Accident Compensation Corporation v Kearney - [2010] NZCA 327

IN THE COURT OF APPEAL OF NEW ZEALAND
CA164/2009
[2010] NZCA 327
BETWEENACCIDENT COMPENSATION CORPORATION

Appellant

ANDROBERT KEARNEY

Respondent

Hearing:15 April 2010

Court:Chambers, Arnold and Baragwanath JJ
Counsel:I G Hunt for Appellant

P J Sara for Respondent

Judgment:27 July 2010 at 11 am

JUDGMENT OF THE COURT

A The appeal is dismissed.
B The appellant must pay to the respondent costs for a standard appeal on a band A basis plus usual disbursements.

REASONS OF THE COURT
(Given by Chambers J)
Interest on accident compensation payments
[1]        On 13 February 1985, Robert Kearney, the respondent, suffered injuries to his wrist and femur in a motor accident. He was unable to return to work as a saw doctor. He claimed cover under the Accident Compensation Act 1982 (the 1982 Act). The Accident Compensation Corporation accepted his claim. It assessed his earnings at $330.12 a week.
[2]        On 31 July 1991, the Corporation terminated Mr Kearney’s weekly compensation payments. He did not appeal the decision at that time. In 2003, however, Mr Kearney had for the first time the good fortune to receive legal advice from Mr Sara. Mr Sara advised him that the Corporation’s decision to cancel his compensation was unlawful. Following a Review Officer’s decision on 11 October 2004, the Corporation accepted that was the case. Mr Kearney thereupon became entitled to backdated weekly compensation from 1 August 1991. That sum was eventually calculated to be $180,326.36, which, after tax was deducted, was paid to Mr Kearney.
[3]        In April 2005, Mr Kearney sought interest on the late payment. The Corporation initially determined that no interest was payable. On review, however, that decision was varied. A Review Officer held that interest was payable but only from 19 August 2003 to the date of payment.[1] Mr Kearney was not satisfied. He contended that interest should run from “as and when the weekly payments were due”, although he accepted that 1 July 1992 was the earliest date from which interest could run. Mr Kearney appealed to the District Court. Judge Cadenhead upheld the Review Officer’s decision.[2]
[1]     The Review Officer found that Mr Kearney had supplied all the financial information to enable the calculation of the backdated compensation by 18 July 2003. The relevant legislation gave the Corporation a month’s grace in which to pay.
[2]     Kearney v Accident Compensation Corporation DC Wellington AI420/05, 1 December 2006 [Kearney DC].
[4]        By leave, Mr Kearney appealed to the High Court. Chisholm J allowed the appeal.[3] He quashed the decision of the District Court, and awarded interest as sought by Mr Kearney. That is to say, interest was payable from the respective dates on which the compensation should have been paid, although not earlier than 1 July 1992. Chisholm J subsequently granted the Corporation leave to appeal to this Court, by decision dated 4 March 2009. The Corporation contends that interest was payable only from the date fixed by the Review Officer and confirmed by Judge Cadenhead.
Issues on the appeal
[3]

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] NZCA 327
Decision Date: 27 July 2010

CaseChat Overview and Summary

In Accident Compensation Corporation v Kearney, the Accident Compensation Corporation appealed against a decision of the High Court that it should pay interest to Mr Kearney from 1 July 1992. The appeal was dismissed. Mr Kearney had suffered injuries in February 1985. The Corporation accepted his claim and paid him weekly compensation until 31 July 1991. It then wrongly decided that it had no further obligation to pay him. In 2003, Mr Kearney applied to a Review Officer for a review of the Corporation’s decision. The Review Officer found the Corporation’s decision was unlawful and Mr Kearney was entitled to backdated weekly compensation from 1 August 1991. In April 2005, Mr Kearney sought interest on the late payment. The Corporation initially determined that no interest was payable. But on review, the Corporation agreed that interest was payable from 19 August 2003 to the date of payment. Mr Kearney was not satisfied. He appealed to the High Court. The High Court quashed the decision of the District Court, and awarded interest as sought by Mr Kearney, that is, from the respective dates on which the compensation should have been paid, although not earlier than 1 July 1992. The Court of Appeal found that the High Court had correctly held that interest was payable from 1 July 1992. The Court of Appeal noted that the Accident Compensation Act 2001 provided that interest was payable only if the Corporation had all the information it needed to enable it to calculate the payment. But it was implicit in that qualification that the Corporation would ask for information it needed in a timely way. Accident victims could not be expected to mind-read or to search through the immensely complicated legislation themselves. Parliament would not have countenanced a regime whereby the Corporation sat by, requested nothing, and then later attempted to take advantage of the qualification to its obligation to pay interest on late payments. The Court of Appeal found that the Corporation had all the information it needed at the time it wrongly stopped paying compensation. It never thereafter sought the information from Mr Kearney until after the Review Officer’s decision on 11 October 2004. It would be quite wrong if the Corporation were to rely on its own failings to escape its liability for interest.

Orders