Estate of Neal v Accident Compensation Corporation

IN THE DISTRICT COURT HELD AT WELLINGTON Decision No. [2011] NZACC 32 6 IN THE MATTER of the Accident Compensation Act 2001 AND IN THE MATTER of an Application for Leave to Appeal to the High Court pursuant to Section 162 of the Act BETWEEN THE ESTATE OF P T NEAL (Al 567/05) Applicant AND ACCIDENT COMPENSATION CORPORATION Respondent DECISION OF OF JUDGE M J BEATTIE ON APPLICATION FOR LEAVE TO APPEAL TO THE HIGH COURT [1] This is an application for leave to appeal to the High Court from two decisions of His Honour Judge D A Ongley, delivered on 18 June 2007, being Decision No. 117/07 and a decision dated 30 January 2008, being Decision No.25/08. [2] Both appeals concern the issue of whether Mr Neal, now deceased, was entitled to interest on backdated weekly compensation in respect of which he had been determined as being entitled. [3] The brief factual background is that the deceased obtained cover for work-related Leptospirosis in August 1978, and he received weekly compensation in respect of his medical condition until 20 May 1979, when it was ceased by the respondent on the basis that the deceased was fit to return to work. [4] It seems to be the case that the deceased was experiencing depression and this resulted in his farming business being sold in 1985, and he ultimately went on to a WINZ Sickness Benefit in March 1986. 2 (5] To cut a long story short, it is the case that by an Accident Compensation Appeal Authority decision of 25 June 1999, it was determined that the deceased's depression was causally linked to the leptospirosis and he accordingly became eligible for backdated entitlements, the principal of which was weekly compensation. (6] The deceased had attained the age for National Superannuateon on 3 June 1997 so that the period for which weekly compensation was due was from 21 May 1979 to 3 June 1997. [7] On 28 March 2000 the respondent received advice from WINZ that the deceased had not been the subject of any WINZ benefit for any of the period from 21 May 1979 to 16 March 1986, that is, for the period before he did go on a WINZ benefit. [8] The respondent then assessed the amount of backdated weekly compensation for that period and the full arrears were paid to the deceased within one month, namely on 19 April 2000. [9] The respondent then sought information from WINZ as to the amount that needed to be reimbursed to it for the period from 17 March 1986 to 3 June 1997, and WINZ advised of the amount to be reimbursed on 26 September 2001. [10] It is the case that despite having that information the respondent did not make payment of the second period of backdated weekly compensation within one month, but the respondent did pay interest subsequently for the three months that elapsed after the one month period of grace on payment of those arrears. [11] There were ongoing issues regarding interest which ultimately came before the District Court, and I have been advised that by decision dated 30 November 2004, His Honour Judge Ongley recommended that the respondent issue a new primary decision in respect of the interest issue, as an earlier decision of the Court by Judge Middleton in July 2001 had been a decision based on incorrect evidence. [12] As a consequence of Judge Ongley's direction the respondent issued a new primary decision on 27 April 2005 determining firstly that no interest was payable on the arrears of compensation that had accrued between 21 May 1979 and 16 March 1986, as payment of those arrears had been made within one month after the necessary information had been obtained. In respect of the second period of arrears, from 17 March 1986 to 3 June 1997, the decision was that the three monthly period of interest paid on those arrears between 26 October 2001 and 28 January 2002 had been paid and that was the extent of the interest entitlement. 3 [13] In terms of appeals from that decision, it is the case that Judge Ongley identified that the aspect of that 27 April 2005 decision which was being appealed was the respondent's declination to pay interest on the backdated weekly compensation covering the 1979 to 1986 period. [14] In submissions which this Court received from Mr B A Corkill, QC, Counsel for the Respondent, it is his advice that the interest situation for the later period, from 1986 to 1997, was not challenged, that is, the deceased accepted the quantum of interest which had in fact been paid. [15] In his first decision on the issue which His Honour Judge Ongley had identified, he considered that on the basis of the wording of section 101 of the 1998 Act, which was the Act in force when the entitlement to interest had been sought, when considered with decisions of this Court and the High Court, and in particular the decision of His Honour Justice Gendall in Wardle v ACC (Wellington AP 134/02) and also the decision of His Honour Justice Randerson in the decision of Knight Christchurch HC, 9 November 2005, he determined on the basis of those decisions that no interest entitlement under section 101 had arisen. [16] In his decision His Honour reserved the question of whether section 373 of the 1998 Act applied, in particular section 373(4), which had been raised by Counsel for the Appellant [17] In his decision His Honour stated: "The question whether section 373 did not apply because the Corporation did not know that the section applied and had not received a request from the Department, is reserved for further evidence and argument if that should become necessary" [18] That issue came back before His Honour in 2008, and in a reserved decision dated 30 January 2008, when he stated at paragraph [13] of his decision: I think that Mr Barnett's submission is correct, that is to say the provision in point is s 101 and the necessary information is the answer to the insurer's reasonable and responsible enquiry. Because the insurer had a potential liability it was necessary to ascertain whether s 373 applied and if so what refund had to be deducted. For periods where no deduction was required, the insurer still needed to know that before making the payment. [19] His Honour therefore confirmed the Judgment given on 18 June 2007 and the appeal was dismissed [20] It is the case that all these matters of whether or not the deceased was entitled to interest under s101 are now being sought to be re-considered by counsel for the applicant as a consequence of the decision of the Court of Appeal in ACC v Kearney (2010) NZCA 327. The submissions of Mr Miller, Counsel for the Applicant, in support of leave, contend that the Court of Appeal decision in Kearney has effectively identified that the circumstances of the deceased's entitlement to arrears of weekly compensation is such that interest on such arrears should commence from 1 July 1992 and further, that the deceased is entitled to interest from 1 July 1992 on all backdated weekly compensation until all the same were eventually paid. [21] As I interpret Mr Miller's submissions, he is not seeking to confine the prospective appeal to the High Court to simply a consideration of whether there is an interest entitlement for the arrears of weekly compensation which accrued between May 1979 and March 1986, but rather it is for the whole period for which the deceased was ultimately found to be entitled to weekly compensation, and which would include the period from 17 March 1986 to 3 June 1997 and for which payment was not made until 28 January 2002. [22] In his submissions in opposition to the granting of leave, Mr Corkill QC asserts that Judge Ongley was required to consider a quite different situation from that which was the issue in the Kearney case, and that in fact the decision of the Court of Appeal in Kearney does not apply to the issue which was in the present case, namely the question of whether all necessary information was obtained, with specific reference to the Corporation's obligations under section 373 of the 1998 Act. Counsel asserted that no point of law had been raised by Counsel for the Applicant in relation to Judge Ongley's decision on the relevance of section 373. [23] I have set out at some length the background to this matter, and at first blush it does seem that Counsel for the Applicant is seeking to widen the scope of an appeal so that it includes matters that were never considered by Judge Ongley in his decision, namely the interest issue on weekly compensation arrears from March 1986 onwards. Having said that, I do consider that Mr Miller is seeking to have the decision of Kearney applied to the present applicant's circumstances, and has certainly sought to do so in respect of that first period of arrears, namely from May1979 through to March 1986, and he asserted in support that the circumstances of the ceasing of weekly compensation to the deceased could be considered as qualifying as a wrongful removal, as identified was the case in Kearney. [24] Having regard to all the circumstances, I do find that there is a question of law which is capable of consideration by the High Court consequent upon the Kearney decision, even if it simply be the question of whether the Kearney decision is a decision which can apply to the particular circumstances which arise in the present appeal. 5 Whether it is limited to that question or widened as would seem to be asserted by Mr Miller, there is undoubtedly a question of law which is appropriate for the High Court to consider and the extent of that question will be something which the High Court will itself determine. [25] Accordingly, leave to appeal to the High Court is hereby granted. DATED this day of October 2011 M J Beattie District Court Judge