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Accident Compensation Cases

ACCIDENT COMPENSATION CORPORATION v BRIDGES (HC, 04/05/00)

Judgment Text

RESERVED JUDGMENT OF THE COURT 
McGeehan J, Gendall J
The Appeal 
[1]
This appeal involves questions as to the correct interpretation of s 40(2)(b) and (c) of the former Accident Rehabilitation and Compensation Insurance Act 1992 made applicable by s 42(1)(b)(i) of that Act. The first question is whether permanent “employment” immediately before the accident concerned is to be read as restricted to employment as an employee, or as extending to include permanent employment on a self employed/contract basis. The second question raises the meaning of “permanent” in the term “permanent employment”; in particular whether permanency is confined to an ongoing engagement without limit or can apply to an expectation of continued work under successive separate and limited engagements. The Appellant does not seek an answer to the second question if successful on the first. While the legislation under which the questions arise has been repealed, there is a possibility of like cases governed by transitional provisions as here, and we have taken time to consider. 
The Facts 
[2]
The Appellant is a skilled tradesman whose services are in demand. In the 18 years down to the date of the accident he was in regular work. Sometimes that was as an employee, under the usual PAYE regime. Sometimes it was as an independent contractor. There is some dispute as to his remuneration potential, but as at the date of the accident it may well have been in the area of $1000 per week. On 6 January 1993 Appellant was injured at work and disabled. There is no dispute as to liability. During the 12 months immediately preceding the accident he had worked sometimes as an employee and sometimes as a contractor. At the time of the accident he was working as a contractor under a fixed term contract. He would have had every reason to expect to be able to obtain other work when that contract expired. 
The Legislation 
[3]
The following provisions of the Act are relevant: 
“3. INTERPRETATION 
In this Act, unless the context otherwise requires, …  
‘Earner’ means any natural person who engages in employment, whether or not as an employee; and includes any person to whom section 44 of this Act applies: 
‘Employment’ means work engaged in or carried out for the purposes of pecuniary gain or profit; and, in the case of an employee, includes any period of paid leave other than paid leave on the termination of employment: 
40. CALCULATION OF WEEKLY EARNINGS WHERE EARNER HAD EARNINGS SOLELY AS AN EMPLOYEE DURING THE 12 MONTHS BEFORE COMMENCEMENT OF INCAPACITY-- 
(1)
This section applies only to earners who are earners immediately before the commencement of the incapacity and who, during the 12 months immediately preceding the commencement of the period of incapacity, had earnings as an employee and who did not also have earnings other than as an employee. 
(2)
The weekly earnings of any person to whom this section applies shall be,-- 
(a)
In respect of each of the 4 weeks next following the sixth day after the day on which the incapacity first commenced, the person's earnings as an employee during the 4 weeks immediately before the commencement of the incapacity divided by the number of full or part weeks during which the person earned those earnings as an employee during that 4-week period: 
(b)
In respect of any weekly period of incapacity after the period referred to in paragraph (a) of this subsection, if the person was in permanent employment immediately before the commencement of the incapacity, the person's earnings as an employee during the 52 weeks immediately before the commencement of the incapacity, divided by-- 
(i)
The number of full or part weeks during which the person earned those earnings as an employee during that 52-week period; or 
(ii)
Thirteen,-- 
whichever is the greater: 
(c)
In respect of any weekly period of incapacity after the period referred to in paragraph (a) of this subsection, if the person was not in permanent employment immediately before the commencement of the incapacity, 1/52nd of the person's earnings as an employee during the 52 weeks immediately before the commencement of the incapacity. 
(2A)
For the purposes of this section, a person shall be regarded as having been in permanent employment if, in the opinion of the Corporation, that person would have continued to receive earnings from that employment for a continuous period of more than 12 months after the commencement of incapacity if the personal injury had not occurred. 
(3)
Where, during the 12 months immediately preceding the commencement of the incapacity, an employee had more than 1 employer, the calculations made under subsection (2) of this section shall be made separately and then be combined. 
42. CALCULATION OF WEEKLY EARNINGS WHERE EARNER HAD BOTH EARNINGS AS AN EMPLOYEE AND OTHER EARNINGS DURING THE 12 MONTHS BEFORE COMMENCEMENT OF INCAPACITY 
(1)
This section applies only to earners who are earners immediately before the commencement of the incapacity and who had both earnings as an employee and earnings other than as an employee during the 12 months immediately preceding the commencement of incapacity. 
(2)
The weekly earnings of any person to whom this section applies shall be-- 
(a)
In respect of each of the 4 weeks next following the sixth day after the day on which the incapacity first commenced: 
(A + B) - the number of weeks or part weeks during the 4 weeks immediately before the incapacity commenced during which those weekly earnings were earned-- 
where-- 
A is the person's earnings as an employee calculated under section 40(2)(a) of this Act multiplied by the number of weeks or part weeks during the 4 weeks immediately before the incapacity commenced during which those weekly earnings were earned: 
B is the weekly earnings of the person calculated under section 41 of this Act multiplied by the number of weeks or part weeks during the 4 weeks immediately before the incapacity commenced during which weekly earnings were earned other than as an employee: 
(b)
In respect of any period of incapacity after the period referred to in paragraph (a) of this subsection, the total of-- 
(i)
The person's weekly earnings calculated under paragraph (b) or paragraph (c) of section 40(2) of this Act, whichever is applicable in the circumstances; and 
(ii)
One fifty-second of the weekly earnings of the person calculated under section 41 of this Act multiplied by the number of weeks or part weeks during the 52 weeks immediately preceding the commencement of the incapacity during which the person earned weekly earnings other than as an employee. 
(3)
Where, during the 12 months immediately preceding the commencement of the incapacity, an employee had more than 1 employer, the calculations made under subsection (2) of this section shall be made separately and then be combined. ”
The Claim:Previous History 
[4]
The Corporation assessed Appellant's weekly earnings under s 42, he having had earnings both as an employee and otherwise during the previous 12 months. There is no significant challenge to the calculation of earnings in relation to the self employed component (s 42(2)(b)(ii)). In relation to the employment component, the corporation, applying s 42(2)(b)(i), considered s 40(2)(c) was the paragraph “applicable in the circumstances”, the Appellant not being in “permanent employment” immediately before the accident. In the result, Appellant's weekly earnings were assessed at a level significantly lower than would have been the case if s 40(2)(b) had been applied. That approach was upheld on review. 
[5]
On appeal the District Court took the opposite view. Stripped to essentials, the Court noted the Appellant was an “earner” as defined, and therefore by definition was in “employment”. The Court noted the requirement in s 42(2)(b)(i) for the calculation to be made under s 40(2)(b) or (c)“whichever is applicable in the circumstances”. The Court turned to s 40(2) and noted that to qualify at all a person must be an “earner”, and have been such immediately before the commencement of the incapacity; adding “i.e. he must have been in employment”. After reference to the significance of the associated requirement for permanency as a “control”, the Court held that “for the foregoing reasons” in case of claimants qualifying under s 42 there is no need to imply into the phrase “permanent employment” the words “as an employee”. That was not needed, it was said, for “ordinary and sensible meanings” to be given to ss 40 and 42. That was said to be particularly so given the definition of “employment”, which was to be read with the definition of “employee”, which included not only employment as an employee but also included self employment. The Court ruled that the fact Appellant was not in an employee situation at the time of the accident did not exclude him from the more favourable terms of s 40(2)(b). 
[6]
We pause to comment. Essentially the District Court appears to be saying that s 40(2)(b) earner claimants must be in (permanent) “employment”; the term “employment” by definition covers both employment as an employee and under contract/self employment; therefore s 40(2)(b) is not confined to employment as an employee. 
[7]
The Court then moved to consider the additional requirement that claimants must be in “permanent employment” at that time. The Court considered the words “permanent” had a wider connotation than simply “permanent employment in a particular position”. A dictionary approach was adopted. “Permanent” was taken as meaning “intended to exist” and “not expected to change”. The Court dismissed as simplistic the Corporation's assumption that because a fixed contract was due to expire it could not be said Appellant would continue receipts for a continuous period of 12 months. “Employment”, it was said, was not restricted to a particular contract, or to a particular employer, where the expectation or intended course was such that the claimant would continue “in work” for the 12 month period. Appellant could have expected “to continue to be able to obtain work on a full-time basis”. Previous patterns would continue. The “permanency” requirement thus was met. 
Submissions 
[8]
We had the benefit of detailed submissions. Brief summaries must suffice. 
[9]
Counsel for the Appellant Corporation urged a purposive interpretation, said to lead to the conclusion “permanent employment” must mean “permanent employment as an employee”. The context of ss 40, 41, and 42 was put as supportive. The only authority on the point, Kerr v ARCIC (Decision No. 218/98, 13 October 1998) (ironically a decision of the same District Court Judge) was put as supporting Appellant's contentions; as were public policy considerations. In any event, on the facts, Respondent's employment arrangements could not be said to amount to “permanent employment”, not satisfying the terms of s 40(2A). There has to be expected earnings from that employment for a continuous period of 12 months, for it to be “permanent employment”. The statutory language was said to be clear, and there was no basis for other conclusions as a method of avoiding injustice. 
[10]
Counsel for the Respondent emphasised the policy objectives underlying the Act, as evidenced by the Woodhouse Report and other materials intrinsic and extrinsic, to the effect “real” compensation was to be provided. On the Appellant's suggested s 40(2)(c) approach, it was said, compensation would fall below that mark, thus raising serious concerns whether that provision could be applicable. More precisely, use of s 40(2)(b) was triggered by application of s 42. When so triggered by s 42, “a self employed situation”, it is appropriate - given that different context for the words of s 40 to have a different meaning from when s 40 was dealing with an employee alone. The reference to s 40 by s 42 was merely a drafting device (stigmatised orally as a “dangerous drafting device”) to avoid repetition. Given s 40(1), s 40 cannot itself apply, and the words used are thus “liberated” from the employee context. Instead, they are imported into and interpreted within the self employed context of s 42. There are no contrary policy considerations. The requirement for permanency, it was said, (“the real control device”) is to ensure persons such as casual seasonal workers who earn high amounts for short periods do not receive compensation based on those high amounts, but merely on usual earnings over a whole year. The Respondent, it was said, was not in that category. 
Decision 
[11]
We are unable to agree with the finding by the District Court that s 40(2)(b) approached through s 42(2)(b)(i) includes employment otherwise than as an employee (i.e. includes self employment). 
[12]
In our view, the point cannot be reached on the simple basis that general definitions of “earner” and “employment” can be applied under s 40(2)(b) with that outcome. Those general definitions are, of course, subject to context. The statutory context clearly points the other way. Section 42 is a special section, dealing in a special way with the situation of claimants who have a past history of employment both as employees and as self employed contractors. It imposes consequences in relation to the history as employees in one provision (s 42(2)(b)(i)), and consequences in relation to history as a self employed contractors in another (s 42(2)(b)(ii)). There is a clear segregation. The evident statutory intention underlying s 42 is that consideration of s 40(2)(b) or (c) will not involve self employment. When approached through s 42, s 40(2)(b) and (c) can only apply to employment as an employee. We do not place any particular weight on the decision in Kerr v ARCIC supra, where the point was not professionally argued, but it is consistent. 
[13]
We are unable to accept arguments for the Respondent to a different effect. It is of course true that the general intention of the scheme and legislation is to confer “real” compensation, but that is subject to specific provisions such as that presently in issue. The Court cannot re-write the Act on the basis of perceived inadequacies in that respect or perceived injustices, if indeed such exist. That is for the legislature. As has been seen, we do not see the approach through s 42 as allowing, let alone inviting, a different interpretation of s 40 in manner favouring the Appellant. To the contrary, it leads to a more restrictive approach. 
[14]
In this light, it is not necessary to consider the second question as to the existence of “permanency”. We are not to be taken as accepting or rejecting the ruling below. Consideration can await an occasion on which such is necessary. 
Order 
[15]
The appeal is allowed. The decision below is reversed. Calculation of weekly earnings as an employee is to be made on the basis of s 40(2)(c). 

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