Van Der Kaap v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT HUNTLY Decision No. 4 199 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 ROBERT VAN DER KAAP DCA 177/98, 287/98 Appellant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 3rd day of December 1998 APPEARANCES: Mr D Heperi, advocate for appellant Ms K Tahana, counsel for respondent RESERVED JUDGMENT OF JUDGE M J BEATTIE This hearing concerned two appeals lodged by the appellant against two separate decisions of Review Officers. Whilst each appeal concerns a separate issue, those two issues are connected one with the other and both issues are determined in this one judgement. 2 The first issue is whether the Corporation was entitled to suspend payment of weekly compensation and to claim recovery of amounts of compensation paid before suspension during the period that the appellant was an inmate of a penal institution. The second issue is whether the Corporation was correct in ruling that the amounts of weekly compensation so paid during the period that the appellant was an inmate of a penal institution should be recovered rather than being remitted pursuant to section 77(2) of the Act. Background The appellant sustained head injuries and multiple fractures in a motor cycle accident in April 1978. Since the date of that accident he has been in receipt of weekly compensation and other entitlements. For some years the appellant has also been embroiled in various types of domestic litigation with his former partner, such proceedings being somewhat acrimonious to say the least. On 6 September 1994 the appellant was arrested for alleged breach of a non molestation order and was remanded in custody to Waikeria Prison for psychiatric examination under the provisions of section 121(2)(b)(i) of the Criminal Justice Act 1985. In all the appellant remained in custody for 20 days. The charge against the appellant was subsequently withdrawn. During the period of his custodial remand he continued to receive weekly compensation through direct credit to his bank account and the amount paid during that period amounted to $1,373.69. On 30 May 1997 the appellant was committed to prison for contempt of Court and he remained in prison for some 17 days. Again weekly compensation continued to be paid but because of the fact that the appellant's imprisonment achieved some publicity the Corporation did in fact suspend further payment during part of the time that he was in prison. The amount paid to the appellant during this second period of 3 imprisonment amounted to $408.29. The Corporation seeks repayment of the total amount so overpaid amounting to $1,781.98. The two review decisions ruled that the Corporation was correct, firstly to rule that there had been an overpayment of weekly compensation because the appellant was not entitled to receive weekly compensation whilst in prison and secondly that the circumstances of the overpayment did not entitle the appellant to a remission of same pursuant to section 77(2) of the Act. The relevant statutory provisions for the first issue are: Section 83 of the Act states: No compensation, grant, or allowance to imprisoned person - in respect of any period during which any person is an nmate in any penal institution within the meaning of the Penal Institutions Act 1954, no compensation, grant or allowance shall be payable under this Act to that person. Section 2 of the Penal Institutions Act 1954 states: "Inmate" means any person for the time being in the legal custody of a superintendent of any penal institution. "Penal institution", ... means any prison, corrective training institution or police jail established under this Act. For the second issue, section 77 of the Act states: Recovery of overpayments and underpaid premiums by Corporation - (1) If any person receives any sum of money from the Corporation - (a) which is in excess of the amount to which he or she is entitled under this Act; or (b) to which he or she is not entitled - the sum of money shall (except to the extent that it is recovered uner subsection (3) of this section) be a debt due to the Corporation and may be recovered by way of proceedings or deducted from any amount thereafter payable to that person (whether or not in respect of the same personal injury). (2) The Corporation shall remit in whole or in part a debt which arose as a result of an error not intentionally contributed to by the debtor if the Corporation is satisfied that the person receiving the amount so paid in error did soin good faith and has so altered his or her position in reliance on the validity of the payment that it would be inequitable to require repayment. 4 In his submissions on behalf of the appellant Mr Heperi submitted that the provisions of section 83 should be confined and restricted to persons who are sentenced to imprisonment after being found guilty of a crime and that it should not apply to persons, such as the appellant, who are remanded in custody and in respect of which there has been no conviction either then or subsequently. Mr Heperi submitted that the mischief which the provisions of section 83 were designed to prevent was the ability or entitlement of a convicted criminal to continue to receive entitlement under the Act after being sentenced to a term of imprisonment. He submitted that this mischief did not apply in the case of the appellant and he referred to the decision of Lord Diplock in Jones v Wrotham Park Settled Estates Ltd (1980) AC 105 where on this question of statutory interpretation Lord Diplock stated: First it must be possible to determine from a consideration of a provisions of the Act read as a whole what the mischief was that it was the purpose of the Act to remedy; secondly it must be apparent that the draftsmen in Parliament had by inadvertente overlooked, and so omitted to deal with, an eventuality that required to be dealt with if the purpose of the Act was to be achieved; and thirdly it must be possible to state with certainty what were the additional words that would have been inserted by the draftsmen and approved by Parliament had their intention been drawn to the omission before the Bill passed into law." I take it from his submission that it was the words "convicted" amd "sentenced" which were overlooked by Parliament when enacting the Accident Rehabilitation Compensation and Insurance Act 1992. Insofar as the claim for repayment of monies overpaid was concerned, Mr Heperi submitted that the appellant had not contributed to the error, that it was received in good faith and that he had altered his position in reliance on the validity of the payment. He submitted that the appellant had paid his commitments from the monies received, that the monies were applied towards normal costs of living, and he did not have the means to repay it. 5 Miss Tahana, counsel for the respondent submitted that the only question that the first issue raised was whether the appellant was as a matter of fact an inmate of a penal institution. She submitted that the provisions of section 83 did not extend to considerations of guilt, innocence or conviction. She further submitted that section 83 applies to all inmates and that the rationale behind the provision is that when the person is in prison, he is not thereby earning, therefore compensation for not being able to earn should likewise cease. At the conclusion of submissions Mr Heperi informed the Court of a response he had had to a letter to the Minister of Accident Rehabilitation & Compensation Insurance in response to his letter which in essence put forward the submission which he made to this Court. The Associate Minister, the Hon Marie Hasler, replied as follows: "In your letter you express concern that claimants who are held in custody in a penal institution, who have their charges dropped, or who are found not guilty in the criminal court, may be unfairly penalised by the application of section 83. The intention of section 83 is to ensure that an ACC claimant, detained in prison for any reason, is not advantaed by their ongoing access to entitlements, such as weekly compensation, over other prisoners who do not have current ACC claims. The nature of detention or imprisonment means that generally, a person cannot continue to receive earnings through their usual employment. Therefore, an ACC claimant continuing to receive ongoing compensation for loss of earnings would be in an advantageous position compared to other prisoners. Your letter does, however, raise interesting and valid points and, as ACC is currently undergoing legislative reform, I have forwarded your comments to officials for their consideration." Decision First issue 6 The provisions of section 83 of the Act make it clear that the status of the beneficiary which would disentitle receipt of compensation is that of an inmate in a penal institution. On the evidence there is no dispute that the appellant was an inmate in a penal institution for the two periods in question. It is also equally clear that he was not an inmate as a consequence of having been sentenced following conviction for an offence. However the provisions of section 121 of the Criminal Justice Act 1985 do allow for a person charged with an offence to be remanded in custody for the purposes of a psychiatric report. During the period of that remand that person is an inmate of a penal institution. A possible outcome could be that as a consequence of that psychiatric report he could be found unfit to plead in which case a prosecution would not proceed, but that would not affect his status as being an inmate in a penal institution. Similarly under the contempt provisions of the Crimes Act and/or the District Courts Act, the Court has inherent powers to commit a person to prison for contempt. Again it does not require conviction for a criminal offence. Interestingly in the definition provisions of the Criminal Justice Act the definition of "sentence of imprisonment" does not include imprisonment imposed, whether by commital, sentence or order for a) non payment of a sum of money or b) disobedience of a Court order c) contempt of Court. Thus the Criminal Justice Act recognises that imprisonment can be imposed in certain circumstances where it is not a sentence of imprisonment. 7 If Parliament had intended that persons such as the appellant were not to be the subject of section 83 it could have easily confined that provision to persons "sentenced to imprisonment". That it did not do so I find was quite deliberate and is a clear indication that the matters referred to by Lord Diplock in the Jones v Wrotham Park case cited above are not applicable in the interpretation of section 83 of the Act. Thus although this appellant has maintained and no doubt will continue to maintain that he has been done a serious injustice, not only by his incarceration but also by the suspending of his weekly compensation during the period of his incarceration, I find that latter action was quite justified by the provisions of section 83 of the Act. Naturally this Court does not concern itself in any way whatsoever with the reasoning for or the validity of the fact of his periods of imprisonment made respectively by the District and High Courts at Hamilton. Accordingly then this Court confirms the decision of the Review Officer that the appellant had no entitlement to weekly compensation during the period he was an inmate of Waikeria Prison and therefore the payments which were so made during those periods constitute an overpayment of the amount to which he was entitled under the Act. Second issue The amounts of overpayment total $1,781.98 and it was the respondent's intention that this sum be repaid by withholding the sum of $50 per week from the appellant's weekly compensation entitlement. The appellant seeks that the sum overpaid be remitted in whole by virtue of section 77(2) of the Act. From the facts it is clear that the overpayments occurred as a result of an error not intentionally contributed to by the appellant. Although the appellant would have been painfully aware of the fact that the Corporation contended he was not so entitled to weekly compensation during any period of custody on the second occasion because of the storm that arose between he and the Corporation as a consequence of the first occasion, I find that although the payment was received by the appellant in technical terms, it was only received by way of direct credit to his bank account during the time he was in custody and he had no control over the actions of the Corporation in it so doing. To suggest that his first thoughts on being incarcerated for contempt of Court should have been to contact the Corporation to tell them of his plight and to ask them to stop payment is taking a flight of fancy and I find that such an onus cannot be cast upon this appellant. Accordingly on both occasions I find that the amounts must be said to have been received, that is paid into his bank account, in good faith. The final requirement that must be considered for the exercise of the discretion must be that the appellant has so altered his position on reliance of the validity of the payment that it would be inequitable to require repayment. This Court in previous decisions, Mathews (104/97), Hurley (49/98) and Fraser (137/98) has ruled that the mere fact of spending money received in the ordinary course of daily living cannot be regarded as an altering of position. In the present case the appellant has done no more or less than spend the money in the ordinary course of living and this I find does not amount to an altering of position. The "equities" which are referred to in section 77(2) are the equities relating to the altering of position and as I have previously stated in the decision of Hurley (supra) "If there is no altered position there can be no inequity in requiring repayment". To emphasise the point, the inequity must relate to the requirement to repay because of the altered position, not to any other perceived inequity which may be the case as in the present instance because of the perceived injustice done to the appellant by his incarceration in the first place. I find that this factor cannot have relevance for the purposes of section 77(2) and therefore, as the appellant cannot bring himself within the essential criteria needed for that provision to apply, the situation must be that the respondent is entitled to recover the amount overpaid. For the foregoing reasons therefore both the previous decisions of the Corporation are confirmed and each of these appeals must be dismissed. DATED at WELLINGTON this 21 3+ ST day of January 1999 M J Beattie DISTRICT COURT JUDGE Kaap.doc