White v Accident Rehabilitation and Compensation Insurance,Corporation

IN THE DISTRICT COURT HELD AT PALMERSTON NORTH Decision No. 2 44 199 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 MARIE FAY WHITE DCA 546/98 Appellant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 29th day of July 1999 APPEARANCES: Mr A R V Rowlett advocate for appellant Ms A Cecil-Gibson counsel for respondent RESERVED JUDGMENT OF JUDGE M J BEATTIE The issue in this appeal is whether the respondent's decision to cancel the appellant's independence allowance was correct. The facts which give rise to this appeal are as follows: N In March 1988 the appellant suffered neck and shoulder injuries. On 1 April 1993 the appellant received a lump sum payment in respect of those injuries, that payment being made on the basis of an assessment of a 15% disability. In January 1995 the appellant applied for an independence allowance and an assessment for same was carried out on 24 January 1995. That assessment determined a disability of 99% from which was deducted the 15% for which lump sum payment had previously been paid and she thereupon commenced receiving an independence allowance based on a percentage disability of 84%. In January 1998 the appellant was reassessed for the purposes of an independence allowance entitlement. That assessment was carried out by Dr Hartshorn who assessed the appellant as having a whole person impairment of 10%. The appellant sought a review of that assessment on the basis that the assessor had not taken account of all relevant material and in that regard she produced a report from Mr Brougham, Orthopaedic Surgeon, in support of that contention. The respondent accepted that there was a deficiency in that earlier assessment and thereupon arranged for the appellant to be reassessed by an Orthopaedic Specialist Assessor, Mr Fong. In October 1998 Mr Fong re-assessed the appellant as having a whole person impairment of 22%. On the basis of that assessment the respondent advised the appellant that having regard to the 15% previously received for lump sum and which must be deducted from the percentage of whole person impairment so assessed, the percentage of whole person impairment remaining was less than the 10% threshold required by the Act, and therefore she no longer had an entitlement to an independence allowance. 3 The appellant sought a review of that decision and the respondent's decision was confirmed by the Review Officer in his decision of 1 December 1998. The appellant thereupon appealed to this Court. The point raised in this appeal by the appellant is wholly one of law and concerns the interpretation of the two relevant sections of the Act, namely, section 54(1) and section 54A(7). These provisions state as follows: Section 54(1) of the 1992 Act as amended from 1 July 1997 Subject to the provisions of this section, every person who has cover under this Act is entitled to receive an independence allowance at the appropriate prescribed rate if the person's personal injury has or personal injuries have resulted in a degree of whole-person impairment of 10% or more. Section 54A(7) states: (7 ) If any person who has received a payment under section 119 of the Accident Compensation Act 1972 or section 78 of the Accident Compensation Act 1982 is assessed for the purposes of establishing an entitlement to the independence allowance, the percentage or percentages of permanent loss or impairment of bodily function upon which any payment or payments under section 119 of the Accident Compensation Act 1972 or section 78 of the Accident Compensation Act 1982 were based shall be deducted from the person's impairment as assessed under this section. Mr Rowlett, advocate for the appellant submits as follows: i) Neither section 54, 54A or the Regulations state that there is no entitlement if the additional percentage over and above the section 78 percentage is less than 10%. In fact section 54(1) states that there is an entitlement if there is a degree of impairment above 10%, which is the case with this appellant. ii) The reference to being entitled to receive an independence allowance at the appropriate prescribed rate in section 54(1) together with the use of the word "deducted" in 54A(7) should be interpreted as meaning that the prescribed 4 rate which would apply for the percentage awarded under section 78 of the 1982 Act should be deducted from the prescribed rate for the assessed . impairment for the independence allowance. Thus in the case of this appellant the calculation ought to be as follows: Assessed degree of impairment 22% - prescribed rate $18.57 Section 78 percentage 15% prescribed rate $13.57 Independence allowance payable 7% difference $ 5.00 Ms Cecil-Gibson, counsel for the respondent, submitted that the wording of the Act as amended did not have the meaning submitted by the appellant's advocate. Counsel submitted that the argument put forward by the appellant was one that had been rejected by the High Court in decision ARCIC v Allen (1995) 1BACK 155 and that reasoning had been confirmed in two subsequent decisions of the High Court in Smith v ARCIC and Erwood v ARCIC. DECISION This Court is bound by the decisions of the High Court as enunciated in Allen, Smith and Erwood. The reasoning behind those decisions was that it was apparent from the provisions of the 1992 Act that double compensation was not to occur. Where there had been some compensation payable under the earlier legislation then there must be reduction in the assessed disabilities so as to adjust the amount of payment under the allowance. As was stated in Allen: "The clear purpose and intent of the legislation in our view require that there be a subtraction process in reducing the percentage of disability upon which a payment is assessed and a proper interpretation of the subsection does not justify the use of calculation process by which there is a multiplication of a figure expressed in percentage terms. What diminishes or is lessened in size is the disability expressed as a percentage for the purposes of obtaining an independence allowance. In such diminution can only logically arise through the deduction of the former disability percentage from the present disability." In the present case when the percentage of whole person impairment has deducted from it the percentage of the section 78 lump sum payment the percentage remaining is less than 10%. If that remaining 7% (in this case) were to nevertheless give rise to an entitlement to an independence allowance using the appellant's argument, this would mean that lump sum recipients were in a more favourite position than those who suffered injury after 1 July 1992 and did not have any lump sum entitlement, and who were assessed as having a whole person impairment of less than 10%. Such cannot and is not the intention of the statutory provisions relating to independence allowance. The threshold of 10% for entitlement is there for all claimants, including those who may have had a lump sum payment under previous legislation and in the case of this appellant her remaining 7% cannot and does not attract any entitlement to an independence allowance. For these reasons therefore this appeal is dismissed. DATED at WELLINGTON this 30th day of August 1999 MJ Beattie District Court Judge 546-98White.doc(gm)