Accident Compensation Corporation v Stewart
[2012] NZHC 772
•26 April 2012
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2012-485-000208 [2012] NZHC 772
UNDER Section 162 of the Accident Compensation
Act 2001
IN THE MATTER OF an appeal against a decision of the District
Court at Wellington
BETWEEN ACCIDENT COMPENSATION CORPORATION
Appellant
ANDDAVID STEWART Respondent
Hearing: 17 April 2012
Counsel: L M Hansen and L Rice for Appellant
K C Y Lau for Respondent
Judgment: 26 April 2012
In accordance with r 11.5 I direct the Registrar to endorse this judgment with the delivery time of 11.00am on the 26th day of April 2012.
RESERVED JUDGMENT OF COLLINS J
Introduction
[1] The appellant (ACC) has been granted leave to appeal a decision of the
District Court dated 2 September 2011.
[2] The District Court allowed the respondent’s appeal from ACC’s decision of 3
May 2010 in which ACC had decided the respondent was not eligible for weekly
ACCIDENT COMPENSATION CORPORATION V STEWART HC WN CIV-2012-485-000208 [26 April 2012]
compensation. The District Court ruled that the respondent was entitled to receive weekly compensation after he had turned 65, which was the age that he had also become entitled to receive New Zealand superannuation.
[3] The key issues raised by this appeal involve the interface between weekly compensation entitlements paid by ACC with New Zealand superannuation.
Facts
[4] On 22 September 2006 the respondent suffered a fracture to one of his vertebrae when he fell from a piece of machinery. The respondent was assessed as being incapacitated. He received weekly compensation from ACC as from
29 September 2006. The respondent’s weekly compensation ceased on 13 May 2007 when he returned to his pre-injury employment.
[5] The respondent turned 65 on 21 August 2009 and became entitled to
New Zealand superannuation at that date.
[6] The respondent experienced further back pain in early 2010. This related to his earlier injury. He was assessed as being incapacitated in March 2010. He underwent surgery on 8 June 2010 and returned to work approximately six weeks later.
[7] In the meantime, on 3 May 2010 ACC determined the respondent was not entitled to receive weekly compensation. ACC’s decision was based on its interpretation of cl 52 of Schedule 1 of the Accident Compensation Act 2001 (the Act).
Relevant provisions of the Act
Definition of “entitlement”
[8] Pursuant to s 6 of the Act, “entitlement”
means the entitlements described or referred to in section 69.
Entitlements
[9] Section 69(1) of the Act provides:
69 Entitlements provided under this Act
(1) The entitlements provided under this Act are—
(a) rehabilitation, comprising treatment, social rehabilitation, and vocational rehabilitation:
(b) first week compensation: (c) weekly compensation:
(d) lump sum compensation for permanent impairment:
(e) funeral grants, survivors’ grants, weekly compensation for the spouse [or partner], children and other dependants of a deceased claimant, and child care payments.
Determination of incapacity and effect of such a determination
[10] Section 103 of the Act provides:
103 Corporation to determine incapacity of claimant who, [at time of personal injury, was earner or on unpaid parental leave]
(1) The Corporation must determine under this section the incapacity of—
(a) a claimant who was an earner at the time he or she suffered the personal injury:
(b) a claimant who was on unpaid parental leave at the time he or she suffered the personal injury.
(2) The question that the Corporation must determine is whether the claimant is unable, because of his or her personal injury, to engage in employment in which he or she was employed when he or she suffered the personal injury.
(3) If the answer under subsection (2) is that the claimant is unable to engage in such employment, the claimant is incapacitated for employment.
[(4) The references in subsections (1) and (2) to a personal injury are references to a personal injury for which the person has cover under this Act.]
[(5) Subsection (4) is for the avoidance of doubt.]
Section 104 of the Act provides:
104 Effect of determination under section 103 on entitlement to weekly compensation
If the Corporation determines under section 103(2) that the claimant is not incapacitated for employment—
(a) a claimant who is receiving weekly compensation for loss of earnings from employment—
(i) loses that entitlement immediately; and
(ii) cannot be subject to a determination under section 107 in respect of that incapacity:
(b) a claimant who is not receiving weekly compensation for loss of earnings from employment is not entitled to begin receiving it.
Payment of weekly compensation
[11] Clause 32 of Schedule 1 of the Act provides:
32 Corporation to pay weekly compensation for loss of earnings to claimant who was earner
(1) The Corporation is liable to pay weekly compensation for loss of earnings to a claimant who—
(a) has an incapacity resulting from a personal injury for which he or she has cover; and
(b) was an earner immediately before his or her incapacity commenced.
(2) The claimant is entitled to weekly compensation for loss of earnings—
(a) on and from the day after the first week of incapacity ends;
and
(b) for any period of incapacity, after that first week, resulting from the personal injury for which he or she has cover.
(3) The weekly compensation payable is 80% of the claimant’s weekly earnings, as calculated under clauses 33 to 45 and 48.
...
Relationship between weekly compensation and New Zealand superannuation
[12] Clause 52 of Schedule 1 of the Act provides:
Effect of New Zealand superannuation
52 Relationship between weekly compensation and New Zealand superannuation
(1) Subclause (2) applies to a claimant who—
(a) first becomes entitled to weekly compensation before reaching New Zealand superannuation qualification age; and
(b) has been entitled to it for 24 months or longer before reaching that age.
(2) Such a claimant loses his or her entitlement to weekly compensation on reaching that age.
(3) Subclauses (4) and (5) apply to a claimant who first becomes entitled to weekly compensation 12 months or more, but less than 24 months, before reaching New Zealand superannuation qualification age.
(4) Such a claimant is entitled to weekly compensation for 24 months from the date of entitlement to the compensation.
(5) However, the claimant’s entitlement to the compensation is dependent on his or her making an election to be entitled, after reaching New Zealand superannuation qualification age, to the compensation, rather than to New Zealand superannuation.
(6) Subclauses (7) and (8) apply to a claimant who [first] becomes entitled to weekly compensation—
(a) within 12 months before reaching New Zealand superannuation qualification age; or
(b) on or after reaching New Zealand superannuation qualification age.
(7) Such a claimant is entitled to the weekly compensation for a period of 12 months following the later of—
(a) the date of reaching New Zealand superannuation qualification age; or
(b) the date of entitlement to weekly compensation.
(8) The claimant is then entitled to the weekly compensation for the next
12 months, if he or she makes an election to be entitled, during those
12 months, to the compensation, rather than to New Zealand superannuation.
(9) Nothing in this clause entitles a claimant to weekly compensation if he or she is not otherwise entitled to it under this schedule.
Decision appealed from
[13] In his judgment, the District Court Judge said:[1]
[1] Stewart (ACR 873/10) v Accident Compensation Corporation [2011] NZACC 241 at [11]-[15].
... An entitlement to weekly compensation requires a person to be determined as being incapacitated, and of course, of being an earner at the time of such incapacity.
In accordance with Clause 32 of Schedule 1 an entitlement to weekly compensation only arises if a claimant has incapacity resulting from a personal injury for which he has cover and was an earner immediately before his incapacity commenced. Central to that entitlement is a finding that a claimant is unable, because of his personal injury, to engage in employment in which he was engaged when he suffered the personal injury, in accordance with Section 103(2).
The facts of this case are that the appellant ceased to be entitled to weekly compensation in May 2007 when he returned to his pre-injury employment and, quite correctly, had ceased to be incapacitated.
In those circumstances I find that Clause 52(1)(b) is such that it does not apply to this appellant’s circumstances, as he had not been entitled to weekly compensation for 24 months or longer before reaching 65 years of age. He was not in fact receiving weekly compensation, not being entitled to it, before reaching 65 years of age.
I find that the word [first] as it pertains in (1)(a) does not mean first as opposed to second time or third time around, but merely that an entitlement to weekly compensation came about before reaching superannuation qualification age. Clause 52(1)(b) which is predicated by the word and indicates that from first becoming entitled to weekly compensation, that entitlement has continued for 24 months or longer before reaching 65 years of age.
[14] The District Court Judge then found the appellant’s circumstances came
within sub-cls 52(6), (7) and (8) of Schedule 1 of the Act. He said:[2]
[2] At [16]-[17].
... The appellant first became entitled to weekly compensation, that is satisfied the statutory requirements, after reaching New Zealand superannuation qualification age. In those circumstances the appellant is
entitled to weekly compensation for a period of 12 months from the later of his 65th birthday or the date of the commencement of entitlement to weekly compensation, which in this case would be 12 months from 25 March 2010 if the appellant elects to receive weekly compensation for that period, rather than superannuation. He is not entitled to both.
Again, the facts of the appellant’s case are that he was in employment at the time his incapacity commenced in terms of Clause 32 and therefore he had an entitlement to weekly compensation, but which, because of his age, is limited to the period provided in sub-clauses (6), (7) and (8) of Clause 52.
[15] The District Court Judge concluded that the appellant was entitled to weekly compensation in accordance with sub-cl (7)(b), that is, from 25 March 2010 for a period of up to 12 months, for as long as he could establish continuing incapacity consequent upon his injury. The Judge ultimately directed that ACC make payment of weekly compensation for such period from 25 March 2010 to 25 March 2011 for which the appellant was certified as being incapacitated.
[16] As a final comment the Judge noted that counsel for the respondent’s:[3]
[3] At [18].
assertion that Clause 52 in its entirety cannot apply to this appellant is simply not the case, because each of the three alternatives in Clause 52 have a cessation date for weekly compensation in relation to a person attaining 65 years of age, or whatever other age may become the New Zealand Superannuation entitlement age, the right to commence or continue to receive weekly compensation would be limited to stated periods after reaching age 65, and at most that weekly compensation entitlement would continue for a maximum of 12 months if the election to receive same is made.
Leave decision
[17] In granting leave to appeal to this Court, the District Court posed five questions of law. Those questions are:
(1) Whether clause 52(1) means that the appellant had to be receiving weekly compensation for 24 months or longer (or continuously) before reaching 65;
(2) Whether the word “first” in clause 52(1)(a) (and inferentially in subclause (6)) means first as opposed to second or third time but merely that an entitlement to compensation came about before reaching superannuation qualification age;
(3) Whether clause 52(6) applied to the [respondent’s] circumstances;
(4) If clause 52(6) applied, whether the [respondent] was entitled to receive weekly compensation only for 12 months from the date of commencement of entitlement to weekly compensation;
(5) Whether none of the parts of clause 52 apply to [the respondent’s] case, and if so whether his entitlement to weekly compensation continues.
Summary of ACC’s case
[18] Ms Hansen’s submissions on behalf of ACC can be distilled to the following
key points:
(1)That the word “first” as it is used in sub-cls 52(1)(a) and (6) of Schedule 1 of the Act means the first or initial period of incapacity which entitles a person to weekly compensation.
(2)The respondent first became entitled to weekly compensation in respect of his injury in September 2006. His subsequent incapacity for that injury arose in March 2010. Consequently, the District Court Judge was wrong to find that the respondent first became entitled to weekly compensation in March 2010.
(3)The words “has been entitled to it for 24 months or longer” in sub cl 52(1)(b) of Schedule 1 of the Act means that the time the claimant first became entitled to weekly compensation was 24 months or more before he turned 65. Ms Hansen submitted that there was no requirement that a claimant had to be receiving weekly compensation continuously for 24 months or more and the District Court Judge was wrong to have found otherwise.
(4)The District Court Judge also erred when he found that sub-cl 52(6) of Schedule 1 of the Act applied to the respondent’s circumstances. Furthermore, Ms Hansen submitted that the District Court Judge appeared to have erroneously conflated sub-cls 52(7) and (8) of Schedule 1 of the Act. Ms Hansen explained that if sub-cl 52(6) did
apply then the respondent was entitled to 12 months compensation from 25 March 2010 (under sub-cl (7)) and then for a further
12 months if he elected to receive weekly compensation, rather than
New Zealand superannuation.
(5)The District Court Judge was correct when he rejected the proposition that the respondent was beyond the scope of cl 52 of Schedule 1 of the Act.
Summary of respondent’s submissions
[19] Ms Lau’s submission on behalf of the respondent can be summarised in the
following way:
(1)The language of cl 52 of Schedule 1 of the Act is not clear enough to deprive the respondent of weekly compensation.
(2) Clause 52 of Schedule 1 of the Act does not govern the respondent’s
circumstances because:
(a) he had only been entitled to weekly compensation for a matter of eight months from late September 2006, not for 24 months or longer. Therefore his case was not governed by sub-cls 52(1) and (2) of Schedule 1 of the Act.
(b)sub-clauses 52(3), (4), (5) and (6) of Schedule 1 of the Act did not apply to the respondent because he first became entitled to weekly compensation in 2006 when he was 62 and therefore more than 24 months before he turned 65.
(3)As no part of cl 52 of Schedule 1 of the Act applied to the respondent, he was theoretically entitled to weekly compensation indefinitely. Any perceived anomaly caused by the state of affairs was for Parliament to resolve, not the Courts.
(4)Ms Lau agreed with ACC’s interpretation of the meaning of the word “first” in sub-cl 52(1)(a) and, inferentially in sub-cl 52(6) of Schedule 1 of the Act.
(5)Ms Lau submitted that the District Court Judge erred when he held that sub-cl 52(6) of Schedule 1 of the Act applied to the respondent. Even if sub-cl 52(6) of Schedule 1 of the Act did apply in this case the District Court Judge further erred when he held the respondent was not entitled to both weekly compensation entitlements and New Zealand superannuation.
Analysis
Legislative history
[20] It is helpful to consider the legislative antecedents of cl 52 of Schedule 1 of the Act. In summary:
(1)Section 128 of the Accident Compensation Act 1972 placed upper age limits for payment of earnings related compensation. Under that Act, earnings related compensation ceased:
(a) when the claimant turned 65 if the accident occurred before the claimant turned 60; or
(b)on the fifth anniversary of the accident if the accident occurred after the claimant turned 60 but before they turned
65; or
(c) on the date the claimant turned 70 if the accident occurred after the claimant turned 65, but before they turned 69; or
(d)on the first anniversary of the accident, if the accident occurred after the claimant turned 69.
(2)Section 66 of the Accident Compensation Act 1982 was worded similarly to s 128 of the 1972 Act.
(3)The Accident Rehabilitation and Compensation Insurance Act 1992 introduced a number of significant changes to the ACC scheme. Many of the changes introduced by the 1992 Act were foreshadowed in a report “Accident Compensation: A Fairer Scheme” which was presented to Parliament as part of the 1991 Budget by the Hon W Birch, then Minister of Finance and Minister responsible for ACC. The following paragraphs can be found at page 44 of that report:
Age Limit for Earnings-Related Compensation
The current age limit for earnings-related compensation is generally 65 but payments can in some cases go beyond age
70. The Rehabilitation and Incapacity Bill introduced in
1989 by the Labour Government provided that entitlement would normally cease at the age of entitlement for
Guaranteed Retirement Income (GRI). The Working Party
supported this change. It considered that because the Government provides a guaranteed retirement income, entitlement for injury compensation should normally cease at the age of eligibility for GRI.
There is little logic in persons being eligible for income maintenance from two overlapping Government-mandated schemes and thus receiving income replacement in excess of
100 percent of previous earnings. The Government has decided that eligibility for earnings-related compensation will normally cease at the age of entitlement for GRI. For earners who are above the age of entitlement for GRI when injured, there will be an entitlement to earnings-related compensation for a 12-month period.
As a result, s 52 of the 1992 Act initially barred a claimant from receiving both earnings-related compensation and New Zealand superannuation. A claimant who was incapacitated within 24 months of reaching the New Zealand superannuation qualification age, or if they were injured after reaching the New Zealand superannuation qualification age was entitled to a total of 24 months compensation for loss of earnings. However, upon reaching the New Zealand superannuation qualification age, the claimant had to elect either to
receive New Zealand superannuation or earnings-related compensation.
(4)In 1993 Parliament amended the 1992 Act and inserted a new s 52 into the 1992 Act. The effects of the amendments were:
(a) Those who first became entitled to weekly compensation between 12 and 24 months before reaching New Zealand superannuation qualification age were entitled to weekly compensation for 24 months, provided they elected to receive weekly compensation instead of New Zealand superannuation upon reaching the New Zealand superannuation qualification age.
(b) Those who first became entitled to weekly compensation within
12 months of reaching the New Zealand superannuation qualification age, or, who were injured after they reached the New Zealand superannuation qualification age, could receive both weekly compensation and New Zealand superannuation for
12 months, and weekly compensation for a further 12 months if they elected to accept weekly compensation instead of New Zealand superannuation.
(5)Clause 25 and Schedule 1, Part 2 of the Accident Insurance Act 1998 preceded cl 52 of Schedule 1 of the present Act. That clause provided:
(1) Subclause (2) applies to an insured who–
(a) Is entitled to weekly compensation immediately before reaching New Zealand superannuation qualification age; and
(b) Has been entitled to it for 24 months or longer before reaching that age.
(2) Such an insured loses his or her entitlement to weekly compensation on reaching that age.
(3) Subclauses (4) and (5) apply to an insured who becomes entitled to weekly compensation 12 months or more, but less than 24 months, before reaching New Zealand superannuation qualification age.
(4) Such an insured is entitled to weekly compensation for 24 months from the date of entitlement to the compensation.
(5) However, the insured’s entitlement to the compensation is dependent on his or her making an election to be entitled, after reaching New Zealand superannuation qualification age, to the compensation, rather than to New Zealand superannuation.
(6) Subclauses (7) and (8) apply to an insured who becomes entitled to weekly compensation–
(a) Within 12 months before reaching New Zealand superannuation qualification age; or
(b) On or after reaching New Zealand superannuation qualification age.
(7) Such an insured is entitled to the weekly compensation for a period of 12 months following the late of–
(a) The date of reaching New Zealand superannuation qualification age; or
(b) The date of entitlement to weekly compensation.
(8) The insured is then entitled to the weekly compensation for the next 12 months, if he or she makes an election to be entitled, during those 12 months, to the compensation, rather than to New Zealand superannuation.
(9) Nothing in this clause entitles an insured to weekly compensation if he or she is not otherwise entitled to it under this schedule.
(6)Clause 52 of Schedule 1 of the Act was initially the same as cl 25 of Schedule 1, Part 2 of the 1998 Act. From 1 July 2005 the following changes were made to cl 52:
(a) the word “is” in sub-cl 52(1)(a) was deleted and replaced with
“first becomes”;
(b) the word “first” was inserted into sub-cls 52(3) and (6)
between the words “who” and “becomes”.
Purpose of Clause 52
[21] Parliament has chosen to manage the interface between weekly compensation and New Zealand superannuation by catering for three different scenarios.
Scenario 1
[22] Scenario 1 is governed by sub-cls 52(1) and (2) of Schedule 1 of the Act. To be in this category a person must have first become entitled to weekly compensation
24 months or more, before they turn 65, which is the New Zealand superannuation qualification age. Once a person in this category turns 65 they lose their entitlement to weekly compensation.
Scenario 2
[23] Scenario 2 is governed by sub-cls 52(3), (4) and (5) of Schedule 1 of the Act. To be in this category a person must have first become entitled to weekly compensation 12 months or more, but less than 24 months before they turn 65. Persons in this category are entitled to receive weekly compensation for a maximum period of 24 months. However, once a person in this category turns 65 they must choose between receiving weekly compensation and New Zealand superannuation.
Scenario 3
[24] Scenario 3 is governed by sub-cls (6), (7) and (8) of Schedule 1 of the Act. To be in this category a person must have first become entitled to weekly compensation either:
(1) within 12 months before they turned 65; or
(2) after they turned 65.
[25] Persons in this category are entitled to weekly compensation for an initial period of 12 months from:
(1) the date they turned 65; or
(2) the date they became entitled to weekly compensation.
In addition, a person in this category may be entitled to receive weekly compensation for a further 12 months if they elect to receive weekly compensation rather than New Zealand superannuation.
[26] In adopting this approach Parliament has endeavoured to manage the relationship between weekly compensation entitlements and New Zealand superannuation by providing for a limited degree of overlap between the two schemes. The alternative policy option that Parliament could have adopted was a blunt demarcation between weekly compensation entitlements and New Zealand superannuation along the lines suggested in “Accident Compensation: A Fairer Scheme”. As noted in [20(4)] above, that policy option was initially favoured in the Accident Rehabilitation and Compensation Insurance Act 1992 but was soon replaced with a system that allowed a limited degree of overlap between weekly compensation and New Zealand superannuation.
Interpretation issues
[27] This appeal requires me to determine the meaning of the word “first” as used in sub-cls (1)(a), (3) and (6) of Schedule 1 of the Act. I am also required to determine the meaning of the words “has been entitled to it for 24 months or longer” in sub-cl 52(1)(b) of Schedule 1 of the Act.
[28] The parties agree that the District Court Judge erred when interpreting the word “first” in sub-cl 52(1)(a). They also agree that by inference the District Court Judge also erred when interpreting the meaning of the word “first” in sub-cls (3) and (6) of Schedule 1 of the Act. I agree with the parties. In reaching this conclusion I have applied a contextual analysis and placed reliance upon the legislative history of cl 52 of Schedule 1 of the Act.
Contextual analysis
[29] The true meaning of the word “first” must be assessed by examining the context in which it is used. The word “first” is used in the phrase “first becomes entitled to weekly compensation” in sub-cls (1)(a), (3) and (6). It has the same meaning in each of these sub-clauses.
[30] I agree with the parties when they submitted that when viewed in context “first” means the ordinal form of one and refers to something that comes before all others in time and order. In the context of cl 52 of Schedule 1 of the Act “first becomes entitled to weekly compensation” contemplates that a person will possibly become entitled to weekly compensation in respect of a particular injury on more than one occasion. The decisive event for the purposes of cl 52 is the first time a person becomes entitled to weekly compensation for an injury, rather than any subsequent weekly compensation entitlements for that injury.
[31] This approach is entirely consistent with cl 32(2) of Schedule 1 of the Act. Under that clause a person is entitled to weekly compensation on and from the first day after the first week of incapacity ends and for any period of incapacity following that first week. This means that entitlements to weekly compensation commence on a particular day and continue thereafter for any period of incapacity. It contemplates that a person may cease to be incapacitated but then again become incapacitated whereupon their entitlements to weekly compensation will resume.
[32] The legislative history and supporting materials support the interpretation
which I favour. The word “first” was inserted into cl 52 by an Amending Statute in
2005. It is clear from the Explanatory Note to the Bill preceding the Amending Act
that the term “first” was inserted into cl 52 to make clear that the time periods in cl
52 were determined by reference to an initial period of incapacity rather than a subsequent period. The Explanatory Note states:[4]
[4] Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 3) (165-1) (Explanatory Note) at 8.
The Bill clarifies that the rules are determined by reference to a claimant’s
first period of incapacity from an injury and not to subsequent incapacity.
At p 22 of the Explanatory Note the following can be found:
Clause 52 is amended to provide that compensation under the clause for persons reaching the New Zealand superannuation qualification age is determined by reference to the person’s age at the person’s first incapacity, rather than the person’s age at a subsequent incapacity during the relevant period.
[33] For these reasons I respectfully conclude that the District Court Judge erred when he interpreted the meaning of the word “first” as it is used in cl 52. When interpreted in context, and with knowledge of the relevant legislative history it is clear that “first” does not mean “... merely that an entitlement to weekly compensation came about before [the respondent reached] superannuation qualification age”.[5] In this case, the respondent first became entitled to weekly compensation from 29 September 2006. That was the pivotal date for the purposes of cls 52(1) and (2) of Schedule 1 of the Act.
[5] Stewart (ACR) 873/10) v Accident Compensation Corporation [2011] NZACC 241 at [15].
“Has been entitled to it for 24 months or longer”
[34] The District Court Judge held that the words “has been entitled to it for 24 months or longer” in sub-cl 52(1)(b) of Schedule 1 of the Act meant that that
respondent had to have been continuously receiving weekly compensation for 24 months before reaching 65 years of age.[6]
[6] At [15].
[35] In interpreting the composite expression “has been entitled to it for
24 months or longer” I have again applied a contextual analysis and been guided by the relevant legislative history. This analysis has led me to the conclusion that sub- cl 52(1)(b) does not require that a person have continuously received weekly compensation for 24 months or more. Accordingly, the learned District Court Judge erred on this point.
Context
[36] When viewed in context, the words “has been entitled to it for 24 months or longer” involve taking account of a past event. In the context of sub-cl 52(1) of Schedule 1 of the Act the past event is the date on which the claimant first became entitled to weekly compensation under sub-cl 52(1)(a). This approach is consistent with sub-cls 52(3) and (6) where it is clear that the triggering of entitlements to weekly compensation is defined temporally, namely:
(1) between 12 and 24 months of turning 65 (Scenario 2); or
(2) within 12 months before or after turning 65 (Scenario 3).
Legislative history
[37] The legislative history supports the conclusion I have reached.
[38] Section 52(2) of the Accident Rehabilitation and Compensation Insurance Act
1992 originally provided:
Compensation for loss of earnings calculated under sections 40 to 42 of this
Act shall not cease on account of age unless it has been paid for a total of
24 months from the commencement of incapacity to any person who first qualified for it after attaining an age within 24 months before the national
superannuation qualification age or any greater age. (emphasis added)
[39] It is noted in [20(4)] above, s 52 of the 1992 Act was short-lived. The amendments enacted in 1993 did not reproduce the formulation set out in [38] of this judgment. Parliament has not referred to weekly compensation being paid for a defined total period since the 1993 Amendments were enacted. In my assessment, this strongly indicates that Parliament did not intend when enacting cl 52 of Schedule 1 of the Act, or its antecedents from 1993 onwards, that a 24 month or longer continuous payment of weekly compensation be received by a claimant before their entitlement to that weekly compensation would cease after they reached
65.
[40] For these reasons, the District Court Judge should have upheld ACC’s earlier
determination that sub-cls 52(1) and (2) applied to the respondent’s circumstances.
Clauses 52(6), (7) and (8)
[41] The third and fourth questions of law posed by the District Court when granting ACC leave to appeal relate to the meaning of cls 52(6), (7) and (8) of Schedule 1 of the Act.
[42] The District Court Judge concluded that the respondent’s circumstances were governed by cls 52(6), (7) and (8) of Schedule 1 of the Act. He then held that the respondent was only entitled to weekly compensation for a period of 12 months from when he turned 65.
[43] It will be apparent that I disagree with the District Court Judge’s conclusion that the respondent’s circumstances were governed by sub-cls 52(6), (7) and (8) of Schedule 1 of the Act.
[44] If I am wrong in my conclusion then it is necessary to consider whether or not the District Court Judge correctly applied sub-cls 52(6), (7) and (8) of Schedule 1 of the Act. On this point both parties have submitted that the District Court Judge erred when he held that the respondent could only be entitled to weekly
compensation for a period not exceeding 12 months from the date of his 65th
birthday.
[45] I also agree with the parties on this point. If the respondent’s circumstances were governed by sub-cl 52(6) of Schedule 1 of the Act then two consequences could follow:
(1)The respondent could be entitled to receive weekly compensation for an initial period of up to 12 months under sub-cl 52(7).
(2)Thereafter, the respondent could receive weekly compensation for a further 12 month period under sub-cl 52(8) if he elected to receive weekly compensation rather than New Zealand superannuation.
The District Court Judge does appear to have erroneously conflated sub-cls 52(7)
and (8) of Schedule 1 of the Act.
Does Clause 52 apply at all?
[46] The principal argument for the respondent was that cl 52 of Schedule 1 of the Act does not apply to him at all. The gravamen of the respondent’s submissions on this point were:
(1)Clauses 52(1) and (2) did not apply to the respondent because he first became entitled to weekly compensation in September 2006 and was entitled to it for a matter of months, not 24 months or longer.
(2)Clauses 52(3), (4) and (5) did not apply to the respondent because he first became entitled to weekly compensation when he was 62, that is to say, more than 24 months prior to him turning 65.
(3)Clauses 52(6), (7) and (8) did not apply to the respondent because he first became entitled to weekly compensation when he was 62, that is to say more than 12 months prior to him turning 65.
[47] If the respondent is correct and cl 52 does not apply to him at all then, in theory, the respondent would be entitled to receive weekly compensation for so long
as he was incapacitated, regardless of his concurrent eligibility for New Zealand superannuation. This state of affairs could theoretically continue until a claimant died. The respondent acknowledged this would be anomalous but submitted it was for Parliament and not this Court to correct any anomaly.
[48] As noted in [34] – [40] above I have concluded that both the respondent and the learned District Court Judge have taken an erroneous approach when they say that sub-cl 52(1)(b) requires a continuous period of entitlement to weekly compensation for 24 months or longer. That determination addresses the respondent’s submission that “clause 52 does not apply to the respondent at all”.
Conclusion
[49] For the reasons set out above I answer the questions of law posed by the
District Court in the following way:
(1)Whether cl 52(1) means that the appellant had to be receiving weekly compensation for 24 months or longer (or continuously) before reaching 65?
Answer: “No”. The respondent had to have first become entitled to weekly compensation more than 24 months before reaching 65.
(2)Whether the word “first” in cl 52(1)(a) (and inferentially in sub-cl (6) means first as opposed to second or third time but merely that an entitlement to compensation came about before reaching superannuation qualification age?
Answer: “First” means first as opposed to second or third and requires that an entitlement to compensation came about before reaching superannuation qualification age.
(3) Whether cl 52(6) applied to the [respondent’s] circumstances?
Answer: “No”.
(4)If cl 52(6) applied, whether the [respondent] was entitled to receive weekly compensation only for 12 months from the date of commencement of entitlement to weekly compensation?
Answer: “No” because cl 52(6) does not apply, but if it did apply then a claimant could receive weekly compensation for up to a further 12 months under sub-cl 52(8).
(5) Whether none of the parts of cl 52 apply to [the respondent’s] case,
and if so whether his entitlement to weekly compensation continues?
Answer: Clauses 52(1) and (2) applied to the respondent’s case
and consequently he is not entitled to weekly compensation.
[50] The issues raised by this appeal have general significance for ACC beyond
the facts of this case. This appeal was in effect a “test” case. For those reasons I am
not inclined to make any order for costs.
D B Collins J
Solicitors:
ACC Legal Services, Wellington for Appellant
John Miller Law, Wellington for Respondent
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