Wilcox v Accident Compensation Corporation

IN THE DISTRICT COURT HELD AT WELLINGTON Decision No. 321/2004 UNDER The Injury Prevention, Rehabilitation, and Compensation Act 2001 AND IN THE MATTER of an appeal pursuant to Section 149 of the Act BETWEEN DALLAS WILCOX of Auckland Appellant (Appeal No. AI 285/03) AND - ACCIDENT COMPENSATION CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARING at AUCKLAND on 9 December 2003 APPEARANCES/COUNSEL H. Ellis for appellant F. Becroft for respondent RESERVED JUDGMENT OF JUDGE J. CADENHEAD The Issue [1] The issue is whether the decision by the respondent dated 6 December 2002 declining the appellant’s application for a further modified vehicle should be upheld. https://openlawnz-my.sharepoint.com/personal/andrew_openlaw_nz/Documents/ACC Decisions (DC appeals)/2004/321- 2004.doc AE The Course of the Hearing [2] In order to be fair to the appellant I gave him the opportunity to follow up the allegations that he made as to the disposal of his car with the police. I received a memorandum from his counsel dated 8 March 2004 indicating that the appellant had laid a formal complaint against Mrs Woods with the Auckland police. It was thought that the investigation would be concluded within three months. I received a further memorandum from counsel dated 28 April 2004 and on 25 August 2004 I queried from counsel as to progress in the matter. On 8 September 2004 the Registry said that counsel for the appellant advised that the investigation was no further ahead and sought further directions from myself. [3] On 23 September 2004 I directed that I would write my decision, unless I heard to the contrary from counsel within seven days. I have not heard from counsel, so I decide this appeal. Narrative of Facts [4] The appellant has cover for injuries sustained as a result of a motor vehicle accident on 29 November 1990. The injury resulted in tetraplegia, and the appellant has required 24 hour care since that time. [5] The respondent has provided significant assistance with home help and various modifications to improve the appellant’s living conditions. The appellant has had a number of care givers over the years. [6] In 1993, the appellant was assessed for vehicle modifications for a van, and the respondent funded $2,887.10 for modifications towards the existing vehicle. [7] In 1997, the appellant applied for a further vehicle grant. The appellant was again assessed, and subsequent to that assessment the respondent approved a vehicle grant, as well as modifications to a vehicle, totalling $28,210. The appellant chose the vehicle himself. 321-2004 2 [8] Over the following years it would seem that the appellant did not use the vehicle much, and rehabilitation reports suggest that much of his time is spent at his home. [9] In 2002, the respondent funded the cost of mobility taxis for appointments because the appellant apparently preferred to take a taxi rather than use his modified vehicle. [10] In September 2002, the respondent investigated the matter of the appellant’s modified vehicle in light of the fact that he was requesting assistance with taxi costs. It also became apparent that the appellant was experiencing financial difficulties. The respondent asked Jennifer Woods, the appellant’s long time care giver, to explain the situation. [11] Mrs Woods advised the respondent by letter dated 28 September 2002 that the appellant had been suffering serious financial difficulties during that year. He was living beyond his means, and had an entitlement from WINZ reduced by a significant amount of money. The appellant had apparently accrued significant debt relating to a family loan and ambulance services. The appellant went into default concerning this loan, at which point he approached Instant Finance to amalgamate his debt, apparently using the modified vehicle as security. [12] Mrs Woods indicated that the appellant continued to have difficulties repaying the loan, and ultimately disposed of the modified vehicle to clear the debt. Mrs Woods noted that one of the considerations which factored in the appellant’s decision to sell the vehicle was the fact that the vehicle had sat in his driveway since December 2001, unregistered and unwarranted. [13] In November 2001, the appellant, through his daughter, applied for funding for a subsequent modified vehicle. This was supported by a report from the appellant’s general practitioner dated 18 November 2002. [14] On 6 December 2002, the respondent declined the appellant’s request. Thereafter the appellant applied for a review of the respondent’s decision. [15] In a review decision dated 13 May 2003, the reviewer upheld the respondent’s decision. 321-2004 3 The Relevant Legislation and Principles [16] The relevant statutory provision of the appellant's obligations concerning a modified vehicle provided by the respondent is set out by Clause 22 of the First Schedule to the Act as follows: “22 Transport for independence: rights and responsibilities (1) The Corporation is not liable to purchase, or contribute to the purchase of, a motor vehicle if the claimant, or a person proposing to transport the claimant,— (a) owns or part owns or has the use of a vehicle that may be modified in order to assist in restoring the claimant's independence; or (b) disposed of a vehicle, after the claimant's personal injury, that may have been able to be modified in order to assist in restoring the claimant's independence. (2) The Corporation is— (a) not liable— (i) to ensure that the claimant pays any person that sells the vehicle or undertakes the modifications; or (ii) to pay that person directly, if the claimant does not pay: (b) not liable for the cost of maintenance or repair of any vehicle or modification to a vehicle, or for registration, licensing fees, insurance, or other running costs: (c) not liable for the cost of removing any vehicle modifications no longer required or for restoring any vehicle to its former state: (d) not liable for any loss of resale value resulting from modifications to any vehicle: (e) not liable to contribute to the cost of replacing a vehicle for whose purchase or modification the Corporation has already contributed, unless the replacement is necessary for the claimant to maintain independence: (f) not liable to contribute to a replacement under paragraph (e) if the claimant's need for a replacement vehicle arises because the claimant— (i) has not maintained or insured the existing vehicle; or (ii) has, without a reasonable excuse, disposed of the existing vehicle. (3) In determining the amount to be paid in respect of a vehicle, the Corporation may take into account the value of any other motor vehicle owned by the claimant, if the claimant previously used the vehicle on a regular basis. 321-2004 4 (4) The Corporation must— (a) make payments for the purchase of, or modification to, a vehicle to the claimant, unless the claimant requests otherwise; and (b) make the payment by way of an outright grant. (5) The Corporation is not entitled to recover any payment made to the claimant if— (a) the claimant no longer requires the vehicle modifications; or (b) the vehicle is disposed of or destroyed.” [17] While there is a power vested in the respondent to exercise its discretion along the lines predicated in Clause 21 to the First Schedule to the Act, Clause 22 imposes the correlative duties imposed upon an appellant, who has been the beneficiary of the exercise of this power. It should be noted that Clause 22 (1) provides: “(1) The Corporation is not liable to purchase, or contribute to the purchase of, a motor vehicle if the claimant, or a person proposing to transport the claimant,— (a) owns or part owns or has the use of a vehicle that may be modified in order to assist in restoring the claimant's independence; or (b) disposed of a vehicle, after the claimant's personal injury, that may have been able to be modified in order to assist in restoring the claimant's independence.” [18] It may be that provisions are to be read down by virtue of the provisions of Clauses 22(2)(e) and (f): “(e) not liable to contribute to the cost of replacing a vehicle for whose purchase or modification the Corporation has already contributed, unless the replacement is necessary for the claimant to maintain independence: (f) not liable to contribute to a replacement under paragraph (e) if the claimant's need for a replacement vehicle arises because the claimant— (i) has not maintained or insured the existing vehicle; or (ii) has, without a reasonable excuse, disposed of the existing vehicle.” [19] Literally read it could be said that the appellant had disposed of a vehicle that was able to be modified to restore the appellant’s independence. However, clearly the appellant is within the purview of Clauses 22(2)(e) and (f)(i). [20] Clauses 21 and 22 of the First Schedule make it clear that what the Corporation must consider is providing enhanced transport assistance, or, as it is 321-2004 5 usually put, “a modified vehicle” or a vehicle that has a particular configuration that meets the claimant’s particular needs arising from his personal injury. [21] Clause 20(1) provides the criteria that are to be taken into account in reassessing that need and they include: • The rehabilitation outcome that could be achieved. • The cost, and the relevant benefit to the claimant. • The difficulties faced by the claimant. • The existing vehicles or vehicles used or owned by the claimant. [22] Specifically dealing with the issues of the transport independence, clause 21 requires a balancing of the rehabilitation outcome and the cost and the relevant benefit to the appellant of the independence service for which the insured has lodged a claim. Pursuant to Clause 22, the respondent is not liable to contribute to the cost of replacing a vehicle for whose purchase or modification the insurer has already contributed, unless the replacement is necessary for the insured to maintain independence in daily living and there is a reasonable excuse for disposing of the earlier vehicle. [23] Having regard to the economic balance and the discretion, I do not think that disposing of a vehicle to meet outstanding liabilities is a reasonable excuse. The Submissions of theAppellant [24] The thrust of the appellant’s submissions were that Mrs Woods was the care giver to the appellant, and that he substantially relied upon her. This reliance was in respect, not only to his physical needs, but also in respect to his financial affairs. The appellant submits that his financial affairs were not managed by himself, and that he was a tetraplegic and required assistance, and that he was totally reliant on Mrs Woods to manage his affairs. The submission is that he entered into the loan agreement on the advice of Mrs Woods. [25] At the review hearing, Leanne Wilcox, the appellant’s daughter, stated that Mrs Woods had full control of his affairs, financial, medical co-ordinator, all mail, 321-2004 6 including bank statements, power, Sky, phone, all those accounts went to his address. [26] The appellant gave evidence at the review that he only became aware that loan payments were not being made when Onehunga Finance rang him around September 2001. He states he tried contacting Mrs Woods without success. [27] The submission is that the respondent appeared to have accepted the views of Mrs Woods over those of the appellant. [28] There is a further submission that the appellant requires a vehicle for his independence, and that without the vehicle the appellant has no ability to travel out of Auckland, and is dependent on the availability of suitably modified taxis. [29] The thrust of the appellant’s submission is that taking into account the physical condition of the appellant, and the financial situation that he found himself in, that it was not unreasonable behaviour on his part that he should have disposed of, or parted with the modified vehicle that had previously been paid for by the respondent. [30] The loan agreement dated 22 November 2000 was between the appellant and the lender for the sum of $13,215.30. Pursuant to the terms of the loan agreement weekly payments were to be made of $89.90. Until 27 September 2001 payments were made. After that date no payments were made, and the arrears accumulated. By letter dated 28 September 2002 Mrs Woods advised the respondent that the appellant had encountered financial difficulties. [31] The submission of the appellant is that he had a reasonable excuse to dispose of the van. The excuse is that he did not manage his financial affairs, but they were managed for him by Mrs Woods. He was a tetraplegic and required assistance in respect of his financial affairs and that the loan fell into arrears without his knowledge. The appellant states that he was totally reliant on Mrs Woods to manage his affairs and that he entered the loan agreement on her advice. The appellant submits that what is a 'reasonable excuse' is not defined by the legislation. [32] The submission of the appellant is that he requires a motor vehicle to maintain his independence. Without a motor vehicle he would become entirely dependent upon taxis. The appellant submits that the time he spends in his vehicle is 321-2004 7 not a relevant consideration. The submission is that what is relevant is whether the vehicle assists his goal of independence. [33] The appellant's excuse was that he was unaware of the loan falling into arrears until it was too late. It is submitted that his excuse is therefore reasonable given his dependence due to the ongoing long-term effects of the accident making him vulnerable in respect to others to manage his financial affairs. The Submissions of the Respondent [34] The respondent submits that there is no objective evidence that the vehicle was repossessed by the finance company because of the mismanagement of his financial affairs by Mrs Woods. The appellant has and still has mental capacity. There is no suggestion that Mrs Woods stole from the appellant. The debt appears to have arisen out of monies paid for services incurred by the appellant. The appellant benefited from these goods and services. In respect to the goods and services the appellant individually signed each of the vouchers approving payment. The submission is that it would be unreasonable not to hold the appellant accountable for the debts that arose as a result of his consumption of these goods and services. The shortfall in the appellant's finances appears to have arisen not through Mrs Woods, but rather by a decrease in his benefit entitlements. [35] It seems relatively clear that the ultimate decision to dispose of the vehicle was made by the appellant, and he in fact was the only person who could authorise that course of action. Nobody should be held accountable for the choices made by the appellant. [36] It is submitted that in the present case the appellant has without reasonable excuse disposed of an existing vehicle. The appellant disposed of this vehicle to cover his debts. These debts appear to have arisen out of a family loan and other living expenses incurred by the appellant over a period of time. It is submitted that the respondent has no further obligation to provide a modified vehicle for the appellant. The appellant received from the respondent a modified vehicle, which the respondent had paid $28,000. This vehicle was then disposed of for a sum of $6,000 and the respondent at no time was consulted as to the loan or its disposal. [37] The respondent also notes from a review of the file that the appellant rarely used the vehicle provided. In fact the respondent had to pay the costs of taxis 321-2004 8 incurred by the appellant. The submission of the respondent was that the appellant seem to prefer use of taxis rather than using a modified vehicle. It also seems that the vehicle was unregistered and did not have a warrant of fitness. The vehicle was only registered to 10 December 2000 and was warranted to 10 February 2001. Decision [38] I decide that the appellant disposed of his existing vehicle without a reasonable excuse. There was an existing obligation upon the appellant not to dispose of this vehicle without a reasonable excuse, and I do not accept that as an excuse that the appellant ran up debts on the strength of vehicle and then had to sell it to meet these debts. Further, the evidence seems to be that the appellant did not use the vehicle that much, as the appellant preferred taxis to that of the modified vehicle. [39] I hold that the respondent correctly used its discretion to refuse the application of the appellant. For the reasons that I have given, the appeal is dismissed. There will be no order as to costs. DATED at WELLINGTON this ……8th...… day of ………October………. 2004 (J. Cadenhead) District Court Judge 321-2004 9