Jones v Accident Compensation Corporation
[2016] NZHC 3044
•14 December 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2016-404-001765 [2016] NZHC 3044
UNDER the Accident CompensationAct 2001 IN THE MATTER
of an application for special leave pursuant to appeal to the High Court pursuant to
s 162 of the Act
BETWEEN
CRAIG JONES Appellant
AND
ACCIDENT COMPENSATION CORPORATION
Respondent
Hearing: 13 December 2016 Appearances:
Appellant in person
D Tuiqereqere for RespondentJudgment:
14 December 2016
JUDGMENT OF GILBERT J
This judgment is delivered by me on 14 December 2016 at 11.30 am pursuant to r 11.5 of the High Court Rules.
..................................................... Registrar / Deputy Registrar
Solicitors:
Medico Law Limited, Auckland
Copy to:
C Jones (Appellant)
JONES v ACCIDENT COMPENSATION CORPORATION [2016] NZHC 3044 [14 December 2016]
Introduction
[1] This is an application for special leave to appeal to the High Court on a question of law pursuant to s 162 of the Accident Compensation Act 2001 (the Act) against a decision of Judge Henare in the Auckland District Court delivered on
24 June 2015.1 Mr Jones wishes to contest the District Court’s finding that a letter
sent by Accident Compensation Corporation (the Corporation) to Mr Jones on
1 September 2013 was not a “decision” as defined in s 6 of the Act and was therefore
not amenable to review or appeal.
Background
[2] Mr Jones has cover under the Act for a back injury he sustained as a result of an accident in April 1992.
[3] On 17 February 2005, the Corporation determined that Mr Jones had vocational independence in terms of s 112 of the Act and was accordingly not entitled to receive further weekly compensation.
[4] When Mr Jones’ weekly compensation payments from the Corporation ceased, he applied for, and obtained, a benefit from Work and Income New Zealand (WINZ) but this was less than he had been receiving from the Corporation. Mr Jones also received from WINZ an accommodation supplement and a disability allowance.
[5] The Corporation’s decision to discontinue weekly compensation was reversed on appeal by Judge Cadenhead in the Auckland District Court in a judgment given on 26 August 2008.2 The Judge directed that Mr Jones “should be restored to his
entitlements”.3
[6] On 17 September 2008, the Corporation wrote to Mr Jones setting out its calculation of the arrears to which he was entitled. This letter reads:
1 Jones v Accident Compensation Corporation [2015] NZACC 163.
2 Jones v Accident Compensation Corporation DC Auckland, Decision No. 195/2008, 26 August
2008.
3 At [78].
Backdated weekly compensation
During the period 25/05/2005 to 13/01/2008 and 20/01/2008 to 07/09/2008 you did not receive the full amount of weekly compensation you were entitled to.
How much we owe you
Backdated compensation owed: $96,899.54
Less Work and Income benefit received when you should have been receiving ACC
weekly compensation $35,491.20
Total amount ACC owes you (before tax) $61,408.34
We will pay this amount to you shortly.
Important tax information about your payment
Weekly compensation is taxed in the year in which you receive it, not the year to which the payment relates.
This means the backpayment shown above will be included in your taxable income for the current tax year.
Depending on what other income you receive this year, you may need a different tax code for your backpayment. This is because your tax rate can change once your total income reaches a certain level.
We strongly suggest you phone the Inland Revenue Department … to find
out if:
· your backpayment should be taxed at a higher rate, or
· you need a special tax code for your backpayment
If you want to change your tax details, please let us know. To do this, please complete the attached ACC 1566 form and return it within 10 working days from the date of this letter. If you require a special tax code, you will also need to send us an ‘IR23 Special Tax Code’ form, which is available from Inland Revenue.
If we don’t hear from you, we will tax your backpayment according to your current tax code. This could mean you incur a tax debt, if the payment should have been taxed at a different rate.
Your right to a review
If you have any questions about this decision, please contact me. If you
aren’t satisfied with the decision, you can ask for an independent review.
The enclosed information Working Together tells you how to do this.
[7] Mr Jones did not apply to review this decision and the payment was duly made on 24 September 2008. The benefit received by Mr Jones from WINZ was repaid directly by the Corporation. This adjustment took no account of the
accommodation supplement and the disability allowance that Mr Jones had received from WINZ. Mr Jones has been progressively repaying these debts, which amount to approximately $10,000 for the accommodation supplement and $2,000 for the disability allowance.
[8] While Mr Jones did not challenge the Corporation’s calculation of the arrears as set out in the 17 September 2008 letter, he did apply for interest to be paid on these arrears. This request was initially declined but the Corporation conceded the issue after an appeal was made to this Court. The Corporation calculated the amount of interest payable as being $7,997.85 and notified Mr Jones of this on 22 August
2013.
[9] The correspondence that followed is central to the present proceeding and I accordingly set it out in full. On 11 September 2013, Mr Jones wrote to the Corporation in the following terms:
As per our phone call 10/9/13 I Craig Jones make the request of A.C.C. to pay my debt owning (sic) to Work and Income of the income support payments from the time of 25/5/2005 till 07/09/2008, A.C.C. legally (sic) stop my compensation payment from this time having put me through work independence assessment without medical grounds to do so, this being the third time A.C.C. has done to me, but the law clearly states in 110.3 of the Act A.C.C. must have medical grounds to put someone through the assessment and Judge Cadenhead made this clear in his judgment.
A.C.C. causes this debt and cause hardship to me
2 The cost in the district Court using Philip Schmidt lawyer was $1800 plus
GST in my interest case I would ask for this cost to be paid
3 when I receive my backdated compensation I was over tax by A.C.C.
4 A.C.C. did not pay the proper amount of interest on my late backed compensation of $96,899.54 instead only paying interest on $61,226.92 as they agreed to before the High Court appeal
Please pay the different please follow the law as to a decision on these matters Thank you
[10] The Corporation’s reply, dated 18 September 2013, is the letter that Mr Jones contends is a “decision” and is the subject of the current special leave application. It reads as follows:
Backdated weekly compensation
In your letter dated 11/09/13 you have requested clarification on a number of points which I will now address in this letter:
1. ACC has reimbursed Work and Income for the period 25/05/05 to
7/09/08. Payment of a total of $29,908.33 was made on 24/09/08. I
enclose a copy of the letter sent to you dated 24/09/08 advising you of this together with the calculation of backdated weekly compensation.
2. Legal costs from your appeal have been paid to Philip Schmidt on
9/07/13. Please discuss any invoice from Philip Schmidt with him.
3.I enclose a copy of the form dated 19/09/08 in which you elected tax code ‘M’ be applied to your backdated weekly compensation. I confirm the payment was made with this tax code, and any further queries concerning tax should be directed to the Inland Revenue Department.
4.ACC has referred your query regarding interest on backdated weekly compensation to our legal services. As such I am unable to offer further comment on this point at this stage.
I trust these comments resolve your concerns.
Application for review
[11] Mr Jones applied for review of the 18 September 2013 “decision”. The relief he sought was for the Corporation to pay his legal costs and his WINZ debts. The review was dismissed in a decision given on 13 February 2014. The reviewer concluded that the relevant decision regarding Mr Jones’ entitlement was made by the Corporation in its letter dated 17 September 2008 and that the letter sent five years later on 18 September 2013 merely served to clarify the Corporation’s position and was not a new “decision”. The reviewer’s reasoning is captured in the following passages of her decision:
One of the matters discussed in the letter is the calculation of backdated weekly compensation. On this issue, I agree with ACC that the operative decision regarding the payment of backdated weekly compensation is the decision dated 17 September 2008. This decision informed Mr Jones about the quantum of weekly compensation that he was entitled to. This letter also contained review rights. I understand Mr Jones has not reviewed this decision.
…
Overall, I find the September 2013 letter was written to provide further information to Mr Jones and to clarify what the present situation was on various issues. It was not a letter that concluded ACC’s findings on a particular entitlement, and merely restated ACC’s position on matters that had already been determined.
Appeal to the District Court
[12] In dismissing Mr Jones’ appeal from the reviewer’s decision, Judge Henare
stated:
[20] I agree with Mr Tuiqereqere’s submission that if Mr Jones was dissatisfied with the 2008 calculation, his recourse was to apply for a review then. Whilst I acknowledge Mr Jones’ frustration that he should not have had to review matters then (he having been successful in his appeal) the issue of quantum of calculation (which Judge Cadenhead did not determine) was a matter to be carried out. In terms of entitlements, Judge Cadenhead’s decision is of general effect, but does not determine what those entitlements are or their quantum.
[21] I also accept Mr Tuiqereqere’s submission that the Corporation does not calculate the amount to be reimbursed to WINZ under s 252 of the Act. That is the function and role of WINZ. If Mr Jones considered the amount was incorrect, his recourse in 2008 was against WINZ.
[22] Similarly, I accept Mr Tuiqereqere’s submission that the Corporation’s advice regarding the solicitor’s costs was not a decision. The Corporation did not make a determination regarding Mr Jones’ eligibility for payment of these costs, but advised him to approach his solicitor direct on the matter.
[23] I conclude the letter of 18 September 2013 is not a decision capable of review.
Application for leave to appeal to the High Court
[13] Mr Jones applied to the District Court for leave to appeal to the High Court. This was declined by Judge Harrison on 7 July 2016.4 Only the first ground of the application for leave remains relevant. This was dealt with by the Judge as follows:
[12] The grounds of Mr Jones’ application are firstly that he had not made any earlier application to the Corporation prior to September 2013 for it to consider repaying his accommodation supplement and disability allowance and there had consequently been no previous decision on that issue.
[13] As counsel for the Corporation submitted (at 3.14):
The Corporation did not purport, expressly or impliedly, in its letter dated 18 September 2013 to make any decision the applicant’s eligibility for an entitlement under the 2001 Act. As such, the letter was not a reviewable decision. The applicant’s arguments do not alter the fact that this matter pertains to a debt owed by the applicant to WINZ. The applicant’s complaint is in relation to the mechanism of payment of that debt; i.e. through a deduction from the applicant’s backdated weekly compensation in September 2008, or as WINZ has actioned, through payments directly from the applicant.
4 Jones v Accident Compensation Corporation [2016] NZACC 211.
[14] That ground does not raise any question of law that should be referred to the High Court for determination. The simple course of action open to Mr Jones was to challenge the Corporation’s calculation in 2008, and he did not do so.
Application for special leave to appeal to the High Court
[14] Mr Jones seeks special leave to appeal to this Court. He wishes to argue on appeal that the letter dated 18 September 2013 is a decision and that, contrary to the conclusion reached in the District Court, it addresses issues that were not resolved in the 17 September 2008 decision:
(a) repayment of the WINZ debts for the accommodation supplement and the disability allowance;
(b) legal costs;
(c) income tax paid on the arrears of weekly compensation; and
(d) interest on the arrears component paid to WINZ.
[15] At the hearing, Mr Jones advised that he does not intend to pursue repayment of the accommodation supplement paid to him by WINZ. The amount in issue under (a) is therefore of the order of $2,000 and relates solely to whether or not the Corporation should be required to fund repayment of the disability allowance.
[16] Mr Jones also advised at the hearing that he does not pursue his claim for payment of legal costs. Issue (b) has therefore fallen away.
[17] Mr Jones is plainly not entitled to special leave to appeal to this Court on issue (c), relating to tax. This is because this issue was not raised by Mr Jones in his original application for review, or in his appeal to the District Court, or in his application to the District Court for leave to appeal to the High Court. Self- evidently, the District Court can have made no error of law on this issue because it was not asked to determine it and did not do so.
[18] In any event, any issue as to the correct amount of tax payable is a matter between Mr Jones as the taxpayer and the Commissioner of Inland Revenue. Mr Jones recognises this and is currently pursuing the issue with the Inland Revenue Department.
[19] Mr Jones has already been denied special leave to appeal to this Court on the interest question, issue (d).5 Justice Palmer summarised his reasons for concluding that Mr Jones’ appeal had no reasonable prospect of success in the following passages of his judgment:
[11] The Court of Appeal’s decision in Cullen v ACC disposes of the application for special leave here. Mr Jones had the benefit of the WINZ payments at the time he should have been receiving the ACC payments. He was therefore not out of pocket for the amount of the WINZ payments. He was out of pocket for the amount the ACC payments exceeded the WINZ payments – but he was repaid that and received interest on that payment. He should not receive interest on the amount of the WINZ payments. If anyone should receive interest, it should be WINZ who was out of pocket for having wrongly paid Mr Jones. But, as Mr Jones noted in oral argument, the legislative regime does not recognise interest being payable to WINZ.
[20] Mr Jones’ attempt to re-litigate this issue, which has already been finally determined against him, is an abuse of the process of the Court.
[21] The only remaining issue is therefore whether special leave should be granted to enable Mr Jones to pursue further his claim that the Corporation should pay his debt to WINZ for the disability allowance he received amounting to some $2,000.
[22] The test applicable on an application for special leave was set out by Fisher J
in Kenyon v Accident Compensation Corporation:6
(a) The purpose of requiring leave for certain appeals is to ensure that scarce judicial time is allocated sensibly: Sandle v Stewart [1982]
1 NZLR 708 (CA)
(b) Although it is ultimately a matter for the discretion of the Court, it will normally be necessary to show that there is an issue of principle at stake or that a considerable amount hinges on the decision, and that there is a reasonable prospect of success: Sandle; Manawatu
5 Jones v Accident Compensation Corporation [2016] NZHC 707.
6 Kenyon v Accident Compensation Corporation HC Wellington AP258/00, 19 December 2001 at
[15].
Co-op Dairy Company Limited v Lawry [1988] DCR 509; Brown v
Chowmein Fashions Limited 1993) 7 PRNZ 43.
(c) The fact that special leave is required is significant and suggests that leave ought not to be granted as a matter of course: O’Loughlin v Healing Industries Limited (1990) PRNZ 464.
(d) It is for the Applicant to show that leave is required in the interests of justice: Avery v No. 2 Public Service Appeal Board [1973]
2 NZLR 86 (CA).
(e) As leave has already been refused by the District Court, however, there will normally have to be some extraordinary factor which has not been properly taken into account: Brown v Chowmein Fashions Limited (supra).
[23] For the reasons that follow, the present application falls well short of meeting the high threshold required to justify the grant of special leave for a further appeal.
[24] First, I agree with the conclusion reached by the reviewer and Judges Henare and Harrison that the Corporation’s letter dated 18 September 2013 is not a decision. The Corporation does not purport to decide anything in this letter. Mr Jones’ contention that this letter is a “decision” is not capable of bona fide and serious argument.
[25] Second, even if that were not so, the question of whether or not the letter constitutes a “decision” in terms of s 6 of the Act does not raise any question of general principle that could justify a further appeal. The question turns on the proper interpretation of a particular letter.
[26] Third, the substance of the proposed appeal has no merit and is not seriously arguable. Mr Jones received payments from WINZ that he ought not to have received. At the same time, he should have been paid weekly compensation from the Corporation. He was never entitled to have both. The position has now been corrected. Mr Jones has received from the Corporation the weekly compensation plus interest to which he was entitled. He cannot also retain the benefit of the disability allowance he received from WINZ. I can see no reason why the Corporation should be expected to pay that debt for him.
[27] Finally, the amount in issue is modest and the proposed appeal raises no issue of general principle or public importance that could justify the cost and delay of a further appeal.
Result
[28] The application for special leave to appeal to the High Court is dismissed.
[29] There is no issue as to costs.
M A Gilbert J
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