Airways Corporation of New Zealand Ltd v Postles

[2002] NZCA 155

IN THE COURT OF APPEAL OF NEW ZEALAND CA66/01

BETWEEN	AIRWAYS CORPORATION OF NEW ZEALAND LIMITED
Appellant

AND	BRUCE RAYMOND POSTLES
First Respondent

AND	ERIC ALFRED JOHNSON
Second Respondent

AND	FRANK EDWARD LESTER
Third Respondent

Hearing:	24 June 2002
Coram:	Tipping J Fisher J Paterson J
Appearances:	P R Jagose and E S K Dalzell for Appellant R R McCabe for Respondents
Judgment:	1 July 2002

JUDGMENT OF THE COURT DELIVERED BY TIPPING J

1. This appeal concerns discovery and inspection of documents.  The Employment Court (Judge Shaw) ordered the appellant (Airways) to discover and produce for inspection all the documents it had concerning its development, operation, review and extinguishing of a certain employment policy.  The policy concerned Airways’ approach to rehiring staff who had earlier been made redundant.  The respondents are air traffic controllers who claim the policy was applied to them in breach of their employment contracts and to their detriment.  Airways contends it did not apply the policy to them.  It admits the policy was in force at an earlier time.  The crucial issue is therefore whether the impugned policy was applied to the respondents by the appellant, as they contend.

2. In her judgment Judge Shaw noted Regulation 48(1) of the Employment Court Regulations 1991 which provides:

   48       Availability of disclosure

   (1)       In proceedings to which this regulation applies, any party may require any opposing party to disclose and make available for inspection any documents which are in the opposing party's possession, custody, or control and which are relevant to any disputed matter in the proceedings.

3. She also referred to the decision of Chief Judge Goddard in Kelly v ARCIC [1996] 2 ERNZ 693 and then said:

   It is against those parameters that I approach reg 48.  Mr Jagose would have the Court construe the words “relevant to any disputed matter in the proceedings” in a narrow way.  He argues that if a matter is not disputed on the pleadings then, relevant or not, there is no requirement for disclosure.  In my view, this is too narrow an interpretation.  Regulation 48 does not refer to any disputed matters in the pleadings but refers to proceedings – a more general term.  This suggests that the regulation contemplates disputes which go beyond the case as strictly pleaded.  (emphasis as in original)

4. Judge Shaw then referred again to Kelly’s case in which the Chief Judge had said:

   …. a matter may be relevant even if it is not one on which direct issue has been joined in the pleadings.

5. With respect we consider the Judge erred in law in drawing for present purposes a distinction between pleadings and proceedings.  The pleadings define the ambit of the proceedings and thereby define the issues to which questions of relevance must be related.  While the concept of relevance should not be looked at narrowly, it can never be divorced from the issues raised by the pleadings.  That is what is meant by the reference in Regulation 48 to any disputed matter in the proceedings. 

6. With that point in mind we do not consider the development of the policy has any relevance to the key issue beyond what is inherent in the concepts of operation, review and extinguishing of the policy, after the amendments which we consider should be made to the other parts of the Judge’s order are brought to account.  The order, as made, went beyond the proper scope of relevance, no doubt because of the Judge’s erroneous distinction between pleadings and proceedings which are, for this purpose, coterminous. 

7. The steps taken by the respondents to seek further discovery from Airways did not follow the relevant requirements for such an application.  While we do not consider this failure deprived the Employment Court of jurisdiction, the regulatory framework is there for a purpose and should have been followed.

8. For these reasons, and also for the reasons discussed with counsel at the hearing, the appeal is allowed to the extent of setting aside paragraph (a) of the order and amending the remaining paragraphs so that the order will now read:

   That the defendant produce for inspection all documents, including originals and copies (and including those stored on computer) of:

   (i)        all correspondence, emails, memoranda, file notes, minutes and other documents concerning the defendant’s operation of the policy after 7 April 2000, including any documents incorporated by reference therein; and

   (ii)       all correspondence, emails, memoranda, file notes, minutes and other documents concerning the defendant’s review of the policy, including any documents incorporated by reference therein; and

   (iii)      all correspondence, emails, memoranda, file notes, minutes and other documents concerning the defendant’s extinguishing the policy, including any documents incorporated by reference therein.

9. In spite of the respondents’ failure to follow the correct procedure and the fact that Airways had a justified complaint and has achieved some success in its appeal, we consider that costs in this Court should lie where they fall and we so order.

   Solicitors

   Chapman Tripp Sheffield Young, Wellington, for Appellants

   R R McCabe, Auckland, for Respondents