Taufua v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT CHRISTCHURCH Decision No. 259 /97 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 VAI TAUFUA DCA 16/97 Appellant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 12th day of November 1997 APPEARANCES: Mr P H B Hall for appellant Mr J S McHerron for respondent DECISION OF JUDGE M J BEATTIE The issue in this appeal is whether the appellant is able to make a late election for lump sum compensation under section 147(2) of the ARCI Act 1992. 2 The background facts giving rise to this issue for determination are somewhat unusual and again throw up the transitional provisions of the 1992 Act for consideration. In early 1990 the appellant came to New Zealand from Western Samoa. Prior to coming to New Zealand he had experienced some abdominal problems in Samoa, had been admitted to hospital there but had not been told what was wrong with him. On 16 March 1990 he was admitted to Princess Margaret Hospital with stomach pains. He remained an inpatient until he was discharged on 20 March 1990. At that time he was diagnosed as suffering from Haematemesis, salmonella septicaemia and antral gastritis. No other abnormality was observed. He was re-admitted to Hospital on 9 April 1990 and underwent emergency surgery for an abscess in the wall of his aorta which had led to a fistula and calcified cyst in the lower left mediastinum. The consequence of this surgery was that the appellant was rendered paraplegic. On the 16th of June 1990 the appellant submitted a claim under the Accident Compensation Act 1982 (the 1982 Act). This claim indicated that the appellant had suffered a possible medical misadventure following the emergency surgery on 12 April. The claim was referred to the Corporation's medical misadventure panel but following investigation a decision was made on 24 May 1991 declining to accept his injury as medical misadventure. It concluded that the outcome of 3 the paraplegic was within the normal range of consequences attendant upon the operation performed upon him. The appellant sought a review of that decision and before that review was heard, the appellant's counsel wrote to the respondent contending that the appellant had suffered from medical misadventure by way of misdiagnosis on his original visit to Hospital in March 1990. A review hearing was eventually held in 1994 and by decision dated 25 October 1994 the Review Officer upheld the Corporation's original decision. That decision was appealed to the Accident Compensation Appeal Authority and by decision dated 19 June 1996, the Authority held that the appellant was entitled to cover by reason of medical misadventure arising out of the failure to diagnose the appellant's condition on his first admission to hospital. The terms of the decision were that the appeal was allowed and that the file was directed to be returned to the Corporation to consider claims for compensation. On 6 August 1996 the appellant's solicitor wrote to the Corporation claiming lump sum compensation under the 1982 Act for the appellant's paraplegic. By decision dated 4 September 1996 the Corporation refused to grant lump sum compensation under the 1982 Act on the basis that no election had been made in accordance with the provisions of section 147(2) of the 1992 Act. The appellant sought review of that decision and the Review Officer issued a decision on 19 December 1996 to the effect that there is no provision under section 147 permitting the Corporation to receive an election for lump sum under the 1982 Act after 31 March 1993. 4 It is to be noted that for the purposes of an independence allowance the appellant has been assessed as having 100% disability. It is the Corporation's contention that the disability allowance under the 1992 Act is the extent of the appellant's entitlement in that regard. The Relevant Statutory provision of the 1992 Act is section 147: 147. Compensation for non-economic loss --- (1) Where any person had an entitlement to compensation under section 119 or section 120 of the Accident Compensation Act 1972 or section 78 or section 79 of the Accident Compensation Act 1982 but has not received that compensation and makes written application for that compensation before the Ist day of April 1993, that person shall be entitled to payment under those sections if payment is made on or before the 30th day of June 1995 or after that date if pursuant to a decision given on review or appeal under Part IX of the Accident Compensation Act 1982 as continued in force by section 152 of this Act. (2) Where any person has suffered personal injury by accident to which the Accident Compensation Act 1972 or the Accident Compensation Act 1982 applies, and --- (a) That person has an entitlement to compensation under section 119 or section 120 of the Accident Compensation Act 1972 or section 78 or section 79 of the Accident Compensation Act 1982 in respect of that personal injury, but has not received any payment under any of those sections in respect of that personal injury; and 5 (b) That person would have an entitlement to an independence allowance under this Act if the personal injury had been suffered on the Ist day of July 1992 --- that person shall be entitled to elect in writing, not later than the 31st day of March 1993, to receive either his or her entitlement under section 119 or section 120 of the Accident Compensation Act 1972 or section 78 or section 79 of the Accident Compensation Act 1982, or an independence allowance under and subject to the conditions of this Act, but not both. (3) Subject to section 148 of this Act, if --- (a) No payment has been made in respect of personal injury by accident under section 119 or section 120 of the Accident Compensation Act 1972 or section 78 or section 79 of the Accident Compensation Act 1982; and (b) No payment is made under subsection (1) of this section; and (c) No election is made under subsection (2) of this section --- the person shall be deemed to have elected to receive an independence allowance under and subject to the conditions of section 54 of this Act as if the personal injury by accident was personal injury that had been suffered on the Ist day of July 1992. 6 Counsel for the appellant submitted that whilst it is acknowledged that there are several decisions of this Court to the effect that there is no discretion under the provision of Section 147 to allow entitlement to lump sum compensation where no written election has been made by 31 March 1993, he submits that those cases are distinguishable. The basis for the distinction is the submission that in those decisions the claimants had simply failed to avail themselves of the entitlements that they did have before 31 March 1993 and that in effect the failure to make the election was as a consequence of their own error or oversight. Counsel contrasts this situation with the case of this appellant who at the transition period, that is to 31 March 1993, was still being denied cover the 1982 Act and therefore had no crystallised rights or entitlements by the expiry of the dates referred to in the transitional provisions of section 147. Counsel contends that it is an arbitrary and unfair interpretation of section 147 to deny the appellant lump sum compensation. Counsel looks to the decision of Judge Middleton in Cook v ARCIC (115/95). In that case the claimant lodged a claim for cover on 29 March 1993 in relation to a tubal pregnancy after sterilisation in 1986. The claimant contended she was entitled to lump sum compensation under the 1982 Act. In those circumstances, His Honour held that the appellant was a person who had entitlement under the 1982 Act for which she had not received compensation and in respect of which she had made written application for compensation before 1 April 1993. His Honour contended that section 147(2A) did not apply because it had not been enacted at the time the claimant's application was made and therefore, 7 the claim made on the 29 March 1993 was sufficient to bring her within the provisions of section 147. Counsel submits that in terms of the Cook decision it is a logical conclusion to draw that the appellant has satisfied the test and is entitled to claim for a lump sum award under the 1982 Act on the basis that he did lodge a claim prior to the 1 October 1992, and the medical misadventure occurred before 1 July 1992, and that it is personal injury by accident within the meaning of the 1982 Act. Counsel for the respondent submits that the provisions of section 147 of the 1992 Act have been considered on numerous occasions. He submits that, in all but one instance, the Court has held that section 147(2) does not give either the respondent or the Court any discretion to allow a late election to receive lump sum compensation no matter what the circumstances. The District Court decisions of Black (66/94), Shearman (123/95), Webster (22/94) and (97/95) and the High Court in ARCIC v ABC (1996) 1BACK 315 are cited as authority for that proposition. Counsel submits that whilst section 147(2) can lead to arbitrary results it was the intention of Parliament to have clear cut-off points for entitlements under the 1982 Act during the transitional period. The decision of Childs v Hillock 1994 2NZLR 65 is cited in support of that proposition. In relation to the Cook decision counsel submits that the Learned Judge was wrong in his reasoning in that decision, and that Cook was wrongly decided. Counsel submits that the subsequent High Court decision of ARCIC v ABC (Supra) establishes that section 147(2A) is not a provision where its retrospectivity is a consideration. As that was the whole basis of the 8 reasoning of His Honour Judge Middleton in the Cook case, for that reason it should not be followed. Decision The purpose of this appeal is counsel for the appellant's contention that the appellant is entitled to lump sum compensation under the 1982 Act. By the decision of the Accident Compensation Appeal Authority in June 1996 the appellant overcame the first hurdle provided by section 135(3) of the Act. Thus, the appellant has had the acceptability of his claim determined under the 1982 Act as if it had not been repealed. For the appellant to avail himself of the provisions of section 147 and be entitled to lump sum compensation for non-economic loss, that section says that the appellant must take three separate steps: i) A claim for personal injury must be lodged before 1 October 1992. The appellant has done so in this case. ii) A written application for lump sum compensation must be lodged on or before 1 April 1993. The appellant has not done so in this case. ifi) A written election to receive lump sum compensation must be lodged no later than 31 March 1993. The appellant has not done so in this case. It is an undisputed fact that the appellant was in the category of being a person who had made a claim for cover but who had had that claim rejected. 9 It is therefore, hardly surprising that he had not taken the steps in (ii) and (iii) stated above. The decisions of this Court and the High Court have consistently held that the Act provides no discretion which would permit an extension of that statutory time limit. In the decision of the Court of Appeal in Childs v Hillock 1994 2 NZLR 65 Hardie Boys J at page 68 said of section 135 - another transitional provision - which is equally applicable to section 147: "It is not a section creating rights but, one that ameliorates the consequences of the changes from a more generous to a less generous compensation scheme. Under the new Act certain eventualities occurring after 1 July 1992, that were covered under the earlier Acts, are no longer covered. The earlier Act having been repealed as at 1 July 1992, unclaimed cover under those Acts in respect of those eventualities would come to an end unless preserved. Subsection (5) preserves them for 3 months. If opportunity is not taken to lodge a claim then cover is lost. This is not a plainly unintended result. There may be hard cases: but no doubt the line had to be drawn somewhere." Insofar as the decision of Cook is concerned, I agree with the submissions of counsel for the respondent that that decision is on the face of it wrongly decided. There are several earlier decisions of His Honour Judge Middleton in which he reaffirms the position that the time limits provided in the transitional provisions are to be strictly observed and there is no discretion vested in the Court or the Corporation for non-observance of same. It seems as though the Learned Judge may have been influenced by the submission of counsel as to the amendment to section 147, being (2A) not being retrospective and, as it were opening the door in the particular facts of the Cook case. 10 That s.147(2A) has no retrospectivity is clearly established by the High Court in the subsequent decision of ARCIC v ABC where that Court said that it is not a question of whether (2A) is retrospective "It is a provision enacted for the avoidance of doubt. It declares the meaning to be attached to subsections (1) and (2). The effect is to make it clear beyond doubt that those two subsections do not apply unless a claim has been lodged before 1 October 1992 that is, as required by section 135(3). Subsection (2A) does not effect any change in the law. It declares what the law was." It does seem as though the decision of Cook overlooks the claim provisions of section 147(2). Having regard to what I consider to be the well settled legal position about the time limits contained in the transitional provisions of the 1992 Act, I find that because this appellant did not, comply with those time limits, even though he could not have been expected to because of the particular circumstances of this case, he has thereby lost any perceived benefits which the 1982 Act may have given him should he have so complied. In passing, this Court notes the substantial benefit which the independence allowance in the appellant's circumstances will give him. It is that to which he is entitled as he debarred from being entitled to any lump sum under the 1982 Act by the operation of the transitional provisions of the 1992 Act. Accordingly, this appeal is dismissed. DATED at WELLINGTON on this day of tember 1997 Seathe M J Beattie District Court Judge Taufua.doc(gm)