BETWEEN STATE INSURANCE LIMITED Appellant AND FRANK ALFRED BROOKER

[2001] NZCA 467

IN THE COURT OF APPEAL OF NEW ZEALAND CA58/01

BETWEEN	STATE INSURANCE LIMITED
Appellant

AND	FRANK ALFRED BROOKER
Respondent

Hearing:

19 November 2001

Coram:

Richardson P Blanchard J Tipping J

Appearances:

P M Muir for Appellant

R J Haultain and C na Nagara for Respondent

Judgment:

19 November 2001

JUDGMENT OF THE COURT DELIVERED BY BLANCHARD J

[1]    The appellant in this case seeks special leave under r5 of the Court of Appeal (Civil) Rules 1997 (the “Rules”) to file a second appeal against a decision of the Employment Court at Wellington delivered on 22 February 2001. The Court held  the appellant liable to pay the respondent a sum for retiring leave in accordance with the respondent’s employment contract. The appellant’s solicitors filed a Notice of Appeal on 16 March 2001. However, they inadvertently failed to file the Case on Appeal within six months after the appeal was brought, as required by r10. The appeal was therefore deemed abandoned.

Facts

[2]    The respondent, Mr Brooker, worked for the appellant, State Insurance Limited, as a claims supervisor in the appellant’s Lower Hutt branch. Because of structural changes in its business, the appellant offered the respondent a replacement position in Wellington. When this was rejected, the appellant refused to pay the respondent any redundancy. It refused also to pay the respondent for retiring leave. The respondent sued the appellant for breach of contract, the issue being whether the claimed redundancy or retirement payments were owing under the terms of the collective employment contract.

[3] The Employment Court rejected the respondent’s claims relating to redundancy. However, the appellant was held liable to pay the respondent retiring leave in terms of the contract. Pursuant to s135(2) of the Employment Contracts Act 1991 the appellant had 28 days from the date on which the Employment Court’s decision was issued in which to file a Notice of Appeal. This was duly done on 16 March 2001. On about 19 March 2001 the solicitor received a letter from the Court of Appeal acknowledging receipt of the Notice of Appeal. Attached to this letter was a copy of the Practice Note – Civil Appeals [1997] 3 NZLR 392 (the “Practice Note”), which states that a Case on Appeal must be supplied to the Court and respondent(s) “no later than the time of filing of submissions”. An appellant’s written submissions must be supplied to the Court and the respondent(s) not less than 20 calendar days prior to the hearing date.

[4]The letter also referred to r10 which states:

10. Appeal abandoned if not pursued

(1) An appeal is to be treated as having been abandoned if the appellant does not, within 6 months after the appeal is brought, either –

(a)Apply for a fixture and file the case on appeal; or

(b)Apply for an extension of time for applying for a fixture and filing the case on appeal.

…

[5]    On 17 July 2001, and thus within the six months, the appellant requested a two-hour fixture for the hearing of the appeal, filed Points on Appeal, lodged a copy of the Employment Court judgment appealed from and paid the appropriate setting down fee. This letter was copied to counsel for the respondent.

[6]    Counsel for the appellant submits that, in the period between 19 March and 17 July, counsel on both sides had communicated over the pending appeal. This is, however, disputed by the respondent.

[7]    On about 2 August 2001 the appellant’s solicitor received a letter from the Court of Appeal stating that a fixture had been allocated for the hearing of the appeal on 22 November 2001. This letter again drew attention to the Practice Note and r10, saying expressly that the appellant’s Case on Appeal “must be received in the Court before the expiry of six months from the date you filed the appeal”. However, the solicitor handling the matter was not at work on the day the letter arrived and failed to read it until 27 September 2001 (about 10 days after the Case on Appeal ought to have been filed in the Court of Appeal under r10). The solicitor immediately contacted the Court of Appeal to explain the oversight. But there was at that stage  no power to extend time under r10. The appellant has therefore made the present application under r5 for special leave to file a second appeal.

The law

[8]    In Airwork (NZ) Ltd v Vertical Flight Management Limited [1999] 1 NZLR 29, 31, this Court said of circumstances like the present that:

It may in theory be possible for such an appellant to begin again by bringing another appeal by special leave under r5, but after a first appeal has been deemed abandoned under r10, that power is unlikely to be exercised save in exceptional circumstances. (emphasis added)

[9]    The Court’s power will not be used lightly. The ultimate test is whether granting leave would meet the overall interests of justice (B Bullock & Co Ltd v Matthews (1998) 13 PRNZ 505 (CA)).

Submissions

[10]   Counsel for the appellant, Ms Muir, submitted that leave should be granted. The appellant was intending to proceed with its appeal expeditiously and filed the Notice of Appeal and Points on Appeal and applied for a fixture within the timeframes required. On discovering her failure to file properly the Case on Appeal, counsel submitted that the appellant’s solicitor had moved promptly and was able and willing to file the Case on Appeal shortly thereafter.

[11]   Counsel submitted the respondent was aware at all relevant times that the appellant intended to pursue its appeal. Neither the respondent, nor his solicitor, was aware of the appellant’s failure to file the Case on Appeal in due time until the appellant’s solicitor so advised the respondent’s solicitor. The respondent therefore suffered no prejudice as a result of non-compliance with r10 and, it was submitted, will suffer no prejudice if leave is given. Counsel referred also to what she described as the respondent’s lack of commitment to resolving this issue or to pursuing the appeal in a timely manner.

[12]   Ms Muir submitted that the appellant was in no way responsible for its solicitor’s oversight. On the other hand, the appellant would suffer great prejudice if leave is not granted. This appeal was described as important to the appellant, not only in relation to the respondent, but also in relation to a number of employees who have similar conditions. Further, counsel submitted that the outcome of the appeal might be of significance to other employers with similar retirement provisions in employment contracts. It involved a question of law, namely the failure of the Employment Court to take into account a contractual definition of “retirement”, as mentioned in the appellant’s Point on Appeal. There had been no evidence before  the Court that the respondent had “retired” in accordance with the contract. It is said that he was in fact made redundant instead.

[13]   Counsel for the respondent, Ms Haultain, submitted that there are no “exceptional circumstances” (Airwork (NZ) Ltd) sufficient to justify special leave. The appellant’s solicitors, through correspondence dated 19 March and 2 August 2001, were specifically notified on two separate occasions of the requirements of

r10. Irrespective of whether the appellant’s solicitor was able to read the 2 August letter when it first arrived at the office, that letter was received six weeks prior to the expiry of the time limit.

[14]   Counsel submitted that, were leave to be given, the appellant would potentially gain an unfair advantage in being able to recast its appeal in light of points made by the  respondent  in  opposing  this  application  for  special  leave.  Ms Haultain submitted also that the appeal is devoid of merit because it turns solely on the construction of the respondent’s collective employment contract, and therefore is barred under s135(1) of the Employment Contracts Act 1991. Further, counsel submitted that the appeal is of no general or public importance.

Decision

[15]   The appellant in this case was clearly intending to prosecute its appeal. Its Notice of Appeal and Points on Appeal were both filed within the appropriate timeframe. A fixture date was requested well within the six month period in r10. Whether or not counsel on both sides discussed the upcoming appeal in the period between 19 March and 17 July, the respondent must be taken to have known the appeal was still on foot when his solicitor received a copy of the appellant’s letter dated 17 July 2001 (para [5] above).

[16]   There is nothing to suggest that the appellant’s failure to file the Case on Appeal pursuant to r10 was caused by anything other than a genuine oversight. The appellant’s solicitor moved promptly to correct her mistake, contacting this Court the same day as the mistake was realised. Nor are we satisfied that the respondent suffered any prejudice or hardship that can be traced specifically to the appellant’s failure to file the Case on Appeal. The respondent said in his affidavit that, at the time the six month timeframe in r10 expired, he was negotiating the purchase of a home maintenance business. On being advised of this application for special leave, he had to pull out of those negotiations because of a lack of adequate finance without payment of the retiring leave owed. However, even if the Case on Appeal had been properly filed, the respondent would have had to wait at least until after the appeal was heard on 22 November, which was then the fixture date, to know whether he

would be entitled to that payment. There is nothing indicating that the inadvertence of the appellant’s solicitor has substantially prejudiced the respondent.

[17]   Special leave has been granted in other cases where there was similar inadvertence (B Bullock & Co Ltd; Board of Governors of Wesley College v Richardson, unreported, Henry J, Thomas J Keith J, 19 June 2000, CA256/99). Bullock was decided in what the Court called the “early period of the life of r10”. In Richardson the lapse of time was less than two weeks. Here it was a little longer but part of the delay was while the appellant was trying to establish what position respondent’s counsel was taking concerning r10.

[18]   In this case, it is a matter of concern that the appellant’s solicitor twice received and overlooked written notice from the Court of the r10 requirements. The 2 August letter expressly spelled out the six month expiry date. We accept the respondent’s submission that, even though the responsible solicitor was absent from her work at the time the letter was received, the appellant still had six weeks to consider the position and file the Case on Appeal before the six month time limit expired. The appellant cannot therefore excuse itself by pointing to the ambiguity in the Practice Note.

[19]   However, in a case in which it is clear that the appellant has in all respects other than failing to file the Case on Appeal in a timely way complied with the Rules, it is appropriate for the Court to take into account whether the appellant has been able to demonstrate that there is an arguable point of law. We are satisfied that the appellant has done so. It appears from the limited material before us that it is arguable that the Employment Court has failed to take into account a relevant definition provision in the collective employment contract when making a finding that a retiring allowance should have been paid. Whilst s135 does not permit an appeal from a decision on the construction of such a contract, it does not prevent this Court from considering an error of interpretation which involves an error of principle. An error of the kind now alleged would be of that character, if it were to  be established.

[20]   As the form of contract is used generally by the appellant and, it is said, by other employees, it is arguable that it is a question going beyond the terms of the particular contractual relationship between the parties.

[21]   Balancing these factors, we are of the view that special leave should be granted to the appellant but on terms that, whatever the result, the appellant is to bear its own costs in this Court. The question of the respondent’s costs on the appeal will be determined in the light of the outcome of the appeal.

[22]There will be no costs award in respect of this application.

Solicitors:

Simpson Grierson, Wellington for Appellant