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Accident Compensation Cases

Young v Accident Compensation Corporation (DC, 29/09/15)

Judgment Text

Judge Denese Henare
The appellant, Mr Young seeks interest on back-dated weekly compensation paid to him by the Corporation on 20 June 2012. The Corporation declined payment of interest as the arrears payment was made within one month of the Corporation having “all information necessary to make the payment”
Mr Young contends that he is entitled to interest because the Corporation had all the necessary medical and financial information in January 2010 it required, to calculate and pay weekly compensation. 
Mr Young has cover for a gradual process wrist injury suffered as a result of his work as a butcher/boner from 1988. Mr Young received entitlements, including weekly compensation. 
On 7 March 2002 Catalyst Risk Management (CRM) issued a decision that Mr Young had the capacity to work for 35 hours or more per week, based on a report from Dr Monash, Occupational Physician. That decision was upheld at review. 
Following this decision, which was not appealed, Mr Young went onto an Invalids Benefit. 
On 6 January 2010 Mr Young applied for weekly compensation. The Corporation received a medical certificate rom Mr Young's GP. The certificate indicated light work was possible for restricted hours for 13 weeks. The recorded diagnosis was complex regional pain syndrome, which had first been diagnosed in October 2001. The Corporation confirmed cover for this syndrome in March 2010. 
The Corporation opened the claim again to investigate the possibility of deterioration of vocational independence. The Corporation received GP medical notes and specialist reports from Neurologist, Dr Hill and Orthopaedic Hand, Wrist and Elbow Surgeon, Mr Boland. 
On 27 October 2010 Mr Boland responded to a number of assessment questions from the Corporation, confirming Mr Young was not fit for work and “for his type of employment he is fully unfit”. In response to the question whether Mr Young was fit for selected work, Mr Boland responded “currently not before further investigations are undertaken”. Mr Boland stated: 
There is nothing specific that I would recommend him not to do. I would recommend that he works within the limits of the pain that he has. 
I think returning this man to an active work place with the specified treatment regimen mentioned above would be very helpful for this man's general wellbeing. 
I think if we follow step by step through a multi-disciplinary pain management programme, diagnostic injections of his radial nerve by local anaesthetic, followed by appropriate surgery by a Hand Surgeon, I believe this man is likely to be able to return to some significant workplace activity. I do not believe with this regimen that he will remain an invalid and on an Invalid's benefit. 
I think his capacity for work is certainly significant. Following the specified treatment regimen I would then put him through the usual ACC assessment for the type of work that he would be able to do. ”
Mr Boland diagnosed “ECRB tendonopathy, commonly known as lateral epicondylitis and also radial tunnel syndrome” and “his functional limitations are significant”. Mr Boland considered this condition arose from Mr Young's previous work activity with boning. 
In 2011 Mr Young was then referred to the vocational independence process. 
In June 2011 Dr Monash, following the results of a Functional Capacity Evaluation (FCE), and his medical assessment, concluded Mr Young had vocational independence in 8 of the 16 job types identified by the vocational independence occupational assessor. 
On 4 October 2011, the Corporation issued a decision that Mr Young was vocationally independent in those 8 job types and: 
“These reports (the VIMA and FCE assessment) indicate that you have not suffered a deterioration of your vocational independence, and therefore we are unable to pay you weekly compensation or provide other vocational assistance. ”
For the purposes of review, a report was obtained from Dr Nicholson, Occupational Medicine Specialist, dated 28 February 2012. Dr Nicholson opined Mr Young did not have vocational independence in any of the 8 job types. Dr Nicholson noted Mr Boland's recommendations had not been acted on by the Corporation and considered Mr Young had no significant improvement in his symptoms over 20 years. 
The Reviewer preferred the opinion of Dr Nicholson and determined Mr Young no longer had vocational independence. The Reviewer noted Mr Young sought reinstatement of weekly compensation from 2003. On the information available the earliest date the Reviewer could identify was that deterioration “nominally started from January 2010”. The Reviewer directed the Corporation to investigate whether deterioration started from an earlier period. 
In respect to the payment of weekly compensation from 6 January 2010, the Corporation received medical certificates and financial information for the period from 6 January 2010 to June 2012. Since Mr Young had received benefits from Work and Income New Zealand (WINZ) the Corporation sought the amount to be reimbursed to WINZ. WINZ responded on 11 June 2012, advising the amount to be reimbursed was $57,247.04 gross. On 19 June 2012, the Corporation calculated that arrears of weekly compensation payable to Mr Young from 6 January 2010 was $74,133.89 gross and paid the net amount to Mr Young on 20 June 2012. Mr Young then applied for interest on the arrears payment. 
By decision of 26 June 2012, the Corporation listed all the information it received to calculate and make the weekly compensation payments. The Corporation determined interest was not payable because the backdated weekly compensation payment, made on 20 June 2012, was within the requisite one month period. 
In accordance with the Reviewer's direction, the Corporation investigated whether there was vocational independence deterioration from 2003 to 2010. 
Following investigation, the Corporation issued a decision on 6 July 2012, determining there was insufficient medical evidence to support his vocational independence from 2003. 
The issue is whether the Corporation is liable to pay interest on an arrears payment of weekly compensation made in June 2012 for the period from January 2010. This issue requires consideration of the application of s 114 of the Accident Compensation Act 2001 (the Act). 
The Case for Mr Young 
Mr Peart submitted Parliament intends there to be interest on late payment of weekly compensation “that is the rule rather than the exception”. He submitted interest should run one month from 6 January 2010, the date of the application for reinstatement of weekly compensation. 
Mr Peart submitted the Corporation had the necessary medical and financial information in January 2010. Mr Peart submitted Mr Young provided medical evidence by way of the medical certificate on 6 January 2010. At that time, the Corporation had all information it required to calculate and pay weekly compensation. The statutory process followed by the Corporation does not affect the “all information date” and does not negate Mr Young's right to interest from one month after that point. 
Discussion and Analysis 
The relevant provision regarding payment of interest is s 114 of the Accident Compensation Act 2001 (the Act) which provides: 
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. ”
Interest is payable after the Corporation has received “all information necessary” and when there is “late payment of weekly compensation” by the Corporation. Payment of compensation is “late” once one month has elapsed from the point in time it can be said the Corporation had: 
“ … received all the information necessary to enable the Corporation to calculate the payment. ”
The question in this case is when is that point in time? 
All Information Necessary Date 
I accept Mr Tuiqereqere's submission the Corporation had “all information necessary” when it had both the medical and financial information. The medical information required cogent information of deterioration of vocational independence, a reassessment involving both a VIOA and VIMA and the results showing Mr Young no longer had vocational independence. The required financial information to calculate weekly compensation from the date of reinstatement and/or to abate his weekly compensation (on post incapacity earnings) and/or reimburse any benefit payments to Work and Income (WINZ) under s 252 of the Act. 
The evidence is that Mr Young was assessed as vocationally independent in March 2002. Mr Peart submitted that the Corporation had evidence of deterioration and incapacity upon production of the medical certificate on 6 January 2010. I disagree. The certificate triggered the need for the Corporation to confirm the position. Even Mr Boland's opinion in October 2010 is couched in terms of further investigations being required. 
In order to be entitled to reinstatement of weekly compensation, it was necessary to show that Mr Young suffered deterioration under s 109. Whilst the facts show Mr Young was on an Invalid's Benefit in 2002, his status under the Accident Compensation legislation was that he had been determined vocationally independent. Mr Young's GP provided a certificate to the Corporation in January 2010 which as Mr Peart put it, “set in train a number of further investigations, including Mr Young's work capacity”. S 109(2) required the Corporation to conduct a reassessment when it had received grounds (via the medical certificate), for believing Mr Young suffered deterioration. A reassessment under s 109, where a claimant suffers a deterioration, is a process involving both a vocational independence assessment and vocational medical assessment. 
The first step for the Corporation was to investigate whether the complex regional pain syndrome was causally related to the originally covered 1988 injury. 
The Corporation sought up-to-date medical and clinical information from Mr Young's GP as well as referred Mr Young to Dr Hill and Mr Boland for specialist assessment. The reports from the two specialists were dated 28 July 2010 and 27 October 2010, respectively. The latter being received by the Corporation on 28 October 2010. 
The Corporation then referred Mr Young for a reassessment of his vocational independence. The VIOA report was prepared on 23 February 2011 and received by the Corporation on 25 February 2011. The VIMA report is dated 8 June 2011 and was received by the Corporation on 24 June 2011. 
By 24 June 2011 the Corporation had the requisite VIOA and VIMA reports as required by the legislation. In order for Mr Young to be entitled to reinstatement of his weekly compensation at that time, the reports were required to demonstrate that Mr Young no longer had a vocational independence. 
However, Dr Monash opined in the VIMA that Mr Young still had vocational independence and, the evidence available to the Corporation in June 2011 did not then support reinstatement of Mr Young's weekly compensation. 
It was not until receipt of the report from Dr Nicholson dated 28 February 2012 (received by the Corporation on 5 March 2012) that there was cogent medical evidence to demonstrate Mr Young no longer had a vocational independence. The Reviewer relied on Dr Nicholson's report to allow the review on 3 April 2012. The Corporation had “all information necessary” to reinstate Mr Young's weekly compensation (on the basis Mr Young no longer had a vocational independence) on receipt of Dr Nicholson's report on 5 March 2012. 
Pursuant to s 113(2), where a claimant's weekly compensation is reinstated following reassessment of that claimant's vocational independence, the claimant is entitled to the higher rate of: 
The rate the claimant was receiving at the time their weekly compensation was previously stopped; or 
The rate payable from the date of reinstatement (in the event the claimant was working immediately prior to the date of reinstatement). 
In the present case, Mr Young advised the Corporation on 2 May 2012 that he had not been working and had been in receipt of a benefit. Such benefit payments were also made to Mr Young after 6 January 2010, the period of overlap where Mr Young was entitled to weekly compensation. 
WINZ Information 
Mr Peart submitted that information about WINZ benefits is not “all information necessary” for the calculation of weekly compensation and is not relevant to the question of interest. Mr Peart submitted the case of Wardle1
| X |Footnote: 1
Wardle v Accident Compensation Corporation AP 134/02 [Wellington Registry, Gendall J, 18 October 2002] 
has been overtaken by Kearney2
| X |Footnote: 2
Kearney v Accident Compensation Corporation NZCA 327 
and Miller3
| X |Footnote: 3
The starting point is the mandatory obligation on the Corporation provided by s 252 of the Act to refund benefit payments to WINZ. In Wardle the High Court considered the equivalent provision to s 252 under the Accident Insurance Act 1998 (s 373). Gendall J held: 
Under s 78(3) of the 1992 Act a discretion existed for ACC to refund part of a compensation payment to WINZ, and receipt of ‘all information necessary to enable calculation’ of payment of the compensation based on weekly earning, did not include the receipt of details from WINZ, such not then being ‘necessary information’ in terms of s 72. 
But s 373 of the 1998 Act applied at the time ACC was calculating the appellant's compensation payment and it was mandatory that ACC make a refund to WINZ, in which circumstance details of the WINZ payment were ‘information necessary’ to enable calculation. ”
The Court of Appeal in Kearney discussed Wardle
“We are not sure from the report what financial information Mr Wardle had supplied when he made his claim in 1992. If at that time he supplied all the financial information necessary to enable calculation of the compensation, then we think, with respect, the decision was wrongly decided. If, on the other hand, he did not supply the information at that time, then Wardle can be distinguished from the current case. ”
I accept Mr Tuiqereqere's submission that the Court of Appeal did not state that WINZ information can never be “all information necessary”. The Court stated that if certain facts existed in Wardle then the outcome in that case was wrong. 
The High Court decision in Miller was quashed by the Court of Appeal, which determined that WINZ information was not relevant where a claimant fell within scenarios (1) to (3). However, it remains necessary information under scenario (4). However, the scenarios do not apply in the present case. The four scenarios were noted by Stevens J as applying where “the Corporation might make a decision to cancel or suspend compensation that is later overturned on appeal”
In summary, I conclude the Corporation had “all information necessary” when it received the information that Mr Young suffered a deterioration following reassessment of his vocational independence. In this case, the Reviewer relied on Dr Nicholson's report to allow the review on 3 April 2012. 
The Corporation did not have the necessary financial information to calculate the payment until it received information from WINZ of the amount to be reimbursed. WINZ supplied this information on 11 June 2012. 
The arrears payment was made on 20 June 2012, within one month of receipt of “all necessary information” to make the payment, as required under the legislation. It follows that no interest is payable. 
Accordingly, the appeal is dismissed. 

Wardle v Accident Compensation Corporation AP 134/02 [Wellington Registry, Gendall J, 18 October 2002] 
Kearney v Accident Compensation Corporation NZCA 327 

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