Inglewood Metal v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT WELLINGTON Decision No. 164 /98 UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an appeal pursuant to section 91 of the Act BETWEEN INGLEWOOD METAL of Stratford Appellant (Appeal No. DCA 227/97) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD at NEW PLYMOUTH on the 13th day of July 1998 APPEARANCES P J Mooney for appellant A Johnson for respondent DECISION OF JUDGE A W MIDDLETON The issue in this appeal is whether the appellant is entitled to the benefit of the provisions of s.90(9) of the Act, thereby having its application for review being deemed favourable to it. The facts which give rise to the appeal are that the Inland Revenue Department did an audit of the appellant's employer premiums for the years 1992, 1993, 1994 and 1995. The reassessment came about because the appellant had paid employer premiums at differing rates for various groups of its employees but had not kept 2 separate accounting records in respect of each of the separate operations in which those employees were engaged. By a letter dated 17 July 1996 the appellant's accountant notified the Inland Revenue Department and particularly its investigator, Ms M Keegan, that it objected to the assessments made by the Department. In a letter of 17 July 1996 the appellant's accountant wrote to the respondent's premiums assessment manager confirming the basis upon which the appellant considered its premiums should be assessed as Ms Keegan, the Inland Revenue Department's investigator, intended being absent from New Zealand for approximately three months. Ms Keegan requested the appellant's accountant to agree to a delay of a decision on the appellant's objection during the period when Ms Keegan would be overseas. The account notified Ms Keegan on 26 July 1996 that it agreed to the postponement with the proviso that "as long as this does not impact adversely on the issue of penalties". It appears from a file memorandum that the appellant's objection of 17 July 1996 was not referred to the respondent until 30 October 1996. On 17 December 1996 the respondent notified the Inland Revenue Department that as the review hearing had not been set down within three months of the request for the review it considered that the provisions of s.90(9) should be applied in favour of the appellant. After subsequent administrative consideration the respondent made a decision on 11 April 1997 that it declined to make a favourable decision under s.90(9) upon the grounds that the appellant had contributed to the delay in the commencement of the review. The review officer upheld the respondent's decision and it is against that decision which the appellant now appeals. Mr Mooney submitted: 1. That the date of 17 July 1996 should be deemed the date of the lodging of the application for review on which basis he submitted that the appellant had not caused or contributed to the delays from that date. 2. That any delay was the result of Ms Keegan's request by reason of her absence from her office which did not amount to a contribution to the delay by the appellant. 3 . That the words "to contribute" imply the notion of some causation by the appellant. That it could not be said that the appellant contributed to the delay which was caused by Ms Keegan's absence. 4. That if it is argued by the respondent that the application for review was not lodged until it was received by it on 4 November 1996 any question of delay in that receipt could not be as a result of the involvement of the appellant. 5. That s.90(9) has been included in the legislation so an objection or application for review will be dealt with without delay. 3 Mr Johnson submitted: 1. That the letter of 17 July 1996 from the appellant's accountant did not constitute an application for review, but was merely an objection to the assessment made by the Inland Revenue Department. He submitted that if the letter did constitute an application for review the issue then was whether the delay in processing the application was contributed to by the appellant. 2. That alternatively the letter of 17 July 1996 cannot be regarded as an application for review as it did not relate to a decision of the respondent which could be challenged. 3. That the letter of 26 July 1996 from the accountant to Ms Keegan indicated a willingness to negotiate. I do not consider that the letter of 17 July 1996 from the appellant's accountant constituted an objection to a decision of the respondent. While the Inland Revenue Department is the respondent's agent for the purpose of auditing employer's premiums that is as far as its duties go. The correspondence indicated that the appellant considered the assessments made by the Department to be wrong and accordingly notified the Department and additionally advised the respondent of the basis upon which it considered the assessments to be wrong. When Ms Keegan indicated that as she had been the Department's investigator it was more appropriate for her to continue to deal with the matter the appellant acquiesced in her request to delay a final assessment pending her return. When the issue of s.90(9) was raised by the respondent's staff on receipt of the appellant's letter from the Inland Revenue Department in November 1996 the respondent took the appropriate course by notifying the appellant that it could not claim the benefit of s.90(9) because it had contributed to the delay. The appellant then lodged an application for review of that decision which was upheld by the review officer. I consider that that was the only course which the respondent could take in the circumstances so that it is for the Court to consider whether that was the correct decision as was found by the review officer. As I have already said, I do not consider that the letter of 17 July 1996 constituted an application for review of a decision of the respondent. While the Inland Revenue Department was the agent of the respondent for the purposes of completing the audit its decision on the audit would amount to a recommendation to the respondent which would then have to issue a decision. Further, even if the IRD assessment could be considered as a decision of the respondent, I consider that the appellant acquiesced in any delay which was caused in the hearing of a review by agreeing to delay further negotiations in relation to its premium assessments until the return of Ms Keegan to the country. In those circumstances I do not consider that the 4 appellant can now turn around and claim that it is entitled to the benefit of a favourable decision. Accordingly the appeal is dismissed. DATED at WELLINGTON this 27 day of July 1998 A W Middleton District Court Judge dca22797.doc(rd)