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Accident Compensation Cases

Baxter v Accident Compensation Corporation (DC, 31/07/15)

Judgment Text

Judge L G Powell
The appellant, John Baxter, has appealed against a refusal of a reviewer to award costs at review. 
The costs decision arose out of a claim for entitlements made by Mr Baxter's counsel, Mr Forster, on Mr Baxter's behalf on 2 March 2012. A month later in the absence of any decision made on the request a review was sought under s 134(1)(b) of the Accident Compensation Act 2001. Prior to the review being heard the Corporation issued its decision declining the claim for entitlements. As a result there is no dispute that at that point there was no longer jurisdiction for the review to proceed and it was appropriately withdrawn. Reviewer J Wilson declined to award costs on the withdrawn application and noted: 
“The legislation [s 148(2)(b) of the Act] provides I must award costs if I find for an applicant, and allows me to award costs if the applicant is unsuccessful but I consider the applicant acted reasonably in applying for the review. 
I consider it was not reasonable for Mr Baxter to ask Mr Forster to apply for the review. My reasons for this are because of the information provided by ACC about what was happening on Mr Baxter's claim and the timeframe involved. 
Mr Forster's first communication with ACC over the issue of further computer training was 2 February 2012. His review application was one month later, dated 2 March 2012 and date stamped as received by ACC four days after that. In the interim period ACC contacted Step by Step the provider of Mr Baxter's rehabilitation to obtain a completion report. ACC received the final report on 28 February 2012, after the case manager then emailed Mr Forster, Mr Baxter and the advocate for the Head Injury Society on 1 March 2012 telling them she would send out the report on her return to work in a week, after surgery. She sent out the report on 8 March 2012. 
The time period between Mr Forster applying for the entitlement and signing the review application was one month. During that time ACC told them what was happening. I do not consider it was reasonable to lodge a review application in those circumstances when Mr Baxter's concerns were being investigated. He is therefore not entitled to an award of costs. ”
Case for Mr Baxter 
Mr Forster has submitted that the Reviewer was wrong to apply s 148(2)(b) in determining costs on the withdrawn review. Instead, in Mr Forster's submission the reviewer should have applied s 148(3) of the Accident Compensation Act which provides: 
Costs on review 
If a review application is made and the Corporation revises its decision fully or partly in favour of the applicant for review before a review is heard, whether before or after a reviewer is appointed and whether or not a review hearing has been scheduled, the Corporation must award costs and expenses on the same basis as a reviewer would under subsection (2)(a). ”
In Mr Forster's submission the issue of the decision by the Corporation amounted to a revision of a decision fully or partly in favour of Mr Baxter before the review was able to be heard and, as a result, the reviewer was therefore required to award costs and expenses in favour of Mr Baxter. 
In the alternative if s 148(3) was found not to apply then in Mr Forster's submission Mr Baxter was none the less entitled to costs pursuant to s 148(2)(b) which provides: 
Costs on review 
Whether or not there is a hearing, the reviewer— 
may award the applicant costs and expenses, if the reviewer does not make a review decision in favour of the applicant but considers that the applicant acted reasonably in applying for the review: 
In Mr Forster's submission the District Court's general right of appeal under the 2001 Act extends to the matters to be determined in s 148(2)(b) and therefore if this Court determined that the review was reasonably brought it is able to substitute its own decision on costs without needing to consider “public law threshold against the exercise of a discretion”
Discussion and Analysis 
Under the Accident Insurance Act 1998 the Corporation had a fixed period to make a decision on an application for entitlements, with any failure to issue a decision resulting in a deemed decision in favour of the claimant. This position changed with the enactment of the 2001 Act. Now in the event that a claimant like Mr Baxter considers that there has been a delay in the Corporation determining an application for entitlements the only remedy is to seek a review under s 134(1)(b) of the Act which provides: 
Who may apply for review 
A claimant may apply to the Corporation for a review of— 
any delay in processing the claim for entitlement that the claimant believes is an unreasonable delay: ”
In the event that, as here, the Corporation issues a decision prior to the hearing of the review, there is then no jurisdiction for the review to proceed subject to the determination of costs on the review pursuant to s 148. 
Against this background the flaw in Mr Forster's submission in the present case is apparent in that an application for review under s 134(1)(b) is predicated on the basis that the Corporation has not made a decision on the claimant's entitlements. As a result on the clear words of the section the eventual issue of a decision by the Corporation after the review application has been filed cannot be a revision of an earlier decision by the Corporation “fully or partly in favour of the claimant” as is required if s 148(3) is to apply as contended by Mr Forster. 
With regard to Mr Forster's alternative argument the ability of this Court to consider costs on review was considered by Judge Ongley in Sutton v Accident Compensation Corporation1
| X |Footnote: 1
[2014] NZACC 345 
which noted: 
The respondent argues that the decision declining costs was a discretionary decision and that it should not be disturbed by the Court except on grounds of unreasonableness or application of a wrong principle.) 
However there are two stages in granting or refusing an award of costs in the case of an unsuccessful applicant for review. The first stage involves a question of fact whether the applicant acted reasonably in applying for the review. I do not agree with the respondent's submission that the first stage involves a discretionary decision. It concerns a question upon which the Court is able to consider the evidence and reach its own conclusion on the merits of the case: see Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103Has partially negative history or cases citing, but has not been reversed or overruled[Yellow] 
I agree that the second stage involves a discretionary decision. At the second stage a Reviewer decides whether to make an award of costs when the review has been unsuccessful but was reasonably brought by the applicant. ”
I respectfully agree with this analysis, and in particular consider the final decision whether or not to award costs is a discretion that is only to be interfered with if improperly exercised in administrative law terms. In particular, although it is clear that the District Court exercises a general right of appeal by way of rehearing in this jurisdiction, rather than concluding generally whether the Corporation's decision is correct in an appeal brought on a decision made under s 145(2)(b) the Court is in fact required to consider the exercise of a specific discretion given to the reviewer to determine costs if he or she has determined a review was reasonably brought. 
There are however some difficulties in applying this approach in the present case due to the fact that the appeal has proceeded primarily on the basis that Mr Baxter has a legal entitlement to costs under s 148(3). There is accordingly no reasoning provided on behalf of Mr Baxter as to why any delay was unreasonable, and very significantly is there not even so much as an assertion by Mr Baxter in either his review application or in his affidavit in support of the appeal that the time taken by the Corporation to make a decision on his application was unreasonably delayed. Thus even the prerequisite for invoking the review jurisdiction required by s 134(1)(b) was not complied with.2
| X |Footnote: 2
See Chalecki v Accident Compensation Corporation [2015] NZACC 224 at [17] 
Leaving aside the lack of evidence of even a subjective basis on the part of Mr Baxter that the delay was unreasonable, the evidence before me does not otherwise establish any reasonable basis for the review. Specifically, the request for entitlements made by Mr Forster on behalf of Mr Baxter on 2 February 2012 related to computer training additional to that which was currently being provided by the Corporation, and which was scheduled to finish on 7 February 2012. Before processing the request the Corporation not unreasonably sought feedback from the computer training provider as to whether additional training was needed or warranted. In view of the timing of the request for additional training the provider's substantive response took the form of a completion report on the current training. There were issues finalising this report as corrections were sought by Mr Forster and Mr Baxter, and as a result an amended report was not received by the Corporation until 28 February 2012, with the review application (dated 2 March) being received by the Corporation on 6 March 2012 without any further follow-up to the initial request having been made by either Mr Forster or Mr Baxter. The situation remained messy even after the review was filed, as even by 27 March 2012, when the Corporation advised that it was considering Mr Forster's request for further training for Mr Baxter, comments were sought from Mr Baxter as to why the additional training was required but no answer was provided. 
In these circumstances it is difficult to see how there was in fact any real delay let alone one that could be characterised as unreasonable. When this is coupled with a failure by Mr Baxter to even allege an unreasonable delay on the part of the Corporation I am satisfied that on the facts before me there was neither a delay nor a subjective belief on the part of Mr Baxter that there had been an unreasonable delay and on that basis the review was not reasonably brought. As a result Mr Baxter was not entitled to costs at review and the appeal must be dismissed. 
The appeal was dismissed. There is no issue as to costs. 

[2014] NZACC 345 
See Chalecki v Accident Compensation Corporation [2015] NZACC 224 at [17] 

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