Cockery v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT PALMERSTON NORTH Decision No. 128/95. UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an appeal pursuant to section 91 of the Act BETWEEN 69/94 0322 RUSSELL LEONARD COCKERY of Woodville Appellant (Appeal No. DCA 238/94) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 19th day of September 1995 APPEARANCES P J Drummond for appellant P Zumbach for respondent DECISION OF JUDGE A W MIDDLETON The issue in this appeal is whether the respondent was entitled to decline continued payment of weekly compensation to the appellant under ss.73 and 64 of the Accident Rehabilitation and Compensation Insurance Act 1992. The facts which gave rise to the appeal are that the appellant who was then a 41 year old freezing working suffered personal injury by accident on 21 May 1995 when he slipped and hurt his back. The respondent accepted that the appellant had cover and provided assistance with physiotherapy and other payments and made lump sum awards under both ss.78 and 79 of the Accident Compensation Act 1982. The appellant was in receipt of earnings related compensation when the respondent was notified in late 1989 by an anonymous caller that the appellant 2 was doing heavy work on his farm. On 1 December 1989 the respondent advised the appellant that it was reviewing his entitlement to weekly compensation and stated: "To this end, I would be grateful if you would inform the Corporation of the details you may be performing on your farm. Please advise the writer of the hours you may input into this work, on a weekly basis, and present the writer with a copy of your financial accounts for the year ending 31 March 1989." There is then on the file a memorandum taken by an officer for the respondent which is dated 15 December 1989 and states: Client in response to letter dated 1/12 came in. He advised that the farm is in his daughter's name and he only goes there 1 x 2 times per week to check its progress. He is adamant that he is doing nothing except perhaps 1 - 2 hrs a week when, if, he loses control of himself, he gets frustrated with his back problem. He says that the farm has been for sale since he had D.O.A. and income would be nil." It appears that on the basis of that information the respondent continued to pay earnings related compensation, but at the same time requested information from the Inland Revenue Department and the appellant's general practitioner. On 19 December 1989 the general practitioner reported that he considered the appellant's condition as unchanged and that he was fully unfit for work and did not consider he would be classified as fit for light duties. A further request for information on 24 July 1990 elicited a report from the general practitioner who then considered the appellant to be fit for selected work, although he considered that such work may not be available in the locality in which the appellant then lived. On 25 March 1993 the respondent notified the appellant's counsel that it was reviewing the appellant's assessment of earnings related compensation and that in response to an earlier application for review the file was being prepared for that purpose. On 25 August 1993 the appellant made an enquiry at the respondent's office as to when his hearing would be set down and stated that he was concerned because he was in trouble with the Inland Revenue Department and his bank because he then owed $7,000 in GST to the Inland Revenue Department and thought he owed a similar amount to his bank. He stated that he had run down his farm because he could not manage it and had sold all his stock. The respondent made an enquiry of the Inland Revenue Department as to the appellant's earnings and the FLC 16 dated 9 September 1993 confirmed that the appellant had returned an income of $30,597 as a self employed person for the year ended 31 March 1992 and an income of $9,527 for the year ended 31 March 1991, such earnings being subject to an ACC levy. 3 On 10 December 1993 the respondent notified the appellant that it was conducting a review of his entitlement to weekly compensation and requested him to attend a meeting to discuss the matter. It subsequently transpired that a meeting was not held until 23 February 1994 at which the appellant's situation was discussed and at which he was requested to return a statutory declaration together with copies of his farm accounts. It appears that while the document was referred to as a statutory declaration it was really a record of the discussion between the officers of the respondent and the appellant in relation to his farming activities. However, the appellant saw fit not to provide the so called "declaration" nor copies of his farm accounts. On 23 March 1993, the respondent advised the appellant that pursuant to ss.73(1) & (2)(a) and s.64 (1)(b) it would cease further payments of weekly compensation at the expiration of four weeks from 19 April 1994. The appellant applied for a review of that decision. At the review hearing the appellant was represented by Mr Drummond who made submissions to the review officer on the basis that the decision was wrong because the medical evidence was that the appellant was unfit for work and had been so for a considerable time. Mr Drummond further submitted to the review officer that it was not accepted that the appellant had been working while in receipt of earnings related compensation and that there was no evidence that his farming activities provided him with income. He submitted further that there was no evidence to support the fact that the appellant was working and receiving income and that while the respondent had an obligation to rehabilitate the appellant there was no evidence that he had failed to attend any rehabilitation course or examination as directed by the respondent. Mr Drummond submitted that the requirement to provide the statutory declaration in the form which was submitted was not reasonable within the meaning of s.64(1)(b). The review officer stated in her decision that as Mr Drummond had raised doubts regarding the Inland Revenue Department's assessment she had checked with the Department as to the method by which this would have been done and was advised that it would not generate information until the appropriate returns had been made. The review officer upheld the respondent's decision. In his appeal, Mr Drummond has submitted: 1. That the application for review was lodged with the respondent on 18 May 1994 and the hearing did not take place until 13 September 1994 and that therefore pursuant to s.90 (9) of the Accident Rehabilitation and Compensation Insurance Act 1992, the application was deemed to have been determined in favour of the appellant because the delay in the hearing was not caused or contributed by the applicant and was not held within three months as required by that section of the Act. 4 2. That the review officer had made her decision on the basis of enquiries made by her after the hearing and that such information that she obtained was not able to be tested by cross-examination. 3. That the review officer made finding the facts which were biased towards the respondent. 4. That the reasons adopted by the respondent to cancel compensation pursuant to s.73 were not valid. 5. That there was no evidence to support the finding that the appellant was unwilling to provide a statutory declaration. 6. That the finding of the review officer that the appellant had failed to furnish appropriate information was incorrect as he had submitted to the lengthy interview with the investigating officer and an employee of the Corporation. Ms Zumbach submitted: 1. That the appeal should not be dismissed for the alleged failure to comply with the provisions of s.90(9) on the grounds that the review hearing was not commenced within 3 months of the lodging of the application for review. The application for review was received by the respondent on 18 May 1994 which meant that, in terms of s. 90(9), the review hearing was required to be commenced by 18 August 1994. On 2 August 1994, the respondent wrote to the appellant's counsel and stated: 'I am writing to confirm our telephone conversation earlier last month. Arrangements for the hearing of your client's application for review have been made as follows: Date: Tuesday 6 September 1994 Time: 9.45 am" It subsequently transpired that in order to suit the appellant's counsel, the date was changed to 13 September 1994. Ms Zumbach submitted that the provisions of s.90(9) should be given a "fair, large and liberal" interpretation of the word " commenced". 2. That the question of the review officer's inquiry of the Inland Revenue Department after the hearing had been concluded, did not relate to a specific .. inquiry as to the affairs of this appellant. It was merely an inquiry about the general procedure employed by the Inland Revenue Department in making a tax assessment for a self-employed person and was only to satisfy the query raised by the appellant's counsel that the appellant was in fact not self- employed. 5 3. That because of the suggestion that the appellant lacked reading and writing skills, it was not possible for him to comply with the requirements of the respondent that this should not affect the respondent's duties to compensate for personal injury by accident. She submitted that the appellant's reading and writing difficulties are non injury related and are not relevant to his entitlement to weekly compensation. 4. That while the respondent had accepted the appellant's earlier explanation that the farm property belonged to his daughter and was something in which he had no interest, there was no reason why he could not arrange for completion of a statutory declaration following the meeting with the investigator and the respondent's representative. In fact, she submitted that the request to sign the record of that hearing would have satisfied the respondent's requirements for provision of information. She submitted that the respondent was not aware of the appellant's farming activities because of his statement that the property belonged to his daughter and it was not until the Inland Revenue Department disclosed earnings as a self-employed person that the respondent required further information. That information disclosed substantial earnings at a time when medical certificates indicated that the appellant was unfit for any work. 5 . That on the basis of the decision in McDonald v ACC (15/94) it was reasonable for the respondent to require the appellant to provide a statutory declaration in relation to his farming activities. That it was relevant that such information should be provided because it could affect the appellant's relevant earnings. She referred me to the following passages in which Judge Ongley stated: " Section 64(1) (b) places the obligation on any person who was in receipt of compensation to furnish relevant information when reasonably required to do so by the Corporation. The obligation therefore arises when the requirement is reasonable and the information is relevant. In the event of refusal to furnish information of that kind, the Corporation is entitled by virtue of s. 73(2) to decline payments where the refusal or failure is unreasonable. There are therefore two issues of reasonableness and one issue of relevance." Mcdonald had submitted that the requirement to provide information was ultra vires the powers of the Corporation and the information was not relevant in terms of s.64 (1)(b) and could not therefore be "reasonably" required. Judge Ongley observed: "I conclude that, for reasons of monitoring the claimant's effort to establish reasonable employment, to relieve the Corporation of responsibility for full payment of earnings related compensation, it is relevant for the Corporation to obtain information and it is reasonable for that information to be stipulated as a report on a form provided by the Corporation of periodic applications for work ..." and then went on to say: 6 " The final question then is whether the claimant's failure to provide the information pursuant to s. 73(2) (a) was unreasonable. In that respect the appellant relied on oral evidence which he had given before the review officer: His assertions of genuine attempts to obtain alternative employment were therefore unsupported by the particulars or documentary evidence which the Corporation and the review officer were entitled to expect. In the absence of such verification the appellant's claim rested on his own word and could not reasonably be tested by the Corporation. The appellant suggested that the failure was reasonable by his own rights because he had been mislead by a clerk of the Corporation. I cannot accept that proposition in light of the very clear requirements which were issued by the Corporation in writing. I find therefore that the appellant's failure to furnish the required information was unreasonable and it follows that the Corporation's decision to cease ERC is confirmed. The appeal is dismissed". Section 90(9) states: "(9) Where the hearing of a review has not been commenced within 3 months after the lodging of the application for review, and the delay is not caused or contributed to by the applicant, the application shall be deemed to have been determined in favour of the applicant." I raised the question with Mr Drummond that perhaps it would have been in the interests of his client had this issue been raised at the review hearing, but he indicated that he was not aware of the provision at the time. It is clear that within the period of 3 months from the lodging of the application for review, Mr Drummond had discussions with the respondent's review clerk in which it was agreed prior to 18 August 1994 that 6 September 1994 was a suitable date on which to hold the review hearing. The section does not require that the review hearing be concluded within 3 months, only that it be "commenced". I consider that the discussion which obviously took place between the review clerk and Mr Drummond at which a date outside the 3 months period was accepted as a suitable date for the review hearing to take place was the commencement of the review process as a result of which the date was fixed. I agree with Ms Zumbach's submission that the provision should be given a fair, large and liberal interpretation because the legislature would have used the word " completed" rather than "commenced" if it contemplated that strict requirements were to be placed on every application for review. Even so, the requirement to " commence" the working within 3 months does impose strict obligations on the respondent and it endeavoured to meet that requirement by discussing a suitable date with counsel which was expected. I do not think that it is now open to counsel to submit that the review hearing had not been commenced within the 3 months' period and his submission is therefore rejected 7 Section 73 of the Act states: "73. Suspension, cancellation, or refusal of compensation and rehabilitation - - -(1) The Corporation shall, and any exempt employer may, if not satisfied on the basis of the information in its possession that a person is entitled to continue to receive any treatment, service, rehabilitation, related transport compensation, grant, or allowance under this Act, suspend or cancel that payment for treatment, service, or related transport, or the payment of compensation, grant, allowance, or provision of rehabilitation. (2) The Corporation shall, and any exempt employer may, upon the unreasonable refusal or failure of any person to - - (a) Comply with any requirement made under any provision of this Act relating to any claim; or (b) Undergo medical or surgical treatment in respect of personal injury irrespective of whether the Corporation or exempt employer is required or permitted to contribute towards the costs of that treatment); or (c) Agree to, or comply with, an individual rehabilitation programme, - - decline to make any payment under this Act." and 64 provides: 64. Responsibilities of claimant - - - (1) Every person who claims for or is in receipt of any rehabilitation, compensation, grant, or allowance shall, when reasonably required to do so by the Corporation, - - (a) Give to the Corporation the prescribed certificate of a registered health professional as to such matters, and containing such information, as the Corporation requires: b) Furnish to the Corporation such other relevant information as the Corporation requires: (2) Every claimant under this Act and every person who is receiving or has received any payment or rehabilitation under this Act shall, whenever required by the Corporation, give to the Corporation a statement in writing, and, if the Corporation so requires, as a statutory declaration or in a form supplied by the Corporation, with respect to such matters relating to the person's entitlement or continuing entitlement to any payment or rehabilitation under this Act as the Corporation specifies." The respondent was placed in the position that when it received information that the appellant had been working on the farm, it set about obtaining confirmation of that allegation. This involved the request to the Inland Revenue Department which provided the FLC 16 on 9 September 1993 with details of the appellant's income as a self-employed person for the years ended 31 March 1991 and 31 March 1992. That certificate also indicated that details for the year ended 31 March 1993 were not available because the return had not then been filed. On the basis of that information and the fact that the appellant had previously indicated that the farm property did not belong to him, but was his daughter's, there was clearly an 8 obligation on the respondent to investigate the matter further. That lead to the meeting with the investigator and a member of the respondent's staff after which the appellant was requested to sign the record of that meeting as if it were a statutory declaration. While the form of the document as a statutory declaration may have been inappropriate the procedure appears to me to have been entirely appropriate as it was necessary for the respondent to ascertain the true nature of the appellant's position because he had been in receipt of earnings related compensation at a time when it appeared from the Inland Revenue Department record that he was receiving a substantial income as a self-employed person. There was also evidence that he had been seen working on the farm, which he denies, and he stated that he was only capable of limited work because of his back. This had also been the tenor of the medical certificates. As the appellant was not prepared to confirm the record of the interview, I consider that it was reasonable and relevant that the respondent should require the appellant to provide full confirmation of his income and farming activities and that that requirement was within the powers of the respondent under s.64. I am also satisfied that pursuant to s.73, the respondent, having regard to the information in its possession and the appellant's failure to comply with its reasonable request to provide information was entitled to thereafter cancel further payments of weekly compensation. I do not consider that the appellant can seek to rely on reading and writing difficulties to avoid complying with the lawful requirements of the respondent. It may well be that the appellant's ability to work is restricted by his injuries and that he had disposed of his farm property all of which may entitle him to seek reinstatement of weekly payments if this is supported by the necessary medical certification. But so far as the respondent's decision of 23 March 1994 was concerned I am satisfied that it was the correct decision and was properly made within terms of the legislation. The appeal is therefore dismissed. DATED at WELLINGTON this 26 day of October 1995 A W Middleton District Court Judge dc238-94.doc(rd)