Jenkins v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT Decision No. 94 / 96 AT WELLINGTON UNDER THE Accident Rehabilitation and Compensation Insurance Act 1992 46/96 0161 AND IN THE MATTER of an appeal pursuant to Section 91 of the Act BETWEEN DOROTHY MAVIS JENKINS of Auckland DCA No. 112/96 APPELLANT AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act RESPONDENT Date of Hearing: 25 July 1996 Date of Decision: 26 sept 1996 Appellant in person Counsel for Respondent Ms R F Irving DECISION OF JUDGE J.H. LOVELL-SMITH The issue in this appeal is whether a lump sum compensation payment previously awarded under section 78 of the Accident Compensation Corporation Act 1982 ("the 1982 Act") is to be subtracted from the independence allowance payable to the appellant under section 54 of the Accident Rehabilitation and Compensation 2 Insurance Act 1992, ("the 1992 Act"), for the purposes of establishing her entitlement to an independence allowance. The appellant suffered serious injuries in a car accident on 7 December 1990. The appellant claimed cover and treatment expenses resulting from the accident on 20 February 1991, which was accepted by the respondent and the appellant was paid lump sum compensation under section 78 and 79 of the 1992 Act. Subsequently it was discovered that the appellant had contracted hepatitis C from infected blood transfusions following the accident. The appellant applied for an independence allowance on 28 November 1995 in respect of contraction of hepatitis C. On 16 July 1995, an independence allowance assessment was made. The result of the Functional Limitations Profile Questionnaire was a disability score of 38.4. The appellant's assessed disability was 69%. The appellant had previously received a payment of $11,271 under section 78 of the 1982 Act for injuries she sustained in the car accident which have been assessed as 66.3% permanent disability. The respondent subtracted that 66.3% from her assessed disability of 69%, leaving her with a 2.7% degree of disability, which did not pass the 10% threshold for payment of an independence allowance set out in the Independence Allowance Regulations 1995. A review of that decision upheld the respondent. Section 54 of the 1992 Act provides: - - Independence Allowance - (1) Subject to this section, every person who has cover under this Act is entitled to receive an independence allowance where the person's personal injury has resulted in a degree of disability of 10% or more. (4) The amount of the independence allowance shall be $40.00 per week for persons who have a degree of disability of 100%, and shall be at such lesser graduated rates as are set by regulations made under this Act in respect of those persons with lesser degrees of disability. (14) Where any person who has received a payment under section 119 of the Accident Compensation Act 1972 or section 78 of the Accident Compensation Act 1982 is assessed for the purposes of establishing an entitlement to an independence allowance, the person's disability assessed under subsection (5) of this section shall be reduced by the percentage or percentages of permanent loss or impairment of bodily function upon which any payment or payments under section 119 of the Accident Compensation Act 1972 or section 78 of the Accident Compensation Act 1982 were based. 4 Regulation 11 of the Accident Rehabilitation and Compensation Insurance (Independence Allowance Assessment) Regulations 1993 provides: (1) The amount of any entitlement to an independence allowance- (a) shall be based on the degree of disability of the claimant calculated by the Corporation ...... and (6) shall be established using the table set out in Part 2 of the Second Schedule to these regulations - but shall not in any case exceed $40.00 per week. (3) The Corporation shall not...pay an independence allowance where the degree of disability calculated in accordance with this regulation is less than 10%. (4) Any entitlement to an independence allowance under these regulations is subject to section 148 of the Act in any case where the person has received a payment under section 119 or section 120 of the Accident Compensation Act 1972 or section 78 or 79 of the Accident Compensation Act 1982. The second schedule to the regulations provides for the calculation of percentage of disability and the weekly rate of an independence allowance. The disability score is converted into a percentage degree of disability using the table set out in the schedule. 5 Following the schedule a disability score of 43.0 and above converts to a one hundred percentage degree of disability. The weekly rate of independence allowance scale then calculated on the percentage degree of disability. A 100% degree of disability equates to a weekly rate of independence allowance in the sum of $40. As the degree of disability diminishes so does the level of allowance. In the appellant's case, after completion of the functions and limitations profile questionnaire, her disability scores calculate to be 38.4%. The percentage degree of disability was then calculated to be 69%. There is no dispute that the appellant had been awarded the sum of $11,271 under section 78 of the 1982 Act for the injuries she sustained in the car accident on 7 December 1990. It was the respondent's submission that under section 54(14) of the 1992 Act, the appellant's disability must now be reduced by the percentage of her loss or impairment of bodily function upon which a payment was made under section 78 of the 1982 Act. The respondent contended that the principle behind this section is that a claimant will not be doubly compensated in respect of the permanent disability if they have already received a lump sum award under previous legislation, but at the same time a claimant will be entitled to receive a top-up if their condition has worsened or they have suffered a further accident. 6 Section 54(14) of the 1992 Act has been considered in Smith -v- ARCIC (136/95), Hart -v- ARCIC 100/95 and Allen -v- ARCIC (1995) I BACK 155. In Smith -v- ARCIC (136/95) a lump sum payment had been made in respect of the claimant's 1978 head injury, which was assessed at 55% permanent impairment. The disability score under the dependence allowance regulations gave a percentage degree disability of 100%. The Corporation deduced 55% and accepted an entitlement to the independence allowance for 45% residual disability. The court dismissed the appeal. A similar appeal was dismissed in Hart -v- ARCIC (100/95). A contrary view was taken by this court in Allen -v- ARCIC (1995) 1 BACK 155 where the words "reduced by" were interpreted to mean reduced by a percentage instead of subtracting percentages. I prefer to follow Smith -v- ARCIC (136/95) and Hart -v- ARCIC (100/95). I accept the respondent's submission that the percentage of the permanent loss or impairment of bodily function upon which the payment made in 1992 was made was 66.3%. Accordingly the permanent disability assessment must be reduced by that 66.3%. The appellant's disability percentage is therefore reduced to 2.7%. On this basis the 10% threshold for entitlement to an independence allowance has not been reached. The appeal must be dismissed. There will be no order for costs. ... ........ Jane H. Lovell-Smith District Court Judge