Katz v Mana Coach Services Ltd - [2011] NZCA 610

IN THE COURT OF APPEAL OF NEW ZEALAND

CA386/2011
[2011] NZCA 610

BETWEEN BEATRICE KATZ
Applicant

AND MANA COACH SERVICES LTD
Respondent

Hearing: 20 October 2011

Court: Glazebrook, Arnold and Ellen France JJ

Counsel: P McBride and T Kennedy for Applicant
B A Corkill QC for Respondent

Judgment: 2 December 2011 at 2.30 pm

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.

BThe applicant must pay the respondent costs for a standard application on a band A basis plus usual disbursements.

REASONS

Arnold and Ellen France JJ [1]
Glazebrook J [16]

ARNOLD AND ELLEN FRANCE JJ

(Given by Arnold J)

Background

The applicant, Ms Katz, seeks leave to appeal from a decision of the Employment Court dated 25 May 2011.[1] In that decision Judge Ford held that Ms Katz’ employer, Mana Coach Services Ltd (Mana), was not liable to indemnify her for legal costs which she incurred when she was prosecuted for careless driving. The prosecution arose out of a traffic accident that occurred while Ms Katz was driving a bus on her assigned route in the course of her employment. The Employment Relations Authority had also dismissed Ms Katz’ claim.[2]
[1] Katz v Mana Couch Services Ltd [2011] NZEmpC 49.
[2] Katz v Mana Coach Services Ltd ERA Wellington WA192/10 5302084, 30 November 2010.
The accident happened when Ms Katz was attempting a right turn at an intersection and came into contact with a stationary car which was waiting to cross the intersection. Both the bus and the car suffered damage. In an insurance claim form which she completed on the day of the accident, Ms Katz admitted responsibility, saying that she simply did not see the car.
Ms Katz was charged with operating a vehicle carelessly. She entered a plea of guilty and was discharged without conviction, presumably under s 106 of the Sentencing Act 2002. In terms of s 106(2), such a discharge is deemed to be an acquittal.
Ms Katz received a fee note from her lawyer for $562.50, which covered advice and three court appearances in relation to the prosecution. Ms Katz then sought, through her union, to recover this sum from Mana. There being no express indemnity clause in her employment agreement, Ms Katz relied on what she described as “the general rule of law that an employee is to have an indemnity acting in the execution and reasonable performance of duty” and an implied term in her employment contract. Mana refused to indemnify her.

Basis of application

This Court may grant leave to appeal on a question of law where the question is one that “by reason of its general or public importance or for any other reason” ought to be submitted to the Court for decision.[3] For Ms Katz, Mr McBride submitted that three questions of law were raised, each of which was of general or public importance and should be dealt with by this Court.
[3] Employment Relations Act 2000, s 214(3).
He put the questions…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Katz v Mana Coach Services Ltd

Details

AGLC: Katz v Mana Coach Services Ltd [2011] NZCA 610
Case: [2011] NZCA 610
Decision Date: 2 December 2011

CaseChat Overview and Summary

In Katz v Mana Coach Services Ltd, Ms Beatrice Katz applied for leave to appeal against a decision of the Employment Court which held that her employer, Mana Coach Services Ltd, was not liable to indemnify her for legal costs she incurred when she was prosecuted for careless driving. The prosecution arose from a traffic accident that occurred while Ms Katz was driving a bus in the course of her employment. Ms Katz sought indemnity for her legal costs under a common law indemnity or an implied term in her employment contract. The Employment Court dismissed her claim, finding that she was negligent in causing the accident and that her negligence fell outside the scope of her employment duties. Ms Katz sought leave to appeal, arguing that the Employment Court erred in its interpretation of the common law indemnity and in its assessment of her conduct.

The key legal issues before the Court of Appeal were whether the Employment Court correctly determined that there was no common law indemnity for legal costs incurred by Ms Katz, whether the obligation to indemnify at common law is lost if there is some act of negligence by the employee, and whether the discharge without conviction affected the common law indemnity. The Court of Appeal found that the Employment Court had correctly applied the principle established in Christchurch City Council v Davidson that an employer is not liable to indemnify an employee for costs incurred in defending an allegation that the employee did something which it was not their duty to do. The Court concluded that Ms Katz's negligence in causing the accident fell outside the scope of her employment duties and that the discharge without conviction did not affect the common law indemnity.

The Court of Appeal dismissed Ms Katz's application for leave to appeal. The Court found that the Employment Court had correctly applied the relevant legal principles and that there was no basis for allowing the appeal. Ms Katz was ordered to pay Mana's costs for the standard application on a band A basis plus usual disbursements.

Orders