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Accident Compensation Cases

Howell v Accident Compensation Corporation (DC, 10/08/11)

Judgment Text

Judge M J Beattie
The issue in this appeal arises from the respondent's decision of 3 March 2010, whereby it determined that the appellant was not entitled to interest on back-dated weekly compensation to which she had become entitled, the respondent contending that it had made payment of the arrears due within one month of it becoming possessed of all necessary information from which to calculate and make payment of those arrears. 
This was the third appeal which the Court had heard that week where the issue and salient facts were more or less on all-fours with each other. The two other appellants were Craig Jones and Ross Donovan. 
As with the other two appeals it was the principal submission for the appellant that the issue was governed by the recent Court of Appeal decision in Kearney [2010] NZCA 327Has Litigation History which is not known to be negative[Blue] 
The relevant background facts are not in dispute and may be stated as follows: 
The appellant has cover for a back and neck injury suffered in May 2005. The injury was one which she suffered in the course of her employment as a sales assistant. 
The appellant received specialist treatment for her injury and it was identified that in addition to the disc prolapsed at L5/S1, the appellant was suffering from multi-level degenerative disc disease. 
The evidence would indicate that the appellant's ongoing problem was that of low back pain, and she was referred to specialists for treatment and assistance for that condition. 
After significant vocational and medical rehabilitation, the appellant was referred to the Vocational Independence Assessment Procedure and an Occupational Assessment Report was provided in August 2008, and Dr Turner provided a Vocational Independence Medical Assessment on 25 September 2008. 
It was Dr Turner's assessment that the appellant was capable of working for 35 or more hours per week in eleven of the work-types identified in the Occupational Assessment. 
Consequent upon those two Vocational Independence Assessments, the respondent issued a decision on 17 October 2008 determining that the appellant had attained Vocational Independence in respect of ten work-types identified by Dr Turner. 
As a consequence thereof, the respondent's weekly compensation ceased on 17 January 2009. 
The appellant sought a review of that decision and a review hearing took place in January 2009 and in a Review Decision dated 3 April 2009, the Reviewer dismissed that application and confirmed the respondent's primary decision. 
The appellant took that decision to appeal and that appeal was heard by His Honour Judge Cadenhead on 19 November 2009. 
In his decision dated 1 February 2010, His Honour identified that there were the competing medical reports of Dr Turner and that of Dr Martin, and as he noted, “these reports indicate that this is not an easy case.” 
In his final analysis His Honour determined that the appellant was not able to work for the stipulated time in the work-types nominated and for this reason he allowed the appeal and directed that the appellant's weekly compensation be restored to her. 
On 5 February 2010, following the respondent receiving advice of His Honour's decision, the respondent wrote to the appellant requesting details of any earnings following cessation of weekly compensation, a Tax Declaration form and medical certificates confirming ongoing incapacity. 
On 12 February 2010, the respondent received the information sought, including advice that the appellant had not earned any income since her weekly compensation had ceased. 
On 22 February 2010 the respondent paid the appellant the full amount of arrears into her bank account. 
In a letter from Mr Darke dated 3 March 2010, a claim was made requesting that the respondent pay interest on that back-dated weekly compensation. 
By decision dated 3 March 2010, the respondent declined that request, it contending that it had made full payment of the arrears within one month of receiving the relevant information. 
Those facts are in essence exactly the same as the chronology of events in the Jones and Donovan appeals, those cases also being a situation where a decision of Vocational Independence was subsequently overturned on appeal by decision of His Honour Judge Cadenhead. The only difference between the three cases was that whereas the appellant in the present case seems to have received no income or WINZ benefit during the period of cessation, both Jones and Donovan did in fact receive a WINZ benefit during that period. 
In the present appeal, Mr Darke submitted that in line with the Kearney decision, interest is payable on the arrears of weekly compensation from the date that weekly compensation was ceased to the date when it was actually reinstated. He submitted that it was the finding of the Court of Appeal that Section 114 does not allow the Corporation to suspend or refuse compensation and then later try to avoid paying interest by saying they needed information about earnings/WINZ Benefits. 
Mr Tui, Counsel for the Respondent, submitted that Judge Cadenhead's decision to quash the decision determining Vocational Independence was only made after further medical evidence had been introduced for the purposes of that appeal. He submitted that there could be no suggestion that the Vocational Independence decision was unlawful, the respondent having followed the correct statutory process and the decision made was one which was available to the respondent at the time based on the assessments which it had. 
Counsel further submitted that the decision in Kearney could be distinguished on the facts and that the Court of Appeal decision did not give rise to a principle of law determining that fault was not relevant in relation to the cessation decision and that interest became an entitlement every time there was a cessation of weekly compensation. 
On the facts of the present case it is clear that the respondent made payment to the appellant of all arrears of weekly compensation due to her within one month of it being advised that the appellant had not received any income during that period of cessation. 
It is the case, I find, that the question of whether income has been earned or not is relevant information, as such income as may have been received would reduce the amount of weekly compensation due in accordance with the abatement provisions contained in Clause 51 of Schedule 1 to the Act. 
The fact that there was no income received which would have caused an abatement does not alter the position. I find that information regarding any income earned or not is “information necessary” to enable the calculation and for the making of payment of the correct amount due to the appellant in accordance with s 114 of the Act. 
As in the other two decisions, I record that the facts in the present case are quite different to those which applied in the Kearney case. In the Kearney case there was no legal basis for the cessation of weekly compensation, and that was the primary reason for the Court concluding that the cessation of Mr Kearney's weekly compensation was unlawful. It had not been done pursuant to any statutory requirements. The Court then went on to state that as of the date that the Corporation unlawfully ceased Mr Kearney's weekly compensation, it did of course have all necessary information for that weekly compensation to be calculated and made. 
In the present case the decision to cease weekly compensation was made after the statutory provisions pertaining to assessment of Vocational Independence had been proceeded with and completed, and the respondent's primary decision was made in accordance with the principles enunciated in the Ramsay decision (2004) NZAR 1, where His Honour Justice Hansen determined that in the absence of evidence to the contrary, the respondent was entitled to rely on the assessments made by the duly-appointed Vocational Independence Assessors. 
As earlier noted, it was only when further evidence was introduced subsequent to that primary decision that His Honour Judge Cadenhead, looking at the matter afresh, was able to come to a different decision on the issue of Vocational Independence. 
Whilst it must be accepted that as of the date of cessation of weekly compensation the respondent was in possession of information necessary to make payment at that time, that is not the time that is envisaged by s 114, which requires the respondent to have received all necessary information for it to have calculated and made payment of the arrears, not weekly compensation going forward from the date of cessation as that weekly compensation had been ceased by operation of law. 
There is no dispute that the respondent did make full payment of arrears due to the appellant within one month of her giving advice that she had not earned any income in the period when her weekly compensation had been ceased, and in those circumstances I find that as a matter of fact and law, there was no right to interest on those arrears as the factual circumstances which need to be present to give rise to an interest entitlement did not exist in the case of this appellant. 
For the foregoing reasons therefore, and in line with the decisions which I have given in the Jones and Donovan appeals, this appeal is dismissed. 

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