Bailey v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT NAPIER Decision No. 41 95 UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an appeal pursuant to section 91 of the Act BETWEEN DUANE BAILEY of Hastings 64 95 0668 (Appeal No. DCA 4/95) Appellant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 21st day of March 1995 APPEARANCES D Johnson advocate for appellant G L Gowland for respondent DECISION OF JUDGE A W MIDDLETON The issue in this appeal is the decision of the respondent to decline to pay expenses incurred by the appellant in being represented in respect of a favourable administrative review. The appellant suffered a hernia injury in 1992 and cover was declined by the respondent as a result of which an application for review was lodged on 28 July 1994. Apparently, the appellant's advocate Mr Johnson was then requested to attend a meeting at the respondent's Hastings office with the appellant in the hope of resolving the issues without the necessity of a formal review hearing. After the meeting had been concluded Mr Johnson submitted an account to the respondent for $38.50 representing his costs incurred in attendance at the meeting. By letter 2 dated 2 September 1994 the respondent declined to pay the expenses and an application for review was lodged. This resulted in the respondent administratively revising its decision and meeting the payment of $38.50. Mr Johnson then submitted an account to the respondent requesting the payment of $130.00 for costs incurred in obtaining that favourable review. The respondent declined to meet those costs. That issue then went to review and the Review Officer held that the proceedings were governed by Part VI of the Accident Rehabilitation and Compensation Insurance Act 1992. She held that pursuant to s.89(1) a person who is dissatisfied with a decision of the Corporation may apply for a review. Section 90 provides that the respondent shall appoint a person to hear such a review, that person to be a person who was not involved in the decision being reviewed. Subsection 10 of s.90 provides: "(10) Where, on an application for review, - (a) The matter is resolved in favour of the applicant (whether or not there is a hearing); or ( 6 ) The person hearing the review considers that the applicant acted reasonably in applying for the review, - the person hearing the review shall award the applicant reasonable costs and expenses in accordance with a scale prescribed by regulations made under this Act." The Review Officer held that an award of costs can only be made in accordance with the Regulations by the person who is delegated as the Review Officer. She therefore concluded that the costs already paid to Mr Johnson by the respondent were ultra vires. This of course is not in issue before me and the only issue before me is whether Mr Johnson is entitled to the payment of costs in respect of the Corporation's administrative decision to decline to pay Mr Johnson's account of $130.00 for what he submits was a favourable review application. The Review Officer held that before any costs can be paid under s.90 of the Regulations a Review Officer has to be appointed and it is only that person who has the necessary power and authority to award costs. Mr Johnson submitted that s.90(10) empowers the award of costs even though there has been no formal hearing before a Review Officer and he submitted further that for some time prior to the Review Officer's decision in this case the respondent has been awarding costs pursuant to s.90(10) in respect of favourable revisions without a formal hearing occurring. I am not certain whether that submission is in relation to cases where a Review Officer has been appointed and has been able to settle the matter in issue without a formal review hearing or whether Mr Johnson is suggesting that even where a Review Officer has not been appointed and a favourable administrative review has taken place the respondent has in fact made an award of costs. I consider that Mr Johnson has misconstrued the provisions of the Act. He has submitted that because there was an administrative review in favour of the appellant he should be awarded costs pursuant to s.90(10). I do not accept that submission. The only basis upon which costs can be awarded under s.90(10) is where an independent Review Officer has been appointed in accordance with the provisions of s.90 and that officer makes a favourable finding without the need for a hearing. When that occurs or if a hearing is held and the Review Officer considers the applicant has acted reasonably in applying for the review, the Review Officer can award costs in accordance with the scale prescribed by the Regulations. Accordingly I consider that the Review Officer was correct in her decision and the appeal is dismissed. DATED at WELLINGTON this 28 day of APRIL. 1995 blenddubs . Judge A W Middleton DCA4-95.doc(19)