LARKIN (by his litigation guardian Penelope Hoare) v ACCIDENT COMPENSATION CORPORATON [2019] NZHC 3085

LARKIN (by his litigation guardian Penelope Hoare) v ACCIDENT COMPENSATION CORPORATON [2019]NZHC 3085 [26 November 2019]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2019-485-135[2019] NZHC 3085UNDER the Accident Compensation Act 2001IN THE MATTER OF an appeal under s 162 of the ActBETWEEN KURTIS LARKIN (by his litigationguardian Penelope Hoare)AppellantAND ACCIDENT COMPENSATIONCORPORATONRespondentHearing: 15 August 2019Appearances: T W R Lynskey and J V Copland for AppellantH B Rennie QC and C J Curran for RespondentJudgment: 26 November 2019JUDGMENT OF CLARK JIntroduction[1] This appeal concerns the proper interpretation of the transitional provisions ofthe Accident Compensation Act 2001 (the 2001 Act) for the payment of attendant care.The appellant, Mr Larkin, was denied back-payment of his attendant care costsbetween 1 July 1993 and 31 March 2002 on the basis that the respondent, the AccidentCompensation Corporation (ACC), has no power to compensate Mr Larkin for thatperiod. Mr Larkin's application for review of that decision was declined on16 November 2012. Mr Larkin then appealed that decision to the District Courtthrough his litigation guardian, Ms Hoare, who is Mr Larkin's mother. On 8 November2018, Judge Walker dismissed Mr Larkin's appeal.1[2] On 12 February 2019, Judge Harrison granted leave for Mr Larkin to appeal tothis Court on the following question of law:2Do sections 374 and 376 of the Accident Compensation Act 2001 confer anypower on the respondent to compensate the applicant for constant personalattention/attendant care provided over the period 1 July 1993–31 March 2002?Background[3] During his birth in 1992, Mr Larkin suffered a significant and permanent braininjury caused by the entry of foetal blood into the maternal circulation (foetal-maternalhaemorrhage) and consequent oxygen deprivation (hypoxia). The injury hasmanifested in cerebral palsy, quadriplegia and epilepsy. As a result, Mr Larkinrequires full-time care.[4] In 2005, an application was made to ACC on Mr Larkin's behalf for cover fora treatment injury. On 2 March 2011, Judge Ongley held that Mr Larkin had suffereda treatment injury because the foetal-maternal haemorrhage was a result of a delay inthe decision to deliver Mr Larkin by caesarean section.3 ACC began providingattendant care from 16 May 2011.[5] On 19 October 2011, ACC agreed to pay back-dated compensation forattendant care from 1 April 2002 (the commencement date of the 2001 Act) until15 May 2011, but declined to provide compensation for attendant care under thepredecessor legislation. It is the 19 October decision that is now challenged on appeal.[6] For completion, I record that a dispute over the number of hours of attendantcare that Mr Larkin requires per week was resolved by Judge Mathers' determinationin 2014 that Mr Larkin is entitled to funding for 24-hour care.41 Larkin v Accident Compensation Corporation [2018] NZACC 177.2 Larkin v Accident Compensation Corporation [2019] NZACC 12 at [5].3 Larkin v Accident Compensation Corporation [2011] NZACC 60.4 Larkin v Accident Compensation Corporation [2014] NZACC 311.Statutory framework[7] Section 374 of the 2001 Act is the key transitional provision in dispute:374 Compensation for pecuniary loss not related to earnings under1972 and 1982 Acts: attendant care and household help(1) This section applies if—(a) a person was receiving compensation at a weekly rate of $350or more immediately before 1 July 1992; and(b) the compensation was paid under section 80 of the AccidentCompensation Act 1982 or section 121 of the AccidentCompensation Act 1972 and was for—(i) attendant care (ii) ; and(c) the compensation was payable because of section 149(3) or (4)of the Accident Rehabilitation and Compensation Insurance Act1992.(2) The sections referred to in subsection (1)(b)—(a) continue to apply to the person and to his or her entitlement toattendant care or household help; and(b) can be used from time to time to reassess the person'sentitlement to attendant care or household help.(5) For the purposes of subsection (1), a person was receivingcompensation immediately before 1 July 1992 if he or she was entitledto do so because of a decision on review or appeal given on or afterthat date on an application for review made before 1 October 1992.[8] Section 376 of the 2001 Act is another relevant transitional provision:376 Compensation for pecuniary loss not related to earnings under1972 and 1982 Acts(1) Section 439 of the Accident Insurance Act 1998 continues to apply inrespect of a person who was entitled to receive, immediately before1 April 2002, compensation under that section.[9] Section 439 of the Accident Insurance Act 1998 (the 1998 Act) provides:439 Compensation for pecuniary loss not related to earnings under1972 and 1982 Acts(1) Subsection (2) applies if, because of section 149(1) or (2) of theAccident Rehabilitation and Compensation Insurance Act 1992, aperson was entitled to receive any compensation on or before31 December 1992 or 30 June 1993, as the case may be, under—(a) Section 121 of the Accident Compensation Act 1972; or(b) Section 80 of the Accident Compensation Act 1982.(2) Compensation not paid by the former Corporation before those datesunder those sections remains payable.[10] The relevant parts of s 149 of the Accident Rehabilitation and CompensationInsurance Act 1992 (the 1992 Act) provide:149 Compensation for pecuniary loss not related to earnings(1) Where any person was receiving or entitled to receive anycompensation under section 121 of the Accident Compensation Act1972 or section 77 or section 80 of the Accident Compensation Act1982 immediately before the 1st day of July 1992, that section shallcontinue to apply to payments in respect of that person until the 31stday of December 1992 as if those sections had not been repealed.(2) The reference to the 31st day of December 1992 in subsection (1) ofthis section shall be read as the 30th day of June 1993 in respect ofcompensation under section 121 of the Accident Compensation Act1972 or section 80 of the Accident Compensation Act 1982 that iscompensation in respect of—(a) Provision of attendant care (being personal care and mobilityassistance necessary for the injured person); or(3) Notwithstanding subsections (1) and (2) of this section, where anyperson was receiving compensation under section 121 of the AccidentCompensation Act 1972 or section 80 of the Accident CompensationAct 1982 in respect of attendant care (being personal care andmobility assistance necessary for the injured person) at a weekly rateof $350 or more immediately before the 1st day of July 1992, thosesections shall continue to apply in respect of that person as if thosesections had not been repealed and the entitlements in respect of theperson may be reassessed from time to time under those sections.(10) For the purposes of subsections (3), (4), and (7) of this section, aperson shall be deemed to be receiving compensation immediatelybefore the 1st day of July 1992 if that person has an entitlement to doso by virtue of a decision on review or appeal given after that date,and the application for review was made before the 1st day ofOctober 1992.Scope of the dispute[11] Several aspects of the interpretation of the transitional provisions are not indispute. The parties agree ACC can only pay compensation to Mr Larkin if it isempowered to do so under the 2001 Act. Mr Larkin has cover under s 360 (the relevanttransitional provision) and is entitled to attendant care under s 81. Section 83(3)empowers ACC to make back-dated payments for attendant care, but only back to thecommencement date of the 2001 Act.5 Any power to make back-dated paymentsbeyond the commencement date can only arise from the relevant transitionalprovisions, namely ss 374 and 376 of the 2001 Act.[12] Section 376 applies to a person "entitled to receive" compensation under the1972 and 1982 Acts. Mr Larkin is such a person. The ultimate effect of s 376 is thataspects of s 149 of the 1992 Act continue to apply, namely s 149(1) and (2). This isachieved indirectly through the transitional provision in the 1998 Act.[13] Section 374, on the other hand, applies to a person who "was receivingcompensation at a weekly rate of $350 or more immediately before 1 July 1992".Mr Larkin was not receiving any compensation in 1992 because no application forcover was made on his behalf until 2005. The effect of s 374 is that s 149(3) of the1992 Act continues to apply for a person covered by s 374.[14] The key distinction between s 149(1) and (2) of the 1992 Act and s 149(3) ofthat Act relates to the period for which cover was available at the higher rates providedby the 1982 Act. Both parties acknowledged the 1992 Act was designed to be a lessgenerous regime than the 1982 Act and that the transitional provisions of the 1992 Actarose in part to deal with the impact of that change on claimants.[15] Section 149(1) provided that any person "receiving or entitled to receive anycompensation" under the relevant provisions of the 1982 Act before thecommencement of the 1992 Act would continue to receive compensation under the5 Rangiwhetu v Accident Compensation Corporation HC Wellington CIV-2006-485-1402 at [67].1982 Act provisions until 31 December 1992. Section 149(2) extended this perioduntil 30 June 1993.[16] Section 149(3) provided that any person "receiving compensation" before thecommencement of the 1992 Act for attendant care under the relevant provisions of the1982 Act at "a weekly rate of $350 or more" would continue to receive, indefinitely,compensation under the 1982 Act provisions. Section 149(3) may be seen thereforeas resulting in more generous outcomes than s 149(1).[17] The key question is whether Mr Larkin is entitled to compensation unders 149(3) as opposed to s 149(1), despite the fact he was not "receiving compensation at a weekly rate of $350 or more" (the language of s 149(3)). Both parties acceptMr Larkin is at least entitled to compensation from the date of his birth in 1992 until30 June 1993.Appellant's arguments[18] Mr Lynskey submitted that giving the transitional provisions their ordinary andnatural meaning would result in a lacuna in the law for a person such as Mr Larkin.He argued that the transitional provisions were poorly drafted and what the respondentdescribes as carefully crafted legislation was in fact patchwork. It is appropriate tointerpret s 374 as applying to a person who was not receiving compensationimmediately before 1 July 1992 but who should have been. Mr Lynskey was emphaticthat Parliament could not have intended to leave someone in Mr Larkin's position withno compensation at all.[19] In support of his argument, Mr Lynskey traversed the Parliamentary debates insome detail, underscoring the political motivations and philosophies at the time the1992 Act was enacted. Mr Larkin's key point was that the amendments were aboutinclusion and making provision for those with serious injury.[20] Mr Lynskey explained that because there is no transitional provision in the2001 Act for entitlements under the 1992 Act itself, there is no scope for ACC to paycompensation on the basis of the regulations promulgated under that Act.6 InMr Lynskey's submission, Parliament had in mind that anyone excluded fromextended cover under the 1982 Act would be eligible under the new regulations. Asthat is not the case for Mr Larkin, Mr Lynskey submitted there is a legislative gap. Hesaid it was unthinkable that Parliament could have intended to reduce a seriouslyinjured claimant's entitlement to zero.[21] In support of Mr Larkin's position, Mr Lynskey cited Taylor v Taite, in whichChambers J applied the transitional provisions of the 1992 Act to a person who shouldhave been receiving compensation for attendant care at a weekly rate of more than$350, but was in fact receiving less than $350 due to ACC's misapplication of the law.7[22] Mr Lynskey referred to the following observation of Baragwanath J inChief Executive of the Department of Labour v Yadegary:8I recognise that sometimes the Court is compelled, in order to avoid an absurdresult, to read words into a statute.[23] Mr Lynskey also referred to the remarks of the Court of Appeal in P v F:9 we accept that there will be cases in which the Court can fill in gaps, thatwould only be appropriate where new legislation has failed to foresee and thusprovided for a particular set of facts.[24] Mr Lynskey argued the phrase "$350 or more" was adopted by Parliament asshorthand for "seriously injured" claimants.Respondent's position[25] Mr Rennie QC submitted that Parliament clearly distinguished in s 149 of the1992 Act between those who were "receiving" compensation under the 1982 Act andthose who were "entitled to receive" such compensation. He argued that thedistinction was deliberate and the logic behind it was rational. In his submission,6 Accident Rehabilitation and Compensation Insurance (Social Rehabilitation – Attendant Care)Regulations 1993.7 Taylor v Taite HC Rotorua M13/00, 23 May 2002 at [28].8 Chief Executive of the Department of Labour v Yadegary [2008] NZCA 295, [2009] 2 NZLR 495at [76] per Baragwanath J.9 P v F [2015] NZCA 317, [2015] 3 NZLR 758 at [25].Parliament was rightly more concerned about the transitional impact on those whowere already reliant on cover at the 1982 Act levels (as long as they fell within thecategory of claimants receiving more than $350 per week). In other words, there wasno oversight.[26] Mr Rennie submitted that to read s 374 in the way advocated on behalf ofMr Larkin would do violence to the language of that section and s 149 of the 1992Act, upon which s 374 is based. He characterised Mr Lynskey's approach as"legislative surgery". Mr Rennie highlighted s 149(10), which deemed a person withan entitlement to compensation by virtue of a decision on review or appeal given afterthe relevant date to have been receiving compensation before that date (as long as theappeal or review had been filed within a certain time thereafter). Subsection (10)demonstrated Parliament had turned its mind to the position of individuals who wereentitled to receive, but were not receiving, compensation at the relevant time.[27] Responding to Mr Lynskey's suggestion that "$350 or more" was legislativeshorthand for the "seriously injured", Mr Rennie pointed out that Parliament hadreduced the threshold figure from $480 to $350 and there was no basis therefore toargue Parliament actually meant the provision to apply to those who were "seriouslyinjured" regardless of their compensation status.[28] Mr Rennie referred to several decisions of the Court of Appeal and toWinkelmann J's decision in New Zealand Guardian Trust Co Ltd v Pora as supportingthe interpretation advanced by ACC.10 He emphasised that purposive statutoryinterpretation is not a license to abandon clear and coherent statutory language.Discussion[29] I am unable to accept the arguments advanced on behalf of Mr Larkin.Mr Lynskey submitted that s 374 should be read as if the words that I have italicisedbelow were impliedly part of the provisions:10 Campbell and Handley v Accident Compensation Corporation CA138/03, 29 March 2004;Bosman v Accident Compensation Corporation [2007] NZCA 482; and New Zealand GuardianTrust Co Ltd v Pora [2007] NZAR 1.374 Compensation for pecuniary loss not related to earnings under1972 and 1982 Acts: attendant care and household help(1) This section applies if—(a) a person was receiving or should have received / or wasentitled to receive compensation at a weekly rate of $350 ormore immediately before 1 July 1992; and(6) A person shall be deemed to have made a written application to theCorporation for attendant care on 1 July 1993 if he or she was entitledto receive compensation at a weekly rate of $350 or more immediatelybefore that date because of a decision on review or appeal on anapplication for review made after 1 October 1992.[30] Section 149(1) clearly distinguishes between two groups of claimants: thosereceiving compensation and those entitled to receive compensation. When s 149(3)was enacted, Parliament omitted any reference to those entitled to receivecompensation. The distinction was the subject of comment by the Court of Appeal inCampbell and Handley v ACC.11[31] As Judge Walker in the decision under appeal accurately observed "thewording of s 149 is clear, and the distinction between the wording of s 149(1) ands 149(3) deliberate" and has been "transported into later legislation without change".12[32] There is no ambiguity in either s 149 of the 1992 Act, or s 374 of the 2001 Act.Mr Larkin does not fall within the clear words of either because he was not receivingcompensation for attendant care at a weekly rate of $350 or more immediately before1 July 1992. By his approach to s 149, the appellant collapses the distinction thatParliament purposefully drew between those in actual receipt and those entitled toreceive but not in fact receiving. The position may be summarised:(a) Where s 149(1) treated both groups of claimants in the same way,s 149(3) did not. Those who, as at 30 June 1992, were in actual receiptof compensation at a weekly rate of $350 or more were designated bys 149(3) to receive (the more significant benefit of) ongoing11 Campbell and Handley v Accident Compensation Corporation, above n 10 at [43].12 Larkin v Accident Compensation Corporation, above n 1, at [104]–[105].compensation beyond the 30 June 1993 statutory end-date.(b) The legislature's distinct treatment of, or approach to, the twocategories is reinforced by s 149(10), which expressly deemed a limitedsubset of merely "entitled" persons to be in actual receipt for thepurpose of s 149(3). As Mr Rennie submitted, the limited conversionbetween the two distinct groups reinforces the legislative intention tostatutorily distinguish the distinct concepts of actual receipt and mereentitlement.(c) Mr Lynskey's approach would render redundant s 374(5), whichmirrors s 149(10).(d) While it is not strictly necessary to refer to the Parliamentary debatesthey do show that, in enacting s 149(3), Parliament had firmly in mindthe need to protect claimants who were already receiving paymentsfrom the adverse effects of a transition:13The Government has also made provision for thegrandparenting of compensation measures for persons whoreceive attendant care as a result of very severe accidents The Government had accepted that it is very difficult to makedownwards adjustments to the finances of that group. It hassaid to those persons that they can continue with their currentlevel of benefits, and that they will be able to make a choicein the future if they want to migrate to the new regulations.(e) In Campbell and Handley v Accident Compensation Corporation, theCourt of Appeal recognised the distinct legislative treatment of thoseactually receiving payments.14The terminology, and in particular the words "was receivingcompensation", suggest that the amendments apply only inrelation to claimants who were actually receiving paymentsprior to 1 July 1992 at a weekly rate of $350 or more.(f) Where Mr Lynskey would draw support from Taylor v Taite, that13 (22 June 1993) 536 NZPD 16230 (Hon Bill Birch, Minister responsible for ACC).14 Campbell and Handley v Accident Compensation Corporation, above n 10, at [43].decision is to be understood in its particular factual context.15 AsWinkelmann J (as she then was) observed in response to an argumentsimilar to that advanced now on behalf of Mr Larkin, the submission"misconstrues" Chambers J's point which was simply that the savingsprovisions in the 1992 Act applied in that case and "it is not a tenablestatutory construction to read in the phrase 'or entitled to receivecompensation'".16[33] In response to the argument that the practical outcome for Mr Larkin is theproduct of legislative oversight, the respondent says the distinction between the twocategories is logical and rational for the purposes of a transitional regime and theappellant's effective rewriting of s 149 results in an outcome that is whollyinconsistent with the provision as enacted. I agree.[34] There are occasions when a court will notionally correct a provision thatcontains an obvious error or that does not properly express Parliament's intention.17Lord Nicholls explained the parameters of the courts' powers of correction in IncoEurope Ltd v First Choice Distribution:18It has long been established that the role of the courts in construing legislationis not confined to resolving ambiguities in statutory language. The court mustbe able to correct obvious drafting errors. In suitable cases, in discharging itsinterpretative function the court will add words, or omit words or substitutewords. Some notable instances are given in Professor Sir Rupert Cross'admirable opuscule, Statutory Interpretation (3rd edn, 1995) pp 93–105. Hecomments (p 103):In omitting or inserting words the judge is not really engaged in ahypothetical reconstruction of the intentions of the drafter or thelegislature, but is simply making as much sense as he can of the textof the statutory provision read in its appropriate context and withinthe limits of the judicial role.This power is confined to plain cases of drafting mistakes. The courts are evermindful that their constitutional role in this field is interpretative. They mustabstain from any course which might have the appearance of judiciallegislation. A statute is expressed in language approved and enacted by thelegislature. So the courts exercise considerable caution before adding or15 See [21] above.16 New Zealand Guardian Trust Co Ltd v Pora, above n 10, at [32]–[35].17 As explained in Burrows and Carter Statute Law in New Zealand (5th ed, LexisNexis, Wellington,2015) at 312.18 Inco Europe Ltd v First Choice Distribution [2000] 2 All ER 109 (HL) at 115.omitting or substituting words. Before interpreting a statute in this way thecourt must be abundantly sure of three matters: (1) the intended purpose of thestatute or provision in question; (2) that by inadvertence the draftsman andParliament failed to give effect to that purpose in the provision in question;and (3) the substance of the provision Parliament would have made, althoughnot necessarily the precise words Parliament would have used, had the errorin the Bill been noticed. The third of these conditions is of crucial importance.Otherwise any attempt to determine the meaning of the enactment would crossthe boundary between construction and legislation [35] In my view, the source of Mr Larkin's difficulty is not actually with s 374 ors 376, but with the absence of a transitional provision in the 2001 Act providing forentitlements under the 1992 and 1998 Acts.[36] The essence of the injustice Mr Lynskey asserts is that Mr Larkin would not beentitled to any compensation if his interpretation were rejected. In response to ACC'sargument that s 374 and s 149 follow ordinary transitional logic, Mr Lynskey broughtthe argument back to the particular injustice for Mr Larkin. He challenged ACC tojustify Mr Larkin's receipt of zero compensation as a logical transition. However,when s 149 is considered in the context of the operation of the 1992 Act, which ofcourse Parliament had in mind when it enacted that provision, all those entitled tocompensation under the 1982 Act who had not yet made a claim would have beenentitled to make a claim under the 1992 Act. If Mr Larkin were entitled tocompensation under the 1992 Act, the asserted injustice would fall away.[37] Why is Mr Larkin not entitled to compensation under the 1992 Act? The 2001Act enacted transitional provisions for entitlements under the 1972 and 1982 Acts butnot for entitlements under the 1992 and 1998 Acts. It appears likely this was the resultof the different policy framework under the 1992 and 1998 Acts. The 1992 Actestablished an "insurance-based scheme".19 Consistent with the insurance-basednature of the scheme, compensation was only payable upon application for cover andfor the particular entitlements sought.20 There was also a 12-month time bar onlodging a claim, although the Act was amended in 1995 to permit late claims if ACCwas not prejudiced.21 The 1998 Act continued the insurance-based scheme and19 Accident Rehabilitation and Compensation Insurance Act 1992, long title.20 Section 63(2) and (4); see Rangiwhetu v Accident Compensation Corporation, above n 5, at [31].21 Section 63(2) and (2A).retained the 12-month time bar for claiming cover.22 The conscious omission of atransitional provision for entitlements under the 1992 and 1998 Acts is to be seen inthat light.[38] Mr Rennie was concerned to emphasise ACC's recognition of the seriousnessof Mr Larkin's injuries and the dedicated care his family has provided since his birth.ACC's understanding of its powers, nevertheless, is correct. There is no legislativeoversight. All of the compensation available to be paid during, and prior to, the2001 Act (when Mr Larkin's claim was made) has been, and continues to be, paid.But ACC has no power to compensate Mr Larkin for care during the period 1 July1993 to 31 March 2002 as he was not "receiving" payment immediately before 1 July1992 and could not have been "receiving" payment as no claim for compensation wasmade until 2005, almost 13 years later.[39] The requirement of actual receipt in s 149(3) is clear. The provision carrieswith it no drafting imperfection of the kind justifying judicial intervention.Result[40] The appeal is dismissed._____________________________Karen Clark JSolicitors:John Miller Law, Wellington for AppellantRussell McVeagh, Wellington for Respondent22 Accident Insurance Act 1998, s 61.