Poihegatama v Accident Compensation Corporation
[2016] NZHC 1047
•19 May 2016
IN THE HIGH COURT OF NEW ZEALAND
DUNEDIN REGISTRY
CIV-2016-412-000027
[2016] NZHC 1047
BETWEEN JASON POIHEGATAMA
Appellant
AND
ACCIDENT COMPENSATION CORPORATION
Respondent
Hearing: 17 May 2016 Appearances:
Appellant in person
C Light for Respondent
Judgment:
19 May 2016
JUDGMENT OF DUNNINGHAM J
[1] Mr Poihegatama has applied for special leave to appeal on a question of law from the decision of Judge Powell in Poihegatama v Accident Compensation Corporation.1 Special leave is required because Mr Poihegatama has already been declined leave to appeal in the District Court in a decision by Judge Harrison.2
[2]The question of law which Mr Poihegatama wishes to argue is:3
(a)Was Mr Poihegatama on unpaid parental leave immediately before the date of incapacity within the meaning of cl 44(1) of Schedule 1 to the Act, in a situation where he had reduced his working hours from five days (working 10 hours each day) to three days (working 10 hours each
1 Poihegatama v Accident Compensation Corporation [2015] NZACC 23.
2 Poihegatama v Accident Compensation Corporation [2016] 26 ACR 9/13.
3 The question of law was formulated by counsel for ACC, but is not challenged by Mr Poihegatama.
POIHEGATAMA v ACCIDENT COMPENSATION CORPORATION [2016] NZHC 1047 [19 May 2016]
day) and on the other two days of the week looked after his new born son.
[3] Judge Harrison, having considered the relevant statutory provisions of the Accident Compensation Act 2001 (“the Act”) and the Parental Leave and Employment Protection Act 1987 (“the PLEP Act”), held that Mr Poihegatama was correctly categorised as an “earner” and concluded “it is not possible to be both an earner and on unpaid parental leave at the same time”. For that reason, he found the point of law was not “capable of bona fide and serious argument” and the application for leave to appeal the High Court was declined.
The legal principles applying to grant of special leave
[4] The application comes before me pursuant to s 162 of the Act. That section provides:
162 Appeal to High Court on question of law
(1)A party to an appeal who is dissatisfied with the decision of a District Court as being wrong in law may, with the leave of the District Court, appeal to the High Court.
…
(3)If the District Court refuses to grant leave, the High Court may grant special leave to appeal.
…
[5] The principles adopted by Fisher J in Kenyon v Accident Compensation Corporation,4 are generally accepted as summarising the principles to be applied when considering an application for special leave:
(a)The purpose of requiring leave for certain appeals is to ensure that scarce judicial time is allocated sensibly:
(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 principal at stake
4 Kenyon v Accident Compensation Corporation [2002] NZAR 385.
or that a considerable amount hinges on the decision, and that there is a reasonable prospect of success:
(c)The fact that special leave is required is significant and suggests that leave ought not to be granted as a matter of course:
(d)It is for the Applicant to show that leave is required in the interests of justice:
(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:
[6] Importantly, there must be a point of law involved in the proposed appeal. A determination on the facts will not amount to an error of law unless there is no evidence to support the decision or the evidence is inconsistent with and contradictory of the decision. Furthermore, the point of law must be capable of bona fide and serious argument before the grant of leave would be considered.5
Background
[7] The relevant background is straightforward. In early 2009, Mr Poihegatama was a permanent employee of Express Logistics working 50 hours (five days) per week as a driver. He and his partner had a child born on 30 December 2008. In February 2009, he renegotiated his hours of work to 30 hours (three days) per week in order to look after his new born son. He anticipated returning to five day a week employment once his son was old enough to enter day care, which he anticipated to be in approximately six months.
[8]Mr Poihegatama’s new working hours took effect from 23 February 2009.
5 Impact Manufacturing Limited v Accident Rehabilitation and Compensation and Insurance Corporation HC Wellington AP 266/00, 6 July 2001, Doogue J.
[9] Mr Poihegatama was injured on 3 June 2009 and was recognised as having become incapacitated on 18 August 2009, at which point he became entitled to weekly compensation.
[10] The Accident Compensation Corporation (the Corporation) calculated Mr Poihegatama’s compensation according to cl 34 of Schedule 1 to the Act, based on his actual weekly earnings at the time he became incapacitated. The Corporation determined that cl 34 applied, because cl 33(1) of Schedule 1 provides that cl 34 applies if a claimant:
(a)was an earner immediately before his or her incapacity commenced; and
(b)was in permanent employment at that time; and
(c)had earnings as an employee from that permanent employment at that time.
As all three pre-conditions were met in Mr Poihegatama’s case, his compensation was determined in accordance with cl 34.
[11] Mr Poihegatama applied for review of the Corporation’s assessment of his weekly compensation on the basis that the two days per week for which he was not receiving payment after 23 February 2009 were, in fact, “unpaid parental leave” and therefore his earnings should have been calculated pursuant to cl 44(2) of Schedule 1 to the Act which requires the calculation to be undertaken based on the claimant’s earnings as at the date parental leave commenced. In other words, Mr Poihegatama considers that, on the date his entitlement to compensation under the Act arose, it should be paid on the basis that he was working five days a week and not three days a week.
[12] His application for review was dismissed on the basis that Mr Poihegatama’s circumstances fell squarely within the circumstances of cl 34(1), and therefore his compensation needed to be calculated on his income at the time he was injured.
[13] The matter then came before the District Court on appeal, with the Judge concluding that “the type of part-time employment agreed between Mr Poihegatama and his employer was not, and could not, constitute unpaid parental leave for the purpose of cl 44(2)… Mr Poihegatama met the pre-conditions set out in cl 33(1) and, as a result, his entitlement to weekly compensation was correctly determined by the Corporation according to cl 34 of the Act”.6
[14] When Mr Poihegatama sought leave to appeal the decision of Judge Powell, the same issues were traversed, with the Judge noting that parental leave under s 26(1) of the Parental Leave and Employment Protection Act 1987 (PLEP Act) “may be taken in no more than one continuous period by each parent or partner of the child requiring care”.7 The Judge noted that Mr Poihegatama was not undertaking a continuous period of extended leave, rather he was working 30 hours a week and being paid for it. He therefore could not expect to be “topped up” by the Corporation for the two days on which he cares for his son because, if he had not been injured, he would have continued to receive income for only 30 hours per week.
[15] Undaunted by the consistent findings in the earlier hearings, Mr Poihegatama again traverses the same arguments in this Court. His particular focus is on cl 44 which provides:
44 Weekly earnings if employee on unpaid parental leave immediately before his or her incapacity commenced
(1)This clause applies to a claimant who is an employee on unpaid parental leave immediately before his or her incapacity commenced.
(2)For the purposes of calculating the claimant's weekly earnings, the date he or she began parental leave is deemed to be the date his or her incapacity commenced.
(3)For the purposes of determining the commencement date of entitlement to compensation for loss of earnings, the date on which the claimant would otherwise be required to return to work at the end of the parental leave is deemed to be the date his or her incapacity commenced.
(4)Unless the personal injury is a motor vehicle injury, a work-related personal injury, or a treatment injury, payments under this clause come from the Earners' Account.
6 Poihegatama v Accident Compensation Corporation, above n 1, at [10].
7 Poihegatama v Accident Compensation Corporation, above n 2, at [11].
(5)If this clause applies the claimant is entitled to the greater of—
(a)weekly compensation for loss of earnings arising from the application of this clause:
(b)weekly compensation for loss of earnings arising from an entitlement under any other provision of this schedule.
(6)Parental leave must not be treated as paid leave for the purposes of this clause only because the person may be entitled to a payment in respect of the leave under Part 7A of the Parental Leave and Employment Protection Act 1987.
[16] He asserts that he was on a form of unpaid parental leave immediately before his incapacity. Therefore, cl 44(2) should apply literally, and his compensation should be based on his earnings when he was working five days a week, rather than his earnings since he reduced his working hours to three days a week.
[17] To counter the submissions that his part-time working arrangement does not qualify as unpaid parental leave because it is not a single period of continuous leave, he relies on s 27(2)(d) of the PLEP Act which provides for the employer and employee to agree to more flexible arrangements where leave is shared between the employee and the employee’s spouse or partner. That section provides:
27 Extended leave to be shared between parties
…
(2)Subject to the provisions of this Act, the period or periods of extended leave provided by section 26(1) shall be shared between an employee and that employee’s spouse or partner in one of the following ways:
…
(d)in such a manner as may be agreed on by the employee and the employee’s spouse or partner and their respective employers.
[18] In summary, Mr Poihegatama considers the law is that an employer and employee may make any agreement they see fit as to terms of parental leave and any such agreement is lawful. He did this when he negotiated to work only three days a week and the other two days should be treated as unpaid parental leave. As a consequence, his weekly compensation must be calculated in accordance with cl 44(2) of the Act.
Application of the Act
[19] Part 2 of Schedule 1 to the Act provides for different qualifying provisions for the calculation and payment of weekly compensation. Subject to defined exceptions (one of which is being on unpaid parental leave), a claimant has to be an earner to receive weekly compensation. “Earner” is defined in s 6 of the Act to mean a natural person who engages in employment, whether or not as an employee, and includes a person to whom cl 44 applies, because they are a claimant on unpaid parental leave.
[20] Clause 33 provides that the calculation method in cl 34 applies where an earner had earnings as an employee in permanent employment immediately before their incapacity commenced. It is clear that Mr Poihegatama meets those requirements in his circumstances. He was earning income for his 30 hours a week of employment. That number of working hours per week meets the definition of fulltime employment in s 6, and that income was earned from permanent employment, in the sense that his employment was ongoing and not casual employment or employment for a fixed term. The Corporation accordingly calculated Mr Poihegatama’s compensation using the formula in cl 34.
[21] Mr Poihegatama’s argument is, however, that as his arrangement with his employer was an informal agreement for unpaid parental leave, cl 44 should apply. As explained by the author’s of Brookers Commentary, Personal Injury in New Zealand:8
Clause 44 provides a deeming mechanism to address some of the inequities previously faced by those incapacitated during a period of parental leave. Under previous legislation, a claimant on unpaid parental leave would usually fall outside of the concept of being an earner immediately before his or her incapacity commenced, as required under cls 33 and 35.
[22]As Gendall J explained in Accident Compensation Corporation v McDougall:9
[15] It has to be kept in mind that cl 44 relates specifically to claimants who suffer injury whilst on unpaid parental leave. The purpose of the legislation is to provide “compensation” for them on the basis of what they would have earned in wages had they not suffered the injury and been able to return to work at the end of the parental leave.
8 Brookers Commentary, Personal Injury in New Zealand AC Sch 1.44.02.
9 Accident Compensation Corporation v McDougall [2006] NZAR 673 (HC) at [15].
[23] Thus, the Act recognises the unfairness that would result if claimants on unpaid parental leave could not claim compensation from the point they would have otherwise returned to work, simply because they were not earning at the time they were incapacitated. However, contrary to Mr Poihegatama’s understanding, cl 44(2) does not provide for payment of compensation while on unpaid parental leave. Even if Mr Poihegatama was on unpaid parental leave, he could not expect to receive compensation based on his previous earnings until the date he would otherwise have been required to return to work, and not the date he was deemed to have been incapacitated.
[24] The second issue was whether, in fact, Mr Poihegatama was on any form of unpaid parental leave. Parental leave was defined in s 2(1) of the PLEP Act at the time Mr Poihegatama lodged his claim as follows:
2 Interpretation
(1)In this Act, unless the context otherwise requires,—
parental leave—
(a)means, for an employee,—
(i)maternity leave to which the employee is entitled in accordance with this Act:
(ii)partner’s/paternity leave to which the employee is entitled in accordance with this Act:
(i)extended leave to which the employee is entitled in accordance with this Act:
(ab) means, for a self-employed person, a period during which the self-employed person temporarily does not work because of the birth of a child or the assumption of care of a child by the person or the person’s spouse or partner (subject to section 71CD):
(b)includes, for the purposes of Parts 6 to 7A, rights and benefits in the nature of any of the kinds of leave described in paragraph (a) to which an employee is entitled by virtue of—
(i)any Act other than this Act; or
(ii)any employment agreement
[25] As the respondent submitted there are three types of parental leave referred to in the definition which applied at the relevant time, and the only type of parental leave that could apply to Mr Poihegatama’s situation was extended leave, because maternity leave was only available to woman, and paternity leave was only for a maximum period of two weeks. Extended leave cannot endure beyond the date on which the child in respect of whom the extended leave is taken is one year old, which in this case was 30 December 2009.
[26] Section 26 places other constraints on extended leave and s 26(1) requires the leave to be “taken by the employee and the employee’s spouse or partner in no more than 1 continuous period each, the combined total of which does not exceed 52 weeks”.10
[27] Section 27 sets out the various ways in which such leave may be granted, and again s 27(2)(a)-(c) all expressly refer to the leave being taken in one continuous period by each parent. The only exception is sub clause (d) which allows the leave to be taken in “such a manner as may be agreed by the employee and the employee’s spouse or partner and their respective employers”.
[28] While this provision suggests a degree of flexibility, the PLEP Act also sets out mandatory requirements for the giving of notice to an employer of the employee’s intention to take unpaid parental leave. The notice must be given in writing with defined notice periods,11 and, in the case of extended leave, contain the information specified in s 32. In addition, the employee also has obligations to provide certain information to the employee under ss 36 and 38.
[29] I accept, as the respondent points out, there is no evidence in this case that there was any compliance with the provisions of the PLEP Act to formalise an agreement to take unpaid parental leave, and, in particular, there was no evidence that a four way agreement was concluded between Mr Poihegatama and his wife and their respective
10 Again the version of the section cited is that in force prior to the 1 April 2016 amendments to the Act.
11 Parental Leave and Employment Protection Act 1987, s 31.
employers under s 27(2)(d) to take intermittent two day periods of unpaid parental leave as Mr Poihegatama suggests.
[30] In short, there is simply no evidence on which Mr Poihegatama could reasonably argue that the adjustment to working three days a week instead of five was a form of agreement under s 27(2)(d) of the PLEP Act.
[31] In the end, the issue is simple and has been fully and accurately canvassed in the previous decisions regarding Mr Poihegatama’s entitlement. As an earner, to whom the provisions of cl 33 applied, his entitlement was correctly calculated under cl 34. In respect of the two days a week he agreed not to work, there is no arguable basis on which this could be described as unpaid parental leave under the PLEP Act because it was neither a continuous period of extended leave, nor is there any evidence that an agreement was reached between both parents and their respective employers under s 27(d) to have discontinuous periods of unpaid parental leave. Accordingly, I accept the respondent’s submission that the question of law regarding whether Mr Poihegatama was on unpaid parental leave before the date of his incapacity must inevitably be answered in the negative. The alternative is not capable of bona fide and serious argument and does not, for any other reason, justify the grant of special leave to appeal to this Court.
[32]The application is declined. Costs are reserved.
Solicitors:
Young Hunter, Christchurch
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