Larkin v Accident Compensation Corporation

[2019] NZHC 3085

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-135

[2019] NZHC 3085

UNDER

the Accident Compensation Act 2001

IN THE MATTER OF

an appeal under s 162 of the Act

BETWEEN

KURTIS LARKIN (by his litigation guardian Penelope Hoare)

Appellant

AND

ACCIDENT COMPENSATION CORPORATON

Respondent

Hearing:	15 August 2019
Appearances:	T W R Lynskey and J V Copland for Appellant H B Rennie QC and C J Curran for Respondent
Judgment:	26 November 2019

JUDGMENT OF CLARK J

Introduction

[1]    This appeal concerns the proper interpretation of the transitional provisions of the Accident Compensation Act 2001 (the 2001 Act) for the payment of attendant care. The appellant, Mr Larkin, was denied back-payment of his attendant care costs between 1 July 1993 and 31 March 2002 on the basis that the respondent, the Accident Compensation Corporation (ACC), has no power to compensate Mr Larkin for that period.  Mr  Larkin’s  application  for  review  of  that  decision  was  declined  on  16 November 2012. Mr Larkin then appealed that decision to the District Court

LARKIN (by his litigation guardian Penelope Hoare) v ACCIDENT COMPENSATION CORPORATON [2019] NZHC 3085 [26 November 2019]

through his litigation guardian, Ms Hoare, who is Mr Larkin’s mother. On 8 November 2018, Judge Walker dismissed Mr Larkin’s appeal.1

[2]    On 12 February 2019, Judge Harrison granted leave for Mr Larkin to appeal to this Court on the following question of law:2

Do sections 374 and 376 of the Accident Compensation Act 2001 confer any power on the respondent to compensate the applicant for constant personal attention/attendant care provided over the period 1 July 1993–31 March 2002?

Background

[3]    During his birth in 1992, Mr Larkin suffered a significant and permanent brain injury caused by the entry of foetal blood into the maternal circulation (foetal-maternal haemorrhage) and consequent oxygen deprivation (hypoxia). The injury has manifested in cerebral palsy, quadriplegia and epilepsy. As a result, Mr Larkin requires full-time care.

[4]    In 2005, an application was made to ACC on Mr Larkin’s behalf for cover for a treatment injury. On 2 March 2011, Judge Ongley held that Mr Larkin had suffered a treatment injury because the foetal-maternal haemorrhage was a result of a delay in the decision to deliver Mr Larkin by caesarean section.3 ACC began providing attendant care from 16 May 2011.

[5]    On 19 October 2011, ACC agreed to pay back-dated compensation for attendant care from 1 April 2002 (the commencement date of the 2001 Act) until    15 May 2011, but declined to provide compensation for attendant care under the predecessor legislation. It is the 19 October decision that is now challenged on appeal.

[6]    For completion, I record that a dispute over the number of hours of attendant care that Mr Larkin requires per week was resolved by Judge Mathers’ determination in 2014 that Mr Larkin is entitled to funding for 24-hour care.4

1      Larkin v Accident Compensation Corporation [2018] NZACC 177.

2      Larkin v Accident Compensation Corporation [2019] NZACC 12 at [5].

3      Larkin v Accident Compensation Corporation [2011] NZACC 60.

4      Larkin v Accident Compensation Corporation [2014] NZACC 311.

Statutory framework

[7]Section 374 of the 2001 Act is the key transitional provision in dispute:

374Compensation for pecuniary loss not related to earnings under  1972 and 1982 Acts: attendant care and household help

(1)This section applies if—

(a)a person was receiving compensation at a weekly rate of $350 or more immediately before 1 July 1992; and

(b)the compensation was paid under section 80 of the Accident Compensation Act 1982 or section 121 of the Accident Compensation Act 1972 and was for—

(i)   attendant care …

(ii)     … ; and

(c)the compensation was payable because of section 149(3) or (4) of the Accident Rehabilitation and Compensation Insurance Act 1992.

(2)The sections referred to in subsection (1)(b)—

(a)continue to apply to the person and to his or her entitlement to attendant care or household help; and

(b)can be used from time to time to reassess the person’s entitlement to attendant care or household help.

…

(5) For the purposes of subsection (1), a person  was  receiving compensation immediately before 1 July 1992 if he or she was entitled to do so because of a decision on review or appeal given on or after that date on an application for review made before 1 October 1992.

[8]Section 376 of the 2001 Act is another relevant transitional provision:

376Compensation for pecuniary loss not related to earnings under  1972 and 1982 Acts

(1)Section 439 of the Accident Insurance Act 1998 continues to apply in respect of a person who was entitled to receive, immediately before 1 April 2002, compensation under that section.

[9]Section 439 of the Accident Insurance Act 1998 (the 1998 Act) provides:

439Compensation for pecuniary loss not related to earnings under  1972 and 1982 Acts

(1)Subsection (2) applies if, because of section 149(1) or (2) of the Accident Rehabilitation and Compensation Insurance Act 1992, a person was entitled  to  receive  any  compensation  on  or  before  31 December 1992 or 30 June 1993, as the case may be, under—

(a)Section 121 of the Accident Compensation Act 1972; or

(b)Section 80 of the Accident Compensation Act 1982.

(2)Compensation not paid by the former Corporation before those dates under those sections remains payable.

[10]   The relevant parts of s 149 of the Accident Rehabilitation and Compensation Insurance Act 1992 (the 1992 Act) provide:

149     Compensation for pecuniary loss not related to earnings

(1)Where any person was receiving or entitled to receive any compensation under section 121 of the Accident Compensation Act 1972 or section 77 or section 80 of the Accident Compensation Act 1982 immediately before the 1st day of July 1992, that section shall continue to apply to payments in respect of that person until the 31st day of December 1992 as if those sections had not been repealed.

(2)The reference to the 31st day of December 1992 in subsection (1) of this section shall be read as the 30th day of June 1993 in respect of compensation under section 121 of the Accident Compensation Act 1972 or section 80 of the Accident Compensation Act 1982 that is compensation in respect of—

(a)Provision of attendant care (being personal care and mobility assistance necessary for the injured person); or

…

(3)Notwithstanding subsections (1) and (2) of this section, where any person was receiving compensation under section 121 of the Accident Compensation Act 1972 or section 80 of the Accident Compensation Act 1982 in respect of attendant care (being personal care and mobility assistance necessary for the injured person) at a weekly rate of $350 or more immediately before the 1st day of July 1992, those sections shall continue to apply in respect of that person as if those sections had not been repealed and the entitlements in respect of the person may be reassessed from time to time under those sections.

…

(10) For the purposes of subsections (3), (4), and (7) of this section,  a  person shall be deemed to be receiving compensation immediately before the 1st day of July 1992 if that person has an entitlement to do so by virtue of a decision on review or appeal given after that date,

and the application for review was made before the 1st day of October 1992.

Scope of the dispute

[11] Several aspects of the interpretation of the transitional provisions are not in dispute. The parties agree ACC can only pay compensation to Mr Larkin if it is empowered to do so under the 2001 Act. Mr Larkin has cover under s 360 (the relevant transitional provision) and is entitled to attendant care under s 81. Section 83(3) empowers ACC to make back-dated payments for attendant care, but only back to the commencement date of the 2001 Act.5 Any power to make back-dated payments beyond the commencement date can only arise from the relevant transitional provisions, namely ss 374 and 376 of the 2001 Act.

[12]   Section 376 applies to a person “entitled to receive” compensation under the 1972 and 1982 Acts. Mr Larkin is such a person. The ultimate effect of s 376 is that aspects of s 149 of the 1992 Act continue to apply, namely s 149(1) and (2). This is achieved indirectly through the transitional provision in the 1998 Act.

[13]   Section 374, on the other hand, applies to a person who “was receiving compensation at a weekly rate of $350 or more immediately before 1 July 1992”.  Mr Larkin was not receiving any compensation in 1992 because no application for cover was made on his behalf until 2005. The effect of s 374 is that s 149(3) of the 1992 Act continues to apply for a person covered by s 374.

[14]   The key distinction between s 149(1) and (2) of the 1992 Act and s 149(3) of that Act relates to the period for which cover was available at the higher rates provided by the 1982 Act. Both parties acknowledged the 1992 Act was designed to be a less generous regime than the 1982 Act and that the transitional provisions of the 1992 Act arose in part to deal with the impact of that change on claimants.

[15]   Section 149(1) provided that any person “receiving or entitled to receive any compensation” under the relevant provisions of the 1982 Act before the commencement of the 1992 Act would continue to receive compensation under the

5      Rangiwhetu v Accident Compensation Corporation HC Wellington CIV-2006-485-1402 at [67].

1982 Act provisions until 31 December 1992. Section 149(2) extended this period

until 30 June 1993.

[16]   Section 149(3) provided that any person “receiving compensation” before the commencement of the 1992 Act for attendant care under the relevant provisions of the 1982 Act at “a weekly rate of $350 or more” would continue to receive, indefinitely, compensation under the 1982 Act provisions. Section 149(3) may be seen therefore as resulting in more generous outcomes than s 149(1).

[17]   The key question is whether Mr Larkin is entitled to compensation under      s 149(3) as opposed to s 149(1), despite the fact he was not “receiving compensation

… at a weekly rate of $350 or more” (the language of s 149(3)). Both parties accept Mr Larkin is at least entitled to compensation from the date of his birth in 1992 until 30 June 1993.

Appellant’s arguments

[18]   Mr Lynskey submitted that giving the transitional provisions their ordinary and natural meaning would result in a lacuna in the law for a person such as Mr Larkin. He argued that the transitional provisions were poorly drafted and what the respondent describes as carefully crafted legislation was in fact patchwork. It is appropriate to interpret s 374 as applying to a person who was not receiving compensation immediately before 1 July 1992 but who should have been. Mr Lynskey was emphatic that Parliament could not have intended to leave someone in Mr Larkin’s position with no compensation at all.

[19]   In support of his argument, Mr Lynskey traversed the Parliamentary debates in some detail, underscoring the political motivations and philosophies at the time the 1992 Act was enacted. Mr Larkin’s key point was that the amendments were about inclusion and making provision for those with serious injury.

[20]   Mr Lynskey explained that because there is no transitional provision in the 2001 Act for entitlements under the 1992 Act itself, there is no scope for ACC to pay

compensation on the  basis  of  the  regulations  promulgated  under  that  Act.6  In Mr Lynskey’s submission, Parliament had in mind that anyone excluded from extended cover under the 1982 Act would be eligible under the new regulations. As that is not the case for Mr Larkin, Mr Lynskey submitted there is a legislative gap. He said it was unthinkable that Parliament could have intended to reduce a seriously injured claimant’s entitlement to zero.

[21]   In support of Mr Larkin’s position, Mr Lynskey cited Taylor v Taite, in which Chambers J applied the transitional provisions of the 1992 Act to a person who should have been receiving compensation for attendant care at a weekly rate of more than

$350, but was in fact receiving less than $350 due to ACC’s misapplication of the law.7

[22]Mr Lynskey referred to the following observation of Baragwanath J in

Chief Executive of the Department of Labour v Yadegary:8

I recognise that sometimes the Court is compelled, in order to avoid an absurd result, to read words into a statute.

[23]Mr Lynskey also referred to the remarks of the Court of Appeal in P v F:9

… we accept that there will be cases in which the Court can fill in gaps, that would only be appropriate where new legislation has failed to foresee and thus provided for a particular set of facts.

[24]   Mr Lynskey argued the phrase “$350 or more” was adopted by Parliament as shorthand for “seriously injured” claimants.

Respondent’s position

[25]   Mr Rennie QC submitted that Parliament clearly distinguished in s 149 of the 1992 Act between those who were “receiving” compensation under the 1982 Act and those who were “entitled to receive” such compensation. He argued that the distinction was deliberate and the logic behind it was rational. In his submission,

6      Accident Rehabilitation and Compensation Insurance (Social Rehabilitation – Attendant Care) Regulations 1993.

7      Taylor v Taite HC Rotorua M13/00, 23 May 2002 at [28].

8      Chief Executive of the Department of Labour v Yadegary [2008] NZCA 295, [2009] 2 NZLR 495 at [76] per Baragwanath J.

9      P v F [2015] NZCA 317, [2015] 3 NZLR 758 at [25].

Parliament was rightly more concerned about the transitional impact on those who were already reliant on cover at the 1982 Act levels (as long as they fell within the category of claimants receiving more than $350 per week). In other words, there was no oversight.

[26]   Mr Rennie submitted that to read s 374 in the way advocated on behalf of   Mr Larkin would do violence to the language of that section and s 149 of the 1992 Act, upon which s 374 is based. He characterised Mr Lynskey’s approach as “legislative surgery”. Mr Rennie highlighted s 149(10), which deemed a person with an entitlement to compensation by virtue of a decision on review or appeal given after the relevant date to have been receiving compensation before that date (as long as the appeal or review had been filed within a certain time thereafter). Subsection (10) demonstrated Parliament had turned its mind to the position of individuals who were entitled to receive, but were not receiving, compensation at the relevant time.

[27]   Responding to Mr Lynskey’s suggestion that “$350 or more” was legislative shorthand for the “seriously injured”, Mr Rennie pointed out that Parliament had reduced the threshold figure from $480 to $350 and there was no basis therefore to argue Parliament actually meant the provision to apply to those who were “seriously injured” regardless of their compensation status.

[28]   Mr Rennie referred to several decisions of the Court of Appeal and to Winkelmann J’s decision in New Zealand Guardian Trust Co Ltd v Pora as supporting the interpretation advanced by ACC.10 He emphasised that purposive statutory interpretation is not a license to abandon clear and coherent statutory language.

Discussion

[29]   I am unable to accept the  arguments  advanced  on  behalf  of  Mr  Larkin. Mr Lynskey submitted that s 374 should be read as if the words that I have italicised below were impliedly part of the provisions:

10 Campbell and Handley v Accident Compensation Corporation CA138/03, 29  March  2004; Bosman v Accident Compensation Corporation [2007] NZCA 482; and New Zealand Guardian Trust Co Ltd v Pora [2007] NZAR 1.

374Compensation for pecuniary loss not related to earnings under  1972 and 1982 Acts: attendant care and household help

(1)This section applies if—

(a)a person was receiving or should have received / or was entitled to receive compensation at a weekly rate of $350 or more immediately before 1 July 1992; and

…

(6) A person shall be deemed to have made a written application to the Corporation for attendant care on 1 July 1993 if he or she was entitled to receive compensation at a weekly rate of $350 or more immediately before that date because of a decision on review or appeal on an application for review made after 1 October 1992.

[30]   Section 149(1) clearly distinguishes between two groups of claimants: those receiving compensation and those entitled to receive compensation. When s 149(3) was enacted, Parliament omitted any reference to those entitled to receive compensation. The distinction was the subject of comment by the Court of Appeal in Campbell and Handley v ACC.11

[31]   As Judge Walker in the decision under appeal accurately observed “the wording of s 149 is clear, and the distinction between the wording of s 149(1) and     s 149(3) deliberate” and has been “transported into later legislation without change”.12

[32]   There is no ambiguity in either s 149 of the 1992 Act, or s 374 of the 2001 Act. Mr Larkin does not fall within the clear words of either because he was not receiving compensation for attendant care at a weekly rate of $350 or more immediately before 1 July 1992. By his approach to s 149, the appellant collapses the distinction that Parliament purposefully drew between those in actual receipt and those entitled to receive but not in fact receiving. The position may be summarised:

(a)Where s 149(1) treated both groups of claimants in the same way,       s 149(3) did not. Those who, as at 30 June 1992, were in actual receipt of compensation at a weekly rate of $350 or more were designated by s 149(3) to receive (the more significant benefit of) ongoing

11     Campbell and Handley v Accident Compensation Corporation, above n 10 at [43].

12     Larkin v Accident Compensation Corporation, above n 1, at [104]–[105].

compensation beyond the 30 June 1993 statutory end-date.

(b)The legislature’s distinct treatment of, or approach to, the two categories is reinforced by s 149(10), which expressly deemed a limited subset of merely “entitled” persons to be in actual receipt for the purpose of s 149(3). As Mr Rennie submitted, the limited conversion between the two distinct groups reinforces the legislative intention to statutorily distinguish the distinct concepts of actual receipt and mere entitlement.

(c)Mr Lynskey’s approach would render redundant s 374(5), which mirrors s 149(10).

(d)While it is not strictly necessary to refer to the Parliamentary debates they do show that, in enacting s 149(3), Parliament had firmly in mind the need to protect claimants who were already receiving payments from the adverse effects of a transition:13

The Government has also made provision for the grandparenting of compensation measures for persons who receive attendant care as a result of very severe accidents … The Government had accepted that it is very difficult to make downwards adjustments to the finances of that group. It has said to those persons that they can continue with their current level of benefits, and that they will be able to make a choice in the future if they want to migrate to the new regulations.

(e)In Campbell and Handley v Accident Compensation Corporation, the Court of Appeal recognised the distinct legislative treatment of those actually receiving payments.14

The terminology, and in particular the words “was receiving compensation”, suggest that the amendments apply only in relation to claimants who were actually receiving payments prior to 1 July 1992 at a weekly rate of $350 or more.

(f)Where Mr Lynskey would draw support from Taylor v Taite, that

13     (22 June 1993) 536 NZPD 16230 (Hon Bill Birch, Minister responsible for ACC).

14     Campbell and Handley v Accident Compensation Corporation, above n 10, at [43].

decision is to be understood in its particular factual context.15 As Winkelmann J (as she then was) observed in response to an argument similar to that advanced now on behalf of Mr Larkin, the submission “misconstrues” Chambers J’s point which was simply that the savings provisions in the 1992 Act applied in that case and “it is not a tenable statutory construction to read in the phrase ‘or entitled to receive compensation’”.16

[33]   In response to the argument that the practical outcome for Mr Larkin is the product of legislative oversight, the respondent says the distinction between the two categories is logical and rational for the purposes of a transitional regime and the appellant’s effective rewriting of s 149 results in an outcome that is wholly inconsistent with the provision as enacted. I agree.

[34]   There are occasions when a court will notionally correct a provision that contains an obvious error or that does not properly express Parliament’s intention.17 Lord Nicholls explained the parameters of the courts’ powers of correction in Inco Europe Ltd v First Choice Distribution:18

It has long been established that the role of the courts in construing legislation is not confined to resolving ambiguities in statutory language. The court must be able to correct obvious drafting errors. In suitable cases, in discharging its interpretative function the court will add words, or omit words or substitute words. Some notable instances are given in Professor Sir Rupert Cross’ admirable opuscule, Statutory Interpretation (3rd edn, 1995) pp 93–105. He comments (p 103):

In omitting or inserting words the judge is not really engaged in a hypothetical reconstruction of the intentions of the drafter or the legislature, but is simply making as much sense as he can of the text of the statutory provision read in its appropriate context and within the limits of the judicial role.

This power is confined to plain cases of drafting mistakes. The courts are ever mindful that their constitutional role in this field is interpretative. They must abstain from any course which might have the appearance of judicial legislation. A statute is expressed in language approved and enacted by the legislature. So the courts exercise considerable caution before adding or

15 See [21] above.

16     New Zealand Guardian Trust Co Ltd v Pora, above n 10, at [32]–[35].

17     As explained in Burrows and Carter Statute Law in New Zealand (5th ed, LexisNexis, Wellington, 2015) at 312.

18     Inco Europe Ltd v First Choice Distribution [2000] 2 All ER 109 (HL) at 115.

omitting or substituting words. Before interpreting a statute in this way the court must be abundantly sure of three matters: (1) the intended purpose of the statute or provision in question; (2) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision Parliament would have made, although not necessarily the precise words Parliament would have used, had the error in the Bill been noticed. The third of these conditions is of crucial importance. Otherwise any attempt to determine the meaning of the enactment would cross the boundary between construction and legislation …

[35]   In my view, the source of Mr Larkin’s difficulty is not actually with s 374 or  s 376, but with the absence of a transitional provision in the 2001 Act providing for entitlements under the 1992 and 1998 Acts.

[36]   The essence of the injustice Mr Lynskey asserts is that Mr Larkin would not be entitled to any compensation if his interpretation were rejected. In response to ACC’s argument that s 374 and s 149 follow ordinary transitional logic, Mr Lynskey brought the argument back to the particular injustice for Mr Larkin. He challenged ACC to justify Mr Larkin’s receipt of zero compensation as a logical transition. However, when s 149 is considered in the context of the operation of the 1992 Act, which of course Parliament had in mind when it enacted that provision, all those entitled to compensation under the 1982 Act who had not yet made a claim would have been entitled to make a claim under the 1992 Act. If Mr Larkin were entitled to compensation under the 1992 Act, the asserted injustice would fall away.

[37]   Why is Mr Larkin not entitled to compensation under the 1992 Act? The 2001 Act enacted transitional provisions for entitlements under the 1972 and 1982 Acts but not for entitlements under the 1992 and 1998 Acts. It appears likely this was the result of the different policy framework under the 1992 and 1998 Acts. The 1992 Act established an “insurance-based scheme”.19 Consistent with the insurance-based nature of the scheme, compensation was only payable upon application for cover and for the particular entitlements sought.20 There was also a 12-month time bar on lodging a claim, although the Act was amended in 1995 to permit late claims if ACC was not prejudiced.21 The 1998 Act continued the insurance-based scheme and

19     Accident Rehabilitation and Compensation Insurance Act 1992, long title.

20     Section 63(2) and (4); see Rangiwhetu v Accident Compensation Corporation, above n 5, at [31].

21     Section 63(2) and (2A).

retained the 12-month time bar for claiming cover.22 The conscious omission of a transitional provision for entitlements under the 1992 and 1998 Acts is to be seen in that light.

[38]   Mr Rennie was concerned to emphasise ACC’s recognition of the seriousness of Mr Larkin’s injuries and the dedicated care his family has provided since his birth. ACC’s understanding of its powers, nevertheless, is correct. There is no legislative oversight. All of the compensation available to be paid  during, and prior to, the  2001 Act (when Mr Larkin’s claim was made) has been, and continues to be, paid. But ACC has no power to compensate Mr Larkin for care during the period 1 July 1993 to 31 March 2002 as he was not “receiving” payment immediately before 1 July 1992 and could not have been “receiving” payment as no claim for compensation was made until 2005, almost 13 years later.

[39]   The requirement of actual receipt in s 149(3) is clear. The provision carries with it no drafting imperfection of the kind justifying judicial intervention.

Result

[40]The appeal is dismissed.

Karen Clark J

Solicitors:

John Miller Law, Wellington for Appellant

Russell McVeagh, Wellington for Respondent

22     Accident Insurance Act 1998, s 61.