Street v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT DCA No, 7/95 AT WELLINGTON Decision. 148/ 95 UNDER THE Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an appeal pursuant to 47/ 95 0504 Section 91 of the Act BETWEEN D. STREET APPELLANT AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION RESPONDENT Heard at Auckland: 20 October 1995 Date of Decision: 21 December 1995. A. Spencer as advocate for the appellant N.L. Smith as counsel for the respondent RESERVED DECISION OF JUDGE J.W. IMRIE I have decided that the appellant is entitled to claim for lump sum compensation. Introduction: The issue in this appeal is whether the appellant complied with s. 147 so as to be entitled to lump sum compensation. 2. On 28 August 1985, the appellant lodged with the Corporation a C1 notification of accident and claim form in respect of an injury to his back and knee which he suffered on 18 July 1985 when he slipped on oil at work. From time to time the Corporation received medical certificates from Dr P.Y.F. Wu, in respect of the appellant's injury to his right knee, and it appears that the Corporation paid the appellant earnings related compensation for the time that he was off work. The file was closed on 14 October 1985. The file was re-opened in 1987 in response to a letter from Personal Injury Claims (NZ) Limited ("PIC") dated 19 November 1987. Mr Spencer is the manager of PIC. The letter reads:- "We enclose a letter of authority from the abovenamed. The authority relates to two claims, one of which is a cartilage injury. We do not have a claim number, nor do we know if claims under ss. 119 and 120 have been settled. Please advise, and if claims have not been settled, please confirm this man can be sent to Thames to Mr Lane for a final disability assessment." The authority enclosed with the letter reads as follows:- "Please direct all correspondence up to and including settlement of and payment for my Accident Compensation Claim, to Personal Injury Claims (NZ) Ltd., 73 Paku Road Tairua via Thames, or as they direct. This authority is given pursuant to Section 97 of the Accident Compensation Act (1982) or where relevant S. 148 of the 1972 Act. This authority is irrevocable by me until after compensation awards have been made relating to claims I may have. This authority does not apply to any review procedure or appeals, and only covers my injuries relating to knee injury and deaf claim." 3. By letter dated 7 December 1987, the Corporation replied to the appellant care of PIC as follows:- "Information on your file indicates that your injury may result in a permanent disability. At the same time there is a chance that your injury could improve in future. However, if you are still suffering from the effects of the injury in one months time, you should present a C15 Medical Certificate, together with the above claim number, to confirm that you have permanent disability. We shall then proceed to assess your entitlement under Section 78 and 79 of the Accident Compensation Act." By letter dated 18 December 1987, PIC wrote to the Corporation asking for a copy of the C1 and C14 forms, and it appears they were sent to PIC on 23 December 1987. By letter dated 25 July 1994, PIC wrote to the Corporation as follows:- "It is four or five years since we corresponded with the Corporation. The above reference number is in relation to a back and knee injury claim. Mr Street had matrimonial problems, shifted address etc and for that reason any further action lapsed. Mr Street did not cancel his authority with us to continue the claim. We presume that no lump sum compensation has been paid for this claim. We enclose an updated authority under Section 87. We attach a copy of a registered letter dated 24 February 1993 which was sent to your Head Office. This letter was intended to cover situations such as that of Mr Street. We will now proceed to obtain a C15 certificate and ask that the man be examined by a specialist." The authority from Mr Street reads:- 4. "Name: Dennis Street Claim Number: 47/86/033596 I hereby instruct and direct you to pay in the manner shown below: any lump sum payment due to me. I acknowledge that I may vary this instruction but only in writing and only on this form. Cheque to be made out to claimant and mailed to Box 77, Postal Delivery Centre, Tairua via Thames." The address given in the letter is the address of PIC. The letter dated 24 February 1993 to the Corporation read as follows:- "RE: ELECTIONS UNDER SECTION 147 On behalf of all clients for whom we are Attorneys, we elect lump sum compensation under Sections 119 and/or 120 of the Accident Compensation Act 1972, and Sections 78 and/or 79 of the Accident Compensation Act 1982. This election is made under Section 147 of the 1992 legislation. This is a general election on behalf of all clients for whom we have Powers of Attorney, and is sent to you in case we have omitted any specific election on behalf of any specific client. We are not handling any cases involving independence allowances, and therefore all files involving lump sum claims involve the pre-1992 legislation. This election is also intended to cover review hearings, where entitlement is possible but not yet ascertained under the pre- 1992 lump sum provisions. This letter has been sent by registered mail." Following further correspondence the Corporation wrote to PIC by letter dated 11 August 1994 as follows:- "Further to my letter of 8 August 1994, I have now considered your request for lump sum assessment. 5. Unfortunately the open election notice you had sent to Head Office is not acceptable. Therefore Mr Street is not entitled to a lump sum as he did not elect to receive a lump sum for this claim or injury. Mr Street may however be entitled to an Independence Allowance. I enclose documents on this matter for your information." By application dated 17 August 1994, signed by PIC as attorneys for the complainant, Mr Street sought a review of the Corporation's decision. The application said in part:- "The Corporation says that a specific election notice was not signed by me. I maintain that no specific form is set out in s. 147 of the 1992 legislation and in particular subsection (1) of s. 147. The Corporation's decision letter relates to subsection (2) of s. 147 which is not relevant in my particular circumstances as I have not made application for compensation under s. 119 or s. 78 of the 1982 Act. I seek ... compensation under s. 79 of the 1982 Act. In addition I claim that a general election signed by my agents and attorneys is sufficient for the purposes of s.78 compensation. This general election was sent by registered letter of the 24th of February 1993 to the Head Office of the Accident Rehabilitation and Compensation Insurance Corporation." The review was dealt with on 21 December 1994 on the papers. In his decision dated 22 December 1994, the Review Officer set out the background to the application for the review, and said in part:- "Mr Spencer is correct that I do not regard the general election notice of 24 February 1993 as being a sufficient election in any particular case under s. 147 of the 1992 Act. In any event, I egard its acceptability or otherwise as being, to a large degree, a policy matter and it is plain from the memoranda on file that the 6. Corporation has made a policy decision not to accept such letters, which it is entitled to do." The officer referred to the appeal decisions in Bright, Lusby, Ballantyne and Newing (DCA Nos. 149, 150, 151 and 192/94) and in Hussain (DCA 152/94). The officer did not consider that the correspondence from Mr Spencer in 1987 was a written application for lump sum compensation at that time, because, even though Mr Spencer raised the issue in his letter of 19 November 1987, when the Corporation explicitly gave Mr Street and PIC the opportunity to claim permanent disability in the letter in reply, this was not taken up. The officer concluded that the general election notice put in by Mr Spencer was not acceptable to the Corporation and that no claim in writing for lump sums had been received before 1 April 1993. In a notice of appeal dated 20 January 1995, the appellant questioned the refusal to accept the election of the appellant's representative for a lump sum. Appeal Hearing: At the hearing of the appeal on 20 October, Mr Spencer made written submissions. He set out the background to the appeal, and advised that the issue was simply whether a claimant's representative could make "written application for that compensation before 1 April 1993". He submitted that a claimant could make written application through an agent. He referred to a number of claims in which he submitted that the Corporation had ignored correct statutory interpretation and allowed late elections. He said that the fact that PIC did not hold a power of attorney was not relevant. He submitted that s.5(j) of the Acts Interpretation Act 1924 required a fair, large and liberal 7. interpretation of s. 147 in this case. He referred to a review decision in Cooper - Review No. 43/94/1024 - where the Corporation accepted the general election made on 24 February 1993. In her submissions on behalf of the Corporation, Ms Smith set out the background to the appeal, and referred to s. 147 and a number of decisions relating to that section. She submitted that it was not appropriate to allow a general election in light of the deeming provision in s. 147(5). She submitted that that subsection is a clear indication from Parliament that if a claimant does not turn his or her mind to the question of whether he or she wishes to receive the independence allowance or a lump sum payment, then he or she will be deemed to have elected to receive an independence allowance. She also referred to Black (Decision No. 66/94) and Demus (Decision No. 71/94) and submitted that the right to receive an independence allowance is important, and it is not appropriate for a representative of many claimants to make a general election for lump sum compensation for all its claimants without ensuring that that is the express wish of those claimants at the time election is made. She also referred to the decisions in Webster (22/94), Shanly (40/94), Black, Demus, and Busch (69/95) and submitted that there was no written application by the appellant as required by s. 147(1), and no written election as required by s. 147(2). Ms Smith also referred to s. 63(5) and submitted that an election for lump sum compensation under s. 147(2) is a step in a claim for payment and therefore falls within s.63. It was not necessary for PIC to sign the election form on behalf of the appellant, and therefore pursuant to s.63(5) it was an invalid election. 8. Consideration and Decision: It is accepted that the letter dated 24 February 1993 from PIC to the Corporation was received by the Corporation within the time limits set out in ss. 147(1) and 147(2). I am satisfied that the letter complies with the meaning of the words "... any person ... makes written application for that compensation" in s. 147(1) and the words "that person shall be entitled to elect in writing, ... to receive ... his ... entitlement ... under s.78 or s.79 of the Accident Compensation Act 1982." The appellant made that application and that election through PIC. It is clear from the course that the claim has followed up to and including the appeal, that the appellant wished to make that claim and that election. Certainly the election is an important one. However, there is nothing to suggest that the appellant did not make it. It is of no significance that the letter applied to more than one claim. Nor do I consider it of any significance that the letter refers to "clients for whom we are Attorneys". The letter dated 19 November 1987 refers to "a letter of authority" from the appellant rather than a power of attorney but that is immaterial. There is nothing on the Corporation's file to suggest that it was misled by the reference to "attorneys" rather than, for example "agents" and if it wanted clarification from PIC it could have asked for it. Section 167 reads in part:- "167. Regulations - (1) The Governor-General may from time to time, on the recommendation of the Minister, by Order in Council, make regulations - . . (b) Prescribing the forms to be used to lodge a claim under this Act: 9. (c) Prescribing the form of certificates required to be submitted in respect of claims lodged under this Act:" The section would not allow the making of regulations prescribing forms to be used which are inconsistent with s. 147. The form used by PIC in this case was consistent with s. 147. Section 63(5) reads in part:- "63. Claims - (1) Every claimant for cover under this Act shall lodge a claim in the prescribed form. . .. (4) The Corporation shall not make any payment in respect of any rehabilitation, compensation, grant, or allowance for which an itemised written application has not been made. (5) Every claim or application made under this section shall be signed by the claimant unless it is necessary for the claim or application to be signed by another person on the claimant's behalf. Any person signing a claim form on behalf of a claimant shall state his or her relationship to the claimant and the reason why the claimant is unable to sign the form." In this case the form of application and election for lump sum compensation did not comply with subsection (5). However, it was not a claim for cover within subsection (1). It also appears that it was not an application of the type referred to in subsection (4). Payment of lump sum compensation pursuant to s.78 or s.79 of the 1982 Act depends on an assessment, not on an "itemised written application". In any case subsection (5) must be directory, for guidance only, not mandatory. It would be absurd if an injured person lost his or her entitlement to lump sums because of non-compliance with subsection (5). 10. Conclusion: The appellant is entitled pursuant to s. 147 to receive any lump sum compensation to which he is entitled. The Corporation should now assess his entitlement to lump sum compensation. Leave is reserved to the appellant to apply for costs. District Court Judge