ACCIDENT COMPENSATION CORPORATION V COURTENEY FRANCIS DONALDSON CA CA210/2008

ACCIDENT COMPENSATION CORPORATION V COURTENEY FRANCIS DONALDSON CA CA210/2008 5 May 2009IN THE COURT OF APPEAL OF NEW ZEALAND CA210/2008 [2009] NZCA 167BETWEEN ACCIDENT COMPENSATION CORPORATION Appellant AND COURTENEY FRANCIS DONALDSON Respondent Hearing: 17 February 2009 Court: Glazebrook, Arnold and Baragwanath JJ Counsel: I Millard QC and P A McBride for Appellant J M Miller and M Kavanagh for Respondent Judgment: 5 May 2009 at 10.30 amJUDGMENT OF THE COURT A The appeal is allowed. B The question in the case is:Whether the temporal limitations set by Regulation 8(1) of the [Attendant Care] Regulations were affected by the change to Section 26 and the enactment of Section 26A [of the 1992 Act] with effect from September 1996, or whether those temporal restrictions continued to apply.Our answer is that the temporal restrictions continued to apply. C We make no order as to costs.REASONS OF THE COURT(Given by Arnold J)Introduction[1] This case concerns the appropriate starting date for attendant care payments to the respondent's mother under the Accident Rehabilitation and Compensation Insurance Act 1992 (the 1992 Act) and the Accident Rehabilitation and Compensation Insurance (Social Rehabilitation – Attendant Care) Regulations 1993 (the Attendant Care Regulations).Background[2] The respondent, Courteney Donaldson, was born on 2 May 1996. She suffered a medical misadventure during her birth, which left her with severe brain damage and other serious disabilities. On account of her serious disabilities the respondent requires extensive care. After her release from hospital on 3 June 1996, her mother was her principal caregiver, although some respite care was available. After the respondent commenced school, her school provided care during normal school hours. [3] No approach or application was made to the Accident Compensation Corporation (ACC) on the respondent's behalf until September 1997, when a claim for medical misadventure was lodged. On 21 October 1997 the respondent's mother, Mrs Donaldson, wrote to ACC requesting home help and attendant care. [4] On 20 July 2000, ACC accepted that the respondent had cover under the 1992 Act on the ground of medical misadventure. ACC agreed to pay for home help and attendant care for the respondent from 21 October 1997, being the date of the initial claim for such care and assistance. Mrs Donaldson accepted that, but on a "without prejudice" basis.[5] Mrs Donaldson then sought home help and attendant care payments from 3 June 1996, the date on which the respondent had been discharged from hospital, until 20 October 1997. ACC rejected that request. [6] The respondent sought a review of ACC's decision. By a decision dated 16 October 2003, the reviewer declined that respondent's application for review. In relation to attendant care, the reviewer considered that under regs 7 and 8 of the Attendant Care Regulations, no payment for attendant care could be made prior to the written application for such care. The position in relation to home help was the same, under the Accident Rehabilitation and Compensation Insurance (Social Rehabilitation – Home Help) Regulations 1992. [7] The respondent then appealed to the District Court. Judge Ongley determined that ACC was right to decline attendant care and home help entitlements for the disputed period: DC WN 353/2004 15 November 2004. On 28 April 2006 Judge Cadenhead stated a case for consideration by the High Court. [8] On the question of the date on which the attendant care payments should commence, MacKenzie J found in favour of the respondent and remitted the matter to the reviewer for reconsideration in the light of his judgment: HC WN CIV 2006- 485-895 20 December 2007. The Judge granted ACC leave to appeal from his decision on 31 March 2008. The Judge stated a case for this Court in which he identified the question for determination as being:Whether the temporal limitations set by Regulation 8(1) of the [Attendant Care] Regulations were affected by the change to Section 26 and the enactment of Section 26A [of the 1992 Act] with effect from September 1996, or whether those temporal restrictions continued to apply.Discussion[9] We begin by discussing the statutory background and MacKenzie J's reasoning. [10] Regulation 8 of the Attendant Care Regulations provides:(1) Subject to subclause (2) of this regulation, where a person is assessed as entitled to an attendant care payment, that payment shall become due and payable from the date of the written application or the date of discharge from a hospital following initial treatment for the personal injury, whichever is the later. (2) Where a person is assessed as entitled to an attendant care payment and the intended carer of that person requires training before that person is discharged from a hospital following initial treatment for the personal injury, the attendant care payment shall, for the purposes of such training, become due and payable from the date 2 days before the final discharge from hospital following initial treatment for the personal injury.[11] If reg 8 applies in the present case, it means that the commencement date for attendant care payments will be 21 October 1997, being the date of the respondent's written application for such care. However, MacKenzie J concluded that the time limit in reg 8(1) did not apply as the regulation had been impliedly repealed when s 26A was inserted into the 1992 Act with effect from 2 September 1996. To explain the Judge's reasoning we must set out s 26 in its original and amended forms. [12] Before amendment, s 26 of the 1992 Act relevantly provided as follows:26 Social rehabilitation(1) In order to ensure– (a) Consistency of provision of social rehabilitation; and (b) Certainty to entitlement to social rehabilitation– no provision of, or payment in respect of, social rehabilitation shall be made by the Corporation in respect of any person except as required or permitted by regulations made under this Act. (2) The objective of social rehabilitation is to restore the independence of the person that has been lost by personal injury covered by this Act. (3) Any regulations referred to in subsection (1) of this section shall apply in respect of all persons, conditions, or items that are of the same class or category. (4) In this Act, social rehabilitation includes, but is not limited to,– (a) Provision of, or payment for, attendant care; and (d) Provision of, or payment for, household help; and (7) No payment in respect of any item referred to in subsection (4) of this section may be made by the Corporation other than under this section.[13] As s 26(1) made clear, attendant care payments had to be made in accordance with the relevant regulations. Section 167(1)(l) provided that regulations could be made:Prescribing the extent to which the Corporation may meet the costs of social rehabilitation and prescribing the circumstances in which, and the method by which, the Corporation shall make any payment in respect of that rehabilitation and may enter into arrangements and make contributions in respect of them; and prescribing the persons to whom those payments may be so made:The Attendant Care Regulations were made under that provision. [14] From 2 September 1996 s 26 was repealed and replaced by the following:26 Objective of social rehabilitation(1) The objective of social rehabilitation is to restore the independence of a person to the extent that the person's independence has been lost by personal injury covered by this Act. (2) In this Act, 'social rehabilitation' includes, without limitation,– (a) Provision of, or payment for, attendant care; and (d) Provision of, or payment for, household help; and 26A Provision of or payment for social rehabilitation(1) Subject to subsection (2) of this section, the Corporation may make any provision or payment in respect of social rehabilitation that is required or permitted under this Act and that is consistent with the objective set out in section 26(1) of this Act. (2) The Corporation's power, under subsection (1) of this section, to provide or pay for social rehabilitation– (a) Is exercisable notwithstanding anything in any regulations made under this Act, subject to any direction of a type referred to in section 159(2) of this Act that is for the time being in force; and(b) Is exercisable subject to any direction of any other type for the time being in force under section 159 of this Act. (3) No payment in respect of any item referred to in section 26(2) of this Act may be made by the Corporation other than under this section or section 23 of this Act.[15] As we have said, MacKenzie J concluded that the time limit provided for in reg 8(1) did not apply as reg 8(1) had been impliedly repealed when s 26A came into force. The Judge's analysis on this point is contained in the following paragraphs:[32] The enactment of s 26A fundamentally changed the basis of entitlement to payment in respect of social rehabilitation. Entitlement was now based on the 1992 Act, not the Attendant Care Regulations. Payment of attendant care was no longer subject to the provision that it could be paid only as permitted by regulations. That fundamental change must affect the regulation making powers in s 167(1)(1), and the regulations made under it. Any prescription as to the extent to which ACC may meet the costs of social rehabilitation must, after the amendment, reflect the basic entitlement to cover under the Act. No consequential amendment was made to s 167(1)(1), or to regulation 8(1). [33] The status of regulation 8(1) following the amendment to s 26 needs to be considered. I consider that the provision that payment shall become due and payable only from the date of application is inconsistent with s 26A. I consider that the doctrine of implied repeal must apply. Section 26A, as both the superior legislation, and the later in time, must prevail. The conclusion that the doctrine of implied repeal should apply is reinforced by s 261(2)(a) [presumably this is intended to be a reference to s 26A(2)(a)]. That section gives a clear indication that the amendment to the legislation is to prevail over the regulations. Accordingly, I hold that the restriction as to payment in regulation 8(1) does not apply, in this case, to prevent payment prior to the date of application. The application was, as I have noted, made after s 26A was in force.This was an analysis that neither party had sought to advance in argument. [16] Section 26A(2)(a) provides that ACC's power to pay for social rehabilitation (including attendant care) under s 26A(1) is "exercisable notwithstanding anything in any regulations made under this Act". However, that is "subject to any direction of a type referred to in s 159(2)". Section 159, which was also amended as from 2 September 1996, relevantly provided:159 Corporation to comply with government policy(1) In the performance and exercise of its functions, duties and powers, the Corporation shall comply with any directions relating to the policy of the Government that are given by the Minister to theCorporation by notice in writing and that are for the time being in force. (2) Without limiting subsection (1) of this section, the Minister may from time to time give the Corporation a direction under that subsection that any item referred to in section 26(2) of this Act shall be provided only under regulations made under this Act, and not otherwise. [17] On 2 September 1996 the responsible Minister, the Minister for Accident Rehabilitation and Compensation Insurance (ARCI), issued a direction to ACC under s 159. The operative part of the directive read as follows:I hereby direct that: (a) except as provided below and until this direction is revoked, payments or provision in respect of social rehabilitation shall be made only as authorised in regulations made under the [1992 Act]. (b) payments or provision in respect of any item of social rehabilitation referred to in section 26(2) of the [1992 Act], may be made other than as authorised in regulations, provided that the ACC Board has first: (i) agreed, with the Minister for ARCI, the performance indicators for payments or provision, other than as authorised in regulations, in respect of that item of social rehabilitation; and (ii) developed an evaluation methodology in respect of that item of social rehabilitation. (c) once an item of social rehabilitation has been provided for 6 months under paragraph (b) of this direction, ACC must report to the Minister for ARCI on the payments or provision in respect of that item of social rehabilitation other than as authorised by the regulations. The report must be provided to the Minister within 2 months of the item of social rehabilitation having been provided under paragraph (b) for 6 months.[18] As will be apparent from the structure of the statutory provisions and text of the ministerial direction, the direction was intended to provide time for ACC to develop and agree performance indicators and evaluation methodologies that would replace the requirements of the Attendant Care Regulations, which were highly prescriptive. While ACC was undertaking this developmental work, it was required to comply with the Attendant Care Regulations. The background to this approachwas fully explained by the Minister when introducing the Amendment Bill: see (1995) 552 NZPD 10595. [19] The Judge said that he did not consider the ministerial direction could have the effect of reinstating the restriction as to payment in reg 8(1). That would be to allow a ministerial direction to override the effect of s 26A(2)(a) and the doctrine of implied repeal. Any direction under s 159 "must comply with the legislation": at [34]. Accordingly he allowed the respondent's appeal on this point.Our evaluation[20] We do not agree with the Judge's conclusion that the effect of the amendments in September 1996 was impliedly to repeal reg 8(1). The doctrine of implied repeal arises where two statutory provisions are "totally inconsistent, so that they cannot stand together": Burrows and Carter Statute Law in New Zealand (4ed 2009) at 453. In those circumstances, the later in time impliedly repeals the earlier. Implied repeal has been described as "a doctrine of last resort, to be applied only where all attempts at reconciliation fail": Burrows and Carter at 453. [21] In the present case, there is not the necessary inconsistency. [22] ACC's power under s 26A(1) to provide for or make payments in relation to attendant care is subject to s 26A(2). Section 26A(2)(a) provides that ACC's power is exercisable despite anything in any relevant regulations, but that is expressed to be subject to a ministerial direction. Section 159(2) specifically empowers the Minister to give ACC a direction that attendant care "shall be provided only under regulations made under this Act, and not otherwise". So while the default position is that ACC has the power to provide for attendant care despite any regulations, the Minister is explicitly authorised to restrict that power so that it must be exercised in accordance with regulations. As we noted at [18] above, the reason for this structure was to give ACC time to develop and agree appropriate measures with the Minister. Accordingly, there is no inconsistency in the relevant statutory provisions and no question of implied repeal arises.[23] Mr Miller attempted to meet this difficulty by arguing that the Minister's power to give directions under s 159 is limited. He pointed to the list of items that are included in "social rehabilitation" in s 26(2) and said that most (including that relating to attendant care) contain the language "provision of, or payment for", which indicates that there is a distinction to be drawn between the two concepts. By contrast, s 159(2) empowers the Minister to give a direction that any of the items "shall be provided only under regulations". Accordingly, Mr Miller said, a ministerial direction could deal only with "provision", not "payment", and payment was in issue in the present case. If Parliament had intended to cover both possibilities, s 159(2) would have said "shall be provided or paid for only under regulations". [24] We do not accept this argument. While we accept that the 1992 Act does at points draw a distinction between ACC providing and making payment for services (see, for example, ss 19 and 23), s 159(2) does not use the concept of "provision" in contradistinction to that of "payment". Section 159(2) empowers the Minister to make a direction that any item in s 26(2) "shall be provided only under regulations". The items being referred to in s 26(2) are (in most instances) expressed as being "provision of, or payment for" specified services. The reference in s 159(2) to the provision of items in s 26(2) must cover both concepts – provision of, and payment for, the specified services. This is because both concepts are contained within the description of the relevant items, and it is the items to which s 159(2) relates. In addition, there is no obvious policy reason for the distinction which Mr Miller seeks to draw. [25] Accordingly, we conclude that reg 8(1) continued to apply and that ACC was right to backdate the payment for attendant care to the date of the written request for such care, namely 21 October 1997, and no earlier. [26] We reach this conclusion because we consider that the language of the 1992 Act, as amended, requires it. Despite this, we note that the Minister's power to give directions under s 159(2) is similar in effect to a Henry VIII clause (a statutory provision which enables a statute to be amended by regulations). Although such clauses are sometimes used in exceptional circumstances, they are, in principle,undesirable: see the Legislation Advisory Committee Guidelines on Process and Content of Legislation Ch 10.1.8.Decision[27] We allow the appeal. The question in the case stated was:Whether the temporal limitations set by Regulation 8(1) of the [Attendant Care] Regulations were affected by the change to Section 26 and the enactment of Section 26A [of the 1992 Act] with effect from September 1996, or whether those temporal restrictions continued to apply.Our answer is that the temporal restrictions continued to apply. [28] We make no order as to costs.Solicitors: McBride Davenport James, Wellington for Appellant. John Miller Law, Wellington for Respondent.