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Accident Compensation Cases

Thimbleby v Accident Compensation Corporation (HC, 10/06/03)

Judgment Text

The judgment of the Court was delivered by 
DURIE  J (reserved):
This is an application for review of a decision of Master Gendall ordering that security for costs be dispensed with on an appeal from this Court to the Court of Appeal. The essential issue is whether the public interest factors and the applicant’s impecuniosity provide sufficient grounds to sustain an order dispensing with security in this case. 
The question arises from proceedings to determine the meaning and effect of particular provisions in the relevant accident compensation legislation. The Legislature had determined to intervene on the formula for assessing compensation entitlements under s 40 of the Accident Rehabilitation and Compensation Insurance Act 1992 on the basis that the old formula was seen to produce inequities “in a number of relatively common situations”. The words I have quoted are from the Minister for Accident Rehabilitation and Compensation Insurance on moving the relevant Bill — see 1995 NZPD P10594. Succinctly, the formula requiring the division by 52 of the applicant’s income for the 12 months preceding the injury penalised those who had worked for only part of that time. This perceived “inequity” was remedied by the Accident Rehabilitation and Compensation Insurance Amendment Act (No 2) 1996. However, the question arose in the applicant’s case, as no doubt it arose in other cases, as to whether the amendment had retrospective effect so that the applicant could claim the balance owing for the years after the injury but before the legislative change. 
The District Court, in allowing an appeal from an internal review, held that the appellant was entitled to have his earnings recalculated from the date of his accident. An appeal against that decision was then allowed in this Court upon the ground that a retrospective effect could not be imputed to the amending legislation. 
The applicant sought leave to appeal to the Court of Appeal, an appeal lying to that Court by way of case stated. Leave was granted, with counsel filing a consent memorandum requesting the court to issue a case stated in the form that counsel annexed. However, leave to dispense with security was not sought at that stage, or subsequently within the allowed time. Accordingly, the appeal was treated as abandoned for non-payment of security. The result was that the appellant applied for an order for special leave to appeal out of time and with it he filed the present application to dispense with security. 
Both applications were heard before the Master. The Corporation elected to abide the decision on the first. The Master took into consideration that leave had been granted earlier by this Court and accordingly (notwithstanding the consent memorandum) the Court must have considered that the appeal had merit. Special leave was granted. No review of that decision is now sought. 
On the second application the Master reviewed a number of matters raised by counsel. He noted that there was a tenable case. He considered the importance of the question that was involved, whether others were affected, the capacity of the Corporation “to fund the financial implications of the appeal” and the appellant’s significant degree of impecuniosity. Ultimately, he was of the view that the Corporation had an interest in clarifying its governing legislation which would be assisted by a proper consideration of the appeal and he was satisfied that there would be little injustice, if any, to the Corporation if security for costs were dispensed with in this case. He considered the test for exceptional circumstances had been made out “if only by a small margin” and he dispensed with security for costs accordingly. 
On this review the Court has the benefit of an affidavit of a manager of the Corporation which was not before the Master. This deposes: 
That the Corporation has significant demands on its legal services budget which requires that it acts responsibly in recovering legal costs. It is not in a position to adopt a munificent attitude in respect of the costs of other parties. 
The Corporation would oppose waiving security for costs on an appeal to the Court of Appeal unless it considered some issue of law arose which needed to be clarified in the interests of the ACC scheme. The Corporation considers that that is not the position here, that the issue will have limited application to other claimants, and that the Corporation has no particular interest in obtaining further clarification. The decision of this Court was unequivocal. 
Rule 11(1) Court of Appeal (Civil) Rules 1997 states: 
Security for costs 
Unless the Court below otherwise directs,— 
An appellant must give security for the respondent’s costs in the Court of Appeal; and 
The Registrar of the Court below must be satisfied with the security; and 
The security must be given within 14 days after the appeal has been brought. ”
This rule does not advise on the circumstances in which the court below might otherwise direct, but it contrasts with provisions in this Court for security to be ordered only on application. It has then been a long-standing view of the Courts that security for costs on an appeal to the Court of Appeal should not be dispensed with except in exceptional circumstances — see Russell v Stainton & Co Ltd [1922] GLR 422 at p 423 (SC) and In re Donner (dec’d), Public Trustee v Donner [1958] NZLR 141 at p 142 (SC). In Donner, Barraclough CJ noted, at p 143, that no-one had yet attempted to frame a definition of what is an exceptional circumstance and he said he was “not rash enough to try to rectify that omission”. Accordingly, the cases have tended to isolate the circumstances relied upon and to consider in each case whether the circumstances of that case were exceptional. 
Thus, in Stainton, Reed J referred to the two grounds there relied on: virtual insolvency on the one hand, and the existence of good grounds for appeal on the other. He held that neither ground pointed to a circumstance that was exceptional. However, with respect to the second matter, the appeal in that case was on a pure question of fact. He made no challenge to the finding of Stout CJ in Hamilton v BNZ (1903) 7 GLR 276 dispensing with security where the point involved was “novel and important and would have, if established by the appellant, a far-reaching effect on titles to property in New Zealand”
In Donner the Court was concerned with an appeal on the interpretation of a deed of settlement and will by a potential beneficiary claiming to represent all of a class yet to be determined. Barraclough CJ found it was not exceptional but was rather common that an appellant should appeal in a representative capacity. Nor was it exceptional, in his view, that costs might well be ordered from out of the fund. 
In this case Mr Miller for the applicant submitted that it is the combined impact of several factors that has especially to be considered. I think he is assisted in that submission by the recent comprehension of the rule in Bernard v Space 2000 Ltd (2001) 15 PRNZ 138. There Laurenson J considered, at para 33: 
“The purpose in requiring security for costs is to impose some restraint on appeals by requiring that an ultimately successful respondent will receive some reimbursement for costs. The difficulty which arises is when an impecunious appellant cannot pay the security. The law acknowledges that any security should not cause a denial of justice, but this has to be tempered by the recognition that an appellant is, by definition, a litigant whose case has been heard and found wanting. The other side of the coin is that a respondent who is taken to appeal is, by definition, a successful litigant who will once again face costs. The exceptional circumstance justifying dispensation from providing security, might perhaps be described in broad terms as some factor which justifies the withdrawal of protection from an already successful litigant, namely the respondent. Allied to this is the need to discourage worthless appeals which might otherwise be avoided by the requirement to provide security. ”
Laurenson J went on to review not one factor but a range of them. He considered (at para 35) that the mere fact that an appellant may have an arguable appeal did not in itself provide a basis for dispensing with security. However, in the matter before him he found the applicant’s case was compelling. The issue at first instance had been whether the applicant had no tenable case such that summary judgment should be entered. After reviewing the relevant law, he found it difficult to see how it could then be said that the plaintiff had no tenable case. That, in my view, was the primary consideration in that case, but the Judge went on to consider other factors which lent support to his conclusion. They included the fact that the plaintiff had been awarded legal aid, the implications of the appeal as far as the plaintiff was concerned, and the fact that the appeal was against a finding on a summary judgment as opposed to an appeal following a full hearing. 
On the present application it is not open to review the strength of the appellant’s case. It is sufficient to note that leave to appeal had been granted by Goddard J, and that was an important consideration for the Master in granting special leave to appeal when circumstances required that special leave be sought. Neither finding can be reviewed on this proceeding. However, the fact that leave was granted is a factor to be brought into account in my view. Notwithstanding any consent or lack of opposition, the Master had still to be satisfied that the case was one where special leave was justified. He must be taken to have been so satisfied. 
Then, the distinctive feature of this case is that the determination of the applicant’s rights derives not from some arrangement or agreement with a third party or some common law duty owed by or to that party. The source of the claimed right is that which the State has decreed as available to all who fall within its prescription. I cannot then accede to the Corporation’s apparent reliance on the fact that the numbers affected could in fact be quite small. The Legislature has determined the right of all persons who are affected in a particular way. No matter the number who might thereby be affected, any person so affected is entitled to have the application of the legislative prescription properly defined. The only issue is whether this is something that may condition the approach to be taken to the requirement for security as a protection for the Corporation. 
In the same context Mr Corkill for the Corporation must surely be correct that there is no proper basis on which the Corporation could be called upon to fund the litigation against it, that the fiscal constraints upon the Corporation must be acknowledged, and that the Corporation must act responsibly in seeking the recovery of legal costs. But that is not the issue. The question is whether the circumstances justify the withdrawal of the protection to which the Corporation is entitled as a successful litigant. The more important consideration in this context, in my view, is that the Corporation is the vehicle by which the Legislature has chosen to give effect to its policy for accident compensation. The question is whether, in that context, the overall imperative of justice is best achieved by viewing the Corporation in the same way as any litigant. In this case that question must surely be answered in the negative. 
In summary, I think the first item for consideration is that the Court has already determined that this is a suitable case to refer to the Court of Appeal and no appeal has been made in respect of that determination. 
The second factor is that the matter in issue concerns the rights of an indeterminate number within a legislative prescription to have their benefit entitlement over a defined period calculated in a certain way. In the consideration of that matter the Corporation is not in the position of an ordinary successful litigant. Notwithstanding that the Corporation has no need to seek a higher judicial ruling in order to perform its task, the reality is that the Court has determined that this matter ought properly to go to a higher authority. That being so, to properly perform its task in the way that the Legislature must be deemed to have intended, it is in the interests of the Corporation to obtain the higher ruling. 
The third factor is that the applicant is impecunious. 
The conclusion to which I come is that this combination of factors provides for a circumstance so exceptional or distinct from the norm as to justify an order to dispense with security. 
That being so, I can find no principled basis on which to interfere with the Master’s decision. The application for review is declined. 
The applicant is entitled to costs on the basis of category 2 band B. 

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