Kemp v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT TAURANGA Decision No. 236 /97 IN THE MATTER of The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an Appeal pursuant to Section 91 of the Act BETWEEN KAREN KEMP DCA 361/96 Appellant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD at TAURANGA on the 29th day of October 1997 APPEARANCES: Mrs K Kemp in person Mr P McBride for the respondent DECISION OF JUDGE M J BEATTIE The issue in this appeal is whether the forms of compensation, and the consequences of remarriage on same, to which the appellant and her dependant children were formerly entitled under the 1982 Act, remained available to her and them upon her remarriage in July 1995. 2 Background Facts The appellant's first husband died in a motor vehicle accident on the 25th February 1984, as a result of which she and her four dependant children received weekly earnings related compensation pursuant to s.65 of the 1982 Act. In a letter dated 27th July 1984 the Corporation advised the appellant's then solicitors Messrs Haddon Marshall and Co precisely what were the nature and extent of the appellant and her children's entitlements under the Act. The relevant paragraph in that letter for the purposes of this appeal stated: "Should she remarry, weekly payments will cease from the date of remarriage and a lump sum representing two years compensation, free of tax will be paid." In May 1995 the appellant contacted the Corporation and advised that she was intending to remarry on 21st July 1995 and requested information as to the Corporation's policy regarding ongoing entitlements after her remarriage. In a letter dated 12 June 1995 the Corporation advised that the weekly payments would be continued for the appellant for two years after the date of her remarriage or until 30 June 1997, whichever came first. Weekly compensation would continue for the dependant children until the end of the year in which they attain the age of 18 or if continuing their education, when they attain the age of 21. In a letter dated 24 May 1996 the appellant wrote to the Corporation stating that under the previous Act she was entitled to receive a lump sum representing two years compensation on remarriage plus the remaining dependant's benefits would be doubled. In a letter dated 10 June 1996 the Corporation wrote to the appellant advising that the 1982 Act had been revoked and ongoing entitlements were provided by 3 the transitional provisions of the 1992 Act. It is that decision, which was confirmed on review, that the appellant has sought to appeal against. Relevant Statutory Provisions The relevant part of section 135 of the Act states: "(1) Any person who has had a claim accepted for personal injury by accident within the meaning of the Accident Compensation Act 1972 or the Accident Compensation Act 1982 suffered before the Ist day of July 1992 shall be deemed to have suffered personal injury that is covered by this Act. (2) Nothing in subsection (1) of this section shall apply if it is subsequently determined that the person had not suffered personal injury by accident within the meaning of the Accident Compensation Act 1972 or the Accident Compensation Act 1982. (3) Any person who has suffered personal injury by accident within the meaning of the Accident Compensation Act 1982 before the Ist day of July 1992 and who has lodged a claim with the Corporation in respect of that personal injury by accident before the Ist day of October 1992, shall have the acceptability of the claim determined under the Accident Compensation Act 1982 as if it had not been repealed. (4) Where subsection (3) of this section applies, the continued entitlement of the person to rehabilitation, compensation, grants, and allowances shall be determined under those Acts, as appropriate, but subject to this Part of this Act." The relevant part of section 145 of the Act states: "(1) Where any person was, immediately before the Ist day of July 1992, in receipt of, or would have been entitled to be in receipt of, compensation calculated 4 under section 123 of the Accident Compensation Act 1972 or sections 65 and 88 of the Accident Compensation Act 1982, that compensation shall continue to be payable or be paid as if it had been calculated under this Act. (2 ) Subject to section 146 of this Act, the compensation payable to a surviving spouse under subsection (1) of this section shall cease upon the latest of - ( a ) The close of the 30th day of June 1997: (6 ) The surviving spouse ceasing to have the care of any child of the deceased who was dependant on the deceased at the date of the deceased's death, or that child attaining the age of 18 years. )The surviving spouse ceasing to care for any other dependant of the deceased: Provided that the compensation payable shall not cease if on the above latest event occurring the spouse - (d) Has then attained the age of 45 years; or (e) Would have been entitled to continue to receive compensation under section 123 of the Accident Compensation Act 1972 or section 65 of the Accident Compensation Act 1982 if those sections had not been repealed. (3) The weekly compensation payable under subsection (1) of this section shall be cancelled by reason of the remarriage of the spouse two years after the date of that marriage. (4) Compensation payable to a surviving child of the deceased under subsection (1) of this section shall cease upon the latest of - 5 (a) The expiry of the calender year in which the child attains the age of 18 years; or b) In the case of a child engaged in full-time study, the cessation or completion of that study or the child attaining the age of 21 years, whichever occurs first." Appellant Submissions The appellant contends that as her husband died in 1984 her remarriage entitlements, and those of the children, should be those given by the statutory provisions which were in force at the time of his death and it is only those persons whose spouse died after 1st July 1992 who should be subject to the 1992 Act. The appellant submits that she ought to be entitled to the benefits in respect of which she was advised in the letter of 27 July 1984 to her solicitors and in particular her remaining dependant children should be entitled to an increase in the amount of weekly compensation following her remarriage as she says had been the case under the 1982 Act. In that latter regard the appellant produced a letter from the Honourable Doug Kidd the then Minister of ACC to whom she had written on the 17th October 1995 in relation to her concern about the Corporation not being able to pay a lump sum allowance and an increase in her dependant children's entitlements. The relevant part of that letter to which she referred is as follows: "You also refer to provisions in the 1972 and 1982 Acts for 'doubling up' of your children's entitlements. If you are referring to the situation when, as your children reach an age where they are no longer eligible for a share of your deceased husband's weekly compensation, their siblings should be entitled to take over their Decision Dealing firstly with the Corporation's letter of 27 July 1984 I rule that the Corporation is not bound by that letter nor is it estopped from not following the statements contained in it. That letter was simply a letter stating what the legal position was at that time and it would be taken as implicit in it that such a state of affairs would only exist for so long as the then statutory regime was in place. There is clear authority in the decision of the High Court in ARCIC v ABC, which decision was followed in Wong Kam v ARCIC Decision No. 22/97 where the clear legal position is that waiver or estoppel cannot apply. The Corporation's legal liability depends on the provisions of the Act not on the decisions or actions of its officers. The simple fact of this matter is that the appellant was, in 1995 at the time of her remarriage, only entitled to the entitlements which the transitional provisions of the 1992 Act allowed. She was in receipt of compensation calculated under s.65 of the 1982 Act and by virtue of s.145(1) of the 1992 Act that compensation "continued to be payable as if it had been calculated under this Act". Furthermore s.145(3) specifically states that weekly compensation payable under subs.(1) shall be cancelled by reason of the remarriage of the spouse two years after the date of that remarriage. The provision relating to the payment of a lump sum on remarriage which was available under the 1982 Act was repealed by the 1992 Act and no vestige of ongoing entitlements under the 1982 Act remained after its repeal. 6 shares, I am advised that this is not possible. When there are more than 2 dependant children sharing the 40% total of the deceased's weekly compensation entitlement, re-apportionment can occur to a maximum amount of 20% per dependant child. I understand you still have 2 children eligible for the 40% total of their father's weekly compensation and therefore each is receiving the maximum amount of 20% payable under the ARCI Act 1992. I presume, however, you are referring to the previous situation where, on the remarriage of a surviving widow with more than two dependants under 18 years (or 21 years in cases of full-time students), the unused portion of her entitlement could be split and paid out to her dependant children. In cases where 4 children had been receiving 40% (10% each) and the mother 60%, on her remarriage each child's portion increased to 20%, as the children had access to her 'unused portion'. This provision is also no longer available under the ARCI Act 1992. I trust this letter has clarified the situation further for you." Respondent Submissions Counsel submits that with the repeal of the 1982 Act by the 1992 Act only those provisions of the 1982 Act which are continued by the transitional provisions of the new Act survive. Therefore the continued entitlement of the appellant and her children to 1982 Act entitlements must be read subject to section 145 of the 1992 Act. Section 145 of the 1992 Act superseded the 1982 Act provisions on remarriage and that all claimants could only be treated in terms of the changes which the 1992 Act had made. Counsel finally submitted that the Corporation could not be bound or estopped by its letter of 27 July 1994 as the Corporation's liability depends upon the provisions of the Act not on the decisions or statements of its officers. 8 In so far as the children's entitlements are concerned the explanation from the Minister correctly set out the position and the remaining dependant children of the appellant are receiving the maximum entitlement allowed by law. Compensation or any other entitlement is only payable if authorised by the Act. There is no discretion vested in the Corporation and there is simply no power or authority to make any lump sum payment to the appellant as had formerly been the case under the 1982 Act. Accordingly this appeal is dismissed. DATED at WELLINGTON this &C day of November 1997 Deathc MJ Beattie District Court Judge Kemp.doc KD