Hayes v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT PALMERSTON NORTH Decision No. 135 /96 UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an appeal pursuant to section 91 of the Act BETWEEN CHRISTOPHER HAYES of Palmerston North Appellant (Appeal No. DCA 76/96) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 17th day of September 1996 APPEARANCES Mr A R V Rowlett - advocate for appellant Mr T P Cleary for respondent DECISION OF JUDGE A W MIDDLETON The issue in this appeal is the application of s.90(9) of the Accident Rehabilitation and Compensation Insurance Act 1992 The appellant lodged a claim with the respondent on 30 June 1989 for an injury suffered to his left elbow on 17 June 1989. The appellant was granted cover and received assistance for hospital treatment and an operation and weekly compensation. On 28 August 1992 the appellant applied for approval for further private hospital treatment costs which application was declined by the respondent on the grounds that the treatment was not necessary for the return of the appellant to his principal economic activity. The appellant applied for a review of that decision on 28 .September 1992 and in that application stated "why should there be any change to private hospital, when you have all ready (sic) let one happen - surgery may return my arm so 2 I can work but will not untill (sic) I have it. So unless you approve it I will be on ACC for some time". The respondent reviewed its decision on receipt of the application for review and on 6 October 1992 advised the appellant: "The Corporation has received your review application in respect of our decision dated 3 September 1992 for decline of private hospital expenses. The Corporation's principle (sic) economic activity test is a very stringent test. To enable the Corporation to consider your application it would need to be proven that there was a reasonable prospect of you obtaining employment before approval could be granted. I must regretfully advise that on the present available information I cannot administratively review the original decision to decline this treatment. In the circumstances this leaves 2 courses of action available to you. a To withdraw your review, or ( b ) Proceed to a formal hearing Please refer to the attached form and advise by 18 October your further intentions. Should I not hear from you by this date I will presume you do not wish to take this matter further and your claim will be withdrawn from the review process." The respondent heard nothing further until it received advice from the appellant's advocate Accident Compensation Advisers who wrote on 22 July 1995 stating that the result should be deemed a favourable outcome pursuant to s.90(9) of the Act. The respondent replied on 1 September 1995 that it accepted that under s.90(9) the private hospital cost issue was deemed to be favourable to the appellant. On 25 September 1995 the respondent then notified the appellant's advocate that it intended altering its decision and in the letter stated: "Thank you for you (sic) letter dated 22 September 1995. I have discussed this issue with our legal section and it appears that I have erred in my decision dated 1 September 1995. Section 90(9) states: (9) Where the hearing of a review has not been commenced within 3 months after the lodging of the application for review, and the delay is not caused or contributed to by the applicant, the application shall be deemed to have been determined in favour of the applicant. 3 As Mr Hayes (Teal) did not respond to our letter dated 6 October 1992, it must be said that he contributed to the delay. Therefore, in accordance with Section 67A of the 1992 Act, I revise our decision dated 1 September 1995 in regard to the Private Hospital costs. The original decision dated 3 September 1992 must now proceed to a formal hearing unless of course you wish to review the decision made above." The appellant then requested by letter dated 26 September 1995 that the original application for review of 28 September 1992, together with the decision on 20 September 1995, should both proceed to review hearings. It appears that the respondent's second decision regarding private hospital costs was reconsidered, but in the meantime the appellant had suffered a wrist injury which prevented him from working as a bar supervisor in the tavern in which he had been employed, a position which he had taken up, notwithstanding his elbow injury. The respondent then decided that an operation to his elbow was not necessary to return him to his principal economic activity. On 28 November 1995 reviews in respect of both applications were heard and the review officer held that the appellant's failure to respond to the letter of 6 October 1992 indicated that he did not wish to proceed with his application for review so that s.90(9) did not apply. The review officer held that in relation to the private hospital treatment costs approval for those costs would not return him to work because of his subsequent injury. The appellant has appealed against both those decision. Mr Rowlett submitted: 1. That it is not open to make a presumption that an appellant has withdrawn an application for review and that the facts clearly show that the appellant had given no positive indication of his intention to withdraw that application. 2. That the respondent's letter of 6 October 1992 to the appellant did not correctly state the position as it applies under s.90 which was that the review would proceed to a hearing unless the appellant withdraw his application and so advised the respondent. He submitted that the letter inferred that the respondent had a right to withdraw the application from the review process which it did not have. 3. That in the result the decision of the review officer was wrong in that the appellant had not in any way withdrawn his application for review. 4. That it could not be said that the failure of the appellant to reply to the letter of 6 October 1992 could be suggested as having caused a delay in undertaking the review. That it was the respondent's action in presuming the application to be withdrawn which it had no right to do. 4 Mr Cleary submitted: 1. That the appellant had contributed to the delay by failing to respond to the respondent's letter. He submitted that there was a period of 2 years and 9 months before the issue was raised again by the appellant. 2. That in the interim the respondent was having discussions with the appellant in relation to lump sum awards under both ss.78 and 79 of the 1982 Act, but at no time was the question of the review application mentioned. It appears that after the respondent had accepted Mr Rowlett's submission that the appellant was entitled to a favourable decision pursuant to s.90(9) it then endeavoured to revise its decision pursuant to s.67A of the Act on the grounds that the appellant had contributed to the delay. I consider that the terms in which the letter of 6 October 1992 was couched were unfortunate and they certainly led to a serious misunderstanding. I accept that the respondent has now ceased advising applicants in that manner and now require a definite response from an applicant for review and will not proceed on the assumption that the failure of reply can be deemed to be a withdrawal. I accept Mr Rowlett's submission that it was not necessary for the appellant to take steps to withdraw the application or to request that the review hearing proceed. While it would have been prudent for him to do so, the obligation is still on the respondent to convene a review hearing within three months of the application and in this case it did not do so. Accordingly, I consider that the decision should have been determined in favour of the appellant pursuant to s.90(9) and the appeal is therefore allowed. There will be costs to Mr Rowlett of $700.00. DATED at WELLINGTON this ) - day of November 1996 Areunadula A W Middleton District Court Judge de76-96.doc(rd)