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Accident Compensation Cases

La Belle v Accident Compensation Corporation (DC, 24/02/06)

Judgment Text

RESERVED JUDGMENT OF JUDGE J CADENHEAD 
Judge J Cadenhead
The Course of the Hearing 
[1]
The respondent's submissions were served upon the appellant late. I indicated to the appellant, if necessary, he could have an adjournment and I gave him time to read the submissions. After the appellant had had time to read the submissions he indicated to me that he did not require further time and that he was content to carry on with the hearing. 
The Issue 
[2]
At issue is the decision by the respondent dated 26 November 2004 calculating an independence allowance arrears payment for the appellant for the period from October 1997 to July 2002. 
Narrative of Facts 
[3]
I substantially set out the submissions of the respondent, as upon a perusal of the file these submissions set out accurately the background of facts giving rise to this appeal. 
[4]
The appellant suffered a fracture to his left calcaneus on 29 November 1996 when he fell off a ladder. The appellant applied for, and commenced receiving, weekly compensation. In March 1997, the appellant applied for an independence allowance. Following the completion of a functional limitation profile questionnaire on 8 April 1997, resulting in a Disability Score of 18.9, the Corporation wrote to the appellant on 15 April 1997 to advise that he was entitled to an independence allowance of $4.38 per week. 
[5]
Such entitlement was paid quarterly. Two quarterly payments were made up to the period ending 7 October 1997. Payment ceased thereafter. It is not clear why such payments were suspended. Notwithstanding, the appellant retained an entitlement, as a result of the earlier assessment, to an independence allowance thereafter. 
[6]
In November 1997 the appellant was referred to WorkBridge for vocational rehabilitation. In January 1998, the appellant commenced part time employment and his weekly compensation was abated. Such employment ceased in April 1998. The same month the appellant was referred to Career Dynamics for vocational rehabilitation. 
[7]
The appellant continued to receive weekly compensation. However, an ARC18 medical certificate prepared for the appellant on 7 April 1999 certified the appellant fit to return to work on 12 April 1999. The appellant's weekly compensation was ceased at or about that time and the file closed a short time later. 
[8]
In March 2002 the appellant approached the Corporation seeking backdated entitlements, including weekly compensation to 1999. Following investigation, the Corporation wrote to the appellant on 9 May 2002 to advise that he was not entitled to backdated weekly compensation. 
The application of an independence allowance in 2002 
[9]
The same month, the appellant applied for an independence allowance. On 24 June 2002, the Corporation wrote to the appellant to confirm receipt of the application and to advise that an assessment would be arranged. The appellant was also advised that he was entitled to arrears in “the amount of $1,178.32 as you have not received any independence allowance payments since 1997”
[10]
Dr P Summers completed an independence allowance assessment report on 19 July 2002, assessing the appellant as having a whole person impairment of 14%. Following a query from Dr Kevin Morris, the Corporations Corporate Medical Advisor, regarding the approach taken by Dr Summers, a further report was prepared by Dr Summers on 25 September 2002. On this occasion Dr Summers assessed the appellant as having a whole person impairment of 13%. 
[11]
On 24 October 2002, the Corporation wrote to the appellant to advise that he was entitled to an independence allowance of $13.37 per week, such payment being made from the next quarterly payment. 
[12]
On 20 December 2002, the appellant applied for a review from the Corporation's calculation (contained in its decision of 24 June 2002) of the arrears of independence allowance payable from 1997 to 2002. 
[13]
In a review decision dated 17 March 2003, decided on the papers, the reviewer determined that the application for review was late and that there were no extenuating circumstances justifying the late review. 
[14]
A Notice of Appeal was filed from the review decision, ie AI 188/03. In a decision dated 19 July 2004, Decision No. 202/04, the District Court allowed the appeal remitting the matter back to review to re-consider the issue of “extenuating circumstances”
The Decision 
[15]
There followed a mediation between the parties which resulted in an agreement that there were extenuating circumstances and that the Corporation would issue a new decision, modifying its decision of 24 June 2002. Such decision was issued by the Corporation on 26 November 2004. The Corporation determined, inter alia:- 
“On 26/6/2002, a payment of $1178.32 was issued for the quarterly periods that begin on 8/9/97 and end on 1/9/02. 
This payment should have been for the period 8/10/97 to 2/7/02 and the amount should have been $1119.82. ”
The Review Hearing 
[16]
The Corporations decision was taken on review. A review hearing was conducted on 10 March 2005. In a decision dated 29 March 2005, the reviewer determined that the Corporation had correctly calculated the quantum of arrears payable to the appellant for the period from 1997 to 2002. 
The Legislation and Legal Principles 
[17]
The appellant was originally assessed as having an entitlement to an independence allowance in April 1997, whilst the Accident Rehabilitation & Compensation Insurance Act 1992 (“the 1992 Act”) was in force. The appellant was assessed as having a 19% disability score. The rate then payable under the ARCI (Independence Allowance Assessment) Regulations 1993 for such a score was $4.38 per week. Such entitlement was, and still is, required to be paid quarterly. 
[18]
Pursuant to the 1992 regime, s 54(A) of the 1992 Act provides for assessment and re-assessment. In particular, s 54(A)(3) and (5) are relevant. These sections state: 
“(3)
If the injured person's impairment increases after the date of assessment, the Corporation shall re-assess the person following verification, by a certificate by a registered medical practitioner, of the increase in impairment, but not more than once such re-assessment (other than a re-assessment under subsection (2) of this section) shall be undertaken in any twelve month period. 
 
(5)
If a re-assessment is undertaken in accordance with this section, the Corporation shall make any necessary adjustment to the level of entitlement to the independence allowance with effect on and from the date of the next quarterly payment. ”
[19]
It seems to me that the present case was to be assessed under the 1992 Act, and any re-assessment take effect on and from the date of the next quarterly payment. 
[20]
However, pursuant to the transitional provisions ss 441 and 442 of the Accident Insurance Act 1998, I am of the view that the appellant fairly and squarely comes within the provisions of s 441. The relevant provisions of s 441 are as follows. Section 441 states: 
“441 Independence allowance 
(1)
Subsection (2) applies to — 
(a)
A person to whom s 27(1) of the Accident Rehabilitation and Compensation Insurance Amendment Act (No. 2) 1996 applies and who was not re-assessed under s 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 s 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]. ”
[21]
In my view, the facts of this case bring the appellant within the provisions of s 441(a) and (b) of the Accident Insurance Act 1998. 
[22]
The problems that had occurred were the interpretation of this section related to the provisions of s 441(3)(a) which provides such a person may not lodge a claim for an independence allowance under Part IV of Schedule 1 for any injury suffered before 1 July 1999. That section was considered by Young J in Buxton v ARCIC, (Wellington, AP.63/02, 12 July 2002) and myself in Davies v Accident Compensation Corporation (District Court, Wellington, Decision No. 130/2003, 19 June 2003)
[23]
The rationale behind those decisions was that s 441(3)(a) prevented those who had not applied for an existing independence allowance from applying under the 1998 Act. However, an application could be made under the 1992 Act, because the substantial entitlement survived the provisions of the 1998 legislation and was not by implication retrospectively extinguished. 
[24]
The present claim for an independence allowance was assessed before 1 July 1999, therefore the provisions of s 441(3)(a) do not apply. 
[25]
Clause 61 of Schedule 1 of the 1998 Act provides for re-assessment of a person's independence allowance, and in that respect clause 63(e) provides: 
“(e)
An adjustment to the level of entitlement to the independence allowance necessitated by a re-assessment under Clause 61 takes effect on and from the date of the next quarterly payment. ”
[26]
Therefore, similar to the 1992 legislation, the re-assessed amount pursuant to the provisions of the 1998 legislation would take effect from the date of the next quarterly payment from such re-assessment. 
[27]
The appellant's entitlement to an independence allowance stopped after two quarterly payments and the appellant was not reassessed under either the 1992 Act or the Accident Insurance Act 1998 (“the 1998 Act”). 
[28]
In 2002 the appellant's entitlement to an independence allowance was re-assessed at 13%. Such rate of entitlement was paid from the next quarterly payment following this assessment. At the time of the reassessment, in 2002, the Injury Prevention, Rehabilitation, & Compensation Act 2001 (“the 2001 Act”) was in force. Pursuant to section 377 of that Act, sections 441 and 442 of the 1998 Act continued to apply to personal injury suffered before 1 July 1999. 
[29]
Section 441(1) provided that subsection (2) applied to, inter alia
“(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 & Compensation Insurance Act 1992. ”
[30]
Pursuant to subsection (2), such a person was entitled to receive an independence allowance on or after 1 July 1999 under Part 4 of Schedule 1 to the 1998 Act. 
[31]
Clause 61 of Part 4 of Schedule 1 makes provision for reassessments of an independence allowance. Pursuant to clause 63(e), any adjustments arising from a reassessment under clause 61, “takes effect on and from the date of the next quarterly payment” - such provision being consistent with section 54A(5) of the 1992 Act. 
[32]
The result of the above legislation is that the Corporation was required to pay the rate arising from the 1997 assessment until such time as the appellant was reassessed. Any adjustment, with the exception of indexation increases, could only be made at the next quarterly payment following the reassessment. 
[33]
In Whitehead (Decision No 317/2003) the claimant was assessed in 1993, using the functional limitations profile questionnaire, as having a 14% disability. Payments were made through to 1994 and similarly stopped for no apparent reason. An application for an independence allowance was subsequently received by the Corporation in February 2002 for the claimant. A re-assessment was undertaken in April 2002 resulting in an 18% whole person impairment. The Corporation paid the appellant's entitlement to an independence allowance at the rate of 18% from the quarterly payment following the reassessment. However, for the period from August 1994 to April 2002, the Corporation paid arrears at the rate of 14%. 
[34]
The District Court upheld the Corporation's decision. The District Court determined that the claimant fell within section 441 of the 1998 Act and that, pursuant to clauses 61 and 63(e), any adjustment was required to be made at the next quarterly payment following the reassessment. The Court concluded at paragraphs 27 and 28: 
“In my view, the appellant was assessed for an independence allowance on 6 November 1993. The respondent made three payments of $58.78 in respect to that allowance for the period 6 November 1993 to 4 February 1994, 5 February 1994 to 6 May 1994, and 7 May 1994 to 5 August 1994. A request was then made by the appellant for re-assessment on 6 May 1994. However, this was not carried out and it was not perfected until 16 May 2002. 
Under both the 1992 and the 1998 relevant provisions of the legislation the date an insurer is liable to pay the re-assessment of an independence allowance takes effect on and from the date of the next quarterly payment after the completion of the re-assessment. 
The appellant always had this entitlement, and I do not think it matters that at one stage he endeavoured to withdraw his entitlement. ”
[35]
As can be seen the factual situation was similar in Whitehead to the present case. 
The Submissions of the Appellant 
[36]
The appellant submitted that he should have been reassessed earlier and he made it clear that this was his sole point. He said that as a result of this, injustice had occurred, as he had been kept out of his money, including interest by the late reassessment. 
[37]
The respondent submitted that an injustice had been done. He agreed that probably that the assessment and calculation was correct in terms of the statute. He accepted that I could not go beyond the terms of the statute, but he voiced his discontent with the state of the law. 
[38]
I advised him that I could not act outside the statute and could not consider issues of economic negligence or the equity of the situation. 
Decision 
[39]
The rate of $4.38 per week was initially paid at the time of the 1997 assessment. Such rate was adjusted by indexations in accordance with increases from 1 November 1997 to 1 July 2001. Pursuant to section 71 of the 1992 Act the Corporation was required to adjust the independence allowance rate in accordance with a formula prescribed in regulations relating to the movement in the Consumer Price Index. 
[40]
Such formula was prescribed at clause 9 of the ARCI (Indexation) Regulations 1992. 
[41]
The requirement to make indexation adjustments continued after the repeal of the 1992 Act (section 103 of the 1998 Act and clause 9 of the Accident Insurance (Interim Indexation) Regulations 1999). 
[42]
With the exception of adjustments for indexation increases and reassessments, the Corporation did not have any other power to adjust a claimant's rate of entitlement to an independence allowance. In his written submissions the appellant appears to have made a claim for compound interest. There is no provision under the legislation for the payment of interest, simple or compound, on late payments of an independence allowance. 
[43]
I am of the view that the respondent has correctly applied the provisions of the legislation in calculating the independence allowance entitlement payable to the appellant. I cannot go outside the legislation and consider whether on the facts it was fair to make the calculation on another date other than that of the next quarterly payment after the date of re-assessment. 
[44]
For the reasons that I have given the appeal is dismissed. There will be no order as to costs. 

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