Guy Hallwright v Forsyth Barr Ltd

• Jurisdiction: New Zealand
• Judge: Christina Inglis
• Judgment Date: 19 July 2013
• Court: Employment Court
• Docket Number: ARC 20/13
• Date: 19 July 2013

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

BETWEEN

Guy Hallwright

Plaintiff

and

Forsyth Barr Limited

Defendant

[2013] NZEmpC 134

ARC 20/13

IN THE EMPLOYMENT COURT AUCKLAND

Application for orders that plaintiff be allowed to use correspondence in Employment Court proceeding — defendant said that correspondence was protected by without prejudice rule — letter from plaintiff set out background in first part and contained proposal in second part that was said to be without prejudice — plaintiff argued could use first part of letter he wrote as it was open correspondence and as author he could invoke (or not) any privilege in respect of it — argued could use second letter as it was not marked without prejudice, did not contain a counter proposal and did not otherwise continue settlement negotiations — whether plaintiff could unilaterally revoke or waive privilege in letter he wrote — whether the first part of letter could be separated from second part — whether fact that second letter was not marked “without prejudice” was determinative of whether it was privileged.

Appearances:

Kathryn Beck, counsel for plaintiff

Peter Churchman QC, counsel for defendant

INTERLOCUTORY JUDGMENT OF JUDGE Christina Inglis

1 The plaintiff applies for orders enabling him to use two pieces of correspondence in evidence in this proceeding (Exhibit A and Exhibit B). The application is opposed on the basis that the correspondence is protected from disclosure by the without prejudice rule. Counsel agreed that the application could be dealt with on the papers.

2 Exhibit A comprises a letter written by the plaintiff to the defendant, dated 26 July 2012. The letter followed a meeting between the parties. The second part of the letter (which has been redacted) commences with the words:

Taking all of the above into account and on a without prejudice basis, proposed terms…

3 The first part of the letter, to which the application relates, sets out the background to the position said to have been taken by the defendant at the earlier meeting, a willingness to resolve the situation by agreement, and a list of factors that would be relevant to any agreement (including the length of time the plaintiff had worked for the defendant and the costs associated with his relocation to take up his position, his salary package, his age and anticipated ability to find alternative employment, and the value of shares held in the defendant company).

4 Exhibit B is the defendant's response to the plaintiff's letter of 26 July 2013.

5 The plaintiff submits that Part 1 of Exhibit A is open correspondence and was written by him on that basis. It is submitted that as he is the author he can invoke (or not) any privilege in respect of it. In relation to Exhibit B it is submitted that it was not marked “without prejudice”, does not contain a counter proposal, and does not otherwise continue settlement negotiations.

6 The defendant submits that the plaintiff does not have the sole ability to revoke or waive privilege in Exhibit A. It is submitted that Part 1 of Exhibit A cannot sensibly be separated from Part 2, is reasonably incidental to it, and was put forward as an inducement or reasoning to encourage the defendant to accept the offer contained in Part 2 of the letter. Mr Churchman also submits that the fact that Exhibit B is not marked “without prejudice” is not determinative of whether it is privileged, and while Exhibit B did not contain a counter-offer it was part of a series of without prejudice correspondence and contained a rejection of the plaintiff's earlier offer.

7 It is well established that written or oral communications made for the purpose of resolving a dispute may generally not be admitted in evidence. The policy underlying the rule is equally well established, namely to encourage parties to settle their disputes without fear of anything said during the course of such negotiations being used to their prejudice in proceedings. The underlying policy is particularly apposite in the employment relations sphere where, as the Chief Judge pointed out in Jackson v Enterprise Motor Group (North Shore) Ltd: 1

It is in the public interest that such practices [ “off the record” discussions between parties seeking to resolve employment relationship issues] be allowed to continue in the safe knowledge that the fact of them and

...