Creagh v Accident Compensation Corporation

IN THE DISTRICT COURT HELD AT WELLINGTON Decision No. 98/2003 UNDER The Accident Insurance Act 1998 AND IN THE MATTER of an appeal pursuant to section 152 of the Act BETWEEN ROBERT ANDREW CREAGH of Auckland Appellant (Appeal No. AI 455/02) AND ACCIDENT COMPENSATION CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARING at WELLINGTON on 15 April 2003 APPEARANCES/COUNSEL Ms C Ross with J M Miller for appellant A D Barnett for respondent RESERVED JUDGMENT OF JUDGE A W MIDDLETON [1] The issue in this appeal is whether the appellant is entitled to reassessment of his weekly compensation under s.138(2) of the Accident Rehabilitation and Compensation Insurance Act 1992. The Facts [2] On 10 February 1984, when he was then aged 15, the appellant was injured when he was hit by a car. At that time the appellant was not in employment. [3] The respondent assessed the appellant’s entitlement to weekly earnings as a potential earner pursuant to s.63 of the Accident Compensation Act 1982. That section provided that where a person suffered personal injury by accident from which he would suffer a loss of potential earning capacity, his entitlement to weekly earnings was to be made on the basis of “such (other) amount as may from time to 2 time be prescribed for the purposes of this section by the Governor-General by Order in Council.” The section provided that that prescribed amount constituted the relevant earnings of the injured person, who was then entitled to weekly compensation based on 80 per cent of the prescribed amount. [4] Various Orders in Council had fixed the prescribed amount at $369 as at 30 June 1992, so that the appellant’s weekly compensation was fixed at 80 per cent of that figure. As at 1 July 2001 the prescribed amount had increased to $340.30. [5] The appellant completed a Bachelor of Science degree at Auckland University in February 2000. In 2002 he applied to the respondent to reconsider the quantum of his weekly compensation because of his then increased ability to earn as a result of having attained the degree. [6] On 8 February 2002 the respondent declined that application and the appellant applied for a review of that decision, which was unsuccessful. [7] In his decision the Reviewer found that s.138 of the 1992 Act did not preserve the discretionary provisions of s.63 of the 1982 Act which would allow an adjustment of weekly compensation. [8] The relevant part of s.63 of the 1982 Act provides: “Provided that the Corporation may from time to time fix the relevant earnings of the injured person at such greater amount, being not more than 50 per cent in excess of the amount prescribed, as it thinks fit, in any case where the injured person is a person to whom any of the subparagraphs of subsection (1)(c) of this section applies.” As the appellant was 15 at the time of his accident, s.63(1)(c)(i) applied to him, he then being enrolled for secondary education. [9] The appellant submitted: [a] That his entitlements under s.63 of the 1982 Act are fully preserved by s.138(1) of the 1992 Act. [b] Alternatively, that an increase in his “loss of potential earnings” figure pursuant to s.63(5) of the 1982 Act constituted the type of adjustment envisaged by s.138(2). [10] The respondent submitted: [a] That s.138 of the 1992 Act continued the entitlement to weekly compensation as “calculated” under the 1982 Act, which the appellant was entitled to receive immediately before 1 July 1992. [b] That the 1992 Act was repealed on 1 July 1999 by the Accident Insurance Act 1998 in which s.429 continued the compensation to which a person was entitled under s.138 of the 1992 Act immediately before 1 July 1999. 3 [11] Section 138 of the 1992 Act preserved the appellant’s entitlement to weekly compensation as calculated pursuant to s.63 of the 1982 Act. That calculation was the relevant earnings as prescribed by Orders in Council as prescribed by s.63(5), which amount could be increased at the discretion of the respondent where the injured person came within the provisions of s.63(1)(c). [12] While the appellant submits that as he had obtained the university degree in the year 2000 that the original assessment of his potential earnings was wrong from the beginning. He submitted that s.63(5) provided the respondent with the discretion to increase the relevant earnings at a later date because at the time of the original calculation it could not be anticipated what occupation the appellant might then pursue. The appellant submitted that this position was similar to the position of the appellant in McGhie (68/96). [13] I do not accept the appellant’s submission that s.138 of the 1992 Act saved the provisions of s.63. I consider that s.138 of the 1992 Act provided that the appellant, as he was in receipt of weekly compensation calculated under s.63 immediately before 1 July 1992, was able to continue to receive “that compensation”. [14] I consider that s.63 is not continued by virtue of s.138 of the 1992 Act, nor is there a similar provision to s.63(5) which would provide authority for the respondent to consider an enhancement of the relevant earnings calculated pursuant to s.63 on the basis of a change of circumstances after 1 July 1992. [15] I do not agree with the appellant’s submission that his position is similar to the position of the appellant in McGhie. In McGhie I held that the use of the word “adjustment” in s.138(2) of the 1992 Act contemplated the situation where the original calculation of the appellant’s weekly earnings had been based on incorrect information supplied at the time that the respondent’s primary decision was made. I considered that as the initial advice of the respondent’s income was wrong, then the provisions of s.138(2) allowed the appellant to “adjust” its original decision by use of the correct figures. However, I do not consider that because it is now found that this appellant may have had a greater potential than that which was anticipated at the time the s.63 decision was originally made constitutes a ground for an “adjustment” as contemplated by s.138(2). [16] The appellant submitted that his situation was assisted by the decision of the Court of Appeal in ARCIC v Watton (10 April 2000, CA 277/99). I do not accept that submission. In her case, Mrs Watton did not seek a reassessment of her entitlement, but claimed that the change brought about by the 1992 Act which reduced the age limit for the cessation of weekly earnings to the age when the person qualified for National Superannuation did not apply to her because her entitlement had been assessed and fixed under s.60 of the 1982 Act prior to July 1992. The Court of Appeal held that “s.138 was concerned with ‘calculation’ of payments which did not encompass entitlement or cessation.” [17] The appellant submitted that s.138(1A) demonstrated that Parliament intended subsection (1) to preserve the effect of the provisions therein listed which included s.60 of the 1982 Act. It was submitted that the provision was inserted to prevent claimants moving from ordinary weekly compensation to a permanent compensation, which would have been possible under subsection (1) in the absence of (1A) if the claimant could show that he or she “would have been entitled to be in receipt of” permanent compensation. I do not accept that submission. 4 [18] It is clear that s.138(1) allows for the continued payment of weekly compensation to which the appellant was entitled immediately before 1 July 1992. I accept the respondent’s submission that the weekly compensation to which the appellant was entitled at that time was the compensation calculated on the prescribed relevant earnings immediately before 1 July 1992. It is clear that s.138(1) does not enable the appellant at a later date to apply for weekly compensation based on enhanced earnings arising after 1 July 1992. [19] Section 138(1A) limits the entitlement of a person to s.60 compensation which must have been assessed prior to 1 October 1992 or be subject to a review application lodged in respect of that assessment before that date. [20] Accordingly I confirm the findings of the Reviewer and the appeal is dismissed. DATED at WELLINGTON this 26th day of May 2003 _____________________________ A W Middleton District Court Judge ai455-02.doc(aw)