A.C.C. overcharged by $32M—Court

Press, 20 October 1987, Page 6

A.C.C. overcharged by $32M —Court

PA . Wellington The High Court has ruled the Accident Compensation Corporation overcharged the meat industry about $32 million in A.C.C. levies.

The New Zealand Meat Industry Association told a court hearing earlier this month that it had decided to take action after A.C.C. levies unexpectedly tripled. Meat companies had not built this cost into their budgets, the association submitted. In a written judgment delivered yesterday, Mr Justice Heron said he had decided the case in favour of the association and its member companies. The A.C.C. should have calculated the levies at the rate in force at the beginning of the 1986-87 financial year, not the new rate set by Parliament at the end of the year. Meat companies withheld about $32.4 million

in A.C.C. levies pending the outcome of the hearing. This was the difference between the $8.9 million they would have had to pay under the old rates and the $41.3 million the A.C.C. was asking for under the new rates. Mr Justice Heron awarded legal costs to the meat industry association. He said there were various reasons why the A.C.C. levy rate should not have been applied retrospectively and the most telling were commercial reasons. “It must have been understood by the draftsmen that accident compensation levies would be an ongoing cost, as part of and in addition to the actual wages bill, likely to be reflected in the reco-

veries required by the employer during the appropriate financial year. “There is ample evidence in the . affidavits that the industry is embarrassed by the sudden increase in rates, for the commercial reasons I have given. I must say, I am not at all surprised.” The association’s executive director, Mr Peter Blomfield, said the High Court’s decision had clearly vindicated the export meat industry’s stance. “This is a significant victory and it will affect all employers in the country. We took to court a matter of principle and the court has now fully endorsed our view of the A.C.C. legislation,” Mr Blomfield said. The association had

taken legal action only after attempts to seek some relief from the corporation had failed. It would move immediately to recover money confiscated from meat companies by the Inland Revenue Department on the instructions of the A.C.C. The money was taken to go towards unpaid A.C.C. levies. The A.C.C. corporate affairs manager, Mr Barry Davis, said the corporation had just found out about the decision and would want to study it in detail. “But we will almost certainly appeal against the decision,” he told NZPA. He did not want to make any more comment on the matter in the meantime. The Attorney-General, Mr Palmer, said the deci-

sion would be appealed against, and it would be “improper to comment on the merits of the case or the likely outcome of the appeal at this stage.” The High Court’s decision was a “major blow” to the Government, said the Opposition spokesman on justice, Mr Paul East “It is gratifying to see the High Court strike down retrospective taxation measures after the Opposition has . persistently spoken out against the manner in which-the Goverment has increased the A.C.C. levies,” he said. “It is unfortunate that the Government is not prepared. to uphold the principle against retrospective levies in the same manner as the Court”