Millin v Accident Compensation Corporation
[2016] NZHC 1287
•15 June 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2015-404-002888 [2016] NZHC 1287
UNDER the Accident Compensation Act 2001 IN THE MATTER
of an application for special leave to
appeal to the High Court pursuant to s 162 of the Act
BETWEEN
MARK MILLIN
Applicant
AND
ACCIDENT COMPENSATION CORPORATION
Respondent
Hearing: On the papers Counsel:
P G Schmidt for applicant
D K L Tuiqereqere for respondentJudgment:
15 June 2016
JUDGMENT OF KATZ J
This judgment was delivered by me on 15 June 2016 at 11:30am
Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Solicitors: Schmidt & Peart Law, Auckland
Medico Law Limited, Lawyers, Auckland
MILLIN v ACCIDENT COMPENSATION CORPORATION [2016] NZHC 1287 [15 June 2016]
Introduction
[1] Until some time in June 1998, Mark Millin was a seasonal worker for a company known at the time as Frucor Limited.1 He suffered a back injury on
29 June 1998 and, from that date, was unfit to work. He originally claimed that by
29 June he had commenced employment as a carpet layer. The Accident Compensation Corporation (“Corporation”) paid him weekly compensation on that basis. However, after an investigation in 2010 and 2011, the Corporation was not satisfied that he was actually employed on 29 June 1998. It issued a decision on
19 April 2011 determining that he was not entitled to weekly compensation. Mr Millin reviewed this decision. His review was dismissed.
[2] Mr Millin then appealed to the District Court. That hearing was confined to the issue whether his Frucor employment had in fact extended to 29 June 1998, taking into account holiday pay and payment for statutory holidays under s 44 of the Accident Rehabilitation and Compensation Insurance Act 1992 (“the Act”). His appeal was dismissed.2
[3] Mr Millin sought leave to appeal to this Court. His application was declined in the District Court.3 Mr Millin now seeks special leave under s 162(3) of the Accident Compensation Act 2001 to appeal on the following question: “Has the District Court correctly applied s 44 of the [Act]?” The leave application further breaks down that question as follows:
(a) As a matter of law, was Mr Millin owed two days in lieu with respect to the two days of statutory holidays he worked while employed with Frucor?
(b)Does the payment of two days of statutory holiday made on the termination of Mr Millin’s employment constitute a payment he was entitled to receive on ceasing employment for the purposes of
[s 44(2)(b) of the Act]?
1 Now known as ENZA Foods New Zealand Limited
2 Millin v Accident Compensation Corporation [2012] NZACC 392.
3 Millin v Accident Compensation Corporation [2015] NZACC 346.
[4] Mr Millin claims that the District Court Judge erred in excluding payments made on cessation of employment, which he says were payments for days in lieu for statutory holidays, when considering whether his employment extended to 29 June
1998. He says those payments have the effect of extending his employment to
29 June, not to 27 June as the District Court Judge found.
[5] The Corporation now accepts that Mr Millin’s employment did extend to
29 June 1998. The parties have agreed that special leave to appeal should be granted and that the appeal should be allowed. They seek the following orders, by consent:
(a) Special leave is granted for Mr Millin to appeal to the High Court.
(b)The decision by the District Court dated 29 November 2012 is quashed as concerns its finding pertaining to the payment by Frucor of
$282 for the two statutory days owed.
(c) The payment by Frucor of $282 to Mr Millin in June 1998 was for two statutory days in lieu owed to Mr Millin as a result of having worked Easter Friday and Easter Monday 1998. This payment further extended Mr Millin’s employment with Frucor under s 44(2) by two days.
(d)The cumulative effect of the extension of the payment by Frucor for holiday pay, extending Mr Millin’s employment to 27 June 1998, together with the payment for two statutory days in lieu, extended Mr Millin’s employment with Frucor to 29 June 1998.
(e) Mr Millin is entitled to weekly compensation for the period from
29 June 1998 on the basis of his employment with Frucor.
(f) In light of the above, the Corporation is directed to recalculate the amount of weekly compensation payable to Mr Millin from June 1998.
[6] A considered opinion of a lower Court cannot be quashed on appeal simply because the parties have agreed on that outcome. The appellate court is bound to
determine whether there is a principled basis for setting aside the decision of the lower court.4 I will therefore assess whether the orders sought are appropriate in all the circumstances.
[7] I am satisfied that, in the particular circumstances of this case, it is in the interests of justice for the substantive appeal to be determined at the same time as the application for special leave to appeal.
Should special leave be granted?
[8] The High Court can grant special leave on a point of law that is capable of bona fide and serious argument. The principles were recently discussed by Woodhouse J in Thomas v Accident Compensation Corporation:5
[5] On an application for leave to the High Court there is the same initial requirement for the applicant to identify an error of law from the substantive District Court decision. But, in addition, the application to the High Court is for “special leave”. This draws a distinction between this application and the one dealt with by Judge Harrison. And the High Court retains a discretion – “the High Court may grant special leave to appeal”.
[6] What is entailed in these additional requirements for an application to the High Court was summarised in this Court by Fisher J in Kenyon v Accident Compensation Corporation.6 Approving and adopting submissions for the Corporation in that case, Fisher J outlined the principles as follows:7
(a) The purpose of requiring leave for certain appeals is to ensure that scarce judicial time is allocated sensibly: Sandle v Stewart [1982] 1 NZLR 708 (CA).
(b) Although it is ultimately a matter for the discretion of the Court, it will normally be necessary to show that there is an issue of principle at stake or that a considerable amount hinges on the decision, and that there is a reasonable prospect of success: Sandle; Manawatu Co-op Dairy Company Limited v Lawry [1988] DCR 509; Brown v Chow Mein Fashions Limited (1993) 7 PRNZ
43 (HC).
(c) The fact that special leave is required is significant and suggests that leave ought not to be granted as a matter of course: O’Loughlin v Healing Industries Limited (1990) PRNZ 464.
4 Peterken v Accident Compensation Corporation [2016] NZHC 778 at [4].
5 Thomas v Accident Compensation Corporation [2015] NZHC 3252.
6 Kenyon v Accident Compensation Corporation [2002] NZAR 385 (HC).
7 At [15].
(d) It is for the Applicant to show that leave is required in the interests of justice: Avery v No. 2 Public Service Appeal Board [1973] 2 NZLR 86 (CA).
(e) As leave has already been refused by the District Court, however, there will normally have to be some extraordinary factor which has not been properly taken into account: Brown v Chow Mein Fashions Limited (supra).
[9] A point of law includes a question whether or not a statutory provision has been construed or interpreted and applied to the facts. A mixed question of law and fact is assailable as a matter of law. It is well settled that a decision-maker’s treatment of facts can amount to an error of law. There will be an error of law where there is no evidence to support the decision, the evidence is inconsistent with, and contradictory of the decision, or the true and only reasonable conclusion on
the evidence contradicts the decision.8
[10] I am satisfied that special leave should be granted. The case is one of considerable significance for Mr Millin. The parties agree that leave should be granted. The parties also agree that Mr Millin was entitled to compensation and that the Judge erred. It is in the interests of justice for special leave to be granted in such circumstances.
Should the orders sought be made?
[11] Mr Millin’s final pay at Frucor was $2,139.09, which included $787.84 for holiday pay and $282.00 for statutory holidays, as Mr Millin had worked on Good Friday and Easter Monday that year. The issue for the District Court was whether his Frucor employment extended by operation of s 44 of the Act to the date of his injury. That section (now repealed) relevantly provided:
44 Extension of entitlement to compensation for loss of earnings
…
(2) Where an employee is entitled to receive any payment on ceasing employment and earner premium is payable in respect of that payment, that person shall be deemed to continue to be an employee for the purposes of
8 Impact Manufacturing Ltd v Accident Rehabilitation and Compensation Insurance Corporation HC Wellington AP266/00, 6 July 2001 at [7]; Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721.
this Act for so long as those payments constitute earnings by virtue of subsection (4)(a) of this section;
...
(4) Where this section applies –
(a) The person concerned shall be deemed to be deriving earnings at the same rate as that person derived earnings while in employment immediately before the employment terminated; and
(b) For the purposes of calculation of weekly earnings, the date of commencement of incapacity shall be deemed to be the last date of employment.
[12] There was no dispute between the parties that if the $282 represented days in lieu that would extend the period of entitlement under s 44 to 29 June 1998. The Judge, however, did not find that the statutory days owed were days in lieu. The Judge relied on a statement of a Mr Neil Fleury, the commercial manager of Frucor, who did not include the $282 when assessing the date to which Mr Millin was paid. Mr Fleury noted the “$282.00 for two statutory days owed to the client” and said those days related “to Easter Friday and Easter Monday”. As he did not include the
$282 in his assessment, the Judge concluded that Mr Millin’s employment extended until 27 June 2008. Mr Fleury also said “the Defendant earned $13,130.60 plus 6% holiday pay of $787.84 giving total earnings for this period of $13,918.47”. The Judge therefore considered that the payment for the statutory days was included in the $13,130.60. He appears to have inferred, therefore, that the $282 was a “make up” or perhaps a late payment for the hours worked on the statutory holidays themselves, rather than a separate entitlement.
[13] The Judge found:
[66] Mr Schmidt did not identify any statutory provision such as might indicate that the ‘make up’ payment for the statutory holidays that was identified by Mr Fleury could or should be related otherwise than as the latter has explained. In other words nothing was put before or to the Court such as might suggest that that payment could work for Mr Millin in s 44 terms so as to take his deemed employment beyond Saturday 27 June 1998.
[67] In particular, Mr Schmidt did not identify any current in 1998 statutory provision such as obviously rendered wrong in law what Mr Fleury finally said as to the calculation of payment in question nor anything else (factual or legal) that countered – or even put in doubt – his statement that the effect of the calculation was to carry Mr Millin through to but 27 June 1998.
[14] It now appears that the Judge may have misinterpreted Mr Fleury’s evidence. Mr Fleury said that the $282.00 was for “two statutory days owed”. He said that those days “relate to Easter Friday and Easter Monday”. Mr Fleury only included the holiday pay, and not the $282, in his calculation of how long the defendant was paid for. He also did not include the $282 as a separate entitlement in assessing the total earnings. But there is no reason to infer from Mr Fleury’s statement that the
$282 was a “make-up” payment for Good Friday and Easter Monday or that it could
not be included in the s 44 assessment.
[15] Mr Fleury’s position has been clarified by further evidence filed in support of the leave application. That evidence includes an e-mail from Mr Fleury dated
27 May 2015 confirming that “if a staff member worked on a statutory Holiday they would have been paid overtime, and would have been credited a ‘day in lieu’ in addition to the overtime payment”. He also states that “I believe the payment of
$282.00 being at the end of employment was for “days in lieu” not taken”. He states “if an employee chose to use leave from the last day they completed work, they would be paid for annual leave days, then days in lieu, and then their employment would cease at the end of that combined period”.
[16] This is also reinforced by s 7A of the Holidays Act 1981, which applied during the relevant period and which, it appears, may not have been drawn to the Judge’s attention:
7A Public holidays
(1) Every employment agreement shall provide, in relation to every worker bound by it, for the grant to the worker in each year of not less than 11 whole holidays which shall, where they fall on days that would otherwise be working days for the worker, be holidays, on pay, in addition to annual holidays.
(2) Unless the employment agreement otherwise provides or a worker and the worker’s employer otherwise agree, the holidays provided for pursuant to subsection (1) of this section shall include –
…
(e) Good Friday:
(f) Easter Monday:
…
[17] The Court of Appeal in Telecom Networks and Operations Ltd v Vevers found that s 7A(1) required that the 11 whole holidays had to be provided as holidays. The majority held that it was not permissible for the employee to give up a holiday in return for penal pay. If an employee worked on a public holiday another day’s holiday had to be provided.9
[18] Days in lieu therefore had to be provided for Mr Millin’s work on Good Friday and Easter Monday. On Mr Fleury’s original evidence $282.00 was provided for two statutory days owed for Mr Millin working over Easter. His subsequent evidence also confirms it was for days in lieu. I accept the parties’ joint submission that the Judge erred in law in concluding otherwise and that the appeal should therefore be allowed.
[19] Mr Millin was owed two days in lieu with respect to the two days of statutory holidays he worked while employed with Frucor. Further, the payment for those two days constitutes payment he was entitled to receive on ceasing employment for the purposes of s 44(2)(b) of the Act. His employment with Frucor therefore extended to
29 June 1998, the day of his accident, and he is entitled to compensation from the
Corporation on that basis.
Result
[20] Special leave is granted to appeal. The appeal is allowed. I make the orders set out at [5] above. The parties have advised that there is no issue as to costs.
Katz J
9 Telecom Networks and Operations Ltd v Vevers [1993] 3 NZLR 425 (CA); and see New Zealand Airline Pilots Association International Union of Workers Inc v Air New Zealand Ltd [2007] NZSC 89, [2008] 2 NZLR 1 at [31]-[38].
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