Godsalve v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT Decision No. |47 /97 HELD AT WELLINGTON IN THE MATTER of The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an application for leave to appeal pursuant to Section 97 of the Act in relation to Decision No. 25/97 BETWEEN ALAN JAMES GODSALVE Applicant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION Respondent M L F Saunders for appellant P J Radich for respondent DECISION OF JUDGE D A ONGLEY This is an application considered on the papers for leave to appeal against a decision of Judge J W Imrie delivered on 21 February 1997. The judgment related to a question of the requirement for an election under s 147 of the Accident Rehabilitation and Compensation Insurance Act 1992 between either lump sum compensation under the 1982 Act or an independence allowance under the 1992 Act. The applicant lodged a claim in 1988 relating to psychological injuries suffered in the course of employment with New Zealand Police between January 1970 and March 1987. The Corporation declined the claim for cover in 1991. An application for review was lodged but was not determined, and in July 1995 the Corporation, by an internal review of its own decision, admitted the claim for cover as incapacity due to work related disease qualifying under s 28 of the Accident Compensation Act 1982. The Corporation then declined lump sum compensation on the ground that the applicant had not complied with s 147 of the 1992 Act. That question went to review and the applicant appealed against an adverse review decision given on 16 May 1996. Part of s 147 states: - 2- 147. Compensation for non-economic loss - (1) Where any person had an entitlement to compensation under section 119 or section 120 of the Accident Compensation Act 1972 or section 78 or section 79 of the Accident Compensation Act 1982 but has not received that compensation and makes written application for that compensation before the Ist day of April 1993, that person shall be entitled to payment under those sections if payment is made on or before the 30th day of June 1995 or after that date if pursuant to a decision given on review or appeal under Part IX of the Accident Compensation Act 1982 as continued in force by section 152 of this Act. (2) Where any person has suffered personal injury by accident to which the Accident Compensation Act 1972 or the Accident Compensation Act 1982 applies, and - (a) That person has an entitlement to compensation under section 119 or section 120 of the Accident Compensation Act 1972 or section 78 or section 79 of the Accident Compensation Act 1982 in respect of that personal injury, but has not received any payment under any of those sections in respect of that personal injury; and (b) That person would have an entitlement to an independence allowance under this Act if the personal injury had been suffered on the Ist day of July 1992 - that person shall be entitled to elect in writing, not later than the 3 1st day of March 1993, to receive either his or her entitlement under section 119 or section 120 of the Accident Compensation Act 1972 or section 78 or section 79 of the Accident Compensation Act 1982, or an independence allowance under and subject to the conditions of this Act, but not both (2A) For the avoidance of doubt, it is hereby declared that, for the purposes of subsections (1) and (2) of this section, no person has an entitlement to compensation under section 119 or section 120 of the Accident Compensation Act 1972 or section 78 or section 79 of the Accident Compensation Act 1982 unless a claim in respect of the personal injury by accident had been lodged with the Corporation before the Ist day of October 1992. (3) Subject to section 148 of this Act, if - (a) No payment has been made in respect of personal injury by accident under section 119 or section 120 of the Accident Compensation Act 1972 or section 78 or section 79 of the Accident Compensation Act 1982; and (b) No payment is made under subsection (1) of this section; and (c) No election is made under subsection (2) of this section - the person shall be deemed to have elected to receive an independence allowance under and subject to the condition of section 54 of this Act as if the personal injury by accident was personal injury that had been suffered on the Ist day of July 1992 (4) Where any election to receive an independence allowance is made under subsection (2) of this section, no payment shall be made under subsection (1) of this section. Judge Imrie accepted that a written application for lump sum compensation had been made before 1 April 1993 in the form of a letter of 18 June 1988 in which the applicant wrote "I also consider that I am entitled to a lump sum payment from - 3- ACC". The appellant then argued that the conditions of's 147(1) were met because he had an entitlement to lump sum compensation and made written application, and finally that he was not barred through having had no payment by 30 June 1995 because his claim for payment was pursuant to a decision given on review or appeal It is implicit in the decision on appeal that there had been no application for review of the separate question of refusal of lump sum compensation. The applicant argued that the acceptance of the claim by the Corporation in July 1995, being an acceptance under the 1982 Act, reactivated the original claim and all the rights of review and appeal. Alternatively, there is an argument that the Corporation's decision on his claim for cover was a decision on review and it was, by extension, a decision relating to payment of lump sum compensation. The respondent submitted that, to qualify under s 147(1), the applicant would have had to exercise a right of review or appeal under Part IX of the 1982 Act, such review and appeal being directed towards payment of lump sum compensation rather than only the preliminary question of the existence of cover or otherwise. Judge Imrie dealt with s 147(2) and (3)(b) of the 1992 Act which give a right of election between two forms of compensation and provides that, in the absence of election, the claimant is deemed to have elected to receive an independence allowance. He found that no election in writing had been made by 31 March 1993. He referred to the fact that the Corporation did not dispute that the applicant's personal injury resulted in a degree of disability of less than 10%. Because of that, the applicant would not have been entitled to an independence allowance in any case. He then referred to s 147(3) and found that the three conditions were satisfied, that is to say that no payment had been made under ss 78 or 79 of the Accident Compensation Act 1982, no payment had been made pursuant to review or appeal, and no election was made under s 147(2). It follows, according to the clear wording of s 147(3), that the applicant is deemed to have elected to receive an independence allowance under the conditions of s 54 of the 1992 Act. The above comments are no more than a cursory summary of aspects of Judge Imrie's decision, which were dealt with in a good deal more detail and, with respect, with a good deal more clarity. In his application for leave, the applicant again addresses the argument that he had less than 10% disability so that he was not a person described in s 147(2)(b) who would have an entitlement to an independence allowance, and therefore he was not capable of making an election nor required to do so. It follows, according to the applicant's argument, that s 147(3)(c) does not apply and he cannot be deemed to have elected to receive an independence allowance as a result of failing to make any election under s 147(2). Judge Imrie dealt with that argument by reference to the fact that an independence allowance is ongoing and a person who may not be entitled at the commencement of the 1992 Act is at least entitled to reassessment from time to time and may become entitled to payment. Such a person cannot be said to have no entitlement to an independence allowance and is required to elect in favour of lump sum compensation or be deemed to have elected in favour of an independence allowance. - 4 - That is a question of law involving a matter of interpretation. The applicant contends that he was not a person entitled to an independence allowance and was not entitled to make an election. It is appropriate to grant leave to appeal on that question. The appellant is still left with the difficulty that no payment has been made as specified under s 147(3)(a), being a payment under the 1982 Act, and s 146(3)(b) which cross-refers to subs (1) concerning payment under a decision on review or appeal. In view of his finding on the other point, Judge Imrie did not deal in any final way with the argument that the Corporation's 1995 decision resurrected the claimant's rights to payment. The argument concerns the meaning in s 147(1) of the words "decision given on review or appeal", which the applicant contends to include the Corporation's internal review decision. It deals also with the meaning of the words "if payment is made ... pursuant to a decision" which the applicant contends to include an indirect entitlement to payment by virtue of the fact that the entitlement to lump sum payment flows from the entitlement to cover. Section 147 is a very difficult provision. The concluding words of subs (1) lack clarity and have been regarded as meaning that if payment has not been made under the 1982 Act by 30 June 1995 a claim for lump sum compensation will survive if it is the subject of a successful review or appeal by the claimant. The applicant's argument that it may have a broader meaning is one which cannot be regarded as untenable. Leave to appeal is therefore granted. DATED at WELLINGTON this |4th day of July 1997 D A Ongley District Court Judge