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New Zealand Basing Ltd v Brown

New Zealand Basing Ltd v Brown

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA12/2015
[2016] NZCA 525

BETWEEN	NEW ZEALAND BASING LIMITED Appellant
AND	DAVID BROWN First Respondent
AND	GLEN SYCAMORE Second Respondent

Hearing:	31 May 2016
Court:	Harrison, Miller and Winkelmann JJ
Counsel:	A H Waalkens QC and M G Lawlor for Appellant G M Pollak and HIK White for Respondents
Judgment:	4 November 2016 at 3 pm

JUDGMENT OF THE COURT

AThe appeal is allowed.
BThe respondents must pay the appellant costs for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Harrison J)

Contents

Introduction  [1]
Background  [6]
The employment issues  [17]
Employment Court decision  [24]
Choice of law principles  [30]
First question: the Employment Relations Act 2000  [31]

Transnational employment  [31]
The Employment Court's approach  [33]
The proper law of the contracts  [34]
Overriding statutes  [36]
Distinguishing Crofts  [41]
Parliamentary intent  [56]

Second question: the public policy exception [60]

The Employment Court's approach  [60]
Principles  [64]
Our analysis  [70]

Result [84]

Introduction

Cathay Pacific is a Hong Kong-based international airline, employing about 3,000 pilots worldwide. Most pilots are based in Hong Kong but others are based in the United Kingdom, Germany, Canada, the United States of America, Australia and New Zealand. Through a wholly owned Hong Kong subsidiary, New Zealand Basing Ltd (NZBL), the airline entered into contracts of employment with a number of New Zealand-based pilots including Messrs David Brown and Glen Sycamore.
Two terms of the contracts are particularly relevant. One obliged Messrs Brown and Sycamore to retire from service with Cathay Pacific on reaching the age of 55 years. The other provided for Hong Kong law to apply to the pilots’ conditions of service.
In determining an application for relief by Messrs Brown and Sycamore, the Employment Court declared that (a) the age discrimination provisions of New Zealand’s Employment Relations Act 2000 (the ERA) apply to the pilots’ employment by NZBL; and (b) it would be discriminatory under the Human Rights Act 1993 to require each of them to retire from employment on the ground of age.[1]
[1]Brown v New Zealand Basing Ltd [2014] NZEmpC 229, [2014] ERNZ 770 [EC judgment].
NZBL appeals with leave on these two questions of law pursuant to s 214 of the ERA:[2]
(a)If the ERA applies, does it override the parties’ agreement that the law of Hong Kong applies to their contract to employment?
(b)If the ERA does not apply, would the application of the law of Hong Kong to the contract of employment be contrary to public policy?
[2]New Zealand Basing Ltd v Brown [2015] NZCA 168.
The threshold issue underlying both questions is, as their terms recognise, whether the ERA applies to the contracts of employment. Our answer to that issue will largely determine the result of NZBL’s appeal.

Background

Messrs Brown and Sycamore joined Cathay Pacific as pilots in the early 1990s. They were based…

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.

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Details

Case: [2016] NZCA 525
Decision Date: 4 November 2016 at 3 pm

CaseChat Overview and Summary

New Zealand Basing Ltd (NZBL), a Hong Kong-based company, appeals a decision of the Employment Court that the Employment Relations Act 2000 (ERA) and the Human Rights Act 1993 apply to the employment contracts of Messrs Brown and Sycamore, two New Zealand-based pilots. The appeal raises two questions of law: (a) If the ERA applies, does it override the parties' agreement that the law of Hong Kong applies to their contract of employment? (b) If the ERA does not apply, would the application of the law of Hong Kong to the contract of employment be contrary to public policy?

The Court holds that the ERA does not override the parties' choice of law. The Court finds that the Judge's application of the base test was flawed in two respects. First, the Court disagrees with the Judge's conclusion that s 238 of the ERA has overriding effect. Section 238 provides that the Act has effect despite any provision to the contrary in any contract or agreement. However, the Court finds that s 238 does not of itself justify the wholesale replacement of carefully drafted transnational bargains with New Zealand's employment regime, even if a court considers the domestic protections more advanced or attractive than those under the foreign law of contract. The Court finds that Parliament did not intend s 238 to apply to displace or override settled rules of private international law. The Court holds that s 238 applies where parties have purported to elect expressly as the proper law of their contract of employment a foreign system with little or no connection to the New Zealand contract. The Court holds that the law of Hong Kong is the proper law of the contracts.

The Court also holds that the application of the law of Hong Kong to the contract of employment is not contrary to public policy. The Court holds that the forum court's discretion to refuse recognition of an agreed choice of law is of an exceptional nature because it impeaches the contract by condemning the foreign law which would otherwise apply. The Court finds that the pilots' case falls well short of satisfying the threshold required to find that the omission from Hong Kong law of a provision protecting against premature retirement offends public policy. The Court holds that the pilots are seeking to call in aid a selective notion of public policy. The Court holds that the pilots' attempt to circumvent a bona fide and legal choice of law clashes with the fundamentals of private international law. The Court holds that the age discrimination alleged by the pilots does not approach the threshold required to find that the omission from Hong Kong law of a provision protecting against premature retirement offends public policy.

The appeal is allowed. The respondents must pay the appellant costs for a standard appeal on a band A basis and usual disbursements.

Orders