Accident Compensation Corporation v Samuela

[2025] NZHC 2415

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2025-404-130

[2025] NZHC 2415

UNDER

The Accident Compensation Act 2001

IN THE MATTER OF

An appeal of a decision of the District Court under s 162 of the Act

BETWEEN

ACCIDENT COMPENSATION CORPORATION

Appellant

AND

SONNY SAMUELA

Respondent

Hearing:	On the papers
Counsel:	C J Hlavac for the appellant H Peart the respondent
Judgment:	25 August 2025

JUDGMENT OF BLANCHARD J

[Application for leave to appeal]

This judgment was delivered by me on 25 August 2025 at 11.00 am pursuant to Rule 11.5 of the High Court Rules 2016

Registrar/Deputy Registrar

Solicitors:

Young Hunter Lawyers, Christchurch Schmidt & Peart Law, Auckland

ACCIDENT COMPENSATION CORPORATION v SAMUELA [2025] NZHC 2415 [25 August 2025]

[1]    In a judgment dated 15 July 2025, I allowed an appeal by the Accident Compensation Corporation (ACC) against a District Court decision.1 I held that ACC was entitled to abate Mr Samuela’s weekly compensation payments by  the amount of leave payments he received during the period he was unable to work but still employed.2

[2]Mr Samuela seeks leave to appeal my decision to the Court of Appeal.

Background

[3]    The background to this proceeding is set out in my judgment allowing the appeal.3

[4]    In short, Mr Samuela was unable to work due to an injury. ACC initially refused to pay him weekly compensation for the period he was unable to work, and he was forced to take annual leave and sick leave. A subsequent review established that ACC was required to pay him weekly compensation. In calculating the amount of the weekly compensation, ACC reduced the payments to Mr Samuela by the amount of the leave payments he had received from his employer.

[5]    Leave payments can be made during employment (when it is taken) or on termination of employment (when it is “paid out”). The leave payments received by Mr Samuela were made during employment.

[6]    The key issue was  whether ACC  was  right, as  a matter of law,  to  abate  Mr Samuela’s weekly compensation payments by the amount of the leave payments he received.4 This turned on the definition of “earnings” in cl 51 of sch 1 to the Accident Compensation Act 2001 (the Act).

1      Accident Compensation Corporation v Samuela [2025] NZHC 1935.

2 At [58].

3      At [2]–[13].

4 At [4].

[7]    There are two definitions provisions in the Act that are relevant in this context. First, there is the general definition of “earnings” in s 6 of the Act. This definition includes leave payments made during employment.5

[8]    Second, there is the definition of “earnings” in cl 49 of sch 1 to the Act. This definition, in cl 49(3), expressly includes leave payments made on termination of employment but is silent about leave payments made during employment.

[9]    There is no doubt that cl 49 applies to cl 51.  The question is whether,  and   to what extent, the s 6 definition also applies.

District Court decision

[10]   In the District Court, Judge P R Spiller allowed Mr Samuela’s appeal against a Reviewer’s decision upholding ACC’s decision to abate his weekly compensation payments.6

[11]The Judge held that:

(a)the s 6 definition of “earnings”, which, as I have said, includes leave payments made during employment, does not apply in the context    of cl 51;7

(b)the definition of “earnings” that must be used in this context is the one in cl 49 only;8 and

(c)as cl 49(3) only expressly refers to leave payments made on termination of employment, it does not include leave payments made during employment.9

5      At [22] and [29].

6      Samuela v Accident Compensation Corporation [2024] NZACC 070.

7 At [27].

8 At [26].

9 At [26].

High Court decision

[12]   On appeal from the District Court, I recorded that the appeal turned on the meaning of “earnings” in cl 51 of sch 1 to the Act.10 I noted that there were two possible interpretations:11

(a)Interpretation one: the definition of “earnings” is the one in s 6 of the Act as modified by cl 49.

(b)Interpretation two: the definition of “earnings” is the one in cl 49 standing alone.

[13]   Interpretation one was the interpretation advanced by ACC. As I have said, the s 6 definition includes leave payments made during employment and cl 49 is silent about such leave payments. Thus, I considered that, if this interpretation was the correct one, then the meaning of “earnings” in cl 51 included Mr Samuela’s leave payments and ACC was right to abate them.

[14]   Interpretation two was the interpretation adopted by the Judge. He held that the s 6 definition has no application in the context of cl 51 and the definition that must be used is the one in cl 49. As I have said, cl 49(3) only expressly refers to leave payments made on termination of employment. Accordingly, as the Judge also held, it does not include leave payments made during employment. Thus, I considered that, if this interpretation was the correct one, then the meaning of “earnings” in cl 51 did not include Mr Samuela’s leave payments and ACC was wrong to abate them.

[15]I held that interpretation one is the correct approach for the following reasons:

(a)Clause 49 cannot stand alone as a definition for “earnings”. It only contains a partial definition. The relevant subclauses in cl 49 begin with “earnings includes”. The word “includes” suggests cl 49 is

10     Accident Compensation Corporation v Samuela, above n 1, at [25].

11 At [27].

intended to expand the s 6 definition of “earnings” rather than replace it.12

(b)The legislative history of cls 49 and 51 does not support interpretation two.13

[16]   I noted that, while interpretation one is correct in law, I consider it will result in unfairness in some cases and that the relevant clauses may well benefit from law reform.14

Legal principles

[17]   The test for granting leave to the Court of Appeal under s 163 of the Act is that the proposed appeal:15

(a)raises a question of law that is capable of bona fide and serious argument; and

(b)the question raises an issue of sufficient importance to outweigh the cost and delay of a further appeal.

ACC’s position

[18]   ACC accepts that the proposed appeal raises an issue of sufficient importance, but it does not consider that it is capable of serious argument. At the same time, ACC does not oppose the application and says it will abide the decision of the Court.

Analysis

[19]   Mr Samuela contends my decision was wrong in law because I identified the issue at appeal as involving a binary choice between two competing interpretations under the Act (interpretation one and two) and incorrectly framed his argument

12     At [36]–[40].

13     At [44]–[54].

14     At [41]–[43] and [56].

15 Accident Compensation Corporation v Anderson [2022] NZHC 2517 at [3]; Cullen v Accident Compensation Corporation [2014] NZCA 94 at [5]; and Knight v Accident Compensation Corporation HC Auckland CIV-2007-485-1632, 14 August 2008 at [5].

as solely relying on interpretation two. He says his interpretation is not based on cl 49 being a standalone provision that operates in place of the s 6 definition. He says he accepts the definition of “earnings” under s 6 of the Act applies but is modified by  cl 49. Mr Samuela contends the difference between the parties centres on how cl 49 modifies the general definition of “earnings” in s 6 — not whether the s 6 definition applies at all.

[20]   I am not sure it is right that I incorrectly framed Mr Samuela’s argument.  As I have said, the Judge rejected interpretation one and adopted interpretation two in that he held that s 6 has no application in the context of cl 51 and the definition that must be used is the one in cl 49 only. Mr Samuela appeared to be urging me to adopt the same approach:

4.18It is submitted that the term “earnings after his or her incapacity commences” at clause 51 has its own meaning for abatement purposes. It derives its context and meaning from clause 49. …

4.19ACC’s argument that earnings for the purposes of abatement under Clause 51(2) means earnings as defined in section 6 rather than clause 49(3) (and therefore includes all types of leave payments) is not stated or clearly implied in the Act. ACC says clause 49 is not a standalone definition section regarding earnings. In response, it is submitted, clause 49 is clearly a provision that exists to define how earnings are to be treated for abatement.

…

4.26 … ACC’s submissions fail to appreciate that earnings defined under section 6 is about the calculation of pre-incapacity earnings and ought not to interfere with the interpretation of the abatement provisions.

[21]   But even assuming Mr Samuela is right about this, I do not think it advances matters for him. His position is to accept that interpretation two (which, as I have said, was the one adopted by the Judge) is not viable, and, instead, to adopt interpretation one but to maintain that the resulting definition of “earnings” does not include leave payments made during employment. However, he has not explained how it can be that the resulting definition does not include leave payments made during employment, and nor do I see how it can be, when, as I have said, the definition in s 6 includes leave payments made during employment, and cl 49 is silent about such leave payments.

[22]   For these reasons, while I accept that the proposed appeal raises  an issue     of sufficient importance, I do not consider that it is capable of serious argument.       I therefore decline leave.

Result

[23]Mr Samuela’s application for leave is declined.

[24]Because ACC did not oppose the application, I make no order as to costs.

Blanchard J