ANZ NATIONAL BANK LIMITED V THE ACCIDENT COMPENSATION CORPORATION CA CA91/06

ANZ NATIONAL BANK LIMITED V THE ACCIDENT COMPENSATION CORPORATION CA CA91/06 29 October 2007IN THE COURT OF APPEAL OF NEW ZEALAND CA91/06 [2007] NZCA 469BETWEEN ANZ NATIONAL BANK LIMITED Appellant AND THE ACCIDENT COMPENSATION CORPORATION Respondent Hearing: 28 August 2007 Court: O'Regan, Arnold and Ellen France JJ Counsel: A D Sharp for Appellant F M R Cooke QC, D Tuiqereqere and N Lawson for Respondent Judgment: 29 October 2007 2.30 pmJUDGMENT OF THE COURT A The appeal is dismissed. B The appellant must pay to the respondent costs of $6,000 plus usual disbursements. REASONS OF THE COURT(Given by O'Regan J)Introduction[1] Under the repealed Accident Rehabilitation and Compensation Insurance Act 1992 (the 1992 Act), the premiums paid by employers to the Accident Compensation Corporation (ACC) for the cover provided by ACC for work-related injuries could be subject to a loading (or a discount) to reflect the accident record of the particular employer. The loading or discount depended on the experience rating assessment made in relation to the employer under the Accident Rehabilitation and Compensation Insurance (Experience Rating) Regulations 1993 (the 1993 Regulations). [2] This appeal relates to the premiums payable to ACC by the appellant, ANZ (formerly known as ANZ Banking Group (NZ) Ltd), for the 1997/98 and 1998/99 premium years. Those premiums were subject to a loading, reflecting ANZ's record for work-related injuries for which cover was provided by ACC to ANZ's employees. [3] At the time, ANZ accepted the experience rating assessments made by ACC, and the premiums charged by ACC for the 1997/98 and the 1998/99 premium years. Although it had a right to invoke the statutory review process, it did not do so. [4] ACC was required to notify an employer when it classified an injury for which it provided cover as a work-related injury. It omitted to do this in relation to one ANZ employee, Patricia Webb, and ANZ believes that it also omitted to do so in relation to a number of other ANZ employees whose injuries were classified as work-related. ANZ believes that ACC may have wrongly classified the injuries of some or all of those other employees as work-related. [5] ANZ initiated a review process in relation to Ms Webb, the ultimate outcome of which was a decision by ACC to accept that Ms Webb's injury was not work- related. A reviewer directed ACC to adjust ANZ's premiums for the 1997/98 and 1998/99 premium years to reflect the removal from the calculation of Ms Webb's claim. ACC did so and made a refund to ANZ of about $19,000. However, ANZ claims that it should be permitted to reopen the experience rating assessments for the1997/98 and 1998/99 premium years, bringing into play all accidents which were classified as work-related during those years. [6] The position is complicated by the fact that the 1992 Act was repealed and replaced by the Accident Insurance Act 1998 (the 1998 Act), which, in turn, was repealed and replaced by the current Injury Prevention, Rehabilitation and Compensation Act 2001 (the 2001 Act).Issues on appeal[7] ANZ has failed to convince a reviewer, the District Court on appeal, and the High Court that the position for which it contends is correct. The case comes to this Court as an appeal by way of case stated from the decision of Keane J in the High Court: ANZ Banking Group (NZ) Ltd v Accident Compensation Corporation HC AK CIV 2005-485-00938 23 November 2005. Keane J ruled that reg 21A of the 1993 Regulations prevented ACC from reassessing ANZ's experience rating after 31 March 2000. The case stated poses the following questions for determination by this Court: (a) Whether [the High Court was] correct to have determined that reg 21A prevents ACC from reassessing [ANZ's] experience rating after 31 March 2000; (b) If [the High Court was] wrong, should the appeal be remitted back to the High Court for further determination? [8] On our approach to the case, the disposition of the appeal turns on the application of s 390 of the 2001 Act, rather than on reg 21A. We propose to deal with that issue first.Does s 390 apply?Statutory scheme[9] The accident compensation scheme has undergone radical changes since the time of the experience rating assessments made for ANZ in the 1997/98 and 1998/99 years. The regime for experience rating in the assessment of premiums was abolished by the 1998 Act, with effect from 1 July 1999. The 1998 Act itself was replaced by the 2001 Act with effect from 1 April 2002. Much of the difficulty with the issues in the present case arises from the application of the transitional provisions in the 1998 and 2001 Acts. [10] Under the 1992 Act, the setting of premiums for employers was governed by the 1993 Regulations. In very broad terms, employers with a good record of work- related injury claims by employees were entitled to a discount, while those with higher incidents of work-related injuries for their employees were subjected to a loading on the premium they paid to ACC. The 1993 Regulations as amended in 1997 provided a formula for the calculation of the experience rating of a particular employer. The precise basis of the formula is not important for present purposes. The classification of an injury to an employee who made a claim for compensation from ACC as a work-related injury affected the experience rating of the employer and this carried through to the amount of the premium payable by that employer in the relevant year. [11] Regulation 21 of the 1993 Regulations (as amended in 1997) obliged ACC to make an assessment of the premium discount or premium loading referable to an employer, and to give notice to the employer. Regulation 21(3) provided that ACC could make alterations to an assessment made under reg 21 to ensure its correctness, notwithstanding that the employer may have made a payment pursuant to the assessment. ACC was required to give notice to an employer in the event that this happened.[12] When the 1992 Act was replaced by the 1998 Act, reg 21 was amended, and a new reg 21A was passed. The amendment to reg 21 removed reg 21(3). Otherwise reg 21 remained substantially unchanged. The new reg 21A provided:21A Assessments not dealt with by 1 April 1999 to be dealt with by 31 March 2000(1) This regulation applies when the Corporation has not complied with regulation 21 before 1 April 1999. (2) The Corporation must make every assessment, and give every notice, required by regulation 21 by the close of 31 March 2000. (3) The Corporation may from time to time, until the close of 31 March 2000, make any alteration to an assessment that the Corporation considers necessary to ensure its correctness, even if the employer has made a payment under the assessment. The Corporation must give notice of any such alteration to the employer by the close of 31 March 2000. (4) The Corporation may at any time after a review or appeal under the Act becomes final and conclusive, whether before or after 31 March 2000, make any alteration to an assessment that is necessary to make the assessment comply with the decision on the review or appeal. (5) The validity of an assessment or an alteration made by the Corporation is not affected by any person's non-compliance with any of these regulations, except that the Corporation must comply with the time limits in subclause (2) and subclause (3).[13] Keane J found that two preconditions must be satisfied before reg 21A(4) can come into play. First, there must be an assessment complying with reg 21A(2) (ie an assessment made before 31 March 2000). Second, there must be a final and conclusive review or appeal decision relating to that assessment. In the absence of one or the other, ACC has no ability to act, and where ACC does have power to act, that action involves no fresh exercise of discretion. Rather, ACC simply make the alteration necessary to make the assessment compliant with the appeal or review decision. The Judge said this involved no decision susceptible to review and appeal. [14] On behalf of ANZ, Mr Sharp said the Judge had misunderstood the purpose and effect of reg 21A. He said the correct position was that ANZ's ability to challenge the categorisation of Ms Webb's injury stemmed from s 390 of the 2001 Act. That section says: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. (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.[15] Mr Sharp said that the decisions on ANZ's experience rating and on the classification of Ms Webb's injuries all occurred when the 1992 Act was in force. (He subsequently accepted that, in fact, the experience rating assessment for the 1998/99 year occurred after the repeal of the 1992 Act. We will come back to this aspect of the case later). He said that s 390(3) requires that ACC apply the legislation which was in force at the time the decision being revised was first made. This required ACC and any reviewers to apply the 1993 Regulations as they stood prior to the 1999 amendment which introduced reg 21A. In short, the law which hadto be applied was reg 21 as it was prior to the 1999 amendment. Reg 21A did not apply to decisions relating to the classification of Ms Webb's injury as work-related and decisions relating to the experience rating assessment of ANZ for the relevant years. [16] ANZ's case is founded on there being a decision in terms of s 390 of the 2001 Act by ACC, which gives rise to a review right. Whether that is correct requires some analysis of exactly what happened in the various reviews relating to Ms Webb's injury and the impact of the classification of her injury as work-related on ANZ's experience rating.The reviews and appeals[17] Ms Webb made her claim for compensation from ACC in March 1997. The claim was for an injury to her elbow, which she thought arose from opening teller units in the course of her work. ACC accepted the claim as a work-related injury and, through ANZ, paid compensation to Ms Webb. ANZ was aware of the classification of Ms Webb's injury as work-related, but ACC did not formally notify ANZ of the classification as it was required to do. [18] ACC's failure to formally notify ANZ was not identified until Injury Management New Zealand Ltd (IMNZ), on behalf of ANZ, took the point in a letter to ACC dated 12 July 2001. ACC wrote the next day to ANZ, as invited, confirming the decision and notifying ANZ that it was entitled to a review. ANZ immediately exercised that right. [19] This led to the first of three review decisions. The first review decision, dated 20 November 2001, dealt with ACC's decision to classify Ms Webb's injury as work-related. The first reviewer quashed ACC's decision and instructed ACC to refer Ms Webb to a physician for examination. [20] After Ms Webb refused to consult a physician, ACC issued another decision on 18 July 2002, again ruling that her injury was work-related. This led to the second review, but before that review commenced ACC revoked its decision andaccepted that the injury was not work-related. However, no change was made to ANZ's experience rating to reflect this change of status for Ms Webb's injury, and ANZ therefore proceeded with the review, notwithstanding that the issue relating to Ms Webb's injury had been resolved. ACC took the position that the repeal of the 1992 Act and the consequent changes to the 1993 Regulations meant that the ability to make adjustments to experience ratings had ceased. ANZ's representative argued that s 452 of the 1998 Act and s 390 of the 2001 Act allowed for the revision of decisions under previous Acts, including those relating to premiums. Perhaps significantly, the reviewer recorded ANZ's representative as having submitted:This was not a matter of ANZ disputing an experience rating assessment.[21] Thus the scope of the second review was limited to the classification of Ms Webb's injury, and its impact on ANZ's experience rating. The second reviewer took the position that ACC was not prevented from adjusting ANZ's experience rating because s 390 of the 2001 Act allowed ACC to revise any decision made under a former Act, whatever the error. He therefore directed ACC to remove Ms Webb's claims cost from ANZ's claims history and to make the necessary adjustments to ANZ's experience rating and provide refunds where applicable. ANZ did not appeal. On the face of it, the second reviewer's decision seemed to provide ANZ with exactly what it had sought. [22] ACC complied with the direction. The adjustment for the 1997/98 experience rating year was just over $14,000, and that for the 1998/99 year was $3,300. When GST was added, the total refund payable by ACC to ANZ was just under $19,500. ACC simply sent a cheque for that amount on 6 June 2003, but when prompted by IMNZ sent a letter explaining its decision on 24 June 2003. In that letter, ACC said that the recalculation of ANZ's experience rating had been done to comply with the second review decision, and the refund had been paid as directed by the second reviewer. ACC noted ANZ's request for an experience rating adjustment notice to be issued, but said it did not consider that this was required. [23] ANZ then initiated the third review. The review document says that ANZ sought a review of a decision of ACC dated 6 June 2003 (the date of the cheque). On the face of it, therefore, the payment on 6 June was the "decision" which ANZsought to review. ANZ said its reasons for the application for review were that the experience rating adjustment and subsequent refund dated 6 June 2003 were incorrect in that ACC had included non-qualifying claims in the assessment. ANZ sought a reassessment of its experience rating and adjustment and refunds as appropriate. ACC submitted that it had not made a "decision" that was subject to a review, but simply given a refund in compliance with the second reviewer's decision. [24] The third reviewer did not accept ACC's submission. She said that the refund of 6 June 2003, followed up by the letter of 24 June 2003 and a subsequent letter of 11 August 2003 explaining how the refund had been calculated amounted to a "decision" made by ACC. Taking a "pragmatic approach" to jurisdiction, the third reviewer considered jurisdiction to be somewhat limited and that only the way in which the refund had been calculated was in issue. The third reviewer confirmed jurisdiction and invited submissions on the calculation of the refund. [25] Having received those submissions, the third reviewer issued a subsequent decision on 17 December 2003. The third reviewer accepted that ACC had correctly calculated the refund and made a decision to that effect. [26] ANZ appealed against the third reviewer's decisions to the District Court. Judge Beattie saw the issue as whether ACC had made a reviewable decision relating to a levy payable by ANZ under Part 6 of the 2001 Act. Having considered the transitional provisions of the 2001 Act and reg 21A, the Judge concluded that neither ACC nor ANZ could litigate the question of levies other than by review and appeal within the statutory timeframes. ANZ had not initiated a review at the time ACC had made the experience rating assessments and set the premiums for the 1997/98 and 1998/99 years. He found that ACC could not be said to be making a reviewable decision when it calculated and made the refund of the claims cost associated with Ms Webb's injury. [27] Keane J said that Judge Beattie had been wrong to focus on whether the decision to make a refund was a decision under Part 6 of the 2001 Act, rather than considering whether it was a decision under Part 7 of the 1992 Act. He saw the issueas whether ACC, in adjusting the experience relating assessments to delete the impact of Ms Webb's injury claim, had made a fresh decision under Part 7 of the 1992 Act which, in effect, affirmed afresh all other aspects of the experience rating assessments for those years. [28] Keane J saw reg 21A as determinative, holding that the alteration of an assessment to comply with a decision on appeal or review did not entail a decision susceptible to review or appeal. He noted ANZ's argument that if ACC altered an assessment to make it comply with a decision on review or appeal under reg 21A(4), this action would constitute a fresh assessment in terms of Part 7 of the 1992 Act and the 1993 Regulations. Keane J rejected this. He described the purpose of reg 21A as follows (at [49]):I consider that the intent of Reg 21A was to bring a conclusion to the assessment regime under the 1992 Act, on the passing of the 1998 Act, and to permit experience rating assessments and payment liabilities only to be revisited exceptionally under Reg 21A(4); and not in the wholesale sense ANZ contends for.Did ACC make a decision?[29] While s 390 of the 2001 Act gives ACC power to revive decisions about premiums made under earlier legislation (including the 1992 Act), we think it is clear that that is not what ACC has done in this case. A review of the 1993 Regulations reveals that a decision to make an experience rating assessment (under reg 21, prior to 1 April 1999, and under reg 21A thereafter) is quite a different thing from compliance with an order made by a reviewer. Regulations 21A(4) and 23 govern the latter. Regulation 21A(4) allows ACC (at any time) to alter an assessment to comply with a review assessment. Regulation 23(1) says that if an employer's application for review is successful and not appealed by ACC, ACC must refund the amount of the premium loading paid by the employer to the extent to which it exceeds the amount which, according to the decision on the review, was properly payable by the applicant.[30] What ACC did in this case was simply comply with the order of the reviewer. We cannot see how it can be said that ACC has undertaken an experience rating assessment or done anything that obliges it to do so. [31] It is clear that when ANZ applied for the second review, it was not arguing for a reopening of an experience rating assessment: its advocate expressly said that to the reviewer. And it seems reasonably clear that ANZ did not consider that ACC had conducted an experience rating review, because it asked the second reviewer to direct ACC to do so. There is a degree of absurdity about characterising the sending of a cheque, with no covering note of any kind, as a reviewable decision in terms of the ACC legislation. Yet is that the position which ANZ took at the time of the third review, though the third reviewer decided that the sending of the cheque and the sending of correspondence thereafter should, together, be treated as a reviewable decision. That "decision" was the decision to calculate the amount of the refund ordered by the second reviewer, ie the amount required to exclude the impact of Ms Webb's injury. In our view, the third reviewer was wrong in that regard. Simple calculation of the amount of the refund ordered by the second reviewer is not a "decision": it is the implementation of the second reviewer's decision. It was certainly not a reopening of the experience rating assessment (if such a reopening was possible). [32] The issue at stake in the first two reviews was the classification of Ms Webb's injury and its impact on ANZ's premium loading. That is all that could have been at stake because ANZ had not taken the opportunity to initiate a review of its experience rating assessment within the required timeframe. The event which re- ignited ANZ's review rights was the notice relating to the classification of Ms Webb's injury, and ANZ initiated a review in relation to that. But, as it acknowledged to the second reviewer, that did not involve a challenge to the entire experience rating assessment. As Keane J observed at [51], only the loading relating to Ms Webb's injury was in issue: "Other loadings were not in issue even abstractly". ANZ argued that it did challenge the entire experience rating assessment in the third review, but as noted earlier, there was no decision by ACC to provide a proper basis for the third review and even if there were, the review could only havebeen of the decision to make the refund ordered by the second reviewer which did not make the overall experience rating of ANZ a live issue. [33] We conclude that ACC's compliance with the second reviewer's decision was not, itself, a decision to which s 390 could apply.Regulation 21A[34] Once it is clear that ACC has done nothing in terms of s 390, the question of whether reg 21 (prior to its amendment in 1999) or reg 21A applies fall away. Nevertheless the first question in the case stated deals with reg 21A and much of the argument focused on it. It is therefore appropriate we should give our views on it. [35] ANZ's contention is that reg 21A(1) cannot apply to the experience rating assessment for 1997/98 because ACC had complied with reg 21 before 1 April 1999, and reg 21A(1) makes it clear that, in that event, reg 21A in its entirety does not apply. ANZ argues that reg 21, as it stood prior to the making of reg 21A, must apply. It relies on s 390(3) of the 2001 Act, which says that where ACC revises a decision under repealed ACC legislation, it must apply the Act that applied at the time when the decision being revised was made. [36] There is no doubt that reg 21A(1) qualifies reg 21A(2). In essence, the two provisions read together say that if ACC has not complied with reg 21 by making a premium assessment by 1 April 1999, then it must make sure that it does so by the close of 31 March 2000. That essentially sets a deadline for ACC to finish the exercise of making premium assessments for all employers under the 1992 Act, so that the new regime ushered in by the 1998 Act can apply and provide employers with certainty about what they owed to ACC under the old regime.[37] However, reg 21A(3) and (4) do not appear to be qualified by reg 21A(1). They are essentially re-enactments of the previous provisions that appeared in reg 21 prior to the making of the new reg 21A but with a final date of 31 March 2000 for alterations of assessments under reg 21A(3). If reg 21A does qualify reg 21A(3) and (4), the power to alter an assessment would apply only to assessments that weremade after 1 April 1999. That would mean that ACC had no power to alter assessments made before that date once reg 21A had come into force. It seems highly unlikely that this was intended because it would have forced ACC to maintain a premium assessment even if ACC accepted that it was demonstrably wrong. This is also supported by the fact that reg 21A(3) and (4) largely replicate the old reg 21(3) and (4), and the former came into effect with the repeal of the latter. [38] In our view, reg 21A has the following effect in the present case: (a) ACC was required to make the experience rating assessment for ANZ for the 1998/99 year by the end of 31 March 2000 (reg 21A(2)). It had already made the experience rating assessment for the 1997/98 year under the old reg 21; (b) ACC could alter ANZ's experience rating assessments (both the 1997/98 assessment which was done under the old reg 21, and the 1998/99 assessment which had been done under reg 21A), but only if it did so by 31 March 2000. After that, further amendment was not permitted under reg 21A (but may have been permitted under other provisions, for example if ACC had exercised its discretion in the present case to re-open the experience rating assessment under s 390 of the 2001 Act); (c) ACC had power under reg 21A(4) to make an alteration to an assessment that was necessary to make the assessment comply with a review decision, and that power was not subject to the deadline of 31 March 2000. ACC did that in this case. Once it had done so it was required to refund the overpayment under reg 23. [39] That leads us to conclude that Keane J was right in relation to his assessment of reg 21A. But, as we noted earlier, the case in this Court turned on s 390, because if ACC had made a decision under s 390, that decision would have required ACC to make a determination in respect of the 1997/98 experience rating (which had been made before reg 21A came into force) under the law applying at the time theexperience rating assessment was made ie. the old reg 21, not reg 21A. However, that argument would not have held good for the 1998/99 assessment because that was made when reg 21A was in force, so the time limit in reg 21A(3) would have prevented ACC from making any alteration to that assessment to ensure its correctness.Decision[40] In light of our conclusions it is not necessary for us to answer the specific questions for which leave to appeal was granted, because on our view of the case they do not arise. The effect of our conclusion is, however, the same as the effect of the decision under appeal (and the decisions which preceded it): ACC is not required to re-open ANZ's experience rating assessments for the 1997/98 and 1998/99 years. The appeal fails and we dismiss it.Costs[41] We award costs of $6,000 plus usual disbursements to ACC. We certify for second counsel.Solicitors: Barbara Buckett & Associates, Wellington for Appellant Legal Services ACC, Wellington for Respondent