O'Brien v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT Decision No. 58 196 HELD AT WELLINGTON 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 PATRICIA ROSALINE O'BRIEN Appellant (Appeal No. DCA 271/94) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 6th day of June 1995 APPEARANCES Mr Rowlett for appellant Mr Fawcett for respondent DECISION OF JUDGE D A ONGLEY This appeal concerned an election not to receive national superannuateon. An election is required under s 142(2) of the Accident Rehabilitation and Compensation Insurance Act 1992 in order to continue receiving accident compensation after 1 July 1993 or after attaining the national superannuateon eligibility age. The appellant suffered personal injury by accident on 22 September 1982 when she fractured her left wrist. On 10 August 1992 the Corporation wrote to her to inform her of changes to the accident compensation scheme on commencement of the new Act and advised her that she was required to make a choice to receive either weekly compensation or national superannuateon. The appellant responded to that on - 2 - 17 September 1992 by electing to receive weekly compensation instead of national superannuateon. On 1 July 1993 the Accident Rehabilitation and Compensation Insurance Amendment (No. 2) Act 1993 came into force. On 20 July 1993 the Corporation again wrote to the appellant advising, in accordance with the amendment, that changes had been made to the upper age limits for receiving weekly compensation, and particularly that the appellant was entitled to receive both weekly compensation and national superannuateon from 1 July 1993 for a period of up to 12 months. It stated: "We will require an election by 1 October 1993 for you to continue to receive either weekly compensation or national superannuateon after 30 June 1994. Should you elect weekly compensation this may continue to 17 March 1995. If no election is received, your weekly compensation cannot continue beyond 30 June 1994. Should you have any queries, please contact our office." Section 142 applies only to persons entitled under s 138 of the Act to a continuation of compensation entitlements under either of rthe former Acts. The scheme of s 142 as amended was different from the scheme that prevailed before 1 July 1993 when the amendment came into force. Under the original s 142 compensation would cease on attaining the national superannuateon qualifying age unless an irrevocable election was made "not to receive national superannuateon in respect of any period for which a person is entitled to receive compensation". The election then amounted to a choice of compensation in preference to national superannuateon, with the claimant accepting the risk that the level of compensation may fall below the superannuateon level. Aside from that, compensation would cease at the time at which it would in any case have ceased under the 1972 or 1982 Acts. The form the election took was a notification that the claimant did not wish to receive national superannuateon. As amended with effect from 1 July 1993 s 142 of the Act, in broad terms, conferred a right on all claimants to receive compensation in addition to national superannuateon for one year after attaining the national superannuateon qualification age. The relevant part then states: (2) No compensation shall be payable under this section to any person- (a) After the 30th day of June 1994, where the person attains the national superannuateon qualification age before the Ist day of July 1993, unless that person has made an election not to receive national superannuateon in respect of any period commencing after the 30th day of June 1994 The general nature of the election did not change when the amended section came into force. In Gray v ARCIC 82/94 I held that an election under the former s 142 not to receive national superannuateon would enure for the purposes of the amended section. I would resile from the observation which I made in that decision that the claimant would not be entitled to make a different election under the amended section. The amended section speaks from the date on which it came into force and the intention of the drafter to confer a right of election must be given effect. I am - 3 - bound to say therefore that the appellant had a further right of election when the amended section came into effect, although I consider that she could have rested on the election she had already made, for the reasons expressed in Gray. In this case the appellant responded to the Corporation's letter of 20 July 1993 by attending at one of the branches on 13 September 1993. There is a factual dispute about what happened. The appellant's version is that she had received an election form with the letter and she signed it in preparation for lodging it with the Corporation as directed, but she did not tick the box to indicate in which direction her election was made. She took it in to discuss with a Corporation staff member so that she could make the right decision. The appellant's exact recollection has not been well recorded in the note of the review hearing, but in a general way she said that the staff member to whom she spoke told her that she would receive no more than $40 per week compensation if she elected not to receive national superannuateon. She then made an election to receive national superannuateon. The section speaks of "an election not to receive national superannuateon" so an election to receive national superannuateon may have had no statutory effect, but in any case once 1 October 1993 came the claimant made an apparent deliberate choice. It is the effect of that choice that needs to be examined. It is my view that the choice made by the claimant was divisible into two stages. The first stage was the decision to revisit the choice that she had already made in the previous year. The second stage was the actual exercise of election. It must be recognised that once the section was re-enacted it was proper for the Corporation to notify claimants of the necessity of making an election before 1 October 1993. Claimants who had already made an election in respect of the identical choice that was offered to them again did not have to renew their election but they were not so informed. Mrs O'Brien fell into that category of claimant and as a consequence of receiving the Corporation's letter she believed she had to make a further election. She was entitled to make a further election for the reasons that I have stated. But she was not obliged to do so. If she had made an informed decision to make a new election, she would have been able to revoke her previous election by making a new election. But in reality that amounted to two separate decisions. Unlike claimants who had made no election at all, and who were compelled by statute to make an election, Mrs O'Brien had first to decide whether to make another election at all. It is that decision that falls to be examined in this appeal. The starting point is that the appellant had existing rights, unlike other persons who had made no election at all. She embarked upon reconsideration of her existing rights and apparently sought some advice. Although there is no record of the advice she received, her own explanation merits belief. It is highly unlikely that she would have made a decision so disadvantageous to herself, and contrary to her earlier election, unless the decision was suggested to her by someone else. It is contrary to justice that she should be deprived of her existing rights unless she made a fully informed decision to relinquish those rights. The available evidence does not support that view. For the Corporation to benefit by the claimant's decision, the onus should be on the Corporation to show that the claimant made an informed decision to relinquish her existing rights, not on the claimant to - 4- show otherwise. On the material before me I am not satisfied that the appellant made an informed decision. I would even go so far as to say that I am satisfied she did not make an informed decision. It follows that she should not be deprived of an existing entitlement by her apparent revocation of her previous election. In this particular case there is no need to go further and decide on what basis her election should be set aside. Her election was one to receive national superannuateon, which is not exactly the form of election described by the statute. The statutory choice is one between electing not to receive national superannuateon or accepting the "default" condition, which was to receive national superannuateon instead of compensation. The distinction may appear pedantic, however the form she signed did indicate a choice that was worded differently from the choice stipulated in the Act. Whether or not that deficiency was significant, I am satisfied that her decision to abandon her previous election was obtained from her without the benefit of correct advice. The appeal is allowed and the appellant will have the benefit of her earlier decision not to receive national superannuateon. The appellant will have costs of $650. DATED at WELLINGTON this |9th day of August 1996 D A Ongley District Court Judge