Cruickshank v Accident Compensation Corporation

IN THE DISTRICT COURT AT AUCKLAND 2013] NZACC 174 ACR 53/13 UNDER THE ACCIDENT COMPENSATION ACT 2001 IN THE MATTER OF AN APPEAL UNDER SECTION 149 OF THE ACT BETWEEN MICHAEL CHRISTOPHER CRUICKSHANK Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent Hearing: 20 May 2013 Appearances: D Heperi for Mr Cruickshank D Tui for the Corporation Judgment: 14 June 2013 JUDGMENT OF JUDGE RODERICK JOYCE QC Reason for appeal [1] This appeal concerns a decision of the Corporation of 10 August 2012 declining to pay interest to Mr Cruickshank on a payment he received from it of $17,080. [2] Mr Cruickshank's position is that this payment was, or should be treated as, one of weekly compensation paid late. [3] The Corporation's position is that it was not or anything like that kind of payment at all but rather a refund from payments made by Mr Cruickshank under a reparation order of the District Court sitting in its criminal jurisdiction. MICHAEL CHRISTOPHER CRUICKSHANK V ACCIDENT COMPENSATION CORPORATION DC AK [2013] NZACC ACR 53/13 [14 June 2013] Background [4] The following are salient to the appeal: Mr Cruickshank has cover for injuries suffered in a fall from a ladder in April 1995 which led to the development of a Chronic Pain Syndrome. During a period when he was in receipt of entitlements in the form of weekly compensation he completed a Patient Declaration in support referable, so it turned out, to a period when, on the basis of enquiries made by the Corporation, he had worked without informing the Corporation of that fact. He went to trial in the District Court on two charges under the Crimes Act and was found guilty on one of them namely that between August 2005 and December 2005 with intent to obtain pecuniary advantage or valuable consideration he dishonestly and without claim of right used a document namely a medical certificate. Weekly compensation that he had received during this period, consequent upon the medical certificate in question, amounted to $8,700.11. That information was provided to the sentencing Judge who ordered Mr Cruickshank to make reparation of $5,000, declining to order as much as $8,700 on the basis that that was beyond Mr Cruickshank's financial ability. [The sentencing notes record at the end that "an appropriate arrangement can be entered into so that can be paid by instalments" and I was told that the subsequently agreed arrangement was for payments of $20 per week to be made by Mr Cruickshank.] Subsequently the Corporation demanded of Mr Cruickshank the difference of $3,700.11 and Mr Cruickshank sought a review of the decision delivering that demand. That decision was upheld on review but then the review decision was quashed by the Court' in these terms: [12] The fact that the appellant did not advise of the work that he was doing, whilst it may be a fraudulent act in terms of the criminal law, does not amount to an act which gives rise to a cancellation or suspension or weekly payments as any income which may have been earned, but which was fraudulently not acknowledged, gives rise to the abatement procedure, but nothing more. [13] In the particular circumstances of this appellant, it is clear that the respondent accepted his continued incapacity and it continued to pay him weekly compensation, and in respect of which there has been no subsequent question mark, and it is the case I find, both as a matter of fact and law, that the respondent is not entitled to recover the full amount of the weekly compensation it paid in that 3 month period, but rather it is entitled to have an amount repaid which is the difference between the weekly compensation to which the appellant was entitled after abatement and the gross amount which was actually paid. [14] As earlier noted, there has been no evidence presented by he respondent to identify what sum, if any, may have been earned by the appellant, which would require to be the subject of abatement, and in those circumstances I find that there is no basis for the respondent to claim an entitlement to recover the $3, 700 now sought. Thereafter Mr Cruickshank requested the Corporation to repay him all the reparation monies it had received from the Ministry of Justice and, at a later point, the Corporation emailed Mr Heperi in response: Good morning Mr Heperi. In relation to the issues you have raised in your communications with Tony Lahman, specifically your client's request for a repayment for all the reparation monies paid through the courts to ACC, I have considered the matter and believe that it would be inappropriate to consider such a proposal From my understanding of the issues, the order for reparation by Judge M E Perkins was made at the end of the criminal trial where all of the evidence was presented and subsequent to this conviction lengthy submissions on sentencing were heard by the Court. The Crown sought an order for reparation of over $8,000, however after careful consideration by the judge, an order for $5,000 was made. Cruickshank v ACC [2011] NZACC 130 Under these circumstances as I have pointed out, I believe for ACC to consider your proposal would be wrong in principle and possibly open the reputation of the Corporation to public criticism, and more importantly, criticism from the courts for what could be interpreted as acting in breach of a court order, I would consider that a more appropriate course of action to be considered where Mr Cruickshank believes he has an issue with the Court in both sentences, that this should be correctly addressed through the courts and not by way of an attempt to negotiate these issues between yourself, as his advocate, and the ACC. Treating that as a decision of the Corporation Mr Heperi filed an application for review which was conducted on 25 January 2012 but with that application being dismissed on 3 February that year, Mr Cruickshank then appealed, after which the matter came before me on 17 April 2012. Consequent upon the calling of the matter that day I issued a direction which, after brief reference to the background, went on: [4] ... there was some unproductive back and forth between Mr Cruickshank and the Corporation about who owed whom what but also a decision which went on appeal Beattie and resulted in him recognising that if, in terms of the facts, it was justified, the case simply called for application of the abatement provisions. [S] I would have expected that the immediate response of the Corporation to that determination would have been - as most reasonably it could have in the circumstances - to require of Mr Cruickshank under s 72 of the Act information requisite to determining with clarity what earnings he might have achieved on his own account for any reason and at any time during the subject period. [6] Instead of doing that, at least according to Mr Heperi's instructions, the Corporation got into a debate with Mr Cruickshank over the fate of some, or all, of the eparation monies and issues had been raised as to whether any refund should be made on that account, that claim being propounded on the basis, at least so far as I gather, that during the period in question Mr Cruickshank did not work for money at all, but simply helped a friend or friends out without charge by applying his building or carpentry skills for a project or two, [7] Rather than taking up everybody's time and thus money, and consuming court time sensibly to be allocated elsewhere, it seems to me that the sensible course here is o go back to what ought to have happened following Judge Beattie's decision, namely the issue by the Corporation to Mr Cruickshank of a s 72 request requiring a response to that to be by way of statutory declaration and I adjourn the appeal, without setting a date for its resumption, so that Ms Becroft can go back to the Corporation and urge upon it the taking of that course [8] Depending upon what that produces, the appeal may well become redundant. In any event, the path to the proper conclusion of this matter should then be that much the clearer, ... On 18 May 2012 the Corporation wrote to Mr Cruickshank requesting that he complaint a statutory declaration of any earnings received, and work performed, for the period from 18 August 2005 to 1 December 2005. On 25 May 2012 the Corporation received an executed statutory declaration from him bearing that date and providing details of his work activities during that period. In that declaration Mr Cruickshank declared that he had not received any payment for the activities identified which he described as "spontaneous voluntary activities for an acquaintance named Dianne Parsons of Food City Limited". [5] He then added that: I received no payment for any voluntary activity that I engaged in between 18 August 2005 and 1 December 2005. I did not engage in any paid employment during the same period. The Corporation responded on 13 June 2012 to say that: Because the period in question is that covered by the prosecution and conviction of Mr Cruickshank for fraud, ACC is comparing the statutory declaration with the evidence presented at that trial. ACC may seek further comment from Mr Cruickshank in the event that discrepancies are found between that evidence and the content of the statutory declaration. This process will not be complete by 22/6/06/2006. However, you will be kept up to date with the progress of the investigation, if there is something to ask of Mr Cruickshank or when there is something to report. In answer to your enquiry regarding the amount of reparation received by ACC, I am advised that to date ACC has received $1600 from the courts . On 29 June 2012 the Corporation wrote to Mr Heperi to say that it had completed its investigation: Into whether Mr Cruickshank received earnings liable for abatement during the period 25/10/05 to 22/01/06. On balance ACC considers it is not established that Mr Cruickshank received earnings during this period. Therefore, Mr Cruickshank is entitled to full unabated weekly compensation at $878.85 gross per week. Mr Cruickshank subsequently sought repayment of the monies paid by him on account the reparation order to which request the Corporation responded on 23 July 2012 to say that it would: ... make a one off payment to Mr Cruickshank of the amounts already paid by him pursuant to the reparation order which had been passed from the Ministry of Justice to ACC. The amount so paid on 30 July 2012 was $1,780 with, I am told, the Corporation also going so far as to pay $3,220 to the Ministry of Justice to clear the balance of the reparation order. Mr Cruickshank subsequently applied for interest on the refund payment of $1,780 which in a decision dated 10 August 2012 the Corporation declined to make saying that: 2 And it appears that this amount coincided with the $20 per week terms apparently agreed after sentencing. ... (it made) this decision on the grounds that the payment to Mr Cruickshank is not weekly compensation. Instead it was reimbursement of amounts that he had paid in accordance with the reparation order and as such there is no provision under the (2001 Act) for payment of interest. Mr Cruickshank sought a review of this decision, the dismissal of which generated this appeal. Review decision [6] In relevant part this recorded the following: ... Mr Heperi argued that the $1780 was weekly compensation as it was a repayment of what was believed at one point in time to have been fraudulently obtained weekly compensation, and because each repayment was taken from Mr Cruickshank's weekly compensation. I am unable to accept Mr Heperi's argument however: Section 114 is expressed to apply only to 'weekly compensation'. Weekly compensation is specifically and particularly defined in the Act, and the reimbursement of reparations does not fall within any of the categories set out in the definition. Having regard to the purposes of the Act and the inalienability of entitlements does cannot (sic) alter the meaning of weekly compensation as set out in the Act; The $1,780 payment by ACC was made pursuant to its own decision, not that of a Court, and in ACC's decision it characterises the payment as a one off repayment of reparations not as weekly compensation; and The money paid to Mr Cruickshank by ACC does not become 'weekly compensation' simply because the initial liability arose in relation to weekly compensation that had been thought to have been fraudulently obtained, or because Mr Cruickshank's weekly reparation payments were drawn from his weekly compensation. The law [7] Section 114(1) of the Act provides: The Corporation is liable to pay interest on any payment of weekly compensation to which the claimant is entitled, if the Corporation has not made the payment within one month after the Corporation has received all information necessary to enable the Corporation to calculate and make the payment. [8] As was identified at the outset of this judgment the question is whether or not the Corporation was correct to characterise the payment of $1,780 as it did or whether in fact and in law it was a late payment of weekly compensation attracting the attention of's 114(1). Case for Mr Cruickshank [9] Mr Heperi ran a colourful argument in terms that were one to place certain (he happened to choose a food by name) material on land that would not make the land something other than it already was. [10; However and as I pointed out to him at the time he made the submission, it begged the question of whether the land (by which he here meant weekly compensation) was in fact that at any relevant point in time. [1 1] My proposition to him was that it rather looked as if the $1,780 in question actually represented, when the refund was made, no more than and nothing different from a sum of money held by the Corporation to the use of Mr Cruickshank. [12] I raised that proposition with Mr Heperi in case I had missed something as would render it one that was ultimately unsustainable in fact and in law, but he was unable to raise a counter argument. Case for the Corporation [13] The Corporation's primary argument was that it was plain from s 114(1) (and neither party suggested that elsewhere in the Act was to be found any other actually or potentially applicable interest provision) that it had no application at all to the present set of circumstances. [14] The submission was that the $1,780 was just a refund of monies paid under a reparation order and for reasons including these: The payment made on 30 July 2012 was separate and distinct from any of weekly compensation calculated and paid under Part 4 of the 2001 Act (in Part 2 of Schedule 1). In respect of the 3 month period in question the appellant received weekly compensation each week, on a timely basis. These payments were made under Part 4 of the 2001 Act and were not late. The weekly payments made by the Corporation for that period were distinct from that made by it on 30 July 2012 for that had its origins in the criminal proceedings determined in 2010. The circumstances identified as relevant to Mr Cruickshank's sentencing in the criminal jurisdiction included his participation 'in interior work at a food court at Northcote in a residential property there' - see 12 July 2010 sentencing notes, Those notes recorded the already identified reparation order and it was common ground that at an agreed rate of $20 per week Mr Cruickshank had made payments on account of it of $1,780 by July 2012; and This amount was simply refunded when the Corporation accepted, on receipt of the statutory declaration, that despite the conviction it had not been established that the appellant received earnings for the work undertaken; hence The payment of $1,780 was unmistakeably a refund of reparation payments. Its nature and character was defined by the reparation order made in the criminal jurisdiction of the Court with the method of payment being in the first instance by Mr Cruickshank to the Ministry of Justice followed by remission by it to the Corporation; thus It was incapable of characterisation as a payment under Part 4 of the 2001 Act and consequentially incapable of identification as a sum to which s 114(1) of the 2001 Act. Discussion [15] Mr Tui also raised a fall back argument but in light of my view of the principal argument there is no need for me to rehearse that. My view in respect of Mr Tui's principal argument is that it is as a matter of fact and law unimpeachable. [16] That had begun to look to me to be the case when (as a matter of fairness so there could be an opportunity to respond) I raised the suggestion with Mr Heperi that the $1,780 simply could not be characterised as his client would wish to see it be, [17] There were some odd notations in the payment records that were produced at the hearing. But, as also discussed with counsel at the time, their oddity was obviously enough to be ascribed to the payment in question being one that the system was not designed to deal with, hence the input had been of a label actually having nothing at all to do with the case one way or the other. [18] On the facts as they have been presented to the Court the only available characterisation of the $1,780 odd is that as a result of the Corporation's decision to accept Mr Cruickshank's statutory declaration (the prior events notwithstanding) that sum became one which in justice and equity - with no rule of policy or strict law standing in the way - that it ought to (as in fact it did) refund to Mr Cruickshank. [19] Had, then, the Corporation not made the refund Mr Cruickshank could have pursued recovery in the ordinary civil jurisdiction and upon that basis and that would have opened up the possibility of the Court in its discretion awarding him interest in terms of the District Court's Act 1947. [20] What in the end, is extraordinary about this appeal, is that Mr Heperi told me that the sum in fact at issue was $50 or thereabouts. On the reasonable assumption that the labourer is worthy of the hire so that Mr Heperi was being remunerated for his pursuit of the appeal it becomes all the more extraordinary that it should have been pursued at all. [21] Mr Heperi told me that it was pursued as a matter of principle. I say no more on that account than that there is well known aphorism concerning principles and money. Result [22] The appeal is dismissed. Roderick Joyce QC District Court Judge