Rolling Thunder Motor Company Ltd v Kennedy

JurisdictionNew Zealand
CourtEmployment Court
JudgeA A Couch
Judgment Date19 August 2010
Date19 August 2010
Docket NumberCRC 12/10

[2010] NZEMPC 109


CRC 12/10

In the Matter of a challenge to a determination of the Employment Relations Authority


In the Matter of an application for an order striking out the proceedings

Rolling Thunder Motor Company Limited
Diane Kennedy

David Burton, counsel for the plaintiff David Clark, counsel for the defendant

Challenge of Employment Relations Authority decision and application to strike out proceeding. Defendant used her employer's BarterCard for personal purchases and failed to reimburse her employer. ERA struck out proceedings on grounds that it lacked jurisdiction to order repayment of “an unpaid loan” — whether proceedings now in the Employment Court should be struck out for want of jurisdiction.

Held: Jurisdiction of the ERA was principally conferred by s161 Employment Relations Act 2000 (“ERAct”) (jurisdiction). Section 161 gave the ERA exclusive jurisdiction where “employment relationship problems” were at issue and s161(1)(r) was a catch-all provision that included “any other action” concerning the employment relationship. The Employment Court in Waikato Rugby Union v NZ Rugby Football Union had adopted the test that an action would arise from, or be related to, an employment relationship if the action would not have arisen if the employment relationship did not exist. This wider interpretation of s161(1)(r) was preferred. There was no reason to read down the plain meaning of the words used in s161(1)(r) to the extent suggested in High Court decisions.

In applying the test, the question in this case was whether the alleged debt by K to RTM Ltd would have been incurred had there not been an employment relationship between the parties. This was answered in the negative. It was clear from the statement of claim that K was permitted to use the BarterCard and thereby incur the alleged debt because she was an employee. Application to strike out dismissed.



The issue decided in this judgment is whether these proceedings should be struck out for want of jurisdiction.


The defendant was employed by the plaintiff as general manager of its business. The plaintiff alleges that, during the period she was employed, the defendant used a BarterCard account in the plaintiff's name to purchase goods for herself and failed to reimburse the plaintiff for the cost of those goods.


The plaintiff commenced proceedings in the Employment Relations Authority to recover the debt said to be owing for BarterCard purchases. The Authority struck out the proceedings on the grounds that it lacked jurisdiction to order repayment of “an unpaid loan”. 1 The plaintiff has challenged that determination and seeks a hearing de novo. The defendant has responded with an application to strike out the proceeding on the grounds that the Court also lacks jurisdiction to hear and decide the matter.

Strike-out principles

Counsel both relied on the summary of principles set out in Attorney-General v Prince2 and approved by members of the Supreme Court in Couch v Attorney-General. 3 Those principles are:

(a) Pleaded facts, whether or not admitted, are assumed to be true. This does not extend to pleaded allegations which are entirely speculative and without foundation.

(b) The cause of action for defence must be clearly untenable.

(c) The jurisdiction is to be exercised sparingly, and only in clear cases. This reflects the Court's reluctance to terminate a claim or defence short of trial.

(d) The jurisdiction is not excluded by the need to decide difficult questions of law, requiring extensive argument.

(e) The Court should be particularly slow to strike out a claim in any developing area of the law, perhaps particularly where a duty of care is alleged in a new situation.


Amplifying the principle in paragraph (b) above, in Couch Elias CJ and Anderson J said: “It is inappropriate to strike out a claim summarily unless the court can be certain that it cannot succeed.” 4


Although these principles have been developed in the courts of general jurisdiction, I accept Mr Clark's submission that they are equally appropriate in this jurisdiction.


In deciding a challenge to a determination of the Authority, in most cases the Court may make any order which the Authority could have made. Thus, the Court's jurisdiction in this matter is derived from that of the Authority and is no wider than the jurisdiction of the Authority.

Pleaded facts

The parts of the statement of claim relevant to this issue are:

    During the Defendant's employment with the Plaintiff she put forward a proposal to open an account with BarterCard. BarterCard operates on the basis of using “BarterCard Trade Dollars” to purchase or sell goods or services from other businesses in the BarterCard scheme. It operates in a similar way to company credit cards. 8 The Plaintiff agreed to open the account with BarterCard. 9 To make the BarterCard scheme more relevant to the Plaintiff the Defendant requested that some employees of the Plaintiff (including herself) have their own personal accounts on the Plaintiff's BarterCard account. This would allow them to make personal purchases for themselves and the employees would then reimburse the Plaintiff. The Plaintiff agreed to this. 10 The Plaintiff's accountant set up an internal accounting system by opening personal debtor accounts for employees participating in the BarterCard scheme. 11 The Plaintiff received a statement from BarterCard each month itemising all transactions on its BarterCard account. 12 Each month the Plaintiff's accountant requested that the Defendant identify which of the expenses on the statement were her personal expenses. The expenses marked by the Defendant as personal were then charged by the Plaintiff to the Defendant's personal debtor account and the Defendant was issued with a corresponding monthly statement of that account. 13 Throughout the Defendant's employment she did not dispute any of the statements of her personal debtor account. 14 The Defendant was made fully aware of the size of her personal debtor account on an ongoing basis. In addition to receiving monthly statements the Defendant had constant access to the account details in her position as General Manager.
Discussion and decision

Mr Burton and Mr Clark both provided me with submissions which were detailed and thoughtful. I have derived considerable benefit from them. Without recording their submissions here, I confirm that I have considered them fully and that I have regard to the decided cases referred to in them.


The jurisdiction of the Authority is principally conferred by s161 or the Employment Relations Act 2000 (the Act). That is a lengthy section but, for the purposes of this case, the relevant parts of it are:

161 Jurisdiction

  • (1) The Authority has exclusive jurisdiction to make determinations about employment relationship problems generally, including—

    • (a) disputes about the interpretation, application, or operation of an employment agreement:

    • (b) matters related to a breach of an employment agreement:

  • (r) any other action (being an action that is not directly within the jurisdiction of the court) arising from or related to the employment relationship or related to the interpretation of this Act (other than an action founded on tort):


The term “employment relationship problem” is defined in s5 of the Act:

employment relationship problem includes a personal...

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7 cases
  • Fmv v Tzb
    • New Zealand
    • Supreme Court
    • 20 August 2021
    ...insofar as those cases treated the question of jurisdiction as factual, for example in Waikato Rugby, above n 42, at [50]; Rolling Thunder Motor Co Ltd v Kennedy [2010] NZEmpC 109 at [22]; and New Zealand Fire Service Commission v Warner [2010] NZEmpC 90, [2010] ERNZ 290 at 157 Pain Manag......
  • Fmv v Tzb
    • New Zealand
    • Supreme Court
    • 20 August 2021
    ...the question of jurisdiction as factual, for example in Waikato Rugby, above n 42, at [50]; Rolling Thunder Motor Co Ltd v Kennedy [2010] NZEmpC 109 at [22]; and New Zealand Fire Service Commission v Warner [2010] NZEmpC [2010] ERNZ 290 at [38]. Pain Management, above n 142, at [22]; cited ......
  • Aztec Packaging Ltd v Vanessa Jean Malevris
    • New Zealand
    • High Court
    • 23 February 2012
    ...AA232/07 , 3 August 2007. 7 Waukura Hauora o Tainui Trust v Nathan [2010] NZEmpC 156 . 8 Rolling Thunder Motor Co Ltd v Kennedy [2010] NZEmpC 109 9 Kennedy v Rolling Thunder Motor Co Ltd [2010] NZCA 582 . 10 Pain Management Systems (NZ) Ltd v McCallum, HC Christchurch CP72/01 , 14 August 20......
  • Jeffrey Reginald Mcculloch v New Zealand Fire Service Commission
    • New Zealand
    • Employment Court
    • 15 December 2010
    ...Union v New Zealand Rugby Football Union [2002] 1 ERNZ 752 followed, for example, in Rolling Thunder Motor Company Limited v Kennedy [2010] NZEmpC 109 but doubted on appeal in Kennedy v Rolling Thunder Motor Company Limited [2010] NZCA 6 [1996] 1 ERNZ 48 . ...
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