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Accident Compensation Cases

Sandford South Island Ltd v Accident Compensation Corporation (DC, 03/09/04)

Judgment Text

FINAL DECISION OF JUDGE P F BARBER 
Judge P F Barber
[1]
In an interim decision herein of 18 January 2001 I found that the claimant's injury in slipping on a wharf of 4 September 1995 occurred while he was at work for the appellant and resulted in injury and incapacity which was correctly covered by the respondent. However, an issue of deemed employment at the later time of incapacity, in terms of s 44 of the 1992 Act, was deferred for argument but, as indicated, the appellant employer's appeal on the question of cover was dismissed. 
[2]
On this outstanding issue of deemed employment, Mr Cadenhead (for the claimant) has no instructions, but submissions were made in writing by counsel for the other two parties. 
[3]
The appellant puts it that the issue now remaining for me to decide is whether the claimant was an employee at the date of incapacity in terms of s 44 of the Accident Insurance Act 1998 which reads: 
“44 Extension of entitlement to compensation for loss of earnings 
(1)
Where a person has ceased to be an employee, the person shall be deemed to continue to be an employee for the purposes of this Part of this Act if - 
(a)
The person had been an employee within 14 days before the commencement of the incapacity; and 
(b)
The person had been an employee for a continuous period of not less than 12 months immediately before that 14 day period; and 
(c)
But for the incapacity, the person would have been an employee within 3 months after the commencement of the incapacity. 
(2)
Where an employee is entitled to receive any payment on ceasing employment and earner premium is payable in respect of that payment, that person shall be deemed to continue to be an employee for the purposes of this Act for so long as those payments constitute earnings by virtue of subsection (4)(a) of this section. 
(3)
Subsection (1) of this section shall not apply in any case where the effect of subsection (2) of this section is to extend the person's status as an employee for more than 14 days after the employment ceases. 
(4)
Where this section applies - 
(a)
The person concerned shall be deemed to be deriving earnings at the same rate as that person derived earnings while in employment immediately before the employment terminated; and 
(b)
For the purposes of calculation of weekly earnings, the date of commencement of incapacity shall be deemed to be the last date of employment. 
(5)
Nothing in this section shall cause any personal injury suffered by a person who is deemed to continue to be an employee under this section to be regarded as a work injury. ”
Relevant Background 
[4]
The claimant lodged a claim for cover in February 1996 relating to an injury sustained to his left shoulder. He stated that he fell on 4 September 1995 while carrying a dive tank on a jetty. At the time of the injury, he was employed by the appellant. 
[5]
On 5 November 1999 the appellant was advised by the respondent that the injury was a work injury and all costs associated with the injury would be attributed to the appellant. 
[6]
The appellant sought a review of this decision but was unsuccessful. 
[7]
The appellant appealed the review decision to this Court and I issued an interim decision on 18 January 2001 in which the appellant was unsuccessful, but leave was reserved on the issue of the effect of the said s 44. At the appeal hearing submissions were made on behalf of the appellant that the claimant was not working for the appellant immediately prior to the incapacity. Protests were made by counsel for the claimant and the respondent. I resolved the situation at the hearing by reserving the right to have the issue dealt with at a later stage. In the interim decision I wrote as my final paragraph: 
“[55]
Accordingly this appeal is hereby dismissed, but I reserve leave to apply on the basis that, as requested by counsel, this is an interim decision, and the s 44 aspect can be addressed further, and any other consequential matters or matters which I have not covered. I shall direct my registrar to arrange a Directions Hearing by phone conference within the next month or so to formulate a timetable to proceed. In the meantime, I reserve the question of costs. ”
A Summary of the Submissions for the Appellant 
[8]
The claimant's personal injury occurred on 4 September 1995 and he resigned from the appellant's employment on 12 March 1996 but not as a result of the personal injury. An M46 Claim From was completed on 21 February 1996 and at this time no costs were attributed to the appellant. 
[9]
Incapacity for the shoulder injury was retrospectively set at 27 March 1996. This date was determined as the claimant then ceased self-employment due to his elbow and shoulder injuries. He had suffered an elbow injury and was incapacitated by it from 27 March 1996 until 7 January 1997 and was granted weekly compensation from April 1996. 
[10]
Pursuant to s 44(1)(a) a person who has ceased to be an employee shall be deemed to continue to be an employee if they fulfil the requirements under s 44. A person can be deemed to be an employee if they had been an employee within 14 days of incapacity. In this case, the claimant had resigned 15 days prior to incapacity. That meant that the claimant did not fulfil the said criteria and, it is submitted for the appellant, had been self-employed immediately prior to incapacity. It is submitted for the appellant that the claimant having resigned for other reasons than the injury would not have continued in the appellant's employ but for the injury and does not fulfil the criteria of s 44(1)(c). 
[11]
It is submitted that the claimant was an earner and therefore entitled to weekly compensation but his earnings derived immediately before incapacity from self-employment and he is to be assessed on this basis. 
[12]
It is submitted, in the alternative, that if I confirm the respondent's decision that the claimant was an employee pursuant to s 44, the claimant would be deemed an employee and, pursuant to s 44(5), the injury would not be regarded as a work injury for claim costs purposes, and would not count against an employer's claim costs records for experience rating purposes. 
[13]
It is noted for the appellant that pursuant to s 67A of the ARCI Act 1992 and s 73 of the Accident Insurance Act 1998, the respondent has the ability to amend, revoke, or substitute a decision if it was made in error; that Clause 21A of the Experience Rating Regulations gives the respondent the ability to make an alternation to an assessment following a review or appeal to give effect to that review or appeal. 
[14]
Accordingly, Ms Mechen submits that the claimant was not an employee or deemed employee at the time of his incapacity so that costs associated with the claim in respect of weekly compensation should not have been recorded against the appellant's claims cost record. 
A Summary of the Submissions for the Respondent 
[15]
Ms Ahern sees the issue as whether there is jurisdiction in this appeal to consider the claimant's eligibility to receive weekly compensation. She puts it that the appellant, as the claimant's employer, is seeking to challenge in this appeal a primary decision of the respondent made in 1997 that the claimant was entitled to weekly compensation. Ms Ahern submits that such a decision was not before the Reviewer and, therefore, cannot be before this Court now; and that the issue before this Court at appeal was solely whether the claimant had suffered a work injury and I have ruled on that; and that the employer has no standing to challenge an entitlement decision. 
[16]
The essence of Ms Ahern's submissions, with regard to this remaining issue, read as follows: 
“The appeal was in relation to a decision by ACC that the appellant has suffered a work injury. The decision was made under s 6 of the 1992 Act. The appellant had a right of review against the decision when it was eventually issued to the appellant in November 1999. 
The issue of whether the claimant suffered a work injury was the sole issue before the Court and has been determined. 
There is no jurisdiction to consider the issue of entitlements that have been paid to the claimant on the work injury claim in the context of this appeal. Furthermore the appellant would have no right to seek review of the entitlements decision, even if they had lodged an application for review at the time the decision was made. This is due to the effect of s 89(4A) of the 1992 Act which provides: 
(4A)
Nothing in subsection (4) of this section shall confer any right to apply for a review of any decision relating to the entitlement under this Act of any person to any payment or rehabilitation or the making of any payment directly or indirectly under this Act in respect of that person. ”
The effect of this section is that the appellant has no rights to seek a review of any decision in relation to entitlements including whether the claimant met the criteria for receiving weekly compensation. Therefore even if the appellant had taken steps to seek to review the entitlement decision there is no jurisdiction for them to do so. 
It appears that the appellant is challenging the entitlement decision in order to challenge the experience rating. The issue of the experience rating under the 1992 Act was not dependent upon the nature of the claimant's employment at the time of incapacity but on whether the claim for which entitlements were paid was a qualifying claim. Therefore the only issue to be determined is whether the claim for which entitlements are sought was a work injury. If this has been established, as it has been in the District Court decision, it is appropriate for the employer to be experience rated on the costs of the claims. 
[17]
Accordingly, Ms Ahern submits that there is no jurisdiction for me to consider the issue of entitlements in this appeal which is solely related to the question whether the claimant has suffered a work injury. In addition she submits that the appellant, as employer of the claimant, has no right to question any entitlement decision pursuant to s 89(4A) of the Act so that I have no jurisdiction to consider the issue now raised by the appellant. 
Reasons for Final Decision 
[18]
My said interim decision of 18 January 2001 reached the same conclusion as had Reviewer P. Barker in the Review Decision of 14 March 2000. The Reviewer made it absolutely clear that the decision of the respondent taken to review in this case was that of 5 November 1999 accepting that the claimant's left elbow/shoulder injury was a work injury sustained on 4 September 1995 by the claimant in the course of his employment with the employer. I outlined this in my said interim decision. 
[19]
It seems to me that the respondent's decision of 5 November 1999 decision includes a finding that, at the time of the accident injury, the claimant was an employee (presumably, of the appellant) rather than self-employed. The submissions for the appellant show that the claimant was not an employee at the time of incapacity and was then self-employed. I accept those submissions in that respect. For the respondent, Ms Ahern did not seem to resist that argument but submits that there is no jurisdiction for me to deal with the issue whether the claimant was an employee at date of incapacity. 
[20]
The appellant considers that it follows from accepting the claimant as self-employed at date of incapacity that costs associated with the claimant's weekly compensation should not be recorded against the appellant's claims cost record. That would be rather fortuitous for the appellant because the accident leading to the appellant's incapacity happened on 4 September 1995 during the course of the claimant's employment with the appellant, as I found in my said interim decision of 18 January 2001. However, Ms Ahern puts it for the respondent that the issue of experience rating under the 1992 Act was not dependant on the nature of the claimant's employment at the time of incapacity, but on whether the claim for which entitlements were paid was a qualifying claim. She continues that: “Therefore the only issue to be determined is whether the claim for which entitlements are sought was a work injury. If this has been established, as it has been in the District Court decision, it is appropriate for the employer to be experience rated on the cost of the claims.” 
[21]
I agree with Ms Ahern that I do not have jurisdiction to consider the issue of entitlements in this appeal. I have already found that the claimant suffered a work injury on 4 September 1995 when in the employ of the appellant. However, I also find that at the later time of incapacity the appellant was no longer an employee of the appellant but was self-employed. It seems to me that I have no jurisdiction to consider what consequences might flow from that finding and, in any case, there were no detailed submissions before me about the effect of such a finding. Since this decision is issued as final in terms of Appeal No. 173/2000, I confirm and incorporate herein my said interim decision of 18 January 2001. I reserve leave to apply regarding costs and as to any orders consequential to my said findings. 

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