Conway v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT WELLINGTON Decision No. 115 / 97 UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an appeal pursuant to section 91 of the Act BETWEEN PAULINE CONWAY of Palmerston North Appellant (Appeal No. DCA 322/96) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent DECISION OF JUDGE A W MIDDLETON I have received submissions from Mr A R V Rowlett advocate for the appellant and Mr D Tui counsel for the respondent with the request that I issue a decision on the papers. The appellant lodged a claim with the respondent in October 1991 that she injured her back while working as a hospital aide. Her claim was accepted by the respondent who commenced the payment of earnings related situation. Thereafter the appellant occasionally obtained casual employment with the result that her earnings related compensation had to be abated accordingly. In December 1993 she received lump sum awards under ss.78 and 79 respectively of the Accident Compensation Act 1982 On 20 January 1994 the respondent notified the appellant that she had been overpaid her weekly compensation in the period 6 November 1993 to 12 November 1993 and the overpayment was recovered by making deductions from her then weekly compensation. A similar situation arose in relation to an overpayment between 4 2 July 1994 and 31 July 1994. It then transpired in October 1995 that considerable overpayments had been made in the periods: 9 July 1993 to 18 July 1994 3 December 1994 to 31 March 1995 1 April 1995 to 22 September 1995 It appears that the payment made on 14 July 1994 for some reason constituted a full year's weekly compensation in the one payment and from 3 December 1994 to 22 September 1995 the respondent had paid double weekly compensation. The total overpayment amounted to $11,515.02. When the respondent had notified the appellant by letter on 11 October 1995 of the amounts overpaid her advocate Mr Rowlett wrote to the respondent requesting remittance of the debt. Mr Rowlett submitted that the appellant had acted in good faith and had altered her position by purchasing a house and furniture and thus it was inequitable for the respondent to seek to recover the debt. On 17 July 1996 the respondent notified Mr Rowlett that it would not remit the debt. The appellant applied for a review of that decision. The appellant gave evidence before the review officer in which she stated that she did not keep large sums in her cheque account and when she received the large payment in July 1994 she transferred it to her savings account. When she was queried as to why she had not inquired from the respondent as to the payment of such a large amount the appellant said: "I didn't, no well at the time I was under stress, I believed that the money was right and I just, when I got that it compounded the fact that it must be right it's all on computer and I just believed they're on computers and they know what they're doing." The appellant then told the review officer that she had held that sum in her savings account for some 3 to 4 months. At no time did she consider querying the amount. However, the appellant conceded that she was aware that the respondent was at that time reviewing the amounts which were paid to her. The appellant conceded to the review officer that she was aware that earnings related compensation were based on 80% of her weekly earnings. She conceded that she thought that as her husband had left her home the additional amount was paid to her for that reason. The appellant said that she could never understand the payments because they kept changing. She said that "whatever the Corporation sort of sent me I just believed it was right to be honest" She said that she had held the $7,000 for some 3 to 4 months but some of it was spent on the purchase of a house and $3,000 went to pay taxes. The review officer found that the appellant had been in receipt of weekly compensation since 1991 and that over the years there had been regular reassessments of her entitlement because she was from time to time employed on alternative work. The appellant was aware that as details of her earnings were given 3 to the respondent reassessments were undertaken. The review officer found that the appellant had admitted that when she received the payment of $6,986.04 on 14 July 1994 she had doubts as to whether she was entitled to that payment but did not query it. The review officer found further that at 2 December 1994 when the appellant was then certified as being fully unfit for work the respondent had advised her that her correct entitlement before tax would be $180.56 per week. After that the appellant received payments well in excess of that gross amount and again did not query those payments. The review officer noted that at that time the appellant claimed that the extra payments were probably because she had then lost her husband's income. The review officer was not persuaded that the appellant had met the requirements of s.77(2) and declined the application for review. It is against that decision which the appellant now appeals. Mr Rowlett submitted: 1. That the review officer's expectation of the appellant's responsibilities were unrealistic and that she should have been aware that for a person of this appellant's capabilities she would have been unaware of the requirements of the Act and had relied on the accuracy of the calculations made by the respondent's staff members. 2. That the review officer in finding that the appellant had intentionally contributed to the amount of debt by failing to query the payments as they were made had overlooked the fact that if errors had been made they may not have been corrected and that the respondent was responsible for the incorrect figures put into the computer. That the error was the computer inputs and was not intentionally contributed to by the appellant. 3. That the appellant did believe that she was entitled to the payments. 4. That it was not open to the review officer to query all payments simply because earlier overpayments had been adjusted. That the appellant was entitled to consider that as earlier reassessments had been made the respondent was in a position to ascertain its own mistakes quickly. 5. That the review officer was wrong in not finding that the appellant had altered her position by spending the money towards the purchase of a house and - furniture. Mr Tui submitted: 1. That in relation to the first overpayment of $6,986.04 on 14 July 1994 the respondent accepted that the appellant had not contributed to that error. However, having received that sum into her cheque account she withdrew it and paid it into her savings account and held it for some 3 or 4 months before spending it without at any time querying the payment with the respondent. 4 That the appellant would have been well aware that the payment was incorrect having regard to the payments which had been made to her up to that time. 2. That the appellant in spending the money had not entered into any binding financial commitments on the strength of the overpayment similar to the appellant in Reinders (33/96). In that case that appellant had purchased a house in the knowledge that the payments she was then receiving which did include overpayments would be sufficient to fund her mortgage payments and that she had altered her position in reliance on the validity of the overpayments. That this appellant has provided no evidence that she entered into similar binding financial commitments on the strength of the overpayment. That the appellant did not rely on the overpayment in regard to the deposit on the house because it appeared that the appellant had purchased the house irrespective of the overpayment and only put, as she said, "a tiny bit" of the overpayment towards the deposit. 3 . That as the appellant had not received the money in good faith she could not have relied on the validity of the overpayment when she spent it and it was therefore not inequitable for the respondent to recover the overpayment. 4. That a similar position arose in regard to the overpayment of $4,014 between 3 December 1994 and 22 December 1995. While the respondent concedes that the appellant did not intentionally contribute to the first overpayment of weekly compensation in December 1994 she did contribute so far as the ongoing payments thereafter were considered because she should have realised after receiving the first overpayment in December 1994 that the quantum of the weekly compensation was far in excess of the entitlement of which she was aware. She had been notified that she would receive approximately $175.00 per week gross and from 3 December 1994 received $265.65 net per week which should have rung earlier bells. 5. Again, it is submitted that there is no evidence of an alteration in her position in reliance on the validity of those overpayments. The review officer clearly made findings as to the appellant's credibility and in particular as to the doubts raised in the appellant's mind when she first received the overpayment in one sum of $6,986.04. Rather than querying the figure she transferred it to her savings account where she held it for some 3 to 4 months before spending it. The review officer accepted that while the respondent had certainly made errors which resulted in the appellant receiving more than her entitlement she was aware of her proper entitlements and took no steps to check with the respondent that she was not being overpaid. The review officer found that there was no evidence that the appellant had altered her position in reliance on the payments such as the appellant in Reinders. The onus is on the appellant to satisfy the Court that the review officer has overlooked evidence which should have been taken into account in reaching her position or as considered evidence which should not have been considered. 5 I am satisfied on reading the very full decision of the review officer that she has carefully considered all the requirements of s.77 before reaching her decision. In addition, I consider that the submissions made by Mr Tui are appropriate in this case and should be adopted. The appeal is therefore dismissed. DATED at WELLINGTON this 6 day of June 1997 A W Middleton District Court Judge de322-96.doc(rd)