Estate of Rae v Accident Compensation Corporation

IN THE DISTRICT COURT HELD AT AUCKLAND Decision No. [2011] NZACC 324 IN THE MATTER of the Accident Compensation Act 2001 AND IN THE MATTER of an appeal pursuant to Section 149 of the Act BETWEEN ESTATE OF NATALIE RAE (ACR 150/11) Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent HEARD at AUCKLAND on 7 October 2011 APPEARANCES Mr P Schmidt, Counsel for Appellant. Mr D Tui, Counsel for Respondent. RESERVED JUDGEMENT OF JUDGE M J BEATTIE [1] The issue in this appeal concerns the correctness of the respondent's decision of 25 August 2010, whereby it determined that five-year old Caitlin Rae, a niece of the deceased, Natalie Rae, was not a dependant of the deceased at the time of her death. [2] The issue in this appeal is wholly a question of law arising from statutory interpretation, and the relevant facts are not in dispute. [3] The facts relevant to this issue are as follows: The late Natalie Rae, then aged 27 years, died on 29 March 2010, as a consequence of suffering pulmonary thromboembolism. 2 A claim for cover was made through the deceased's mother and the respondent accepted that the appellant's death had been caused as a consequence of a treatment injury. . At the time of her death the deceased was unmarried and had one child, a young boy named Braden, aged 7 years. . At the time of her death the deceased shared a home with her sister, Selina, also unmarried, and she had one child, Caitlin, aged five. The two sisters and their two children lived together and had done so for some time, and sharing the household duties and expenses. The deceased's sister, Selina, made two statutory declarations in the course of seeking to have Caitlin declared a dependant. Those two declarations stated as follows: That Natalie Rae and I had lived together for 7 years. We shared all household expenses including rent, food and also purchased furniture together for the house. We had set up our own family with the 2 children and had looked after each of them as our own. We shared all household chores including cleaning, shopping etc. We each stepped in to help the other person out when we were sick or were off work when having our children. We took holidays together as a family and shared all the experiences and expenses together as partners and a family. Xmas and all holidays were spent together as a family and we bought presents for everyone. There was no plan to change any of this, except to get a bigger house so the children could have their own bedrooms. That Natalie Rae acted as a full parent to Caitlin Rae. She was in the Operating Room when Caitlin was born by C-Section. Natalie looked after Caitlin from 4 1/2 months of age while I went back to work to earn money for the household. Natalie looked after Caitlin when she was sick and often picked her up from preschool. Natalie was Aunty Mum to Caitlin. At the time of Natalie's death we were looking for a larger home so the children could have their own bedrooms. By a decision dated 17 August 2010 the respondent did accept that both Braden and Caitlin were eligible to receive a Survivor's Grant and Childcare payments as a child of the deceased and arrangements were set in train for the payment of same. In a subsequent decision dated 25 August 2010, the respondent revised that decision and stated that having looked carefully at all the information it had determined that the decision was incorrect and that as Caitlin was not the biological child of the deceased or an adopted child, she did not qualify as a dependant child. The decision of 17 August 2010 was therefore revoked. A review of that decision was sought and a Review Hearing took place on 11 February 2011, at which Ms Selina Rae was represented by Mr Schmidt. In her decision dated 2 March 2011, the Reviewer, Ms M Hill, found that Caitlin was in fact not financially dependent on the deceased in a direct sense, and that Caitlin was for all intents and purposes financially dependent on Selina, her mother, she being the one with the legal and moral duty for Caitlin's care. She therefore determined that the child did not come within the meaning of being a dependant of the deceased. [4] In his submissions to the Court, Mr Schmidt accepted that the child, Caitlin, did not meet the definition of a child of the deceased claimant as that definition is set out in section 6 of the Act. He also accepted that Selina and Natalie were not "partners" for the purposes of the Act. [5] Counsel submitted that Caitlin came within the definition of "other dependant" of the deceased, and he referred to the definition of "other dependant" in section 6 of the Act, that definition states as follows: other dependant means a person who has all the following characteristics immediately before a deceased claimant's death: (a) Because of his or her physical or mental condition, he or she is financially dependent on the deceased claimant: (b) he or she is deriving average earnings per week of less than the minimum weekly earnings as determined under clause 42(3) of Schedule 1: ( c ) he or she is not the deceased claimant's spouse or partner: (d) he or she is not a child of the deceased clamant under 18 years. (6] Counsel submitted that the only questionable characteristic pertaining to Caitlin would be (a) and he submitted that as a five-year old child she was financially dependent on the deceased because of her physical and mental condition. He submitted that the mere fact of her being a child brought her within that definition rather than needing to identify any specific physical or mental condition or disability. He submitted that there was nothing in the legislation which limited the meaning to a person having a disability. Mr Schmidt further submitted that a generous and unniggardly approach to the statutory regime should apply to bring Caitlin within the definition of "other dependant". [7] Mr Tui, Counsel for the Respondent, acknowledged that the only issue was whether or not Caitlin satisfies the characteristics of (a) of the definition as set out above, and he referred to section 5 of the Interpretation Act 1999 which identified that the meaning of words must be ascertained from its text and in the light of its purpose. [8] Counsel submitted that there were two requirements to be satisfied in that first characteristic, namely that the person had a physical or mental condition, and secondly was financially dependent on the deceased as a result of her physical or mental condition. [9] Counsel submitted that youth is not a physical or mental condition and that secondly, it could not be identified that Caitlin was financially dependent upon the deceased [10] Counsel submitted that the fact of being a child could not apply to the definition as it could mean that whereas under Clause 70 of Schedule 1 a person coming within the definition of a child of the deceased would be entitled to weekly compensation until that child turns 18 years; in contrast under Clause 71 "other dependant" was entitled to weekly compensation until he or she receives more than the minimum weekly compensation payable as income or reaches the New Zealand superannuateon age. Counsel therefore submitted that compensation for a child was based on age and the prescribed relationship with the deceased, and this was not something which applied under Clause 71 and therefore "other dependant" did not include child. DECISION [11] The issue in this appeal requires a consideration of two interpretation provisions of section 6 of the Act, and in particular the interpretation of "other dependant", and the provisions of Clauses 70 and 71 of Schedule 1 which provide for entitlements respectively for a child of the deceased and "other dependants" of the deceased. [12] In this case it is accepted that Caitlin cannot come within the definition of child of the deceased in terms of section 6, and it is to be noted that under (d) of that definition, child in relation to a deceased claimant "does not include an "other dependant" of the claimant. 5 [13] Clause 70 of Schedule 1 sets out the circumstances whereby a child of the deceased has an entitlement to compensation, and as earlier noted that entitlement would in normal circumstances end when a child turns 18 years, although there is a provision for it to continue until 21 years if the child is engaged in full-time study. [14] As identified by Mr Tui, weekly compensation payable to a "other dependant" of the deceased continues until that dependant is earning above minimum weekly earnings or becomes eligible for New Zealand superannuateon. [15] It would therefore seem, at first sight, that where the definition of "other dependant" requires that person to be financially dependent upon the deceased because of her physical or mental condition, if it were to be extended to include a normal child it would allow for a potentially much longer period of entitlement under Clause 71 than a person who is in fact a child of the deceased and whose entitlement under Clause 70 ceases at 18 years of age. [16] It was Mr Schmidt's submission that physical or mental condition giving rise to financial dependency need be nothing more than being a young person without there being any disability, either physical or mental, so that the word "condition" would include the condition of normalcy. [17] On the facts of this case, it is clear that Caitlin is a dependant of her mother, Selina, and comes within the definition of child of Selina. Because Caitlin does not come within the definition of child of the deceased, she cannot be said to be other than the deceased's niece. [18] In those circumstances I consider that Caitlin cannot be identified as being financially dependent on the deceased, and I find that she cannot come within (a) of the definition of "other dependant" because I find that the meaning of "dependant" must be taken as being a dependency that has arisen because of a physical or mental disability of the person which has brought about a state of financial dependency on the deceased. [19] I find that the mere fact of youth or of being a young person cannot bring that person within the definition of "other dependant" without there being some physical or mental condition causing that state of financial dependency. In the case of Caitlin, she is fully dependent upon her mother, just as the deceased's child, Braden, was fully dependent upon the deceased. 6 [20] In the final analysis, I find and rule that Clause (a) of the definition of "other dependant" in section 6 does not extend to include a young person simply because of that person's age without there being some physical or mental condition which is the factor which has given rise to a state of financial dependency on the deceased. But even without that requirement of a physical or mental condition, I find it to be the factual situation in any event, that Caitlin was not financially dependent upon the deceased, rather, she was financially dependent upon her mother. [21] For the foregoing reasons, therefore, I find that the respondent's decision to exclude Caitlin from having an entitlement under the Act, as a dependant of the deceased, was the correct decision, and this appeal is dismissed. DATED this 25 day of October 2011 beatle M J Beattie District Court Judge