Savage v Accident Compensation Corporation

IN THE DISTRICT COURT HELD AT AUCKLAND Decision No. ( 92 /2001 IN THE MATTER of The Accident Insurance Act 1998 AND IN THE MATTER of an Appeal pursuant to Section 152 of the Act BETWEEN GRAHAM SAVAGE AI 505/00 Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent HEARD at AUCKLAND on the 27th day of April 2001 APPEARANCES: Mr G Savage in person Ms J M Silcock counsel for respondent RESERVED JUDGMENT OF JUDGE M J BEATTIE [1] The issue in this appeal is whether the respondent acted correctly in suspending the appellant's weekly compensation for the period 3 January 2000 until 20 January 2000 on the grounds that the appellant had unreasonably refused or failed to provide information which had been requested of him relating to his business. The power of suspension exercised was that contained in section 116(3)(a) of the Act [2] The facts which are relevant to the determination of this issue, as I find them to be, are as follows. 505 00Savage.doc(gm) [3] In July 1983 the appellant suffered injuries to his hip as a result of a car accident. The appellant's claim for cover was accepted and he commenced receiving various entitlements including weekly compensation. [4] In 1999 the respondent became aware that the appellant was involved in a business venture and it was the case that any income received from that venture would affect the amount of his weekly compensation. [5] The business venture carried on by the appellant was that of a music business trading as Savage Sounds and which, the respondent learned, had received a Business Development Grant from the Auckland Business Development Board. [6] Accordingly by letter dated 26 August 1999 the respondent wrote to the appellant requesting full particulars of the business, including copies of his financial statements for the financial years ending 1993 to 1999. The letter also required to be advised of all monies received by him from this business venture. The letter concluded by stating that the information was required pursuant to section 115 of the Act and that failure to comply with that request for information may result in the respondent declining to make further payments of weekly compensation, pursuant to section 1 16 of the Act. [7] The respondent received a response to that letter from Mr Oliver, the principal of Compensation Consultants Lid, requesting that he be provided with all details of the appellant's file before responding to that request for information. [8] Particulars from the respondent's file were provided to Mr Oliver on 21 September 1999 and by letter dated 23 September 1999 the respondent again wrote to Mr Oliver requesting the information sought, stating that it must be received within three weeks. The letter indicated that should an extension be required Mr Oliver should contact the Corporation. [9] No further response was received from Mr Oliver and therefore by letter dated 29 November 1999 the respondent advised that as it had not received the requested information it would be suspending the appellant's weekly compensation as from 8 December 1999. [10] In a letter dated 3 December 1999 Mr Oliver advised the respondent that he had ceased to act for the appellant who he now understood was representing himself. 505 00Savage.doc(gm) 2 Mr Oliver advised that he had forwarded the Corporation's letter of 29 November 1999 to the appellant. [1 1] In a letter to the appellant dated 21 December 1999 the respondent advised that it had not received any of the information requested and it noted that Mr Oliver had advised he was no longer acting for the appellant. The letter then set out the provisions of sections 115 and 116 of the Act and advised that as the information requested had not been provided the appellant's weekly compensation would cease two weeks from the date of this letter until such time as the information requested had been provided. [12] The date on which weekly compensation would cease was therefore 3 January 2000. [13] From a copy letter provided by the appellant it seems that he had consulted Brett Cunningham, Barrister, in relation to the matter and by letter dated 22 December 1999 Mr Cunningham wrote to the appellant requesting him to sign a fresh authority for Mr Cunningham to act for him. [14] The next recorded event on the file is Mr Cunningham's letter of 10 January 2000 to the respondent, which letter states as follows: "I now act for Mr Savage in place of Mr Howard Oliver of Compensation Consultants. Please find enclosed herewith an authority from Mr Savage. Mr Martin Williscroft, Examining Officer, in a letter dated 26 August 1999 requested Mr Oliver to provide certain information to the Corporation regarding the financial statements of Savage Sounds. I understand that Mr Williscroft will be on leave until the end of this month, hence this letter is addressed to you. The Corporation appears to believe that Mr Savage was a sole proprietor trading as Savage Sounds. Savage Sounds Lid, a company of which Mr Savage is a director, was incorporated on 30 October 1996 and its file numbered AK/832274 is located at the Auckland office of the Companies Office. Could you please direct all future correspondence to me at the abovementioned address? I am endeavouring to obtain the information requested from Mr Savage for forwarding to ACC." 505 00Savage.doc(gm) 3 [15] The respondent acknowledges that part of the information sought was provided to it on 21 January and it thereupon reinstated weekly compensation from that date. [16] Although it is not relevant for the determination of the issue in this appeal a further suspension of weekly compensation was imposed in February 2000 when the further information was not to hand. [17] The foregoing is the chronology of the events as they are disclosed from the respondent's file and which relate to the correspondence which passed between the parties during the relevant period. [18] The hearing of this appeal first came on before me on 1 February 2001 and in the course of his submissions to me Mr Savage contended that Mr Cunningham had obtained an extension of time for the providing of the information requested, that extension of time having been obtained prior to Christmas 1999. There was no evidence on this point and therefore I adjourned the hearing of the appeal to enable the appellant to produce such evidence as may exist as to any such arrangement for an extension of time. [19] The evidence produced by the appellant was an affidavit sworn by Mr Cunningham and the relevant paragraphs on that affidavit states as follows: 2. The respondent advised the appellant by letter dated 21 December 1999 that his weekly compensation would be declined 2 weeks from the date of that letter until such time as the information requested by the respondent had been provided in full. 3. The appellant telephoned me on 22 December 1999 and informed me of the threatened suspension of his weekly compensation. 4. I telephoned Mr Martin Williscroft, the writer of the said letter dated 21 December 1999, on his mobile telephone in late December 1999. Mr Williscroft mentioned that he was at an airport at the time and that he would be on holiday until the end of January 2000. I believe that I made that call on 23 December 1999 to number 021 653 233, a number that is no longer in use. I annex and mark "A" a copy of a page from my telephone account dated 17 January 2000 showing a call made on 23/12/99 at 2.33 pm to that mobile telephone number. 5. During my telephone conversation with Mr Williscroft, I informed him that it would be very difficult to obtain all of the information requested by the respondent when the persons who held it would be on holiday. I advised Mr Williscroft that I would endeavour to send the information to the respondent as soon as it came to hand. 505 00Savage.doc(gm) 4 6. I informed the respondent in writing that I was acting for the appellant by letter dated 10 January 2000 enclosing an authority for me to act signed by the appellant on 24 December 1999. 7 . I sent as much of the requested information that I could obtain at the time under cover of a letter dated 20 January 2000 to Sonja Akkerman at the Corporation because I had learned from my call to Mr Williscroft that he would be on holiday at that time. I annex and mark "B" a copy of that covering letter. 8. I was surprised when the respondent suspended the payment of weekly compensation to the appellant as from 3 January 2000 after I had informed Mr Williscroft that all of the requested information available would be sent to the respondent as soon as was practicable after the Christmas and New Year holiday period." [20] With reference to exhibit A to Mr Cunningham's affidavit, that is a page of his telephone account and he has indicated that a telephone call made on 23 December 1999 at 2.33 pm to a Vodafone cellphone 021-653233, being a call timed at 1 minute, was the telephone call that he identified as being to Mr Williscroft. [21] The respondent obtained leave to file an affidavit in reply, that affidavit being from Mr Williscroft and the relevant paragraphs of it stated as follows: 2. I understand that Mr Savage is alleging that an oral extension was given by myself to Mr Cunningham, his Barrister, granting further time in which to provide the requested information before weekly compensation would be suspended. I have read the affidavit of Brett Michael Cunningham, dated 16 March 2001 filed in support of Mr Savage's appeal. 3. While I do recall having a telephone conversation with Mr Cunningham about the information that had been requested from Mr Savage, I do not recall exactly when this conversation took place. I think the conversation took place earlier than 23 December 1999, maybe even in November 1999. There are a number of reasons why I do not believe that the phone call took place on 23 December 1999. 4. Firstly, I have never (either personally or through work) had the mobile number 021-653-233 which is the number that Mr Cunningham alleges records his telephone call with me. In December 1999 that was not my mobile phone number. I note that the telephone call to that number was only a one minute telephone call. 5. Secondly, the 23rd of December 1999 was a Thursday. I was still working at this time. I went on holiday from midday on Friday the 24th of December 1999 until the end of January 2000. Further, I did not fly anywhere over that period. 6. If I was on holiday at the time the telephone conversation took place, then I would not have agreed to any extension as I was not in a position where I could implement it. I would have had to informed someone at the Corporation of the extension so that weekly compensation would not cease. That did not happen. 505 00Savage.doc(gm) 5 7. Irrespective of when the telephone conversation took place, I agree with paragraph 5 of Mr Cunningham's affidavit - that we discussed the information which had been requested by the Corporation back in August 1999. I explained to Mr Cunningham the detail of the information which we were seeking. 8. I told Mr Cunningham that the initial request had been made for such information in August 1999 and over four months had now passed. At no time did I indicate to Mr Cunningham that suspension would not take place on 3 January 2000 in order to allow additional time to obtain the information. 9. The information that was provided by Mr Cunningham on 21 January 2000 was still not all the information that had been requested. However, weekly compensation was reinstated by the Corporation at that time. 10. If any kind of agreement in relation to an extension of time had been made, I would have made a record of the same. There is no record on my file to this effect." [22] Another document presented by the appellant is a copy of a fax from Mr Cunningham to him dated 1 October 1999 which is headed up "Authority to Act" and says "Please sign and return by fax the Authority herewith. I shall enclose a copy of it in requesting your file from ACC Officer at Henderson." [23] The relevant statutory provisions are sections 115(1)(b) and 116(3)(a). [24] Section 115(1)(b) states: "An insured who receives any statutory entitlement must, when reasonably required to do so by the insurer - ( 6 ) Give the insurer any other relevant information that the insurer requires. [25] Section 116(3)(a) states: "An Insurer may decline to provide any statutory entitlement for as long as an insured unreasonably refuses or unreasonably fails to --- (a) Comply with any requirement of this Act relating to the insured's claim. DECISION [26] Having regard to the fact that the appellant acknowledges that he was operating a business at the time he was receiving full weekly compensation, I find it totally reasonable for the respondent, when it learnt of this, to seek full details of that business and of the financial ramifications of it and of any income that the appellant may be receiving from that source. For the avoidance of doubt therefore I find that 505 00Savage.doc(gm) 6 the request made by the respondent of the appellant for the information was a reasonable request. [27] At the time that request was made the appellant was represented by a person holding himself out as having some expertise in compensation matters and the letter of request was first made in the letter of 26 August 1999 and there was a further letter of 23 September 1999. [28] From statements made by the appellant at the hearing, it would seem that he contends that Mr Oliver of Compensation Consultants Lid did not serve him well and this was the reason he sought advice elsewhere and consulted with Mr Cunningham. It can be inferred from the evidence that the appellant had consulted Mr Cunningham in late September 1999 as the first authority to act was sought to be obtained by Mr Cunningham in his fax to the appellant dated 1 October 1999. [29] From the affidavit of Mr Williscroft it seems that Mr Cunningham did have a conversation with him at some earlier time than mid December 1999 but I find as a fact that Mr Cunningham did not speak to Mr Williscroft on 23 December 1999 by telephone and that Mr Williscroft did not agree to or give any extension of time at the time he did have a conversation with Mr Cunningham. An extension of time was not something that was discussed in that conversation. From the contents of Mr Cunningham's letter of 10 January 2000 it is clear that this is the first formal contact between he and the respondent and as is noted in that letter Mr Cunningham advises he is endeavouring to obtain the information requested. [30] That information, or sufficient of it to satisfy the respondent initially, was provided in a letter of 21 January 2000 and therefore it can be seen that that information was not hard to get. [31] The appellant had had since late August 1999 to provide the information but the undertone from the file is that he, through Mr Oliver, was seeking to be difficult and seemed not to appreciate the concern that the respondent would have had on learning of the fact of this business venture of the appellant. [32] Having regard to the time frames that were involved I am satisfied that the respondent was acting within the spirit and intent of section 116(3)(a) when it suspended the appellant's weekly compensation for the period 3 January 2000 to 20 505 00Savage.doc(gm) 7 January 2000 as there had been by that date an unreasonable failure or refusal to provide the information sought. [33] From a perusal of the review decision, I note that the Reviewer had concerns about the appellant's evidence and I also note that Mr Cunningham represented the appellant at that review hearing and yet there was no suggestion of any extension of time being given in evidence or submissions at that review hearing. [34] Accordingly therefore, I find that the respondent was correct to suspend the appellant's weekly compensation entitlement for the period it did and this appeal is dismissed DATED at WELLINGTON this 13 day of July 2001 the M'J Beattie District Court Judge 505 00Savage.doc(gm) 00