Ravestein v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT Decision No. 65 / 95 AT WELLINGTON DCA No. 231/94 UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an appeal pursuant to Section 91 of the Act 49 / 94 / 1528 . BETWEEN A.K. RAVESTEIN APPELLANT AND THE ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION RESPONDENT Heard at Auckland on: 24 February 1995 A Fisher as counsel for the appellant N. Morrison as counsel for the respondent Date of Decision: 7 June 1995 RESERVED DECISION OF JUDGE J.W. IMRIE I find that the appeal succeeds. 2. Introduction: The issue is the date from which the appellant should receive her entitlement to attendant care payments. This involves s.80 of the 1982 Act and s. 149 of the 1992 Act. On 24 September 1983 the appellant suffered accident by way of medical misadventure at the time of her birth. She suffered brain damage through medical error. These circumstances are not in issue:- (a) The first approach by the representatives of the appellant was made to the Corporation in 1984. (b) The Corporation advised them to wait for two-three years for the appellant's condition to stabilise. (c) The first medical certificate was obtained in 1986. (d) The Corporation did not advise until 1991 that anything further was required by way of a formal claim. (e) The application for cover was initially declined in March 1993. However, the Corporation finally accepted the claim on review on 12 October 1993. Following the decision of the Corporation, the appellant lodged a claim for attendant care in an effort to recoup some of the substantial expenses incurred since her birth. 3. (g) The Corporation awarded attendant care from the date the application was filed, 5 November 1993, but has refused to reimburse the appellant for her attendant care expenses for any period before that date. It appears that the Corporation set out its decision in a letter dated 17 December 1993. I have not been able to locate a copy of the letter but that is not surprising because there are a number of separate files relating to the appellant. The decision letter is referred to in the first Review Officer's decision dated 29 March 1994. By application dated 17 December 1993 the appellant's mother lodged on behalf of the appellant an application for review of the Corporation's decision. The review was heard on 16 February 1994 and in his decision dated 29 March 1994 the Review Officer said (in part):- "Application for Review: In December 1993 Mrs Ravestein lodged an application for review of the decision on her daughter's behalf. She stated that the first approach to the Corporation was made in late 1984 but she was told to wait 2-3 years for Ahimsa's condition to stabilise. The first medical certificate was obtained in 1986 and Mrs Ravestein made written application in 1991. The Corporation accepted that there were valid reasons for the claim being lodged late and the claim was accepted in 1993, thirty-one months later. Mrs Ravestein sought the provision of attendant care payments pursuant to Section 80 of the 1982 Act and Section 149 and Section 26 of the 1992 Act before 5 November 1993. The application for review stated that Ahimsa has an entitlement to attendant care pursuant to Section 80 1982 Act; 4. and has an entitlement to attendant care pursuant to Sections 26 and 149 of the 1992 Act. There is on file a memorandum from the Manager, Legal Services dated 8 December 1993. That is before the decision letter was written. In fact the decision letter does not refer to the claim for entitlements under the 1982 Act but simply refers to the $480.00 a week, the maximum under the 1992 Regulations. The Manager, Legal Services' memorandum of 8 December 1993 states an accompanying memorandum had not been previously received in Head Office and information in a facsimile was not really sufficient to enable him to answer the questions. However in general terms he wrote, it is possible for a claim lodged prior to 1 October 1992 and relating to personal injury by accident suffered prior to 1 July 1992, to attract compensation under some 1982 Act provisions irrespective of the date of acceptance of the claim. In this way, for example, he wrote, it is possible for an attendant care entitlement to be notionally 'assessed' as at 30 June 1992 and then grandparented even though the claim had not been accepted at that date. As far as Section 80(2)(b) is concerned, he wrote, 'It is unlikely that the Corporation would be able to make any payments after 31 December 1992 (or at the very latest 30 June 1993) but it is not possible to provide any definitive opinion here without the file, and when you have not provided details of what the claims relates to. He wrote that Section 118 of the 1982 Act is not preserved by the transitional provisions of the 1992 Act and therefore cannot apply from 1 July 1992. There is an extensive file summary on file and a further memorandum from the Rehabilitation Co-ordinator to the Legal Services Manager dated 14 January 1994. Full background material was enclosed. Recommendation were made under 5. Section 80(2)(b) and Section 80(3). The recommendation under Section 80(3) regarding retrospective attendant care was that S.80(3) attendant care should be paid back to date of lodgement of the claim for cover when Ahimsa was 71/2. Should her entitlement exceed $480.00 per week (should be $350.00 per week at 30 June 1992) she should have the option to choose that and have it 'grandparented' (S.149 1992 Act as amended by Amendment (No. 2)) i.e. preserved. ... " "DECISION: My decision in this matter is that the opportunity for the Corporation to consider making retrospective payments under Section 80 for attendant care for Ahimsa from the date of her birth or lodgement of the claim for cover until June 1993 has been lost. This is because she did not lodge a claim for such attendant care before the Ist day of October 1992. I readily acknowledge that she could not do so because the claim for cover had not been accepted by that date, the successful review decision being dated 12 October 1993. I do not believe such a claim for attendant care can be imputed. In reaching this decision I am also conscious of the District Court decision in Smith v ACC (1/94) a decision of Judge Middleton. That decision concerned the claim for cover itself and stated that as long as the definitions of personal injury by accident in both the 1982 and 1992 Act applied, S.135(5), then a claim for cover lodged after 1 October 1992 could be accepted without regard to the fact that more than 12 months had elapsed However I have taken from the King decision that an application for benefits under the 1982 Act by 1st October 1992 is critical for the preservation of rights under the 1982 Act. Also, rehabilitation is specially dealt with in the transitional provisions at S. 136. 6. As regards attendant care under the 1992 Act, the only issue is whether it is to be paid from the date in the decision letter, 5 November 1993, or from Ist July 1993, as was submitted to me. I decide that attendant care is payable from the date of application for it under the 1992 Act and the Regulations as per Regulation 7 and so the application for review is unsuccessful in this respect also. I confirm Section 118 has been repealed as part of the repeal of the 1982 Act so no ex gratia payment can be made." There was a second application for review. In an application for review dated 21 June 1994 the appellant's father said:- "Application was made 5/11/93 for compensation under Section 80(2)(b) 1982 Act. As of this date no decision has been advised to applicant." An internal memorandum by the Corporation Case Manager dated 7 July 1994 states:- "49.94.7002. This relates to no decision being given in respect to an application for compensation under Section 80(2)(b) of the 1982 Act. The application is correct in that no decision has been issued on this request, however this entitlement ceased to exist before the application was received ..." On 8 July 1994, the Corporation wrote to the appellant's mother and father:- 7. "The entitlements you have applied for under Section 80 of the 1982 Act are covered by Section 149(1) of the 1992 Act ... As your application was made on 5 November 1993 and received by the Corporation on 8 November 1993 entitlement no longer existed and therefore your application cannot be considered ... This issue has also been forwarded to the Review Section for a formal decision." The further review was heard on 11 October 1994. The decision of the Review Officer was dated 27 October 1994. In his decision the Review Officer said (in part):- "Mr McQuoid has lodged an application for review on the basis that a decision had never been made regarding the application to Section 80(2)(b) of the Accident Compensation Act 1982 to the question of Ahimsa's Attendant Care from the period from the date of accident until 31 September 1992. The Corporation also appeared to have accepted that no decision has been issued regarding this. However, in my view this is incorrect. The file is difficult to follow and I am unable to find the decision letter of 17 December 1993 referred to in Mr Carter's decision of 29 March 1994. However, the Advice of Hearing notice states that the issue to be considered in that decision included: 'Commencement of Attendant Care.' In addition, in my view it is extremely clear from Mr Carter's decision that he turned his mind in his review decision to the whole question of the effect of Section 80 of the 1982 Act on Ahimsa's entitlements, including the effects of Section 80(2)(b). Mr Carter makes specific reference to Section 80(2)(b) in his decision, as well as to Section 80 in general, which may be considered to encompass Section 80(2)(b). This being the case, I find that the Corporation should not have accepted the 8. application for review alleging that no decision had been made regarding Section 80(2)(b), as it is clear that in fact that such a decision had been issued and in addition a review decision encompassing the question of Section 80(2)(b) has also been issued. This being the case, I have no jurisdiction and accordingly this application must be unsuccessful.' In the notice of appeal the relief which the appellant seeks is entitlement to back payments under s.80 of the 1982 Act from the date of the accident until 5 November 1993. In the introduction to her submissions in support of the appeal Miss Fisher said that:- 1. The Review Officer failed to take into account the effect of the Corporation's delay and the resulting prejudice to the appellant. 2. The Review Officer misdirected himself as to the interpretation of the governing legislation. 3. The Review Officer misdirected himself as to the interpretation placed on the King decision. As I understand it, Miss Fisher in effect seeks payment from the date of the accident i.e. 24 September 1983 to 25 November 1993, under either the 1982 Act or the 1992 Act, or both. At the hearing on 24 February Miss Fisher presented written submissions in support of the appeal, Mr Morrison presented written submissions on behalf of the Corporation. Miss Fisher presented a written 9. chronology which was accepted by Mr Morrison as accurate. Miss Fisher also presented a written summary of facts. After the submissions had been read, I questioned whether the appeal should be heard in the District Court or by the Appeal Authority. Counsel agreed to file and serve written submissions relating to that point. Miss Fisher was to file and serve hers on or before 3 March. Mr Morrison was to file and serve his on or before 10 March. Those submissions have now been received. Jurisdiction: Each counsel submitted that the appeal should be dealt with under the 1992 Act and accordingly I will deal with it. Submissions Relating to Back-dating of Entitlement: In her submissions Ms Fisher referred to sections 135(3), 135(4) and 149 of the 1992 and s.80(3) of the 1982 Act and submitted:- "9. The applicant's claim was accepted by the Corporation under the 1982 Act. Accordingly as her accident occurred in 1984 she was entitled to receive compensation under section 80 of the 1982 Act for the period prior to Ist July 1992. On this basis the applicant's entitlement under section 80 AC Act continues to apply to reimburse her payments until 30 June 1993. [Reg 3(1)(b) Accident Rehabilitation & Compensation Insurance (Social Rehabilitation - Attendance Care) Regulations 1993] (Social Regs). 10. 10. From 1 July 1993 section 26 1992 Act and the Social Regs apply in respect of the payment of attendant care to the applicant. 11. Reg 3(1)(b) of the Social Regs provides that the regulations shall apply 'on and after the Ist day of July 1993, in respect of any claimant for whom any payment for attendant care under section 80(3) of the Accident Compensation Act 1982 has been continued until the 30th day of June 1993 by virtue of section 149 of the Act.' 12. Regulation 3(2) of the Social Regs provides 'a claimant to whom subclause (1)(b) of this regulation applies shall be deemed to have made a written application to the Corporation for attendant care. 13. Pursuant to regulation 8 of the Social Regs, the Corporation is legally required to commence payments under the new regime from the date of application. 14. From the date of the applicant's accident to 30 June 1993 the Corporation has a discretion under section 80(3) of the 1982 Act to pay attendant care. After 30 June 1993, the new Act applies. 15. In exercising its discretion under section 80 of the AC Act the Corporation must act according to law. If it can be shown: (a) That the Corporation erred in principle; or (b) That the Corporation took into account irrelevant considerations or failed to consider relevant matters; or (c) That the Corporation's decision is plainly wrong; he exercise of the Corporation's discretion is not valid. [Waverley [1993] 2 NZLR 709] 11. 16. By exercising the Corporation's discretion as to whether or not to reimburse the applicant's costs of attendant care the Corporation must take into account all relevant matters: (a) The date of the applicant's accident in 1984. (b) That the first approach by the applicant was made to the Corporation in 1984. (c) That the Corporation advised to wait 2-3 year for the applicant's condition to stabilise. (d) That the first medical certificate was obtained in 1986. (e) That the Corporation did not advise until 1991 that anything further was required by way of a formal claim. (f) That the Corporation did not accept the applicant's claim until 1993. 17. The date of the Corporation's decision is irrelevant to the interpretation of section 80 of the 1982 Act, sections 26, 135 and 149 of the 1992 Act, the Social Regs, and the circumstances of the applicant. The date of the Corporation's decision is a totally arbitrary, irrelevant consideration. 18. The applicant is entitled to reimbursement of her costs of attendant care under section 80 of the 1982 Act from the date of her accident to 30 June 1993. 19. On account of the applicant's entitlement to reimbursement under section 80 of the 1982 Act she was deemed to have made an application for attendant dare under regulation 3 of the Social Regs and accordingly is entitled to payment thereunder from 1 July 1993." 12. Ms Fisher advised that if the appeal succeeds the money will go into a trust fund which is currently in operation for the appellant. For the Corporation, Mr Morrison referred to ss. 135, 136 and 149 of the 1992 Act and regulation 3 of the Social Rehabilitation - Attendant Care Regulations 1993 and submitted:- "5.1 Section 135(3) of the 1992 Act applies in that: . a claim was lodged with the Corporation before the Ist day of October 1992; and . the Appellant suffered personal injury by accident before 1 July 1992. Accordingly, acceptability of the claim is determined under the 1982 Act and sub-section (4) of section 135 applies. 5.2 Section 135(4) provides that the Appellant's continued entitlement to rehabilitation, compensation grants and allowances should be determined under the 1982 Act but subject to this Part of the 1992 Act. 5.3 Section 136 of the 1982 Act applies to rehabilitation after 1 July 1992. It provides that the entitlement of the Appellant should be determined under the 1992 Act subject to section 149. 5.4 Section 149(1) allows the continued application of section 80 to payment where the Appellant was receiving or entitled to receive any compensation under that section immediately before the Ist day of July 1992. (emphasis added). The question is accordingly raised; 13. Was the Appellant entitled to receive section 80 payments immediately before the Ist day of July 1992? 5.5 It is submitted that it is important to consider the whole phrase, that is not just 'entitled' but 'entitled to receive'. It is submitted that whilst there may have been a notional entitlement 'entitled to receive' requires some crystallisation of that notional entitlement (i.e. the words 'to receive' are as important as the word 'entitled'). 5.6 It is submitted that an important contrast can be drawn with the wording in section 138(1). In that sub-section the contrasting phrase 'would have been entitled to' is used. It is submitted that that phrase is more notional than the wording used in section 149(1). The phrase in section 138(1) suggests that one must consider the situation had any necessary preconditions been met. In contrast the phrase 'was entitled to receive' seems to suggest those preconditions have been met. 5.7 Section 149(10) deems receipt immediately before the Ist day of July 1992 where there is a subsequent positive review or appeal. The application for review must have been made before the 1st day of October 1992. This sub- section allows for transition, facilitated by sub-sections (3), (4) and (7), of payments. There is no reference to entitled to receive' in those sub-sections. Sub-section (10) provides a definition for entitled to receive. It is submitted that, in accord with the Review Officer's finding, that definition denies the Appellant entitlement to receive on her specific facts. (When that conflict has been resolved:-) 5.8 If it is determined that the Appellant had an entitlement to receive immediately before 1 July 1992 then it is submitted that entitlement could not arise until lodgement of the 14 claim. It is submitted that without lodgement of claim there can be no entitlements which must flow from cover. Furthermore, if there is found to be entitlement to receive under section 149 it is conceded that entitlement is transitioned' by the application of regulation 3(2). (Attendant Care Regs). (On a more general note:-) 5.9 It is submitted that section 80 of the 1982 Act was a section designed to meet a need. It is not a section which was designed as a replacement for common law damages and to utilise this section in that manner, (i.e. as a substitute for common law damages) would be inappropriate. (In effect that is what the Appellant seeks). 5.10 Both the Review Officer and the Appellant, in her submissions at review, placed some reliance on the High Court decision of King (King v ACC 2 August 1993 HC Auckland Barker J). It is submitted that that decision can clearly be distinguished from the present Appellant's factual situation. In King there was an application for entitlement under the 1982 Act which was made before 1 July 1992. His Honour Justice Barker applied section 135(3) to the claim for entitlement. There was no such claim for entitlement here. In His Honours decision at page 23 it states: 'It is clear from the narrative that the Corporation deliberately refused to action the Plaintiff's request for a s60 assessment, knowing that the legislation was about to be changed to 1 July 1992.' The judgment continues at page 24 where it states: The argument for the Corporation is not cluttered with objective merit. It is saying in effect: 15. 'We deliberately delayed considering your application for a s60 assessment until we knew that we no longer had the power to consider it.' It is hard to see how the Corporation can rely on non- fulfillment of practical steps preconditioned.' 5.11 In the King decision his Honour Justice Barker found a statutory basis for finding against the Corporation. It is submitted that the Corporation is a creature of a statute and bound by the statute which regulates its behaviour. There is no statutory basis for payment to the Appellant under section 80. 5.12 Accordingly it is respectfully submitted that the Review Officer's decision should not be disturbed." Consideration: I consider that the Corporation should deal with the appellant's various applications on the basis that (1) She applied for cover when the first approach was made to the Corporation by her representatives in 1984 and (2) That application for cover should be treated as an application for all entitlements under the 1982 Act. It has proved that the appellant was entitled to cover from the date of her birth. The accident seriously disabled her. She is not yet twelve years old. Refusal for her claims for technical reasons cannot be justified. 16. Section 80(3) of the 1982 Act reads:- "Where a person suffers personal injury by accident in respect of which he has cover and the injury is of such a nature that he must have constant personal attention, the Corporation, having regard to any other compensation payable, may pay to that person, or if it thinks fit to the administrator of that person, such amounts as the Corporation from time to time thinks fit in respect of the necessary care of the person in any place of abode or institution." There is no doubt that the Corporation should have paid under this provision to the appellant or her administrator, from the time of her birth, such amounts as the Corporation from time to time thought fit in respect of the necessary care of the appellant. It should now assess the amounts it should have paid. This may not be an easy exercise but is possible. The appellant's mother and father may have to provide more information to enable the Corporation to make the assessment. However, there may already be on the Corporation's files most of the information the Corporation needs, and the Corporation will, of course, know how it made in the past assessments from time to time under s.80 of the 1982 Act. Section 149(1) of the 1992 Act reads:- "149. Compensation for pecuniary loss not related to earnings - (1) Where any person was receiving or entitled to receive any compensation under ... section 80 of the Accident Compensation Act 1982 immediately before the Ist day of July 1992, that section shall continue to apply to payments in respect 17. of that person until the 31st day of December 1992 as if those sections had not been repealed." I consider that the appellant was "entitled to receive compensation . ..under section 80" of the 1982 Act "immediately before the Ist day of July 1992." She did not in fact receive that compensation because the Corporation postponed its decision on cover until October 1993, but she was entitled to receive compensation. In saying that I do not overlook that under s. 80(3) of the 1982 Act the Corporation has a discretion to make payments, but that discretion had to be exercised properly, and in the case of the appellant it would have been exercised in her favour. Although the amounts payable and the periods for which amounts were paid were matters for the Corporation to decide, and during some periods there may have been no payments at all, the history of this claim shows that some payments would have been made from time to time and that there would have been entitlement to payment immediately before 1 July 1992 (and thereafter). Section 149(2 ) reads in part:- "(2) The reference to the 31st day of December 1992 in subsection (1) of this section shall be read as the 30th day of June 1993 in respect of compensation under ... section 80 of the Accident Compensation Act 1982 that is compensation in respect of - (a) Provision of attendant care (being personal care and mobility assistance necessary for the injured person); or . . . 18. Thus pursuant to s. 149(2) the appellant's entitlement continued up to 30 June 1993. Accordingly, the appellant is entitled to payment of the appropriate sums for attendant care from the date of her birth up to 30 June 1993. The next question is whether she is entitled to payments for attendant care from 1 July 1993 up to 5 November 1993. Regulation 3 of the Social Rehabilitation - Attendant Care Regulations reads (in part):- "3. Application - (1) Except as provided in section 149 of the Act and subject to these regulations, these regulations shall apply - . . . (b) On and after the Ist day of July 1993, in respect of any claimant for whom any payment for attendant care under section 80(3) of the Accident Compensation Act 1982 has been continued until the 30th day of June 1993 by virtue of section 149 of the Act; and . . . (2) A claimant to whom subclause (1)(b) of this regulation applies shall be deemed to have made a written application to the Corporation for attendant care." It could be argued that the payments for attendant care for the appellant had not "been confirmed until 30 June 1993 by virtue of s. 149 of the Act" because in fact no payment had been made. However, in the circumstances 19. of this case the wording of the regulations should not defeat the proper claim of the appellant. The Corporation should have been making payment for attendant care under s. 80(3) of the 1982 Act and that payment should have been continued until 30 June 1993 by virtue of s. 149 of the 1992 Act. The regulation should be read on this basis. Accordingly, pursuant to regulation (3) the appellant is also entitled to attendant care payments from 1 July 1993 up to the date from which the Corporation agreed to make payments, i.e. up to 5 November 1993. Conclusion: The appellant is entitled to payment for attendant care:- (1) From the date of her birth to 30 June 1993 as assessed by the Corporation pursuant to s. 80(3) in accordance with ( i) Information already provided or to be provided by or on behalf of the appellant and (ii) The discretion of the Corporation exercised in accordance with s.80(3). As I have already indicated that may mean that the appellant is not entitled to any sum for certain periods, because her needs were provided for in some other way, such as by the public hospital system. 20. (2) From 1 July 1993 up to 5 November 1993 in accordance with the 1993 regulations. There will be rights of review and appeal against these assessments. The appellant is also entitled to costs. Leave is reserved to apply to have the sum for costs fixed if agreement cannot be reached. -(J.W. Imrie DCJ)