Ngarangione v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT GISBORNE Decision No. 3 3 /9 4 UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an Appeal pursuant to Section 91 of the Act REVIEW NO. 66/93 / 0082 BETWEEN ANGUS NGARANGIONE of Gisborne Appellant (Appeal: DCA 146/93) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the proYisions of the said Act Respondent HEARD on the 19th day of July 199-! APPEARANCES Appellant in person N G Morrison for respondent DECISION OF JUDGE A W MIDDLETON This appeal is against the decision of the respondent requiring the appellant to repay an overpayment of compensation. The facts which give rise to the appeal are that on 20 August 1991 the respondent accepted a claim from the appellant for injuries to his right knee sustained \\·hile playing rugby on 24 April 1972. The appellant's orthopaedic surgeon assessed his total disability as 11.25% with the result that under s.78 of the Accident Compensation Act 1982 the respondent made a payment to the appellant of £1,912.50. Under s.79 it made an award of $10,000. These awards were sent to the appellant under cover of a letter dated 24 February 1992. 2 The appellant had another claim ,\·ith the respondent which was being dealt with under a separate file and on 21 July 1993 \\'hile considering the merits of the second claim the respondent re\·iev,:ed the earlier file. It was then discovered that as the accident which gave rise to the lump sum awards had occurred on 2-! April 1982 before the commencement of the Accident Compensation Act 1982, the awards should ha\·e been made under ss.119 and 120 of the Accident Compensation Act 1972. The result was that the lump sum award for loss of bodily function was overpaid by $1,123. As the respondent was then in the process of assessing an award under s.79 in respect of the second accident, it advised the appellant by letter dated 10 August 1993 that the overpayment of Sl,125 had been deducted from the award in respect of the second accident. The appellant applied for a review of that decision. The Review Officer heard evidence from the appellant who stated that he had accepted the respondent's decision and assumed that it was correct. He had received the money in good faith and \Vas concerned that it took the respondent so long to become aware of the error. The appellant submitted to the Review Officer that he had no knowledge of the error, that he had not contributed to it and had anticipated a higher award in respect of his second claim. He told the Review Officer that he had taken out a student loan and was expecting to repay part of that from the second award. He also told the Review Officer that he had banked half of the original award and used part to purchase a car. He had had to use the money in the bank subsequently to replace a friend's car which he had damaged. The Review Officer confirmed the respondent's decision. The appellant made the same submissions to me as he had to the Review Officer and said he was concerned that the error had not been discovered at an earlier date. Mr Morrison submitted that the deduction made by the respondent from the second award did not constitute a requirement to repay the overpayment because the Concise Oxford Dicitionary defines deduct as "take away, put aside". He submitted further that the Dictionary defines repay as "pay back". He submitted that as the respondent had merely made a deduction it was not a requirement to repay. I do not accept this submission. In the overall context of the proceedings between the parties, the fact that the respondent was making a further payment to the appellant enabled it to deduct the previous overpayment, which in effect constituted a repayment of the overpayment. The position is governed by s.77(2) of the Accident Rehabilitation Compensation and Insurance Act 1992 which states: "(2) Tlze Corporation shall remit in wlzole or in part a debt wlzich arose as a result of mz error not intentionally contributed to by the debtor if the Corporation is satisfied tlzat tlze person receiz,ing the amount so paid in error did so in good fnitlz and lzas so altered lzis or her position in reliance on tlze 1H1lidity of tfze payment tlzat it would be ineq11itable to require repayment." 3 I am satisfied on the evidence that the respondent clearly made an error in its original assessment which subsequently came to its notice because of the second claim made by the appellant. I also accept that \.vhen he received the original award the appellant did so in good faith and on that basis he purchased a motor vehicle. If he had not had the second claim it seems to me that he would ha\·e been justified in claiming that it was inequitable for the respondent to require a repayment of the overpayment. However, the second claim resulted in the appellant becoming entitled to a lump sum award in an amount to be assessed by the respondent. The appellant would have had no knowledge of the amount involved and could not honestly say that he had altered his position in reliance on the anticipated award. Until the assessment had been made he would have had no knowledge of the amount involved and his evidence certainly does not lead to the conclusion that he did alter his position in anticipation of the receipt of that award. Accordingly I consider that the respondent acted correctly in deducting the overpayment from the second award. I therefore confirm the decision of the Review Officer and the appeal is dismissed. DATED at WELLINGTON this :Z 8 day of J Ll L 'i 1994 Judge AW Middleton DCH6-93.doc09)