Accident Compensation Corporation v Estate of Versey

IN THE DISTRICT COURT HELD AT WELLINGTON Decision No. 066/2004 IN THE MATTER of the Injury Prevention, Rehabilitation and Compensation Act 2001 AND IN THE MATTER of an appeal pursuant to Section 149 of the Act BETWEEN ACCIDENT COMPENSATION CORPORATION Appellant AND ESTATE OF RACHAEL VERSEY (AI 692/03) Respondent HEARD at WELLINGTON on 18 February 2004 APPEARANCES Mr A D Barnett, Counsel for Appellant. Mr D Vincent and Miss A S McIntosh, Counsel for Respondent. RESERVED JUDGMENT OF JUDGE M J BEATTIE [1] The issue in this appeal is whether the appellant had power to revise, by way of Section 390 of the Act, an earlier "deemed" decision found to be so by the decision of a Reviewer. [2] The issue in this appeal is wholly a question of law and the facts which bear upon it are not in dispute and may be stated as follows: • Rachael Versey, since deceased, lodged a claim for cover on 17 April 2001 for an ankle injury said to have occurred on 15 June 2000. • The Corporation accepted cover for that injury on 18 April 2001. 692.03 (pg) 2 • On 24 May 2001 Miss Versey lodged a completed Treatment Details Sheet outlining the basis of her claim as being a medical misadventure claim associated with the ankle injury. • On 19 January 2002 the Corporation issued a decision whereby − (i) It revoked its decision of 18 April 2001 granting cover for personal injury by accident and (ii) declined the claim for cover for personal injury by medical misadventure. • The letter went on to give specific reasons for that declinature. • Prior to the lodging of an application for review Mrs Versey had died and the proceedings have been continued by her Estate. • A review hearing took place on 10 December 2002 at which the Estate was represented by Mr Vincent who asserted, inter alia, that Mrs Versey had been entitled to a "deemed" decision under Section 66 of the 1998 Act as the Corporation had failed to take action on the claim within the period stipulated in Section 65, or had not sought an extension of time from the 2 month expiry date. • In his decision dated 7 January 2003, the Reviewer accepted that submission and quashed the Corporation's decision declining cover for medical misadventure, the Reviewer stating that Mrs Versey had a "deemed" decision in her favour accepting cover for medical misadventure by operation of Section 66 of the Act. • On 27 January 2003, the Corporation wrote to the Estate's solicitor advising that, pursuant to Section 390 of the 2001 Act it formally revoked the "deemed" cover for medical misadventure which had been brought about by the earlier review decision. • The Estate sought a review of that decision and the review hearing took place on 5 November 2003 at which the parties were represented by Mr Vincent and Mr Barnett respectively. • In his decision dated 28 November 2003 the Reviewer found that the Corporation in its decision of 27 January 2003 had attempted to revise a review decision which in law it could not do and she therefore issued a decision quashing the Corporation's decision revoking cover. • It is from that decision that the Corporation now appeals to this Court. 692.03 (pg) 3 [3] It should be noted that the Corporation does not challenge, nor did it at any stage challenge, the finding of the first Reviewer that the facts which that Reviewer found allowed for Mrs Versey to have a decision that the Corporation had accepted her claim for cover for medical misadventure by operation of Section 66 of the 1998 Act. [4] It is Counsel for the Appellant's contention that Section 390 of the 2001 Act enabled the appellant to revoke the decision made under Section 66 and that that decision was not a decision of the first Reviewer, but was rather a decision which arose by operation of law by virtue of Section 66 of the 1998 Act. Counsel contended It thereby did not offend the jurisprudence which has arisen on the point that the statutory power to revoke or revise does not extend to review decisions but only to decisions of the Corporation. [5] It was Mr Vincent's submission that it was the review decision which established the right to cover and it was the review decision which the Corporation purported to revoke under the statutory power of Section 390. [6] In fact, Counsel for the Respondent went further and submitted that Section 390(4) of the Act must be read subject to Section 390(1) and that the power to revise a "deemed" decision can only be exercised if the decision was made in error. Counsel suggested that the only error that could apply would be if the Corporation had made an error in its assessment of what was the applicable time limit within which it was required to deal with the particular claim. Relevant Statutory Provisions Section 66 of the Accident Insurance Act 1998 states − "66. Failure to meet time limits, or to decide, is decision to accept − (1) At the time when an insurer fails to comply with a time limit under section 64 or section 65, whichever applies, the insured has a decision that the insurer has accepted the claim. (2) An insurer to which subsection (1) applies must tell the insured − 692.03 (pg) 4 (a) That the time limit has expired without the insurer having made a decision; and (b) That the effect is that the insured has a decision that the insurer has accepted the claim." Section 390 of the Injury Prevention, Rehabilitation and Compensation Act 2001 states as follows − "390 Corporation may revise decisions − (1) The Corporation may revise any decision specified in subsection (2) if it appears to the Corporation that the decision was made in error, whatever the reason for the error. (2) The decisions are the following decisions made before the commencement of this Act: (a) decisions made by the Corporation (including decisions about premiums): (b) decisions not made by the Corporation, but made in respect of claims that the Corporation is responsible for managing. (3) In revising a decision, the Corporation must apply the Act that applied at the time when the decision being revised was made. (4) The Corporation may revise a decision that, by operation of section 66(1) of the Accident Insurance Act 1998, it has accepted a claim. (5) However, if the Corporation issues a decision in reliance on subsection (4), the Corporation may not recover from the claimant any payments made by it, in respect of the claim, before the date of the revision unless the claimant made statements or provided information that are, in the opinion of the Corporation, fraudulent or intentionally misleading. (6) A revision may − (a) amend the original decision; or (b) revoke the original decision and substitute a new decision. 692.03 (pg) 5 (7) Every amendment to a decision, and every substituted decision, is a fresh decision. (8) Part 5 applies to every fresh decision made under this section." DECISION [7] Consideration of the issue in this appeal must proceed from the clear principle that the statutory powers of review of its decisions which successive acts have granted to the Corporation do not permit the Corporation to revise or amend decisions given on review or on appeal. Mr Barnett, Counsel for the Appellant, is not challenging the correctness of the jurisprudence which has evolved in that regard - the decisions of this Court in Wood (80/03), Mitchell (220/97) and Eason (202/97) are representative of that principle. [8] Mr Barnett submitted that the grant of cover for medical misadventure to Mrs Versey was not granted by the Reviewer, being his assessment of the facts and the law pertaining to medical misadventure, but rather it was the Reviewer finding that the provisions of Section 66 applied and that the grant of cover was provided to Mrs Versey by operation of law. [9] In support of that submission Counsel cited the decision of this Court in Grimes (94/02) where the Court found, inter alia, that a decision under Section 66 was not a decision of the Corporation which enabled it to revise it under Section 73 of the Act as it was a decision that arose by operation of law. [10] It should be noted that in the circumstances of Grimes, Section 73 gave no power to revise "deemed" decisions, but which power is now granted to the Corporation by virtue of Section 65 of the 2001 Act as well as Section 390(4) for decisions made under earlier acts. [11] The contrary argument is that it was the decision of the Reviewer that found that Section 66 of the 1998 Act applied and it was therefore the review decision which granted cover to Mrs Versey for medical misadventure. 692.03 (pg) 6 [12] I have considered the arguments of both counsel carefully and I have come to the clear view that the submissions presented by Mr Barnett correctly identify the answer. [13] It is to be remembered that the Reviewer was not making a finding of fact or law that the circumstances of the appellant's claim amounted to medical misadventure. In other words the Reviewer was not making a determination on a substantive issue. In fact the Reviewer was making a finding of fact on an issue of procedure and he determined that a particular document did constitute a claim for cover for medical misadventure and that the Corporation had not acted upon that claim within the time lines provided in Section 65 of the Act. Therefore, he found that the provisions of Section 66 did come into play. [14] In other words, the Reviewer found the facts which brought about a decision in favour of Mrs Versey by operation of law. The fact that the Reviewer may well have stated that Mrs Versey had the benefit of Section 66 is no more than saying that the statutory provisions were in her favour and that by virtue of those provisions she had a decision granting her cover by operation of law. [15] To further clarify the matter I say that if the Corporation had sought to revise the Reviewer's decision by issuing a decision that it did not accept that the Treatment Details Sheet did constitute a written claim for cover for medical misadventure, as had been found by the Reviewer that it did, and it sought to revoke cover on the basis that Section 66 did not apply, then that would be an example of an invalid use of the power under Section 390 and would offend the principle of law enunciated in Mitchell and Others set out above. [16] By contrast, however, the Corporation has accepted the correctness of the decision of the Reviewer that Section 66 applies and that cover is granted by operation of law, and it is the Section 66 cover which the respondent has revoked by its decision of 27 January 2003. [17] I find as a matter of law that the decision revoked was not the review decision and is one which can be revoked by way of Section 390(4) of the Act. [18] Looked at from a slightly different angle, the review decision did no more than identify the fact that Section 66 had in fact come into effect and given Mrs Versey a 692.03 (pg) 7 "deemed" decision on the expiry of the two months from the time of the lodging of the application for cover. Indeed, his decision stated precisely that when he stated − "Via Section 65, ACC have two months to either decide cover or advise the applicant that it requires more time. At 24 July 2001 ACC had failed to do this. Therefore, via Section 66 there is a "deemed" decision accepting cover on that date." The Reviewer then went on to quash ACC's decision "to the effect that cover is granted on 24 July 2001". [19] The substance of that review decision was a finding that Section 66 operated to grant Mrs Versey cover and it is that cover which I find the respondent was entitled to revoke by applying Section 390(4) of the 2001 Act. [20] For the foregoing reasons therefore I find that the appellant is entitled to succeed in this appeal and the effect of this is that the correctness of the Corporation's decision of 27 January 2003 is confirmed and that cover for the late Mrs Versey's claim for medical misadventure is revoked. . DATED at AUCKLAND this 19th day of March 2004 M J Beattie District Court Judge 692.03 (pg)