AIR NEW ZEALAND LIMITED V CLIFF AND ANOR CA CA200/06

AIR NEW ZEALAND LIMITED V CLIFF AND ANOR CA CA200/06 8 May 2007IN THE COURT OF APPEAL OF NEW ZEALAND CA200/06 [2007] NZCA 181BETWEEN AIR NEW ZEALAND LIMITED Applicant AND BRIAN CLIFF AND ALLAN WILLIAM GROOM Respondents Hearing: 19 February 2007 Court: Hammond, Chambers and Arnold JJ Counsel: A H Waalkens QC and K M Thompson for Applicant R E Harrison QC, J Roberts, and G J Luen for Respondents Judgment: 8 May 2007 at 10.30 amJUDGMENT OF THE COURT A The application for leave to appeal is dismissed. B The applicant must pay to each respondent costs of $2,000, plus usual disbursements. REASONS OF THE COURT(Given by Chambers J)Application for leave to appeal[1] On 23 August last year, the Employment Court delivered its decision on personal grievance claims brought by Brian Cliff and Allan Groom against their employer, Air New Zealand Limited: 7 NZELC 98,369. Judge Shaw found thatAir New Zealand was not justified in reaching the conclusion that Messrs Cliff and Groom had been guilty of serious misconduct. She ordered the airline to reinstate Mr Cliff, to compensate him for lost earnings, and to pay him damages for stress and humiliation in the sum of $10,000. Mr Groom had not sought reinstatement. The judge in his case ordered the airline to contribute towards his loss of earnings. She also awarded him $12,000 compensation for stress and humiliation. [2] The airline now seeks leave to appeal against this decision. Leave can be granted only if, in this court's opinion, the question of law involved in the proposed appeal is one that, by reason of its general or public importance or for any other reason, ought to be submitted to this court for decision: Employment Relations Act 2000, s 214(3). [3] Messrs Cliff and Groom oppose the grant of leave. [4] We have determined that leave should be refused. We now give the reasons, "briefly and in general terms only", as permitted by r 27(3) of the Court of Appeal (Civil) Rules 2005. [5] Before giving these reasons, we make one general observation. In Waitemata District Health Board v New Zealand Public Service Association [2005] 1 ERNZ 1058, this court held that, on applications for leave to appeal from Employment Court decisions, it was incumbent on the applicant to identify the precise questions of law which the applicant asserted met the statutory criteria: at [16]. Air New Zealand did not do that in this case. The notice of application set out only "grounds of appeal". During the course of discussion between bench and bar, we attempted, with some difficulty, to reformulate the grounds as questions of law. The difficulty in formulation principally arose from the fact that some of the grounds did not in truth contain questions of law. That is precisely why this court has insisted applicants identify questions of law in their applications for leave. It is an important discipline on counsel and the bench, and helps ensure that this court does not exceed its limited jurisdiction under s 214.Grounds 1-3[6] Mr Waalkens QC, for Air New Zealand, advanced no fewer than nine points of law arising, he said, from the Employment Court's decision. Following discussion with the bench, Mr Waalkens accepted the first three grounds could be considered together. [7] Messrs Cliff and Groom were dismissed following a company investigation into their use of company computers. Judge Shaw found the company's investigation had been undertaken unfairly and inadequately. Air New Zealand seeks to challenge that aspect of the decision on the ground that the court set too high a standard for the investigation. There was said to be a misapplication of this court's decisions in W & H Newspapers Limited v Oram [2001] 3 NZLR 29 and Northern Distribution Union v BP Oil New Zealand Limited [1992] 3 ERNZ 483. [8] Because the first three grounds did not state a question or questions of law, we attempted in the course of the short leave hearing to articulate what the question might be. In the end, Mr Waalkens said the question might be phrased along the following lines:Did the judge, having found certain defects in the employer's investigation, then fail properly to determine whether, from the perspective of a fair and reasonable employer, there were nonetheless reasonable grounds for believing that serious misconduct had occurred?[9] We are not satisfied that the challenge, even as now drafted, does raise a question of law. Rather the essential challenge is to the court's factual findings and the evaluative conclusions based on them. Even if we are wrong in that, the question of law arising does not meet the statutory test, particularly in circumstances where this court's decision in Oram has to a significant extent been overturned by Parliament: see Employment Relations Act, s 103A. (This section was not in force at the date of these dismissals.)Ground 4[10] Mr Waalkens complained that the judge failed to consider that Air New Zealand had relied on two distinct reasons in dismissing Messrs Cliff and Groom. The first reason related to personal use of the internet during work time. The second reason related to the nature and content of the sites allegedly visited. Mr Waalkens submitted the judge failed to consider personal overuse separately. Had she done so, she would have found that a conclusion of serious misconduct was open to the airline on this count. [11] We do not accept the judge did ignore the separate ground of personal overuse. Mr Waalkens focused on what Judge Shaw said at [186] of her judgment, but this ignores what she went on to say at [190]-[194]. As Dr Harrison QC, for Messrs Cliff and Groom, said, the airline's argument on this head involves "a misinterpretation of an extractof the judgment". We agree.Ground 5[12] Mr Waalkens's next complaint was that the judge failed to give "individual consideration" to the claims of Mr Cliff and Mr Groom. He submitted that "there were material differences in the circumstances of the two individuals", but those differences were not reflected in the judgment. [13] We do not accept the judgment suffers from this alleged error. The two cases were, as Dr Harrison submits, "very similar and inter-related", which is why they were heard and argued together. Much of the evidence (eg, as to Air New Zealand's policies) was common to both claims. Notwithstanding that, the judge clearly considered the men's claims separately, as numerous passages in her judgment attest to.Ground 6[14] The sixth ground of appeal was that Judge Shaw erred in concluding there was no evidence to suggest it would not be practicable to reinstate Mr Cliff. Mr Waalkens submitted this finding overlooked evidence given by an Air New Zealand witness, Malcolm Waite, to the effect reinstatement was not practicable. [15] Mr Waalkens in our view misstates what the judge decided. The judge, at [204] of her judgment, expressly acknowledged that Mr Waite had given evidence suggesting he would not be comfortable "with the prospect of Mr Cliff returning". What the judge said was, apart from that evidence, "there [was] no evidence to suggest that [Mr Cliff's reinstatement] would not be practicable". She then went on to say at [205]:I do not accept that Mr Waite's evidence is sufficient to establish that if Mr Cliff returned that he would not be able to become a harmonious and effective member of the employer's team were he to be reinstated.[16] That finding was open to her. She was entitled to reject Mr Waite's evidence.Ground 7[17] The next ground of complaint was that the judge failed to reduce Mr Cliff's claim for lost earnings on the ground that Mr Cliff had failed to mitigate his loss between the date of the Employment Relations Authority's decision (finding the dismissals of both men justified), namely 1 June 2005, and her decision (23 August 2006). [18] Mr Cliff gave evidence as to the work he had done and the money he had earned since his dismissal. As Dr Harrison observes, he was not cross-examined about that. Mr Waalkens accepts the onus of establishing a failure to mitigate fell on Air New Zealand. He submits the issue was raised in Air New Zealand's statement of defence, where the final plea read:If the plaintiff's dismissal was unjustified (which is denied) the plaintiff has failed to mitigate his loss in not seeking any form of alternative employment and/or remuneration following his dismissal.[19] But no particulars were given. And Mr Cliff's evidence as to what he had done was not challenged. In these circumstances, the judge was fully entitled to ignore that pleading, which had been given no factual substance. [20] No question of law arises. Even if we are wrong in that, any conceivable question does not meet the statutory criteria.Ground 8[21] Mr Waalkens submitted the judge misapplied s 124 of the Employment Relations Act. That section reads as follows:124 Remedy reduced if contributing behaviour by employeeWhere the Authority or the Court determines that an employee has a personal grievance, the Authority or the Court must, in deciding both the nature and the extent of the remedies to be provided in respect of that personal grievance, - (a) consider the extent to which the actions of the employee contributed towards the situation that gave rise to the personal grievance; and (b) if those actions so require, reduce the remedies that would otherwise have been awarded accordingly.[22] Mr Waalkens's complaint is that the court misapplied that section because, when determining the employees' contribution towards the situation that gave rise to the personal grievance, the court also took into account the employer's actions. [23] In our view, there is nothing in this complaint. In many cases, it is impossible to assess the extent of the employees' contribution without at the same time considering the extent of the employer's contribution. As Dr Harrison observed, "How else can the court fairly and properly reach a percentage assessment of overall relative contribution or "fault"?"Ground 9[24] The final ground relates to Judge Shaw's award to Mr Groom of 75% of his overall loss of earnings between the date of the Employment Relation Authority's determination and the date of the Employment Court decision. Mr Waalkens pointed out that Mr Groom in his statement of evidence had sought lost wages "onlyto 27 June 2005", that being the date on which he managed to gain alternative employment. [25] While Dr Harrison sought to defend what the judge had done in this regard, suggesting she had acted "pursuant to the equity and good conscience jurisdiction", this clearly was an error by the judge. She ought not to have compensated for a loss which Mr Groom had not sought. She gave no hint that she was exercising "the equity and good conscience jurisdiction" in awarding compensation beyond 27 June 2005. In any event, it would have been wrong to exercise such a jurisdiction without forewarning Air New Zealand. [26] Although we are clear there was an error in this regard, it does not give rise to a question which should properly trouble this court. The restricted appeal right will mean that Employment Court errors go uncorrected from time to time. Errors of fact are not correctable; errors in the construction of employment agreements are not correctable; errors of law which do not meet the criteria set out in s 214(3) are not correctable. [27] The financial consequences of this error are relatively insignificant. It may be the airline will decide to bear the cost. Alternatively, Mr Groom and the airline may be able to agree on a recalculation of the compensation for lost earnings, based on the judge's formulation, but with a cut-off date of 27 June 2005 (as claimed). [28] We express no view as to whether the airline could apply to the Employment Court to have the judgment recalled on this point to correct this obvious error.Conclusion[29] None of the grounds of appeal give rise to questions of law meeting the statutory criteria. We accordingly dismiss the application for leave to appeal.Solicitors: G L Norton, Company Solicitor, Air New Zealand Limited, for Appellant Hesketh Henry, Auckland, for Respondent