Murray v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT WELLINTON Decision No. 61 /98 IN THE MATTER of an application for leave to appeal under section 97 of The Accident Rehabilitation and Compensation Insurance Act 1992 BETWEEN BRUCE RANGI MURRAY (Decision 103/97) DCA 187/96 Appellant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent DECISION OF JUDGE MJ BEATTIE ON APPLICATION FOR LEAVE TO APPEAL This is an application on the papers for leave to appeal pursuant to section 97 of the Accident Rehabilitation and Compensation Insurance Act 1992 on the ground that the decision is erroneous in point of law. There were two issues in the appeal to this Court from the decision of the Review Officer, namely: 2 (i) Whether the Corporation was entitled to recover the amount owing under a Deed of Debt pursuant to section 77(1) of the 1992 Act and (ii) Whether the Corporation ought to have applied the provisions of section 77(2) of the Act and remitted the amount owing under that Deed of Debt. The facts which gave rise to the appeal were that the appellant suffered back injuries in a motorcycle accident in 1986. He commenced receiving earnings related compensation. In June 1989 he sought to become self employed in a long haul transport service and in that regard the Corporation advanced him the sum of $29,200 by way of interest free loan. That loan was recorded in a Deed of Acknowledgement of Debt. It was a clause of that Deed that the principal sum advanced would be repayable upon demand but that the Corporation would not make demand except on the happening of any one of a series of events. One of those events being the committing of an act of bankruptcy. It is common ground that the applicant was adjudicated bankrupt in 1991 but the actual date of same does not appear to be recorded on the file. Suffice is to say that upon the happening of the bankruptcy the Corporation commenced deducting the sum of $50.00 per week from the earnings related compensation that it was paying the applicant as a repayment of the amount owing under the Deed of Debt. It would seem that no formal decision regarding that deduction was made at that time, namely September 1991, but a formal decision regarding the deductions, which had continued uninterrupted over the years, was made 3 on 3 April 1996. It was that decision which the applicant sought to review and appeal. In his decision the Learned Judge held that the bankruptcy of the applicant brought the repayment condition of the Deed into play and that in those circumstances, the debt thereupon constituted an overpayment within the meaning of the provisions of section 77(1) of the 1992 Act and as such he ruled that the Corporation was entitled to deduct the payments of $50.00 per week from the applicant's entitlements to weekly compensation. The Court further ruled that the provisions of Section 77(2) did not apply as the applicant could not establish any detriment. The question of law which the applicant now contends is in issue is the ruling of the Learned Judge that the amount owing under the Deed of Debt did become a sum in excess of the amount to which he was entitled, by virtue of his bankruptcy, and that pursuant to section 77(1) of the Act the Corporation was entitled to recover it by way of deductions from the weekly compensation payable to the applicant. The applicant contends that that decision is erroneous in law in that the Deed of Debt itself gives the Corporation a right to sue for recovery but that the provisions of section 77 of the Act cannot apply as the sum cannot be regarded as being a sum in excess of the amount to which he is entitled under the Act or a sum to which he is not entitled. The applicant contends that the Learned Judge made an error of law in ruling that the repayment clause in the Deed of Debt thereby enabled section 77(1)(a) of the 1992 Act to apply. It is the applicant's submission that, but for this error of law, the Corporation would not be entitled to deduct any 4 monies from the applicant's compensation entitlements in reduction of that debt. Neither counsel could refer to any previous decisions of this Court on this particular point. Having regard to the facts of this case and of the provisions of section 77(1) of the Act, I find that there is an important question of law to be determined namely, whether the amount owing under a Deed of Debt can come within the provisions of section 77(1) of the Act and the Corporation be entitled to recover it pursuant to that provision as an over payment rather than the Corporation simply being required to pursue its ordinary contractual remedies. It is noted that under the provisions of section 89 of the 1982 Act, and its comparable provision section 86 of the 1992 Act, all compensation entitlements are inalienable. Insofar as the provisions of section 86(2)(h) of the 1992 Act are concerned it is noted that nothing affects the right of the Corporation to recover any amounts under this Act or to make any deductions authorised by this Act from any compensation grant or allowance payable under this Act. The Corporation's statutory right of deduction is provided in section 77(1) and thus the question of law as to whether section 77 can apply for the benefit of the Corporation in this case is one which I consider is properly put by the applicant, it having not been determined hitherto, and therefore it is a matter that is appropriate for the High Court to determine. Accordingly then leave to appeal to the High Court on this question of law is granted. 5 No question of law arises over consideration of whether the Corporation ought to have remitted the amount owing in accordance with section 77(2) of the Act and therefore the leave so granted is limited to the question of law previously considered and approved. DATED at WELLINGTON this 6 day of April 1998 M J Beattie District Court Judge Murray.doc(gm)