Brand v Accident Rehabilitation and Compensation Insurance Corporation

Decision No. 171 / 99 IN THE DISTRICT COURT DCA 75/99 HELD AT WELLINGTON BETWEEN ROBYN CHRISTINE BRAND Appellant AND THE ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION Respondent Date of Hearing: 23 June 1999 Date of Decision: 24 June 1999 Counsel: Appellant in person Ms Fotiades for respondent DECISION OF JUDGE JEREMY DOOGUE DCJ Solicitors: [AUCK_DC_10IVOL 1\GROUPS\JUDICIAL\DOOGUEJP\DECISION\Brand.doc sb] 2. The appellant received an over-payment from the respondent, so that she received money that was in excess of her entitlement to benefits under the Accident Rehabilitation Compensation and Insurance Act. She sought to have the Corporation remit the whole or part of the amount of over-payment which was $14,042.54. The Corporation declined to do so. The appellant commenced review proceedings, and the review was conducted before a Review Officer on 12 January 1999. The Review Officer gave her decision on 22 January 1999. She declined to review the decision of the respondent. The Review Officer considered the provisions of s.77 of the Act which govern recovery and concluded that the over-payment to Mrs Brand arose as a result of an error, not intentionally contributed to by her. She concluded as well that Mrs Brand received the over-payment in good faith. She also concluded that Mrs Brand had altered her position in reliance on the validity of the payment that she received. She purchased a new vehicle, "carried out alterations to her house etc. and altered her position in reliance on the validity of the payment". However, the review decision stopped short of accepting the submissions by the appellant that it would be inequitable to require repayment. The decision noted the comments of Judge Beattie in the decision of Hurley (49/98) that:- "The mere fact of receipt of the monies in good faith does not make it inequitable to be required to repay ..." The Review Officer held that the onus was on the appellant to establish that it would be inequitable for the Corporation to require repayment of the money. She 3. declined to make an order reviewing the decision of the Corporation not to remit the amount over-paid. In the course of her decision the Review Officer made reference to the fact that Mrs Brand had apparently been asked by the Corporation to disclose her husband's means. Mrs Brand had declined to do this on the grounds that it was irrelevant to her case. I will leave that aspect of matters to one side, and consider whether or not the decision by the Review Officer could be upheld, even ignoring the matter of Mrs Brand's husband's financial position. - - -- - - The object of s.77 is to balance the rights of the party who is over-paid the money against any possible injustice to the payee in being required to repay the money. A payment of money to which a payee is not entitled is a windfall. The starting point will be that the payee is required to replace the money unless he or she can point to some injustice arising from being compelled to repay. The injustice must be something independent of any understandable dislike the payee may have for the notion of having to give back what he or she once had before the Court gets to the stage of considering the factors of whether or not the payee has altered her position in reliance on the validity of the payment, so that it would be inequitable to require payment, he or she must first establish that the two matters, namely, that the over-payment arose as a result of an error not intentionally contributed to by the debtor, and that he or she received the money in good faith. Unless those two threshold matters can be resolved in favour of the payee, the matter does not get past first base. But the fact that the payee establishes those matters does not of 4. itself raise any sort of presumption that the payee, by establishing those matters, is on her way to establishing an alteration of position in reliance on the validity of the payment such that it would be inevitable to require payment. I was referred to the decision of Hardie Boys J (as he then was) in Hollidge v Bank of New Zealand (High Court, Nelson, M. 1840 29 March 1982). That was a case where the bank sought repayment of money paid in error. It issued proceedings in quasi-contract for money paid under mistake of fact. The defences relied on were estoppel and equitable considerations arising by virtue of s.94B of the Judicature Act 1908. In considering the matter of change of position, the Judge held that the payee had to establish a change of position to his detriment, and in deciding whether or not there had been detriment, Hardie Boys J said at p.5:- "The mere fact that the present appellant has spent the money is not enough to establish detriment ... Nor is the relevant enquiry necessarily whether he has altered his mode of living. The real question is whether he will suffer detriment by being required to repay. That question can be answered only by considering whether the disadvantage of having to find the money to repay is offset by advantages derived from its earlier expenditure. The onus of proving detriment lay on the appellant and I am not satisfied that he has discharged it." In her decision in Satherley (150/96) Her Honour J.H. Lovell-Smith was considering a case under s.77 of the Act. She had this to say concerning whether or not the appellant had discharged the onus of proving detriment, at p. 16 where the following statement is made:- "I do not consider the appellant has discharged the onus of proving that he would suffer a detriment of the nature described in Hollidge v Bank of New Zealand (supra). The appellant has had the benefit of the use of a car and he could still sell it to recoup some of the over-paid funds." 5. Ms Fotiades in her submissions to me said that in order to establish a relevant change of position, it needs to be established that the change was to the detriment of the payee. Further, she said that the payee has to show that there was a detrimental consequence of receiving the money which cancelled out any benefit obtained therefrom. Ms Fotiades gave as instances of this kind of consequence the situation where a payee had, as a result of receiving money, entered into other onerous arrangements which had negated any advantage from receiving the money, or where the arrangements were such that it was impossible for the payee to extricate him or herself and put himself in a position where he could repay the money. I think those general submissions are correct. The evidence here was that Mrs Brand had, as a result of receiving the money, purchased a new car, she had sold her previous house and moved to a more suitable one, and she had carried out alterations to those properties. No details or figures were provided of the financial impact on her of the various steps that were taken as a consequence of her receiving the over-payment. She did not establish that there had been any detriment to her that had off-set the advantage of the payment made to her. The onus was on her to do that at all stages of the enquiry, and it remains on her at the hearing of this appeal. Based on the evidence that was put before the Review Officer, I am unable to conclude that the Review Officer's decision was wrong, and accordingly the appeal will be disallowed. (J.P. Doogue) District Court Judge