New Zealand Case Law: Decisions & Judgments

Topic

Shareholder-employee earnings

Legal area

Court

30 Jun 2023

SIMPSON v ACCIDENT COMPENSATION CORPORATION [2023] NZHC 1661

Citation

[2023] NZHC 1661
Court

High Court

Special leave was declined because the proposed questions either did not arise squarely from the District Court decision or were not questions of law capable of bona fide and serious argument; the statutory scheme makes s 15(2) the default and the Corporation was reasonable to rely on PAYE/tax evidence showing nil earnings given the company's losses and absence of salary payments; clause 39 applies only where the claimant had earnings as a shareholder-employee and thus clause 42 was not engaged.
8 Feb 2018

Hamilton v Accident Compensation Corporation (Suspension of Entitlements)

Citation

[2018] NZACC 30
Court

District Court

The District Court held ACC was entitled to apply s15(3) to post-incapacity earnings (it need only take tax returns into account and is not bound by them) and, on the facts, the tax returns for 2004–2014 could properly be treated as unreasonably influenced; ACC's allocation of 75% of Olette Ltd's profits to the appellant as reasonable remuneration for services was a justified and reasonable exercise of discretion for abatement purposes. The appeal was dismissed.
3 Aug 2017

Hawkins v Accident Compensation Corporation (Weekly Compensation)�

Citation

[2017] NZACC 90
Court

District Court

On the evidence the change from non-PAYE year-end drawings to a PAYE shareholder salary in March 2007 lacked contemporaneous, cogent business justification and, given the company's substantial losses and cashflow position, the March 2007 PAYE payments were properly regarded as unreasonably influenced by incapacity under clause 31; accordingly the Corporation's revocation of weekly compensation was upheld.
9 Dec 2016

Gardner v Accident Compensation Corporation

Citation

[2016] NZACC 320
Court

District Court

The Court allowed the appeal in part: although the Corporation was entitled to treat the 2014 tax return as unreasonably influenced, it failed to perform the statutory s15(3) calculation of reasonable remuneration after rejecting the tax-based amount; the original decisions are set aside and ACC is directed to reconsider entitlement by undertaking the s15(3) assessment and then issue a fresh decision with review rights. The separate challenge to levy invoices was dismissed as out of time and the Corporation's refusal to issue a new levy decision did not create a reviewable decision.
4 Mar 2016

Irwin v Accident Compensation Corporation

Citation

[2016] NZACC 58
Court

District Court

The Court held that clause 31 requires the Corporation to take tax returns into account but does not extinguish the statutory power under s15(3) to determine a reasonable remuneration amount where the subsection (2) amount is not a reasonable representation; given the stark post-accident apportionment and supporting evidence the respondent was entitled to adjust the appellant's earnings to $34,791.79 for abatement, so the appeal was dismissed.
30 Oct 2015

Accident Compensation Corporation v Rusher

Citation

[2015] NZACC 322
Court

District Court

The Court held clause 39(2)(a) of the First Schedule and the 'relevant year' definition govern calculation; because the respondent had no shareholder-employee earnings in the relevant year the statutory formula yields nil for that period and section 15(3) cannot be used to substitute earnings from a later tax year or to override clause 39; accordingly the reviewer's decision was quashed and the original weekly compensation assessment reinstated.
5 Aug 2011

BARTROM ESTATE V ACCIDENT COMPENSATION CORPORATION HC AK CIV-2011-404-887

Citation

openlaw-b652313a_4456_4461_931b_f772e815870c.pdf
Court

High Court

Clause 39(2)(c) applied because the claimant had shareholder-employee earnings in earlier years and the relevant year for clause 39 was the year ending 31 March 2002; s 15(3) permits the Corporation to determine reasonable remuneration for that relevant tax year (which it did as $7,402.38) but does not allow the court or the Corporation to circumvent or alter the mandatory clause 39 arithmetic; therefore the Corporation's calculation of weekly earnings was correct and the appeal is dismissed.
17 Jan 2011

Estate of M Bartrom v Accident Compensation Corporation

Citation

[2011] NZACC 8
Court

District Court

Leave to appeal was granted because there exist arguable questions of law regarding the proper application and interaction of s15(3) and Schedule 1 clause 39(2) in assessing shareholder-employee earnings and weekly earnings, warranting referral to the High Court.
19 May 2010

Estate of Bartrom v Accident Compensation Corporation

Citation

[2010] NZACC 72
Court

District Court

Because the deceased had previously received shareholder-employee earnings from the same company in earlier years, he did not 'first commence' shareholder-employee earnings in the 2003 tax year; therefore Clause 39(2)(c) applies, and ACC correctly used s15(3) to determine reasonable shareholder-employee remuneration for the relevant year (2001–02) and calculated weekly earnings accordingly, excluding 2003 profits.
8 Mar 2010

Pratley v Accident Compensation Corporation

Citation

[2010] NZACC 42
Court

District Court

Weekly compensation entitlement and calculation depend on earnings immediately before the specific period of incapacity; drawings are not earnings; the appellant had no earnings as a shareholder-employee immediately before the May 2008 incapacity and therefore had no entitlement to weekly compensation and clause 42 did not apply.