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Accident Compensation Cases

Andersen v Accident Compensation Corporation (DC, 13/06/07)

Judgment Text

Judge M J Beattie
The issue in this appeal arises from the respondent's decision of 21 April 2006, whereby it advised the appellant that he was not entitled to interest on the payment of arrears of weekly compensation which the respondent paid to him on 19 April 2006. 
The period for which arrears of weekly compensation were paid was from 8 July 2005 until 19 April 2006, and it is for the weekly compensation that accrued during that time and which was not paid until 19 April 2006 that the appellant seeks to have interest thereon for the period that the monies were outstanding. 
The background facts and chronology of events which are relevant to the issue in this appeal may be stated as follows: 
The appellant has cover for various injuries including a right shoulder injury suffered in June 1999, a left knee injury in February 2000, left shoulder injury in March 2000, and left hip in April 2000. 
From some point in or about 2000 the appellant was accepted as being incapacitated from his pre-injury employment of Boilermaker/Welder and he began to receive weekly compensation. 
Following Vocational Rehabilitation the appellant was assessed for Vocational Independence and consequent upon Occupational and Medical Assessments, the appellant was determined as having attained Vocational Independence in six work types. 
By decision dated 7 April 2005, the respondent advised the appellant that he had attained Vocational Independence and that his weekly compensation would cease on 6 July 2005. 
That decision was confirmed on review by decision dated 1 September 2005. 
In May 2005 the appellant submitted a Medical Certificate from his GP suggesting that his medical condition had deteriorated and he sought reconsideration of his status of Vocational Independence. 
By decision dated 10 June 2005, the respondent advised the appellant that it did not consider that the further medical information affected his Vocational Independence and that its previous determination of 7 April 2005 still stood. 
The appellant sought a review of that decision and a review hearing took place on 5 October 2005 at which further medical evidence, including that of Mr Calder, the appellant's treating Orthopaedic Specialist, was introduced. 
By decision dated 4 November 2005 the Reviewer quashed the respondent's primary decision and directed that the respondent undertake a further full Vocational Independence Assessment and issue a fresh decision as to whether the appellant retained Vocational Independence. 
Further Occupational and Medical Assessments were carried out in accordance with that review direction and the respondent also obtained a further medical report from Mr Calder. 
On 4 April 2006 the respondent advised the appellant that it would reinstate and backdate weekly compensation and sought further information from the appellant as to any earnings post 7 July 2005. 
Between 5 April 2006 and 11 April 2006 the appellant provided the respondent with the information sought and completed a statutory declaration. 
The respondent calculated the arrears of weekly compensation due to the appellant and advised him of the amount of same by decision dated 13 April 2006. That quantum has not been questioned. 
On 19 April 2006 the respondent made payment to the appellant of the full amount of arrears of weekly compensation to which he was entitled, being the net arrears, after deduction of income received by the appellant during the period 6 July 2005 to 19 April 2006. 
By further decision dated 21 April 2006, the respondent declined to pay any interest on those arrears. 
The appellant sought a review of that decision and by decision dated 26 October 2006, the Reviewer upheld the respondent's decision that no interest was payable. 
At the hearing of this appeal, Mr Andersen made somewhat impassioned oral submissions, firstly as to the deficiencies of the Review Hearing, which decision is now the subject of this appeal, and secondly, he sought to revisit the respondent's decision of 7 April 2005 which had determined that he had attained Vocational Independence. He also sought to include in his sights the Review Decision which confirmed that decision. 
Essentially, the appellant's submissions were that the respondent ought never to have stopped his weekly compensation, in that it did not have proper grounds for so doing, but that in any event, the respondent had all necessary information in its possession relating to the payment of weekly compensation at the time it ceased same and therefore, in terms of Section 114 of the Act, interest should commence from the date when that weekly compensation ceased on 6 July 2005. 
Not unnaturally, Ms Rice had a different view on the matter now under appeal. She submitted that in terms of Section 114, the information that was necessary to calculate and make payment of the arrears included particulars of any income that the appellant had earned during the period 6 July 2005 onwards. 
Ms Rice referred to the fact that the appellant was engaged in remunerative employment during the period in question, and indeed provided details of his earnings whilst self-employed and obtained a Certificate of Earnings from an employer. He also signed a statutory declaration confirming that the information as to earnings which he had provided was the whole of his earnings for the period. 
Counsel finally submitted that in view of the fact that the arrears of weekly compensation were paid within a week of receiving the last details of the appellant's earnings meant that in terms of Section 114 no interest liability arose. 
As a preliminary issue I indicate that the Court does not have any jurisdiction to revisit either the respondent's primary decision of 7 April 2005, determining that the appellant had attained Vocational Independence, or the Review Decision of 1 September 2005 which confirmed that primary decision. No appeal from that Review Decision has ever been lodged, and prima facie the time for lodging such an appeal has long past. 
The District Court's jurisdiction to consider appeals from review decisions is contained in Section 149 of the Act and that jurisdiction is confined to a consideration of the correctness of the review decision sought to be appealed. 
In the present case, the appellant lodged a Notice of Appeal against the Review Decision dated 26 October 2006. That review decision was confined solely to the issue of whether or not the appellant was entitled to interest on the arrears of weekly compensation that were paid to him on 19 April 2006. It is therefore that issue alone which this Court can consider in this appeal. 
The statutory provision covering a right to interest is contained in Section 114 of the Act, a statutory provision which has received a considerable amount of attention from the Courts since the right to interest was first enacted under the Accident Rehabilitation & Compensation Insurance Act 1992. 
The statutory provision pertaining to a right of interest has not changed materially under the successive statues and at present Section 114 states as follows: 
“114 Payment of interest when Corporation makes late payment of weekly compensation 
The Corporation is liable to pay interest on any payment of weekly compensation to which the claimant is entitled, if the Corporation has not made the payment within 1 month after the Corporation has received all information necessary to enable the Corporation to calculate and make the payment. 
The Corporation is liable to pay the interest — 
at the rate for the time being prescribed by, or for the purposes of, section 87 of the Judicature Act 1908; and 
from the date on which payment should have been made to the date on which it is made. ”
The key to an entitlement to interest is in circumstances where the Corporation has not made a payment within one month of receiving all information necessary for it to calculate and make payment of the weekly compensation entitlement. 
Thus the material date is the date when all information necessary has been received. It is not the date from which it may have been determined that weekly compensation is to be paid in arrears, unless those two dates were, from a factual perspective, to coincide. 
The legal position is succinctly identified by His Honour Justice Randerson in the decision of Knight (Christchurch Registry CIV 2005-485-1582) where at paras [28] and [29] he stated as follows: 
I respectfully adopt the view expressed by Gendall J in Wardle v Accident Rehabilitation & Compensation Insurance Corporation HC Wellington, AP 134/02, 18 October 2002) at [15] when he rejected the Appellant's contention that interest ran under s 72 of the 1992 Act from the date when payment of compensation was due. Gendall J drew a distinction, which I accept, between the date from which a compensation entitlement arises and the eventual payment of the entitlement. The legislation deliberately provides for interest to run from a date one month after all information necessary to enable the Corporation to calculate and make the payment is received. 
The legislation does not provide for interest to be paid from the date of commencement of the entitlement. Nor does it allow for a retrospective deeming of receipt of ‘all information necessary’ when it is later established on inquiry that, for example, there was no relevant post-accident income which would require abatement of the compensation due. …  ”
With that being the statement of the law, which I accept, it now requires the Court to identify the facts as to when it was that “all information necessary” was to hand. 
It is the case, and which was known to the respondent, that the appellant had engaged in gainful employment subsequent to his weekly compensation ceasing in July 2005. He had employment as a self-employed contractor doing fitting and maintenance work on a ship and he then obtained employment doing maintenance work for a partnership known as L G and J M Pohe. This work was of course alluded to in the Occupational Assessment that was carried out in December 2005. 
It is a fact that on 5 April 2006, the appellant provided the respondent with copies of his invoices from all his maintenance work which he carried out on the SV“Gypsy Rose” and earnings from his employment at Plant Maintenance Services was provided on 7 April 2006. 
The respondent obtained confirmation from Work and Income that the appellant had not received any benefit during the period in question and on 11 April 2006 the appellant made a statutory declaration confirming that the information that he had supplied was the full extent of his earnings during the period. 
It was following the receipt of that information that the respondent calculated the net sum due to the appellant by way of arrears for the period 6 July 2005 to date of payment and it duly made payment of the correct sum on 19 April 2006. 
In terms of Section 114, I find as a fact that the respondent made payment of the arrears of weekly compensation to which the appellant was entitled within one month of it receiving the information that was necessary for the purpose. 
The submission made by the appellant that the respondent had in fact all the information at the time it ceased paying weekly compensation is not the case. It may have had information as to his pre-accident income, which was to form the basis for the calculation of weekly compensation, but it did not have any information of income earned from July 2005 onwards. In the present case the dates of the commencement of the entitlement and the date of receipt of all information necessary do not coincide. In those circumstances, the respondent is under no liability to pay interest on those arrears from 6 July 2005 as claimed. 
Accordingly, it is the case that the respondent was correct to determine that the appellant had no entitlement to interest and the Reviewer was correct to confirm that decision. This appeal is dismissed. 

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