Clarey v Accident Rehabilitation and Compensation Insurance Corporation
The Court held that s 162(b)'s deemed delivery rule applies to lodgement under s 89(6), the applicant bore the evidential onus to prove posting/delivery on 19 January 1995, probabilities were evenly balanced and not proven to meet that onus, so the application was deemed lodged on 20 January 1995 and the hearing was...
Source-derived case information.
- Citation
- [1995] NZACC 124
- Parties
- Appellant: J G Clarey; Respondent: Accident Rehabilitation and Compensation Insurance Corporation
- Court
- District Court
- Jurisdiction
- New Zealand
- Judgment Date
- 25 October 1995
- Procedural Posture
- Appeal Under Accident Rehabilitation and Compensation Insurance Act 1992 (s 91) / District Court Determination on Appeal From Review Officer
- Outcome
- Appeal allowed; Corporation's decision dated 17 October 1994 revoked; matter remitted to Corporation to determine appropriate backdating of reinstated payments with rights of review preserved; appellant awarded costs of NZD 600.
- Legal Topics
- Suspension and Cancellation of Benefits (s 73), Review Procedure and Limitation (s 89, S 90), Deemed Delivery and Postal Presumptions (s 162), Test of Incapacity (s 37), Onus of Proof for Lodging and Timing
Source-derived case record
Summary, issues, holding and outcome
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Parties
J G Clarey
Appellant
Accident Rehabilitation and Compensation Insurance Corporation
Respondent
Procedural Posture
Appeal Under Accident Rehabilitation and Compensation Insurance Act 1992 (s 91) / District Court Determination on Appeal From Review Officer
Legal Issues
- 1 Whether the application for review was lodged on 19 January 1995 or 20 January 1995 for s 90(9) purposes
- 2 Whether s 162(b) deemed delivery rule applies to s 89(6) lodgement and time computation
- 3 Which party bears the evidential onus to prove posting/delivery date when relying on s 90(9)
Ratio Decidendi
The Court held that s 162(b)'s deemed delivery rule applies to lodgement under s 89(6), the applicant bore the evidential onus to prove posting/delivery on 19 January 1995, probabilities were evenly balanced and not proven to meet that onus, so the application was deemed lodged on 20 January 1995 and the hearing was within three months; on the merits the Review Officer's factual findings were preferred and the medical evidence did not establish that the Corporation could reasonably decide there was no incapacity under s 37, and there was insufficient evidence of fraud or bad faith to justify cancellation under s 73, therefore the Corporation's 17 October 1994 decision was revoked.
Court Disposition
Appeal allowed; Corporation's decision dated 17 October 1994 revoked; matter remitted to Corporation to determine appropriate backdating of reinstated payments with rights of review preserved; appellant awarded costs of NZD 600.
Orders
- Revocation of the Corporation's decision dated 17 October 1994
- Remit to the Corporation to determine date from which payments should be reinstated and backdated with rights of review
Full Case Text
Judgment text and source record
1 paragraphs
IN THE DISTRICT COURT Decision No. 12 4 /95 HELD AT CHRISTCHURCH IN THE MATTER of The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an Appeal pursuant to 89 95 0367 Section 91 of the Act BETWEEN J G CLAREY Appellant (Appeal Nos. DCA 100/95 and 133/95) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 6th day of September 1995 APPEARANCES Mr C Hutchison advocate for appellant Mr N Morrison for respondent DECISION OF JUDGE D A ONGLEY This decision concerns two appeals relating to the same claim. The first appeal is brought on the ground that the Review Officer had no jurisdiction to embark on a hearing because the hearing was not commenced within three months after the lodging of the application for review. The second appeal, if the first question is not decided in favour of the appellant, is an appeal against cessation of compensation under s 73 of the Accident Rehabilitation and Compensation Insurance Act 1992. The appellant, who is now aged 43, suffered acute back strain on 15 October 1992 when lifting a piece of factory equipment in the course of his employment. The Corporation accepted a claim for cover and contributed to chiropractic treatment - 2 - and the cost of a posterior lumbo-sacral fusion operation in March 1993. His surgeon, Mr. Jones reported on 4 August 1993: "He opened a small pottery with a friend on the 20 April 1993 and I am sure he is perfectly capable of returning to the workforce in this type of area. I fully accept that he would have difficult coping with heavy physical work as a polyethylene film extruder, lifting heavy weights on a repetitive basis but at this stage I would not anticipate he would have any difficulty working in a pottery shop." The appellant's activities were the subject of investigation and a threatened prosecution by the Corporation. While receiving earnings related compensation he is alleged to have engaged in work without informing the Corporation. The Corporation then either suspended or terminated his earnings related compensation (the meaning of the Corporation's decision being in contention) for reasons associated with his alleged misconduct or with the belief that he was no longer incapacitated. On 8 November 1993 the Corporation wrote to the appellant as follows: "Given that you were found to be working and did not advise the Corporation of this, and that you continued to provide medical certificates confirming that you were still unfit for work during this time, the Corporation has decided to suspended your weekly compensation ..." The appellant did not lodge an application for review. His reason was that he was told by a Corporation employee that there was no point in his doing so until an investigation of his criminal liability was completed. Nothing further turns on that. The appellant's advocate corresponded with the Corporation about the meaning of the word "suspended" and obtained an acknowledgement that an indefinite suspension was possibly an inappropriate application of s 73 of the Act which refers to either a suspension or cancellation. Section 73 states in part: 73. Suspension, cancellation, or refusal of compensation and rehabilitation - (1) The Corporation shall, and any exempt employer may, if not satisfied on the basis of the information in its possession that a person is entitled to continue to receive any treatment, service, rehabilitation, related transport, compensation, grant, or allowance under this Act, suspend or cancel that payment for treatment, service, or related transport, or the payment of compensation, grant, allowance, or provision of rehabilitation. (IA) ... (2) The Corporation shall, and any exempt employee may, upon the unreasonable refusal or failure of any person to - (a) Comply with any requirement made under any provision of this Act relating to any claim; or (b) Undergo medical or surgical treatment in respect of personal injury (irrespective of whether the Corporation is required or permitted to contribute towards the costs of the treatment) ; or (c) Agree to an individual rehabilitation programme - decline to make any payment under this Act. - 3 - Although the Corporation's legal adviser considered that the original decision had to be modified, when the Corporation issued a further decision it was in the same terms, stating: "Further to the Corporation's letter of 8th November 1993, to suspend weekly compensation in accordance with Section 73 of the Accident Rehabilitation and Compensation Insurance Act 1992, I confirm that this decision was correct and the cessation date of the weekly compensation will remain as 9th November 1993." Leaving aside for the moment questions about the meaning and effect of this new decision, at least the appellant gained a further opportunity to apply for review and he did so. His notice of application for review was dated 18 January 1995 and when it was received by the Corporation it was date stamped 20 April 1995. The Corporation requested the review section to allocate the latest possible hearing date, evidently because the investigation of the appellant and its outcome were still uncertain. A hearing was allocated on 20 April 1995. Section 90 provides "90. Reviews - .. . .. (9) Where the hearing of a review has not been commenced within 3 months after the lodging of the application for review, and the delay is not caused or contributed to by the applicant, the application shall be deemed to have been determined in favour of the applicant." The allocation of the hearing date was the last day of the 3 month period after 20 January 1995, the day on which the Corporation considered the application had been lodged. The appellant now submits that the application had been lodged on 19 January 1995 and the hearing was not commenced within 3 months after that date so that the application is deemed to have been determined in his favour. The appellant relies on s 89(6) and it is instructive to set out both subs (5) and (6): "(5) An application pursuant to this section - (a) May be made in the prescribed form within 3 months after the date on which the claimant is entitled to treat the claim in respect of which the review is sought as having been rejected under section 66 of this Act; and (b) In any other case, an application in the prescribed form may be made within 3 months after the date on which notice in writing has been given of the decision in respect of which the review is sought. (6) Any application under this section shall be made by giving it to the Corporation or exempt employer in the same manner as notices may be delivered under section 162 of this Act". Subsection (6) follows immediately after the statement of time limits for lodging and application for review. Section 162 provides: "162. Delivery of notices - Where notice is required to be given to any claimant, employer, or person liable to pay any premium under this Act, that notice may be given to that person by - (a) Personal delivery to that person; or - 4 - (b) Posting it to the usual or last known address of that person, in which case it shall be deemed to have been delivered to that person at the time at which it would have been delivered in the ordinary course of post; and in proving delivery - (i) It shall be sufficient to prove that the notice was properly addressed; and ii) It shall be presumed, in the absence of proof to the contrary, that the notice was posted on the day on which it was dated; or (c) Except in the case of a claimant, sending it by facsimile or other electronic means to that person, in which case it shall, in the absence of proof to the contrary, be deemed to have been delivered on the day after the day on which it was sent; and in proving sending, it shall be sufficient to prove that a correct machine-generated acknowledgement of receipt has been received." Section 162(b) not only provides for a means of delivery by ordinary post but also declares a presumption as to the date of delivery. Counsel for the respondent accepted that the deemed date of delivery under s 162(b) is also the deemed date of lodgement under s 89(6). The natural meaning of the two sections of the Act read together is that the date of lodgement fixed under s 162(b) is to be applied for the purposes of the limitation of time for lodging an application for review under s 89(5). It might be argued that the application of s 89(6) is limited to the manner of lodgement and that the presumption as to time of delivery is not necessarily to be imported into s 89(6), but the deemed date of delivery is so much an integral part of s 162(b) that it would be artificial to read the Act as permitting the lodgement of an application for review by post without deeming the date of delivery to follow in accordance with s 162(b). That construction was not submitted by the respondent and it is not tenable. The deemed date can only have been included in s 162(b) for the purpose of calculating time. It would be quite illogical that it should be applied for the purposes of deciding whether an application had been lodged in time but should not be applied for the purpose of s 90(9) in deciding whether a hearing has been commenced in time. The respondent submitted that there was insufficient evidence of the time at which the application would have been delivered in the ordinary course of post. The Review Officer dealt with the question on the basis that there was no sufficient proof of the ordinary course of post and that the best available evidence of delivery was the Corporation's date stamp. She considered also that it was not necessary to refer to s 162 at all because the fact of delivery was not in dispute. For the reasons that I have stated I consider that the time of delivery is fixed by s 162 even when the fact of delivery is not in question. The issue to be decided then is whether the time of delivery has been shown to have been on 19 January 1995 and not on 20 January. The incidence of the onus of proof is important. In cases where there is a doubt, at least an evidential onus should rest on the claimant who is the party seeking to take advantage of the operation of's 90(9). The justice of placing the onus on the person seeking to take advantage of a provision is recognised, for example, in insurance law where an insurer assumes the onus of proving that an exception applies under the policy Dawson v Monarch Insurance Co [1977] 1 NZLR 372. The appellant is assisted by s 162(b)(2) which presumes, in the absence of proof to the contrary, that . 5 - the notice was posted on the day on which it was dated. No evidence was given as to the time and place of posting but the appellant lived in Christchurch and it is probable that he posted it in Christchurch. The Review Officer indicated that she would make an enquiry concerning the postal rules. There was no reference in her decision to any further material of that kind and counsel for the respondent did not object to a copy of the New Zealand Post guide ADVIO(7/94) being produced on the hearing of the appeal. The guide states that ordinary post delivery targets are for delivery across town (within city limits) by the next working day, by contrast with out of town targets which are for 2-3 days. Mail should be lodged by 5 pm and some mail outlets close off mail acceptance a little earlier. The fastpost target is for delivery between major towns and cities by the next working day. Although those are expressed as "targets" I accept the guide as evidence of delivery in the ordinary course of post. The difficulty is that there is no evidence of the time of day on which the letter was posted. The presumption that the notice was posted on the day on which it was dated assists only so far. Neither is the date stamp impressed by the Corporation sufficient evidence on its own of the date of receipt because there is no evidence from the Corporation of the mail receiving system in operation at the relevant time and place. The date stamp does however have some relevance in supporting at least the possibility that the letter was not posted in time for delivery on 19 January. I find that in the absence of evidence of the time of posting the probabilities were at best evenly balanced and it was not proved that the review application was posted at a time at which it would have been delivered in the ordinary course of post on 19 January. The hearing, which commenced on 20 January 1995, was therefore within three months after the day of lodging the application. The folly of fixing a hearing date in reliance on the Corporation's date stamp requires no comment. For completeness I refer to the appellant's argument that the hearing date was fixed without consultation and the review was therefore not properly conducted. Section 90(5)(a) states that the hearing shall be held at a time and place that are agreed to by the applicant, the Corporation and the person hearing the review. That provision protects an appellant who is given an inconvenient hearing date, or who takes steps to have a hearing date allocated, but it is a procedural provision only and cannot have a consequential effect of invalidating the proceedings for non compliance or depriving the Review Officer of jurisdiction to hear the proceedings. I then move on to the second appeal which concerns s 73 of the Act: '73. Suspension, cancellation, or refusal of compensation and rehabilitation - (1) The Corporation shall, and any exempt employer may, if not satisfied on the basis of the information in its possession that a person is entitled to continue to receive any treatment, service, rehabilitation, related transport, compensation, grant, or allowance under this Act, suspend or cancel that payment for treatment, service, or related transport, or the payment of compensation, grant, allowance, or provision of rehabilitation. . .... (2) The Corporation shall, and any exempt employee may, upon the unreasonable refusal or failure of any person to - - 6- (a) Comply with any requirement made under any provision of this Act relating to any claim; or (b) Undergo medical or surgical treatment in respect of personal injury (irrespective of whether the Corporation is required or permitted to contribute towards the costs of the treatment) ; or (c) Agree to an individual rehabilitation programme - decline to make any payment under this Act. This is not a case where the appellant is alleged to have refused or failed in the manner described in subs (2). The facts that constrained the Corporation to suspend or terminate his compensation were that he was seen to be working while in receipt of earnings related compensation and that he continued to provide the Corporation with medical certificates confirming that he was unfit for work. When he was advised in November 1993 that his weekly compensation was suspended, the appellant responded by advising the Corporation that he had never received wages but worked from time to time in a pottery and craft business called Earthworks. He furnished a statement from Ms Mcpherson, the owner of the business, to the same effect. The Corporation believed that the appellant and Ms Mcpherson were in a close relationship and the assertion that he was unpaid did not answer the question whether he was fit for work and was in fact working. An internal recommendation was made to take recovery action for $3, 185.44 in respect of compensation paid to the appellant during a period when he was working and also to commence a prosecution. Oddly enough, at about this time the appellant completed am independence allowance assessment and was granted an allowance on the basis that he was 39% disabled. The independence allowance is based on a functional limitations profile questionnaire which contains largely subjective material. The prosecution did not proceed, possibly because the time for laying an information was exceeded. The appellant did not apply for review of the Corporation's decision of November 1993 but he later consulted Compensation Advisory Services which took up with the Corporation a question whether an indefinite suspension amounting to a cancellation of compensation was a proper exercise of the Corporation's power. The Corporation issued a further decision dated 17 October 1994 which did not make any change to the earlier decision but which gave an opportunity for an application for review. It was against that decision that the review application was filed in January (the application itself being on the verge of expiry of time for review but treated as being in time). The Corporation had initiated an investigation and received an investigator's report of 4 May 1993. That report referred to his assisting his partner Ms Mcpherson when she was working for Mission Wines. It did not disclose that the appellant had "engaged in any paid employment, although he had assisted Ms Mcpherson in wine tasting presentations. I have referred to Mr Jones' report in August 1993 disclosing that the appellant had opened a small pottery with a friend. On 29 September 1993 the Corporation received an investigator's report recommending that the appellant should be interviewed about the following matters: "I. That he is engaged in full-time employment at Earthworks. 2. He is able to undertake physical work inconsistent with his injury. - 7- 3. He rides his push bike to work. 4. He is engaged in the sale of Mission Wines with his de facto, Rebecca McPherson.' He was interviewed and he explained that he minded the shop without pay while Ms Mcpherson was out four days a week. As well as suspending his weekly compensation, the Corporation decided to recover alleged overpayments from 13 September 1993 onwards on the basis that he had been working during at least that period without informing the Corporation. In May 1994 the Corporation obtained further information to the effect that he had left Ms Mcpherson and taken $1,800 from her funds. She was interviewed and she said that the appellant had been attending to general shop duties and also doing pottery work out the back. She produced examples of small pottery objects that he had made. He faced criminal proceedings, the exact nature of which are not known and are not part of this decision. On 20 May 1994 his general practitioner, Dr Lyftogt wrote to the Corporation: "As you know James Clarey sustained a major injury to his low back. In March of 1993 his mechanical type back pain was treated with fusion of the lumbosacral junction. following the operation he initially improved and then deteriorated and he has been left with post operative lumbosacral pain. He was followed up by Mr Jones until an MRI scan of his lower back in March of this year could not identify any structural problems of the lumbar spine. Mr Clarey is now left with a chronic low back syndrome and he would theoretically be fit for selective alternative work, specifying avoidance of lifting and heavy work. As you are aware, ACC suspended payment to Mr Clarey in November 1993 because of alleged earnings related work while on ACC. Other aspects of his life also went wrong, and he is at the moment on bail for a criminal offence unrelated to ACC, and which will proceed to court in two weeks time. Mr Clarey has not found himself in a typical Catch 22 situation. He is at present on bail, and staying with his ex-wife he is not entitled to a sickness benefit, and as his ACC payments were stopped in November, he is forced to work, at present, as a potter in order to earn some money for his daily requirements. As his general practitioner, I am most concerned about his physical and mental health. The heavy pottery work is affecting his back adversely and he is now in chronic pain, often unable to sleep at night because of it. He is already on antidepressants for major depressive illness. I would like to impress on you that I am most concerned about his mental and physical state from a medical point of view. May I request that in the interest of Mr Clarey's mental and physical health, ACC deals with Mr Clarey's case in the shortest possible time. I am sure that you can impress on the Crown Prosecutor the need for a speedy conclusion of Mr Clarey's case." As weekly compensation had been suspended Dr Lyftogt was not furnishing C15 certificates at that stage, but his opinion in the above letter was consistent with earlier medical opinion that the appellant was not fit for lifting and heavy work. 8- At the review hearing evidence was given by two investigators. The Review Officer summarised the evidence of the investigators. The investigators saw the appellant arranging pots and plants, lifting 20 litre bags of plant mix, lifting stands of pottery and plastic pots containing plants and potting mix, and bending over low shelves. The appellant was seen bending with his legs straight on at least 7 occasions. He was seen carrying a step ladder, climbing to reach plants that were hanging outside the shop and carrying signs and plants inside the shop. An investigator observed the appellant cycling a distance of 5 kilometers to his home. The following day he observed the appellant cycling to the shop. The appellant opened the shop, wheeled out a wheelbarrow, carried out pots and plants and climbed a ladder to display them. He did not show signs of being in pain. Mr Thiele, an investigator, gave evidence of an enquiry in July 1993 when he obtained evidence that the appellant had been selling pottery to garden shops. He said he had interviewed the appellant who admitted that he opened the shop four mornings a week. He also described his observation of the work that the appellant did about the shop. Mr Clarey gave evidence confirming that he worked at the shop and occasionally potted but received no wages. He said that when the shop was started he was a guarantor of the lease and the cheque account but during his separation from Ms Mcpherson he had withdrawn his guarantee. They had reconciled in September 1993. Ms Pherson had told Mr Thiele that the shop had originally been in their joint names but that was changed because of problems with ACC. The Review Officer referred to s 37 of the Accident Rehabilitation and Compensation Insurance Act 1992: "37. Test of incapacity - For the purposes of this Part of this Act, whether or not a person to whom this Act applies is incapacitated shall be determined by whether or not the person is, by reason of his or her personal injury, for the time being unable to engage in employment in which the person was engaged when the personal injury occurred or, where any of sections 44, 45, 46, or 49 of this Act applies, any other employment for which the person is qualified by reason of experience, education, or training or any combination of them." In dealing with the appellant's pre-accident employment he referred to evidence of the appellant that he was required to place a roll shaft carrier two metres long and weighing 36 kg at an extended distance of about 500mm while leaning over the drum at an angle of up to 40 degrees. The appellant said that he had to perform that operation 36 times in an eight hour shift. On the other hand the factory manager had stated that the appellant was required to remove a roll of plastic film and return the roller to the machine about once every hour and that the job did not require a great deal of heavy lifting. The Review Officer referred also to conflicts between the appellant's evidence and the evidence of the investigators and said that he had significant doubts about the appellant's evidence which contained exaggerations and inconsistencies, some of which he referred to in his decision. He said: "Because of the inconsistencies noted above I prefer the evidence of Mr Thiele and Mr Shriek regarding Mr Clarey's activities at the Earthworks shop. I consider that the activities undertaken by Mr Clarey at the Earthworks shop had similar qualities to the work undertaken by him at Southern Packaging Lid, particularly the requirement to lift and carry relatively heavy items. I - 9- appreciate that the type of work was quite different, one involving industrial manufacturing and the other small scale manufacturing and retailing, however as I have said I consider that an analysis of the work tasks shows that there were very similar qualities like lifting and moving heavy items, standing and bending. By undertaking the activities that Mr Clarey did at Earthworks I consider that he has shown that he is substantially capable of engaging in his pre-accident employment and as such the test of incapacity has not been satisfied." In the course of this appeal Mr Hutchison pointed to inconsistencies in the evidence of the investigators. The points that he addressed were only incidental, having no inherent value as an indication of unreliability of the evidence. The Review Officer had the opportunity of hearing the witnesses and forming an impression of the reliability of the evidence from his impression of the witnesses and the content of their evidence. The Review Officer's decision expressed his findings of fact established by evidence at the review hearing and those findings should not be disturbed on appeal without good reason. However the appellant introduced three documents by way of further evidence on the hearing of this appeal. All were prepared after the Review Officer's decision of 30 May 1995. Two of the documents are medical reports and the third is a written statement from Mr T Stacey who worked with the appellant at Southern Packaging and who appended his business card showing him to be a production manager. If that material was to be accepted as true the appellant's case would be a good deal stronger. Apart from the appellant's own evidence, the only evidence at the review hearing of the demands of his pre-accident employment was contained in a report of a telephone conversation between a Corporation officer and the manager of Southern Packaging Ltd. In contrast, the document signed by Mr Stacey is detailed and comprehensive and, at least on its face, tends to establish that the physical demands of the job were greater than the demands of the work done by the appellant at Earthworks, even if the investigators' description of that work is accepted in preference to the appellant's own evidence which the Review Officer did not accept. Under r 16 of the Accident Rehabilitation and Compensation Insurance (Appeals) Regulations 1992 this Court has power to remit to the Review Officer for further consideration and determination the whole or any part of the matter to which the appeal relates with a direction as to any rehearing or reconsideration of the questions. This Court may hear such evidence as it thinks fit whether such evidence would otherwise be admissible in a Court of law. The documents to which I have referred appear to be unexceptionable and counsel for the respondent quite properly made no objection to their being admitted as evidence on the hearing of their appeal. Their weight of course is a matter for consideration. After evaluation that evidence .. I consider that the proper course is to determine the question on appeal without referring questions back to the Review Officer for further determination. I accept the Review Officer's findings as to credibility and weight of evidence considered at the review. The first of the two medical reports is from Dr Lyftogt who said that lifting two buckets was not outside Mr Clarey's capabilities but lifting 30 kgs 30 times a day - 10 - was quite a different matter. The second was from Prof. Rothwell who set out his understanding of the history as follows: "Mr Clarey states that he has had a degenerative back problem for many years. Up until 1992 Mr Clarey had been working in a plastics firm for six to seven weeks prior to the accident date of 14. 10.92 he had been working on a special machine which involved lifting a 36 kg cone shaft and placing it forward of him into a cradle. This task required him to lean forwards with his arms fully outstretched. Mr Clarey did this on an average of ten times a day but on 14. 10.92 he did it twenty eight times and on the last time he developed severe pain in the back causing him to totally seize up in the back, shoulders and neck." He described the self reported symptoms experienced by the appellant including pain exacerbated by lifting, bending or stooping and relieved by heat or medication. He gave the following summary: "Mr Clarey has chronic back pain which has become entrenched since the incident of October 1992 with involvement of the neck and shoulder girdle. The pain affects all aspects of day to day living so that he now leads a very restricted life as outlined above. Examination however, demonstrated very few objective abnormal findings and it is noteworthy that there was continual vocal reinforcement throughout the examination. It is also noted that the xrays apart from the transitional vertebra do not show a significant abnormality. I find it difficulty to determine the ACC liability with regard to Mr Clarey. There is no doubt that the action Mr Clarey described of lifting the shaft into the machine cradle would certainly place enormous stress on the lower back and be responsible for the symptoms which he developed in October of 1992. However, one would expect these symptoms to settle in due course especially as he had not returned to the same type of work. What Mr Clarey now demonstrates is abnormal injury reaction with stronger psycho-social than biological factors. I strongly believe he needs referral to the MSPEM centre at Burwood Hospital. I discussed this with Mr Clarey who had heard of the Unit and is keen to be referred. Mr Clarey has accepted my offer of a referral." Prof. Rothwell appears to have taken a suitably critical approach to his assessment of the appellant's injury but nevertheless regards him as suffering entrenched chronic back pain affecting all aspects of day to day living. The appellant's present problems are regarded as real enough and they must originate by reason of his personal injury even if there is some intervening psycho-social factor. After considering that material, and substantially discounting the appellant's own .. evidence, I find that there is insufficient evidence for the Corporation to reasonably decide that there is no longer an incapacity in terms of s 37 of the Act. The work that he did at Earthworks is not disentitling, even accepting fully the observations by the investigators in preference to the appellant's evidence. It amounts to evidence that he was able to engage in selected employment, but it is consistent with the medical views that he is not fit to resume his former employment. - 11 - Mr Morrison submitted that even if that conclusion was reached there was sufficient reason under s 73 of the Act to cancel weekly compensation on the ground that the appellant is no longer entitled. I reject that argument. First, it was not a ground on which the Review Officer confirmed the Corporation's decision. Secondly, accepting only for the purposes of argument that there may be circumstances that disentitle a claimant for reasons of bad faith or fraud in dealing with the Corporation, the evidence in this case does not reach that kind of level. Fraud by the appellant has not been proved. He did not hide from the Corporation the fact that he proposed to do some pottery. He failed to disclose that he was helping in his partner's business but there is insufficient evidence that the non-disclosure was intended to deceive. It is consistent with a desire to remain active and a capacity for occasional exertion. The evidence that he bent from a straight legged position without showing signs of discomfort raises perhaps the most doubt about the appellant's capacity for work, but in my view it is a casual observation clearly outweighed by the medical reports. It is possible that the Corporation, through its officers, was influenced by an accumulation of prejudicial material, a good deal of which was capable of satisfactory explanation. For example, some weight was placed on the fact that the accused was the subject of criminal proceedings and was in fact imprisoned, without interviewing him about those matters and finding out the circumstances of the charges. It appears possible that they were centred on a domestic dispute as a result of which he took cash belonging to his partner and lit a fire in the shop. Those are not matters having a direct bearing on his responsibilities under the Act and there may be countervailing considerations. Dr Lyftogt expressed particular concern about the appellant's clinical depression and its effects. He later reconciled with his partner. No doubt the appellant has contributed in his own way to the Corporation's view of aspects of his case, but at least on the present material the is no cogent evidence of deliberate deception. For those reasons the appeal is allowed and the Corporation's decision of 17 October 1994 is revoked. There may be some difficulty in selecting the date from which reinstatement of payments should be backdated. If so that will have to be the subject of a further decision by the Corporation with rights of review. The appellant will have costs of $600 on the appeal. DATED at WELLINGTON this 25th day of October 1995 D A Ongley - District Court Judge