Orr v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT Decision No. $5 195 HELD AT AUCKLAND 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 VICTOR ORR 45 / 94 0315 . Appellant 211 (Appeal No. DCA 45/94) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 7th day of July 1995 APPEARANCES Mr M D Edwards for appellant Ms J L Johnston for respondent DECISION OF JUDGE D A ONGLEY The question in this appeal was whether s 75(8) of the Act continued in force for the period of time from January 1992 to February 1993 while the appellant was obtaining and using prescribed medication outside. The appellant suffered a motorcycle accident in 1976 which led to renal failure in 1988. He underwent a transplant in 1988 and requires lifelong medication to avoid rejection of the transplanted kidney. He is an electrical engineer. When his incapacity prevented his obtaining employment in New Zealand he decided in April 1992 to travel to Malaysia to take up a position at a lesser remuneration than his last employment in New Zealand. His medication had been provided in New Zealand through a social security health benefit. He applied to the Corporation for payment of his medication overseas and payment was approved to be reimbursed at the New Zealand equivalent cost. The letter of approval was dated 12 June 1992. The relevant regulations were, and still are, the Accident Compensation (Pharmaceutical - 2 . Costs) Regulations 1990/243. Those regulations were made under the Accident Compensation Act 1982 and reg 8 stated: "Nothing in these regulations shall limit or restrict section 75(8) of the Act." Section 75(8) of the act conferred a broad discretion on the Corporation to pay the costs of treatment outside New Zealand. On 1 July 1992 the Costs Regulation Amendment Regulations 1992/111 came into force with the result that the definition of the term "the Act" as it appeared in a number of existing regulations was revoked and substituted by defining "the Act" as the Accident Rehabilitation and Compensation Insurance Act 1992. The Pharmaceutical Costs Regulations was one of the scheduled regulations. However while the definition of "the Act" was changed, there was no amendment to reg 8 and so a question existed concerning whether s 75(8) of the Accident Compensation Act 1982 had continuing effect for the purposes of the regulations. The 1982 Act was itself repealed but by s 135(3) of the 1992 Act any person with an existing claim had the acceptability of the claim determined under the 1982 Act as if it had not been repealed and by s 135(4) the continued entitlement to compensation, grants and allowances was to be determined under the former Act. Payment for the appellant's pharmaceutical treatment continued until it was withdrawn by the Corporation in September 1993. During the period from January 1992 to February 1993 the appellant was in Malaysia and the total cost of treatment exceeded the equivalent New Zealand cost by approximately $10,000. The Corporation's decision to cease payment was expressed in its letter of 22 September 1993 stating that the costs were declined under s 88 of the 1992 Act preventing payment for costs incurred outside New Zealand unless required or permitted by regulations made under the 1992 Act. The Pharmaceutical Costs Regulations 1990 are such regulations. The reference in the regulations to the former s 75(8) remained until 1 July 1993 when reg 8 was revoked by an the Pharmaceutical Regulations Amendment 1993/206. The review was conducted on 22 December 1993. The review officer considered that the issue was decided by the Amendment Regulations that came into force on 1 July 1992 and referred to reg 8 as having been repealed. The decision did not deal with the questions arising during the interregnum from 1 July 1992 until 1 July 1993 during which reg 8 was not expressly repealed but only the governing Act had been changed. Some time after the review decision, in a letter of 21 December 1994 to Mr Edwards, counsel for the Corporation expressed the view that it was at least clearly arguable s 75(8) of the 1982 Act governed the position until reg 8 was expressly revoked. The matter was referred back to the Corporation for an administrative review but without any favourable result for the appellant. The notice of appeal states that the part of the decision appealed from is that s 88 of the 1992 Act prohibits payment for the appellant's medication whilst he was overseas. The grounds of appeal were expressed in a way which indicated that the claim was ongoing, but counsel confirmed, as stated in his letter of 15 December 1994, that the appellant returned to New Zealand in February 1993. During the - 3 - whole of the period of concern to the appellant reg 8 had remained in force and the appeal does not raise any question of eligibility for medication costs after 1 July 1993. At first, the appeal appeared to be advanced on a wider basis, and only at the hearing did it transpire that the point was restricted to the effect of reg 8 during the period which I have mentioned. No detailed argument was addressed to the principles of interpretation to be applied in deciding the effect of reg 8. The meaning of the regulation was of course quite plain. The difficulty lies in deciding the meaning and effect of the Costs Regulations Amendment Regulations 1992. If applied literally, the Amendment Regulations had the effect of modifying reg 8 so that it referred to s 75(8) of the 1992 Act which would be absurd. No such subsection existed, nor would it have been likely to deal with the same subject matter if it had existed. Regulation 8 had not been repealed and it had to be given effect. It either had the same meaning as it did immediately before the amending regulations or some altered meaning achieved by the Amendment Regulations. Formerly it had the effect of keeping s 75(8) in force for the purpose of transitional claims. The respondent has not been able to make any submission as to what new meaning the regulation may have had after the Amendment Regulations. The only alternatives available are that it continued to have the same effect or was impliedly repealed. The regulation would be repealed by implication if it was inconsistent with the provisions of the new regulations. There is no reason why reg 8 could not have continued to give a discretion to the Corporation to pay for pharmaceutical treatment overseas for persons who had a claim under the 1982 Act. The Amending Regulations brought the Pharmaceutical Costs Regulations under the umbrella of the 1992 Act but they were not inconsistent with reg 8 continuing to have the same effect as it had before the amendment. The survival of reg 8 is also consistent with the principle generalia specialibus non derogant. I conclude that reg 8 was not impliedly repealed and it stood until 1 July 1993. The Corporation was therefore entitled to pay for the appellant's medication. There has been no review of the quantum of treatment costs payable by the Corporation. The question was before the review officer because the application for review concerned the "refusal to pay pharmaceutical costs in excess of $13,800 and ERC makeup". The failure to pay caused the claimant to return to NZ and lose substantial income. The review officer did not deal with the substantive question because he decided that the Corporation had no power to pay for pharmaceutical treatment overseas. For the reasons I have stated the appeal is allowed. The review officer's decision is revoked which leaves the question of quantum yet to be determined on review. The appellant will be entitled to costs $650. DATED at WELLINGTON this 2 7 day of JULY 1995 D A Ongley District Court Judge