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Accident Compensation Cases

Borst v Accident Compensation Corporation (HC, 12/10/12)

Judgment Text

JUDGMENT OF KATZ J 
Katz J
Introduction 
[1]
In 1977 the appellant, Mr Borst, was involved in a motor vehicle accident in which he was seriously injured. He has never fully recovered from those injuries. He has received earnings related compensation (ERC) under successive accident compensation statutes intermittently since the time of his accident. 
[2]
At issue in this appeal is Mr Borst's entitlement to a permanent incapacity assessment under s 60 of the Accident Compensation Act 1982 (1982 Act). If Mr Borst is entitled to such an assessment he may be found to be eligible for compensation payments known colloquially as “permanent pensions”. Such “pensions” are not subject to ongoing review, in contrast to ERC. 
[3]
Permanent pensions were effectively abolished in 1992. However, under s 368(4) of the Accident Compensation Act 2001 (the 2001 Act) a person receiving a permanent pension before 1 April 2002 would continue to receive such payments.1
| X |Footnote: 1
Sections 368(2) and (3). 
 
[4]
Alternatively, a claimant might be entitled to a permanent pension under s 368(4) if he or she can establish that an assessment of permanent incapacity was completed: 
(a)
prior to 1 October 1992; or 
(b)
after 1 October 1992, only because an application for review of a decision about the assessment was lodged before 1 October 1992. 
[5]
In June 1987 the Accident Compensation Corporation (ACC) declined to assess Mr Borst for permanent incapacity. Mr Borst says that, prior to the 1 October 1992 deadline, he applied for a review of that decision. 
[6]
The Accident Compensation Appeal Authority found against Mr Borst. He now appeals to this Court against that decision. I must decide whether a letter written by Mr Borst to the Minister of ACC in or about January 1990, viewed in its full context and given a fair and liberal interpretation, is a valid application for a review of ACC's 1987 decision. If that letter is not a valid application for review, then Mr Borst has no prospect of obtaining a permanent pension under s 60 of the 1982 Act. 
Facts 
[7]
In 1977, a truck driven by a drunk driver crossed the centre line and collided head on with the vehicle in which Mr Borst and his fiancée were travelling. His fiancée was killed in the accident and Mr Borst suffered fractures of his sternum and leg. Mr Borst subsequently developed gas gangrene in his leg and associated toxaemia, anaemia and renal failure. Amputation of the leg above the knee was necessary to save his life. 
[8]
For a period, Mr Borst received ERC, returning to work in another occupation in September 1978. 
[9]
In July 1980, Mr Borst had another period of incapacity and in September 1980 he was forced to leave his employment for reasons primarily to do with his injury. Following his unsuccessful attempts to have his ERC reinstated, he left New Zealand for Australia in November 1980, and returned in March 1985. Mr Borst then applied for reinstatement of his ERC. 
[10]
In 1987 Mr Borst's doctor contacted the ACC to inquire about Mr Borst's entitlement to an assessment of permanent incapacity under s 114 of the Accident Compensation Act 1972 (the 1972 Act).2
| X |Footnote: 2
The contemporaneous documents refer interchangeably to a s 114 assessment under the 1972 Act and a s 60 assessment under the Accident Compensation Act 1982 (the 1982 Act), which was in force when the Corporation made the decision which is the subject of this appeal. Nothing turns on the distinction in this case. 
This was the equivalent to s 60 of the 1982 Act. 
[11]
On 11 June 1987, ACC notified Mr Borst that he was not entitled to a permanent incapacity assessment under s 60 or ERC under s 59. 
[12]
Mr Borst did not lodge a formal review application of either decision within the one month period specified. Instead, he concentrated on the reinstatement of his ERC through various representations made personally and through his doctor and ACC appointed specialists between 1987 and 1990. 
[13]
By late 1989, Mr Borst's frustration levels had reached such a level that he contacted the Minister of ACC and the Minister of Health by way of letters dated approximately January 1990. 
[14]
Mr Borst's January 1990 letter to the Minister of ACC prompted a review of his file by ACC staff. On 1 November 1990, following that review, Mr Borst's ERC was reinstated back to March 1985. ACC did not, however, revisit the permanent incapacity assessment issue at that time (or subsequently). 
[15]
Thirteen years later, in 2003, Mr Borst took legal advice regarding his ACC entitlements. A late application for review was formally lodged in respect of various matters, including ACC's 11 June 1987 decision that Mr Borst was not eligible for a permanent incapacity assessment. It appears that Mr Borst's then advisers may not have been aware of the effect of s 368(4) of the 2001 Act, which required an application for review to have been lodged prior to 1 October 1992. 
[16]
Mr Borst's 2003 application for review was dismissed in September 2003. The reviewer declined to extend the time for filing the review. An appeal was lodged with the Appeal Authority. The Appeal Authority, relying on the decision in White v ACC,3
| X |Footnote: 3
White v ACC HC Christchurch CIV-2005-409-629, 21 July 2005
determined that s 368 of the 2001 Act was fatal to Mr Borst's appeal. 
Section 60 of the 1982 Act 
[17]
Section 60 of the 1982 Act4
| X |Footnote: 4
The 1982 Act, including s 60, was repealed on 30 June 1992 with the enactment of the Accident Rehabilitation & Compensation Insurance Act 1992 (1992 Act). The 1992 Act did not contain an equivalent provision but did, through its transitional provisions (s 138) permit the continued payment of compensation under s 60 for claimants in receipt of such compensation immediately before 1 July 1992. Payment under s 60 was continued under the Accident Insurance Act 1998 (s 429) and the Accident Compensation Act 2001 (s 365), the latter Act coming into force on 1 April 2002. 
provided for an assessment of a claimant's permanent incapacity. Section 60(1) prescribed the criteria to be satisfied before an assessment could be undertaken: 
“60 Assessment of permanent incapacity 
(1)
Where an earner who suffers personal injury by accident does not completely recover from his incapacity due to the accident, as soon as the Corporation considers that (so far as the consequences of the injury are concerned) his medical condition is stabilised and all practicable steps have been taken towards his retraining and rehabilitation, the Corporation shall review his case and make an assessment …  ”
[18]
Accordingly, if Mr Borst did not make a full recovery, ACC was required to make a permanent incapacity assessment once his medical condition had stabilised and all practicable retraining/rehabilitation had been undertaken. 
[19]
An internal ACC file note dated 9 June 1987 expressed the view that Mr Borst's rehabilitation had not yet been completed. This was not, however, conveyed to him as the reason for declining to make a permanent incapacity assessment. 
[20]
Rather, on 11 June 1987, ACC notified Mr Borst that he was not entitled to reinstatement of his ERC and that therefore he was not entitled to a permanent incapacity assessment under s 114 of the 1972 Act (equivalent to s 60 of the 1982 Act). The letter stated that, as at the time of his second period of incapacity, Mr Borst was not an earner. He therefore had no diminution of earning capacity. However, should it transpire at a later date that he was placed in employment and then suffered diminished capacity to earn, ACC said it would be in a position to reconsider a s 114 (s 60) entitlement. 
[21]
Counsel for ACC accepted that the reasons given in that letter as to why Mr Borst was not entitled to a permanent incapacity assessment were not correct. The criteria under s 114 of the 1972 Act (or s 60 of the 1982 Act) for a permanent incapacity assessment were separate and distinct from the criteria for ERC under s 59, which the letter focused on. 
[22]
Mr Borst was not informed in the June 1987 letter that, in ACC's view, he was not entitled to a permanent incapacity assessment because he had not yet completed all practicable rehabilitation. If Mr Borst had been so informed he may have challenged that view. Alternatively, it is possibly he may have made a fresh application for a permanent incapacity assessment at a later date, for example when the Rehabilitation League finalised their report on his rehabilitation in November 1988. 
Applications for review — legal requirements 
[23]
Section 101 of the 1982 Act provided that any person who was dissatisfied with a decision of ACC could apply for a review of that decision where it affected the granting or payment of compensation to any person. An application for review was required to be made in writing within one month after the date on which written notice was given of the relevant decision, or within: 
“ … such extended time as ACC may allow on application made either before or after the expiration of that month, and shall state shortly the grounds on which the application is made. ”
[24]
No specific form was required at that time (although counsel advised that one has been introduced subsequently). 
[25]
In relation to the equivalent provision (s 89) under the 1992 Act, the District Court found in Crone v ARCIC:5
| X |Footnote: 5
Crone v ARCIC DC Auckland decision No 7/99, 26 January 1999 at 11. 
 
“Accordingly, whilst this Court does confirm the decision of Simpson (84/95) that reference in the Act to a prescribed form must be regarded as directory only rather than mandatory, and that provided the express intention was clear, a simple letter advising of a wish to review would be sufficient, the principles in Simpson do not in any way dilute the basic principle that it is incumbent on the applicant to clearly express his/her intention to seek a review of a decision and to particularise the decision sought to be reviewed. ”
[26]
Accordingly it was incumbent on Mr Borst, in his January 1990 letter, to clearly express his intention to seek a review of ACC's June 1987 decision and to give particulars of the decision he was seeking a review of. 
Section 368(4) of the 2001 Act 
[27]
The focus of the argument has shifted somewhat on appeal. Mr Borst's 2003 application for review is no longer in issue. Counsel for Mr Borst accepts that it was filed out of time. 
[28]
Mr Borst must establish that he filed an application for review which meets the requirements of s 368(4) of the 2001 Act, which are as follows: 
“(4)
No compensation is payable under this section or s 365 unless— 
(a)
An assessment of compensation has been made under section 114 of the Accident Compensation Act 1972 or section 60 of the Accident Compensation Act 1982; and 
(b)
The assessment was completed— 
(i)
before 1 October 1982; and 
(ii)
on or after 1 October 1992 only because an application for review of a decision about the assessment was lodged before 1 October 1992 under Part IX of the Accident Compensation Act 1982. ”
[29]
Section 368(4) was considered by Randerson J in White v ACC.6
| X |Footnote: 6
White v ACC HC Christchurch CIV-2005-409-629, 21 July 2005 at [33]-[37]. 
His Honour observed that: 
“[35]
Section 368 is not happily drafted but its intent is clear. Under s 368(4)(b)(i) if the s 60 assessment has been completed prior to 1 October 1992 but payments had not been commenced by 1 April 2002, then the claimant is entitled to weekly payments under s 60 notwithstanding. Plainly, the appellant does not meet these criteria because no assessment had been made at all prior to 1 October 1992. 
[36]
Under s 368(4)(b)(ii) there is one other option for s 60 entitlement. If no assessment has been completed under s 60 prior to 1 October 1992 only because an application for review of a decision about the assessment has been lodged under the 1982 Act before 1 October 1992, then once the assessment is made and completed after 1 October 1992, the claimant is entitled to payments of such weekly compensation as is assessed to be due. 
[37]
The appellant does not meet the conditions of s 368(4)(b)(ii) because there was no pending application for a review of a decision about the assessment under s 60 lodged before 1 October 1992. ”
[30]
In this case the key issue is whether Mr Borst's January 1990 letter can be interpreted as an application for a review of ACC's June 1987 decision not to undertake a s 60 permanent incapacity assessment, in order to fall within s 368(4) of the 2001 Act. 
Approach to interpretation of Mr Borst's January 1990 letter 
[31]
On its face Mr Borst's January 1990 letter is not expressed to be an application for review of ACC's June 1987 decision. Counsel for Mr Borst submitted, however, that it was important for the Court to take a generous and liberal approach to interpretation of the letter. In particular, he submitted that: 
(a)
Cover and entitlements under the Act must be interpreted in a “generous and unniggardly” way (Harrild v Director of Proceedings;7
| X |Footnote: 7
Harrild v Director of Proceedings [2003] NZLR 289 at [39]. 
Rangiwhetu v ACC).8
| X |Footnote: 8
Rangiwhetu v ACC HC Wellington CIV-2006-485-1402, 19 April 2007 at [41]. 
 
(b)
It would be inequitable if claimants were denied entitlements because of an overly strict approach to the form of application required. All claimants cannot be expected to know what they are entitled to and how they are to proceed if they are to receive those entitlements (Rangiwhetu at [48]). 
(c)
Individual documents should be interpreted in the context of other surrounding documents and communications on an ACC file. Such communications must be read as a whole (Rangiwhetu at [51]-[52]). 
[32]
I accept those submissions. Indeed, the requirement to take a “generous and unniggardly” approach to interpretation of the letter is particularly important in this case, given that Mr Borst had been misinformed (presumably unintentionally) in ACC's June 1987 letter as to the reasons why ACC was unwilling to undertake a permanent incapacity assessment at that time. 
Mr Borst's January 1990 letter 
[33]
Mr Borst's January 1990 letter recorded (amongst other things) that Mr Borst had been working with the Rehabilitation League. It enclosed a copy of their final report, dated 15 November 1988. Counsel for Mr Borst submitted (and I accept) that the letter should be read together with the accompanying report in order to determine whether, taken as a whole and given a fair and liberal interpretation, the letter can be construed as an application for review of ACC's June 1987 decision. 
[34]
The conclusion to the Rehabilitation League report was said to be particularly material. It reads as follows: 
“Mr Borst has made quite remarkable changes since he commenced at the League in March 1988 and is now much more accepting of his situation and more positive about his abilities and potential. 
Assessment has shown that Mr Borst is not able to undertake open employment, but is capable of doing jewellery work which he could do in his own home. He would be able to supplement his income with his work, but is unlikely to ever be totally self supporting. In order to undertake jewellery making, Mr Borst will need some basic equipment, without which he will be unable to make anything, and it is likely he will vegetate at home. (He has very limited mobility). ”
[35]
Counsel for Mr Borst submitted that the facts set out in the Rehabilitation League report clearly indicated that Mr Borst was not only entitled to s 59 ERC, but that he was also likely entitled to a permanent pension under s 60 as well. He submitted that ACC should have been alerted to this, given the content of the Rehabilitation League report and should have arranged for a permanent incapacity assessment following receipt of Mr Borst's January 1990 letter. 
[36]
An astute reader of the Rehabilitation League report may well have concluded that Mr Borst's rehabilitation was now complete, his condition had stabilised and he had not fully recovered from his injuries. Given that those are the pre-requisites for a permanent incapacity assessment, it may be that ACC was in breach of its statutory obligations under s 60 in failing to carry out a permanent incapacity assessment on receipt of that report. However, I do not have sufficient material before me to be able to determine that issue, nor is it necessary to do so. 
[37]
The issue before me is somewhat different. It is whether the January 1990 letter (considered together with the accompanying report) constituted an application for review of the June 1987 decision to decline a permanent incapacity assessment. The mere fact that a report accompanying a letter contains information which may have justified ACC reconsidering its earlier position, of its own initiative, is not sufficient. To constitute an application for review of a specific decision there must be some indication in the documents that such a review is sought. 
[38]
Mr Borst's letter is three pages in length. He provides a brief history of his ACC claim beginning with the accident in 1977. He then refers to: 
(a)
The lump sum payment of $12,000 which he understood was “below the maximum allowed for this type of disablement”
(b)
His employment with the Ministry of Works and his stay in Australia; and 
(c)
The events following his return to New Zealand including the rehabilitation received from the Rehabilitation League and the fact that he was then on a benefit from the Department of Social Welfare. 
[39]
Mr Borst's letter concluded as follows: 
“I feel that I have no say in my future and believe that those who have handled it with incompetence. My three basic complaints towards ACC are: 
(1)
The ERC allocated to me at the time of the accident was incorrect and below what I believe I should have got. 
(2)
I was placed by ACC in quite unsuitable jobs which I was unable to maintain. This type of work was against medical advice given at the time. I was to do three hours a day sitting down. 
(3)
I was not given adequate lump sum compensation for my disability. 
The effect of my accident and subsequent emotional problems have meant that I have been unable to piece together all the above events until now. 
I feel I am now living in poverty, with no car and no prospect of improving my situation. ”
[40]
The issue I must determine is whether this letter (interpreted liberally and considered in context) expresses Mr Borst's intention to seek a review of the 1987 decision and “states shortly the grounds on which the application is made”, as required by s 101. 
[41]
Mr Borst's letter does not expressly seek a review of the 1987 decision and nor is such a request implicit from the terms of the letter. Indeed, there is no reference at all in the letter to s 60 or the permanent incapacity issue. The focus of the January 1990 letter is on ERC under s 59 and the allegedly inadequate lump sum payment. Mr Borst's key complaints at the time appear to relate to his ERC, including how his relevant earnings were calculated. There is simply no reference to the s 60 issue and no grounds are set out to support an application for review of the s 60 decision. 
[42]
In reality the s 60 issue did not achieve prominence in Mr Borst's dealings with ACC until 2003, when his then advisers filed a belated application for review. 
[43]
Mr Borst relied on the High Court decision of King v ACC9
| X |Footnote: 9
King v ACC [1994] NZAR 159Has partially negative history or cases citing, but has not been reversed or overruled[Yellow] 
in support of his position. That case is, however, materially different to the present one. Mr King applied to be assessed for permanent incapacity under s 60 before 1 July 1992. ACC, in effect, deliberately delayed considering his application for a s 60 assessment because it knew there was about to be a law change. Because ACC had declined to properly consider the matter, and make a decision when it should have, Mr King was deprived of his ability to seek a review of such a decision. 
[44]
Barker J observed in King that “the argument for the Corporation is not cluttered with objective merit”. There was significant material showing that ACC had deliberately delayed making an assessment because of the pending introduction of the 1992 Act. Barker J accordingly found that the grounds for a judicial review were made out and, by way of remedy, he ordered that Mr King's application for assessment under s 60 be considered by a review officer under the 1982 Act. 
[45]
In the present case, however, ACC did not “stonewall” a request for an assessment under s 60. ACC did not refuse to make a decision as it did in King. There was simply no communication between the parties regarding the permanent incapacity issue at all, subsequent to ACC's decision not to undertake such an assessment in June 1987. 
[46]
The fact that ACC's June 1987 letter did not set out the correct reason for its decision to decline a permanent incapacity assessment at that stage is a troubling feature of this case. If Mr Borst had been aware of the correct reasons (that ACC did not believe his rehabilitation was yet complete) he may have been prompted to challenge that view or subsequently make a fresh application under s 60. However, this oversight on the part of ACC is not comparable to the conduct which was before the Court in King
[47]
While I have some sympathy for the situation in which Mr Borst found himself, I find that his January 1990 letter cannot fairly be construed as an application for review from the 1987 decision. Even giving it a very liberal construction and considering it in the context of the annexed Rehabilitation League report, the letter cannot be realistically construed, in form or substance, as a request for a review of the 1987 decision under s 60. No ACC employee receiving the letter would have read it as such. Accordingly they would not have been alerted to the need to initiate a review of the permanent incapacity issue (and they did not in fact undertake such a review). 
[48]
The terms of s 368(4) are mandatory. They define the circumstances where payments under s 60 are preserved after 1 April 1992. The provision achieves finality in relation to eligibility for the now abolished “permanent pensions.” A claimant is not entitled to payment under s 60 unless an assessment is undertaken or review application lodged before 1 October 1992. Mr Borst did not, as at 1 October 1992, have an outstanding application for review and accordingly does not meet the requirements of s 368(4). 
Result 
[49]
For the reasons outline above, the appeal is dismissed. 


Sections 368(2) and (3). 
The contemporaneous documents refer interchangeably to a s 114 assessment under the 1972 Act and a s 60 assessment under the Accident Compensation Act 1982 (the 1982 Act), which was in force when the Corporation made the decision which is the subject of this appeal. Nothing turns on the distinction in this case. 
White v ACC HC Christchurch CIV-2005-409-629, 21 July 2005
The 1982 Act, including s 60, was repealed on 30 June 1992 with the enactment of the Accident Rehabilitation & Compensation Insurance Act 1992 (1992 Act). The 1992 Act did not contain an equivalent provision but did, through its transitional provisions (s 138) permit the continued payment of compensation under s 60 for claimants in receipt of such compensation immediately before 1 July 1992. Payment under s 60 was continued under the Accident Insurance Act 1998 (s 429) and the Accident Compensation Act 2001 (s 365), the latter Act coming into force on 1 April 2002. 
Crone v ARCIC DC Auckland decision No 7/99, 26 January 1999 at 11. 
White v ACC HC Christchurch CIV-2005-409-629, 21 July 2005 at [33]-[37]. 
Harrild v Director of Proceedings [2003] NZLR 289 at [39]. 
Rangiwhetu v ACC HC Wellington CIV-2006-485-1402, 19 April 2007 at [41]. 
King v ACC [1994] NZAR 159Has partially negative history or cases citing, but has not been reversed or overruled[Yellow] 

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