EMMA YUEN SEE FOX v HEREWORTH SCHOOL TRUST BOARD NZEmpC WELLINGTON

• Jurisdiction: New Zealand
• Judge: G L Colgan
• Judgment Date: 15 April 2016
• Court: Employment Court
• Docket Number: WRC 5/13
• Date: 15 April 2016

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

And in the Matter of an application for costs

BETWEEN

Emma Yuen See Fox

Plaintiff

and

Hereworth School Trust Board

Defendant

[2016] NZEmpC 39

WRC 5/13

IN THE EMPLOYMENT COURT WELLINGTON

Application by the plaintiff for costs incurred in the Employment Relations Authority (ERA) and Employment Court (EC) — the plaintiff had been successful in her claims to unjustified dismissal and, in part, successful in recovering compensation — she sought an order for contribution to her legal costs — the application extended to costs in the ERA because, although it found in the defendant's favour, that determination had been reversed on appeal by the EC — the plaintiff claimed costs for representation by senior counsel, along with travel and accommodation — the plaintiff had made a Calderbank offer which the defendant had not responded to — what were the actual and reasonable costs incurred by the plaintiff — whether the recognition of the plaintiff's contribution to her grievance in the award was a success factor for the defendant and was to be taken into account when determining costs — whether the Court had the power to make a costs order either by instalments or by fixing a date in the future for the payment of those costs.

Appearances:

D Traylor, counsel for plaintiff

L Blomfield, counsel for defendant

COSTS JUDGMENT OF CHIEF JUDGE G L Colgan

1 The plaintiff, having been successful in her claims to unjustified dismissal and, in part, successful in recovering compensation, seeks an order for contribution to her legal costs. 1 Despite the Court having given the parties an opportunity to attempt to settle this question themselves, they have been unable to do so. The plaintiff's application extends also to costs in the Employment Relations Authority because, although it found in the Hereworth School Trust Board's (the Board's) favour, that determination 2 has been reversed on appeal by this Court.

2 The Authority ordered Mrs Fox to pay the Board $21,000 as a contribution towards the defendant's costs of a three-day Authority investigation in September

2012. Although Mrs Fox acknowledges that she was represented substantially by her husband during the Authority proceedings she says that the legal advice fees and other expenses incurred by her amounted to $4,300.32 (including GST). She seeks reimbursement of that sum from the defendant for the proceedings in the Authority

3 The plaintiff's costs of legal representation in this Court between February 2013 and November 2015 amounted to $287,268.23 (including GST). The plaintiff was represented by senior counsel (Peter Churchman QC) and his junior, David Traylor. Both the engagement of senior counsel and the presence of a junior were reasonable in all of the complex and difficult circumstances of the case. The defendant, too, was represented by a senior practitioner with a junior (Stuart Webster and Lara Blomfield respectively), an arrangement which would similarly not be open to any reasonable criticism.

4 The plaintiff having been substantially successful, at least on liability questions although not entirely in terms of remedies, Mrs Fox is entitled to an order for costs against the defendant. The defendant does not oppose this. The initial question is to determine what were actual and reasonable costs incurred by the plaintiff.

5 First, the plaintiff's actual costs have been revealed (above) as being almost

$290,000. There is no challenge to the accuracy of those costs or their makeup. Rather, the more difficult question is whether those were reasonable costs in all the circumstances, for the purpose of asking the defendant to contribute to them, in all the circumstances. The defendant says they were not.

6 The hearing of the case occupied seven days in Hastings which was the venue nearest to the school and most of the witnesses. It was necessary for counsel for the plaintiff to travel from Wellington. There were also a number of interlocutory matters dealt with by the Court before the case was ready to begin, most on papers filed but at least one in court in Wellington.

7 These interlocutory proceedings resulted in no fewer than seven preliminary judgments, each of which required the filing of one or more applications, memoranda, affidavits and submissions and, in at least one case, appearances before the Court. In addition to the seven days of hearing already mentioned, there were six East light volumes of documents totalling nearly 1,000 pages. Ten witnesses gave evidence, although only three of them were called by the plaintiff. The substantive judgment runs to 84 pages and even then does not deal, at least in detail, with a number of peripheral issues, raised principally by the plaintiff, especially before she was legally represented. By the Employment Court's standards, it was a lengthy and intensive case.

8 The plaintiff divides up her claim for costs (and, in particular, whether there should be any uplift from a starting point of two-thirds of these) into different periods in the litigation.

9 For the first, from 11 February 2013 to 30 September 2013 and 1 May 2014 to 16 July 2014, the plaintiff says that she incurred legal costs of $72,096.73 (including GST). She says, nevertheless, that nothing that occurred during those periods justifies any adjustment up or down from the two-thirds starting point, so that her application for contribution at that rate is $48,016.42 (including GST).

10 Next, the plaintiff says that in the period 1 October 2013 to 13 April 2014, she incurred legal fees of $38,799.50 although no GST was payable, I assume because the plaintiff was by then no longer residing in New Zealand. This is the period during which the majority of interlocutory proceedings were argued and decided. As the plaintiff points out, in relation to the applications for non-party disclosure and the defendant's challenge to the plaintiff's objection to disclosure,

neither party was entitled to costs. 3 In respect of the remaining interlocutory proceedings, each party enjoyed a measure of success. 4 To reflect this, the plaintiff proposes an adjustment down from the two-thirds starting point. She seeks a contribution of 33 per cent of her actual costs for this period, or $12,803.84.

11 Next, the plaintiff relies on an offer of settlement conveyed to the defendant on 11 July 2014 which was made “without prejudice save as to costs”. In addition to

rejecting the Board's offer of settlement contained in its letter of 9 July 2014 which is not relied on by it now, the plaintiff counter-proposed a settlement on the following terms

• • That there would be a consent judgment of the Court including a statement that Mrs Fox had been dismissed unjustifiably (both procedurally and substantively);

• • that the defendant would pay Mrs Fox six months' salary;

• • that the Board would pay Mrs Fox the sum of $20,000 pursuant to s 123(1)(c)(i) of the Employment Relations Act 2000 (the Act), what is known by the shorthand of ‘distress compensation’;

• • that the Board would pay a contribution to Mrs Fox's costs in the Employment Court proceedings (upon receipt of an invoice) of up to $70,000 (plus GST);

• • that the Board would refund to the plaintiff the sum of $21,000 paid by her as costs in the Authority;

• • that this settlement would be certified by a mediator in a Record of Settlement, fully and finally settling all matters between the parties; and

• • that the plaintiff would withdraw her proceedings.

12 Further, the plaintiff's proposal included that:

• • money held as security for costs by the Employment Court would be returned to Mrs Fox;

• • that the parties would not “speak ill of one another”; and

• • that the fact and terms of the settlement would remain strictly confidential to the parties.

13 A response to this proposal was requested by the plaintiff's solicitors within five days and the proposal would lapse after this deadline. The plaintiff says that there was no response from the defendant at all to that offer before it expired. She now says that the amount of six months' salary at that time would have been $29,602. The plaintiff says, therefore, that the total monetary value of her offer to settle was $151,102.

14 The plaintiff says that, by comparison, the Court's judgment awarded $78,934 for lost remuneration, $6,666 as s 123(1)(c)(i) compensation, 5 and set aside the refunding of the Authority's costs' award of $21,000 which was apparently paid by Mrs Fox and so needs to be credited to her now. The plaintiff says, therefore, that the total value of the remedies awarded by the Court was $106,600. She says that to this figure there needs to be added a further amount as a likely order for costs as at the date of the settlement offer, in reliance on the judgments in Rodkiss v Carter Holt Harvey Ltd 6 and Sealord Group Ltd v Pickering. 7 The plaintiff assesses this additional sum to be $60,387.68 (based on the figures set out previously). The resulting total (notional) monetary achievement for the plaintiff is $166,987.68. Therefore, the plaintiff says, she was or will be awarded more by this Court than she offered on 11 July 2014 and therefore seeks to rely on that rejected offer. She says that the terms of the offer were transparent; the period for its acceptance or rejection was reasonable; and, had it then been accepted by the defendant, all issues between the parties would have been resolved at lesser cost to all, including the defendant. The plaintiff says, however, that she is better off by going to judgment and that the defendant forewent the opportunity to be better off by rejecting that offer of settlement.

15 The plaintiff says that this was both a genuine and reasonable attempt to resolve the matter and one made before the period during which the majority of costs would have been...