Wilson v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT HUNTLY Decision No. $1 /98 IN THE MATTER of The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an Appeal pursuant to Section 91 of the Act BETWEEN EDMUND WILSON DCA 209/97 Appellant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 4th day of March 1998 APPEARANCES: Mr D Heperi advocate for appellant Ms E Long for respondent DECISION OF JUDGE M J BEATTIE The issue in this appeal is whether the amendment made to section 40(2) of the ARCI Act 1992 by section 8 of the ARCI Amendment Act 1996 has retrospective effect. In terms of this appellant the issue is whether the current formula contained in section 40(2) of the Act as enacted by the 1996 Amendment should be used to calculate the amount of his entitlement to weekly compensation from the date of his injury (28 February 1993) or from the date the amendment came into force (2 September 1996). Background: On 28 February 1993 the appellant suffered injuries to his back when he fell off a horse. As a consequence of that injury he was incapacitated and entitled to weekly compensation based on his previous 52 weeks earnings. Calculation of his entitlement to weekly compensation was done in accordance with the formula set out in the then prevailing section 40(2) of the Act. On 2 September 1996, section 40(2) of the Principal Act was repealed and was substituted by section 8 of the 1996 Amendment Act. This amendment contained a change in the formula for the calculation of weekly compensation, that change intending to introduce greater fairness into the way it is calculated in cases where a claimant has not worked a full year immediately preceding the accident. It transpires that under the new formula as enacted by that amendment the appellant would be entitled to a greater sum by way of weekly compensation. In what might be regarded as a policy decision, the Corporation determined that all persons who were currently receiving weekly compensation calculated pursuant to the provisions of section 40 of the Act as originally enacted would have that sum reassessed in the light of the 1996 Amendment and that any increase by virtue of that changed formula would be payable from the date that the amendment came into force namely 2 September 1996. Insofar as this appellant is concerned the weekly compensation being calculated as 80% of his total loss of earnings based on the previous 52 weeks earnings was $718.00. Under the new formula which came into force on 2 September 1996 that weekly sum increased to $848.60. The appellant commenced receiving payments at the increased rate from 2 September 1996 but contends that the increased rate should be backdated to the date of his initial entitlement that is one week after his accident in March 1993. The Review Officer in his decision held that the 1996 Amendment was not retrospective and that the appellant was not entitled to any increased weekly payment prior to that amendment coming into force. The 1996 Amendment Act received the royal assent on 2 September 1996. The short title and commencement provision states as follows: 1. Short title and commencement - (1) This Act may be cited as the Accident Rehabilitation and Compensation Insurance Amendment Act (No.2) 1996, and shall be read together with and deemed part of the Accident Rehabilitation and Compensation Insurance Act 1992 (hereinafter referred to as the principal Act). (2) Except as provided in subsection (3) of this section, this Act shall come into force on the day on which it receives the Royal assent. (3) Sections 13 and 27 of this Act, and the amendments to sections 71 and 148 of the principal Act in the Schedule to this Act, shall come into force on the 1st day of July 1997. [Emphasis added] 28. Regulations providing for transitional matters - (1) Without limiting anything in section 167 of the principal Act, the Governor-General may from time to time, by Order in Council, make regulations prescribing transitional and savings provisions required by the coming into force of - (a) This Act, on receipt of the Royal assent; or (b) Sections 13 and 27 of this Act, and the amendments to sections 71 and 148 of the principal Act in the Schedule to this Act, on the ist day of July 1997. (2) Regulations made under subsection (1) of this section shall not - (a) Have retrospective effect; or (b ) Displace any of the provisions of sections 26 and 27 of this Act (but may be additional to any such provisions). (3) This section shall cease to have effect one year after this Act receives the Royal assent. Section 40(2) as substituted by section 8 of the 1996 Amendment Act states as follows: (2) The weekly earnings of any person to whom this section applies shall be, - ( a) In respect of each of the 4 weeks next following the sixth day after the day on which the incapacity first commenced, the person's earnings as an employee during the 4 weeks immediately before the commencement of the incapacity divided by the number of full or part weeks during which the person earned those earnings as an employee during that 4-week period: (b) In respect of any weekly period of incapacity after the period referred to in paragraph (a) of this subsection, if the person was in permanent employment immediately before the commencement of the incapacity, the person's earnings as an employee during the 52 weeks immediately before the commencement of the incapacity, divided by - () The number of full or part weeks during which the person earned those earnings as an employee during that 52-week period; or (ii) Thirteen - whichever is the greater: (c) In respect of any weekly period of incapacity after the period referred to in paragraph (a) of this subsection, if the person was not in permanent employment immediately before the commencement of the incapacity, 1/52nd of the person's earnings as an employee during the 52 weeks immediately before the commencement of the incapacity. Mr Heperi, advocate for the appellant, submits that as the appellant's entitlement to weekly compensation as calculated in accordance with the 1996 amendment requires a consideration of his earnings for a period pre-dating that amendment, then that is sufficient to have the amendment be retrospective in its effect. He stated that the word "any" in paragraph 2 b)and (c) means that it can relate back to 1993 and the appellant's entitlement should be backdated accordingly. Mr Heperi did not provide any authority for his contention that the provisions of the amendment Act were retrospective. Ms Long for the Corporation submitted that underlying the appellant's submission is an assumption that the amendment must be wholly prospective (only applying to new claimants from 2 September 1996) or wholly retrospective (backdating all existing claimants' entitlements to the date of incapacity). She says that submission does not recognise that there is a middle way which more accords with the intention of the 1996 amendment namely applying the provisions of the amendment to all claimants from 2 September 1996. Counsel further submitted that the Corporation has not applied the amendment retrospectively as suggested by the appellant, for to draw on past events to determine future entitlements is not to apply the Act retrospectively. Counsel submits that the ordinary and natural meaning of the amendment indicates that it is not retrospective and the fact that an enactment relies on events which have past for its operation in the future does not make it retrospective. 6 Decision: The object in construing an Act is to discover the intention of Parliament as expressed in the Act. As was stated by Somers J in Donselaar v Donselaar [1982] 1 NZLR 97 at 114: "The function of the Court in relation to a statute is to discover the intention of the legislature. That intention is to be ascertained from the words it has used. But the richness of the English language is such that the same words or phrases may convey different ideas depending on the context and circumstances in which they are used. So it is that the words used in enactment are to be considered in light of the objects which the statute as a whole is intended to achieve. In modern legal parlance that is called a "purposive" construction. Section 1 of the Amendment Act states that "This Act shall come into force on the day on which it receives the royal assent". The ordinary and natural meaning of that phrase is that the Amendment Act has no effect or does not create any legal entitlements until it has come into force. There is no statement in this Amendment Act that s.40, or indeed any other provision, is to have retrospective effect. It is to be noted that a previous amendment to the Act namely the Accident Rehabilitation and Compensation Insurance Amendment Act (No.2) 1993 had several provisions where it was specifically stated "This section shall be deemed to have come into force on Ist day of July 1992". There is no such comparable provision in the 1996 Amendment Act. Thus, there is nothing in the provisions of section 40 which could give a suggestion that it is deemed to have commenced before the date of the commencement of the Act itself. Furthermore, I find that retrospectivity cannot be inferred simply because the particular provision is one which relies on past events for its future operation. This principle was authoritatively established by the English Court of Appeal in the decision of R v Inhabitants of St Mary, Whitechapel (1848) 116 ER 811. There Lord Denman stated: "It has been said that the operation of the statute was confined to persons who had become widows after the Act passed, and that the presumption against the retrospective statute being intended supported this construction: but we have before shown that the statute in its direct operation prospective as it relates to future removals only and that it is not properly called a retrospective statute because part of the requisites for its action is drawn from a time antecedent to its passing." In addition to that canon of construction there is generally a presumption against a statute having retrospective operation in the absence of clear expression to the contrary. In Dean v ACC [1982] 1 NZLR 752 Woodhouse P stated: "The cannon of construction which raises the presumption against the retrospective operation of a statute is accurately and succinctly explained in a passage in Maxwell on the Interpretation of Statutes (12th ed 1969) at p 215 which has been given judicial approval on a number of occasions: Upon the presumption that the legislature does not intend what is unjust rests the leaning against doing certain statutes retrospective operations. They are construed as operating only cases or on facts which come into existence after the statutes were passed unless a retrospective effect is clearly intended. It is a fundamental rule of English law that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act or arises by necessary and distinct implication." I can find nothing in the language used in the 1996 Amendment Act which would give even a slight suggestion that it was to be retrospective in its operation. Counsel for the respondent in her helpful and thorough submissions has also referred to the minutes of the Cabinet Social Policy Committee which was the precursor of the amendment. The 1996 amendment is identical to the relevant clause in the bill as it was introduced and whilst it is only persuasive it can be taken that enacting the amendment in the form that it did Parliament can be taken to have intended that the amendment be not retrospective in its operation, as had been specifically stated to have been its intention in those minutes. Accordingly then for the reasons given I rule as a matter of law that section 40(2) of the Act as amended by the 1996 amendment is not retrospective in its operation and therefore the entitlement of the appellant to weekly compensation as recalculated having regard to the formula contained in that amendment can only enable compensation to be paid in accordance with that formula from the 2nd September 1996. This appeal is dismissed. DATED at WELLINGTON this 25day of March 1998. Janthe M J Beattie District Court Judge