ACC v Kearney (Interest on Back-Dated Weekly Compensation)

Accident Compensation Corporation (ACC) v Robert Kearney
Court of Appeal 15 April 2010.

On 13 February 1985, Mr Robert Kearney suffered injuries to his wrist and femur in a motor accident. Because of the accident Mr Kearney was unable to return to work as a saw doctor. Mr Kearney retrained as a pastor. In 1991, ACC advised Mr Kearney that they were terminating his weekly compensation payments as he was now able to resume full time employment as a pastor.

In 2003, Mr Kearney appealed the 1991 decision. The Review Officer held that ACC had unlawfully cancelled Mr Kearney’s compensation. This was because under the 1982 act a complainant was to receive compensation if they could not do the job they held prior to injury. Because of this, Mr Kearney was awarded a backdated sum. The issue in this case was whether Mr Kearney should receive interest on this payment, and if so when should it be backdated to.

The Review Officer held that interest was payable from 19 August 2003. ACC reasoned that this was the time that they had received all information necessary to enable calculation of the payment.

Mr Kearney submitted that he believed the interest should be paid from 1 June 1992, “as and when the payments are due.”

The decision: There were concerns over whether it was s 72 of the Accident Rehabilitation and Compensation Act 1992, s 101 of the Accident Insurance Act 1998 or s 114 of the Accident Compensation Act 2001 that covered Mr Kearney’s interest payments.

The judges found that all three acts covered the payment for the years that they were in force. However, the judges stated that, “for present purposes, the three provisions [were] identical”.

Chambers J, believed these sections entitled Mr Kearney to interest from, “1 month after the Corporation…has received all information necessary to enable the insurer to calculate”, a payment. ACC stated that the date they received all information was 19 August 2003 and that this is when interest should be applied from. While Mr Kearney believed that the date interest should be charged from was 31 July 1991 when payments were ceased because at that time they had all the information they required to make payments.

Chambers J, agreed with Mr Kearney because ACC was solely to blame for Mr Kearney not receiving compensation. Chambers J, believed that in deciding how the provision should be read one must look to the intention of parliament. The judge did not believe parliament would have intended “the Corporation to be able to represent to an accident victim it (wrongly) did not need any further information, and then later be able to take advantage of that error. In short Parliament would not have envisaged a situation where the Corporation sought to benefit from its own wrong.”

Conclusion: s. 72 of the Accident Rehabilitation and Compensation Insurance Act 1992, s. 101 of the Accident Insurance Act 1998 and s 114 of the Injury Prevention, Rehabilitation and Compensation Act 2001 are substantially similar. Where ACC is at fault they should not be able to benefit from their own wrong doing.

Cases Referred to:
Accident Compensation Corporation v Broadbelt [1990] 3 NZLR 169 (CA)- interest is only payable if authorised by statute.
Unwin v Accident Rehabilitation and Compensation Insurance Corporation DC Wellington 21/97 14 February 1997 – the 1992 act can backdate interest to prior to the act.
Robinson v Accident Compensation Corporation [2007] NZAR 193 (CA) s 72 of the 1992 Act, s. 101 of the 1998 Act, and s 114 of the 2001 Act use “materially the same language”.
Salt v Governor of Pitcairn and Associated Islands [2008] NZCA 128, [2008] 3 NZLR 193- Parliament would not envisage a situation where someone could benefit from their own wrong.