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Accident Compensation Cases

Smith v Accident Compensation Corporation (DC, 14/10/05)

Judgment Text

RESERVED JUDGMENT OF JUDGE M J BEATTIE 
Judge M J Beattie
[1]
The issue in this appeal arises from the respondent's decision of 24 September 2004. That decision determined that the appellant was entitled to an Independence Allowance calculated on the basis of a Whole Person Impairment of 17%, and that the payment of that allowance would commence and be paid from the date when the appellant had made her application for an Independence Allowance, namely 12 September 2002. 
[2]
The appellant has appealed that decision contending that the date for payment of the Independence Allowance should be back-dated to the date of her injury in March 1993 or the lodging of her claim for cover in July 1994. 
[3]
The facts giving rise to this appeal are not in dispute and may be stated as follows: 
In 1986 the appellant suffered an injury to her right thumb for which she was granted cover and ultimately received a Lump Sum Payment based on a 5% permanent disability. 
In July 1994 the appellant lodged a claim for cover for what need only be described as a sensitive issue claim and cover was duly granted. 
The appellant received entitlements under that grant of cover, in particular treatment and counselling costs. 
On 12 September 2002 the appellant completed an application for an Independence Allowance on the respondent's prescribed form. That application referred only to the sensitive issue claim. 
The appellant was referred to Dr Noelene Tanner for assessment of her sensitive issue injury. 
In her Assessment dated 2 December 2003 Dr Tanner assessed the appellant as having a 30% Whole Person Impairment relating to her mental condition but that 15% of which was for factors unrelated to the events for which the appellant had cover. 
On 9 March 2004 the appellant's right thumb injury was assessed by Dr I Bailey, and he determined that this injury constituted a 4% Whole Person Impairment in accordance with the AMA Guides. 
On 6 May 2004 the respondent issued a decision which advised that the appellant's combined Whole Person Impairment was 18% but deducted from which must be the 5% Permanent Loss Lump Sum Settlement, leaving a residual impairment of 13%, which would be the percentage on which the appellant's Independence Allowance would be based. 
The appellant sought a review of that decision and the respondent carried out a peer review of the assessments. 
Dr Tanner amended her original assessment by reducing the apportionment for non-injury factors to 10%. She confirmed the original assessment of 30%. 
In a decision dated 24 September 2004 the respondent issued a revised decision to the effect that the appellant was entitled to an Independence Allowance based on a residual impairment of 17% after the deduction of the 5% for Lump Sum Payment. That decision also confirmed that payment of the allowance would commence as from the date of application for it, namely 12 September 2002. 
The appellant remained dissatisfied with that decision, particularly the date of commencement for payment, and the matter proceeded to a review hearing on 18 May 2005. 
In a decision dated 31 May 2005 the Reviewer confirmed the correctness of the respondent's decision, firstly as to the deduction of the 5% Permanent Loss for the Lump Sum Payment made, and secondly, that the relevant statutory provision only allowed for payment of the allowance to be back-dated to the date of application for same. The respondent's primary decision was therefore confirmed. 
[4]
It is the case that the appellant is not contesting the Whole Person Impairment assessment carried out by Dr Tanner in relation to the sensitive claim injury and that after apportionment for non-injury related factors the final Whole Person Impairment of 20% is accepted. The appellant, through Counsel, is, however, contesting firstly the deduction of the 5% Permanent Loss for Lump Sum Payment in relation to the thumb injury and secondly, the date of commencement of payment of her Independence Allowance. 
[5]
It was Counsel for the Appellant's contention that the thumb injury should play no part in the calculation of the appellant's entitlement for an Independence Allowance and that the commencement date for payment of same ought to be the date of her injury, or no later than the date of lodging of her claim for cover in July 1994. 
[6]
Mr Holmes submitted that the appellant's claim for cover, as lodged, should be considered to be a general claim for all relevant entitlements which may be applicable to the appellant and which would include a claim to an Independence Allowance. 
[7]
Although it was not put forward as a ground for this submission, Counsel nevertheless advised that the delay in making a specific application for an Independence Allowance was attributable to the appellant's delicate mental condition and also because of difficulties that she had experienced with the respondent over time in obtaining reimbursement or payment of counselling fees which she had incurred as a consequence of her covered injury. 
[8]
Another ground for the first submission was that the appellant's injury was a mental injury as a consequence of a Schedule III physical injury and that the Act provides that such an injury is deemed to be suffered when the physical injury is suffered. 
[9]
Insofar as the deduction of the 5% Permanent Loss for Lump Sum is concerned, Counsel submitted that Section 442 of the Accident Insurance Act 1998, which is the Section relied on by the respondent, was not applicable to this appellant, as it only applied to persons who were seeking an Independence Allowance for a claimed increased degree of permanent impairment to that injury from that assessed at the time the Lump Sum was paid. Counsel submitted that the appellant was not contending for any increased degree of impairment in relation to her thumb, and that she was not wishing the thumb injury to be taken into account in any way whatsoever. 
[10]
Counsel for the Appellant further contended that the method of calculation of impairment was unfair and he posed the proposition “what if” the thumb injury had not existed. He contended that in those circumstances the appellant would have been entitled to an Independence Allowance for the injury on which it was sought at its correct figure of 20%. Counsel submitted that the appellant should be treated on that basis. 
[11]
Ms Rice for the Respondent submitted as follows: 
Section 377 of the 2001 Act preserves Sections 441 and 442 of the Accident Insurance Act 1998 for injuries that occurred before 1 July 1999. 
Section 441(3)(c) of the 1998 Act requires all pre 1 July 1999 injuries to be assessed together for Independence Allowance assessment. 
Section 442(2) applies to claimants who have previously received any Impairment Lump Sum. 
Section 442 requires that any percentage of impairment previously paid be deducted from the impairment assessed for an Independence Allowance. 
Section 442(2)(b) provides that the Independence allowance is payable from the date of application when a person has previously received an Impairment Lump Sum. Therefore the correct commencement date was 12 September 2002 being the date when the application for an Independence Allowance was made. 
Decision 
[12]
The appellant's application for an Independence Allowance was lodged with the respondent on 12 September 2002, that is during the currency of the Injury Prevention, Rehabilitation and Compensation Act 2001. That Act contains no provision for an Independence Allowance for injuries suffered after its commencement but it does provide for assessment and payment of Independence Allowance for injuries suffered before its commencement, and in particular in the case of this appellant, for injuries suffered before 1 July 1999, that is injuries suffered before the commencement of the Accident Insurance Act 1998
[13]
The Accident Insurance act 1998 introduced a new regime for Independence Allowance claims for injuries suffered post July 1999 and it continued to provide a separate regime for claims for Independence Allowance for injuries suffered before its commencement. The reason why there was the need for two separate regimes was that the 1998 Act introduced the concept of multiple insurers and in particular separate workplace insurers and for this reason all covered injuries were to be treated separately in relation to claims for Independence Allowance. 
[14]
Prior to the 1998 Act, the 1992 Act had the Accident Compensation Corporation as the only “insurer” and therefore all Independence Allowances for injuries suffered during the currency of that Act were met and paid by the Corporation. 
[15]
It is against that background that this appellant's application for an Independence Allowance is required to be considered. In effect it is that regime for the granting of independence allowances that applied prior to 1 July 1999. That statutory framework had been preserved in the succeeding statutes by transitional provisions, and in particular, Sections 441 and 442 of the Accident Insurance Act 1998 provided the necessary transition. Those Sections stated as follows: 
“441. Independence allowance — 
(1)
Subsection (2) applies to — 
(a)
A person to whom section 27(1) of the Accident Rehabilitation and Compensation Insurance Amendment Act (No.2) applies and who was not reassessed under section 54A of the Accident Rehabilitation and Compensation Insurance Act 1992 before 1 July 1999: 
(b)
A person who, immediately before 1 July 1999, was receiving or was entitled to receive an independence allowance under section 54 of the Accident Rehabilitation and Compensation Insurance Act 1992
(c)
A person who suffered a personal injury before 1 July 1999 and did not apply for an independence allowance before 1 July 1999. 
(2)
Such a person is entitled to receive an independence allowance on and after 1 July 1999 under Part 4 of Schedule 1, as modified by - 
(a)
Subsection (3); and 
(b)
Section 442(2)(a) and (b), if the person is a person to whom section 442(2) applies. 
(3)
The modifications made by this subsection are as follows; 
(a)
Such a person may not lodge a claim for an independence allowance under Part 4 of Schedule 1 for any injuries suffered before 1 July 1999: 
(b)
A person described in subsection (1)(a) receives the rate of independence allowance payable on 30 June 1997 as adjusted by section 71 of the Accident Rehabilitation and Compensation Insurance Act 1992 or section 460: 
(c)
Any assessment under clause 60 of Schedule 1, or reassessment under clause 61 of Schedule 1, must be done on the basis of whole-person impairment for the combined effect of all his or her personal injuries covered by the former Acts, and only 1 independence allowance is payable for all those injuries; 
(d)
As soon as practicable after 1 July 1999 the manager must require a person describe din subsection (1)(a) to be reassessed in accordance with paragraph (c). ”
Section 442 of the AI Act provides: 
“442. Entitlement to the independence allowance of persons who received lump sums under former Acts and suffer further impairment — 
(1)
Subsection (2) applies to a person who received a payment for personal injury by accident under section 119 of the Accident Compensation Act 1972 or section 78 of the Accident Compensation Act 1982
(2)
Such a person may apply under section 441 for an independence allowance under Part 4 of Schedule 1. That Part applies subject to the following modifications: 
(a)
The independence allowance must be calculated by deducting, from any whole-person impairment assessed under Clause 60 of Schedule 1, or reassessed under Clause 61 of Schedule 1, any percentage permanent loss or impairment of bodily function for which any payment was made under section 119 of the Accident Compensation Act 1972 or section 78 of the Accident Compensation Act 1982
(b)
An independence allowance payable as the result of an assessment under Clause 60 of Schedule 1 is payable from the date of the application for it. ”
[16]
As earlier noted, these two sections were the transitional sections provided in the 1998 Act for persons who had suffered injury before the commencement of that Act and it is those provisions that have continued to be saved by virtue of Section 377 of the 2001 Act, which section states as follows: 
“377. Personal injury suffered before 1 July 1999 
(1)
Sections 441 and 442 of the Accident Insurance Act 1998 continue to apply to personal injury covered by this Part that was suffered before 1 July 1999, irrespective of when the claim for cover in respect of that personal injury was or is lodged. 
(2)
A claimant who suffered personal injury before 1 July 1999 and who applied, before that date, for an independence allowance but who was not or would not have been entitled to receive the allowance before the close of 30 June 1999 is to have his or her independence allowance assessed under Part 4 of Schedule 1 of the Accident Insurance Act 1998. ”
[17]
The appellant is a person whose application for an Independence Allowance must be considered in accordance with the provisions of Sections 441 and 442 of the 1998 Act by virtue of Section 377(1) of the 2001 Act. 
[18]
The appellant is a person to whom Sections 441(2) and (3) apply, she being a person identified in Section 441(1)(c) as being a person who suffered personal injury before 1 July 1999 and who did not apply for an Independence Allowance before 1 July 1999. 
[19]
The modifications provided require that the assessment of entitlement be done on the basis of Whole Person Impairment for the combined effect of all his or her personal injuries covered by the former Acts. 
[20]
The claim for an Independence Allowance is further modified by Section 442(2)(a) and (b) where there must be a deduction from the assessed Whole Person Impairment for any percentage of Lump Sum Permanent Loss paid, and that allowance is payable from the date of the application for it. 
[21]
The requirements of the claim process and the need to claim for a specified entitlement, (see Section 48 of the Act) dispels any suggestion that the claim for cover which was lodged by the appellant in July 1994 could be accepted as a claim for the specified entitlement, an Independence Allowance. The claims process requires specificity both as to cover for injury and for claim for entitlement and the wording of Sections 441 and 442 make it clear that there must be a specific application made for an Independence Allowance, and it is the date that application is made which determines the commencement of the entitlement. 
[22]
It is common ground that the appellant lodged her application together with the requisite medical certificate, in September 2002. The medical certificate certifying for an impairment and of its stability is an integral part of any application for an Independence Allowance and this further gives lie to the suggestion that such an application could be inferred from the claim for cover that was initially made. 
[23]
In the case of this appellant the provisions of Sections 441 and 442 of the 1998 Act are quite clear and require firstly that there be a deduction for any permanent loss or impairment for any Lump Sum made, and secondly, that the commencement date be the date when the Independence Allowance was applied for. 
[24]
Whilst it is the case that the appellant lodged her application for an Independence Allowance in relation to the sensitive claim only, it is the case that Section 441(3)(c) requires the respondent to carry out an assessment of the appellant's Whole Person Impairment for the combined effect of all her personal injuries covered by former Acts. Thus it is the case that whilst the appellant may have only referred to her sensitive claim, the respondent was required by statute to take into account all covered injuries. 
[25]
It is for this reason that the respondent arranged for the appellant to be assessed for the thumb injury and it was given a 4% Whole Person Impairment and that percentage impairment was added to the 20% for the sensitive claim injury and which under the combined tables set out in the AMA Guides resulted in a combined Whole Person Impairment of 22% from which was deducted the 5% previously assessed and paid as a Lump Sum pursuant to the 1982 Act. 
[26]
It is not open to the respondent to simply disregard that earlier Lump Sum Payment for the thumb injury and it is the case that the appellant has had that injury assessed again and its impairment taken into account when fixing the Whole Person Impairment. From that combined figure the deduction of the 5% previously paid has been made. This is wholly in accord with the statutory requirement and the respondent is required to observe the imperatives which the statute imposes on it. 
[27]
Accordingly, for the foregoing reasons, I find and rule that the respondent was correct, firstly to deduct 5% from the assessed Whole Person Impairment to take account of the previously paid Lump Sum Payment; and secondly to commence payment of the Independence Allowance from the date application for it was made by the appellant. 
[28]
This appeal is dismissed. 

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