Willis v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT AUCKLAND Decision No. 83 / 97 UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an appeal pursuant to section 91 of the Act BETWEEN GAIEL ANN WILLIS of Auckland Appellant (Appeal No. DCA 337/96) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 10th day of April 1997 APPEARANCES Ms P Cunningham for appellant A Barnett for respondent DECISION OF JUDGE A W MIDDLETON The issue in this appeal is whether s.147 of the Accident Rehabilitation and Compensation Insurance Act 1992 applies. The appellant lodged a claim with the respondent on 15 September 1992 for cover for personal injury by accident under the Accident Compensation Act 1982. After the claim was received the respondent requested the appellant's psychologist on 30 October 1992 to provide it with a report regarding her alleged abuse. After numerous requests to the psychologist a report was received on 10 July 1995. On 15 August 1995 the respondent advised the appellant that it was accepted that she had 2 cover. In September 1995 the appellant enquired as to what compensation she would receive from the respondent. On 12 October 1995 the respondent advised the appellant that as no election for compensation had been made by the due date of 1 April 1993 she had no entitlement to compensation under ss.78 and 79 of the 1982 Act. The appellant applied for a review of that decision which was upheld by the review officer. At the review hearing it was argued by the appellant's counsel that s. 147 of the Act did not apply because in order to elect a lump sum payment the appellant's entitlement to cover must be in existence and as cover had not been accepted prior to 1 April 1993 there was no lump sum entitlement for the appellant to elect. The review officer in her decision held that the appellant had an entitlement prior to 1 April 1993 although a cover decision had not been made at that time. This decision relied on the decision of this Court in McDermott v ARCIC (4/95). Ms Cunningham submitted that the word "entitlement" in the context of s.147 means more than a "bare or inchoate" entitlement as referred to by Judge Ongley in McDermott. She submitted that entitlement is a right that exists in the present. She submitted further that if the Court does not accept that the decision in McDermott was incorrect, the appellant's case can be distinguished. She submitted that this appellant's injury which involves a sensitive claim could not be accepted for cover until after proper investigation which involved the receipt of a psychologist's report. She submitted that until the report was received the decision as to whether or not the appellant's claim could be accepted for cover must rely on the result of that report so that the appellant did not have an entitlement compensation before August 1995. She submitted that on this basis the appellant's situation can be distinguished from that of McDermott who had broken a leg during a rugby game. Ms Cunningham submitted that McDermott had an entitlement at the time of lodging his claim because there was a clear personal injury which would be covered by the respondent in contrast to the nature of this appellant's claim. Ms Cunningham submitted further that this appellant's situation in relation to the election for lump sum compensation can be distinguished from the decisions in Webster v ARCIC (22/94) and Shanly v ARCIC [1994] NZAR 104. In each of these cases the appellants had clearly identifiable personal injuries which had been accepted for cover prior to 1 April 1993. She submitted that this appellant was in a different position because her claim for injury required investigation which was not completed until August 1995. Mr Barnett submitted that as the appellant's claim was lodged between 1 July and before 1 October 1992 in respect of an injury occurring before 1 July 1992 she became a transitional claimant to whom s.135(3) of the 1992 Act applied. That meant that her claim has to be determined pursuant to the 1992 Act as if it had not been repealed because without s.135(3) there would be no continued entitlement at all under the 1982 Act. He submitted however, that s. 135(4) qualifies subsection (3) by providing that the entitlements continued by virtue of subsection (3) shall be determined under 3 the 1982 Act "but subject to this part of this Act". That means that s.147 being one of the transitional provisions is brought into play. Mr Barnett referred to the fact that there have been numerous decisions relating to transitional claimants to whom s.147 applies and on that basis the fact that the Corporation had not as at 1 April 1993 made a cover decision in respect of this appellant's claim did not provide an exception to those authorities. In addition, he referred me to two recent decisions being Walmsley v ARCIC (23/97) in which the appellant had lodged a claim for cover in respect of the medical misadventure which occurred prior to July 1992. The claim was lodged on 16 September 1992 and the Court held that the appellant was a transitional claimant to whom s.135(3) and (4) applied. As the appellant did not lodge an election for lump sum compensation prior to April 1993 at which time no cover decision had been made and cover was not accepted until 29 November 1993, the Court held that s.147 applied. In the absence of an election being lodged by 31 March 1993 that appellant was not entitled to lump sum compensation under the 1982 Act. The second decision was Godsalve v ARCIC (25/97) in which the appellant lodged a claim on 23 June 1988. Cover was initially declined but later accepted in July 1995. While that appellant when filing the review application in relation to the cover decision indicated a desire to have lump sum compensation, no election was made for lump sum compensation prior to April 1993. The court held in that case that s. 147 applied but had not been satisfied as no election had been filed. Although the Court had recognised that an application for lump sum compensation had been made, that did not constitute an election. In that case the Court held that pursuant to s.147(3) there was a deemed election for the Independence Allowance as each of the three requirements were met, namely: No payment had been made under the 1982 Act; No payment had been made pursuant to s.147; and No election had been made pursuant to s.147(2). Mr Barnett submitted that for all material purposes the facts of those two appeals are indistinguishable from the present appeal. Mr Barnett submitted further that while the appellant had argued that there was no existing entitlement at 31 March 1993 because cover had not been accepted, this proposition had been considered in a slightly different context in the decision in McDermott. He submitted that that decision had equal force and application in the context of the present appeal. In McDermott it was argued that there had been no assessment of disability pursuant to s.54 of the 1992 Act and consequently the appellant was not entitled to an Independence Allowance at that date. In his decision Ongley J rejected that argument and said: 4 "There is some force in that argument, but in my view the expression entitlement' must have been used in s.147 to include a bare or inchoate entitlement, equivalent to entitlement to cover under the 1992 Act for an injury that had already occurred. Having 'an entitlement' would include a contingent further entitlement to an Independence Allowance in the event of disability of 10% or more occurring as a result of the accident". And, "The view that 'entitlement' is used in the sense of a right to make a claim is also supported to some extent by the wording of subs (2A) which appears to be based on an underlying assumption that, but for the enactment of the subsection, an entitlement to lump sum compensation under the previous Acts may have existed in terms of this section even if the claim for personal injury by accident had not been made. The wording of s.147(2) (b) does raise a difficulty of interpretation. However the purpose of the sections is made manifestly clear by subs (3) which states that if no election is made the person shall be deemed to have elected to have received an Independence Allowance". While this appellant has been placed in a difficulty in that, for whatever reason, the psychologist failed to provide his report in spite of numerous requests, the respondent could not make a decision until 1995. I agree with Mr Barnett's submission that this appellant clearly comes within the provisions of s.135(3) and (4). She is a person who has suffered a personal injury by accident within the meaning of the 1982 Act, who has lodged a claim for cover before 1 October 1992. Accordingly, the acceptability of her claim has to be determined under the 1982 Act as if it had not been repealed. As s.135(3) applies to this appellant subsection (4) is then brought into play and her continued entitlement has to be determined under the 1982 Act, but subject to Part VII of the 1992 Act. I agree with Mr Barnett that that then brings s. 147 into play. This appellant having an entitlement under ss.78 or 79 of the 1982 Act and not having received that compensation provided she makes an election by 1 April 1993 is entitled to payment under those sections of the 1982 Act. I do not accept Ms Cunningham's submissions in relation to the question of entitlement. This appellant clearly had an entitlement but has failed to make the necessary election in the time prescribed so is not now entitled to apply for lump sum payments and the deemed election for an Independence Allowance must apply. The appeal is dismissed. DATED at WELLINGTON this ZO day of April 1997 A W Middleton District Court Judge