Langton v Raytheon Polar Services (NZ) Limited HC Christchurch CIV-2009-409-002666

[2011] NZHC 291

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2009-409-002666

BETWEEN  MICHAEL STEVEN LANGTON Plaintiff

ANDRAYTHEON POLAR SERVICES (NZ) LIMITED

Defendant

Hearing:         5 April 2011

(Heard at Wellington)

Appearances: R Chapman for Plaintiff

G Wadsworth for Defendant

Judgment:      5 April 2011

Reasons:        7 April 2011

JUDGMENT OF HON JUSTICE FRENCH

on Application to Strike Out Claim

Introduction

[1]      Mr Langton was injured in an accident while working for the defendant, Raytheon Polar Services (NZ) Limited, in Antarctica.

[2]      He has issued these proceedings seeking common law damages.   Raytheon has applied to strike out the claim.

[3]      The primary issue raised by the strike out application is whether Mr Langton was ―ordinarily resident in New Zealand‖ as defined by the Accident Compensation Act 2001, and therefore had cover under that Act.  If he did have cover, that in turn

would mean he has no right to sue at common law.

LANGTON V RAYTHEON POLAR SERVICES (NZ) LIMITED HC CHCH CIV-2009-409-002666 5 April

2011

[4]      At the conclusion of Tuesday’s hearing, I stated I had come to the clear view that the strike out application should be dismissed.  I now set out my reasons for that decision.

Factual background

[5]      Much of the factual narrative that follows is derived from affidavit evidence filed by Mr Langton.  Raytheon’s counsel queried the credibility of some aspects of the affidavit.   However, the contents are in my view inherently plausible and supported by documentation.  In the absence of any evidence to the contrary, I am therefore prepared to accept the affidavit at face value.

[6]      Mr Langton is a British citizen.  He currently lives in Switzerland, and is a mechanic by trade.

[7]      Mr Langton came to New Zealand with his wife and infant child in about June 2006.  Their intention was simply to work for a time while travelling around New Zealand and then return to Europe.  They never intended to live permanently in New Zealand.

[8]      Mr Langton obtained a work permit and got his first job in New Zealand in about October 2006.

[9]      The family stayed longer than anticipated, but in June 2007 made definite plans to return to Europe, booking flights for December 2007.

[10]     After  they  had  purchased  the  tickets,  an  opportunity  arose  to  work  for Raytheon in Antarctica.  Mr Langton says it was a lifetime opportunity and not one he could pass up.  He and his wife agreed that she and their child would return to Europe as planned, and he would follow in February 2008 immediately his employment with Raytheon ended.

[11]     The employment contract was a fixed-term seasonal contract from October

2007 to 22 February 2008.

[12]     Mrs Langton and the couple’s child duly left New Zealand in 2007, while Mr Langton changed the date for his return flight to Europe to 25 February 2008.  His intention was to spend only a few days in New Zealand once the work in Antarctica had finished.

[13]     By the time Mr Langton departed for Antarctica, he had already sold his car and relinquished his rental accommodation in New Zealand.  He did not have any accommodation address in New Zealand.

[14]     Unfortunately, Mr Langton had only been in Antarctica three weeks when he sustained a serious injury.  A hydraulic press that was being used to repair links on a Caterpillar bulldozer track ruptured or exploded, releasing a steel ball at speed which struck and injured his hand.

[15]     Mr Langton was flown to Christchurch for emergency treatment.

[16]     On his arrival, an ACC report form was completed and signed by a doctor, but not by Mr Langton.  The claim form wrongly states that the accident happened in New Zealand.

[17]     ACC accepted the claim, and between 29 November 2007 and 18 February

2008 made payments totalling $2082.76 exclusive of GST to Mr Langton or third parties on his behalf.

[18]     Mr Langton returned to Antarctica on 7 December 2007 for light duties, but this proved problematic and his employment was eventually terminated on the grounds of ill-health.  He returned briefly to New Zealand on 14 January 2008, and left two days later for Europe.

[19]     These proceedings were issued in November 2009, Mr Langton contending that the injuries to his hand have not yet completely resolved and that as a result he has lost nearly two years’ income.

[20]     The statement of claim pleads four causes of action: [i]          Breach of duty of care.

[ii]      Breach of contract.

[iii]     Vicarious liability for the negligence of fellow employees.

[iv]     Breach  of  statutory  duties  under  the  Health  and  Safety  in

Employment Act 1992.

[21]     In 2010 (ie after the proceedings were filed), ACC revoked its decision to grant cover and demanded repayment of the monies.  Mr Langton has now repaid ACC.

Grounds of strike out application

[22]     Raytheon seeks to strike out the entire claim on the grounds:

a)       That the claim is barred by s 317 of the Accident Compensation Act because Mr Langton had cover under the Act.

b)Even if Mr Langton did not have cover, there has been an accord and satisfaction which provides a complete defence.   The accord and satisfaction is said to be between Raytheon and ACC, arising out of the fact that Raytheon paid ACC employer levies, ACC’s initial advice accepting cover and the payment of benefits which Mr Langton accepted without demur.

c)       The interests of justice require strike out.  Raytheon, having paid ACC levies, was entitled to expect its employees would qualify for cover and that once compensation was paid it would not be sued.

Discussion

[23]     The Court’s approach to strike out applications is well settled:[1]

[1] See Couch v Attorney-General [2008] 3 NZLR 725 (SC) and Attorney-General v Prince and

Gardner [1998] 1 NZLR 262 (CA).

i)         The Court will assume the facts pleaded are true.

ii)Before it may strike out a proceeding, the Court must be certain the cause of action is so clearly untenable it cannot succeed.

iii)The  jurisdiction  is  to  be  exercised  sparingly.    Striking  out  is  a draconian step.

iv)Particular care is required in areas where the law is confused or developing.

v)The jurisdiction is not ousted by the need to decide difficult questions of law requiring extensive argument.

vi)Where a defect in a pleading, challenged as disclosing no reasonably arguable cause of action, can be cured by amendment which the plaintiff is willing to make, the Court will almost always permit amendment rather than strike the pleading out.

[24]     Bearing  these  principles  in  mind,  I  now  turn  to  consider  the  grounds advanced for strike out in this case.

[25]     Section 317(1) states:

317     Proceedings for personal injury

(1)      No person may bring proceedings independently of this Act, whether under any rule of law or any enactment, in any court in New

Zealand, for damages arising directly or indirectly out of—

(a)      personal injury covered by this Act; or

(b)      personal injury covered by the former Acts.

[26]     It was common ground that before s 317 could apply to bar Mr Langton’s common law claim, it was necessary that Mr Langton had cover under the Act.  If he had cover, he could not bring a claim.   Conversely, if he did not have cover then s 317 did not apply.

[27]     It  was  also  common  ground  that  for  the  purposes  of  the  Accident Compensation legislation, Antarctica is not New Zealand and therefore the case is governed by s 22:

22Cover for personal injury suffered outside New Zealand (except mental injury caused by certain criminal acts or work-related mental injury)

(1)      A person has cover for a personal injury if—

(a)      he or she suffers the personal injury outside New Zealand on or after 1 April 2002; and

(b)      the personal injury is any of the kinds of injuries described in section 26(1)(a) or (b) or (c) or (e); and

(c)      the person is ordinarily resident in New Zealand when he or she suffers the personal injury; and

(d)      the personal injury is one for which the person would have cover if he or she had suffered it in New Zealand.

…

[28]     Of the four pre-requisites to cover, counsel agree that Mr Langton’s case

satisfies (a), (b) and (d).

[29]     What is at issue is (c) – whether he was ―ordinarily resident in New Zealand‖

when he suffered the personal injury.

[30]     The Act itself defines when a person is to be considered ordinarily resident in

New Zealand. That is to be found in s 17, which read at the relevant time as follows:

17       Ordinarily resident in New Zealand

(1)      A person is ordinarily resident in New Zealand if he or she—

(a)       has New Zealand as his or her permanent place of residence, whether or not he or she also has a place of residence outside New Zealand; and

(b)      is in 1 of the following categories: (i)       a New Zealand citizen:

(ii)      a holder of a residence permit granted under the

Immigration Act 1987:

(iii)     a holder of a returning resident's visa or residence visa issued under the Immigration Act 1987 allowing the person to lawfully return to New Zealand or

come to New Zealand for the purposes of residence:

(iv)     a person who is exempt from any requirement to hold a permit under the Immigration Act 1987:

(v)      a person who is a spouse or partner, child, or other dependant of any person referred to in any of subparagraphs (i) to (iv), and who generally accompanies the person referred to in the subparagraph.

(2)      A person does not have a permanent place of residence in New Zealand if he or she has been and remains absent from New Zealand for more than 6 months or intends to be absent from New Zealand

for more than 6 months. This subsection overrides subsection (3) but is subject to subsection (4).

(3)       A person has a permanent place of residence in New Zealand if he or she, although absent from New Zealand, has been personally present in New Zealand for a period or periods exceeding in the aggregate

183 days in the 12-month period immediately before last becoming absent from New Zealand. (A person personally present in New Zealand for part of a day is treated as being personally present in New Zealand for the whole of that day.)

(4)      A person does not cease to have a permanent place of residence in New Zealand because he or she is absent from New Zealand primarily in connection with the duties of his or her employment, the remuneration for which is treated as income derived in New Zealand for New Zealand income tax purposes, or for 6 months following the completion of the period of employment outside New Zealand, so long as he or she intends to resume a place of residence in New Zealand.

(5)      A person is not ordinarily resident in New Zealand if he or she is in

New Zealand unlawfully within the meaning of the Immigration Act

1987. Any period during which a person is in New Zealand unlawfully is not counted as time spent in New Zealand for the

purposes of subsection (3).

[31]     In support of his argument that Mr Langton was ordinarily resident in New

Zealand, Mr Wadsworth relied on s 17(3) and (4).

[32]     There is no doubt that Mr Langton was living in New Zealand for a period exceeding 183 days in the year prior to the accident, as required by s 17(3).

[33]     However,  in  my  view,  in  itself  that  is  not  enough  to  render  a  person

―ordinarily resident in New Zealand‖ within the meaning of s 17. [34]          I have come to that conclusion for the following reasons.

[35]     Correctly analysed, the s 17(1) definition of ―ordinarily resident‖  has two component parts, both of which must be satisfied.  First, the person must have New Zealand as their permanent place of residence.  Secondly, the person must fall within one of the five categories listed in s 17(1)(b).

[36]     Subsections (3) and (4) only bear on the first component  – having New Zealand as a permanent place of residence – and not the second.   As regards the second, Mr Langton was not within any of the five listed categories.

[37]     It follows that he cannot be said to have been ordinarily resident in New

Zealand.

[38]     My  second  reason  for  rejecting  Mr  Wadsworth’s  submission  is  that  it overlooks s 17(2).   Section 17(2) expressly overrides (3) and states that a person does not have a permanent place in New Zealand if they intend to be absent from New Zealand for more than six months.  The time at which that intention must be assessed is the time of the accident.  At the time of Mr Langton’s accident he clearly did intend to be absent for more than six months.

[39]     I am satisfied that Mr Langton was not ordinarily resident in New Zealand for the purposes of s 17, and therefore he does not have cover.

[40]     Mr Wadsworth submitted that if I were to reach that conclusion it would have far-reaching practical implications.  He contended there were very large numbers of

New  Zealand  companies  who  employ  foreign  nationals  in  places  outside  New

Zealand on the assumption that ACC covers any workplace accidents.

[41]     I am unsure whether that is in fact the case.  However, even if it is, the words of the legislation are so clear that they do not permit, in my view, of any other conclusion.

[42]  I  am  also  satisfied  that  the  other  two  grounds  (accord  and satisfaction/interests of justice) are not tenable.

[43]     In my view, as a matter of law, if Mr Langton does not have cover then it must follow he is free to bring a common law claim.[2]   The existence of a mistaken decision by ACC cannot be a bar.[3]    Nor can the fact that Raytheon has paid ACC levies.

[2] See Queenstown Lakes District Council v Palmer [1999] 1 NZLR 549.

[3] See for example S v Attorney-General [2003] 3 NZLR 450 (CA), on appeal from S v Attorney- General (2002) 22 FRNZ 39, where a plaintiff who was held not to have cover was able to maintain a claim for damages although ACC had previously paid benefits in the mistaken belief that he was covered.

[44]     It is not possible to contract out of the ACC scheme,[4]  and the legislation recognises that ACC may make a mistake.[5]     I also accept, as submitted by Mr Chapman, that in any event there has been an insufficient factual foundation made out for these other two grounds.

[4] Section 299.

[5] Sections 65, 248 and 251

[45]     In  coming to this view,  I have not overlooked  the point stressed by Mr Wadsworth that ACC’s decision to revoke cover was at the instigation of Mr Langton himself and done so as to enable him to pursue this claim.

[46]     That  may  well  be  correct,  and  there  is  some  support  for  it  in  the documentation.  However, in my view for present purposes Mr Langton’s motives are entirely irrelevant.

[47]     ACC could only revoke cover if its original decision was wrong.

[48]     I am satisfied its original decision was indeed wrong.  Whether ACC would itself have ever come to that realisation is beside the point.

[49]     For present purposes all that matters is whether Mr Langton did or did not have cover.

Outcome of hearing

[50]     The application to strike out is dismissed.

[51]     While   not   consenting   to   a   costs   order,   Mr   Wadsworth   responsibly acknowledged the standard rules and was unable to offer any reason as to why they should not apply.  Costs are accordingly awarded to Mr Langton on a 2B basis.

Solicitors:

Johnston Lawrence, Wellington

Kennedy’s, Auckland