Nicholl v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT ROTORUA Decision No. 238 /97 IN THE MATTER of The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an Appeal pursuant to Section 91 of the Act BETWEEN BRIAN WILLIAM NICHOLL DCA 125/97 Appellant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 30th day of October 1997 APPEARANCES: Mr B W Nicholl in person Mr P McBride for the respondent DECISION OF JUDGE M J BEATTIE The issue in this appeal is whether the Corporation was correct to deduct a previous lump sum percentage from the amount of the assessment of the appellant's independence allowance. 2 Background Facts The appellant was a self-employed builder and on 19 July 1996 he suffered acute lower back strain whilst working. The appellant applied for an independence allowance as a consequence of the disability which that injury had caused and the assessment of such disability was found to be 100%. However some years previously, and the precise date is not disclosed on the file, the appellant was assessed under section 78 of the 1982 Act as having a hearing disability for which he had cover under the Act and which was assessed at 13% of total. He was paid a lump sum pursuant to section 78 based on that percentage disability. In its decision letter of 27 November 1996 the Corporation advised the appellant that pursuant to section 54 of the 1992 Act the percentage of disability previously received must be subtracted from the current percentage of disability to determine the payment level for the independent allowance and this was accordingly re-assessed as being 87% percent. It is that decision which was confirmed by the Review Officer on review and which the appellant appeals to this Court. Relevant Statutory Provision Section 54 of the Act relates to the assessment and payment of independence allowance. The particular section 54 in force at the time of the Corporation's decision letter in November 1995 was in fact repealed and substituted from 1 July 1997 by a new section 54 and accompanying section 54A, although the 3 particular subsection with which this appeal is concerned has not altered materially. Section 54(14) states: "Where any person who has received a payment under section 119 of the Accident Compensation Act 1972 or section 78 of the Accident Compensation Act 1982 is assessed for the purposes of establishing an entitlement to an independence allowance, the person's disability assessed under subsection (5) of this section shall be reduced by the percentage or percentages of permanent loss or impairment of bodily function upon which any payment or payments under section 119 of the Accident Compensation Act 1972 or section 78 of the Accident Compensation Act 1982 were based." In his submissions the appellant stated that there was no co-relation between his hearing impediment and the disability caused by the acute back strain and as the latter had been assessed at 100% it should remain so for the purposes of assessment of the independence allowance. It is to be noted also that the appellant was under the belief that the circumstances created by section 57(14) did not pertain under the ACC regime prior to the 1992 Act. The appellant's submission was in effect that the system was unfair particularly in the case of a person who has multiple injuries each creating substantial disability. It also seems that the appellant did not in fact receive 87% of the independence allowance but rather a sum less than that because prior to 1 July 1997 the allowance was assessed in bands of percentage rather than each percentage point being a dollar calculation of the maximum. That apparent unjust situation has now been rectified by the 1997 amendment. The 4 appellant made much of that but his submissions and observations in that regard were not strictly relevant to the issue in the appeal. The respondent submitted that the provisions of section 54(14) were clear and that the respondent was obliged to deduct the 13% from the percentage of total bodily disablement that had been assessed for the purposes of the independent allowance. Counsel submitted that the requirement to deduct was mandatory and that there was no discretion vested in the Act to do otherwise. Decision Despite the eloquent plea of the appellant I must state that the contention he makes has no basis in law. The provisions of the statute are quite clear and indeed there is High Court authority as well as authority from this Court to the effect that there is no discretion given to the Corporation under section 54 and that the assessment is a simple mathematical calculation with the percentage disability previously allowed being deducted. This question was recently considered in the High Court in the decision of ARCIC v I Allen (AP 100/96) Wellington Registry where Justice Gendall delivering the decision of himself and Justice Gallen stated at page 10 of the judgment: "Whilst of course the assessments are reached on a different basis because of changes in legislation, nevertheless it is a reduction of one percentage of disability by another percentage of disability. The clear purpose and intent of the legislation in our view require that there be a subtraction process in reducing the percentage of disability upon which a payment is assessed and a proper interpretation of the subsection does not justify the use of a 5 calculation process by which there is a multiplication of a figure expressed in percentage terms. In any case where a disability exists it is not possible to say that it can be reduced to nothing. That is an absurdity. However the reducing exercise does not relate to the disability which as a matter of common sense remains but to the formula which determines whether an independence allowance can be made. In our case what diminishes or is lessened in size is the disability expressed as a percentage for the purpose of obtaining an independence allowance and such diminution can only logically arise through the deduction of the former disability percentage from present disability." The Court in this decision reaffirmed the situation that there was no discretion available to the Corporation or indeed to the Court when considering this question. For the reason that the position is clear and has been authoritatively stated as such previously both in this Court and in the High Court this appeal must be dismissed. DATED at WELLINGTON on this day of November, 1997 M J Beattie District Court Judge Nicholl.doc(gm)