Lane Walker Rudkin Limited v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT Decision No. 149 197 HELD AT CHRISTCHURCH 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 LANE WALKER RUDKIN LIMITED Appellant (Appeal No. DCA 162/96) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 25th day of June 1997 APPEARANCES Kay Stringleman for appellant Rebecca Irving for respondent DECISION OF JUDGE D A ONGLEY This appeal relates to the scope of a review conducted in relation to an assessment of premium made by the Corporation against the appellant under the Accident Rehabilitation and Compensation Insurance (Experience Rating) Regulations 1993. The particular question is whether the appellant is entitled to have the circumstances of a 1989 accident reconsidered in order to dispute that it is a qualifying claim under the regulations. An experience rating credit note was issued dated 10 June 1995 for the appellant's experience rating assessment for the year ended 31 March 1994. Included in the assessment was a qualifying claim related to a Mr Barclay. Mr Barclay was an employee of the appellant in 1989 when he claimed to have suffered back strain. At - 2 . the time of the initial claim in 1989 the appellant had not accepted that an accident or an injury occurred in employment, but it had not then exercised review rights. Mr Barclay had a history of back complaints and had been involved in a motor accident followed by about nine days off work. He claimed that after returning to work following the motor accident he suffered a back injury when he was assisting two people to shift a motor at work. He continued to perform normal duties until he went to a doctor some two months later. The Corporation accepted that Mr Barclay had suffered personal injury by accident in the course of his employment, and it accepted that he experienced some continuing incapacity. The Corporation's decision had no particular consequences for the appellant until the Accident Rehabilitation and Compensation Insurance Act 1992 came into force. Section 104 of the 1992 Act contained power for the Corporation to adjust basic premium by reference to the accident experience of an employer. The method of carrying out the adjustment was prescribed by s 104(2) to be by way of a premium loading or premium discount. The basis and procedure for adjusting the premium is prescribed by the Experience Rating Regulations When the new Act came into force the appellant was out of time to appeal against earlier decisions by the Corporation that the worker's incapacity was a consequence of a work accident in June 1989. However, an opportunity arose when the Corporation wrote to the appellant on 17 February 1993. That letter recited that Mr Barclay had a previous history of back problems but none of the previous injuries had been significant enough to be regarded as being the reason he continued to be off work. The letter stated that the June 1989 injury occurred when Mr Barclay helped lifting a motor. Therefore, the letter referred to the position which the Corporation accepted in relation to the accident and the ensuing incapacity. The letter then stated: "At this point I have to say that this claim will remain on your claim history. Review rights in relation to this claim are attached." The letter was evidently intended to convey a decision by the Corporation. "Claim history" is not an expression that is used in the Act. It was obviously intended as a reference to "accident experience" in s 104 of the 1992 Act. The regulations were not passed until 27 September 1993, some time after that decision letter was written. The words "claim history" are not used in the regulations either. The regulations refer instead to "qualifying claims" which mean work injury claims lodged in respect of employment with the employer and accepted by the Corporation. The appellant did not lodge any application for review in respect of the letter of 17 February 1993. It is unnecessary in the present appeal to decide what kind of decision was contained in the letter and what opportunity of review would have been available to the appellant. On 13 December 1993 the Corporation responded to an inquiry about the Barclay accident appearing on a claim history notification. That letter stated that the appellant may apply for a review in February 1994 when the debit/credit notes are sent out for experience rating. It noted that the application for review must relate to the last round of experience rating for which the appellant would have received a credit note or - 3 - invoice. The appellant therefore applied for a review when an experience rating credit note was issued for the year ended 31 March 1994. The review was heard on 31 January 1996. The Review Officer declined to consider the question whether Mr Barclay's incapacity related to a work accident in June 1989. The reason for that was that there appeared to be no jurisdiction for review of that question under s 89 of the 1992 Act. Section 89 provides as follows: 89. Application for review - (1) Any claimant (or the representative of any deceased claimant) who is dissatisfied with a decision of the Corporation in respect of his or her claim or entitlement under this Act may apply to the Corporation or a review of that decision. (2) Any employer who is dissatisfied with a decision of the Corporation under section 65 or section 107 of this Act may apply to the Corporation for a review of that decision. (3) Any registered health professional who is dissatisfied with a decision of the Corporation under subsection (6) or subsection (7) of section 5 of this Act in respect of that registered health professional may apply to the Corporation for a review of that decision. (4) Any person who is dissatisfied with any decision of the Corporation relating to any premium payable or claimed to be payable by that person under this Act may apply to the Corporation for a review of that decision; but no such right shall exist under this Act in respect of the calculation for the purposes of the Income Tax Act 1994 of the taxable income of any person. (4A) Nothing in subsection (4) of this section shall confer any right to apply for a review of any decision relating to the entitlement under this Act of any person to any payment or rehabilitation or the making of any payment directly or indirectly under this Act in respect of that person. Argument relating to s 89 Section 89(2) does give employers certain rights in relation to the Corporation's decisions about work injury claims. Under the 1992 Act those claims are processed according to s 65 of the Act and the Corporation is required to give an employer notice before a work injury claim is determined. In Evans 113/97 I considered whether the words of s 65 were sufficiently general to include work injury claims which had already been determined under 1982 Act. On the facts in that case I decided there had been no decision under s 65. Section 65 is primarily a procedural provision for work injury claims to be determined under the 1992 Act only after notice has been given to an employer. In the present case it has not been argued that there is a decision under s 65 against which the appellant has a right of review under s 89(2). The argument in this case is directed to s 89(4). The appellant has a right of review in relation to the premium now claimed by the Corporation. In Evans it was not necessary to consider whether, in the course of a premium appeal under s 89(4), the claim for cover could be revisited by considering whether it is a qualifying claim - 4- under the regulations. Under s 89(4A) the right of review is declared not to extend to a question of entitlement of any person to a payment or to rehabilitation under the Act. The respondent contends that the words of s 89(4A) restrict the scope of appeals against premium decisions so that the question of whether a particular claim is a qualifying claim cannot be reconsidered. The argument is that consideration of that question necessarily involves a question of entitlement to payment or rehabilitation and is excluded by subs (4A). The appellant submits that the decision of the Corporation relating to a premium payable under the Experience Rating Regulations is a decision that includes several elements, including the two separate questions of whether there is a qualifying claim and whether there are costs associated with a qualifying claim in the year of assessment of premium. The second question enquires whether the employee has suffered incapacity in relation to the alleged personal injury by accident during the particular premium year. Indirectly, that is a question relating to the employee's entitlement to payment. That may not always be the case because the employee may suffer from pain or disability that is accident related, but not related to a qualifying claim. In those cases questioning the costs associated with the qualifying claim would not indirectly affect entitlement to payment. Put in another way, even on a narrow construction of s 89(4), an employer who is assessed with a premium loading relating to the costs of claims payable by the Corporation to the an employee or former employee, might accept that the employee was entitled to payment. At the same time, the employer might be able to argue that the entitlement to payment arises by reason of personal injury by accident that does not arise out of and in the course of employment with that employer. In other cases, it may be argued that the entitlement to payment is only indirectly in question. The issue the employer seeks to address is whether payment relates to the qualifying claim. The consequence for the claimant, if the employer is successful, is a secondary result. If the costs cannot be related to a qualifying claim, then that is a matter for the Corporation and the claimant to resolve. The claimant may lose entitlements if the injury could only otherwise have resulted from disease or gradual process other than in employment. In such cases, the question is rather one of compensation cover than one of entitlement to particular payments or rehabilitation. Elsewhere in the Act, clear distinctions are drawn between cover and entitlements. The distinction is so much a part of the scheme of the Act that there is no need to give examples. With that in mind, it may be thought that the expression in s 89(4A) referring to "entitlement ... to any payment or rehabilitation ..." is not intended to refer to a question of the right to cover under the Act, less still a question of classification of the circumstances in which the injury occurred. Counsel for the respondent submitted that once a "work injury" decision was made and after the time for review has passed without any application for review being made, the decision becomes binding and there is no further opportunity for review. The appellant argues that the decision is binding only for limited purposes and that it does not follow that the appellant has accepted the decision, nor that the decision cannot be challenged if it is adhered to in the course of the Corporation issuing another decision for another purpose. - 5- I reject the respondent's argument that the appellant is bound by the Corporation's original decision to the extent that it is prevented from questioning that decision. That result could only follow by operation of the statute or by some kind of estoppel. There is nothing in the 1982 Act nor the 1992 Act which renders a decision of the Corporation binding for all purposes if the opportunity of review is not taken. An estoppel is not raised merely by a failure to appeal; Joseph Lynch Land Co. Lid v Lynch [1995] 1 NZLR 37, 41. Issue estoppel could prevent further litigation of the point if it had been definitely decided in proceedings between the appellant and the Corporation, but it has not and so the extent to which the appellant may be bound by an issue estoppel does not have to be considered. In this case, the premium loading decision that is under review includes a number of questions, particularly the classification of the claim as a "qualifying claim", the attribution of the claim to the appellant, the calculation of costs relating to the claim and also the attribution of costs to one or more employer. The appellant submits that the only question that cannot be reviewed is the question whether the costs would have been properly applied if the claimant had cover in respect of the injury. It would follow that, on the making of a premium loading decision in any particular year, the employer has an opportunity for review of all questions raised in the premium loading decision except questions of entitlement of the claimant to actual payments or rehabilitation provision in the event that the claimant does have cover. It does not follow that the employer would be able to obtain repeated reviews of the accident classification question. The doctrine of issue estoppel will prevent classification questions being re-litigated once they have been decided at review or appeal level. The meaning of s 89(4A) The limiting words which require definition are: "... review of any decision relating to the entitlement under this Act of any person to any payment or rehabilitation or the making of any payment directly or indirectly under this Act in respect of that person." The words "directly or indirectly" must qualify "payment". It would be an ungrammatical construction of the subsection to apply the qualifying words to the word "review" at the beginning of the phrase. I consider that the subsection is capable of permitting a review which has a consequential indirect effect on entitlements. What is prohibited is a review of the entitlement decision. For example, if the Corporation decided to meet costs of vocational rehabilitation, s 89(4A) would prevent the appellant reviewing the Corporation's decision concerning the appropriateness of the grant of vocational rehabilitation to the claimant. For the reasons that I have set out in this decision, I reach the conclusion that the question of classification of the claim as a qualifying claim may be considered in the course of a review of the accident experience component of premium loading under s 89(4) of the Act, and the appellant is not estopped, from having that question determined, by virtue of its failure to exercise review rights in respect of two earlier - 6. occasions on which the Corporation issued decisions concerning substantially the same question. Once the classification has been determined by review or appeal, the same question will not be able to be re-opened between the same parties in respect of any future premium loading decision by the Corporation. The appeal is allowed and the matter is referred back to the Review Officer for determination. The appellant will have costs of $800 on the hearing of the appeal. DATED at WELLINGTON this 1 8 day of July 1997 D A Ongley District Court Judge