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Accident Compensation Cases

McCullough v AFFCO New Zealand Ltd (EMC, 06/08/97)

Judgment Text

FINNIGAN J:
Introduction 
This is an appeal against a decision of the Employment Tribunal (AT318/96) which was delivered on 5 November 1996. Mr McCullough had sought leave to file a personal grievance out of time, but the Tribunal had declined. 
It was agreed between the advocates and the Court that, while two issues are raised on behalf of the appellant, there is only one issue for decision in the present hearing. If this issue is decided against the appellant, then the matter is at an end and the second issue will not be raised. If on the contrary the issue is decided in the appellant’s favour, then the second issue is in the opinion of the advocates one which will require determination by a full Court of this Court. That matter, however, can be left aside for the time being. 
The issue at the present hearing is whether the appellant has brought himself within subs (4) of s 33 of the Employment Contracts Act 1991. That provision is as follows: 
33. Right to use procedures— …  
(4) Where, on an application under subsection (3) of this section, the Tribunal, after giving the employee’s employer an opportunity to be heard,— 
(a)
Is satisfied the delay in submitting the personal grievance was occasioned by exceptional circumstances; and 
(b)
Considers it just to do so,— 
the Tribunal may grant leave accordingly, subject to such conditions (if any) as it thinks fit. ”
The facts of the matter 
The facts are not in issue. On 12 December 1994 the appellant Mr McCullough suffered an injury in an accident at work. As a result he lost his left thumb. As the Tribunal notes in its decision (at p 2) Mr McCullough had good advice as to his rights shortly after the accident. His union was involved. His own evidence was that before the expiry of the statutory 90-day period for filing a personal grievance, ie before 12 March 1995, he was aware that the occupational safety and health service of the Department of Labour (“OSH”) was preparing a case for prosecution of the employer under the Health and Safety in Employment Act 1992. Mr McCullough’s evidence was that he decided to be content with the OSH prosecution and that he decided not to file a personal grievance claim. He hoped, and he put it no higher than that, that the Court would convict the employer and upon imposing a fine would direct that some or all of the fine be paid to him. 
As the Tribunal notes, the OSH prosecution was never heard on its merits. It was first called in the District Court on 20 June 1995. On 29 August 1995 it was dismissed upon the failure of both parties to appear. Subsequently OSH applied for reinstatement and on 7 February 1996 that application was dismissed in the District Court. That, as the Tribunal notes, was the end of the OSH prosecution. 
Mr McCullough’s grievance claim was filed in the Tribunal on 2 April 1996. The Tribunal placed it in the chronological order of things as having occurred 55 days after the refusal of the District Court to reinstate the prosecution, and 217 days after the District Court initially dismissed the case for non-appearance. It was 477 days after the accident. 
Mr McCullough’s claim of grievance is a claim of unjustifiable disadvantage under s 27(1)(b) of the Act. In the notice of his application for leave to file the grievance out of time, and in his brief of evidence for the Tribunal, Mr McCullough stated that he did not submit a personal grievance within the 90-day time limit because he thought that a prosecution would be enough punishment for the employer and that he would be paid some money from the fine that would compensate him for his injury. From comments made to him and from the facts of the employer’s alleged offence and from the evidence available to prove it, a conviction seemed to him to be a foregone conclusion. He had been reluctant to seek a remedy through submitting a personal grievance claim within the 90-day time limit because of his expectation that he would be awarded a portion of the fine. As well, he wanted to maintain a good working relationship with the employer’s management and staff. He thought that any portion of a fine awarded to him would be seen as outside his control and not a payment caused by a direct claim from him upon the employer. 
There is nowhere in the evidence or the notice of application, or in the Tribunal’s decision, any explanation for the delay until 2 April 1996 other than those which I have set out. 
The submissions for the parties 
For Mr McCullough, Mr Cunningham submitted that the Tribunal was wrong in fact to find that Mr McCullough’s delay in submitting his personal grievance was occasioned by the hope that Mr McCullough would receive some or all of the fine that he expected would be imposed. The Tribunal’s error he submitted was in focusing upon the delay. The facts in his submission were that Mr McCullough did not delay, he positively chose not to submit a personal grievance and he positively chose to rely upon the prosecution to provide him with a remedy in his claim of unjustifiable disadvantage. Mr McCullough in his submission made this choice deliberately and with full knowledge that if he elected to submit a personal grievance he had 90 days in which to do so. The claimed grievance, as I understand it, was to be the claim of disadvantage to his employment that arose from the work injury which had occurred on 12 December 1994, that injury being the result of an allegedly unjustifiable action by the employer. 
I should pause and comment that if the claim of grievance appears to be a claim for personal injury in another form, then that topic is included within the second issue that will arise, if leave is granted. I refrain from any comment about that issue. 
Mr Cunningham submitted that there is a fundamental difference between a person’s delaying the submission of a grievance and a person’s decision not to submit one at all. In the present case he submitted it was not a mere oversight or careless failure to take action and thus a delay in that sense. There was no delay because there was no intention to submit a grievance. Until, that is, the OSH prosecution evaporated, which event led Mr McCullough to reverse his initial decision and to decide he would submit one. That event and that decision occurred about a year after the 90-day period had expired. 
I pause to comment that the action of filing for leave to bring the grievance claim was itself delayed; it occurred 55 days after the OSH prosecution evaporated, but no explanation has been given (assuming one is needed) for the lapse of 55 days before Mr McCullough eventually took action to reverse his initial decision. 
Mr Cunningham submitted that any hope which Mr McCullough had had of receiving a payment of money out of a fine had been dashed on 7 February 1996 when the District Court refused to reinstate the OSH prosecution. It was however not that hope which had caused him not to submit his personal grievance in time, rather it was the delay in the District Court proceedings occasioned first by the adjournments and ultimately by the application to reinstate, the reserved judgment therein and the time that elapsed until that reserved judgment was issued in February 1996. It was by February 1996 that all hope which Mr McCullough had held in respect of the fine had, like the OSH prosecution, evaporated. Further time elapsed after that before the grievance was submitted and hope was not a factor that existed during that time. The reason, in Mr Cunningham’s submission, for the delay was in fact the ending of that hope by the refusal of reinstatement. The hope had remained until the prosecution was finally disposed of. 
Mr Cunningham summarised this argument by saying that the hope remained alive until the prosecution was finally disposed of. The hope of a favourable income/outcome from the prosecution was not a cause of delay, but was the positive reason for a decision not to submit a grievance at all. The delay or lateness in seeking leave thereafter to submit a personal grievance was caused by the ultimate dismissal of the prosecution — which had taken time to occur — and with that the evaporation of the hope of a remedy from that source. 
Mr Cunningham referred me to the (obiter) comment of the Court of Appeal in GFW Agri-Products Ltd v Gibson [1995] 2 ERNZ 323, 330, which I shall set out below. He submitted that Mr McCullough’s case comes within the terms of that dictum and within the terms of s 33(4) of the Act because, as the Tribunal held, the circumstances of the dismissal of the OSH prosecution were exceptional. In his submission, it could not be held that a concluded prosecution failing on its merits would have been by itself an exceptional case, and that thus success by Mr McCullough in this appeal would not for that reason open a floodgate of applications for leave out of time on that ground. What was exceptional in his submission was the dismissal of the prosecution in the circumstances of this case, and that exceptional circumstance in his submission had a causative link to the time lapse which occurred after expiry of the 90-day period. 
In his submission the issue of delay did not arise until the circumstances changed, causing Mr McCullough to decide to lodge a grievance claim, and this did not occur until the reinstatement application had been refused. In fairness to Mr McCullough, in his submission, the duration of the delay in seeking leave to proceed out of time should be deemed to run not from the end of the 90-day period, but from the date when the District Court announced its refusal to reinstate the prosecution. The time from then until the application was filed he says was 55 days. 
To deny Mr McCullough leave would in his submission be unjust as it would deprive him of a potential remedy in place of another potential remedy lost through circumstances not of his making. He submitted that there were exceptional circumstances and that these did cause the delay in seeking leave to submit the grievance, and that these arose upon the dismissal of the OSH prosecution and the Court’s refusal to reinstate it. Until that occurred there had been no exceptional circumstances and indeed there had been no intention to file a claim of grievance because of the hope of being awarded part of a fine. In his submission s 33 of the Act is designed for just such a case as the present one. Granting leave would allow Mr McCullough to seek compensation based on a claim that he has been disadvantaged in his employment because of an allegedly unjustifiable action by the respondent. In his submission that claim would not be barred under s 14 of the Accident Rehabilitation and Compensation Insurance Act 1992, provided it was not a claim for compensation for personal injury covered by that Act. This is a submission which as I have indicated I shall leave without comment. 
As I understand it, Mr Cunningham submits that there were no exceptional circumstances at all until February 1996 when the reinstatement was refused, and thus no grounds for seeking leave to file a personal grievance, and indeed no intention to file a personal grievance. The exceptional circumstances in this submission arose in February 1996. Assuming an exceptional circumstance for the purposes of s 33(4) to have arisen then, that exceptional circumstance explains the delay. The time lapse from 12 December 1994 when the accident occurred until February 1996 was caused by circumstances which Mr McCullough does not claim were exceptional. Neither were they. He had made his own decision positively not to exercise his right to claim a personal grievance. That was why no claim was made until February 1996. That was still the reason why no claim was made after February 1996 for a further 55 days, with the added circumstance during that period that his one hoped-for source of remedy had unexpectedly and exceptionally disappeared. 
Decision of the application 
For the Tribunal, and for the parties, an important statement of principle is derived from the judgment of the Court of Appeal in GFW Agri-Products (above). The dictum to which all have referred is acknowledged as obiter, but it is frequently cited (and I accept it) as authoritative: 
“we do not wish to be taken as endorsing the Employment Court judgment so far as it reversed the decision of the Tribunal on the leave application … It is sufficient to comment that the Legislature has provided for a time limit. That is a requirement of the law which is to be given effect and which cannot be abrogated by invoking equity and good conscience. Similarly, for the grant of leave an applicant must show exceptional circumstances having a causative effect upon the delay in submitting the grievance. The Legislature has set the burden at the high level by requiring that circumstances be exceptional and that must be given proper application. Further there is no formality or difficulty involved in notifying a grievance to an employer and failure to do so within 90 days generally will not be ‘occasioned by’ circumstances which, on a practical approach, have left reasonable time to secure any necessary advice and notify the grievance. We find nothing unduly rigid in the approach taken by the Tribunal. ”
Further to that, there had been an appropriate finding in a judgment issued by the Labour Court in 1988, Winstones Trading Ltd v Northern Distribution Union [1988] NZILR 1042, 1044. I set out that finding here: 
“We find as a fact that the applicant, once it was aware of the judgment, had ample time to make its application within the 14 day period and that we are not satisfied that the application could not reasonably have been made in time. The evidence shows that responsible officers of the applicant became aware of the default in appearance on or about 7 October 1988 and yet allowed that default to continue past the prescribed time limit in a situation which clearly required prompt action and a clearing away of the claimed communication difficulties associated with the restructuring of the company. ”
There the Court was dealing with an application for rehearing which was permitted by s 302(1) of the Labour Relations Act 1987, subject to a proviso, which was as follows: 
“Provided that a rehearing shall not be granted on an application made more than 14 days after the judgment order, unless the Labour Court is satisfied that the application could not reasonably be made sooner. ”
Section 302(1) is the equivalent of s 125(1) in the present Act. The Court concluded, after deliberation, that “sooner” meant “within the prescribed 14-day period”. I note also that in Winstone, for the reasons stated in the passage cited, the application for leave to proceed out of time was dismissed. 
There can be no doubt that the time limits imposed in the Act for procedural steps in grievance claims are to be given effect by the Court. Where some leniency is intended by Parliament, it has been made abundantly clear in the Court of Appeal and Labour Court dicta which I have just set out that the leniency itself is circumscribed. 
I have set out the submissions of Mr Cunningham at length because they are on a fine point. He found it necessary when addressing this fine point to restate the argument in different ways. The point which he wishes to establish is subtle. To bring Mr McCullough within the terms of s 33(4), he must persuade the Court that Mr McCullough’s delay in submitting his personal grievance was “occasioned by exceptional circumstances”, and that giving him the opportunity to be heard is the just thing to do. Both conditions must be fulfilled. The exceptional circumstances must be an occasion, an effective cause, for the delay. 
What is the delay? Section 33(2) allows a delay of up to 90 days, so it cannot be that. The delay must be a delay occurring in the period commencing on the 91st day. Mr Cunningham’s submission is that the passage of time was not a delay until the circumstances changed in February 1996, nearly a year after the end of the 90-day period, because during all that time Mr McCullough had a specific intention of not claiming a personal grievance. In Mr Cunningham’s submission, he was not delaying. Once the circumstances changed and he considered his position, he made his application well within 90 days and did not delay. None the less, in his submission, the failure of both parties to appear in the District Court with the resultant dismissal of the prosecution, was an exceptional circumstance and although it did not arise for nearly a year, it was linked to the time that had passed between the 90th day and the 477th day, and it contributed as a cause to (part of) that time lapse which, by Mr McCullough’s change of mind, now had the character of delay. 
I must confess that, after searching consideration of this submission, I find that its subtlety does not carry the day. 
As the Labour Court noted in dismissing a leave application in Winstone, the applicant had become aware that it had grounds to apply for rehearing while the period allowed by the statute was still running, yet the applicant allowed the time to continue past the prescribed time limit without correcting its default even though the situation clearly required prompt action. Because it had not taken action within the time limit the Court could not be satisfied that the application “could not reasonably be made sooner” (for the purposes of the statute which applied in that case). 
As the Court of Appeal noted in GFW Agri-Products, it is sufficient to comment that the Legislature has provided for a time limit. That time limit must be given effect and cannot be abrogated by invoking equity and good conscience. To get leave to submit a grievance outside the time limit, an applicant must show exceptional circumstances which have been a cause of the delay which has occurred since the time limit expired. There is, in the opinion of the Court of Appeal, no formality or difficulty involved in notifying a grievance to an employer. That was the position adopted by this Court also (see for example Winstone Wallboards Ltd v Samate [1993] 1 ERNZ 503). The Court of Appeal went on to comment that failure to notify a grievance within 90 days generally will not be “occasioned by” circumstances if, on a practical approach, the circumstances have left a reasonable time to secure any necessary advice and notify the grievance. 
In the present case, there were no supervening circumstances at all within the 90 days. Mr McCullough acknowledges that he had “reasonable time to secure any necessary advice and notify the grievance”. He actually had the advice and the time. He chose to decline his right. He chose to let the period expire without taking action. 
He made a considered choice to abide by the outcome of the OSH prosecution, whatever it was. He had no guarantee that the employer would be prosecuted. He had no guarantee that the employer would be convicted. He had no guarantee that the employer would be fined. He had no guarantee that any portion of any fine upon any conviction would be paid to him. He chose to abide by the outcome of whatever occurred. He had no control whatever over the circumstances. He chose to accept that. Thus, on the 91st day and the 92nd day, and indeed for nearly a year, he acknowledges there were no exceptional circumstances and no cause upon which he could rely for obtaining leave. Suddenly an unforeseen event occurred. That unforeseen event made it immediately plain that he had no hope of a remedy for the consequences of losing his thumb, unless (perhaps) he could revive his right to claim a personal grievance. So he has claimed that the unforeseen refusal of the District Court to reinstate the OSH prosecution was an exceptional circumstance which was a contributing cause to the fact that he did not file his grievance application in the time when it was legally permissible for him to do so, ie within the initial 90-day period. 
Did the unexpected dismissal of the OSH prosecution when it occurred become a cause of that failure? It contributed as a cause, along with Mr McCullough’s desire to obtain compensation, to Mr McCullough’s change of mind. Did it contribute as a cause to the delay itself? I cannot see that it did. 
The delay in the present case from the 91st day onwards was, in Mr Cunningham’s submission, caused by Mr McCullough’s decision that he would not exercise his right to claim a grievance. There was thus, Mr Cunningham submits, not even a delay after the 90th day. There was no intention to make a claim for a period of about a year. The concept of delay occurred, as Mr Cunningham has submitted, only when Mr McCullough changed his mind. The failure of the OSH prosecution was a strong contributing cause to his change of mind as Mr Cunningham has submitted. That is so, but Mr McCullough now has to explain what caused the delay. It can only be as the Tribunal found, that Mr McCullough had chosen not to exercise his right. The time for that expired and he permitted it to do so knowing that his right to claim a grievance (save for exceptional circumstances and the justice of his claim to revive that right) expired with it. That decision is what then caused time to run without his making a claim. The OSH prosecution provided another contributing cause, because Mr McCullough relied upon it to yield for him whatever remedy he might get, and he was prepared to accept whatever remedy came from that source. 
I think the matter has to rest there. This is not a case in my opinion for holding that exceptional circumstances were a contributing cause for the delay in making the application, and thus for the application of s 33(4) of the Act. In my view the Tribunal was correct and pursuant to s 95(5)(b) of the Act I uphold its decision. 

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