Lomey v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT HUNTLY Decision No. 1 85 /98 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 VICKY JANE LOMEY DCA 138/98 Appellant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 5th day of August 1998 APPEARANCES: Ms J M Screech counsel for appellant Mr J D Palmer counsel for respondent RESERVED JUDGMENT OF JUDGE M J BEATTIE The issue in this appeal is whether the Corporation can make home help payments to a claimant whilst that claimant is living outside New Zealand. 2 BACKOUND The pellant is a solo parent now aged 33 and has a 7 year old son. In Deober 1989 she suffered severe injuries to her neck and back and these injes still cause her pain and disability today. Irr about 1995 the appellant departed New Zealand and commenced to 1 in Australia. Her reason for so doing was that she found that the armer climate of Queensland was more beneficial to her injuries than had een the case in New Zealand. Prior to departing New Zealand the appellant had been in receipt of certain entitlements including home help and child care. The payments for home help and child care ceased when she departed New Zealand but the appellant did subsequently in January 1997 make a formal request for home help to be paid to her in respect of her new situation in Queensland. The Court is not concerned with whether or not her circumstances would title her to home help, that fact is taken as being accepted and the only estion is whether the Corporation has the power or discretion under the to make payment to her whilst she is resident out of New Zealand. Te are several statutory and regulatory provisions which are applicable anese are as follows: Section 26 Objective of social rehabilitation -- (1) The objective of ial rehabilitation is to restore the independence of a person to the extent the person's independence has been lost by personal injury covered by Act. (2n this Act, "social rehabilitation" includes, without limitation, - "Section 88. Payments to persons outside New Zealand - (1) Compensation based on weekly earnings, independence allowances, and survivors grants shall be paid in accordance with this section to persons who are outside New Zealand. (2) No payments shall be made under this Act in respect of any treatment, service, rehabilitation or related transport costs incurred outside New Zealand unless required or permitted or regulations made under this Act. (3) No compensation based on weekly earnings shall be payable to any person who suffered personal injury outside New Zealand which is covered by this act, and who is not for the time being in New Zealand, unless that person - ( a) Had earnings within the meaning of this Act while absent from New Zealand prior to suffering the personal injury; or (6 ) Had earnings within the period of 6 months immediately before leaving New Zealand. (4) No compensation based on weekly earnings and no independence allowance shall be payable to any person outside New Zealand unless the condition of the person has been assessed for the purposes of this Act by a person approved for the purpose by the Corporation. (5) Where compensation based on weekly earnings or an independence allowance is payable outside New Zealand and the person's continuing right to receive that compensation or allowance is to be assessed, the Corporation shall not be liable to meet any costs incurred by the person overseas or any costs relating to the return of the person to New Zealand for examination or assessment in excess of the costs that the Corporation would be required to meet if the person had remained in New Zealand. (6) No compensation based on weekly earnings shall be payable outside New Zealand to any person whose entitlement to that compensation is based on earnings in employment in New Zealand that that person was not lawfully entitled to undertake by reason of that person not having appropriate New Zealand citizenship, residency, or permit qualifications. (7) In making any payment to a person who is outside New Zealand the Corporation may make the payment to a New Zealand bank account denominated in New Zealand dollars; and if necessary the Corporation may open such an account at a New Zealand bank in the name of and at the expense of that person for that purpose." "159 Corporation to comply with Government policy - (1) In the performance and exercise of its functions, duties, and powers, the Corporation shall comply with any directions relating to the policy of the Government that are given by the minister to the Corporation by notice in writing and that are for the time being in force. (2) Without limiting subsection (1) of this section, the Minister may from time to time give the Corporation a direction under that subsection that any item referred to in section 26(2) of this Act shall be provided only under regulations made under this Act, and not otherwise. (3) Subject to subsection (5) of this section, where a notice is given to the Corporation under subsection (1) of this section, the Minister shall, within 10 working days after the giving of the notice,- (a) Publish a copy of the notice in the Gazette; and 6 (b) Lay a copy of the notice before the House of Representatives. (4) A policy direction given under this section may be annexed to a service agreement entered into under section 159AA of this Act. (5) The annexing of a policy direction to a service agreement under subsection (4) of this section, and the laying of that service agreement before the House of Representatives under section 159AA (6) of this Act, constitute sufficient compliance with the obligations contained in subsection (3) of this section." Reg. 2 of the Accident Rehabilitation and Compensation Insurance (Social Rehabilitation - Homehelp) Regulations 1992 states: "Home Help means the provision, in New Zealand, of services related to meal preparation, laundry and cleaning". On the 2nd September 1996 the Minister for Accident Rehabilitation and Compensation Insurance Corporation issued a policy direction under section 159 of the Act. That policy direction stated inter alia: " a Except as provided below and until this direction is revoked, payments or provisions in respect of social rehabilitation shall be made only as authorised in regulations made under the ARCI Act. Payment or provisions in respect of any item of social rehabilitation referred to in section 26(2) of the ARCI Act 1992 may be made other than as authorised in regulations, provided that the ACC Board has first. N. agreed with the Minister for ARCI the performance indicators for payments or provisions, other than as authorised in regulation, in respect of that item of social rehabilitation, and ii developed an evaluation methodology in respect of that item of social rehabilitation." On 29 November 1996 the Minister agreed the performance indicators and a valuation methodology for home help established by the Corporation. Counsel for the appellant submitted that as home help is an item of social rehabilitation in respect of which the Minister has made a direction and approved a methodology, the provisions of 26A of the Act thereby apply when considering any application for home help and that the Corporation is thereby given a discretion irrespective of whether the claimant would otherwise qualify by reference to the Home Help Regulations. Counsel for the appellant submitted that section 26A(2)(a) states that the discretion is exercisable notwithstanding anything in any regulations and is only subject to any direction made by the Minister. Counsel submits that the regulations make provision for home help in New Zealand only by virtue of the definition of home help in those regulations but that those regulations need not apply if the Corporation is able to source its authority from section 26A. Counsel for the appellant submits that once the discretion pursuant to section 26A is available that overrides the provisions of section 88(2) of the Act which prohibits payments for social rehabilitation if those costs are incurred outside New Zealand. 8 Counsel submits that section 88(2) is subject to section 26A and that therefore, there is a discretion vested in the Corporation to make payment of home help to a deserving claimant outside New Zealand. Mr Palmer, Counsel for respondent, submits that the provisions of the Act and regulations are circular in their application. He submits that any payments authorised to be made under section 26A must be subject to the provisions of the Act and this leads to consideration of the provisions of section 88(2) which in turn leads to the provisions of the Home Help Regs. and the definition of home help. Counsel submits that the Corporation cannot apply a discretion so as to contravene the clear policies set out in section 88(2). He contends that if that had been the intention it would have required a re-definition of "Home help" in the regulations. Counsel submitted that Home Help applies only to the provision of services within New Zealand. The Minister's policy direction does not confer on the Corporation a discretion to make payment or provision of Home Help in contravention of section 88(2). DECISION When the 1992 Act was originally enacted, it made similar but separate provision for payments in respect of social rehabilitation and for physical rehabilitation. They being respectively provided for in sections 26 and 27 of the Act. It was the corner stone of those two provisions that provision for payment of any entitlements to social or physical rehabilitation could only be made as required or permitted by regulations made under the Act. It was because of those particular provisions that various regulations for social and physical rehabilitation were promulgated and the regulation relevant to this appeal so promulgated was the Accident Rehabilitation and Compensation Insurance (Social Rehabilitation - Home Help) Regulations 1992. Thus, by virtue of section 26, as originally enacted, home help or household help could only be provided in terms of the Home Help Regulations. There was no discretion given to the Corporation in any case and unless the particular claimant could bring himself/ herself within the regulations there was no power given to the Corporation to make any provision for same. The Home Help Regulations provided for an assessment to be made of a claimant's needs and that assessment was to be given a score as contained in the schedule and the amount in dollar terms of the home help entitlement was dependent upon the score that the assessor determined the claimant warranted. The foregoing state of affairs applied with all regulations which were required to provide for various aspects of social and physical rehabilitation. In 1996 section 26 of the Act was repealed and a new section inserted together with an accompanying section 26A. Those sections are as set out earlier in this decision. The change created by the enactment of these new provisions was that insofar as social rehabilitation was concerned there was a change from the previous strict regulatory system to a system created by the wording of section 26A which gave the Corporation a discretion on how it was to provide provision or payment for social rehabilitation and that new discretion was not to be fettered by any existing regulatory provisions which may be covering the particular type of payment that was being sought. 10 The only limitation placed on that discretionary power was that it had to have approval of the Minister and be subject to any direction which the Minister may make, relating to the exercise of that discretion. As has been noted the Minister did make a direction in relation to home help which enable it to be administered other than as authorised in the regulations as from 29 November 1996. Thus, for the purposes of considering home help entitlements I find that it is clear that from 29 November 1996 the Corporation has a discretion, within the methodology, performance indicators and other mechanical aspects approved, to make payment to a claimant, notwithstanding anything in the Home Help Regulations made under the Act. To this extent therefore, I accept counsel for the appellant's submission that once it can be established that the particular item of social rehabilitation that is claimed is one that has been accepted and directed pursuant to section 159 then the restrictions, be they mechanical or descriptive as contained in the regulations ceased to be applicable. Thus, I find that insofar as the Home Help Regulations are concerned the fact that the definition of home help means the provision in New Zealand of services related to meal preparation, laundry and cleaning does not apply because the regulations themselves are not referred to or need not be referred to for the purposes of the Corporation's power or authority to provide payment to a claimant. However, the provisions of section 26A state that the Corporation may make any provision or payment in respect of social rehabilitation that is permitted under this Act. Section 88(2) of the Act states specifically that no payments shall be made under this Act in respect of any ... rehabilitation costs incurred 11 outside New Zealand unless required or permitted by a regulation made under this Act. "Rehabilitation" as defined in section 3 includes social rehabilitation. Thus there is a statutory provision which places a prohibition on the payment of social rehabilitation costs incurred outside New Zealand. The only way that prohibition can be softened is if there is a specific permission so to do contained in regulations made under this Act. There are no general regulations which cover payment of costs incurred outside New Zealand and the particular regulations covering the payment of Home Help costs has as a component that it can only apply to payment for the provision of those services in New Zealand. This must result in the situation being that if the Corporation is being asked to exercise its powers to pay for home help pursuant to section 26A, that power must be subject to section 88(2). If the claimant is seeking to have payment under the former regime as contained in the Home Help Regs., payment for same can only be made for services in New Zealand. In summary then, if the Corporation is going to go by the Home Help Regulations it excludes payment for services incurred outside New Zealand. If it is going to consider any particular claim under its extended discretionary power now given under section 26A, again it can only do so where the costs of home help are incurred in New Zealand. Thus, whichever method is put forward as the basis for entitlement, I find there is the clear prohibition on it covering payments incurred outside New Zealand. I do not agree with counsel for the appellant's submission that section 26A takes priority over section 88(2) under the "maxim generalia specialibus non derogant". That maxim cannot apply when the purported "special" provision has as an express provision the statement that payment can only be made in 12 circumstances permitted under the Act. The circumstances permitted under the Act are those circumstances contained in section 88. In every sense section 26A must be read subject to section 88. For the foregoing reasons therefore, I rule that the Corporation was correct to rule that it had no power, either regulatory or discretionary, to make payment for the appellant's costs of home help incurred by her whilst resident out of New Zealand. DATED at WELLINGTON this 20" day of August 1998 wathe MJ Beattie District Court Judge Lomey.doc(gm)