United Flower Growers Ltd v Hansen [2021] NZDC 16199

Published 08 December 2021

Application to set aside — notice of appearance under protest to jurisdiction — jurisdiction of Employment Relations Authority — claim for summary judgment — deductions from wages — Employment Relations Authority — “employment relationship problem” — recovery of debt — Employment Relations Act 2000, ss 5, 103, 123 & 161 — Employment Contracts Act 1991, s 28 — Wages Protection Act 1983, ss 4 & 5 — Tranz Rail Limited v Rail & Maritime Transport Union (Inc) [1999] 1 ERNZ 460 — ANZ National Bank v Dodge [2005] 1 ERNZ 518 — Spotless Facility Services NZ Ltd v Anne Mackay [2017] NZEmpC 16 — Global Kiwi NZ Ltd v Fannin [2014] NZ HC 656 — JP Morgan Chase Bank NA v Lewis [2015] NZCA 256 — CPL v Chief Executive of Oranga Tamariki [2019] NZERA 526 — Performance Cleaners All Property Services Wellington Ltd v Chinan [2017] NZEmpC 152 — BDM Grange Ltd v Parker [2006] 1 NZLR 353. The defendant in the matter had previously filed a protest of the Court's jurisdiction, arguing that the dispute was an employment matter and should be heard by the Employment Relations Authority. In this hearing, the plaintiff filed an application to set aside the defendant's protest to jurisdiction, to allow it to continue its claim in the District Court. The defendant had previously owned a business that had entered a credit account agreement with the plaintiff. As part of the agreement, the defendant had personally guaranteed all money that her business owed the defendant, along with other costs and expenses. The defendant later entered an employment agreement with the plaintiff. At the same time as entering the employment agreement, the parties entered an incentive scheme that was tied to the defendant's trading debt with the plaintiff. The defendant's employment with the plaintiff was terminated, and she commenced 'unjustified dismissal' proceedings in the Employment Relations Authority, seeking a whole or partial forgiveness of her debt to the plaintiff. Shortly afterward, the plaintiff commenced a summary judgment proceedings against the defendant for payment of the debt. The Court observed that the parties had entered into the credit agreement several years before the defendant had begun working for the plaintiff. The incentive scheme between the parties provided a means for the defendant to repay her debt to the plaintiff, but was not part of the employment agreement. Therefore the claim arose independently of the employment relationship. The Court found that the proper forum for resolving the dispute was the District Court. The defendant's protest to jurisdiction was set aside. Judgment Date: 12 August 2021.