Laura Jane George v Auckland Council

• Jurisdiction: New Zealand
• Judge: B S TRAVIS
• Judgment Date: 17 May 2012
• Court: Employment Court
• Docket Number: ARC 91/10
• Date: 17 May 2012

In The Matter Of an application to remove proceedings from the Employment Relations Authority

And In The Matter Of an interlocutory application

Between

Laura Jane George

Plaintiff

and

Auckland Council

Defendant

[2012] NZEmpC 83

ARC 91/10

IN THE COURT OF APPEAL OF NEW ZEALAND

Application for directions concerning alleged conflict of interest on the part of Auckland Council's (“council”) solicitors and its counsel — plaintiff worked for council — allegations concerning breach of recruitment policy, which was not serious misconduct — attended meeting regarding allegations — council representative (“CR”) prepared report and draft letter setting out allegations after meeting — plaintiff alleged that CR then consulted with council's solicitors — final form of letter raised issue of plaintiff's conduct constituting serious misconduct — plaintiff dismissed following further meetings, on basis that explanation as to perceived inconsistencies was not accepted, her truthfulness was doubted, and this amounted to serious misconduct — whether CR consulting with council's solicitors had resulted in a real or apparent conflict of interest in terms of r13.5.3 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (independence in litigation).

Counsel:

Tony Drake, counsel for plaintiff

Tim Clarke, counsel for defendant

INTERLOCUTORY JUDGMENT OF JUDGE B S TRAVIS

1 Mr Drake, counsel for Ms George, filed a memorandum in which he advised that he wished to draw the Court's attention to an actual or apparent conflict of interest on the part of the Auckland Council's (AC) solicitors and its counsel. He sought directions from the Court concerning this alleged conflict of interest. In support, he referred to an affidavit of Ms George, sworn on 30 March 2012, and an earlier affidavit sworn on 31 May 2010. He also annexed to his memorandum his exchange of letters with the AC's solicitors concerning this matter.

2 The AC filed a notice of opposition in which it advised it was opposed to the making of the orders sought in Ms George's application, principally on the grounds that there was no conflict of interest which would disqualify the AC's solicitors and counsel from continuing to act. An affidavit of Duncan Alexander Bremner, who held a number of positions in the human resources department of the Auckland Regional Council (ARC), now amalgamated into the AC, was filed in opposition.

3 Mr Drake relied on r 13.5.3 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care Rules 2008 (the Rules) which reads as follows:

…

Independence in Litigation

• 13.5 A lawyer engaged in litigation for a client must maintain his or her independence at all times.

• 13.5.3 A lawyer must not act in a proceeding if the conduct or advice of the lawyer or of another member of the lawyer's practice is in issue in the matter before the court. This rule does not apply where the lawyer is acting for himself or herself, or for the member of the practice whose actions are in issue.

4 Mr Drake was initially also concerned about the involvement of Mr Clarke in the disciplinary investigation, a matter which may have been covered by r 13.5.2 of the Rules if Mr Clarke was likely to be required to give evidence. When it became clear that Mr Clarke would not be required to give evidence, Mr Drake did not pursue that aspect.

5 As to r 13.5.3, Mr Drake concentrated on what he submitted was the key legal issue in the grounds relied on by the AC for Ms George's dismissal. As background he referred to the circumstances set out in Ms George's affidavit of 31 May 2010. In that affidavit, she deposes that in December 2009 she received a letter containing ten allegations, nine of which, she submits, all concerned the same issue, that was whether a university student had been employed by the ARC without the necessary authorisation having been obtained. The tenth item concerned a charitable donation and, after explanation, was not pursued by the ARC.

6 Mr Drake relied on definitions in the discipline and dismissal policy of the ARC which were said to be terms of Ms George's employment agreement and contended that an alleged breach of a recruitment policy was “misconduct” under that policy for which a written first warning could have been issued if a breach of policy was established. He submitted that if such a breach was established, it could not amount to serious misconduct as defined in the policy and could not have led to Ms George's dismissal.

7 A meeting was held between Ms George and the ARC on 1 December 2009 in which one of the representatives of the ARC was Mr Bremner. Mr Drake alleges that Mr Bremner was tasked with preparing correspondence relating to this matter and, following the 1 December meeting, he prepared a report and a draft letter which instructed Ms George to attend a disciplinary meeting on 9 December 2009 to respond to nine out of the ten original allegations. In the process of disclosure, AC disclosed a draft letter dated 23 December 2009 which set out the nine allegations. Mr Drake alleges that Mr Bremner then sought and obtained advice from the ARC's solicitors in relation to the disciplinary process and the disciplinary meeting to be held with Ms George. He contended that following that advice being provided, Mr Bremner's draft letter was amended and the letter in its final form, dated 12 January 2010, was sent to Ms George. The 12 January letter contained the following paragraph which was not in the 23 December draft:

We also have serious concerns about the truthfulness of your explanation given that parts of your evidence are wholly inconsistent with evidence of other factual witnesses. We would invite your response to these concerns. If it becomes evident that your explanation has not been truthful then this may itself constitute serious misconduct.

8 Mr Drake relied on Ms George's second amended statement of claim in ARC 91/10 which pleads that the new wording was not one of the ten specific allegations set out in Mr Bremner's report. Following further meetings, Ms George was dismissed on 4 February 2010 on the basis that her explanation as to the perceived inconsistencies was not accepted, her truthfulness was doubted, and that this amounted to serious misconduct.

9 Mr Drake submitted that when the proceeding comes to trial, a significant issue will be whether it was fair or lawful for the ARC to have elevated what he described as a relatively minor incident of alleged misconduct in relation to the recruitment policy, for which the harshest penalty was a written warning, to serious misconduct based on Ms George's explanation about the relatively minor incident of alleged misconduct. In his letter to the defendant's solicitors of 1 March 2012, Mr Drake contended that the advice that was given to the ARC about whether such an additional allegation could justify a dismissal for serious misconduct was not supported by, or consistent with, case law and, had the legality of the issue been properly researched, the Employment Court's decision in the Iakopo v Waikato Electricity Ltd 1 with the following reasoning would have been found: 2

That aside, taking annual leave at short notice was not in itself an act of misconduct for which he was liable to be dismissed. That is clearly acknowledged by both Mr Taylor and Mr Parmenter. I cannot accept that even if it was shown that he had consistently lied about his reasons for doing something for which he was not liable to be dismissed, then those lies should in the circumstances of this case be elevated to the status of something so destructive of the employment relationship that they justified instant dismissal.

10 Mr Drake also relied on the following submission which he had made in that letter:

Further, it should have been evident to an experienced employment lawyer that it could not be lawful for an employer to simply decide to elevate an incident of relatively minor misconduct to an offence of serious misconduct by electing to not believe the employee's explanation. If that was lawful then the effect would be the routine circumvention by employers of the statutory protection employees have against unjustified dismissal under the Employment Relations Act 2000. That is, it would be a very simple matter for employers to summarily dismiss their employees for any minor incident of alleged misconduct and claim justification for doing so on the basis of the employer saying that it did not accept the employee's explanation and doubted the truthfulness of the explanation.

11 In their written response, the AC's solicitors did not accept Mr Drake's contention that the addition of a new allegation of dishonesty during an investigation into lesser allegations could not amount to serious misconduct and cited as examples: Honda NZ Ltd v NZ (with exceptions) Shipwrights etc Union, 3 New Zealand Sugar Co Ltd v Connelly, 4 Blaker v B & D Doors (NZ) Ltd 5 and Featherston v Ravensdown Fertiliser Cooperative Ltd. 6 They observed the Iakopo decision was decided in 1994 and stated it was distinguishable on a number of bases.

12 Mr Drake submitted that the four cases all had one common feature which was that the original act of misconduct by each of the employees was itself serious misconduct, as specified in the applicable employment agreement or established at common law and, if proven, could have justified a dismissal. He submitted that Ms George's situation was different because she was alleged to have breached a recruitment policy which was not serious misconduct and for which she could not have been dismissed. He submitted that the Iakopo decision...