New Zealand – Cases

2013

Commerce Commission v Thai Airways International Public Company Ltd [2013] NZHC 844

High Court of New Zealand Auckland Registry, Allan J, 22 April 2013

Costs order. The defendant, Thai Airways International Public Company Ltd (Thai Airways) had admitted breaches of Part 2 of the Commerce Act 1986 (the Act). The plaintiff subsequently asked the court to impose a pecuniary penalty under the Act. An order was given for payment to be made in accordance with the following timetable: (a) Thai Airways to pay to the Commission $259,079.18 for costs within 30 days of the date of this judgment; (b) Thai Airways to pay the pecuniary penalty of $2.7 million in four equal instalments of $675,000 each, on or before the following dates: (i) 30 days from the date of delivery of this judgment; (ii) Six months from the date of delivery of this judgment; (iii) Twelve months from the date of delivery of this judgment, and (iv) Eighteen months from the date of delivery of this judgment. No interest was payable on any part of the pecuniary penalty or costs.

 

Commerce Commission v Cathay Pacific Airways Limited [2013] NZHC 843

High Court of New Zealand Auckland Registry, Allan J, 22 April 2013

Costs order. The defendant, Cathay Pacific Airways Ltd (Cathay Pacific) had admitted certain breaches of Part 2 of the Commerce Act 1986 (the Act) and had not denied other breaches. The Court was asked to impose a pecuniary penalty under the Act. The Court gave an order approving the recommended penalty and directing the defendant to pay to the Commission the sum of $4.3 million. The defendant was further ordered to pay costs to the Commission of: (a) $159,079.18 for the stage one hearing, and (b) $100,000 for the Commission’s other Court costs.

 

2011

Civil Aviation Authority of New Zealand v New Zealand Airline Pilots’ Association Industrial Union of Workers Incorporated [2011] NZCA 520

Court of Appeal of New Zealand, Ellen France, Harrison and Stevens JJ, 7 October 2011

Section 10(3) Civil Action Act 1990 – Random Sampling Procedures – Pilots Criminal Records – Privacy Act 1993 – New Zealand Bill of Rights Act 1990

The Civil Aviation Authority of New Zealand and the Ministry of Justice entered into an agreement to provide the Authority and the Director of Civil Aviation access to a random sample of pilots criminal records, relying on section 10(3) of the Civil Aviation Act 1990. The Authority and Director argued that section 10(3) allows such a sampling to ensure the pilot is fit for duty.

The New Zealand Airline Pilot’s Association Industrial Union of Workers Incorporation maintained that the random sampling process was not lawful and fell outside the scope of section 10(3).

The Court of Appeal dismissed the appeal. The Court agreed with the Judge, Kos J, that the purpose of section 10(3) cannot be used as a “trawling” exercise to determine whether a pilot is a fit for duty. The court confirmed that section 10(3) should only be used for the application or review process and therefore would only be applicable when an application for a pilot’s license is sought or if a pilot seeks a renewal of their license.

 

Director of Civil Aviation v Shahroodi HC Auckland [2011] NZHC 1183

The High Court of New Zealand Auckland Registry, 4 October 2011

Competency of a Pilot – Revoking a Pilot’s Licence – Human Rights Act 1993 – Privacy Act 1993 – Civil Aviation Act 1990

The Director suspended Mr Shahroodi’s pilot’s licence after an aircraft he was piloting left the runway and collided with a perimeter fence. Upon reviewing Mr Shahroodi’s file the Director sent a notice that Mr Shahroodi’s pilot’s licence was to be revoked under s.18 and s.19 of Civil Action Act 1990. When Mr Shahroodi received this decision he replied to the Director’s with a request for his personnel file. The initial request was made on 20 March 2009 and the Director sent the personnel file on 26 March 2009, but failed to provide all documentation to Mr Shahroodi claiming the request was not for the entire file but solely the personnel file. Mr Shahroodi continued to request all the documentation held but the Director did not comply until 14 July 2009, after the pilot’s licence had been revoked.

The High Court have noted that the appeal regarding the revocation of Mr Shahroodi’s pilot’s licence has been heard and a decision has been reserved.

With regard to this matter the High Court has reviewed the proceedings pursued under the Privacy Act 1993 and the decisions reached by the Tribunal. The Tribunal found that Mr Shahroodi’s privacy had been interfered with and awarded damages of $10,000.00 to Mr Shahroodi under s.88(1)(b) and (c) of Privacy Act 1993, but dismissed his claim for loss of income. Further to this decision the Director sought to appeal but failed to file a Notice of Appeal before the end of the 30 day period prescribed by law. The Court found that though the damages could be appealed, the Director failed to notify of his intention to appeal and therefore the Tribunal’s decision would remain.

 

Wellington International Airport Limited v Commerce Commission HC Wellington [2011] NZHC 971

High Court of New Zealand Wellington Registry, Clifford J, 17 August 2011

Judicature Amendment Act 1972 – Part 4 Commerce Act 1986 – Regulation of airport services – Regulation of the price and quality of goods or services in markets where there is little or no competition and little or no likelihood of a substantial increase in competition – Joinder of Major Electricity Users’ Group Inc

This cases was brought to challenge the process under Part 4 CA 1986 and determine the “input methodologies” (“IMs”) used in the regulation of airport services. Both Wellington International Airport Ltd (WIAL) and Christchurch International Airport Ltd (CIAL) brought these proceedings against the Commerce Commission (CC), it should be noted the outcome of these proceedings would affect Auckland International Airport Ltd (AIAL) and Air New Zealand Ltd (ANZ). The focus of this aspect of the proceedings involved an application to include the Major Electricity Users’ Group Inc (MEUG) as an interested party.

The main purpose of Part 4 CC is to promote a competitive market to allow investment and innovation for the lasting benefit of consumers. The CC used MEUG to produce s.52 determinations which under Part 4 help regulate the supply of goods and services for suppliers and customers.

The CC supported the application to allow MEUG to join the proceedings as even though they would not be affected by the airports services in this matter they had been involved in the process that resulted in the CCs determinations. The Airports response to the CCs support being that MEUG have no direct interest and would act solely as an industry group representative and not an affected party. They argued that any addition to the proceedings would unnecessarily increase the costs.

The Court made a decision to add MEUG as a joinder to the proceedings on the basis that MEUG would have an interest in the outcome of this matter. The Court agreed with the argument made by the CC that the Airports are challenging the lawfulness of the process adopted by the CC, thus creating a situation where MEUG has a direct interest in the outcome of the proceedings on whether or not the process they engaged in with the CC is lawful or not.

A final judgment regarding Part 4 of the Commerce Act 1986 is awaited.

 

Matsuoka v LSG Sky Chefs New Zealand [2011] NZEmpC 44

Employment Court, Judge B S Travis, 18 May 2011

Employment Law – Employment Relations Act 2000 – Catering contract to service Singapore Airlines – Right to transfer employment – Terms of employment

 

Brunton v Garden City Helicopters Ltd [2011] NZEmpC 29

Employment Court Christchurch, Judge B S Travis, 31 March 2011

Employment Law – The tests for employee or contractor; The Economic Reality Test, The Control Test and The Integration Test – Bargaining power

The main argument here was whether or not the plaintiff was an employee, under a contract of service, or an independent contractor, under a contract for services. Mr Brunton was a pilot and manager for Garden City Helicopters who had worked as a contractor over the years but claimed to be an employee and not a contractor during the latter period.

In determining the status of Mr Brunton the Court had to consider a variety of tests;

1. The economic reality test – “whether the person who engaged in providing the service did so as a person in business on his or her own account”

2. The control test – “whether the defendant had the right to control the plaintiff not only in what they do but when and where they do it”

3. The integration test – “would they be a contractor or an employee considering the level or integration and work they are given”

The Employment Court held the plaintiff was not an employee but rather an independent contractor. To determine this, the Court considered the bargaining position of the parties and used a starting point that an employee is recognised as having a lesser bargaining power as they will generally be less experienced than the employer. However, in this instance Mr Brunton was considered to have equal bargaining power due to his extensive experience. There were a variety of additional reasons for this decision, the most important being the “real nature” of the parties relationship. In considering the “real nature” of the relationship there will need to be consideration of the written agreements, documentation, and actions of each party. Unless there is a document signed by both parties expressly confirming the status of a party this will always be a fact dependant point such as here where the plaintiff took no actions to amend his status from contractor to employee when he should have know the difference.

 

C v Air Nelson Limited [2011] NZEmpC 27

Employment Court Auckland, Judge M E Perkins, 29 March 2011

Employment Law – Misconduct of a Pilot; Purchase of alcohol, Consumption of alcohol when rostered for duty, Sexual Harassment and Did the behaviour and conduct of the pilot breach the Airlines standards of conduct – Disciplinary Action – Employee Dismissal – Personal Grievance – Claim that the dismissal was unjustified and caused a disadvantage to the pilot during the investigation and sought reinstatement

The plaintiff was a pilot who worked for Air Nelson Limited (ANL) at the time of the material incident. The male pilot, the male flight officer and female flight attendant had an unscheduled overnight layover in Napier due to adverse weather conditions. As a result of the unplanned layover the three parties where required to stay in a hotel until the rescheduled flight time the next day. On their way to the hotel the three employees stopped at a supermarket to purchase alcohol. Upon arrival at the hotel the parties changed into hotel robes as they did not have any overnight clothing. The parties engaged in alcohol consumption between 10pm and 11.30pm resulting in sexual intercourse between the plaintiff pilot and female flight attendant. The female attendant did not remember the sexual acts and believed she would not have had sex with the plaintiff or flight officer but could not remember anything and alleged rape to the police and a grievance to ANL.

This action arose from the decision to dismiss the pilot as a result of the investigation into the pilots conduct during the layover. The employer’s investigation into the pilot’s conduct involved actions such as finding out the size of the hotel’s wine glasses to determine alcohol consumption and not considering the experts opinion that the amount of alcohol consumed would have been out of the plaintiff’s system in the morning, which would indicate there had not be excessive drinking. Further to this point the investigator engaged in a game of speculation about the alleged rape and the motives of the plaintiff, failing to account for the numerous holes in the scenario such as the level of alcohol in the flight attendant being such that she would not have been unconscious at the material time and did not drink enough to suffer memory loss, that she removed her tampon in the plaintiff’s bathroom and returned to his bed naked during the night and that the parties agreed she had been discussing the possibility of sexual intercourse with a married man prior to the alleged rape, even though she stated she would never engage in such activity. The investigators decision to dismiss the plaintiff was considered unfounded and unreasonable.

The Employment Court found the dismissal of the plaintiff unjustified. Upon handing down this decision the Court found that the primary remedy for the dismissal would be reinstatement of the pilot’s position with ANL. The Court held that the plaintiff should be reinstated within 21 days of the judgement and will be reimbursed his lost salary between the time of his dismissal and his reinstatement. The court also considered his award for damages and held that due to contributing factors, such as the willing consumption of alcohol, it would be reasonable to reduce his damages from $25,000 to $10,000. The Court also stated that such contributing factors could not alter the primary decision that the plaintiff should be reinstated.

 

Smith v Air New Zealand Limited [2011] NZCA 20

Court of Appeal of New Zealand, O’Regan P, Chambers and Ellen France JJ, 18 February 2011

Discrimination on the grounds of disability – Sections 44 and 52 of the Human Rights Act 1993 – Passenger facilities; charging a passenger for oxygen

The appellant suffers from a genetic condition limiting her chest expansion and ability to take in oxygen, as a consequence, they require supplementary oxygen on domestic and international flights. A claim was made to the Human Rights Tribunal that the respondent, Air New Zealand (ANZ), discriminated against the appellant on the grounds of her disability. Though ANZ accommodated the requirement of supplementary oxygen they required the appellant to arrange and fund her own oxygen on domestic flights and charged her on international flights.

The Tribunal held ANZ had breached s.44(1)(b) of the Human Rights Act 1993 (HRA) as the treated her “less favourably” due to her disability. However, the Tribunal went further to state that such discrimination would be covered under the exception of s.52b(ii) HRA, where “the person who supplies the facilities or services cannot reasonably be expected to provide them without requiring more onerous terms”. The Tribunal therefore found in favour of ANZ that Ms Smith had not been discriminated against but did find that there had been an initial breach of s.44(1)(b).

The High Court heard this appeal and found that ANZ had not breached s.44(1)(b) as they had not treated the appellant less favourably due to her disability. The Court also agreed with the conclusion of the Tribunal that ANZ had complied with s.52 and evidenced this fact, therefore they had acted reasonably in this matter.

 

Director of Civil Aviation v Air National Corporate Limited [2011] NZCA 3

Court of Appeal of New Zealand, Arnold, Ellen France and Harrison JJ, 7 February 2011

Suspension of Air Operator’s Certificate – Civil Aviation Act 1990 – Interim Relief – Judicature Amendment Act 1972 – Judicial Review

The Director of Civil Aviation suspended the Air Operator’s Certificate for Air National Corporate Ltd for 10 days to allow them time to investigate operations after a management audit identified a variety of breaches and violations. The suspension was pursuant to s.17 Civil Aviation Act 1990, which allows for the removal of the certificate where it is necessary in the interests of safety.

Air National brought this action and asked for judicial review claiming the process was unreasonable and outside the procedural requirements.

The Court of Appeal allowed the appeal. The Court took the view that the Director had acted within the remit of s.17 and treated the possible falsification of documents as a serious matter. The Court stated that the Director must ensure the safety of air operations at all times and Air National had not proven that this decision was unreasonable or irrational.

 

Milne v Air New Zealand Limited [2011] NZERA 65

Employment Relations Authority, R.A Monaghan, 3 February 2011

Employment Law – Flight attendant on long term sick leave – Company policies on long term sick leave – Bullying and Harassment causing an increased fear in flying due to in flight safety concerns raised against fellow employees – Dismissal

 

2010

Andrews v Director of Civil Aviation [2010] NZCA 505

Court of Appeal of New Zealand, Glazebrook, Arnold, Randerson JJ, 9 November 2010

Section 27(A-P)Civil Aviation Act 1990 – Pilot’s and Medical Certificates- Risk of a further cardiovascular event – Suspension or imposed conditions for the carriage of passengers – “Reasonable Grounds”

The Director of Civil Aviation imposed restrictions on the appellant’s medical certificate while he underwent further medical examination to determine the risk of a further cardiovascular event. The appellant was restricted from carrying passengers, flying over built up areas and towing until the outcome of further review. Upon final medical review of the appellant’s condition the restrictions were considered reasonable and were to remain conditions of the medical certificate as he did not meet the agreed medical standard.

The Court of first instance held such restrictions imposed by the Director were not within the powers of section 27I and would only be relevant when there has been a change of medical circumstances. On appeal to the High Court this decision was overturned and the Court held that the Director was able to rely on section 21I as any imposed restrictions should be based on the medical evidence provided at the time a decision is reached.

The Court of Appeal dismissed the appeal. The restrictions imposed on the appellant were within the powers of section 27I and any decision made would be based on the facts of the case. However, though this appeal was dismissed it was noted that any restrictions imposed on a pilot’s medical certificate should only be made on “reasonable grounds”. Further to this the Court of Appeal returned this matter to the District Court Judge to decide whether the restrictions were imposed on “reasonable grounds”.

 

Page v Hendra HC Palmerston North CIV 2009-454-772 [2010] NZHC 1833

High Court of New Zealand Palmerston North Registry, Associate Judge D.I Gendall, 21 September 2010

Joint Venture Project and Agreement– “Deed of Arrangement” – Division of Assets – Aviation Property – Section 23M Judicature Act 1906

The plaintiff, Mr Hendra, was an experienced aircraft engineer who entered into a joint venture project and agreement with the defendant, Mr Page, a businessman. The project being to repair and refurbish aircraft and helicopters in a leased hangar at Palmerston North International Airport.

This case arose from a dissolution of the parties partnership and a dispute over the division of assets. The plaintiff maintained he was entitled to remuneration for works done and an equity share of the company assets, where the defendant argued he had financed the company and project and was therefore entitled to the proceeds from the sale of the assets.

The court held each party had an equitable stake in the venture and therefore an equitable division of assets was ordered. The court also held this order would be secondary to the creditors of either the partnership or its companies.

 

2008

Craigie Trust and Ors v Auckland International Airport Limited HC AK [2008] NZHC 991

High Court of New Zealand Auckland Registry, Williams J, 27 June 2008

Public Works Act 1928 – Section 40, Public Works Act 1981 – Reserves Act 1977 – Land no longer required for the public work purpose of an “aerodrome” – What constitutes an “aerodrome” – Right to purchase the land at the price as of 1982 – Section 4(6) Auckland Airport Act 1987

In this matter an area of around 36 hectares was acquired under the Public Works Act 1928 and held for a public work. The land is no longer required and the Craigie Trust sought to reclaim the land under section 40 Public Works Act 1981 (s40 PWA), which would entitle them to purchase the land back at the price applicable in 1982. One of the most fundamental questions arising from this matter is whether an airport could be considered a public work when it is not being used or required. The Court would be required to consider whether it would be impractical, unreasonable or unfair to offer the land back and whether there has been a change in the character of the land under which it was originally held.

The High Court confirmed that under Section 4(6) of the Auckland Airport Act 1987 the airport is considered a public work due to the ability “to exercise the functions of a local authority”. On this basis the land in question would be subject to s40 PWA and the airport would be “bound to honour its provisions unless exempted”. Further to these points the Court must then establish whether the land was still held for a public work. This point meant the Judge needed to determine the meaning of the term “aerodrome” and whether the current use and future plans for the land would fall under the modern definition of the term. The Court held that if the term “aerodrome” is a point of reference it would be common for people to include the airport and all subsidiary functions of the airport under the heading. This meant that the ancillary facilities and projects within the Craigie Trust land would fall under the term a public work and could therefore still be held under a public work.

Though the Court did not find in favour of the Craigie Trust they did comment on the third salient point on whether the land could have been offered back to the Trust. On this issue the Court stated that it would not have been a practical, reasonable or fair to offer the land back to the Trust, though a partial offering may have been possible where it did not interfere with the existing public work. The final comment of significance in this judgment was that had the offering for the whole land been granted this may have created a windfall for the Craigie Trust as the capital expenditure on the airport would have significantly increased the land value between the acquisition of the land and the purchase by the Craigie Trust.

 
 

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