Fletcher v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT DUNEDIN Decision No. 18 /98 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 COLLIN LEONARD FLETCHER DCA 176/97 Appellant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 3rd day of December 1997 APPEARANCES: M P J Sara for appellant Miss C Taylor for respondent DECISION OF JUDGE MJ BEATTIE The issue in this appeal is whether the Corporation's decision of 29 November 1996 to cancel the appellant's entitlement to weekly compensation pursuant to s.73(2) of the Act was correct. 2 This is another appeal involving considerations of the provisions of s.73 of the Act. This Court has recently considered this section in its decision of Hyde v ARCIC Decision No.14/98. The facts in this appeal again throw into the spotlight the issues that this Court considered and dealt with in the Hyde decision. The facts of this case and the decisions made relating thereto are another example of the Corporation misconstruing the provisions of s.73 when making decisions pursuant to it and throw into sharp relief where the Corporation has gone wrong in dealing with this appellant. In saying that I also say that this appellant deserves no sympathy because of his conduct but he is entitled to the protection of the law and to have the Act and his rights under it administered in accordance with the law. Background Facts The appellant, then a 19 year old soldier, suffered a fracture of the left fibula whilst playing rugby on the 25th June 1984. He underwent surgery to deal with an ununited oscicle tip of the left lateral malleolus. The appellant's file was reopened by the Corporation in December 1990 when approval was sought to carry out surgery on the appellant's left ankle because of recurrent instability. As a consequence the appellant became unfit for military duties and from 7 April 1992 he commenced receiving weekly compensation. In addition he was paid the maximum award under s.79 of the 1982 Act. In December 1992 the appellant shifted to Dunedin and a plan of vocational rehabilitation was introduced. It seems apparent that this was not successful and in 1995 further attempts were made to further his rehabilitation and in particular to find him employment. 3 The Corporation's file discloses that from about July 1995 onwards the appellant proved very difficult to communicate with and on many occasions when appointments for medical examinations, appointments with his case manager or other representatives of the Corporation or with third parties in relation to prospective employment, there was a pattern of failure to attend. At the review hearing the appellant's case manager said that over a long period of time the appellant had been reluctant to participate in efforts to return him to the workplace. That statement in my view is a correct assessment of what is disclosed on the appellant's file. It should be noted that the appellant resided in a rural location at Warrington. The appellant had a telephone but mail delivery was not to the residence but to a Post Office box. These Post Office boxes were operated by NZ Post Community Mail Boxes Warrington. It is to be noted that during the period from July 1995 to October 1996 the appellant had failed to comply with requests made of him on several occasions and his weekly compensation had been suspended or he was threatened with suspension on a considerable number of occasions. In September 1996 the appellant failed to attend the Corporation's office for an interview or to complete a consent form. Several efforts were made to contact him without success and his weekly compensation was stopped. On 30th September the appellant rang the Corporation to discuss the cancellation and the appellant was advised that compensation would be reinstated when he had completed and returned the consent form. This he did and weekly compensation recommenced. On the 24th October 1996 the appellant's case manager wrote to him by registered mail requiring him to attend an interview on the 5th of November. He did not attend. An inquiry was made of the Post Office at Warrington and it was 4 ascertained that the letter was still in his post box. On the 18th of November the Corporation again wrote to the appellant indicating a further appointment date for 28 November and advising that failure to comply would result in the Corporation declining to pay the appellant's weekly compensation. The exact words being "Your continued unreasonable refusable to comply with this requirement will result in ACC declining to pay you weekly compensation from that date". There was no reply to this letter and on 29 November 1996 the Corporation wrote to the appellant again that letter being as follows: "I am writing to advise you that your entitlement to weekly compensation in respect of your claim for your left ankle injury which occurred on 25 June 1984 has been declined. This is because ACC considers that your continued failure to contact your Case Manager and attend appointments is unreasonable. Your entitlement to weekly compensation will therefore cease from 5 December 1996. This decision is made pursuant to Section 73(2) of the ARCI Act 1992. Should you require income support from 6 December 1996 I suggest you contact the New Zealand Income Support Service immediately to avoid interruption to your income. If you are not satisfied with this decision, or if there is something you do not understand, you should contact us immediately and discuss your concerns. Our staff will explain the decision and will explain your right to ask that the decision be reviewed. If you do want the decision to be reviewed a request must be made in writing using an ARC33 form which is available from our office. The written request for a review must be received within three months from the date of this letter." It is to be noted that the Corporation also wrote to the appellant on the 13th November advising that his current medical certificate would expire on 24 November 1996 and that continued payment of weekly compensation is dependent upon receipt of a further medical certificate. He was also required to sign and complete a declaration in the form provided. These were said to be requirements pursuant to s.64 of the Act. On the 26th November a medical certificate dated 24 November was received from the appellant's doctor and on the same day the Corporation received the signed declaration from the appellant dated 22nd November. It transpires that the Corporation's letters of 18 and 29 November were ultimately returned from the post box with the advice that no attempt to claim this mail had been made. These letters were returned after they had remained in the post box for one month. As had been threatened in the letter of 18 November and advised in letter of 29 November, weekly compensation for the appellant ceased on 5th December. The next contact was the appellant attending at the Corporation's office on the 28th of January 1997 in an agitated state to complain about the fact that his weekly compensation had been cancelled. The case manager's memorandum of the events of that day would indicate that matters got somewhat heated but the upshot was that the present status quo remained. The next step was that Mr Sara then came into the picture and sought a review of the decision to cease his entitlement. In the Review Officer's decision following the review hearing the Review Officer stated: 6 "It would appear to me that Mr Fletcher has been selective in the mail he accepts. In between the first and second registered letter there was a form needing to be completed for ongoing entitlement which was received, signed and returned. I also find that there has been more than one warning given to Mr Fletcher that failure to comply with the requirements of the Corporation would result in cessation of weekly compensation. He had to be aware of the consequences because of two previous cessations. The overall picture is one I believe where Mr Fletcher has been unreasonable in his dealings with the Corporation and I believe that the Corporation was correct in its decision to decline him entitlement in terms of s.73(2) of the Act. The Corporation's decision is upheld." It will be seen that in the course of its dealings with the appellant the Corporation has used various expressions to describe the way it proposed or intended to deal with his weekly compensation. On the penultimate occasion that it was affected, on the 17th September 1996, the appellant's case manager advised him that because he had not signed and returned the consent form his weekly compensation was ceased. It was stated that this cessation was in terms of s.73(2)(a). In the letter of 13th November requesting the new medical certificate and signed declaration (the letter that was received and acted upon by the appellant) the advice was that unless it was acted upon compensation would be suspended. In the letter of 18 November, which was the letter which related to his failure to attend an appointment, the threat was "Your continued unreasonable refusal to comply with this requirement will result in ACC declining to pay you weekly compensation from that date." Finally in the letter of 29 December the advice was "Your entitlement to weekly compensation will cease ... This decision is made pursuant to s.73(2) of the Act." 7 Whatever may have been the way in which it was described the fact of the matter is that the appellant's entitlement to compensation has been cancelled. His rather agitated requests to have it reinstated have not been met and it is a fact that he has not had any compensation since 6th December 1996. It is to be noted that he provided a medical certificate as had been requested of him, signed the declaration that was necessary to accompany it and in accordance with that certificate he would prima facie have been entitled to weekly compensation for the duration of that certificate, which was until 14 February 1997. Although this Court has had no direct evidence on the point, it is understood that the appellant's present medical situation has not changed from that which pertained at the time that last certificate was received. Further, he has not obtained employment and would therefore prima facie seem to be entitled to weekly compensation by virtue of his incapacity. From the Review Officer's decision it is clear that both he, and the Corporation in its initial decision, held that grounds existed to somehow cease the appellant's entitlements to compensation, or indeed any other benefit, under the Act because of his refusal to comply with the requirements made of him. The provisions of the Act under which the Corporation stated it purported to act are sections 64 and 73. 64. Responsibilities of claimant ---(1) Every person who claims for or is in receipt of any rehabilitation, compensation, grant, or allowance shall, when reasonably required to do so by the Corporation, --- (a) Give to the Corporation the prescribed certificate of a registered health professional as to such matters, and containing such information, as the Corporation requires: 8 (b) Furnish to the Corporation such other relevant information as the Corporation requires: (c) Authorise the Corporation to obtain medical and other records which are or may be relevant to the claim: (d) Undergo examination, at the expense of the Corporation, by an appropriate registered health professional specified by the Corporation for the purpose: (e) Undergo assessment of impairment, disability, or handicap at the expense of the Corporation: ) Undergo assessment of present and likely capabilities for the purposes of rehabilitation at the expense of the Corporation: (8) Take action by way of rehabilitation in order to endeavour to terminate or reduce the extent of any impairment, disability, or handicap. (2) Every claimant under this Act and every person who is receiving or has received any payment or rehabilitation under this Act shall, whenever required by the Corporation, give to the Corporation a statement in writing, and, if the Corporation so requires, as a statutory declaration or in a form supplied by the Corporation, with respect to such matters relating to the person's entitlement or continuing entitlement to any payment or rehabilitation under this Act as the Corporation specified. 73. Suspension, cancellation, or refusal of compensation and rehabilitation ---(1) The Corporation shall, if not satisfied on the basis of the information in its possession that a person is entitled to continue to receive any treatment, service, rehabilitation, related transport, compensation, grant, or allowance under this Act, suspend or cancel that payment for treatment, service, or related transport, or the payment of compensation, grant, allowance, or provision of rehabilitation. (1A) Where the suspension, cancellation, or refusal under this section is in respect of a matter that is the subject of an agreement or contract or arrangement under section 29A of this Act, the Corporation shall notify the appropriate 9 purchaser of the suspension, cancellation, or refusal within 14 days or such other period as it specified in the agreement. (2) The Corporation shall, upon the unreasonable refusal or failure of any person to --- (a) Comply with any requirement made under any provision of this Act relating to any claim; or (b) Undergo medical or surgical treatment in respect of personal injury (irrespective of whether the Corporation is required or permitted to contribute towards the costs of that treatment); or (c) Agree to, or comply with, an individual rehabilitation programme, - decline to make any payment under this Act." Section 73 indicates that it provides for suspension, cancellation or refusal of compensation and rehabilitation. As I have previously ruled in the Hyde decision, s.73(1) allows the Corporation to cancel or suspend the payment of compensation or other entitlements if a person is no longer entitled to it. Thus s.73(1) is about entitlements under the Act, the criteria which give rise to an entitlement, and the cancellation or suspension of that entitlement when the entitlement criteria of a claimant is considered to no longer be present. Section 73(1) deals with the substantive issue of entitlement, that is, does a claimant still qualify under any particular statutory criteria for the continuation of the particular benefit that he/she was enjoying. Section 73(1) permits the Corporation to cancel or suspend if it believes that the claimant no longer qualifies for that entitlement. The Accident Rehabilitation and Compensation Insurance Act 1992 is stated as being "An Act to establish an insurance-based scheme to rehabilitate and compensate in an equitable and financially affordable manner those persons who suffer personal injury." Persons who suffer personal injury have rights under that Act to rehabilitation and compensation. I find that those rights continue for so long as a person is still suffering from the personal injury which gave rise to the right in the first place. 10 Those rights cannot be taken away in some arbitrary or capricious manner where a person otherwise entitled is left to fend for himself or seek some other form of state aid. Yet I find that is what the Corporation has sought to do here. The Corporation have not said that the appellant no longer qualifies because he is no longer suffering from personal injury, but rather it is saying he has not been cooperating and therefore his right or entitlement to compensation can cease. That is be cancelled, be terminated, ended. The Corporation has purported to do this under s.73(2). That section does not say that a person's entitlement can be terminated, cancelled or ended. It says that the Corporation shall decline to make any payment under this Act. The whole tenor of s.73(2) relates to the failure of a claimant to comply with reasonable requirements made of that person. This subsection does not talk of cancellation of entitlement. It is not seeking to affect entitlement or qualification. Rather simply to affect the right to presently receive benefits whilst that person remains in a state of unreasonable non-compliance. The clear inference is that the requirement for which compliance is sought is likely to be one which is directed towards establishing continued entitlement or otherwise, and so that until the position as to entitlement can be ascertained payment that would otherwise be made to the claimant can be withheld. If upon the compliance with the request it is established that entitlement is no longer present then s.73(1) is the provision by which cancellation can be made. Unless the Corporation has evidence in its possession that enables it to be satisfied that a person's entitlement to compensation no longer exists, it cannot cancel that entitlement. In the case of this appellant the Corporation could not be said to be in possession of any information that would enable it to decide that there was no longer a right or entitlement. The evidence is that the Corporation had a complying declaration and a medical certificate valid until 14 February 1997. Thus it could not cancel 11 under s.73(1) and as I have ruled s.73(2), being the provision under which it purported to act, gives no power to cancel. In terms of this appellant's situation I find that the Corporation had good and valid grounds to act under s.73(2) and decline to make any payment to him until he had complied with the requirements that were made of him. For so long as he was in a state of unreasonable refusal or failure to so comply the Corporation was quite entitled to withhold his weekly compensation. However once he had come to his senses and carried out the obligations which the Corporation had made of him pursuant to s.64 of the Act or otherwise and providing the substantive criteria for his continued entitlement remained, he was entitled to receive the benefits which the Act provides. Accordingly then I rule that the Corporation were entitled to decline to make any payment to the appellant whilst he was in default, but that in not just declining to make payment but rather cancelling his entitlements under the Act was wrong and was made without any statutory authority. Accordingly the Corporation's decision to cancel the appellant's entitlements under the Act is hereby revoked. The appellant is entitled to costs which I fix at $850. DATED at WELLINGTON this 3'd day of February 1998 Seathe MJ Beattie District Court Judge Fletcher.doc KD DCA 82/97 H N Brown -v- ARCIC Directions of Judge M J Beattie On the 4th December 1997 a Directions Hearing took place in the District Court at Dunedin. Ms J E Mcknight represented the appellant and Ms C Taylor represented the respondent. At the conclusion of discussion regarding this appeal I made the following note: "The issue on appeal must be confined to the issue before the Review Officer i.e. section 73(2) and section 64 of the Act. The Corporation cannot introduce considerations under section 37 as this was not in issue previously. Counsel for the Corporation is to reconsider its position in light of this direction and in light of how this Court considers the meaning of "requirement" in section 73(A) is to be interpreted. If the matter cannot be resolved then consideration should be given to have the appeal determined on the papers. Leave is reserved to either party to apply for further directions." I have now received a further submission from Miss L Dall senior solicitor with the Corporation drawing my attention to the fact that in her view the issue of section 73(1) was not a new issue. She contends that the Review Officer made reference in her decision only to section 73 not to either subsection (1) or (2). Further she states that counsel for the appellant has raised the question of incapacity and section 73(1) in her submissions to this Court and that the further submissions filed by the respondent were specifically intended to address those matters raised by counsel for the appellant. Counsel has also referred me to the original decision letter of the 11th June 1996. Having regard to the contents of that letter and of the matters which have now been put before the Court, I accept that the issues to be considered on appeal are wider than just a consideration of section 64 and section 73(2). Accordingly the direction previously given by this Court on the 4th of December is to no longer apply. Counsel for the respondent has requested that leave be granted to adduce further evidence from the appellant's former employer and such leave is granted. I direct that counsel for the respondent provide brief of any such evidence to counsel for the appellant. Each party is entitled to make further submissions on the matters in issue in this appeal and the parties should confer as to when it is considered that the appeal is ready for hearing. th DATED this SO day of January 1998 M f Beattie District Court Judge