Jago v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT Decision No. 5 | 195 HELD AT WELLINGTON 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 GARRY BRENDEN JAGO 89 /94 / 0606. Appellant (Appeal No. DCA 125/94) 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 April 1995 APPEARANCES Mr A J Cadenhead for appellant Ms J W Saxton for respondent DECISION OF JUDGE D A ONGLEY This appeal concerned the provision of assistance for purchase of a vehicle under the Accident Rehabilitation and Compensation Insurance (Social Rehabilitation - Purchase and Modification of Vehicles) Regulations 1992. The claimant developed tendonitis of the left and right arms while in employment in October 1990. His claim for cover was accepted under the 1982 Act and various payments were made from time to time. He applied in 1992 for assistance to purchase a replacement car with manual transmission and power steering to accommodate his disability. On 12 June 1992 the Occupational Therapist at Canterbury Health Board reported: - 2 "Mr Jago has owned a 1974 Holden manual for three years. It is worth about $800 maximum. This car is fitted with a column change which has seen better days and requires an awkward movement for Mr Jago to operate. He sometimes drives a Union car (Toyota manual) which has a floor change and even this is a considerable improvement over driving his own car. For a month he had the use of a Mitsubishi automatic with power steering which he found very easy to drive. Mr Jago is married with three children aged eight, six and three. His wife does not have a licence. Mr Jago spends his mornings working voluntarily at his children's school helping with reading and computers, drives to the city on Union business once a week, and to the supermarket once a week. In the weekends they either drive to Marshlands Road for fruit and vegetables or take the children to a park for an outing Mr Jago has just finished a Management Course at Polytech and will be on a Maori Course until August. He is also having counselling at Polytech once a week and belongs to the R.S.I. Support Group They visit the childrens' grandmother occasionally and Mr Jago drives his wife to appointments when required. From time to time they visit friends in Rangiora but after one of these trips Mr Jago is unable to drive at all for several days due to loss of strength and pain. Mr Jago has applied to join the Board of Trustees for the St Albans School and if successful this will involve him in additional driving. The Jagos have no surplus funds and manage their living/driving expenses carefully." On 24 June 1992 the Corporation wrote to Mr Jago informing him that a driving assessment would be obtained followed by a meeting between the claimant and the Corporation to design a rehabilitation programme. The letter stated that the Corporation would not contribute to items that were convenient but not essential and that the claimant is expected to make a contribution which may include borrowing. A Corporation memorandum on 29 June 1992 recorded that its criteria would be met by a mid-1980's vehicle under 100,000 km in a price range of $6,400 to $6,500 and likely to give about 5 years trouble free driving. In a memorandum of 15 July 1992 it was recorded that an indication was given that the Corporation was likely to contribute $3,500 to $4,000 including a component of $1,500 to meet the cost of an automatic power steered vehicle in preference to a manual vehicle and also a contribution to the general cost. It was noted that Mr Jago walks where possible and would not have major problems with public transport. He had provided a budget which showed that no surplus cash was available to assist with the purchase. Mr Jago complained about the delay in dealing with his claim. The delay appears to have been no more than the reasonable administrative lag in considering his claim and it is not a factor in this appeal. Once the Accident Rehabilitation and Compensation Insurance Act 1992 came into force on 1 July 1992 the Corporation was obliged to put the claim aside until the relevant regulations were passed on 25 September 1992. That was because the power to grant assistance under the 1992 Act was classified in the category of social rehabilitation and under s 26(1) of the 1992 Act provision could be - 3 - made only to the extent authorised by regulations made under the Act. Once the Purchase and Modifications of Vehicles Regulations were passed regulation 6 provided: 6. Approval of purchase of and modification to a vehicle - (1) On receipt of an assessment undertaken pursuant to regulation + of these regulations, the Corporation or exempt employer shall give approval in principle for the purchase of and modification to a vehicle as recommended in the assessment, to the extent that the Corporation or exempt employer considers the purchase of and modification to the vehicle is necessary and cost-effective in order for the claimant to achieve independence in daily living. The Corporation then decided that as the claimant was not permanently unable to drive without vehicle modifications he should not receive assistance and on 20 October 1992 it notified Mr Jago that his claim was declined. That decision was the subject of review but the review hearing did not commence within three months of the application and so was deemed to have been concluded in favour of the claimant in accordance with s 90(9) of the Act. The question whether Mr Jago was permanently unable to drive without vehicle modifications was therefore determined in his favour. On 7 October 1992 P.I.B.A. Consultants Lid then acting for the claimant informed the Corporation that Mr Jago had purchased a Toyota Corolla G T Twin Cam vehicle for $7,995. A memorandum was then recorded on the Corporation's file as follows: "I have conducted a survey to obtain an idea of what would be a fair contribution for vehicle purchase assistance for Mr Jago in retrospect. To supply and fit power steering and auto transmission to a 1986 manual Toyota Corolla similar to the one he purchased would cost anywhere between $2,500.00 and $4,000.00 plus GST. Similar manual vehicle sales range from $4, 950.00 to $10,000.00 depending on the mileage whether imported or New Zealand new etc. The same exercise on modifying his vehicle at the time of application 1974 HQ Holden Kingswood would be approximately $1,540.00 plus GST similar vehicles advertised for sale with the added features range from $3, 400.00 to $3, 900.00. Given the nature of his disability, the Of report recommendations, the above exercise to determine what it may have cost to convert at the time. I suggest the sum of $5,000.00 as vehicle purchase assistance in this case." On 22 October 1993 the Corporation advised Mr Jago that a contribution of $5,000 would be made towards the purchase of a new vehicle. On 16 December 1993 he filed an application for review. The application was set down within three months but the claimant's representatives applied for an adjournment and the review was heard on 14 April 1994. The maximum amounts which the Corporation may provide are limited by r 13 of the Motor Vehicles Regulations: - 4 13. Maximum amounts payable - (1) Subject to subclauses (2) and (3) of this regulation, the Corporation shall not, and an exempt employer shall not be required to, contribute an amount in excess of $15,000 for the modification to and the purchase of a vehicle. (2) The Corporation shall not, and an exempt employer shall not be required to, contribute an amount in excess of $12,000 towards the purchase of a vehicle. (3) The Corporation shall not, and an exempt employer shall not be required to, contribute and amount in excess of $10,000 towards the modification of a vehicle. At the review hearing the Corporation represented that grants of the full entitlement of $12,000 were usually restricted to severely injured clients such as paraplegics and tetraplegics. The Corporation took the view that claimants considering the purchase of another vehicle would normally be expected to make a significant contribution towards the purchase price to recognise the fact that they were receiving an updated vehicle. The Review Officer considered that the regulations were not intended to enhance the position of a claimant by enabling him to trade up in the general quality of his vehicle aside from obtaining the additional features required to compensate for his disability. He referred to the Appeal Authority decision of George (208/88) which recognised the principle that the legislation is designed to cushion the effects of loss rather than to provide full compensation. Taking account of the improvement in quality of Mr Jago's vehicle from one worth $700 to one worth $7,995 the Review Officer considered that if the Corporation provided the assistance which was being asked for then Mr Jago would receive a significant advantage as a result of his personal injury by accident. The Review Officer considered the grant of $5,000 was reasonable. The appellant placed emphasis on s 26(2) of the Act which articulates that the objective of social rehabilitation is to restore the independence of the person that has been lost by personal injury covered by this Act, and referred to the definition of rehabilitation in s 3 of the Act and the duty of the Corporation to assist. He submitted that the "cushioning principle" should not be applied because it has already been given effect by r 13 and to apply it again would be wrong in principle, amounting to a "double deflation" of the appellant's entitlement. He submitted that the cushioning principle is a broad brush concept and what is envisaged by the courts is not the slavish analysis of each individual piece of compensation or rehabilitation assistance received by a person and then a discounting back from a maximum level to ensure that no claimant ever receives a maximum across the board but an overall consideration of all compensation and rehabilitation assistance provided to a person. He submitted further that the cushioning principle should have little application with respect to the social rehabilitation provisions of the 1992 -Act where s 26 speaks of restoring and the definition of rehabilitation in s 3 uses emphatic language. Counsel for the appellant then dealt with the circumstances relating to his previous vehicle and his replacement. The cost of replacement was well within the regulatory limit. He said that the appellant's own view of his rehabilitative needs should be regarded as a factor when considering reasonableness. - 5 - The Corporation exercised a discretion under r 6: 6. Approval of purchase of and modification to a vehicle - (1) On receipt of an assessment undertaken pursuant to regulation + of these regulations, the Corporation or exempt employer shall give approval in principle for the purchase of and modification to a vehicle as recommended in the assessment, to the extent that the Corporation or exempt employer considers the purchase of and modification to the vehicle is necessary and cost-effective in order for the claimant to achieve independence in daily living The Corporation is not required by the Act or regulations to provide the full cost of a suitable vehicle. It is required to judge the extent to which the purchase of a vehicle is necessary for the claimant to achieve independence in daily living. Cost effectiveness is not in issue in this case. The appellant is not so incapacitated that his vehicle is essential to all aspects of his independence. The Corporation must take account of the increased need of the appellant to rely on his vehicle for his rehabilitation. It must first meet the greater cost of automatic transmission in preference to manual transmission because that is a clear necessity. It must then consider a reasonable contribution to recognise the greater reliance that the appellant now has to place on having a car to compensate for his loss of amenities. There is still a test of necessity to be considered. There is no directive for the Corporation to meet the full cost of a vehicle and the decision in the end is a matter of judgment on the facts of each case. In this case is it not possible to say that the Corporation's decision or the Review Officer's decision was based on any wrong principle or was unreasonable or against the weight of evidence. For those reasons the appeal is dismissed. DATED at WELLINGTON this day of MAY 1995 D A Ongley District Court Judge