Porter v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT NAPIER Decision No. 3 g / cq l/ UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an appeal pursuant to Section 91 of the Act REVIEW No. 64 93 0227 BETWEEN GRAHAM PORTER of Flaxmere Appellant (Appeal: DCA 57 /93) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 20th day of July 1994 APPEARANCES P J Callinicos for appellant N G Morrison for respondent DECISION OF JUDGE A W MIDDLETON The issue in this appeal is the decision of the respondent to cease the payment of Earnings Related Compensation pursuant to s.73 of the Accident Rehabilitation and Compensation Insurance Act 1992. The appellant, now aged 58, suffered an injury to his knee on 1 May 1986 whilst employed as a shearer. As from 8 September 1986 v:hile in receipt of Earnings Related Compensation the appellant was certified as being fit for selected or alternative work. A report from his Orthopaedic Surgeon, Mr J Elliott, dated 23 September 1988 concluded: ; "Tlzis 1111111 Jzas k110ll'll osteonrthritis of his left knee but prior to his i11j11ry 011 1.5.86. stated that lze fwd 110 problelll 1uith the right k11ee. At surgical cxalllillation 1111 nrticular rnrtilage dt/ect was 11oted 011 the ll1 eiglitbeari11g portion of tltt! 111cdi,1/ fe111oml co11dyle mid it is co11cei11able tlwt this defect zt•ns caused by the t1l'isti11g illjllnJ tlznt occurred on 1.5.86.' If it is accepted t/zat t/ze enrly osteonrtlzritis i11 lzis riglzt knee is due to tlzis accident I nssess lzis disability relating to t/ze right knee problem as being 12%. In 11iell1 of persisti11g discomfort and limitnhon of ncti11 ihJ a reaso1Zable clni111 under Section 79 wollld be appropriate. He is not fit for lzenvy mnnunl work and is not able to shear which used to be his principle occupation. Work tlznt requires prolonged standing wen if not strenuous will be difficult for him nnd he Jzas experienced troubles in this regard wizen attempting to nm a butchers shop. If he is to work, senzi-sedentanJ duties are probably necessanJ His condition cannot be regarded as stable ns it is likely thnt tlze osteonrthritis 7.l'ill progress in both knees and it is likely that surgical treatment to botlz knees ll'ill be required in the future." On 1 March 1987 the appellant purchased a butchery shop but by May 1988 the shop had to be sold because the injury to his knee precluded him from carrying out the heavy work. He was again certified fit for selected or alternative work. Earnings Related Compensation continued and lump sums were assessed and paid. On 17 October 1989 the appellant was again certified as fit for selected or alternative work but that such work could only be light duties such as clerical work. The appellant entered into a rehabilitation programme with the respondent on 13 November 1989. That programme notes that the appellant suffers osteoarthritis of the right knee and that in 1987 he fractured his right shoulder which is also affected by osteoarthritis with limitation of movement. The programme further notes that his working life has been spent as a manual worker and that he does hold a heavy traffic licence. The programme states that his needs are 1 1 suitable light manual 7.l'ork, not inuol11 i1Zg excessi7.1 e lifting or 1mlki11g11 The • rehabilitation goals for the long term are a return to full-time manual work but in the short term the finding of suitable light work. The programme sets out the tasks which each party agreed to action and they include, on the part of the appellant: (1) 1 1 Register witlz Lnbour Department, Napier" (2) 1 1Produce evidence of job seeking monthly" On 20 December 1989 the respondent notified the appellant of his responsibilities in relation to the certification that he was available for selected duties and included a reminder that he was to produce evidence of job seeking efforts on a monthly basis. The letter also reminded him that at that time the respondent had only received confirmation that he had enrolled \.vith the Department of Labour ., _.., but no evidence of any job seeking. The letter further reminded the appellant that Earnings Related Compensation would continue to be paid pro\·ided he complied with the requirements to job seek and produce e\·idence of that on a monthly basis. Further similar notifications ·were sent to the appellant on 28 February 1990 and again on 20 June 1990 when the respondent advised the appellant that because of his failure to comply with the requirements further payments of Earnings Related Compensation would cease from 5 July 1990. The appellant applied for a review of that decision and a file memorandum of 3 August 1990 indicates the concern of a member of the respondent's staff that the rehabilitation scheme proposed for this appellant was 1 1 irznppropriate, unreasonable nnd unrenlistic11 • This was particularly so because of his age, the fact that he had no skills and had limited education. The memorandum suggested that the appropriate course to follow was a permanent disability assessment. On 23 August 1990 the respondent advised the appellant that it had reconsidered its position and payment of Earnings Related Compensation was reinstated. This position continued until the Corporation received anonymous advice that the appellant had been working and was in receipt of a large income. The appellant then advised that he was hospitalised through factors other than injury as a result of which Earnings Related Compensation ·was stopped. On 27 December 1990 the appellant's General Practitioner certified that he had recovered from his medical illness and had resumed the same status as he had prior to that illness as a result of which Earnings Related Compensation was reinstated. On 26 February 1991 the respondent notified the appellant that it had evidence which indicated he was capable of undertaking light work such as the making of deliveries. It reminded him of his obligation to disclose any earnings which he might receive . whilst in receipt of Earnings Related Compensation. It also reminded him of his obligation that the Corporation required him to report fortnightly with evidence of job seeking. A similar notification was given to the appellant on 11 December 1991. In June 1992 the respondent received further advice which indicated that the appellant was working and he was interviewed by staff of the respondent on 11 August 1992. It appears from the evidence that the appellant had been seen on the premises known as Whites Traders. I accept the appellant's evidence that the proprietor of that business was a friend and that the appellant went there on a semi-regular basis to look after the premises while the proprietor attended auctions. The appellant stated that he received no payment for this and the only payment he received was a petrol allowance to run the small truck lent to him by the proprietor of the business. Some evidence indicated that the appellant had been seen moving articles for the business but the appellant states that his ability to do any heavy work is extremely limited because of his injuries. He is adamant that he has received no payment and that the opportunity to assist at the business does give him something to occupy himself during the day. -± On 7 Januar:· 1993 the respondent notified the appellant that the payment Llt Earnings Related Compensation \.vould cease as from 19 January 1993. The letter stated: "As a result of i1r£1estigi1tiolls i111 to your ll 1 ork ability, your failure to 11dpis1: us of your 1l'Drk actiz,ihj, a1Zd yoLLr failure to comply 11·itl1 reqLLire111e11ts of relz11bilit11tio11, we 111L1st 110ll' adii ise that your future e11titlellle11ts to Il'eekly co111pe11s11tioll for tlze il!jury sLLs tai11ed on 1 May 1986 is to be declined. Tlzis decline is made LLnder Sectioll 73 of the Accident Rehabilitatioll a11d Compellsatioll Act 1992, claLLses (1), 2 (a) al!d (2) (d)." The appellant applied for a review of that decision and the Review Officer confirmed the respondent's decision. Section 73 of the Accident Rehabilitation and Compensation Insurance Act 1992 states: 11 73. Suspension, cancellation, or refusal of compensation and rehabilitation-(1) Tlze Corporation slznll, and any exempt employer may, if 11ot satisfied on tlze basis of tlze infomzntioll in its possession that a person is entitled to continue to receire any treatment, sen•ice, relzabilitation, related transport, compensation, grnnt, or allowance under this Act, suspend or cnncel tlzat payment for treatment, sen1 ice, or related transport, or the payment of compensation, grant, allowance, or provision of relwbilitation. [(1A) vVlzere t! ze Sllspension, cancellation, or refusal under this sectiol! is in _ respect of a matter that is the subject of an agreement made under section 2 7 of this Act, the Corporation shall notzfiJ the appropriate pLLrchaser of the suspension, cnncellntion, or refusal 1l'itlzin 14 days or sllclz other period as is specified ill tlze agreement.] [(2) The Corporation shall, and any exempt employer may, upon tlze unreasonable refusal or failllre of any person to- (a) Comply witlz any requirement made llnder any proz1 isio11 of tltis Act relating to any claim; or (b) Undergo medical or surgical treatment in respect of personal injury (irrespecti'ue of wlzether tlze Corporation or exempt employer is required or permitted to contribute tozmrds the costs of tlzat treatment); or (c) Agree to, or comply witlz, an indi-uidual rehabilitatioll progra11rn1e- decline to make any payment under tlzis Act.] 11 Mr Callinicos made submissions on the basis that it was necessary to apply for leave to appeal out of time but Mr Morrison took no issue with this and therefore leave to appeal out of time is granted. Mr Callinicos submitted that at the critical time there was no individual rehabilitation programme in place because there is an absence of a d.eem.ing provision in the 1992 Act. It seems to me that s.136 does provide for the carrying over of existing rehabilitation programmes when the applicant is the subject of such an agreement entered into prior to 1 July 1992. However as the focus of the respondent's case is not really based on the failure to comply with the rehabilitation programme as such but more on the failure to pro\·idc regular :> reports on job applications I do not consider that it is necessary tl) go further into the submissions regarding the suitability or otherwise of the rehabilitation programme. If I had to consider that issue I "'·ould agree with Mr Callinicos and the file memorandum of 3 August 1990 that the programme was completely unrealistic. However, I do not co11sider that would detract from the appellant's obligation to provide regular reports on his endeavours to obtain jobs. The thrust of Mr Morrison's submission was first that the appellant was entitled to suspend or cancel the payment pursuant to s.73(1) because of the information it had received that the appellant was working, and secondly that pursuant to s.73(2)(a) the respondent was entitled to cease payments because of the appellant's failure to comply with the provisions of s.64(1)(b) which required the appellant "wizen reasonably required to do so by tlze Corporation to furnish to the Corporntion such other rele1. 1 an t information as the Corporation requires". The evidence clearly establishes that the appellant has serious injuries which preclude him from any type of heavy work and this is confirmed by both the orthopaedic surgeon's report and by the medical certificates and also by the report from the Workbridge facility to which the appellant had been referred in February 1991. The only real evidence that the appellant has been working is the result of the anonymous phonecall to the respondent. The appellant answered this allegation by detailing the nature of the work which he claims was very limited and which principally amounted to sitting in the shop while the proprietor attended auctions. He c).lso confirmed, and there is nothing to detract from this, and it is confirmed by the proprietor of the shop, that he received no payment for carrying out these duties. The most that can be said of that evidence is that it confirms the medical certificates that the appellant is fit for only light duties. While the Review Officer considered that the review application should be declined because the appellant had a work capacity, I do not agree with that finding. I consider that on the evidence the only available finding is that he has an ability for light or selected duties. The other issue which I consider to be vital is Mr Morrison's submission in relation _ to s.73(2)(a). From the very beginning the appellant has been made aware of his obligation to provide regular reports in relation to his applications for work. The respondent kept reminding him of this obligation and while he claims to have visited the office on two occasions to report on those efforts there is no confirming memorandum on the file and one must therefore be left in some doubt as to whether in fact those attendances took place. Even if they did, there are numerous letters on the file to the appellant reminding him of his obligation to report and it is clear that he has not done so. This then brings into focus the decision of Judge Ongley McDonald (15/94) in which he stated: "It is plain, without needing to be expressly stated, that the insured person should seek whatever level of employment is consistent with lzis or lzer cnpncity and tlznt tlze Corporation should take active steps to ascertain, in appropriate cnses, that a11 effort zs being made. Tlzat conforms also with general concepts of insurance co1.1er. t1 I coJidudc t/1at, for rcasoJis of 1110JiitoriJig t/1c cl11i11umt's effort to establish rl'aso11t1blc cl/Iploy111cJit, to relie"i'C t/11! Corpomtio11 of resp0Hsibilityforf11ll pc1y111eJit of earnings rclatl'd co111pc11satioJI, it is rclcrn11tfor t/1c CorpomtioJI to obt11iJI i11fon11atioJI aJid it is reaso1u1ble for t/111t infonn11tio11 to be stipulated as n report 011 a for111 1-.1rot·ided liy the Corporatio11 of periodic app1icatioJis for ccork. Applirntio11s iJI three occasio11s each 1110/lth are in 111y ii ie1l' re11so11nble ill the present cnse." The issue as it was in the McDonald case is ,-v hether it was reasonable for the respondent to require the appellant to report on the basis set out in the correspondence. I consider that it v\.·as and that the appellant failed to comply. Accordingly the decision of the Review Officer confirming the respondent's decision to cease the payment of Earnings Related Compensation pursuant to s.73(2)(a) was correct. The appeal is dismissed. DATED at WELLINGTON this s day of August 1994 Judge A W Middleton DCA57-93.docG9)