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Accident Compensation Cases

GPB v Accident Rehabilitation & Compensation Insurance Corporation (HC, 23/11/98)

Judgment Text

JUDGMENT OF THE COURT 
Doogue J, Wild J
This Appeal 
This is an appeal from a decision of the District Court at Tauranga delivered on 7 October 1996. The relevant provisions of the Accident Rehabilitation and Compensation Insurance Act 1992 (“the 1992 Act”) came into force on 1 July 1992. Section 72 of the 1992 Act provides for the payment of interest where the Corporation fails to make payment of compensation based on weekly earnings within the time period specified in s 72. The appellant claimed interest under s 72, but the Respondent (“the Corporation”) refused to pay him interest. The decision of the District Court under appeal upheld the Corporation's refusal. The issue on this appeal is whether the appellant, in the circumstances we will shortly outline, is entitled to have his claim for interest considered under s 72. 
When we refer to the appellant, we are referring now to his estate, the appellant having died since the decision under appeal was delivered. 
The Facts 
The appellant first filed a claim on 15 October 1984. The claim was in respect of an accident deemed to have occurred on 20 November 1982. That was the date on which the appellant had been obliged to give up the employment he then had. Some two and a half years later, on 24 April 1987, the former Accident Compensation Corporation declined that claim. The appellant filed a review application on 4 June 1987. Over five years elapsed before that application was heard on 25 June 1992. The decision was favourable to the appellant, the review officer holding on 7 August 1992 that the appellant was entitled to compensation under s 28 of the Accident Compensation Act 1982 (“the 1982 Act”). In the meantime, on 1 July 1992, the 1992 Act came into force, repealing the 1982 Act. On 13 August 1992 the Corporation accepted the appellant's claim for compensation. 
Payment to the appellant of earnings related compensation commenced on 24 August 1993. Arrears of compensation from 18 February to 23 August 1993 were paid to him in October 1993, and further arrears for the period 1 April 1984 to 1 November 1993 on 5 January 1994. 
On 26 July 1995 the appellant requested payment of interest on the arrears of compensation he had been paid, the interest to run from February 1983. The appellant submitted that the Corporation, by 21 September 1992, had all the information it needed to make an assessment of earnings related compensation. On 25 September 1995 the Corporation notified the appellant that it was not until 9 August 1993 that it had all the necessary information. The Corporation declined to pay the appellant any interest. The appellant sought to have that decision reviewed. The review officer upheld the Corporation's decision. The appellant appealed, unsuccessfully, to the District Court. The appellant appealed to this Court. His executor now pursues that appeal for the estate. 
Relevant statutory provisions 
The relevant provisions of the 1992 Act are: 
“3.
Interpretation 
In this Act, unless the context otherwise requires, — 
‘Weekly earnings’ means, in relation to any earner, the weekly earnings of that earner determined in accordance with sections 40 to 43 of this Act: 
72.
Payment of interest where Corporation … makes late payment of compensation based on weekly earnings — Where any payment of compensation based on weekly earnings to which a claimant is entitled is not paid by the Corporation … within 1 month after the Corporation … has received all information necessary to enable calculation of the payment, interest shall be paid on the amount payable by the Corporation … at the rate for the time being prescribed by or for the purposes of section 87 of the Judicature Act 1908 from the date on which payment should have been made to the date on which it is made. 
135.
Relationship of this Act and former Acts — 
(1)
Any person who has had a claim accepted for personal injury by accident within the meaning of the Accident Compensation Act 1972 or the Accident Compensation Act 1982 suffered before the 1st day of July 1992 shall be deemed to have suffered personal injury that is covered by this Act. 
 
(3)
Any person who has suffered personal injury by accident within the meaning of the Accident Compensation Act 1972 or the Accident Compensation Act 1982 before the 1st day of July 1992 and who has lodged a claim with the Corporation in respect of that personal injury by accident before the 1st day of October 1992, shall have the acceptability of the claim determined under the Accident Compensation Act 1982 as if it had not been repealed. 
(4)
Where subsection (3) of this section applies, the continued entitlement of the person to rehabilitation, compensation, grants, and allowances shall be determined under those Acts, as appropriate, but subject to this Part of this Act 
 
138.
Weekly compensation — 
(1)
Where any person is, immediately before the 1st day of July 1992, in receipt of or would have been entitled to be in receipt of compensation calculated under any of the provisions of sections ... 59, 60, 61, 62, 63, 64, and 88 of the Accident Compensation Act 1982, that compensation shall continue to be payable or be paid as if it had been calculated under this Act; and the personal injury by accident suffered by that person shall be deemed to be personal injury within the meaning of this Act. 
(2)
Notwithstanding subsection (1) of this section, adjustments to the calculations referred to in that subsection that are to be made other than pursuant to an Order in Council or regulations shall be made under the Accident Compensation Act 1972 or the Accident Compensation Act 1982, as appropriate. 
… ”
Two opposing District Court judgments 
In the judgment under appeal, Judge Middleton held that the appellant was in receipt of earnings related compensation under the 1982 Act and not of weekly earnings assessed under the 1992 Act, that there is no provision comparable to s 72 in the 1982 Act, and that accordingly the appellant was not entitled to interest. The Judge essentially accepted the Corporation's argument that the appellant's entitlement to earnings related compensation had to be determined under s 135(3) of the 1992 Act. That meant that s 138 of the 1992 Act covered the appellant's position, in that immediately before 1 July 1992 he would have been entitled to compensation calculated pursuant to ss 59-64 of the 1982 Act, which compensation “shall continue to be payable as if it had been calculated under the 1992 Act”. Section 138 also provides that any adjustments to the calculations made pursuant to s 138(1), other than pursuant to an Order-in-Council or regulations, were to be made pursuant to the 1982 Act. The Judge accepted the Corporation's submission that it followed that the appellant's assessment of earnings related compensation was an assessment under the 1982 Act which contained no provision for the payment of interest for late payment of that compensation. 
A different interpretation was placed upon these provisions by Judge Ongley in the subsequent case of Unwin v ARCI 14.2.97, District Court, Wellington, Decision No. 21/97. In that case, the appellant suffered injuries in a motor vehicle accident on 7 September 1990 and was paid earnings related compensation. The level of payment was reduced from 1 May 1992 on the basis that Mr Unwin was a “field agent” (he was a real estate agent) and not an employee. Judge Ongley found that the payments to him should have been continued from 1 May 1992 without the reduction the Corporation had made. In other words, there was short (and thus late) payment of earnings related compensation by the respondent from 1 May 1992. 
Judge Ongley then turned to the question of interest on that late paid earnings related compensation. He referred to the decision now under appeal. He noted that it was not evident from Judge Middleton's decision whether s 72 applied in relation to earnings related compensation for a period(s) after the commencement of the 1992 Act. He said that he reached a conclusion different from that of Judge Middleton in respect of payments of earnings related compensation after the commencement of the 1992 Act. He held that the authority for continued payments of earnings related compensation flowed from the 1992 Act, although s 138(2) provided that adjustments to the primary calculations were to continue to be made under the 1982 Act. The critical part of the judgment is: 
“The authority for continued payments now flows from the 1992 Act. Payment of interest is not an adjustment to the primary calculation of compensation. It is an additional payment to be made in respect of late payment. Section 72 came into force on 1st July 1992, and it applied from that date onwards to payments which should have been made and were not made within one month after the time when respondent received all necessary information. If a claimant is entitled to a payment which should have been made but has not been, the entitlement itself will have been based on a calculation made under the former Acts. The 1992 Act then governs the manner in which the payment is to be made after July 1992 and accrual of interest should be determined by the amounts payable and the dates on which payment should have been made. 
It is of course significant that s 72 refers to ‘compensation based on weekly earnings’. ‘Weekly earnings’ is an expression defined in the 1992 Act and it is not found in the 1982 Act where the equivalent expression comprised in s 53 of the 1982 Act is ‘relevant earnings’. It could follow that s 72 does not apply to compensation based on ‘relevant earnings’. Against that, s 138(1) states that the compensation shall continue to be payable or to be paid as if it had been calculated under this Act. Therefore, it continues to be paid as if it is based on weekly earnings. Both of the expressions in question deal with the income sample which is used to calculate earnings compensation. While pre-1992 earnings compensation was based on ‘relevant earnings’, it is not inappropriate, once it is preserved under the 1992 Act, to then include it in a global description of compensation based on weekly earnings. Under ss 47 and 140 of the 1992 Act the abatement calculations are the same whether the calculation of compensatable earnings loss had been made under either Act. 
The Indexation Regulations SR 1992/277 dealt with a similar problem of definition and addressed it by defining ‘weekly earnings’ to have the same meaning as in the Act and to include relevant earnings as calculated under the earlier Acts where relevant earnings were used as the basis for earnings related compensation for the purposes of s 138 of the 1992 Act. Indexation is authorised by s 70 of the Act which employs the expression ‘compensation based on weekly earnings’ just as it is used in s 72. 
I reach the conclusion that the evident intention of s 72 is to confer a right to payment of interest on late payments of compensation whether the compensation is based on weekly earnings or on relevant earnings under the earlier Acts. ”
The opposing arguments 
Mr Miller's primary submission was that the appellant came under s 135(1) of the 1992 Act, and was thus entitled to interest under s 72 as well as to the other entitlements in the 1992 Act applicable to him. It was therefore unnecessary to consider s 138. Alternatively, Mr Miller argued that s 135(3) applied to the appellant. The acceptability of his claim thus fell to be determined under the 1982 Act and s 135(4) provided that his continued entitlement to compensation was to be determined under the 1982 Act, but subject to Part VIII of the 1992 Act. That brought in s 138(1) which provided that the appellant's compensation calculated under the 1982 Act: 
“Shall continue to be payable … as if it had been calculated under this Act; and the personal injury by accident suffered by (the appellant) shall be deemed to be personal injury within the meaning of this Act. ”
Section 138(2) then provided that adjustments to the calculations referred to in s 138(1), other than pursuant to an Order-in-Council or regulations, were to be made under the 1982 Act. 
Mr Miller then adopted Judge Ongley's view that payment of interest under s 72 was not an adjustment to the primary calculations made under the 1982 Act, and that authority for continued payments of earnings related compensation had flowed from the 1992 Act once it had come into force on 1 July 1992. Mr Miller then closely adopted the reasoning in that part of Judge Ongley's decision which we have set out earlier in this judgment. Addressing the change in the accident compensation legislation in 1992, Mr Miller pointed out that originally there was no clause in the Bill providing for interest on late payment of earnings related compensation. What is now s 72 was introduced by a supplementary order paper following the second reading of the Bill. Mr Miller provided copies of the relevant Parliamentary Debates, but they shed no light on the genesis of s 72, still less on its interpretation. He placed before us some Parliamentary correspondence tending to suggest that s 72 was intended to be the legislative equivalent of s 118 in the 1982 Act, which authorised the Corporation to make ex gratia payments. The Court has resorted to Parliamentary Debates in order to ascertain the purpose of legislation. See, for example, New Zealand Maori Council v Attorney-General [1987] 1 NZLR 641 (CA) at 658. However, we are not aware of a Court ever resorting to Parliamentary correspondence as an aid to statutory interpretation, and as a matter of principle we decline to do so. In any event, we see no need here for such resort. Finally, Mr Miller provided us with the Government's Policy Paper entitled “Accident Compensation — A Fairer Scheme”, issued on 30 July 1991 under the name of the then Minister of Labour, The Hon. W F Birch. He asked us to note the emphasis, in the body of, as well as the title to, this paper, upon fairness and equity. 
For the Corporation, Mr McKenzie first submitted that the Corporation has no power to pay interest in the absence of statutory authority: Accident Compensation Corporation v Broadbelt [1993] NZLR 169, 173 (CA). There can be no doubt about that, and Mr Miller readily accepted the point. Mr McKenzie submitted that the appellant came within s 135(3), with the result that his entitlement to cover (the acceptability of his claim) was to be determined under the 1982 Act, as also was his entitlement to compensation: 135(4). Mr McKenzie contended that s 135(1) could not apply to the appellant because his claim had not been accepted under the 1982 Act. Even if that were not so, Mr McKenzie said that s 138(1) would still govern both the appellant's entitlement to compensation, and the calculation of that compensation. The nub of Mr McKenzie's argument for the Corporation was that s 138 preserved the appellant's entitlement to compensation based on “relevant earnings” pursuant to the 1982 Act as a separate entity, different from compensation based on “weekly earnings” under the 1992 Act. His submission was thus the antithesis of Judge Ongley's holding that the authority for continued payments of compensation from 1 July 1992 flowed from the 1992 Act. Mr McKenzie supported his submission with reference to ss 139-146 in the 1992 Act, which applied various provisions of the 1992 Act to compensation payments made in relation to pre-1 July 1992 entitlements, continued under s 138. Mr McKenzie gave as examples abatement of earnings related compensation (s 140) and cessation of earnings related compensation on account of age (s 142). His point was that, in all those cases, the entitlement to be paid compensation preserved by s 138 is adapted to certain changes introduced in the 1992 Act. Those adaptations were required in order to apply various provisions of the 1992 Act to the compensation that continued to be payable under s 138, or to adapt that compensation to the new regime. But they did not affect the separate nature of the compensation. Mr McKenzie argued that, in carefully providing for only certain adaptations to, or applications of, the 1992 Act to pre-1992 Act claimants, Parliament had clearly restricted them from becoming fully entitled under the new regime. He said that Parliament's intention was to ensure that pre-1992 Act claimants suffered no detriment or loss because of the introduction of the new regime, but was not to provide such claimants with additional rights available under that new regime. 
Mr McKenzie then pointed out that those special adaptations to or applications of the 1992 Act did not include interest for late payments of earnings related compensation. Whilst s 138 authorised the Corporation to continue paying earnings related compensation, it contained no authority to pay interest on that compensation. The critical words are: 
“Where any person is immediately before the 1st day of July 1992, in receipt of or would have been entitled to be in receipt of compensation calculated under [the earlier Act] that compensation shall continue to be payable or to be paid as if it had been calculated under this Act. ”
(Mr McKenzie's emphasis.)
We inquired of Mr McKenzie what the unemphasized words “as if it had been calculated under this Act” were intended to mean. We suggested they could only mean calculated as, or on the basis of, weekly earnings. Mr McKenzie submitted that s 138(1) was essentially a deeming provision. He said those words referred to ss 40-42 of the 1992 Act, which dealt with the “calculation of weekly earnings”, and it is those calculations which underlie the rate at which compensation is to be paid. He pointed out that ss 40-42 say nothing about the payment of interest, which cannot constitute a “calculation” of the compensation payment. Entitlement to interest can only arise once the compensation has been calculated and it has been determined what sum of compensation is payable. There must, Mr McKenzie submitted, be separate statutory authority to permit the Corporation to pay interest and that was not conferred by s 138. Section 138 is headed “Weekly Compensation” which term seems to cover compensation whether calculated under the 1982 or 1992 Act. However, Mr McKenzie quite correctly pointed out that headings are not to affect the interpretation of a section: s 5(f) Acts Interpretation Act 1924. 
As to s 72, Mr McKenzie emphasised that it referred only to compensation based on “weekly earnings”, which he said was referable to compensation under the 1992 Act as defined in s 2, the calculation of which was provided for in ss 40-43. He submitted that, if Parliament had intended s 72 to apply to different types of earnings related compensation which continued to be payable because of s 138, it could easily have so provided. 
Finally, Mr McKenzie dealt with the Accident Rehabilitation and Compensation Insurance (Indexation) Regulations 1992 (SR1192/277) (“the Regulations”). He submitted that the extended definition of “weekly earnings” in Regulation 2 underlined his argument that “weekly earnings” did not, in the 1992 Act (i.e. apart from that special definition), include “relevant earnings”. He thus again invited us to draw a conclusion which was the antithesis of that arrived at by Judge Ongley. However, Mr McKenzie recognised that caution must be exercised in using regulations to interpret the statute authorising them, and referred to Hanlon v Law Society [1980] 2 All ER 199, particularly the comments of Lord Lowry at 218-219,in particular: 
“Regulations made under the Act provide a parliamentary or administrative contemporanea expositio of the Act but do not decide or control its meaning: to allow this would be to substitute the rule-making authority for the judges as interpreter and would disregard the possibility that the regulation relied on was misconceived or ultra vires. ”
Our approach 
We reject Mr Miller's submission that the appellant comes within s 135(1) of the 1992 Act, and accordingly is entitled to the benefit of s 72, without the need for consideration of s 138. Section 135(1) is cast in the past tense: 
“Any person who has had a claim accepted …  ”
(our emphasis)
That can only refer to a person whose claim had been accepted under the 1982 Act, which was repealed when s 135(1) came into force on 1 July 1992. The appellant's claim had not been accepted by 1 July 1992. In our view, the appellant comes within s 135(3): his accident has occurred before 1 July 1992 and he had lodged a claim with the Corporation before 1 October 1992. Thus, the acceptability of his claim was to be determined under the 1982 Act, as also was his entitlement to compensation: s 135(4). 
We accept that s 138 governs the appellant's continuing entitlement to compensation. However, we are unable to accept the Corporation's argument that this is simply a deeming provision. That interpretation ignores the words in s 138(1)“ … as if it had been calculated under this Act … ”. In our view, the legislature intended those words to have a meaning, and that meaning is that earnings related compensation paid or payable under the 1982 Act, from 1 July 1992, was to be paid or payable as if it had been calculated as “weekly earnings” under the 1992 Act. Section 138(2) is of no relevance, since the Corporation did not argue that interest was an adjustment to the calculations referred to in s 138(1). It follows from that interpretation, that s 72 applies to the appellant, since the earnings related compensation payable to him is to be regarded as calculated as “weekly earnings”, or, more relevantly, as “compensation based on weekly earnings”, those being the words used in s 72. The inequity which would result if this interpretation were not adopted, reinforces us in our conclusion. If the Corporation's intepretation were accepted, then, in the event that the Corporation defaulted for a significant period in paying earnings related compensation, 1982 Act claimants would have no entitlement to interest, whilst 1992 Act claimants would be entitled to interest. In fact, the position would be even more perverse and anomalous. Claimants coming within s 135(1) (i.e. those whose claims under the 1982 Act had been accepted by 1 July 1992), would be entitled to interest. Claimants such as the appellant whose claims within s 135(3) (i.e. those whose claims under the 1982 Act had not been accepted by 1 July 1992 but had been lodged before 1 October 1992), would not be entitled to interest. Claimants covered by s 135(5) (i.e. those injured before 1 July 1992, but who had not lodged a claim before 1 October 1992), would be entitled to interest if a claim subsequently lodged by them was accepted. We would not be prepared to arrive at an interpretation resulting in such inequity and anomalies, without very clear wording, and we do not find such clear wording in s 138(1). The interpretation we have adopted is, we consider, the full, large and liberal interpretation demanded by s 5(j) of the Acts Interpretation Act 1924. We note that in King v Accident Compensation Corporation [1994] NZAR 159 at 169-170, Barker J adopted a similar, purposive approach in interpreting s 135(3) of the 1992 Act, noting that acceptance of the interpretation for which the Corporation had argued before him, would have resulted in injustice. A further justification for the interpretation we have adopted concerns the legislative intention to have a scheme which is equitable. Mr Miller drew our attention to the Government's Policy Paper “Accident Compensation — A Fairer Scheme”, which we have already mentioned. More relevant and cogent, for our purposes, is the long title to the 1992 Act: 
“An Act to establish an insurance-based scheme to rehabilitate and compensate in an equitable and financially affordable manner those persons who suffer personal injury. ”
Quite apart from the interpretation we have placed upon s 138(1), we consider that the context of the words “weekly earnings” as used in s 72 requires a wider meaning than is given to those words in s 3 (Interpretation) of the 1992 Act. That is because s 72 speaks of “any payment of compensation based on weekly earnings … ” (our emphasis). The words “based on”, in our view, are intended to indicate that s 72 applies also to earnings related compensation paid or payable as if calculated under the 1992 Act. That is, they refer back to s 138(1). Thus, we consider those words encompass earnings related compensation, irrespective of whether it is calculated under the 1982 or 1992 Acts. 
We also draw some slight support from s 140, which refers to s 47, and deals with abatement of compensation. Section 47 initially refers to “the weekly compensation for loss of earnings … ”. The similar treatment of compensation under both Acts in relation to abatement argues for similar treatment in relation to interest also. The definition in the Regulations extending indexation under s 70 to include earnings related compensation under the 1982 Act is of doubtful relevance. We place no reliance either way on that extended definition. We find it unnecessary to do so. We think it also unwise to do so, both because of the cautionary comments of the House of Lords in Hanlon v Law Society, but also because both counsel sought to place reliance upon the extended definition, for their diametrically opposed arguments. 
Result 
The appellant is entitled to have his claim for interest pursuant to s 72 considered by the Corporation. As accepted by counsel, we are in the unfortunate position of not being able to decide that claim. 
Costs 
The Corporation advised us that it was treating this as a test case. Taking that into account, but also the facts that the argument was not particularly complex and the hearing was contained within half a day, we allow the appellant $1,500 costs plus disbursements as fixed by the Registrar. 

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