Farrell v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT WELLINGTON Decision No. 149 /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 MALCOLM BENNIE FARRELL of Ashburton Appellant (Appeal No. DCA 146/97) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD at CHRISTCHURCH on the 25th day of June 1998 APPEARANCES Mr I J D Hall for the appellant Ms J Cheyne for respondent DECISION OF JUDGE A W MIDDLETON The issue in this appeal is whether the review officer was correct in confirming the respondent's decision that the appellant's entitlement to weekly compensation under s.142 of the Act was to cease on 30 June 1997. The facts which give rise to the appeal are that the appellant suffered a serious back and right hip injury in an accident on 13 April 1989 as a result of which he became entitled to receive weekly compensation. 2 On 27 February 1995 the appellant wrote to the respondent requesting information as to how his benefits would be affected as he was then anticipating his entitlement to receive the Guaranteed Retirement Income in that year. On 23 March 1995 the respondent replied to that request and advised the appellant that as he qualified for National Superannuateon on 13 November 1995 he could receive both weekly compensation and National Superannuateon for 12 months after that date following which he would be required to elect to receive either weekly compensation or National Superannuateon but not both. The letter also stated that he could receive weekly compensation until he reached the age of 65 so long as he completed the appropriate election notice. On 10 August 1995 the appellant completed his election form in which he chose to receive weekly compensation instead of National Superannuateon. On 28 September 1995 the respondent confirmed receipt of the election form and advised the appellant that he would receive weekly compensation until he reached the age of 65 in addition to National Superannuateon. On 11 October 1996 the appellant telephoned the respondent's office to enquire about his National Superannuateon being stopped and was told that it would cease on 15 November 1996. A file note also states that the appellant was advised that weekly compensation would cease on 30 June 1997 and the appellant expressed doubt as to whether that information was correct. On 30 October 1996 the respondent notified the appellant that the information it had previously given him that he could receive weekly compensation until he reached the age of 65 was incorrect and he was advised that pursuant to s.142 of the Act he could only receive weekly compensation until 30 June 1997. In a further letter on 4 November 1996 the respondent notified the appellant that pursuant to s.67A it was changing its earlier decision and that pursuant to s.142 of the Act his weekly compensation would cease as from 30 June 1997. On 25 November 1996 the appellant lodged an application for review of the respondent's decision to cease payments of weekly compensation from June 1997. The review hearing took place on 8 April 1997 when the appellant was represented by Mr Hall who submitted that once the form of election had been completed the appellant was bound by it and he could not subsequently change his mind. He submitted that the same obligation should apply to the respondent in that having provided the appellant with incorrect information upon which he had acted to his detriment the respondent should be bound to follow the information it had given. The review officer upheld the decision of the respondent on the grounds that s.67A provided a power to the respondent to revise earlier decisions made by mistake as it was clear that a mistake had been made in the information provided to this appellant. It is against that decision which the appellant appeals. Mr Hall submitted that the evidence is clear that the appellant was aware that he had to take certain steps prior to his becoming eligible for National Superannuateon and he initiated the inquiry with the respondent so that he could consider his position before having to make the election. He carefully considered the financial outcome of making the election based on the information provided by the respondent that he 3 could receive weekly compensation until he reached 65 in addition to National Superannuateon. Mr Hall submitted that the respondent had carelessly misled the appellant and that it should now be bound by its own mistake. He submitted that on the basis of the decision in Gray (82/94) as the election was irrevocable, the respondent had to accept it as being made. He submitted that the appellant could not have changed his election if he thought that National Superannuateon would have been more profitable to him. Mr Hall submitted that s.67A provides that the respondent may revise any decision made by it when it appears to it that the decision has been made in error, whether by reason of mistake or by reason of fault or misleading information having supplied or by reason of fresh evidence or for any other reason. Mr Hall submitted that the words "for any other reason" should entitle the appellant to the same benefit by having a decision made in his favour as the "reason" for the respondent's decision arose out of its own mistake. Mr Hall submitted that before making his election the appellant had carefully considered his financial position on the basis of the information supplied to him by the respondent upon which he relied with the result that the subsequent decision made by the respondent resulted in a financial loss to him. He submitted that s.67A should therefore be available to the respondent to make a decision in favour of the appellant because his election had been made on incorrect information provided by the respondent. Mr Hall submitted that it was open to the Court to adopt this proposition. Ms Cheyne submitted that s.67A has been considered by the Court in decisions Gray (82/94) and O'Brien (58/96). She submitted that while the appellant relies for support on the decision of Gray the review officer considered that the facts of this appeal are distinguishable from those in Gray in which the Court had to consider whether or not an election made before 1 October 1992 constituted an election for the purposes of s.142. He considered that that case did not consider the issue of whether s.142(1) applied to the cut-off date of 30 June 1997. Ms Cheyne submitted that the appellant's situation was analogous to that of the appellant in Terzaghi (38/98) in which the Court confirmed that the cut-off date in s.142 meant that weekly compensation ceased on 30 June 1997 rather than the later date of the appellant's 65th birthday. The provisions of s.142 are clear and provide that the appellant can receive weekly compensation, if he so elects, until the earlier of the dates being the 30th of June 1997 or the date upon which payment would have ceased to be payable under the Accident Compensation Act 1982. In this case the appellant's date of birth was 15 August 1933 so that the date upon which he would have ceased to receive weekly earnings under the 1982 Act would have been 15 August 1998 so that the earlier date in accordance with s.142 is 30 June 1997. While I agree with Mr Hall that this appellant was clearly misled by the information provided to him, he made his decision after receiving advice from his solicitor contained in a letter dated 23 February 1995. It cannot therefore be said that all the blame can be placed on the respondent. 4 As to the argument that s.67 A should be applied for the benefit of the appellant, I do not accept this proposition. Section 67A enables the respondent to amend a decision made by mistake and I do not consider that the words "or for any other reason" as submitted by the appellant entitle him to the benefit of a finding in his favour. There is no discretion under s.142 and an election must be made within the time limits fixed by the section. Accordingly, as was found in Terzaghi the application of the doctrine of estoppel cannot apply to decisions of the respondent. Furthermore, it is not open to the Court to require the respondent to make payments which it is not entitled to make. In this case a decision in favour of the appellant would entitle him to receive weekly compensation and National Superannuateon until 15 August 1998 which is clearly contrary to the strict provisions of s.142 and is not within the powers of the respondent. Accordingly, the appeal must fail. The appeal is dismissed. DATED at WELLINGTON this a day of July 1998 A W Middleton District Court Judge de14697.doc(rd)