THE ATTORNEY-GENERAL (ON BEHALF OF THE DEPARTMENT FOR COURTS) V KATINA LYNDA TIPENE CA CA115/03

THE ATTORNEY-GENERAL (ON BEHALF OF THE DEPARTMENT FOR COURTS) V KATINA LYNDA TIPENE CA CA115/03 29 September 2003IN THE COURT OF APPEAL OF NEW ZEALAND CA115/03BETWEEN THE ATTORNEY-GENERAL (ON BEHALF OF THE DEPARTMENT FOR COURTS) Applicant AND KATINA LYNDA TIPENE Respondent Hearing: 18 August 2003 Coram: Keith J Blanchard J Tipping J Appearances: H Aikman and P J Gunn for the Applicant J Katz QC for the Respondent Judgment: 29 September 2003JUDGMENT OF THE COURT DELIVERED BY KEITH J[1] Ms Tipene was employed as the associate to a High Court Judge. She suffered from occupational overuse syndrome (OOS) and from the beginning of 2001 she had been unable to work full time as an associate. Attempts by the Department for Courts to obtain her agreement to medical retirement were unsuccessful, and the Judge for whom she worked advised the Department on a number of occasions (the last on 29 October 2002) that he would not consent to the Department terminating her employment. On 7 November 2002 the Department invoked cl 40 of the employment contract to terminate her employment. [2] Ms Tipene applied to the Employment Relations Authority claiming unjustifiable dismissal. The proceeding was removed into the Employment Court. Ms Tipene applied for a split trial, with the interpretation of the contract and inparticular cl 40 to be the subject of a preliminary determination. The parties did not agree on the terms of the question, and the matter was not resolved at an interlocutory hearing. The Chief Judge before whom the preliminary matter came for discussion was however "quite clear about what is in issue":The question for the Court is one of the proper construction of the applicant's employment contract. Specifically, the question is whether, on 7 November 2002, it was open to the respondent (as contrasted with the Judge, and contrary to his express wishes) to terminate the applicant's employment by the period of notice laid down in the contract as the minimum permissible for the case where the employee under it is rendered incapable by extended illness of the proper performance of any of her duties under her contract. For the purpose of answering the question I am not called upon to decide or even assume whether it has been established to the requisite degree that the applicant is in fact rendered incapable by extended illness of the proper performance of any of her duties under her contract.[3] Clause 40 read as follows:Either party may terminate this contract by the provision of at least 20 working days' written notice. By consent a lesser period of notice may be agreed. In cases of serious misconduct, or of any material breach, continued non- observance, or non-performance of any of the terms of the contract, including persistent failure to meet the agreed performance provisions established under this contract, the Judge may summarily dismiss the Associate or dismiss on the provision of such notice as the Judge deems appropriate in the particular circumstances, provided that no dismissal shall be held effective unless it is conveyed to the Associate in writing. Dismissal will be considered if at any time the Associate: • commits any act of bankruptcy, becomes insolvent, or compounds with or attempts to compound with any creditors of the Department • commits any offence involving dishonesty or any indictable offence • behaves in a manner likely to bring the Associate or the Department into disrepute• is rendered incapable by extended mental or physical illness of the proper performance of any of the Associate's duties under her/his contract except where the provisions of Cl 21 apply The Judge shall act in accordance with the principles of fair procedure when considering terminating the appointment of the Associate. The Judge shall advise the Associate of the matter of complaint and shall allow the Associate a reasonable opportunity to provide an explanation and shall fully consider the explanation before making a decision.The Associate shall be advised of the right to representation by a bargaining agent at any stage. If the Judge forms the opinion that cause may exist for terminating the contract the Judge may, by written notice to the Associate, suspend the Associate from the performance of her/his duties under this contract. The suspension shall be upon such conditions as the Judge thinks fit, and may be on such remuneration as the Judge thinks is appropriate. During any period of suspension, the provisions of the Associate's contract shall, subject to any necessary modification, continue to apply and to bind both parties. Where employment has terminated all remuneration, outstanding leave and/ or time in lieu due to the Associate shall be paid on the day on which notice expires by cheque or direct credit as agreed.[4] The contract began in this way:BETWEEN J J W Bailey, Chief Executive, Department for Courts (on the Judge's behalf) AND Miss Katina Linda Tipene 1. PREAMBLE This contract is made under Section 19 of the Employment Contracts Act 1991 and binds the Department for Courts; including the Chief Executive, any Chief Executive who may succeed the signatory to this contract, or any other Chief Executive who may take office during the term of the contract, including Managers acting for the Chief Executive (on the Judge's behalf). 2. INTENT OF THE PARTIES The intent of this contract is to establish by mutual agreement a partnership between the Department, (acting on behalf of the Judge) and the Associate, and to define the expectations and responsibilities of both parties. The partnership will be founded on a commitment to quality, integrity and honesty. The Associate will be expected to support the polices and work practices of the Judge and work towards achieving objectives in a professional, ethical, efficient and effective manner. 3. TERM This contract shall take effect on signature from 1 July 1995 and will be ongoing until terminated in accordance with the resignation/termination provisions of this contract.4. EMPLOYMENT STATUS A Judge's Associate is a Crown prerogative employee. She/he is not a public servant. The Employer is the Crown. The Judge is the Crown's agent in respect of appointment and termination and control of conditions of the Associate. The Department is the Crown's agent in respect of negotiating terms and conditions of employment and arranging and administering payments. Their status is a reflection of the need to preserve the independence of the judiciary. The Associate's status as an employee of the Judge is necessary to enable the Judge to function, if need be, independently of the Executive. As signatory party to this contract the Chief Executive acknowledges he/she will act as the employer's agent and will provide support as required by the Judge in his/her role in appointing, terminating and deciding on the salary levels and other conditions of Associate, as contained in this individual contract. 5. APPOINTMENT PROCEDURES Associates are appointed by the relevant Judge. The Registrar (or equivalent) shall provide administrative support as required by the relevant Judge in advertising the position and arranging payment of the appropriate salary according to this contract. [5] The Chief Judge reviewed the history of the matter, set out the parties' contentions and under the heading "The contract construed" stated two "controlling propositions". In the light of that approach he asked "what does the contract mean?" He found in favour of Ms Tipene:72. No difficulty arises from the fact that, upon the retirement of the Judge, there is a role for the department to play and the associate's position is protected, at least for a limited time. The contract expressly provides that the Judge appoints the associate and the Judge terminates the associate's appointment. It is not impossible to envisage a contract under which a Judge and the department might have different roles to play in the termination of an associate's employment but that view is not available because the contract provides expressly that, so long as the associate is employed by the Judge, only the Judge may dispense with her services. There is no exception for those cases in which the department might perceive the termination action ought to be taken but the Judge is unwilling to take it. That is a situation with which, on this contract, the department has to live. In this context the expression "employed by a Judge" means quite simply while the relationship of the Judge and the Judge's associate subsists. That relationship comes to an end if the Judge dies in office or if he retires or, of course, if he has terminated the associate's employment. 73. In this case, however, at the relevant time none of these events had happened. The contract provides that, while "an Associate is employed by a Judge, only that Judge can terminate [the] Associate's appointment." This,and other language in the immediate context, could not be more clear. The word "only" strikes the eye and impresses the mind. It means, as the dictionary says, no one else other than the Judge. Accordingly, the only possible conclusion is that the department had no right to give the applicant notice terminating her employment as associate to the Honourable Justice Morris at the date when it purported to do so or at the date on which the notice expired. Whichever of those times was taken, the Judge was still in office and he alone could have terminated the associate's employment. This is scarcely a surprising conclusion. There are in the contract 61 references to the Judge or a Judge, 47 of them in the extract attached to this judgment.The contractual term quoted in para 73 comes from cl 38, Discipline and Dismissal, which sets out "principles [which] are to be followed when dealing with disciplinary matters". [6] That is the essence of the reasoning on the "Construction of the contract". It is the essential foundation for the finding which the Chief Judge makes in favour of Ms Tipene and for "the consequences" which he draws, by making a declaration, referring the amount of compensation to mediation, and indicating how questions of costs were to be resolved. [7] The Chief Judge went on to consider "The Crown prerogative point", beginning in this way:75. There is a tension between what the contract says and the Crown's contention that what the contact says, as a matter of law, is a nullity in respects and must be overridden.Crown counsel told us that they did not go so far. Rather they contended that cl 4 of the contract had to be read in the context of the contract and legislation as a whole. [8] The Chief Judge continued:76. I reject that contention, for the purposes of the present case only, on procedural grounds. The procedural objection, which I hold to be well founded, was to the absence of any advance notice, let alone pleading, of the point taken as the central issue of the respondent's case. This is no technical matter but means that the respondent failed to comply with the requirements of the Employment Relations Authority Regulations 2000 as to the contents of a statement in reply.Mr Katz QC, counsel for Ms Tipene, the Chief Judge said, had come to the Court prepared to argue only a point of contractual interpretation. We agree that the recordstrongly supports that conclusion. "In deference to the labours of counsel [Mr Katz would add, for the Crown]", the Chief Judge nevertheless over the next 17 paragraphs did indicate "a tentative view" on the soundness of the Crown argument. [9] After he had done that, the Chief Judge turned to "The consequences", that is for Ms Tipene:95. It follows that the applicant is entitled to the remedies she seeks. She is entitled to a declaration that the department proceeded unlawfully in purporting to terminate her employment. I have no hesitation in making a declaration to the effect sought which implies the further declaration that the respondent ought not to rely upon or act further upon the purported notice.As already noted, the amount of compensation was left for "further consideration" and referred to mediation; costs also remained to be fixed. The judgment ended with a two page "postscript" on its implications, where again prerogative issues are prominent. [10] The Attorney-General seeks leave to appeal against the decision under s214 of the Employment Relations Act 2000:214 Appeals to Court of Appeal on question of law(1) Where a party to any proceedings under this Act is dissatisfied with any decision of the Court (other than a decision on the construction of any individual employment agreement or collective employment agreement) as being erroneous in point of law, that party may, with the leave of the Court of Appeal, appeal to the Court of Appeal against the decision; and section 66 of the Judicature Act 1908 applies to any such appeal. (3) The Court of Appeal may grant leave accordingly if, in the opinion of that Court, the question of law involved in that appeal is one that, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for decision. (4) The Court of Appeal, in granting leave under this section, may, in its discretion, impose such conditions as it thinks fit, whether as to costs or otherwise. [11] The Crown in the introduction to its written submissions in support of its application saysthat this case involves an interpretation of the scope of the Crown prerogative, which not only affects the employment of a significant number of "Crown prerogative" employees of the Department for Courts, but also concerns the proper boundaries of the principle of judicial independence. In addition, it affects the responsibilities of State sector chief executives, both as employers and for the prudent financial management of their departments. As such, the issues of law involved are much wider than the individual employment issues arising between the two parties.[12] The submission elaborates that point by reference to particular passages of the judgment appearing under the heading "The Crown prerogative point". It is critical in considering this submission to emphasise that the Chief Judge discusses the scope of the Crown prerogative only in the later "tentative" part of his judgment, having already rejected the Crown's contentions about the prerogative on procedural grounds (para [8] above). On its face, for those two reasons, that part of the judgment is not part of the ratio of the case. We do not see it as having any binding authority. Further and to repeat, the essential reasons for the decision on the interpretation of the contract are those under the heading "The contract construed". Section 214 provides for appeals by a "party dissatisfied with [a] decision of the Court as being erroneous in point of law". It does not allow simply for the correction of errors in statements of law unnecessary for decision. [13] It is true that the Crown does contend that three passages of the judgment falling under the heading "The contract construed" are erroneous in law. The first, however, is criticised because it is said to contradict what the Court says in the later "prerogative" part of the judgment. That later passage is of course subject to the two substantive qualifications relating to the authority of the part of the judgment just identified. It cannot be extracted and treated as if it appeared within the substantive part of the judgment constituting the ratio. [14] The second reference is however to an alleged contradiction within that substantive part. In the first passage, the Chief Judge says that the contract was plainlydeclaratory of the proposition that the associate was answerable and owed loyalty to the Judge exclusively and was not answerable and did not owe loyalty to the chief executive or other instrument of the executive government notwithstanding that it is the Crown that pays her.That passage is said to be contradicted by the statement in para 72 (para [5] above) that the Chief Executive was responsible for various aspects of the employment. We do not see the latter passage as going so far. In any event this matter appears to be one simply of the construction of the contract – a matter excluded from any appeal to this Court. [15] The final passage to which the Crown refers appears earlier in the judgment when the Court is setting out the parties' arguments:65. Another section [of the Crown's argument] dealt with in some length was the true identity of the employer but I do not propose to discuss this argument or the cases cited in support of it because, essentially, I accept the applicant's argument that the challenge is to the department's action in purporting to terminate the applicant's employment.In fact, later in the judgment, the Chief Judge does appear to find, as a matter of the construction of the particular contract, that the judge was the employer. The ultimate decision did not however turn on that point or the Judge's view of it. [16] The Crown also submitted that the Chief Judge had failed, when interpreting cl 4 of the contract, to pay sufficient regard to the contract as a whole and the legislative context in which it was designed to operate. The Chief Judge thereby, so it is submitted, failed to apply proper principles of interpretation, a matter which is capable of appeal to this Court, as opposed to an individual interpretation which is not. We accept that such consideration of the legislation as there was appears in the "tentative" prerogative part of the judgment and there is no express reference to the need to interpret the contract as a whole. We do not, however, regard these matters as raising, in the circumstances of this particular case, a point which bears with sufficient force on the Chief Judge's ultimate interpretation of the contract as to warrant the grant of leave to appeal. [17] The Crown also refers to several procedural decisions which it says are erroneous; and contends further that the Chief Judge erred in making evidential findings in respect of disputed aspects of Ms Tipene's employment and its termination given that he was asked to decide only a preliminary issue of law. There does appear to be some strength in those complaints, but they arise out of theprocedural complexities into which this case has descended. If there are questions of law to be disentangled they do not have the general or public importance to which s214 refers and there is no other reason identified for referring them to this Court for decision. [18] To repeat, the broad issues of law which the Crown identified at the outset of its written submission (para [10] above) might well have qualified, but those matters were not in fact the subject of a decision by the Chief Judge because, acting fully within his discretionary powers, he decided they could not be raised for procedural reasons. [19] We accordingly refuse leave to appeal. We repeat that we do not consider that the discussion appearing in the judgment under the heading "The Crown prerogative point" has any precedential authority. That is both for the reasons which the Chief Judge himself gives (para [8] above) and because he had already decided the question of construction in favour of Ms Tipene. [20] Ms Tipene is entitled to costs of $4,500 and to reasonable disbursements including the travel and accommodation expenses of counsel to be fixed by the Registrar in the absence of agreement.Solicitors: Crown Law Office, Wellington for the Applicant Haigh Lyon, Auckland for the Respondent