ST v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT Decision No. 178 /97 HELD AT WELLINGTON 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 SUSAN TAYLOR Appellant (Appeal No. DCA 363/96) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the Ist day August of 1997 APPEARANCES Frances Gush for appellant L M Rice for respondent DECISION OF JUDGE D A ONGLEY This appeal concerns an application for lump sum compensation in respect of injury by accident suffered on 8 January 1989. The appellant was violently assaulted by her partner and suffered multiple bruising and psychological trauma. Her partner was sentenced in imprisonment for the assault. The application for compensation form Cl was lodged with the Corporation on 1 1 August 1989. The application was accepted and the appellant received counselling paid for by the Corporation. The Corporation sought information from Police. On 6 September 1989 a police constable wrote to the Corporation setting out details of the assault and consequent police action. In that letter he said: - 2. "There are two points which I am concerned about. The first is that if her children are to receive compensation that it should be put in a Trust fund as TAYLOR is not in a secure financial position. Secondly that TAYLOR and ORMSBY are more than likely to live together once he has served his sentence. Any compensation should not be available to the offender." The Corporation corresponded further with the counsellor, who wrote to the Corporation on 11 December 1989 as follows: "Regarding you requests for information about the counselling of Susan Taylor: It is impossible to give you that kind of up to date information when events, as they have for Susan, change so rapidly. I met with her several times before her partner emerged from prison. A Justice Dept. psychologist and I met once with Susan and her partner to attempt to help them find a harmonious relationship. Since then, she has left him and returned, she has had a hysterectomy and returned to her feet and home and 4 children far too soon and all of us workers heard they were all moving out of Wellington. I have rung Susan and got no reply or found her out. I obviously cannot tell you the latest except to say she is obviously still behaving in an upset, confused and erratic manner, uncertain of what she want or needs. Her condition has certainly not stabilized as a letter of 27 October suggests. If she had a lump sum now I suspect her partner would be a major influence on how she uses it." On receipt of that letter a senior client officer endorsed on the file: "In my view the best action re PD is to wait for contact from either counsellor or I/P. It would be unwise for us to try and contact I/P in view of comments from counsellor." A manager endorsed the file as follows on 16 May 1990: "It appears reasonable to close file at this stage in view of lack of contact." Nothing further appeared on the Corporation's file until January 1996. The issues on appeal stated in the notice of appeal are as follows: "Whether the correspondence from the Police and Dr Vera Levett (ACC Counsellor) constitute a claim for lump sum compensation prior to 1 April 1993 - Section 147(2). That the Corporation breached its statutory duties to Ms Taylor by: 2.1 Failing to advise her or her Counsellor that her claim for lump sum payment had been deferred. 2.2 Failing to determine the Appellant's entitlement for lump sum compensation within 2 years from the date of the accident - Section 79(1) 1982 Act 2.3 Closing the Appellant's file without her knowledge of the Corporation's decision." - 3 - Under s 147 of the Accident Rehabilitation and Compensation Insurance Act 1992, a claimant for lump sum compensation who had not been paid by the commencement of the 1992 Act on 1 July 1992, lost all rights to lump sum compensation unless a written application was lodged and an election in writing to receive lump sum compensation instead of an independence allowance. Both those requirements had to be completed by 1 April 1993, otherwise the claimant would have been deemed to elect to receive an independence allowance pursuant to s 147(3) of the 1992 Act. The conditions for the granting of lump sum compensation during the transitional period from 1 July 1992 to 31 March 1993 were more onerous than they had been before the enactment of the 1992 Act. In this case, counsel for the appellant argued that either the letter from the police constable or the letter from the counsellor, or both of those documents combined, amounted to written application for lump sum compensation. In my view that is an artificial proposition. Both letters suggested that any lump sum compensation should be deferred. The Police letter suggested that it should be dealt with in a way that avoided the possibility of enriching the offending partner. They cannot be treated as an application in writing for lump sum compensation. Furthermore, they are not documents that appear on their face to have been written with the authority of the appellant. It is not necessary to deal with the second question of written election under s 147(2). Counsel for the appellant submitted that there was no requirement on the appellant to make such an election because the appellant was not entitled to an independence allowance at an time from the commencement of the 1992 Act. If she was not so entitled, there was nothing to elect between. It was submitted that she should be regarded as not being required to make such an election and her claim would therefore not be defeated by s 147(3). A similar argument has been rejected in this Court in Godsalve 25/97. In that case, the respondent argued that there was a theoretical possibility that the appellant may become entitled to an independence allowance at some time. Similar considerations may apply in this case. Leave has been granted for appeal to the High Court on the question of law decided in Godsalve. The question does not require further consideration in this case. The appellant has suffered an injustice. With all good intentions, officers of the Corporation took a step which had the practical effect of depriving the appellant of her entitlement. She was traumatised from her experiences, she was not adequately able to address her legal entitlements or obtain professional advice, and it might well have been expected that she would not apply for all the benefits to which she was entitled. Corporation staff elected to close the file rather than to obtain information in order to make a lump sum payment. The lump sum payment should have been made in accordance with the proviso to s 79(1) of the Accident Compensation Act 1982 as soon as the appellant's medical condition had sufficiently stabilised, or forthwith after the expiration of two years from the date of the accident, whichever was the earlier. In the ordinary course of events, the lump sum payment should have been made well before the commencement of the 1992 Act. It is to be inferred that the purpose of closing the file was to avoid a lump sum payment falling into the hands of the appellant's partner. It was a deliberate act by Corporation staff. It has had the unintended but foreseeable effect of keeping the appellant from her entitlement. The - 4- Corporation, through its staff, must be taken to have known, once the 1992 legislation came into effect, that the appellant was likely to be permanently deprived of the opportunity of obtaining a lump sum compensation payment. The appellant has a persuasive argument of breach of a statutory duty under s 79 of the Accident Compensation Act 1982 and breach of a common law duty of care. Those matters cannot be determined in this jurisdiction but it would be wrong to dispose of this appeal without referring to them. It is a case that should be considered by the Corporation under its wrongful action discretion. The appeal is dismissed. In the unusual circumstances of this case the appellant should be entitled to some contribution for costs and the sum of $300 is ordered to be paid by the respondent. DATED at WELLINGTON this 26+ day of August 1997 D A Ongley District Court Judge