Philip Zhou v Chief Executive of The Department of Labour

• Jurisdiction: New Zealand
• Judge: G L COLGAN
• Judgment Date: 15 April 2011
• Court: Employment Court
• Docket Number: ARC 115/10
• Date: 15 April 2011

In The Matter Of proceedings removed from the Employment Relations Authority

And In The Matter Of interlocutory applications

BETWEEN

Philip Zhou

Plaintiff

and

Chief Executive Of The Department Of Labour

Defendant

[2011] NZEmpC 36

judges:

GL Colgan

ARC 115/10

IN THE EMPLOYMENT COURT AUCKLAND

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.

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)

• 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.

REASONS FOR INTERLOCUTORY JUDGMENT NO 2 OF CHIEF JUDGE G L COLGAN

Introduction

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

2 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.

3 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.

4 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.

5 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.

6 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 content of reports and other written material sent to and from the defendant (including, in particular, correspondence with the NZSIS) about Mr Zhou is relevant to the matters between the parties in this proceeding.

7 The proceeding challenges the justification for that suspension and subsequent dismissal. The test to be applied by the Court is that set out in s 103A of the Employment Relations Act 2000 (the Act), whether what the employer did, and the way in which the employer did it, were what a fair and reasonable employer would have done in all the circumstances at the time. The defendant will, in effect, bear the onus of establishing justification for his dismissal of Mr Zhou by satisfying those tests.

8 Processes for the mutual disclosure and inspection of relevant documents are contained in the Employment Court Regulations 2000 (the Regulations). The case will also follow a pre-trial process in which each side will have to disclose the precise nature of the evidence-in-chief that he intends to call at the hearing in sufficient time for the other party to prepare cross-examination of those witnesses. The issues for decision will be established by the primary pleadings, the statements of claim and defence. Regulations 11 and 20 provide that these must state the general natures of the claim and defence, the facts (but not the evidence of the facts) on which the claim and defence are based, reference to any relevant employment agreements or legislation, the relief sought, and the grounds of the claim and defence. These must be specified with such reasonable particularity as to fully, fairly and clearly inform the Court and other party of the nature and details of the claim and defence, the relief sought and the grounds on which it is sought.

9 The applications for further and better particulars of the statement of defence, to issue interrogatories and challenging the defendant's objections to disclosure of documents, are all connected in that they are part of the plaintiff's strategy to obtain more information about his dismissal from the defendant. Nevertheless, I consider

that they should be dealt with independently starting with the application for further and better particulars of the statement of defence, moving next to the question of interrogatories, and dealing finally with disclosure. The application for appointment of a special advocate is connected with document disclosure and will be dealt with immediately before that final topic. This hierarchy of dealing should allow a logical and categorical treatment of the plaintiff's very broad request for more information.

Application for further particulars of statement of defence

10 The plaintiff seeks an order pursuant to reg 6(2) that the defendant provide, within such time as may be fixed, further and better particulars and answers to interrogatories (as the case may be) in respect of the following matters.

11 In the absence of rules or regulations in this Court allowing it to direct further and better particulars and to direct interrogatories be answered, recourse can be had to the High Court Rules which permit these interlocutory procedures. There is no controversy about this: such orders are frequently made in appropriate cases.

12 The provision of further and better particulars of a statement of defence is aimed at compliance with reg 20 of the Regulation which states:

• (1) Every statement of defence filed in accordance with these regulations–

  • (a) must be in form 4; and

  • (b) must specify, in consecutively numbered paragraphs,–

    • (i) whether the defendant admits or denies each of the allegations of fact contained in the plaintiff's statement of claim so far as those allegations affect the defendant; and

    • (ii) where the defendant has a positive defence, the details of that defence.

• (2) The details of a positive defence must include–

  • (a) the general nature of the defence; and

  • (b) the facts (but not the evidence of the facts) upon which the defence is based; and

  • (c) references to any relevant employment agreement or employment contract or legislation and to any provisions of the agreement or the contract or the legislation that are relied upon.

• (3) Each paragraph of the statement of defence must be concise and must be confined to 1 topic.

• (4) Every statement of defence must specify the matters listed in subclause (1)(b) with such reasonable particularity as to fully, fairly, and clearly inform the Court and the other parties of the nature and details of the defence to the plaintiff's claim.

• (5) Every admission or denial must not be evasive but must substantively answer the point.

13 The dividing line between fact and evidence of facts is not always bright and clear. An assessment must be made whether the plaintiff is entitled justly to particulars to enable him to prepare for trial or, on the other hand, is not entitled to evidence which can and will be made known to him later in the course of preparation for trial and, in particular, as part of the advance exchange of briefs of evidence that the Court usually directs.

14 In paragraphs 4 and 35 of the statement of defence the defendant says that the plaintiff's “role includes in the position description the requirement for the holder to obtain and retain appropriate security and character clearances” and “[t]he position...