Philip Zhou v Chief Executive of The Department of Labour

JurisdictionNew Zealand
CourtEmployment Court
JudgeG L COLGAN,GL Colgan
Judgment Date15 April 2011
Docket NumberARC 115/10
Date15 April 2011

[2011] NZEmpC 36



GL Colgan

ARC 115/10

In The Matter Of proceedings removed from the Employment Relations Authority

And In The Matter Of interlocutory applications

Philip Zhou
Chief Executive Of The Department Of Labour

Rodney Harrison QC and Deborah Manning, counsel for plaintiff

Joanna Holden and Andrew Gane, counsel for defendant

Una Jagose, counsel for the Director of New Zealand Security

Intelligence Service (appearing and heard by leave)

Applications for the defendant to give further particulars of his defence pursuant to r6 Employment Court Regulations 2000 (procedure) — application by plaintiff for special advocate to represent his interests in matters of document disclosure where documents subject to public interest privilege — substantive proceedings concerned unjustified dismissal — plaintiff dismissed after allegation of misconduct that resulted in loss of security clearance after NZSIS disclosed documents to defendant — defendant refused disclosure on public interest grounds — whether the Employment Court had power to appoint a special advocate — whether information already deemed privileged by the Chief Ombudsman and Privacy Commissioner could be ordered for disclosure.

The issues were: whether the Chief Executive should have to provide further particulars of his defence and answer interrogatories in order to narrow the factual issues for trial; whether the Employment Court (“EC”) had the power to appoint a special advocate to protect Z's interests in disclosure matters; and whether information already deemed privileged by the Chief Ombudsman and Privacy Commissioner could be ordered to be disclosed.

Held: The Chief Executive's statement of defence was unclear as to whether the requirement to obtain and retain security clearance was a contractual term or a condition of the employment agreement, and whether it applied from the outset of Z's employment. While the Chief Executive did not have to specify what was meant by “appropriate security and character clearances”, he did have to provide further particulars on whether it was a requirement for a compliance officer to obtain and retain appropriate security and character clearances, and details of the vetting procedure. While it was open to the Court to determine that, as a whole, the interrogatories were unnecessary (Dodds v Smith and Novatis New Zealand Ltd v Ancare New Zealand Ltd), that approach was not appropriate in this case. The proceedings involved a personal grievance and once the plaintiff had established a suspension and a dismissal and a related sense of injustice, the onus shifted to the defendant to justify his actions. As the defendant held many of the cards, it was fair to a plaintiff to allow him to know of the details of the defence of justification before he read them in the defendant's witnesses' briefs of evidence shortly before trial.

Z had sought details of information known to the Chief Executive or his decision-maker and relied on by the decision-maker. The information was in a different category from information relating to the Directors' decision to recommend that Z no longer have security clearance. The fact that the questions could be answered by a competent witness at the trial was not a total defence to answering interrogatories. A plaintiff was entitled to know details of the defence of justification under s103A Employment Relations Act 2000 (“ERA”) (test of justification) before he read them in the defendant's witnesses' briefs of evidence before trial. The Chief Executive had to answer them.

The Employment Court was empowered to require disclosure and inspection of relevant documents on conditions that were not expressly set out in the Regulations. Regulation 6(2)(b) (if no provisions) permitted that; it mandated a form of procedure that the Court considered would best promote the object of the ERA and the ends of justice. Z's personal grievance was properly before the Court, so that it had jurisdiction to determine them and that the document disclosure and inspection regime was applicable. The proposed special advocate procedure was not contained in the High Court Rules but it was really no different in principle to the power to impose the conditions that the Court frequently directed upon disclosure and inspection of sensitive documents.

The Chief Ombudsman and Privacy Commissioner's decisions did not determine whether the Chief Executive could assert privilege in them for the purposes of the regulations. Both decisions interpreted and applied different legislation. They did not determine public interest privilege in this litigation so that no further inquiry was necessary. Disclosure was sought against the Chief Executive, not the NZSIS Director and those documents were in the possession of the defendant, although the NZSIS Director claimed they contained secret information.

A form of independent assessment of the contents of the documents for which public immunity privilege was asserted was necessary. There was authority for the proposition that while New Zealand court's would consider a Minister's certification that disclosure of particular documents would be injurious to the public interest, the Court's were not bound by that certificate (Choudry v Attorney General (CA)). As to the form of inquiry, if it should be necessary, the Chief Executive's proposal that there be a private briefing to the judge on the role of the Director of the NZSIS (without plaintiff's counsel being present), would be unacceptable. It would be inimical to notions of natural justice that a Judge should receive information from someone who was both a witness in the proceeding and, by leave, an intervener (although not a party) on matters that go to the heart of the proceeding, the withholding, for reasons of secrecy, of relevant documents. That would be especially so if, in addition to the plaintiff, his counsel were also to be excluded from that briefing and unable to participate in it.

Z's application for a special advocate was adjourned sine die pending further particularisation and explanation by the Chief Executive of the documents which he objected to producing. If following further particularisation and explanation the documents remained subject to a claim of privilege the Court would inspect and determine each claim of privilege.

Order for further particulars; application for special advocate adjourned sine die pending particularisation of defence; Order for affidavit setting out particular grounds of defendant's objection to production of specified documents.

  • A. The defendant is directed to give the further particulars of his defence in an amended statement of defence and to answer the interrogatories set out in the judgment, both within 30 days of the date of this judgment.

  • B. The plaintiff's application for the appointment of a special advocate to deal with matters of document disclosure, inspection and use is adjourned sine die pending further particularisation and explanation by the defendant of the documents which he objects to produce and have inspected by the plaintiff. If following such further particularisation and explanation, these documents remain subject to a claim to public interest injury privilege that the Court cannot determine on the affidavit(s), the Court will inspect these to determine privilege.

  • C. The defendant must, within 21 days of the date of this interlocutory judgment, file and serve a further and better affidavit setting out the particular grounds for his objection to produce specified documents on the ground that to do so will be injurious to the public interest.


This interlocutory judgment determines several preliminary questions before Philip Zhou's personal grievances can be heard and decided on their merits.


First, the plaintiff seeks an order that the defendant give further particulars of his defence and directing the defendant to answer interrogatories, questions that seek to narrow the factual issues for trial by obtaining admissions and denials.


Next, Mr Zhou seeks the appointment of a special advocate to represent the plaintiff's interests in matters of document disclosure, both interlocutory and substantive, where those relevant documents may be the subject of public interest privilege and thereby not disclosable.


This judgment also deals with disclosure and inspection of some of the defendant's documents that he says he is not obliged to disclose to the plaintiff. Mr Zhou has challenged that objection to disclosure and seeks a further order that the defendant provide a verified list of documents. The documents concerned are ones by or to the New Zealand Security Intelligence Service (NZSIS) dealing with the loss of the plaintiff's security classification which, in turn, led to his dismissal.


In determining the various interlocutory applications currently before the Court, it is important to set out the context of the litigation in which they arise. It is common ground that Mr Zhou was dismissed (and if his suspension by the defendant is established, that too) as a result of the receipt by the defendant of information alleging misconduct by the plaintiff in, and consequent inappropriateness of, employment. This is said to have resulted in the employer's loss of trust and confidence in Mr Zhou as an employee and also the loss by him of security clearance which the defendant claims was necessary for the performance by Mr Zhou of his job.


Among Mr Zhou's complaints of unfair and unreasonable treatment by his employer is that he was not told of the fact or content of adverse reports at relevant times and which he says contained erroneous information which he would have been able to correct had he been given an opportunity to do so. So the...

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2 cases
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    • New Zealand
    • 26 November 2015
    ...with Caffe Coffee, which it is common ground contains this provision: 3 4 5 6 Zhou v Chief Executive of the Department of Labour [2011] NZEmpC 36. At The Vice-Chancellor of Massey University v Wrigley [2010] NZEmpC 52 at [17]-[19]. Faccenda Chicken Ltd v Fowler [1986] 1 All ER 617, at 626; ......
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    • 18 August 2020 Langford v Chief Executive of Inland Revenue Department [2020] NZEmpC 123. See Zhou v Chief Executive of the Department of Labour [2011] NZEmpC 36; Industrial Equipment Distributors Lifting Centre Ltd v Scouller [2018] NZEmpC 90 at [45]−[46]; and Air New Zealand Ltd v Kerr [2013] NZEmpC ......

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