Trudy Butterworth v Tba Communications Ltd

 
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[2012] NZEmpC 24

IN THE EMPLOYMENT COURT AUCKLAND

ARC 101/11

IN THE MATTER OF a challenge to a determination of the Employment Relations Authority

BETWEEN
Trudy Butterworth
Plaintiff
and
Tba Communications Limited
Defendant
Counsel:

Mark Ryan, counsel for plaintiff

Gretchen Stone, counsel for defendant

Challenge to compliance order issued by Employment Relations Authority (“Authority”) with respect to payment of a costs award — Authority ordered plaintiff to pay costs following her personal grievance claim — time limit for payment was not set out and no express requirement was made that payment be made in a lump sum — plaintiff made one substantial payment and set up an automatic payment for remainder — would take some years before debt was discharged — whether a costs award had to be satisfied within in a reasonable time frame — whether plaintiff was complying with order and therefore s137 Employment Relations Act 2000 (power of Authority to order compliance) was not engaged — whether defendant was entitled to indemnity costs.

The issues were: whether a costs award had to be satisfied within in a reasonable time; whether B was complying with the order by making instalment payments; whether the court would order a judicially sanctioned payment regime; and whether TBAL was entitled to indemnity costs.

Held: While a date was not stated in the costs award, it did not mean that B had an indefinite time to pay. The effect of B's argument was that she could choose any timeframe for payment, or the rate of payment. That argument would lead to absurd results (including that the defendant would effectively be required to act as banker for the plaintiff). It was contrary to the public interest, including by bringing the administration of justice into disrepute.

The argument was not consistent with the wording of s137(1). The provision was expressed in the past tense: “has not observed or complied with”. This did not indicate a present or ongoing state of affairs. The terms of the Authority's costs order were clear. It was not qualified in any way. Even though B had made — and continued to make — attempts to meet the costs order, the quality of her compliance did not alter the fact of her breach. Further, the statutory scheme told against B's interpretation, as the ERA provided an avenue for dealing with difficulties in meeting any award by allowing a party to apply for a variation of a costs order.

The effect of the costs order was to make the amount owing immediately, subject to any agreement the parties might otherwise have made between themselves. As B had not paid the full amount owing, there was non-compliance with the clear terms of the order. The submission that the Authority acted without jurisdiction was not accepted.

The issue of whether the Employment Court could order a judicially sanctioned payment regime was not clear cut. It appeared that the general power to impose conditions contained within s138(4)(a) (order may be made subject to such terms and conditions as Authority thinks fit) was subject to the express powers contained within s138(4A) (Authority may only order payment to the employee by instalments if financial position of employer requires it). This might effectively exclude orders for payment by instalment by employees, as opposed to employers. However it was not necessary to decide this issue as it was clear that B had the sufficient financial resources to satisfy the order against her in a lump sum.

TBAL sought indemnity costs on the basis that B had rejected two Calderbank offers and had delayed in addressing costs, necessitating TBAL to apply for a compliance order. The Calderbank offers were not before the Court and were in any event taken into account by the Authority in its costs determination. Indemnity costs were exceptional and required exceptionally bad behaviour ( Bradbury v Westpac Banking Corporation). B's conduct was not sufficiently reprehensible to warrant indemnity costs to be awarded against her.

Both challenges dismissed.

JUDGMENT OF JUDGE Christina Inglis

1

The plaintiff challenges a compliance order 1 issued by the Employment Relations Authority (the Authority) in relation to an earlier costs award 2 against her. The challenge is brought on a de novo basis. There is some urgency attaching to these proceedings as the plaintiff is required, in terms of the compliance order made by the Authority, to make payment of the outstanding amount by 14 March 2012 (no application for stay of those orders having been filed).

Background
2

The original costs determination of the Authority followed a personal grievance brought by the plaintiff against the defendant, together with an application for interim reinstatement. No issue has been taken with the quantum of that award.

No time limit for payment was set by the Authority for payment of costs, and nor was there any express requirement that the amount be paid in a lump sum. These are matters that the plaintiff seeks to make something of, and which are dealt with below.
3

It is apparent from the affidavit evidence filed in these proceedings that, despite a request that payment be made, the plaintiff failed to do so. The defendant then filed an application with the Authority for a compliance order, pursuant to s 137 of the Employment Relations Act 2000. It is common ground that the plaintiff made a substantial payment towards satisfying the costs award on 3 November 2011 of $1,800. She then set up an automatic payment system, at a rate of $30 per week.

4

In its determination of 20 December 2011, the Authority found that “…it is implicit that [costs] orders are to be met within a reasonable period.” 3 The Authority member observed that it appeared that the plaintiff intended to pay and had made instalments, while noting that this would take a number of years to discharge the debt. 4 The Authority also recorded that no further or better particulars had been supplied by the plaintiff about her financial circumstances than those before the Authority when it had considered the issue of costs in June. 5

5

The Authority accepted that the defendant considered the rate of payment was too low in the circumstances and determined that it was reasonable to issue a further order.

6

The Authority ordered the plaintiff to pay the defendant the full balance of costs as at the date of its determination by 14 March 2012 pursuant to s 137. The Authority also ordered the plaintiff to pay costs on the application of $375 and disbursements of $71.56.

7

The plaintiff contends the Authority had no jurisdiction to issue a compliance order against the plaintiff in the circumstances. The plaintiff bases this argument on a submission that she was complying with the order that had been made, by having made a lump sum payment and by continuing to make payments by way of weekly instalments.

8

The plaintiff seeks an order setting aside the Authority's compliance order and that it be declared a nullity. The plaintiff also seeks costs in relation to her challenge.

9

The defendant submits that the plaintiff failed to comply with the Authority's costs determination which, it says, while not expressly setting a timeframe for payment, impliedly did so and that the plaintiff was required to make payment within a reasonable period. The defendant submits that, at the current rate, it will take the plaintiff some four years to satisfy the costs award and that that is not reasonable. The defendant seeks indemnity costs, both in relation to the Authority's compliance order determination and in this Court.

Discussion
10

Section 161(1)(n) of the Act confers jurisdiction on the Authority to make compliance orders under s 137. Section 137(1)(b) provides that the Authority may order compliance with any order, determination, direction, or requirement made or given by the Authority. The power contained within s 137 may be exercised where any person has “not observed or complied with” any such order or determination. 6

11

Counsel for the plaintiff submits that s 137 was not engaged because the plaintiff was complying with the Authority's earlier costs award. It is submitted that the power to order compliance only arises where there has been an established failure to comply. Counsel goes on to submit that the Authority erred in finding that there was an “implied” term that any payment would be made within a reasonable timeframe. That, he contended, involved reading words into the statute.

12

Ms Stone, on behalf of the defendant, made the point that once a judgment has been sealed it becomes an undisputed debt and judgment proceedings can be commenced in relation to it. She submitted that important public policy issues arise and that adopting the interpretation advanced on behalf of the plaintiff would cut across cl 15 of schedule 2 of the Act. That provision contains the Authority's power to vary or alter any order in relation to costs. This, Ms Stone submitted, provides the route by which any difficulties are to be raised in relation to meeting costs awards that cannot otherwise be dealt with by agreement between the parties in terms of satisfying a costs order of the Authority.

13

Neither counsel was able to identify any relevant authorities. The plaintiff's argument appears to be a novel one.

14

Whoever has the benefit of a judgment is entitled to the fruits of...

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