Morgan v Accident Compensation Corporation [2012] NZHC 1789 (20 July 2012)

Last Updated: 23 August 2012

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2011-488-528 [2012] NZHC 1789

UNDER The Injury Prevention, Rehabilitation and

Compensation Act 2001

IN THE MATTER OF an application for special leave to the High

Court pursuant to s 162 of the Act

BETWEEN REGINALD MORGAN Appellant

AND ACCIDENT COMPENSATION CORPORATION

Respondent

Hearing: 10 November 2011

Appearances: D Tuiqereqere for Respondent

J Robinson, Advocate for Appellant

Judgment: 20 July 2012

_{JUDGMENT OF PETERS J}

This judgment was delivered by Justice Peters on 20 July 2012 at 4 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date: ...................................

_{Solicitors: Medico Law Limited, Auckland: [e-mail]}

Copy for: J Robinson, Whangarei: [e-mail]

_{R Morgan, c/- P O Box 4407, Kamo, Whangarei}

MORGAN V ACCIDENT COMPENSATION CORPORATION HC WHA CIV-2011-488-528 [20 July 2012]

Introduction

[1] The Applicant, Mr Morgan, seeks special leave to appeal to the High Court from a decision of the Accident Compensation Appeal Authority (“the Authority”).1

The Respondent (“the Corporation”) opposes the application.

[2] I may grant leave only if the appeal raises a question of law or if the question involved in the appeal is one which by reason of its general or public importance or for any other reason ought to be submitted to the High Court for decision.2

[3] I note that the application for special leave was made marginally out of time, due to the ill health of the Applicant’s advocate, Mr Robinson. I allowed the extension of time necessary to make the application and I also allowed Mr Robinson to appear and make submissions on behalf of the Applicant when I heard the application.

Background

[4] In about 1975, the Applicant applied to the Corporation for earnings related compensation (“ERC”) under the Accident Compensation Act 1972 (“1972 Act”). The Applicant was a stock and station agent, and he suffered a serious injury in a motor vehicle accident. That accident had the effect of ending the Applicant’s career as a stock and station agent, and was an event which has affected the Applicant and his family very adversely over the years.

[5] The Corporation accepted the Applicant’s claim for ERC, determined the level of ERC to which it considered the Applicant was entitled and paid him accordingly.

[6] The period for which the Corporation paid compensation for the injury and for another injury in 1980 were the subject of later, successful applications for

1 _{Morgan v Accident Compensation Authority [2010] NZACA 10, 24 December 2010.}

2 Accident Compensation Act 1982, s 111.

review. However, more than 30 years after the original decision, on 17 December

2007, the Applicant filed an application to review the Corporation’s decision on the level of ERC that he would be paid. The basis for the application was a claim that, in determining the level of ERC, the Corporation had failed to take into account various benefits which the Applicant’s employer had allowed him, namely the use of a vehicle, and payment of his telephone bill and an expense allowance.

[7] It was common ground that the Applicant would require an extension of time if he were to pursue the proposed application for review. That was because the relevant legislative provision allowed the Applicant to apply for a review of the decision as to ERC within one month of receipt of notice of the decision “or such longer or shorter time as the Corporation might allow”.3

[8] The application for review came before a Corporation reviewer. On 2 May

2008 the reviewer declined to grant the extension of time that the Applicant required.

[9] The Applicant appealed the reviewer’s decision to the Authority. The

Authority dismissed the appeal.

[10] The Applicant subsequently applied to the Authority for leave to appeal to the High Court from the decision of the Authority. The Authority refused leave and the Applicant then made the present application.

Application

[11] Although the Applicant has made his application for special leave pursuant to s 162(3) and (4) of the Injury Prevention, Rehabilitation and Compensation Act

2001, I accept the submission for the Corporation that the relevant provision is s 111 of the Accident Compensation Act 1982 (“1982 Act”). The relevant parts of s 391(1) of the Accident Compensation Act 2001 (“2001 Act”) and s 111 of the 1982 Act read as follows:

391 Review and appeal proceedings for decisions under former Acts

(1) Part 9 of the Accident Compensation Act 1982 continues in force in order to apply to any decision made by the Corporation –

(a) under the Accident Compensation Act 1972 or the Accident

Compensation Act 1982; or

(b) ...

111 Appeal to High Court

(1) Where any party is dissatisfied with any order or decision of the Accident Compensation Appeal Authority, that party may, with the leave of the Authority, appeal to the High Court against that order or decision:

Provided that, if the Appeal Authority refuses to grant leave to appeal, the High Court may grant special leave to appeal.

(2) The Appeal Authority or the High Court, as the case may be, may grant leave accordingly on a question of law or if in its opinion the question involved in the appeal is one which by reason of its general or public importance or for any other reason ought to be submitted to the High Court for decision.

[12] The Applicant seeks special leave on the basis that the proposed appeal raises a question of law, namely:

Do s 66 of the Accident Compensation Act 2001 and the common law doctrine of spoliation create an evidential burden upon ACC when it is not possible to determine historic questions of fact because the Corporation has destroyed the relevant evidence in breach of s 66.

[13] Section 66 of the 2001 Act reads as follows:

66 Corporation must keep claims files

The Corporation must keep every claim file for at least 10 years after the date of the latest action the Corporation has recorded on the claim.

[14] The circumstances in which the Court may grant special leave were discussed in Kenyon v Accident Compensation Corporation,4 the relevant parts of which are as follows:

(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 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).

Discussion

[15] The reviewer and the Authority were required to decide whether they should exercise their discretion in favour of the Applicant and grant him an extension of time in which to make an application for review. In reaching a decision on that matter, they were required to consider whether it would be just to grant the extension, which in turn required them to consider the following matters:5

(a) the length of the delay beyond the time allowed; (b) the reasons for the delay;

(c) the strength and merits of the case on review; and

(d) the prejudice to the Corporation if the extension were granted.

[16] The main reasons the reviewer and the Authority declined to grant an extension were those in (c) and (d). I propose to confine myself to the Authority’s decision because that is the one principally in issue.

[17] Insofar as concerns (c), the Authority considered, rightly, that to succeed on the review he sought to bring, the Applicant would have to establish on the balance of probabilities that the Corporation’s original decision as to the level of ERC compensation was “manifestly wrong”. The Authority’s view was that the Applicant would have difficulty doing so, for the following reasons.

[18] In determining the amount of ERC that was to be paid to the Applicant, the Corporation would have had to consider information as to the Applicant’s then work and earnings’ history and, from that, would have had to determine the sum that the Corporation considered “fairly and reasonably” represented the Applicant’s “normal average weekly earnings”.6 Accordingly, if the Corporation’s decision as to the amount of ERC to be paid were to be reviewed now, evidence of these matters would be required, and likewise as to the matters that the Corporation had or had not taken into account in determining the amount of ERC to be paid.

[19] The Authority considered that it would be difficult, if not impossible, for the Applicant to establish that the original decision was manifestly wrong because the information originally available to the Corporation and as to the basis on which it made its decision was no longer available.

[20] The proposed question on appeal relates to the Authority’s conclusion on that point and on the issue of prejudice to the Corporation, referred to in [15](d) above. On that matter, the Authority considered that there was a clear risk of such prejudice on a review, because of the lack of the contemporaneous documents.

[21] For these reasons, the Authority confirmed the reviewer’s decision to decline

an extension.

Leave to appeal

[22] The Authority refused leave to appeal to the High Court on the proposed question because it did not consider that the outcome of any such appeal would alter the decision as to whether an extension ought to be granted, given the burden of proof that the Applicant would bear on any review.

This application for special leave

[23] A matter which is critical to the application for extension of time is the evidence that can now be adduced in support of and opposition to the application for review, if an extension were granted.

[24] When I heard this matter there was no evidence from the Corporation that it was not able to find the contemporaneous file for the calculation of the Applicant’s ERC in or about 1975 (“original file”). The reviewer and the Authority appear to have accepted at face value statements on behalf of the Corporation that it could not find the original file, although it may be that the Applicant had not pressed the point.

[25] In any event, a long serving employee of the Corporation, Mr A C Palmer, has now sworn an affidavit in which he reports on inquiries and investigations that he and other employees have made recently. In that affidavit, Mr Palmer states that the Corporation has undertaken a thorough search for the original file; that the Corporation cannot find the original file; that the Corporation’s records suggest that since at least 2003 it has used a “substitute” file for matters relating to the Applicant’s application for ERC; that it seems likely the original file has either been destroyed or mislaid; and that the earliest document on the substitute file is from

1999.

[26] Given this evidence, it is necessary to proceed on the basis that, at present, it is impossible to know what information the Corporation had when it determined the amount of ERC to be paid, and how it arrived at the amount that it did. The Applicant himself is able to adduce some relevant evidence but clearly the reviewer and Authority considered that evidence would not be insufficient to enable a

resolution of the proposed review, having regard to the interests of both Applicant and the Corporation. The question of law now sought to be put before the High Court derives from the decision that the reviewer and the Authority reached.

[27] I do not propose to grant special leave to appeal for the following reasons.

[28] First, any question of law sought to be put to the High Court on appeal should arise squarely from the decision against which the appeal is brought. The matter now sought to be raised in the High Court was not put to the reviewer or to the Authority when the extension were sought. With respect to the Applicant, it appears to be something of an afterthought.

[29] Secondly, even if the Court were to determine the question that the Applicant seeks to put to the High Court, and to do so in the Applicant’s favour, I am not satisfied that the Applicant’s prospects on an application for an extension of time would be much improved. The same question and the same considerations referred to in [15] would still arise and I would expect the answer to be the same. The Applicant submits that he should not be prejudiced by the Corporation’s inability to produce the original file. I do not consider there is any merit in this submission in this particular case. A party who seeks an extension of time requires an indulgence. The one month period given to lodge an application for review as of right is an indication that Parliament intended that an applicant should proceed promptly after receipt of the original decision. The longer a party leaves it to take steps, the greater the risk that practical considerations will affect the decision to grant or refuse the extension.

[30] Thirdly, the proposed question of law assumes both that s 66 of the 2001 Act applies and that it has been breached.

[31] I have reservations about both of these matters. I think it unlikely the Applicant could establish that s 66 is engaged in this case. That is because at present there is no evidence that the original file existed as of 2001. The Applicant’s advocate emphasised a handwritten note appearing at the foot of a typed letter from the Corporation to the Applicant dated 18 February 2002. That note might be read as

suggesting that the files for claims 75/022026 (that is, the claim for ERC made in about 1975) and for a later claim should be kept together. The note is not, however, evidence that the original file existed at that time.

[32] As for breach, even if s 66 were to apply, the original file may have been mislaid (rather than destroyed), in which case there may have been no breach. If the file has been destroyed, there is no evidence that it was destroyed after 2001 but within the 10 year period referred to in s 66, which period runs from the date of the last action the Corporation has recorded on the claim.

Result

[33] For the reasons given I decline this application for special leave to appeal. Costs are to lie where they fall.

..................................................................

M Peters J