Hyde v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT DUNEDIN Decision No. 14 98 UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an appeal pursuant to section 91 of the Act BETWEEN DEBORAH ANNE HYDE of Dunedin Appellant (Appeal No. DCA 258/97) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 2nd day of December 1997 APPEARANCES 2 Mr B P Kilkelly for appellant Ms L M Dall for respondent DECISION OF JUDGE M J BEATTIE The issue in this appeal is whether the decision to cancel the appellant's entitlement to weekly compensation was correct. Background Facts In January 1986 the appellant lodged a claim for cover in respect of OOS to her right forearm arising out of her employment as a Communications Controller at Dunedin Taxi. Cover was accepted by the Corporation on 6 March 1996. Her General Practitioner certified her as being unfit for any work for three months. The Corporation arranged Vocational Rehabilitation for her and referred her to Van Petegem Scott, Consultants in Employment and in accordance with the individual rehabilitation programme which she had signed on 21 May 1996, she commenced retraining as an Activities Co-ordinator, working part-time at Rest Homes. In a medical certificate dated 27 September 1996 from her General Practitioner, Dr Tilyard, she was certified as being suitable for half day work up to five half days per week. This certificate stated that it was effective until 30 December 1996. 3 In a report dated 8 October from Van Petegem Scott to the appellant's Case Manager it is stated that she appears to be doing well at the New Cranston House Rest Home and that she appears to be suitable for the role of an Activities Co-ordinator. The report indicates that the appellant is trying hard and is actively seeking to obtain suitable permanent employment. On 2 December 1996 the appellant's Case Manager, Claire Hastie received a telephone call from the appellant and she made a file note of that conversation, that file note being as follows: "I received a call from Debbie inquiring about what would happen to her compensation should she go overseas. She advised that her brother has just had an accident in London and she may be required to leave within the next few days and help him. I advised that we would be reasonable and allow her to go for a short while but that as she was in the process of a rehabilitation programme, that her trip would have to be timeframed and suggested that four weeks would be the longest that we would consider releasing her. I advised that if she needed to her compensation until her return. She said that she would make a few more inquiries about what care her brother would require and phone me back with her decision. I asked that if she decided to go that she advise in writing her departure and return date for the file." On 9 December 1996, Claire Hastie received an ARC18 medical certificate relating to the appellant signed by her General Practitioner, Dr Tilyard indicating that she would be fit to resume work on 1 March 1997. Ms Hastie noted that the previous medical certificate did not expire until 30 December 1996. She also noted on the file that the appellant had not telephoned back to advise of details regarding her trip overseas. She noted that she would not accept the certificate without the appellant 4 signing the claimant declaration at the foot of the certificate. That declaration states as follows: "I declare this certificate to be an accurate reflection of my fitness for work, and that there is nothing else I need to tell ACC about my circumstances. I understand that I must notify ACC of any employment (part-time, full-time, paid or unpaid) that I undertake, and of any income that I receive over the time I am receiving compensation." Ms Hastie wrote to the appellant on 10 December 1997 to her PO Box mail address stating: "Please find enclosed your latest medical certificate from Dr Tilyard dated 27 November 1996. Before I can accept the certificate I require you to sign the claimant declaration portion at the bottom. Please ensure this is returned to me within seven days or your compensation may be suspended." The appellant did not respond to that letter and on 16 December 1997, Ms Hastie again wrote to her as follows: "I refer to my letter of 9 December, a copy of which is enclosed, asking that you complete the claimant declaration portion of the medical certificate submitted to ACC. Unfortunately I note that this has not been signed and returned as requested. In terms of section 64 of the ARCI Act 1992 every claimant must, when required to do so, give a statement in writing or complete a statutory declaration with respect to matters relating to their entitlement. Failure to do so can result in the suspension or cancellation of weekly compensation entitlement under section 73(2) (a) of the Act. 5 Accordingly I now again request that you complete the claimant declaration portion of the medical certificate, additionally I have enclosed a further standard declaration form which I require you to complete. Please return both of these forms within fourteen days of this letter or your compensation may be suspended." About this time Ms Hastie also received information from Van Petegem Scott that the appellant had spoken to them about her possible overseas trip as far back as late October and the memorandum from Van Petegem Scott stated that they had been advised that she had now left the country on the trip as planned. Consequent on a discussion between Ms Hastie and Liz Hennan, principal Case Manager, the Corporation's decision letter of 19 December 1996 was written to the appellant and the relevant portions of that letter are as follows: "You were advised in that conversation that the maximum time you would be allowed to travel would be four weeks, and that you would be required to confirm your travel plans in writing providing a departure and return date. Unfortunately, you failed to provide this information. This is a breach of your responsibilities in terms of Section 64 of the Corporation's 1992 Act. Furthermore the requirement of your individual rehabilitation programme meant that you would be required to make yourself available for active job search. By leaving the country you have failed to meet your obligations in terms of Section 18 of the 1992 Act which states that you are required to take personal responsibility for your own rehabilitation. This letter is formal notification that your weekly compensation will cease from 17 December 1996 under Section 73(2)(a) of the Corporation's 1992 Act which allows for cancellation of weekly compensation payments in cases where a person has failed to meet their obligations under the Act." 6 From evidence given at the review hearing it was established that the appellant departed New Zealand on 6 December 1996 and returned on 6 February 1997. On her return to New Zealand the appellant sought to have weekly compensation reinstated but the Corporation would not agree to do so. Therefore the decision to cancel went to a formal review hearing on 7 May 1997. In his decision the Review Officer found that because the appellant had not informed the Corporation of her departure date or of the length of her absence she was in default of her responsibilities in terms of section 64 of the Act. The decision goes on to state: "The Corporation has decided that Ms Hyde had prearranged her travel and left without informing the Corporation and therefore had failed to meet the obligations required of her terms of the Act." He found that the decision to cease rather suspend weekly compensation was correct. Relevant Statutory Provisions Section 18 of the Act states: "18. Right to rehabilitation--Every person who has suffered personal injury for which the person has cover under this Act is responsible for his or her own rehabilitation to the extent possible having regard to the person's condition and is entitled to the extent provided by this Act to rehabilitation to enable the person to lead as normal a life as possible, having regard to the consequences of his or her personal injury." 7 Section 64 in part states: "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, -- (6) Furnish to the Corporation such other relevant information as the Corporation requires: ... (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 specifies." Section 73(1) and (2) states: "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, 8 or related transport, or the payment of compensation, grant, allowance, or provision of rehabilitation. (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." It was counsel for the appellant's submission that the decision to cancel the weekly compensation was unjust. There was clear medical evidence that the appellant was still incapacitated by her OOS condition and that she ought to be entitled to compensation under the Act for so long as that incapacity continues. He submits that because of her failure to comply with the Corporation's request regarding advice of departure or for completing the declaration, there was grounds for suspension but not cancellation. Counsel for the respondent submitted that the appellant knew that the consequence of not informing her Case Manager of the dates of her departure and return would be that her weekly compensation would stop. Counsel further submitted that the appellant would be taken to know of the necessity to complete the statutory declaration on the medical certificate. Counsel referred to several earlier certificates which contained the appellant's completed declaration. Counsel submits that section 64 required the appellant to comply with the request to complete the statutory declaration. Counsel submits that the appellant's failure to sign the declaration was unreasonable within the meaning of section 73(2)(a). Finally 9 counsel for the respondent submitted that in the light of the certificate provided by Dr Tilyard on 27 November 1996 indicating that the appellant would be fit to return to work on 1 March 1997, the respondent's decision to cease weekly compensation was reasonable. Decision From the contemporaneous memoranda on the Corporation's file and the findings of fact made by the Review Officer in his decision, I find that there was a significant element of subterfuge about the appellant's preparations for and departure overseas on 6 December 1996. At the time that she had her discussion with her Case Manager on 2 December, she had already purchased the tickets which had a specific departure date and the inference that can be drawn is that on being told by Ms Hastie that the longest the Corporation could allow her to be absent was four weeks, and that this was less than was her intended stay, she opted to remain silent and simply go ahead with her plans. As is now known the letters of 10 December, 16 December and 19 December 1996 would not have been received by the appellant, she having departed overseas on 6 December 1996. At the time of her departure, the appellant would have been aware that if she was away for more than four weeks there was the likelihood that her compensation payments would be suspended until her return. That is what her Case Manager told her on 2 December 1996. That particular vein was continued by the Case Manager's letters of 9 and 16 December, which again talked of suspension until compliance with requirements that were made of her. 10 Those threats of suspension until compliance were changed to cancellation of compensation in the decision letter of 19 December 1996. That letter states that cancellation was made pursuant to section 73(2)(a) of the Act. Whether it was by oversight or not, the appellant had not signed the declaration at the foot of the medical certificate which I note is date stamped as being received by the Corporation on 5 December 1996, although it did not reach the desk of the person for whom it was intended until 9 December 1996. No doubt it was one of the last acts that Ms Hyde did before her departure overseas on 6 December 1996. The Corporation were quite entitled to require that certificate to have the appropriate declaration from the claimant before it could be recognised, despite what was said in it by her doctor. However, in terms of her status and entitlements, there was in existence a certificate which established her medical situation until 30 December 1996. The Corporation could not require anything of the appellant before that date which was contrary to what that certificate stated she could or could not do. As has been noted the advice from the Corporation to the appellant was that unless she complied with the request to sign and complete the declaration, her weekly compensation would be suspended. Suspension was the threat. When a decision was made because of non-compliance, compensation was ceased pursuant to section 73(2) (a). The Corporation's decision letter of 19 December 1996 talks of section 73(2)(a) allowing for cancellation in cases where persons have failed to meet their obligations under the Act. The circumstances of this case and the issue to be determined in this appeal, I find require a careful consideration of the provisions of section 73 of the Act. The heading or "marginal note" of this section states "Suspension, Cancellation or Refusal of Compensation and Rehabilitation." Although that marginal note does not 11 form part of the statutory provision itself - see section 5(g) of the Acts Interpretation Act 1924 - the Court of Appeal on several occasions has indicated that they may be taken as being giving some indication of the main subject with which the section deals and can be used as an aid to statutory interpretation. The marginal notes of section 73 would indicate that there are three methods of dealing with a person's rights to compensation or other entitlements provided under the Act. Section 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 section 73(1) is about entitlements under the Act and consideration of the criteria which enable continuation of entitlement. Any cancellation or suspension of that entitlement depends on whether the entitlement criteria of a claimant is considered no longer to be present. The most common example would be the entitlement of weekly compensation because of incapacity under sections 37A and 37B of the Act. If a person no longer meets the criteria for incapacity, their entitlement to weekly compensation ceases and section 73(1) enables cancellation of the payment of weekly compensation. I interpret section 73(1) as being pertaining to the substantive issue of entitlements of the Act - this section says so when it refers to "treatment, service, grant, allowance, etc". It is not concerned with compliance, obligations or duties that the Act may specify. In terms of the aims and objectives of the Act, if a person suffers personal injury by accident, the Act grants that person various entitlements. If that person no longer suffers from that personal injury by accident, that person ceases to be eligible for a continuation of those entitlements. That is what section 73(1) is about. In contrast, section 73(2) concerns compliance with requirements made under the Act. Unreasonable refusal or failure to comply with any matter coming within 12 subsection (2)(a), (b) or (c) enables the Corporation "to decline to make any payment under the Act" Thus a person who has "incapacity" as a consequence of personal injury by accident and who thereby has entitlements under the Act can nevertheless have payments of those entitlements withheld if the grounds of subsection 2(a), (b) or (c) are established. I find it clear that "decline to make payment" means something different from suspension or cancellation, it means refusal - refuse to - in line with the wording in the marginal note. Under subsection 2 a person's entitlements under the Act are not lost - eligibility for entitlement remains - but the present right to receive any payment of such entitlement provided by the Act is lost for so long as the state of unreasonable failure or refusal to comply exists. A person's rights to treatment, service, compensation, etc under the Act are not taken away. A person's "incapacity" still gives rise to payments for various entitlements, but because a person is in default with compliance within the meaning of section 73(2) that person is not entitled to receive such payment whilst that state of non- compliance exists. It follows that when there has been compliance and an entitlement to continue to receive payments is established, those payments continue. If, after compliance, the criteria for entitlements under the Act is found to be no longer present, section 73(1) becomes applicable to cancel the payment of those entitlements. It follows therefore that cancellation or suspension are not available as a tool of punishment for a person who is not complying with any requirement which comes within section 73(2)(a), (b) or (c). The tool of punishment or encouragement under section 73(2) is the withholding of payment of that to which a person remains entitled. 13 In the case of this appellant the Corporation had no information in its possession that the appellant was no longer entitled to continue to receive weekly compensation. It had a medical certificate - valid until 30 December 1996 with the appropriate declaration at its foot completed by the appellant - to the contrary. The appellant maintained a valid entitlement to weekly compensation in so far as section 73(1) was concerned. However on the facts as found by the Review Officer and this Court on appeal, the appellant did fail to comply with a requirement made under section 64(2) of the Act, in that she failed to give a statutory declaration in the form provided as she knew she was required to do. There was evidence of several previous occasions that she had been required to do so as a condition precedent to a continuation of payments. For the purposes of considering whether there has been a failure or a refusal to comply within the meaning of section 73(2), I find that the fact of her having gone overseas is not determinative. It was the fact of breaking off communication with the Corporation, in particular with her Case Manager for a greater period than the four weeks sanctioned. The Review Officer did not accept as credible the evidence that the appellant had been led to believe she could go overseas for eight weeks. However, she was told four weeks was permissible. I find the significance of this to simply be that the appellant's obligation under her individual rehabilitation programme could be suspended for four weeks, whether it was because she was to be overseas or not. As previously noted the appellant's status for entitlements was valid until 30 December 1996 when her medical certificate expired. Thereafter she was in a state of non-compliance under section 73(2)(a) and in respect of which the Corporation was entitled to decline to make any payment of weekly compensation to her under the Act until she did comply. 14 From evidence given by the appellant at the review hearing, it appears that she has continued to be incapacitated and was receiving a sickness benefit, therefore prima facie I would imagine she would have continued to be entitled to weekly compensation but for the decision to cancel. Having regard to the meaning and purposes of sections 73(1) and 73(2) respectively as I have stated them to be, I find that the decision to cancel the appellant's weekly compensation under section 73(2) (a) was wrong in law and that the Corporation had no statutory authority to so cancel under that provision, nor did grounds exist for cancellation under section 73(1). However, I find that grounds did exists which would have entitled the Corporation to have declined to make payment of weekly compensation from 30 December 1996 until 11 February 1997 when the appellant re-established contact with her Case Manager and was willing to comply with the requirements made of her. Accordingly I rule that the decision of the Review Officer and Corporation to cancel the appellant's weekly compensation be revoked. I further rule that the Corporation was nevertheless entitled to decline to make payment during that period. For the avoidance of doubt I rule that it is for the appellant to furnish such information or comply with any reasonable request that may be made by the Corporation so that her entitlement or not to weekly compensation under the Act from 30 December 1996 onwards can be established. This appeal being successful, the appellant is entitled to costs which I fix at $850 together with such disbursements as may be fixed by the Registrar. DATED at WELLINGTON this 30th day of January 1998 M J Beattie District Court Judge