Davies (Peter) v Police [2007] NZCA 484; [2008] 2 NZLR 645; (2007) 23 CRNZ 858; (2007) 5 NZELR 1 (2 November 2007)

Last Updated: 2 February 2018

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA101/07
[2007] NZCA 484

BETWEEN PETER MILES DAVIES
Appellant

AND NEW ZEALAND POLICE
Respondent

Hearing: 12 June 2007

Court: William Young P, Hammond and Wilson JJ

Counsel: C R Gates for Appellant
A M Powell and K Laurenson for Respondent

Judgment: 2 November 2007 at 11am

JUDGMENT OF THE COURT

1. Neither s 317(1) of the Injury Prevention, Rehabilitation, and Compensation Act 2001 nor s 32(5) of the Sentencing Act 2002 prevents the award of reparation to compensate for loss of earnings not compensable under the former Act.

B The appeal is therefore dismissed.

C No order as to costs.
____________________________________________________________________

REASONS OF THE COURT

(Given by Wilson J)

Introduction

[1] Following conviction in the District Court on a charge of careless use of a motor vehicle causing injury, the appellant was ordered under section 32 of the Sentencing Act 2002 (the Sentencing Act) to pay to the victim of his driving a substantial sum to compensate her for the difference between her resultant loss of income and that part of her loss for which she was compensated under the provisions of the Injury Prevention, Rehabilitation, and Compensation Act 2001 (the Compensation Act).
[2] The appellant contended on appeal to the High Court that s 317 of the Compensation Act precluded the making of such an order.
[3] Panckhurst J dismissed the appeal (CH CRI-2006-409-203 19 December 2006) but on 7 March 2007 granted leave to the appellant, pursuant to s 144(2) of the Summary Proceedings Act 1957, to appeal to this Court on the following question of law:

Pursuant to the Sentencing Act 2002 may reparation be awarded to a victim to compensate for the earnings entitlement shortfall (20%) not covered under the Injury Prevention, Rehabilitation and Compensation Act 2001, or does the latter Act prohibit such an award?

Issues

[4] Section 317(1) of the Compensation Act reads in material part:

No person may bring proceedings independently of this Act, whether under any rule of law or any enactment, in any court in New Zealand, for damages arising directly or indirectly out of –

(a) personal injury covered by this Act ...
[5] Section 32(5) of the Sentencing Act provides in material part:

... the court must not order the making of reparation in respect of any [loss or damage consequential on any emotional or physical harm] for which the court believes that a person has entitlements under [the Compensation Act].

[6] For the appellant, Mr Gates submitted that s 317(1) applied so as to prevent the making of the order. In the alternative, counsel contended, s 32(5) applied because the relevant entitlement was to earnings-related compensation generally, and not the 80 percent of the lost earnings which was payable under the Compensation Act.
[7] For the respondent, Mr Powell submitted that, on their proper analysis, neither s 317(1) nor s 32(5) applied.
[8] The appeal thus raises two narrow issues of statutory interpretation, the first whether s 317(1) applies and the second whether s 32(5) applies.

Section 317(1)

[9] We are in no doubt that s 317(1) does not apply so as to prevent compensation for loss of earnings being ordered under the Sentencing Act.
[10] In short, the charge of careless use of a motor vehicle causing injury did not come within the phrase “proceedings ... for damages arising directly or indirectly out of ... personal injury”. To the contrary, the bringing of the charge was not a claim for damages but the commencement of a criminal prosecution, in the course of which the Judge awarded reparation as part of the sentence.
[11] As Mr Gates accepted in the course of argument, if s 317 were breached it was breached when the prosecution was commenced. But, at that time, the victim had no claim for damages, or even an expectation of their award.
[12] If s 317(1) applies to the charge of careless use causing injury, it must also apply to any prosecution where injury had resulted. On Mr Gates’ argument, a court would therefore have no power to award compensation to the victim of an assault. Nor would a court have had the power to direct that part of the fine be paid to an injured employee upon conviction of an employer under the provisions of the Health and Safety in Employment Act 1992. Prior to the enactment of the Sentencing Act, and at a time when the Compensation Act was in force, that procedure was permitted by the provisions of the Criminal Justice Act 1985.
[13] Neither the wording of the section nor policy considerations could justify an interpretation with these consequences.

Section 32(5)

[14] Mr Gates accepted that there is an ambiguity in s 32(5) as to whether it applies only to earnings-related compensation actually paid under the Compensation Act or extends to the “topping-up” of that compensation to provide full recovery.
[15] Counsel submitted that the latter interpretation should be preferred, because otherwise defendants and their insurers would be exposed to a liability which they had not anticipated when entering into contracts of insurers.
[16] For a number of reasons, we do not accept this submission.
[17] First, the legislative history supports the interpretation that the intention of s 32(5) is to exclude from a sentence of reparation only compensation paid under the provisions of the Compensation Act.
[18] Section 32 corresponded to cl 29 of the legislation when it was introduced as the Sentencing and Parole Reform Bill. Clause 29 permitted reparation for emotional or physical harm consequential on offending. The report of the Justice and Electoral Committee recommended that cl 29 be amended to remove the power to award reparation for physical harm because it was covered under accident compensation legislation.
[19] Because this is the rationale of s 32(5), there is no basis for bringing within its ambit losses which are not compensated under the provisions of the Compensation Act.
[20] More particularly, there can be no justification for construing s 32(5) so as to permit reparation for emotional harm but not for the consequences of physical harm which are not otherwise compensated.
[21] Secondly, s 69(1)(c) of the Compensation Act specifies that the “entitlements” provided under that Act include “weekly compensation”, which is defined in s 2 as the compensation for loss of earnings which is “payable” by the Accident Compensation Corporation. Payment of the remaining 20 percent of lost earnings is therefore not an entitlement under the Compensation Act. The closing words of s 32(5) make clear that it applies only where there are “entitlements under the [Compensation Act]”.
[22] Thirdly, s 33(1)(c)(ii) of the Sentencing Act permits a Court to obtain a report, in the case of loss or damage consequential on physical harm, on “the extent to which the person who suffered the loss or damage is likely to be covered by entitlements under the [Compensation Act]”. The obvious intention is that the consequences of physical harm may be the subject to a reparation order unless they are compensated under the Compensation Act.
[23] On the one hand, there is to be no “doubling up” of recovery under the Compensation Act and the Sentencing Act. On the other hand, the consequences of physical harm are not to fall outside both Acts.
[24] Fourthly, s 7(1)(d) of the Sentencing Act provides that one of the purposes of sentencing is “to provide reparation for harm done by the offending”. That purpose could not be achieved if a court were unable to order reparation for that part of a victim’s lost earnings which are not compensable under the Compensation Act.
[25] Fifthly, s 10 of the Sentencing Act requires the court to take into account any offer by the offender to make amends. Such an offer could include the “top-up” of earnings-related compensation under the Compensation Act. The court would then have to take the offer into account and, if it thought fit, could order the “top-up” compensation to be paid.
[26] Sixthly, in the light of this Judgment, insurers will readily be able to specify the extent of the cover which they are providing as from the date of renewal of existing policies, or the commencement of new policies, and to set premiums accordingly.
[27] For all these reasons, s 32(5) should be construed as applying only to compensation actually paid.

Result

[28] Neither s 317(1) of the Compensation Act nor s 32(5) of the Sentencing Act applied so as to prevent the District Court Judge from ordering the appellant to compensate the victim for the difference between the earnings-related compensation payable under the Compensation Act and her actual loss of earnings.
[29] The appeal is therefore dismissed.
[30] Because the issues on appeal arose in the context of a criminal prosecution, we make no order as to costs.

Solicitors:
DLA Phillips Fox (Auckland) for appellant
Crown Law (Wellington) for respondent