Kogler v Accident Compensation Corporation

IN THE DISTRICT COURT HELD AT AUCKLAND Decision No. [2011] NZACC /18 IN THE MATTER of the Accident Compensation Act 2001 AND IN THE MATTER of an appeal pursuant to Section 149 of the Act BETWEEN HANS KOGLER (Al 169/09) Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent HEARD at AUCKLAND on 16 February 2011 APPEARANCES Mr M Darke, Advocate 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 October 2007, whereby it determined that the level of weekly compensation to which the appellant was entitled was that provided in the Act as being the amount payable for Loss of Potential Earning (LOPE). [2] The issue in this appeal involves a consideration of the various statutory provisions relating to entitlement to weekly compensation and the amount thereof and is wholly a question of law, as the facts which are relevant to the issue in this appeal, are not in dispute. [3] The relevant facts in this appeal can be stated as follows: 2 On 8 December 1991 the appellant, then a 16 year-old schoolboy, suffered severe injuries in a motor accident when his motor cycle came into collision with a motor car. A statement in a neurological report of October 1992 gave particulars on the injury suffered by the appellant as follows: He has about 15 minutes of retrograde amnesia and no clear recollection of what happened to him for about 7 to 10 days. He received treatment at the Whangarei Base Hospital. He required intensive care and his injuries included a blow to the head, multiple abdominal injuries, a fracture of the pelvis, a fracture of the left shaft of the femur, a fracture of the left forearm, multiple facial lacerations, a laceration of the left knee, a paralysis of the left leg, and possibly a stroke affecting the right side of his body. . The injury to the appellant's left leg did not heal and was subject to frequent infection and culminated in left leg amputation in December 1995. . The appellant remained at school in 1992 and 1993. The appellant left school in November 1993 and the Corporation commenced paying weekly compensation to the appellant on the basis of Loss of Potential Earnings under Section 46 of the 1992 Act from 15 November 1993 onwards. The LOPE payments continued to be made until 6 February 1994 when the appellant commenced a full-time course at the Auckland Institute of Technology. . In July 1994 the appellant advised the Corporation that he had withdrawn from the course because of the ongoing problems with his injuries and the Corporation thereupon reinstated the appellant's LOPE compensation from 19 June 1994 onwards. On 7 November 1994 the Corporation wrote to the appellant to advise that the medical certificate upon which his LOPE payments were dependent had expired on 30 October 1994. The Corporation did not receive any further medical certificate although it became aware that the appellant was now receiving a sickness benefit from the Department of Social Welfare. 3 . As no further medical certificates were produced by the appellant, no further LOPE payments were made to him after 30 October 1994. The appellant did in fact have continuing contact with the Corporation by reason of ongoing medical matters, payment of Lump Sum compensation and assistance for the purchase of a motor vehicle. In August 2006, the appellant made an inquiry with the Corporation about his entitlement to LOPE and after an investigation the Corporation considered that the appellant was entitled to a reinstatement of his LOPE, weekly compensation. In a recommendation from the Corporation's Branch Medical Advisor, Dr G Corbett, he stated as follows: "I am of the opinion that in view of these severe injuries there would not have been a change in work capacity since 1994 and there is no need for you to obtain medical certification of incapacity for the period from then to now." The Corporation wrote to the appellant on 25 October 2007 formally advising him that he was entitled to LOPE from the date when it had been ceased in 1994 onwards, and with the necessary adjustments for repayment of WINZ payment received and earnings from the comparatively short periods when the appellant was in employment It is the case that the appellant was in full-time employment as a Workshop Hand by Reynolds Group Limited for a period of ten months from March 2003. It is the case that the appellant was obliged to give up this work because of ongoing problems associated with his covered physical injuries. . The appellant sought a review of the decision relating to his entitlement to weekly compensation based on LOPE. A Review Hearing took place on 22 December 2008 at which the appellant was represented by Mr Darke, and it was the contention of Mr Darke that the appellant's weekly compensation should be assessed by reference to the income he had earned during the period of his employment with Reynolds Group In a decision dated 25 March 2009, the Reviewer determined that the Corporation had correctly interpreted the statutory requirements, and that the appellant's entitlement was limited to that of the sum which represented LOPE and the respondent's primary decision was confirmed. [4] It was the submission of Mr Darke that the combined effect of Sections 100(1)(d) and 105(2) and a claimant who thereby has an entitlement to LOPE pursuant to Clause 47 of Schedule 1, can by virtue of Section 365(4) have the rate calculated under the provisions of the 2001 Act and thereby have eligibility for a higher rate based on earnings rather than the LOPE rate. Mr Darke submitted that the appellant was thereby entitled to weekly compensation as assessed pursuant to Clause 32 of Schedule 1. [5] Mr Tui, Counsel for the Respondent, submitted that in order for Clause 32 of Schedule 1 to be applicable a claimant must come within the test provided under Section 103(2) and that this is a different test for incapacity from that under Section 105(2) which he submitted applies to this appellant. [6] Counsel submitted that the chain of the appellant's incapacity was unbroken from the date of his injuries in 1991, and therefore in line with the decision of this Court in Courtney (Decision 22/04) weekly compensation must be considered in terms of the entitlement to LOPE, and that subsequent earnings from employment must be taken as being only earnings to be considered for abatement and such employment does not extinguish the original status of being a potential earner from the date of injury. [7] I also note the further submission made by Mr Darke in which he stated as follows: It seems extraordinary to suggest, within the concept of an accident compensation scheme, that a claimant could be deprived of earner status forever because of a serious childhood injury. It is said that because Mr Kogler suffered this childhood injury he is struck out of the weekly compensations scheme forever in terms of that injury. Rather than the potential ear ial earner provision being beneficial, it would be a shackle with a life sentence. 5 It is hard to imagine that parliament would have intended a result so clearly contrary to the intention of the scheme. The potential earner provision was a safety net for children suffering serious injury to ensure some level of meagre support but it cannot have been intended to signify that this was their lot once and for all. DECISION [8] It is the case that when the appellant first became eligible for weekly compensation consequent upon his incapacity from his covered injuries, the Accident Rehabilitation and Compensation Insurance Act 1992 had come into effect, and by virtue of Section 46 of that Act the appellant became entitled to weekly compensation for loss of potential earning capacity and the amount of entitlement was stated in that section in dollar terms. 19] It is the case that upon the repeal of the 1992 Act by the Accident Insurance Act 1998, Section 428 of the 1998 Act preserved Section 46 and the entitlements under that Section 46 were stated to continue to apply. With the repeal of the 1998 Act by the Accident Compensation Act 2001, Section 365 of the 2001 Act preserved Section 428 of the 1998 Act. However, by virtue of subsections 3 and 4 of Section 365, it stated as follows: "(3) On and after 1 April 2002, the compensation under subsection (2) continues to be payable at the rate payable as if it were calculated under this Act. (4) However, the person's continued eligibility for weekly compensation and adjustments to the rate at which it is paid are subject to this Act.' [10] I find it to be the case, both as a matter of fact and law, that as of the date of the commencement of the Accident Compensation Act 2001 the appellant's entitlement to weekly compensation was an entitlement based on his incapacity and LOPE. That status had commenced pursuant to Section 46 of the 1992 Act and had continued pursuant to the provisions of Section 428 of the 1998 Act. [11] As noted from Section 365(4) of the 2001 Act, a person's continued eligibility for weekly compensation and adjustments are subject to the provisions of the 2001 Act. [12] Section 100 of the Act is the principal statutory provision pertaining to entitlement for weekly compensation, and by virtue of subsections (1) (a) to (d), 6 there are four separate categories identified. The two relevant subsections in this case are (a) and (d) respectively, and state as follows: A claimant who has cover - (a) is entitled to receive it if the Corporation determines that the claimant is incapacitated within the meaning of section 103(2) and the claimant is eligible under clause 32 or clause 44 of Schedule 1 for weekly compensation. (d) is entitled to receive it if the Corporation determines that the claimant is incapacitated within the meaning of section 105(2) and if the claimant is eligible under clause 47 of Schedule 1 for weekly compensation. [13] In terms of Section 100(1)(a) where entitlement requires incapacity with the meaning of Section 103(2), Section 103(2) states as follows: ( 2 ) The question that the Corporation must determine is whether the claimant is unable, because of his or her personal injury, to engage in employment in which he or she was employed when he or she suffered the personal injury. [14] In terms of Section 100(1)(d), incapacity within the meaning of Section 105(2) provides for the Corporation to determine the incapacity of a claimant who at the time of incapacity was a potential earner and - (2) The question that the Corporation must determine is whether the claimant is unable, because of his or her personal injury, to engage in work for which he or she is suited by reason of experience, education, or training, or any combination of those things. [15] In terms of Section 105(2) the respondent did obtain a Medical Assessment from Dr Bruce Gollop, Occupational Medicine Specialist, and his report, after noting the severe nature of the injuries on an ongoing basis, stated as follows: Moving forward, he is permanently unfit for moderate or heavy manual work or for those occupations that require mobility and have a standing or walking component which is more than for an hour or two per work day. He is fit for light supervisory type work or office type work where he is mostly in a sitting position. [16] In terms of the Act, I find that it must be the case that the appellant is still incapacitated and that that incapacity has continued since he suffered the severe injuries in 1991 and that this incapacity has continued unabated and was the appellant's status at the time the respondent made its decision in October 2007. 7 [17] For the appellant to be eligible for weekly compensation based on the entitlements contained in Clause 32 of the Act, the appellant would have to satisfy the statutory requirements contained in Section 103(2) as set out above, and the primary requirement, which this appellant unfortunately cannot satisfy, is establishing incapacity based on an inability to engage in the employment in which he was employed when he suffered the personal injury. [18] The fact that the appellant was not in employment, he being a 16 year old schoolboy at the time, means that he can never come within Section 103(2) and that status of incapacity would not arise until the appellant could establish, on medical grounds that he had ceased to be a potential earner because he had ceased to be a person to whom Section 105(2) applied, but rather he has subsequently become incapacitated by reason of further personal injury suffered whilst in employment.. [19] The period of the appellant's employment with Reynolds was of a comparatively short duration, and it is clear from a statement made by Reynolds's Operation Manager, that he was not able to continue with this employment because of his covered injuries, and therefore it could not be said that he had attained the status of no longer being incapacitated as a potential earner. [20] The finding I have made above is in line with the comments made by His Honour Justice Gendall in the decision of ACC v Vandy and where the basic fact in that case was that the claimant had suffered serious injury whilst still at school, after leaving school she obtained employment, but was then forced to give up that employment because of her medical condition arising from that earlier injury. In that decision His Honour stated as follows: But the requirements for entitlement to weekly compensation in s 100(1)(a) are clearly expressed as cumulative. The section says who is "entitled" and they must be "incapacitated" (unable to engage in employment) within s 103(2) (i.e. "in which he or she was employed when he or she suffered personal injury"). Of course, if a person is not in employment when suffering personal injury they may still, factually, be rendered incapable ("incapacitated") of continuing in later employment and have an "incapacity" commencing after engaging in employment (in terms of cl 32). Yet they still do not have an "incapacity" in terms of s 103. [21] In response to Mr Darke's assertion that the statutory provisions are unjust and unfair if it were to be the case that a potential earner was shackled to that status for life. This is not the case, as was identified by His Honour Judge 8 Cadenhead in the course of his decision in the appeal of Courtney (Decision 22/04). As His Honour noted: The issue that has to be faced is whether or not from the date of the original accident and entitlements to cover there had been a break in the chain of causation, so that it could be said the appellant's present incapacity is not connected to the original injury. Clearly, there were lengthy periods when he worked and by virtue of the abatement provisions of the legislation, his earnings while either in New Zealand or overseas abated his right to receive weekly earnings of compensation. [22] I concur with the view expressed by Judge Cadenhead, that where a potential earner, from a medical perspective, is no longer said to be unable because of his personal injury, to engage in work for which he is suited and is so engaged in work for which he is suited and then suffers an incapacitating injury, and such incapacity from a subsequent event establishes that there has been a break in the chain of causation of injury and its effect from that which was the original injury which had given rise to the finding of loss of potential earning capacity. In those circumstances Sections 100(1)(a), 103(2) and Clause 32 of Schedule 1 would apply. [23] In the present case, I find that the income which the appellant earned whilst employed by Reynolds can only be considered as an abatement feature, and there is no evidence that there was any break in the causation between the personal injury suffered by the appellant in that motor accident and his ongoing inability to engage in employment. [24] For the foregoing reasons, therefore, I find that the appellant is still entitled to weekly compensation based on Section 105(2) with the quantum of entitlement being as contained in Clause 47 of Schedule 1. That was the decision of the respondent and therefore this appeal is dismissed. DATED this 13 day of April 2011 M J Beattie District Court Judge