Noel Coventry v Vincent Singh

JurisdictionNew Zealand
CourtEmployment Court
JudgeJudge Christina Inglis
Judgment Date23 Feb 2012
Docket NumberARC 73/11

[2012] NZEmpC 34

IN THE EMPLOYMENT COURT AUCKLAND

ARC 73/11

In the Matter of an application for compliance order

Between
Noel Coventry
Plaintiff
and
Vincent Singh
Defendant
Counsel:

Paul White, counsel for plaintiff

Moira Macnab, counsel for defendant

Application for order under s140(6) Employment Relations Act 2000 (imposition of imprisonment, fine or sequestration of property for failure to comply with compliance order) — defendant failed to comply with order to pay plaintiff, arrears of wages, a lump sum for humiliation, and other costs — Authority issued compliance order and defendant failed to comply with that — whether imprisonment was appropriate — what level of fine should be imposed.

Held: S also knew that a compliance order had been made against him but he took no steps to seek a rehearing in the Employment Relations Authority. He had the opportunity to meet his obligations but failed to do so. The Authority gave S 21 days to comply with its order. The Authority had observed its statutory obligations when issuing the compliance order.

Imprisonment was a sanction of last resort. S's financial position was relevant in terms of likely compliance. Further, S was a first time offender. In the circumstances, imprisonment was not appropriate.

S was in flagrant disregard of the Authority's orders. It appeared that he disagreed with the Authority's rulings and had no intention of paying. There was some evidence that S had been under financial pressure, but he appeared to have been prioritising where he wanted to spend the money, and C had simply not been a priority. S had ignored the award made against him and had taken no steps to meet his obligations. It was appropriate for a fine to be imposed. In past cases, the highest fine that appeared to have been imposed under the section was $10,000. Those cases were distinguishable. as there apppeared to have been no financial information before the court indicating hardship.

A fine of $3,000 was appropriate, fifty percent of this being payable to C.

ORAL JUDGMENT OF Judge Christina Inglis

1

The plaintiff has applied for orders under s 140(6) of the Employment Relations Act 2000 in relation to the failure of Mr Singh to comply with an earlier compliance order made by the Employment Relations Authority. The plaintiff seeks a sanction of imprisonment for a period not exceeding three months and that that term of imprisonment be suspended to provide an opportunity for Mr Singh to make payment of the amounts owing under the compliance order. In the alternative the plaintiff seeks an order that Mr Singh be fined a sum not exceeding $40,000. Also being sought are costs in relation to this application.

2

The background to this proceeding is conveniently set out in the Authority's substantive determination of 1 April 2011. Mr Coventry was employed as a cabinet maker by Mr Singh in 2010. An hourly rate of $30.00 was agreed. Over the course of the following six weeks Mr Coventry worked a total of 262.25 hours. Full payment for these hours was not made. Mr Coventry ceased working for Mr Singh on 24 October 2010.

3

Mr Coventry subsequently filed a grievance with the Employment Relations Authority. The Authority Member determined that Mr Coventry had been unjustifiably dismissed following an investigation meeting which Mr Singh attended. The Authority awarded Mr Coventry arrears of wages in the sum of $5,367 gross, holiday pay of $629.36 gross, interest on these sums of 8.4 percent per annum from 19 October 2010 until the date of payment, lost earnings of $1,350 gross and compensation of $3,000 for hurt and humiliation. Mr Coventry then invited the Authority to consider the issue of costs which were awarded in his favour in the sum of $3,795 plus disbursements of $346.60.

4

It is apparent that steps were taken to extract the sums awarded by the Authority from Mr Singh by Mr Coventry's then lawyer and subsequent counsel, Mr Upton. This included correspondence to Mr Singh requesting payment. However, no response was received and no payment was forthcoming.

5

Mr Coventry then applied to the Authority for a compliance order. Issues arose in relation to service which are set out in detail in the Authority's determination of 29 August 2011. The Authority made directions as to substituted service and dealt with the application for a compliance order on 26 August 2011. Mr Singh did not participate in that investigative process. The Authority Member was satisfied based on the material before her that Mr Singh had had the opportunity to meet the obligations set out in the Authority's substantive and costs determinations and had failed, in the absence of any good reason, to do so. A compliance order was accordingly issued in relation to the awards. I return to the issue of service shortly.

6

The Authority also ordered that Mr Singh pay a further sum of $1,773.75 by way of full solicitor/client costs to Mr Coventry on the application. The Authority ordered that Mr Singh comply with its earlier orders within a period of 21 days from the date of its determination and drew to Mr Singh's attention the strict nature of the obligation on him to comply, noting this Court's powers to fine, sequester property and imprison for non-compliance.

7

Where any person fails to comply with a compliance order made under s 137 (which relates to orders made by the Authority), the person affected may apply to the Court for the exercise its powers under s 140( 6) (s 138(6)). Amongst other things, s 140(6) empowers the Court to order the person in default be sentenced to imprisonment for a period not exceeding three months, to be fined a sum not exceeding $40,000 and/or to order that the property of that person in default be sequestered. Prior to exercising such a power the Court must be satisfied that the person has failed to comply with the compliance made under s 137.

8

There have been unfortunate delays in progressing this matter. When it first came before the Court, Chief Judge Colgan issued a minute on 29 November 2011, identifying issues in relation to an affidavit of service that had been filed with the application. His Honour noted the potential sanctions against the defendant and that he had taken no step in the proceeding. He observed that the Court needed to be satisfied to a high standard that the proceeding had been served on Mr Singh and directed that another affidavit from the process server be filed. He went on to direct that:

…subject to satisfactory proof of service, … as if the defendant took no steps to defend the proceeding it would be a matter of the plaintiff formally proving his claim.

9

A further affidavit of service was filed and was referred to the Chief Judge. He issued a minute on 20 December stating that he accepted from the affidavit that the defendant had been served with the proceedings and set the matter down for a formal proof hearing. Mr Singh appeared at the hearing. He sought leave to be heard and an adjournment on the basis that he was not ready to proceed, his lawyer being otherwise engaged. I granted that application referring to the desirability of Mr Singh having the benefit of legal counsel, given the nature of the sanctions being sought, including imprisonment, although noted the unsatisfactory features of the application advanced by Mr Singh on his own behalf.

10

The onus is on the plaintiff to establish beyond reasonable doubt the grounds upon which he relies for the imposition of a penalty: Fletcher Development1.

11

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