Cullen v Accident Compensation Corporation
[2014] NZCA 94
•26 March 2014 at 10.30 am
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA582/2013 [2014] NZCA 94 |
| BETWEEN | TREVOR CULLEN |
| AND | ACCIDENT COMPENSATION CORPORATION |
| Hearing: | 17 March 2014 |
Court: | Stevens, White and French JJ |
Counsel: | P G Schmidt for Applicant |
Judgment: | 26 March 2014 at 10.30 am |
JUDGMENT OF THE COURT
The application for special leave to appeal is declined.
____________________________________________________________________
REASONS OF THE COURT
(Given by White J)
The applicant, Mr Cullen, seeks special leave to appeal to this Court on the following question:
Is the [Accident Compensation] Corporation required to pay interest on the whole amount of retained weekly compensation [to which the applicant was entitled] notwithstanding any repayment to WINZ of income support benefit paid to the [applicant]?
The question arises because from October 1988 to 2006 Mr Cullen received income support from Work and Income New Zealand (WINZ) when he had been entitled in fact to continue to receive weekly compensation from the Accident Compensation Corporation (the Corporation). Arrears of compensation were calculated to be $198,288.07. $185,498.63 was paid as reimbursement by the Corporation to WINZ under the Accident Compensation Act 2001 (the Act). The difference between the compensation payable and the benefits WINZ had paid, $12,789.45, was then paid to Mr Cullen. Mr Cullen claimed interest on the total compensation arrears (from 1992 when the entitlement to interest was created), but the Corporation paid interest calculated on only the balance of $12,789.45 in arrears paid to Mr Cullen.
The question was answered in the negative first by the District Court on appeal from the Corporation.[1] That Court then declined Mr Cullen’s application for leave to appeal to the High Court on the question.[2]
[1]Cullen v Accident Compensation Corp [2011] NZACC 206.
[2]Cullen v Accident Compensation Corp [2012] NZACC 306.
The High Court granted Mr Cullen special leave to appeal, but then also answered the question in the negative.[3] The High Court declined Mr Cullen’s application for leave to appeal to this Court.[4]
[3]Cullen v Accident Compensation Corp [2013] NZHC 941.
[4]Cullen v Accident Compensation Corp [2013] NZHC 2067.
This Court has power to grant special leave to appeal under s 163(2) of the Act. The principles applicable to an application for leave under s 67 Judicature Act 1908 apply equally to an application under s 163 of the Act.[5] The Court will exercise this power if satisfied that there is a serious question of law capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of a further appeal.[6] Other relevant considerations include the desirability of finality of litigation and the overall interests of justice.[7] The primary focus is on whether the question of law is worthy of consideration.[8]
[5]Knight v Accident Compensation Corp HC Christchurch CIV-2005-485-1582, 6 April 2006 at [18].
[6]Impact Manufacturing Ltd v Accident Rehabilitation and Compensation Insurance Corp HC Wellington AP266/00, 6 July 2001; Khan v Accident Compensation Corp HC Auckland CIV-2007-485-1632, 14 August 2008 at [5]; Ellwood v Accident Compensation Corp [2012] NZHC 2887 at [10]; and Waller v Hider [1998] 1 NZLR 412 (CA) at 413.
[7]Knight v Accident Compensation Corp, above n 5, at [18].
[8]Khan v Accident Compensation Corp HC Auckland CIV-2007-485-1632, 14 August 2008 at [5] and Downer Construction (New Zealand) Ltd v Silverfield Developments Ltd [2007] NZCA 355, [2008] 2 NZLR 591 at [33].
As the Courts below and the Corporation have accepted, the question in respect of which Mr Cullen seeks leave to appeal is a question of law involving both public and private interest. But is it a question capable of serious argument or is it one in respect of which, as the Courts below have found and the Corporation submits, Mr Cullen does not have a real prospect of success?
Notwithstanding Mr Schmidt’s careful and comprehensive submissions for Mr Cullen, we are satisfied for the following reasons that the question is not capable of serious argument.
First, the nature and scope of the Corporation’s liability under s 114(1) of the Act to pay interest “on any payment of weekly compensation to which the claimant is entitled” if payment is not made within the stipulated period must be ascertained from the text of the provision interpreted in light of its purpose and heading and the scheme of the Act read as a whole.[9]
[9]Interpretation Act 1999, s 5; Commerce Commission v Fonterra Co-operative Group Ltd [2007] NZSC 36, [2007] 3 NZLR 767 at [22]; and Fonterra Co-operative Group Ltd v The Grate Kiwi Cheese Co Ltd [2012] NZSC 15, [2012] 2 NZLR 184 at [13].
Second, the text of s 114 and its heading, “Payment of interest when Corporation makes late payment of weekly compensation”, makes it clear that the compensation to which the claimant is “entitled” and in respect of which interest is payable is the late payment of weekly compensation. There must in fact be a late payment of compensation to which the claimant was entitled before any interest is payable on the payment. This is clear from s 114(2) which provides that the Corporation is liable to pay “the interest” at the prescribed rate “from the date on which payment should have been made to the date on which it is made”.[10]
[10]Emphasis added.
Third, this interpretation is consistent with the purpose of s 114 which is to ensure that a claimant is not left out of pocket as a result of a late payment. To avoid this outcome, the Corporation is liable under s 114(2) to pay interest at the prescribed rate for the period the compensation was not paid. We do not accept Mr Schmidt’s submission that there is anything in the decision of this Court in Accident Compensation Corp v Miller about the legislative history and purpose of s 114 that contradicts this interpretation.[11]
[11]Accident Compensation Corp v Miller [2013] NZCA 141, [2013] 3 NZLR 312 at 39]–[40].
Fourth, s 252 of the Act deals with the situation that arises when a claimant receives a payment of an income-tested benefit under the Social Security Act 1964 in respect of a period and also establishes a claim to an entitlement from the Corporation in respect of all or part of the same period. As Toogood J pointed out,[12] it is clear from s 252 and its companion provision s 253 that Parliament intended that, to the extent overlapping entitlements may arise under both statutory schemes, such persons should receive assistance under one or other of the schemes, but not both.
[12]Cullen v Accident Compensation Corp, above n 3, at [28].
For present purposes, the relevant features of s 252 are:
(a)The obligation imposed on the Corporation by subs (4) to refund WINZ for the amount of any benefit paid by WINZ if it is established that the beneficiary would have been entitled under the accident compensation scheme to a payment of compensation under the Act.
(b)The amount of the refund is limited by subs (3) to the amount which the Corporation would have paid if the beneficiary had been receiving his or her entitlement under the Act during the relevant period.
(c)The benefit payments received by the beneficiary are regarded by subs (2) as having been paid in respect of the entitlement to compensation under the Act.
(d)The benefit payments received by the beneficiary are deemed by subs (6) to have been paid in respect of the entitlement to compensation “for all purposes”.
As Toogood J pointed out,[13] the purpose of s 252 is to prevent a beneficiary from retaining the benefit of payments made under the Social Security Act and claiming, in arrears, payments from the Corporation in respect of his or her entitlement under the Act.
[13]Ibid, at [33].
Finally, when ss 114 and 252 are read together it is clear that no interest is payable under s 114 on the amount of a Corporation refund to WINZ under s 252 because the claimant has not in fact received any late payment to which he or she was entitled in respect of which interest is payable. As we have emphasised, interest is only payable under s 114 on late payments of weekly compensation which have in fact been made to and received by the person entitled to them. We do not accept Mr Schmidt’s submission that the definition of the expression “entitlement” in ss 6 and 69 of the Act alters the conclusion we have reached. On the contrary, the definitions are consistent with our interpretation of the two provisions.
This means that in this case Mr Cullen was entitled under s 114 of the Act to the interest he received on the late payment of arrears of compensation of $12,789.45 which he in fact received, but he was not entitled to interest on the refund of $185,498.63 paid by the Corporation to WINZ under s 252 of the Act. Mr Cullen was out of pocket in respect of the late payment he received. He was not out of pocket in respect of the refund to WINZ.
We do not accept Mr Schmidt’s submission that this conclusion is inconsistent with Mr Cullen’s “entitlement” to the “gross” amount of compensation calculated under the relevant statutory formula and recognised by ss 114 and 252. The short answer is that, apart from the sum of $12,789.45, Mr Cullen had already received from WINZ the full amount to which he was entitled. In terms of s 114 the Corporation was not liable to pay him interest on the amount he in fact received from WINZ. No late payment was involved in respect of that amount.
Nor do we accept Mr Schmidt’s submission that this outcome results in a “windfall” for the Corporation. The Corporation has met its statutory obligation to refund WINZ the sum of $185,498.63. The fact that in these circumstances it is not liable to pay interest to Mr Cullen on that sum is not a “windfall”.
The application for special leave to appeal is therefore declined.
Solicitors:
Schmidt & Peart Law, Auckland for Applicant
Medico Law Ltd, Auckland for Respondent
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