Karl v Accident Compensation Corporation

IN THE DISTRICT COURT AT WELLINGTON DECISION NO 070/2004 AI 562/02 BETWEEN MARGARET ELLAINE KARL, of State Highway 3, R D 2, Ohaupo, Widow as Trustee and Executor of the Estate of HAROLD PETER KARL Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent Heard on the papers Date of substantive decision no 274/03: 5 November 2003 Date of this decision: Monday 22 March 2004 Counsel: Mr D Vincent for Applicant/Appellant Ms L Rice for Respondent DECISION OF JUDGE P F BARBER ON APPLICATION FOR LEAVE TO APPEAL TO THE HIGH COURT [1] Before me is an application for leave to appeal from a reserved decision of Judge Beattie dated 5 November 2002. The issue before Judge Beattie was whether the respondent was entitled to recover all or part of a $75,091.69 overpayment of weekly compensation to the appellant/applicant during the period 7 October 1992 to 29 March 2000. Judge Beattie found “that the respondent cannot be dis-entitled from recovering the amount of the overpayment that it made to the appellant” and dismissed the appeal of the applicant. M E Karl v ACC[] [2] The applicant’s grounds for leave to appeal are: 1. The decision of Judge Beattie of 5 November 2003 is wrong in law in finding that the Court of Appeal’s decision in National Bank of New Zealand Limited v Waitaki International Processing Limited [1999] 2 NZLR 211 did not apply to the recovery of overpayments by the Accident Compensation Corporation; and 2. The decision was wrong in rejecting the authority of Philip Collins Limited v Davis [2000] 3 All ER 808 in finding that there was no change of position in reliance on the overpayment. [3] Section 162 of the Injury Prevention Rehabilitation and Compensation Act 2001 provides that a party dissatisfied with a decision in the District Court may appeal if there is an error of law. Section 162(1) provides: A party to an appeal who is dissatisfied with the decision of a District Court as being wrong in law may, with the leave of the District Court, appeal to the High Court. [4] The District Court and High Court have demonstrated that, provided there is a bona fide question of law at issue, then leave to appeal will be granted. As the decision of P & O Services (NZ) Limited v ARCIC (unreported, 30 July 1998, Gendall J, HC Wellington, AP43/98) demonstrates, the key issue ordinarily is whether an appeal is being brought on a question of fact rather than a question of law. [5] Leave has consequently been granted in cases involving legal issues that are of limited precedential value. Consequently, in Karaitiana v ARCIC (35/97) leave to appeal was granted on an issue of whether certain treatment came within the provisions of the Accident Compensation (Specialised Costs) Regulations (no.2) 1990. The Court has granted leave to appeal on issues concerning regulations in other cases as well: Mollgaard v ARCIC (65/98), Nepia v ARCIC (33/98). [6] Leave to appeal has only been declined on cases where there is a real question of law if the issue is well settled and beyond doubt. Consequently, in 2 Reihana v ARCIC (36/97) the Court refused leave because the issue was settled previously by the High Court. Otherwise, the Court generally turns its mind to whether the appeal is on an issue of fact rather than law. In this case, where the question of law has not been decided previously, and where it is of significant value both to the appellants and to future claimants, Mr D D Vincent (for the appellant/applicant) submitted that leave to appeal is justified. Mr Vincent deals with the issues on appeal as follows: “Issues on Appeal 7. The first issue of law concerns the application of the Court of Appeal decision in Waitaki (supra). The decision dismissing the appeal stated that the decision was not applicable to the Accident Compensation jurisdiction because it concerned an application to a restitutionary claim, rather than an action in debt. Reference was made to section 230 of the 2001 Act which deems such overpayments to be a “debt”. This issue was not canvassed in argument and was not perceived by the Appellant as an issue before proceeding to the hearing. The question of law that arises from the decision is, therefore, somewhat novel in that it brings up an issue of whether section 320 of the 2001 Act in itself excludes Waitaki from applying to this case. 8. Issues of restitution and equity are central to the Accident Compensation regime. There are no High Court decisions on the application of such principles to cases like these and no real guidance at District Court level on this issue. Given the fact that the decision itself brings up issues that were not considered in argument, and given the absence of High Court on this issue, it is submitted that it is worthy for further appeal. 9. The second question of law concerns the change of position arguments that were raised in argument. The Appellant relied upon Philip Collins v Davis (2000) 3 All ER 808, as well as subsequent authorities that followed that decision, to argue that there was a sufficient change in position to make recovery now inequitable. 10. These decisions were not considered in that Judgment, with the Court finding simply that no significant expenditure had been made by Mr Karl before his death. 11. The Court’s reasoning on this point is given as a sufficient basis, in itself, for the dismissal of the appeal. At paragraph 21 of the Judgment the Court finds that: In the event however that my findings should be shown to be wrong, nevertheless I find as a fact that there has been no altering of position by this Appellant which would bring him within any wider equitable principles as those enunciated in Lipkin Gorman. 3 12. If indeed the reasoning on Waitaki is incorrect, and the decision is deemed to apply, then a fuller balancing of the equities is required beyond simply determining whether there has been an alteration of position. Consequently, it is submitted that this aspect of the Judgment ought to be revisited on appeal. 13. Also of importance is the law on change of position generally. The Appellant cited decisions from the English jurisdiction demonstrating that the definition of “change of position” is potentially widening overseas. This has been in response to concerns raised about the application of the current law and its injustice in favouring those who have made one-off purchases over those who have spent gradually an overpayment received. Although no authorities are referred to in the Judgment, the decision does accord with other decisions in the ACC jurisdiction at District Court level. This judgment, together with the general District Court juris of prudence on this issue is worthy of reconsideration at High Court level. Consequently, for those reasons, leave to appeal is sought for that error of law as well.” Reasons for Ruling [7] It seems to me that there is some merit in the submissions of Mr Vincent for the Appellant in terms of the aspect whether this Court should grant leave to appeal. It seems to me that significantly substantial issues of law are sought to be raised by the applicant/appellant on appeal by the High Court. [8] I accept that this case is of quite some monetary significance to the family of the appellant and the overpayment of $75,000 is a substantial sum of money. As Mr Vincent points out, the last time an issue surrounding the recovery of a debt arose, under the provisions of the 1992 Act, this Court granted leave to appeal. In Murray v ARCIC (61/98) leave was granted for the appellant to pursue the issue whether the respondent corporation was entitled to recover a debt under s77(1) of the 1992 Act, rather than pursuing ordinary contractual remedies. That case did not consider the issue of restitution and equitable defences but does demonstrate that issues of recovery are of real importance to the Accident Compensation regime and may be worthy of leave to appeal being granted. [9] It seems to me that the question of restitution and overpayments of Accident Compensation is an issue of some public importance and is worthy of consideration by the High Court. 4 [10] I record that counsel for the respondent advised my Registrar, by letter of 23 February 2004, that the respondent neither consents to, nor opposes, the appellant’s application for leave to appeal to the High Court. [11] I hereby grant leave for the applicant/appellant to appeal the said decision of this Court. Judge P F Barber District Court Judge, Wellington 5