cast upon the opinion of Mr Hooker in this case. 
By adopting the reasoning of Justice Paterson in Barnett (supra), particularly paragraphs 31 and 38 thereof, it must be the case in this present appeal that the requirement of all information necessary would be satisfied on the establishing of the fact that the appellant's incapacity was due to personal injury. That information was not to hand until 22 August 2001 when the medical reports were provided to the respondent. At that time of course there was a review of the respondent's primary decision in train and the essential question is whether the respondent ought to have exercised its powers under section 73 of the Act, determine that it had made its decision to cancel in error and thereupon revoke that decision and substitute a new decision of resumption of entitlements or allow the review process to take its course now that the review hearing could proceed, the appellant having obtained the medical evidence that it had been promising for some considerable time. 
It seems to me that in the light of the decision in Barnett, particularly the observations of His Honour in para [31] which I have set out above, the situation is that whilst the Corporation can let the law take its course as it were and wait for the review decision to determine the question of the appellant's entitlement, nevertheless if it does, after it is in possession of all necessary information, it thereby runs the risk of having interest accrue from the date of receipt of that necessary information. 
I take that view from the fact that His Honour Justice Paterson found that if the Corporation had all necessary information before the date on which cover was granted, and of course in the Barnett case cover was not finally granted until the Accident Compensation Appeal Authority decision, nevertheless interest would date back to commence from the receipt of the necessary information for the granting of cover and entitlements. 
Even though there is a difference in the nature of the “necessary information” in the present case, it being medical and being medical evidence which casts doubt on the correctness of the previous medical evidence upon which the respondent had acted, nevertheless I find that the situation must be the same as the word “information” is not simply confined to matters financial such as earnings etc but does include information establishing the fact of an incapacity due to personal injury. 
As it is the case that the evidence establishing the fact of continued incapacity due to personal injury was more or less overwhelming by the evidence supplied to the respondent on 22 August 2001, I find that interest on the arrears which were ultimately paid to the appellant commences to run on the amount of those arrears as from 23 September 2001 until 23 November 2001 when payment of the arrears was made. 
For the sake of completeness I find that this is not a case where interest would be payable right back to the date upon which weekly compensation was ceased by reason of the fact that it certainly required further information to be provided to the respondent before it could be considered to be in possession of all necessary information on which it could come to a decision that entitlement to weekly compensation should be reinstated. 
The appellant being successful, I direct that the respondent pay the appellant costs in the sum of $1,000.00. 

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