IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE	
CIV-2018-485-775
[2019] NZHC 612	

UNDER	the Accident Compensation Act 2001	
IN THE MATTER	of an application under section 162 of the Act to appeal to the High Court on a question of law	
BETWEEN	JAMES MCKEEFRY
Appellant	
AND	ACCIDENT COMPENSATION CORPORATION
Respondent	

Hearing:	21 March 2019	
Appearances:	L J Newman and T W R Lynskey for the Appellant P A McBride and S J Hack for the Respondent	
Judgment:	28 March 2019	

JUDGMENT OF COOKE J

[1]	The appellant appeals from a decision of the District Court dismissing an appeal from a determination made by the Accident Compensation Corporation (the Corporation) relating to the weekly compensation he is entitled to under the provisions of the Accident Compensation Act 2001 (the Act).1 Under s 162 of the Act there is an appeal to this Court on a question of law with leave. Leave was granted by the District Court in the present case.2

1	McKeefry v Accident Compensation Corporation [2018] NZACC 45.
2	McKeefry v Accident Compensation Corporation [2018] NZACC 160.

MCKEEFRY v ACCIDENT COMPENSATION CORPORATION [2019] NZHC 612 [28 March 2019]

The facts

[2]	Prior to his accident Mr Keefry had been employed as a builder with K Sullivan Builders in Christchurch. His employment ended on Thursday 18 December 2014, the month before his accident. Mr Keefry then looked for other work and sought employment with a glazier in Wellington trading under the name of the Glass Shoppe. Mr Dean Tredrea was the Managing Director of the Glass Shoppe.   On Monday     12 January they discussed Mr Keefry joining the Glass Shoppe on a glazing apprenticeship. Mr Keefry was taken on on a trial basis and worked at that business for six hours that same day, and then worked for a full eight hours on the following day. At the conclusion Mr Tredrea offered him full time employment commencing on Monday 26 January and agreed to pay Mr Keefry for the two days he had already worked. The full-time position did not commence earlier because Mr Tredrea was going away for the following two weeks, until 26 January.

[3]	On Saturday 24 January, the weekend before he was due to start this work, Mr Keefry was involved in a motor vehicle accident and sustained very serious injuries. The nature of his injuries, and the incapacitation that has resulted, are not described in the decision under appeal or the earlier decision of the Corporation’s review officer. I was advised in his submissions to this Court that he is now a C4 AIS A tetraplegic as a result of the accident. I am not in a position to make any factual findings about his condition, but I proceed on the basis that he has suffered permanent disability. He was obviously not able to take up his employment with the Glass Shoppe.

[4]	The Corporation has accepted that he is entitled to receive weekly compensation for lost earnings under the Act. It has assessed the entitlement of that compensation based on the provision that determines the rate of compensation for somebody who has been in non-permanent employment, which is essentially based on his earnings over the preceding year. The amount he so earned was materially less than the minimum wage. It is materially less than his anticipated employment with the Glass Shoppe.

[5]	On  appeal  two  main  arguments  are  advanced.  First  it  is  argued  that  Mr McKeefry should receive an uplift to his weekly compensation so that it meets the level of the minimum wage as is contemplated by a particular provision in the Act. Secondly, he contends that he should have his weekly compensation calculated on the basis of his anticipated employment with the Glass Shoppe rather than his past employment. The level of compensation to which the Corporation accepts he is entitled gives him $354.14 per week. If either of the alternative arguments is accepted it would entitle him to be paid $504 per week.

The interpretive approach

[6]	Before turning to the issues and argument, I will first address the approach taken to the interpretation of the Act. Both parties advanced submissions on the approach that should be adopted to the interpretation of the ACC statutes. In Accident Compensation Corporation v Algie the Court of Appeal held:3
[14]	The question for this Court is the proper interpretation of two materially identical statutory provisions. Pursuant to s 5 of the Interpretation Act 1999, their meaning must be ascertained from their text and in light of their purpose. Even if the meaning of the text may appear plain in isolation of purpose, that meaning must be cross-checked against purpose in order to achieve the requirements of s 5. As the Supreme Court said in Commerce Commission v Fonterra Co-operative Group Ltd:

“In determining purpose the court must obviously have regard to both the immediate and the general legislative context. Of relevance too may be the social, commercial or other objective of the enactment.”

[15]	The Accident Compensation Acts, of which there have been more than a few, are some of the most litigated pieces of legislation. In this particular context statutory provisions often have to be interpreted and certainly continue to be applied years, even decades, after their repeal. The Acts are frequently amended. There is, accordingly, discussion to be had as to the approach to be taken to the interpretation of these Acts, although it should be observed that this discussion reflects no more than the application of the approach described in Fonterra in a particularly fraught statutory context. For example, in Queenstown Lakes District Council v Palmer this Court said of the task of interpreting a provision in ACC legislation:

“The subsection must be interpreted as a whole having regard, not only to the language that is used, but also to the context of the subsection, to the scheme and purpose of the Act, with reference, if

3	Accident Compensation Corporation v Algie [2016] NZCA 120, [2016] 3 NZLR 59 (footnotes omitted).

that is necessary, to the history and policy of the legislation and to the consequences of the interpretation which is under consideration.”

[7]	Other authorities have referred to adopting a “generous and unniggardly” interpretation, indicating that a more generous path for a claimant should be taken if a reasonable choice presents.4 Other cases note, however, that being generous to claimants is not one of the principal purposes of the Act, and that the Act has a range of competing interests.5 Decisions have also held that the generous and unniggardly approach is not available unless the legislation is capable of that interpretation,6 and that the legislation can be anomalous, but nevertheless careful and crystalline.7

[8]	For myself I do not find the additional verbal formulations — such as adopting a generous or unniggardly approach — to be helpful. They seem to me to unduly complicate the task.8 The general approach described in Algie is consistent with the observation of the Supreme Court in Terminals (NZ) Ltd v Comptroller of Customs that particular legislation (in that case tax legislation) does not involve a different approach to statutory interpretation, and that the position of one party or the other is not to be preferred.9 For all legislation the task is to interpret the text of the enactment in light of its purpose. With legislation that involves an overall statutory scheme, that scheme will be of significance in understanding the meaning of particular provisions within it. The objective must be to make the Act work as Parliament must have intended.

[9]	Here the Act’s purpose is described in a broad way in s 3. This includes achieving its purposes through “ensuring that … claimants receive fair compensation for loss from injury, including fair determination of weekly compensation” (s 3(d)). It has rules within that scheme that provide for this. They can lead to arbitrary cut-off points, and accordingly anomalies. It would probably be impossible to devise such a scheme without them. Nevertheless the scheme must be made to work as intended,

4	J v Accident Compensation Corporation [2017] NZCA 441, [2017] 3 NZLR 804, at [37].
5	Robinson v Accident Compensation Corporation [2007] NZAR 193 (CA) at [49]; and Rangiwhetu v Accident Compensation Corporation HC Wellington CIV-2006-485-1402, 19 April 2007, per Mallon J.
6	Revitt v Accident Compensation Corporation [2014] NZHC 1394.
7	Murray v Accident Compensation Corporation [2013] NZHC 2967.
8	Being generous and unniggardly may best describe the spirit in which the Act is applied once it has first been interpreted.
9	Terminals (NZ) Ltd v Comptroller of Customs [2013] NZSC 139, [2014] 1 NZLR 121 at [39].

adopting the normal purposive approach, remembering that the fair determination of weekly compensation is amongst those purposes.

The weekly compensation scheme

[10]	Part of the scheme for compensation under the Act involves payment of weekly compensation for those who cannot work because they are incapacitated. The rules for doing so are set out in Part 2 of Schedule 1 of the Act. Section 100 confirms the entitlement to compensation in accordance with those rules. Here, Mr McKeefry’s entitlement to weekly compensation arises under s 100(1)(c).

[11]	The starting point is cl 32 of Schedule 1. A person who was an “earner” immediately before being incapacitated is entitled to 80 percent of their former weekly earnings as calculated under the clauses later set out in Part 2.

[12]	There are calculation complications which the provisions seek to deal with — for example in relation to people who are self-employed,10 or who are shareholder employees.11 It has also been recognised that basing compensation solely on former earnings over a year could give rise to unfairness — for example someone may have earned less than their usual wage because of a period off work. Various adjustments are contemplated by particular provisions. There is an uplift for people who earn less than the minimum wage (cl 42), for employees on unpaid parental leave (cl 44), for those who were a recuperating organ donor (cl 44A) and even for those who had consecutive periods of unpaid parental leave and who were organ donors (cl 44B). As can be seen Parliament has set a general rule, and then attempted to deal with particular exceptions where that rule creates injustice. This is consistent with the purpose of ensuring the fair determination of weekly compensation as identified in s 3(c).

[13]	The Corporation has accepted that one such provision applies in the present case. Parliament has turned its mind to the situation where someone has become incapacitated shortly after they have left employment. Such a person may be covered by cl 43. It provides:

10	Clauses 37–38A.
11	Clauses 39–40.

Claimant no longer an employee

43 Weekly earnings if employment ended before commencement of incapacity

(1)	Subclause (2) applies to a claimant who, before his or her incapacity commenced, has ceased to be in employment.

(2)	The claimant is deemed to continue to be in employment and have earnings from that employment for the purposes of this schedule for the longer of—

(a)	28 days from the date he or she ceased to be in employment, if he or she—

(i)	had been in employment within 28 days before his or her incapacity commenced; and

(ii)	would have been an employee within the period specified in subclause (3) after the date on which his or her incapacity commenced, but for the incapacity; or

(b)	the period for which payments that the claimant is entitled to receive on ceasing employment and on which earner levy is payable constitute earnings under subclause (4).

(3)	For the purposes of subclause (2)(a)(ii), the period is,—

(a)	unless paragraph (b) applies, 3 months if the claimant had entered into an employment agreement, or had arranged to enter into an employment agreement, before the incapacity commenced; or

(b)	12 months if—

(i)	the claimant was employed in seasonal employment with the same employer as he or she had been employed in the 2 seasons before the claimant’s incapacity commenced; and

(ii)	the employer confirms that the claimant could reasonably have expected to be re-employed in the season after the claimant’s incapacity commenced.

(4)	A claimant, who is deemed by subclause (2)(b) to continue to be in employment, is also deemed to be deriving earnings at the same rate as he or she derived earnings while in employment immediately before he or she ceased to be an employee, a self-employed person, or a shareholder-employee, as the case may be.

(5)	For the purposes of calculating the claimant’s weekly earnings, the date his or her incapacity commenced is deemed to be the last date on which the claimant was in employment.

(6)	Unless the personal injury is a motor vehicle injury, a work-related personal injury, or a treatment injury, payments under this clause come from the Earners’ Account.

(7)	In this clause—

employee includes an employee who is on unpaid leave that is not unpaid parental leave

employment means employment as—

(a)	an employee; or

(b)	a self-employed person; or

(c)	a shareholder-employee.

[14]	A person who was not in employment when they became incapacitated is accordingly deemed to continue to be so in order that that weekly compensation is available. This provision, designed to remedy an otherwise anomalous situation, nevertheless creates its own anomalies. Parliament has had to decide for how long it will deem people to still have been in their former employment. In cl 43(2)(a)(i) it has adopted a time period of 28 days. If you were in employment within a period of 28 days before you became incapacitated you are deemed to have been in that employment for the purposes of the compensation calculations. But if the gap was 29 days, the person receives no weekly compensation at all.

[15]	That cut-off  period  had  the  capacity  to  operate  in  an  unjust  way  for  Mr McKeefry. He had finished his job as a builder in Christchurch on 18 December 2014, and was to commence employment as an apprentice glazier in Wellington on 26 January 2015. He might have started earlier but his prospective employer wanted a holiday. The new start date was 39 days after the preceding employment, and his accident was beyond the 28 days prescribed.

[16]	But Mr McKeefry was saved from that anomalous result by a further arbitrary factor. He had  come in  to  the  Glass  Shoppe to  seek  employment  on  Monday  12 January. Not only was he offered employment, but he did in fact work on the Monday and Tuesday, and it was agreed he would be paid for that work. Given that, he  had  in  fact  been  “in  employment  within  28  days”  of  his  accident  under   cl 43(2)(a)(i). Therefore in accordance with cl 43 he was “deemed to continue to be in employment and have earnings from that employment for the purposes of this schedule”.

[17]	The Corporation then had to calculate what his entitlement under the schedule was. There are two potentially applicable calculation provisions. Both contemplate an initial period of four weeks compensation of a particular type, and then a subsequent longer-term compensation entitlement. There are materially different calculations for the longer-term entitlement. For non-permanent employees under cls 35 and 36 the calculation looks back at the claimant’s earnings as an employee over the 52 weeks prior to incapacitation from all employers, divided by 52 (subject to certain exceptions). For permanent employees under cls 33 and 34 the calculation is based only on the earnings as an employee from their last employer divided by the actual number of weeks or part weeks worked for that employer (and only that employer).

[18]	The Corporation proceeded on the basis that Mr McKeefry was in non- permanent employment, and calculated his entitlement under cl 35 and 36. That involved all payments from his employment over the preceding 52 weeks divided by
52.	That gave rise to the weekly entitlement of $354.14. That amount is a relatively low amount, and arises because of the nature of Mr McKeefry’s work during 2014. It is an amount less than what would have resulted from full time employment on the minimum wage which would result in $504 per week.

[19]	Mr McKeefry has challenged this calculation before the District Court seeking a higher amount, but his interpretation arguments have been rejected by that Court. On appeal to this Court he advances two arguments for increasing his weekly entitlement. I will address each in turn.

Minimum wage uplift

[20]	First, the Act addresses a situation where someone’s historic earnings have been lower than the minimum wage. Clause 42 provides as follows:

Adjustments for low earners

42	Weekly earnings of earners in full-time employment: increase in certain circumstances

(1)	This clause applies to a claimant who—

(a)	was, immediately before his or her incapacity commenced,—

(i)	in the category of earners liable to pay the minimum levy set in regulations made for the purposes of section 168B; or

(ii)	an earner in full-time employment; and

(b)	had weekly earnings calculated under clause 41 or, if that clause does not apply, under any of clauses 34, 36, 38, or 39 of less than the minimum weekly earnings as determined under subclause (3); and

(c)	is incapacitated for more than 5 weeks after the incapacity first commenced.

(2)	For the purpose of calculating weekly compensation for loss of earnings payable to the claimant for any period after the 5-week period, the claimant is deemed to have had, immediately before his or her incapacity commenced, the minimum weekly earnings as determined under subclause (3).

(3)	The minimum weekly earnings are—

(a)	for a person under 18 years of age, the amount as at 1 July each year which is the greater of—

(i)	the minimum weekly adult rate prescribed under section 4 of the Minimum Wage Act 1983; or

(ii)	125% of the rate for a single person under the age of 18 years and without dependent children of supported living payment under the Social Security Act 2018; or

(iii)	the higher of the amounts calculated under subparagraphs
(i)	and (ii) as at 1 July in the preceding year.

(b)	for a person 18 years of age or over, the amount as at 1 July each year which is the greater of—

(i)	the minimum weekly adult rate prescribed under section 4 of the Minimum Wage Act 1983; or

(ii)	125% of the rate for a single person over the age of 18 years and without dependent children of supported living payment under the Social Security Act 2018; or

(iii)	the higher of the amounts calculated under subparagraphs
(i)	and (ii) as at 1 July in the preceding year.

…

(7)	Subclause (2) does not apply to any period unless the Corporation is satisfied that, but for the incapacity, the claimant would have been an earner in full-time employment during that period.

(8)	Subclause (2) does not apply if the claimant has an entitlement under any other provision of this schedule to weekly compensation for loss of earnings that is greater than the claimant’s entitlement under this clause.

(9)	Nothing in this clause is affected by the claimant’s entitlement to any weekly compensation under any of clauses 66, 70, and 71.

[21]	As is apparent, this applies only to people who were in full-time employment. Someone is not entitled to that uplift if they only worked part-time, and whose wages may have been lower than the minimum wage over a full year period as a result. It is only intended to apply for those in full-time employment who earned less than the minimum wage. That could arise, for example, if they had a period of time off work because of sickness or other factors of that kind.

[22]	As a matter of fact Mr McKeefry was not in full-time employment in the year prior to becoming incapacitated. That is precisely why the calculation looking back over the preceding 52 weeks leads to an amount less than he would have been paid on the minimum wage. But he had entered an oral agreement for full-time employment, and his employment prior to his incapacitation was as an employee for that employer. In accordance with cl 43 he is deemed to continue in that employment. For that reason Mr Lynskey argued on his behalf that he qualified for the uplift contemplated under cl 42.

Issue of fact or law?

[23]	In response to this contention Mr McBride for the Corporation first argued that cl 42 could not apply at all because Mr McKeefry did not have this status as a matter of fact “immediately before his … incapacity”. He argued that the factual findings of the District Court Judge were effectively being challenged. I do not accept this. Clause 43 deems Mr McKeefry to have continued in the employment occurring on 12 and 13 January, and under cl 43(5) the last date on which he was in employment is the date upon which is incapacity commenced. Indeed Mr McBride’s argument seems contrary to the Corporation’s own decision, as the Corporation has decided that     Mr McKeefry was an “earner immediately before his or her incapacity commenced” under cls 32 and 35 as a consequence of the effect of cl 43.

[24]	The real issue arising from the argument is a legal question. It arises from the defined terms used in cl 42. Mr McKeefry needs to qualify under cl 42(1)(a)(ii) — he needs to have been “an earner in full-time employment” immediately before his incapacity commenced.

[25]	There is a definition of “earner” in s 6 of the Act. It is:

earner—

(a)	means a natural person who engages in employment, whether or not as an employee; and

(b)	includes a person to whom clause 43, 44, or 44A of Schedule 1 applies

[26]	As can be seen that definition expressly includes a person covered by cl 43. So therefore Mr McKeefry is an “earner” as he is deemed to be so.

[27]	But there is also a definition of “full-time employment” in the following terms:

full-time employment, in relation to an earner, means employment in the 4 weeks immediately before his or her incapacity commenced, for either—

(a)	an average of at least 30 hours per week; or

(b)	a lesser number of hours, if the lesser number of hours is defined as full- time employment in the employment agreement under which the earner was employed, because of the particular nature of that employment

[28]	The Corporation and the District Court have held that the uplift under cl 42 is not available because of this definition. Its application involves a question of law. On the face of it the definition stands in the way of the contention. In the four weeks before his incapacitation on 24 January, Mr McKeefry had not worked an average of
30 hours per week, or worked a lesser number of hours counted as full-time employment because of the nature of that employment.

[29]	Mr Lynskey advanced three arguments to overcome this apparent problem.

Extrapolation

[30]	First he argued that the averaging exercise contemplated by (a) of the definition of full-time employment was satisfied. Mr McKeefry had worked an average of seven

hours per day on the two days he worked, which could then be extrapolated to a five day working week involving more than 30 hours per week (i.e. 7 x 5 = 35). With respect, that is an interpretation contrary to the calculation Parliament has prescribed. The exercise is one of averaging down to a week, not extrapolating up from a day. The fact he worked for 14 hours in one week cannot give rise to him working an average of 30 hours per week.

Nature of employment

[31]	Next Mr Lynskey argued that Mr McKeefry fell within (b) of the definition because he worked a lesser number of hours because of the particular nature of his employment. Again I do not accept that. This part of the definition seems to me to be directed to particular types of employment which are regarded as full-time notwithstanding that a reduced number of hours are involved. That might be the case, for example, with work of a particularly intense nature. There is nothing about being an apprentice glazier that means that working less than an average of 30 hours is counted as full-time employment. Neither was a lesser number of hours defined in that way in his employment agreement. Again I see this as an artificial attempt to interpret the words to mean something other than that which was plainly intended.

Unless the context otherwise provides

[32]	Mr Lynskey’s final argument relies on the usual qualification preceding the defined terms in s 6 that the words have that meaning “unless the context otherwise requires”. There are a number of authorities on the approach that the Court should adopt to this qualification. In AFFCO New Zealand Ltd v New Zealand Meat Workers and Related Trades Unions Inc the Supreme Court put the position in the following way:12
[65]  Summarising  what we consider to be the correct approach, where  there is a defined meaning of a statutory term that is subject to a context qualification, strong contextual reasons will be required to justify departure from the defined meaning. The starting point for the court’s consideration of context will be the immediate context provided by the language of the provision under consideration. We accept that surrounding provisions may also provide relevant context, and that it is legitimate to test the competing

12	AFFCO New Zealand Ltd v New Zealand Meat Workers and Related Trades Unions Inc [2017] NZSC 135, [2018] NZLR 212.

interpretations against the statute’s purpose, against any other policy considerations reflected in the legislation and against the legislative history, where they are capable of providing assistance. While we accept Mr Jagose’s point that the context must relate to the statute rather than something extraneous, we do not see the concept as otherwise constrained.

[33]	Contextually adjusted meanings are perhaps most common where a particular provision uses the defined expression in a different way than normally contemplated. In a long Act where a word is used several times there may be occasions where it does not bear its defined meaning.13 Here it is suggested that Mr McKeefry’s case is a particularly unusual one. He only qualifies for weekly compensation through the deeming provision in cl 43, and only because of the two days he worked in January. Those two days were in an employment relationship which was intended to be full- time employment. Hence it is argued that the defined definition should be departed from because of that context.

[34]	But these factors relate to the unusual circumstances of Mr McKeefry’s individual case. They do not relate to the unusual context of the use of the expression “full-time employment” in cl 42. A contextual interpretation means that these words in the provision have other than the prescribed meaning. That needs to be the case in all situations falling within those words in the provision. Contextual meaning does not allow you to adopt a meaning of a provision in some cases, but not in others.

[35]	It also seems to me that the very purpose of the prescribed definition was so that it could be applied in precisely this situation. The expression “full-time employment” only appears in the Act in these very provisions (cls 42 and 33) and in two other places (s 366, and the definition of “private domestic worker” in s 6). So it would seem that it has been given this definition precisely for the purpose of these provisions.

[36]	This is not a term used on many occasions in a long Act where its use in a particular section demands a different meaning. This is a carefully drawn definition to identify what a term means when determining compensation levels. It is accurately

13	See Ross Carter Burrows and Carter Statute Law in New Zealand (5th ed, LexisNexis, Wellington, 2005) at 438.

described as stipulative.14 It is difficult to know how context could warrant a different technical definition, and what that definition would actually be. I understood the suggestion from counsel was that the definition could be extended to cover a person intended to be in full-time employment. The legislative context of cl 42 does not seem to me to contemplate, let alone require this.

[37]	For these reasons I cannot accept Mr Lynskey’s submissions. It follows that the first argument advanced on appeal is not accepted.

Calculation based on permanent employment

[38]	The second main argument advanced for Mr McKeefry is that the wrong calculation provisions have been applied to his case. His entitlement should have been calculated on the basis of permanent employment under cls 33 and 34 rather than non- permanent employment under cls 35 and 36.

[39]	There is an initial issue in relation to the way in which the decision granting leave to appeal is formulated. The District Court gave leave not by reference to the claimant’s entitlement to compensation in accordance with particular provisions under the Act, but by reference to a more precise question — “Was Mr McKeefry in full- time employment on 24 January 2015?”.15 This formulation does not appear to encompass this further issue which does not turn on the full-time employment status. Rather it turns on the question of whether Mr McKeefry should have been treated as being in “permanent employment”.

[40]	The decision granting leave nevertheless refers to the clauses that are central to this further argument (cls 33(3) and 35(2)). It is also apparent that the District Court Judge thought that the question whether a person was in full-time employment was inextricably interlinked to whether they were in permanent employment. Moreover, the leave decision appears to be considering the question of Mr McKeefry’s entitlements more broadly. It seems to me that the Judge did not intend to confine what was able to be argued by the precise terms in which the question of law was

14	See Barr v Police [2009] NZSC 109, [2010] 2 NZLR 1 at [11]; and AFFCO New Zealand Ltd v New Zealand Meat Workers and Related Trades Unions Inc, above n 12, at [64].
15	McKeefry v Accident Compensation Corporation, above n 2, at [36].

framed. For that reason I conclude that the argument addressed below is within the leave granted. Even if it were not, I would have given leave for it to be advanced.16

[41]	The method of calculation applicable to permanent employees is different to that for non-permanent employees. For permanent employees the calculation is as follows in cl 34:

(2)	This subclause applies to any weekly period of incapacity after the 4 weeks described in subclause (1). The claimant’s weekly earnings for any such weekly period are calculated using the following formula:

a ÷ b where—
a	is the claimant’s earnings as an employee (from employment with that employer) in the 52 weeks immediately before his or her incapacity commenced

b	is the number of full or part weeks during which the claimant earned those earnings as an employee.

[42]	Unlike the calculation for non-permanent employees, Mr McKeefry’s earnings from other employers (such as K Sullivan Builders of Christchurch) would be ignored. The calculation is solely based on the payments made by the permanent employer over the relevant period of employment by that employer.

[43]	Here Mr McKeefry started his employment with the Glass Shoppe over the two days of 12 and 13 January. Ms Newman set out the calculation that would arise under cls 33 and 34 in the following terms:

(a)	the “a” figure is $252 (being 14 hours work at $18 per hour);

(b)	the “b” figure is 0.4 as Mr McKeefry worked a part-week equating to that (two of five working days);17 and

16	High Court Rules 2016, r 20.19(4); and see Andrew Beck and others McGechan on Procedure
(loose-leaf ed, Brookers) at HR 20.18.04.
17 Which in turn adopts the approach to “part-week” applied in Ryan v Accident Compensation Corporation [2005] NZACC 199 rather than that adopted in Pihama v Accident Rehabilitation and Compensation Insurance Corporation  (ARCIC)  Decision  No.  70  –  94  DCA  139-94,  31 October 1994. In the circumstances of this case that seems correct.

(c)	the result of the above equation is $630. When that is then adjusted for the 80 percent entitlement coverage under the Act contemplated by   cl 32(3) the answer is $504.

[44]	As Ms Newman indicated, by coincidence that is exactly the same amount as would have been applicable had Mr McKeefry’s entitlement been uplifted under cl 42 under the first argument.

[45]	Ms Newman argued that the Corporation and District Court had erred by treating Mr McKeefry as a non-permanent employee for the purposes of the calculation. The clauses have a test for addressing that question. It is set out in the following terms in clause 33:

(3)	For the purposes of this clause and clause 34, the claimant is regarded as having been in permanent employment if, in the opinion of the Corporation, he or she would have continued to receive earnings from that employment for a continuous period of more than 12 months after the date on which his or her incapacity commenced, if he or she had not suffered the personal injury.

[46]	And clause 35 provides:

(2) For the purposes of this clause and clause 36, employment is not permanent employment if, in the opinion of the Corporation, the claimant would have not continued to receive earnings from that employment for a continuous period of more than 12 months after the date on which his or her incapacity commenced, if he or she had not suffered the personal injury.

[47]	The test is based on what is likely to happen in the future, not what has happened in the past. The material question is what Mr McKeefry’s employment situation would have been for the 12 months following his accident.

[48]	The relevant evidence on the question of Mr McKeefry’s future employment position came from Mr Tredrea from the Glass Shoppe. He said in his affidavit:

7.	I considered James to be in full time employment from the 12 January 2015.

8.	For a glazing apprenticeship, James would have had to do a 4000 hour adult apprenticeship, which can in most time get 1000 hours taken off with good marks from the block courses and with employer approval. After the apprenticeship I would hope to have James for two or more

years to get my teaching input back. As an adult apprentice, I would have paid James $18.00 an hour on a 45 hour week with a standard increase every six months or so or after 500 hours (whichever comes first). The increase amount varies depending on the apprentice’s ability.

[49]	Neither the Corporation nor the District Court have approached the entitlement in light of cls 33(3) and 35(2) and this evidence. Had they focused on this line of inquiry their decisions may well have been different. For example Judge Walker noted:18
[100]	Clause 43 does give consideration to a person who is between employment positions and the Corporation has recognised that.

[101]	The fact that the appellant’s accident occurred just before he was to start a new life and career makes this matter particularly poignant.

[50]	The decision by the Corporation’s Reviewing Officer was based solely on what appears to be the first argument addressed above. The Officer said:

Whilst Mr McKeefry might regard that as unfair, I find that, in terms of Murray ‘the meaning and effect of the statutory words in issue is quite clear and ACC’s decision was correct’.

[51]	For these reasons the Act does not appear to have been applied as required. Mr McBride’s response to the argument was to focus on the factual question. The Corporation had not formed the opinion referred to in cl 33(3). In answers to questions from me he accepted that if the Corporation did form the opinion referred to in the subsection then the clauses operated in the manner that Ms Newman had submitted. His point was, however, that that opinion had simply not been formed. It follows from that, however, that the critical question required to be addressed for Mc McKeefry’s case has not been considered by either the Corporation or the District Court. They have erred in not doing so.

[52]	Mr McBride argued that it was not appropriate for the High Court to now step into the Corporation’s shoes and make the relevant factual findings. I have considered whether, notwithstanding that proposition, I should proceed to make the decision based on Mr Tredrea’s evidence. There is certainly nothing in the materials before me that would suggest his evidence should not be accepted. Whilst Mr McKeefry had

18	McKeefry v Accident Compensation Corporation, above n 1.

apparently not sustained permanent employment in 2014, it would seem niggardly and ungenerous to make anything of that point. I nevertheless accept that I should leave it to the Corporation to make the factual finding in the first instance.

[53]	In those circumstances the appropriate course is to allow the appeal, and to remit the matter so that the factual matter can be assessed and the proper entitlement calculated. In the circumstances of this case I direct the matter should be remitted to the Corporation rather than the District Court. Whilst that could be achieved by giving a direction to the District Court under r 20.19(1)(b)(ii) of the High Court Rules 2016 to in turn remit the matter to the Corporation under s 161(2)(b) of the Act, the most appropriate course is for this Court to remit the matter directly to the Corporation under r 20.19(1)(c). In the meantime Mr McKeefry’s existing entitlements should continue pending a further decision to increase them.

[54]	Accordingly the appeal is allowed, and the question of the application of cls 33 and 34 is remitted to the respondent for reconsideration.

[55]	The appellant is entitled to costs. I was advised that he is legally aided. Normally I would award costs on a 2B basis to the appellant, but I reserve the determination of costs. The parties can file memoranda if costs cannot be agreed. The costs below should also be reconsidered in light of this judgment.

Cooke J

Solicitors:
John Miller Law, Wellington for Appellant