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Accident Compensation Cases

Marino v Accident Compensation Corporation (DC, 28/11/03)

Judgment Text

Judge M J Beattie
The issue in this appeal is whether the appellant is entitled to interest for any period on her back-dated weekly compensation. 
This is a case where the chronology of relevant events is all important and that chronology, which is not in dispute, is as follows: 
In July 1996 the appellant was granted cover for a repetitive strain injury, later diagnosed as fibromyalgia. 
By decision dated 21 August 1997 the respondent determined that it had granted cover to the appellant in error and revoked cover with the appellant's entitlements to cease from 15 September 1997. 
From the cessation of entitlements the appellant began receiving a sickness benefit from WINZ. 
The appellant sought a review of the respondent's decision, which was unsuccessful and she then appealed that decision to the District Court. 
By interim decision dated 17 March 1999 His Honour Judge Barber adjourned the hearing to enable the appellant to introduce further evidence, if she could, to satisfy the various criteria of section 7 of the Act relating to a claim for cover for a gradual process injury. 
In August 1999 certain affidavits were filed on the appellant's behalf relating to the appellant's work tasks which were in question. 
On 22 March 2000 the appeal hearing was reconvened and submissions made. 
By decision dated 18 April 2000 His Honour Judge Barber ruled that, on the basis of that further evidence, the appellant was entitled to cover for the claimed injury. 
On 26 June 2000 the appellant's weekly compensation was reinstated. 
On 11 August 2000 WINZ supplied details of the benefit payments the appellant had received during the period that her weekly compensation had been cancelled. 
On 14 August 2000 the respondent paid arrears of weekly compensation to the appellant back to September 1997 less the amount payable to WINZ. 
Following payment of the arrears the appellant applied for interest on those arrears back to the date of cessation, namely 15 September 1997. 
In its primary decision the respondent advised that no interest was payable as the last piece of information necessary to enable calculation of the payment was not received by it until 11 August 2000 when the WINZ information was provided, and payment of arrears was made within one month of the receipt of that information. 
In a subsequent review decision dated 5 June 2001 the Reviewer confirmed the respondent's primary decision, noting that it was a requirement of the 1998 Act that WINZ be reimbursed and that it was therefore “necessary information”
It was Mr Miller's submission to this Court that the appellant was entitled to interest calculated from 16 September 1997 onwards on the weekly compensation which accrued incrementally from that date to the 14th of August 2000 when those arrears of weekly compensation were paid. 
Counsel submitted that as the appellant had been in receipt of weekly compensation before it was cancelled, the respondent must be taken to have been in receipt of all information necessary to enable calculation of the payment in terms of section 72 of the 1992 Act and that the appellant ought to be returned to the position she would have been had the respondent not made its wrong decision to cease payments in August 1997. 
Mr Miller submitted that the respondent had an obligation to reinstate the appellant to her former position and therefore it was irrelevant that the decision to reinstate occurred after 1 July 1999 and that the provisions of section 72, unaffected by the provisions of section 373 of the 1998 Act, must prevail with the WINZ information being not necessary information. Counsel cited the High Court decisions of Wardle (High Court Wellington AP134/02) Gendall J, and Howley (High Court Invercargill AP29/01) John Hansen J. 
Mr Barnett submitted that whilst he accepted that section 72 of the 1992 Act was the applicable provision relating to interest, nevertheless in terms of the chronology it required that section 373 of the 1998 Act be considered. That section required the respondent to refund WINZ so that the information as to the amount to be refunded was part of the information which the respondent was required to obtain before it could make payment to the appellant. Counsel submitted that the decision of Wardle was on point. 
Counsel further submitted that in terms of the interim decision of His Honour Judge Barber, it was necessary for the appellant to provide further “necessary information” relating to the question of cover and that this information was not to hand until August 1999 which was a date which would also trigger the provisions of the 1998 Act as being required to be considered. 
It is essentially the claim of the appellant that the respondent incorrectly cancelled her weekly compensation and that when the District Court finally determined the incorrectness of that decision, it should be the case that the appellant should be fully reinstated to her former position and that she should be given interest on the weekly compensation to which she was found entitled but to which she was denied during the period that the cancellation was in being. 
In furtherance of that it was submitted that because the respondent had been making payments of weekly compensation it must be taken to have had all the necessary information and therefore the period of interest can be sheeted home to a date commencing one month after the date of cessation, which date would be 16 October 1997. 
The provisions of section 72 of the 1992 Act to which counsel are referring state as follows: 
Payment of interest where Corporation makes late payment compensation based on weekly earnings - 
Where any payment of compensation based on weekly earnings to which a claimant is entitled is not paid by the Corporation within 1 month after the Corporation has received all information necessary to enable calculation of the payment, interest shall be paid on the amount payable by the Corporation at the rate for the time being prescribed by or for the purposes of section 87 of the Judicature Act 1908 from the date on which payment should have been made to the date on which it is made. ”
The other provision which is relevant is section 373 of the Accident Insurance Act 1998. That provision states as follows: 
“373 Relationship with social security benefits: Reimbursement by insurers — 
This section applies where a person — 
Receives a payment of an income-tested benefit under the Social Security Act 1964 in respect of a period and 
Establishes a claim to an entitlement from an insurer in respect of all or part of the same period. 
An excess benefit payment is treated as having been paid in respect of that entitlement. 
The insurer must refund the excess benefit payment to the department responsible for the administration of the Social Security Act 1964 — 
If the insurer knows that this section applies or 
If requested to do so by the department. ”
In the Wardle decision one of the principles enunciated was that if the period when the appellant first became entitled to the weekly compensation was during the time that the 1992 Act was in force then the provisions of section 72 relating to interest applied as that provision was saved by section 458 of the Accident Insurance Act 1998. The decision in Wardle went on to note that under the provisions of the forerunner of section 373 of the 1998 Act, namely section 78 of the 1992 Act, the repayment to WINZ was only discretionary and therefore the amount of refund could not be said to be information necessary for the calculation of payment in terms of section 72. 
I took Mr Miller to be submitting that this appellant was entitled to be considered within that capsule of time and therefore was entitled to interest on the unpaid weekly compensation from one month from cessation. I find that such a submission cannot prevail as other aspects of the Wardle decision are more pointedly against such a consequence as Mr Miller would have. 
Whilst the Learned Judge in Wardle ruled that the provisions of section 72 would apply because it was during the currency of that Act that the entitlement to compensation arose, the Learned Judge went on to note that as it was the case that by the time the Corporation came to consider the question of interest, the 1998 Act had come into force and section 373 required the refund to WINZ to be mandatory. It was therefore “information necessary” that needed to be obtained. 
His Honour found as a matter of law that section 373 of the 1998 Act applied and this must also be the case on the facts of this present appeal. The request for interest was not made until late 2000 but that in any event the decision of this Court establishing an entitlement to weekly compensation was not made until April 2000, based as it was on information which His Honour Judge Barber found necessary, which necessary information was only brought to hand in August 1999 by the provision of certain affidavit evidence which was of the type which His Honour had earlier directed in his interim decision would need to be provided. 
The Court must also have regard to the decision of His Honour Justice Paterson in Barnett (Auckland High Court AP64-SW02) where His Honour, at para 38, determined that “all information necessary” included information other than purely financial. In the case of this appellant it required what was regarded as “core” information necessary for the grant of cover. I find that the information which was provided in the affidavits, and which was acted upon by His Honour Judge Barber must be regarded as being part of the information necessary for the respondent to be in a position to make payment even if it were to be found that the respondent could not simply await the determination of that information by the Court but that it ought to have acted upon it when it was received. 
It is clearly the case from the Wardle decision that not only does section 373 of the 1998 Act apply but that its applicability means that the receipt of information from WINZ as to the amount that required to be refunded to it was necessary information which was required to be had by the respondent in terms of section 72 before it could calculate the payment of arrears of weekly compensation due to the appellant. 
I find that the principles enunciated in Wardle make it impossible for this appellant to claim that section 72 of the 1992 Act can apply unaffected by the provisions of section 373 of the 1998 Act. 
For the reason that the respondent made payment of the arrears of weekly compensation due to the appellant within one month of being provided with all information necessary to enable calculation of the payment, it is the case that no interest is payable to the appellant on any part of those arrears. This appeal is dismissed. 

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