Sawyer v Vice-Chancellor of Victoria University of Wellington [2017] NZEmpC 166 (21 December 2017)

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IN THE MATTER OF	of a challenge to a determination of the Employment Relations Authority
AND IN THE MATTER	of an application for a stay of proceedings
BETWEEN	CAROLINE SAWYER Applicant
AND	THE VICE-CHANCELLOR OF VICTORIA UNIVERSITY OF WELLINGTON _Respondant

Hearing:	On the papers, dated 28 November, 6 December and 18 December 2017
Appearances:	C Sawyer, applicant in person M Scholtens QC and G Davenport, counsel for the respondent
_Judgment:	_{21 December 2017}

[1] On 1 November 2017, Dr Caroline Sawyer applied for a stay of proceedings arising from a determination of the Employment Relations Authority ordering her to pay a penalty of $8,500 within 28 days.1

[2] The circumstances in which the Authority concluded that Dr Sawyer must pay a penalty have been addressed in an earlier judgment dealing with a request for

1 Vice-Chancellor of Victoria University of Wellington v Sawyer [2017] NZERA Wellington 106.

2 _{Sawyer v Vice-Chancellor of The Victoria
University of Wellington [2017] NZEmpC 143.}

CAROLINE SAWYER v THE VICE-CHANCELLOR OF VICTORIA UNIVERSITY OF WELLINGTON NZEmpC CHRISTCHURCH [2017] NZEmpC 166 [21 December 2017]

[3] The Authority’s determination imposing a penalty was a culmination of proceedings taken by the Vice-Chancellor of the Victoria University of Wellington over a record of settlement he entered into with Dr Sawyer on 24 July 2014.3 In an earlier proceeding the Authority had determined that the record of settlement was final and binding on the parties pursuant to s 149 of the Employment Relations Act

[4] On 21 February 2017, the Vice-Chancellor lodged a statement of problem in the Authority seeking a compliance order and penalties.5 That proceeding was based on alleged breaches of the record of settlement.

[5] The compliance order was ostensibly consented to by Dr Sawyer because of an email sent on her behalf by counsel who was then instructed, Mr Greg Lloyd.6

(a) Dr Sawyer had breached the terms of the record of settlement; (b) she was ordered to comply with all of the terms of it; and

[6] The Vice-Chancellor’s subsequent application for penalties relied on alleged breaches of cl 12 of the record of settlement by Dr Sawyer. That clause requires both parties not to make disparaging remarks about the other.8 This clause was written in a way to include an obligation on the Vice-Chancellor to request that identified persons, referred to in the determination only as Mr X and Mr Y, not speak in disparaging terms of Dr Sawyer. The same clause required Dr Sawyer not to speak in

4 At [1]. Dr Sawyer has challenged whether that record of settlement is, in fact, final and binding in proceedings EMPC 7/2017 which are yet to be decided.

6 Sawyer (Authority determination) at [10]. See also the Court’s interlocutory judgment about waiver of privilege: Sawyer v Vice-Chancellor of the Victoria University of Wellington [2017] NZEmpC 154.

[7] The Vice-Chancellor’s application was based on five emails sent by Dr Sawyer that were said to be disparaging. The Authority decided that those emails, sent on 19 and 20 January 2017, and 17 February 2017, breached the record of settlement. The Authority found disparaging remarks had been made in them about Mr X and Mr Y.

[8] The Vice-Chancellor sought a penalty of $10,000 for each email. His total claim was for penalties of $50,000.

[9] The Authority concluded a penalty should be imposed under s 149(4) of the Act.9 The appropriateness of imposing a penalty, and the amount of it, was considered relying on the full Court decision in Borsboom (Labour Inspector) v Preet PVT Ltd and Warrington Discount Tobacco Ltd.10 It concluded that a penalty of $8,500 was appropriate. Of that penalty, $7,500 was payable to the Vice- Chancellor for the use of Mr X and Mr Y ($3,750 each) and a further $1,000 was to be paid to the Authority for payment into the Crown bank account. Payment was ordered to be made within 28 days.

[10] One of the considerations taken into account by the Authority was step 3 from Borsboom, the ability of the party required to pay to be able to pay. Dr Sawyer did not provide any evidence to the Authority about her ability to pay a penalty if one was ordered. While the Authority recognised that generally, paying a penalty imposes some hardship, there was insufficient evidence to conclude that the proposed penalty should be reduced because of Dr Sawyer’s financial circumstances.11

[11] The determination has been challenged by Dr Sawyer. She considers the penalty should not have been imposed and she seeks a hearing de novo. The matters

10 Borsboom (Labour Inspector) v Preet PVT Ltd and Warrington Discount Tobacco Ltd [2016] NZEmpC 143. The Authority also considered penalties for breach of a record of settlement as discussed in Lumsden v SkyCity Management Ltd [2017] NZEmpC 30, (2017) 14 NZELR 546.

(a) the Employment Court is already seized of the proceeding in related litigation and the determination prejudged those issues;12

(e) certain unspecified inaccuracies in evidence provided to the Authority by the Vice-Chancellor.

[12] The substance of those pleadings is repeated as the grounds for the application for a stay. Distilling Dr Sawyer’s submissions in support of her application she said:

(a) it is in the interests of justice for the Court to stay the order to pay penalties;

(b) her signature was improperly procured on the record of settlement which is at the heart of this proceeding and other proceedings;

12 EMPC 7/2017 dealing with the record of settlement and its validity and EMPC 144/2017, an application for leave to extend the time within which to challenge the determination that she must comply with the record of settlement.

(f) Mr X and Mr Y, who are to receive most of the penalty if it is payable, are the same people she alleged are responsible for widespread wrongdoing by the Vice-Chancellor (which I infer this proceeding and the other proceedings referred to earlier are to redress);

(h) she is unable to pay the penalty because of her limited income, attributed to the actions of the Vice-Chancellor (or perhaps actions taken on his behalf) which she wishes to redress by this proceeding and other proceedings between them; and

(i) it would be unjust to allow the determination to stand in the meantime, because that would allow the covering up of wrongdoing on the part of the Vice-Chancellor.

[13] An alternative submission was that, if some part of the penalty must be paid as a condition of a stay, the order should be for an amount less than the full penalty imposed by the Authority. What that lesser amount should be was not stated. That request came with a qualification. The Court was asked to stay the proceeding entirely until “these various related proceedings” are concluded. I infer Dr Sawyer is asking for a stay so that any penalty is not payable until such time as the substantive proceeding in this challenge, and the proceedings in EMPC 7/2017 and EMPC

[14] Filing a challenge to a determination does not operate as a stay.13 Regulation

64 of the Employment Court Regulations 2000 provides the Court with the power to order a stay in certain circumstances. The regulation reads:

(1) If an election is made under section 179 of the Act, the Authority and the court each have power to order a stay of proceedings under the determination to which the election relates.

(2) If an application for a rehearing is made under clause 5 of Schedule 3 of the Act, the court has power to order a stay of proceedings under the decision or order to which the application relates.

(a) may relate to the whole or part of a determination or decision or order, or to a particular form of execution; and

(b) may be made subject to such conditions, including conditions as to the giving of security, as the Authority or the court thinks fit to impose.

[15] Whether a stay is granted requires a balancing exercise in the interests of justice. The Court of Appeal in NZ Cards Ltd v Ramsay described that balance as:14

“...In determining whether or not to grant a stay, the Court must weigh the factors in the balance between the successful litigant’s rights to the fruits of a judgment and the need to preserve the position in case the appeal is successful.”

[16] The criteria to apply were described in Assured Financial Peace Ltd v Pais.15

In that case the Court said that exercising the discretion in reg 64 would be assisted by considering the following factors:16

(b) whether the appeal is brought and prosecuted for good reasons, in good faith;

(e) the novelty and importance of questions involved in the case if the public interest in the proceedings; and

[17] Dr Sawyer’s application, and the submissions she filed in support of it, did not address the criteria for a stay as described in cases such as NZ Cards and Pais. She did not address reg 64, although her submissions repeated the pleadings in her statement of claim (referred to at [11]).

[18] That lack of detail led the Vice-Chancellor to consider that the grounds of this application might include aspects of the application for urgency made by Dr Sawyer in which the record of settlement was described as being disputed.17 The Vice- Chancellor submitted that the Court does not have jurisdiction if this application is intended to challenge the record of settlement. There is a separate challenge dealing with that subject, EMPC 7/2017. The stay sought in this case is confined to the separate, and subsequent, determination that a penalty should be imposed. The Vice- Chancellor said this application was being used as a tangential challenge to the record of settlement.

December 2017. Unequivocally this application is not intended to be a challenge to the record of settlement. References to it merely explained this application and provided context to understand it. Consequently it is not necessary to address her submission that her signature on it was improperly procured.

[20] Dr Sawyer’s submissions in reply claimed the penalty is an enforcement action amounting to an abuse of process. That is because, she said, steps taken to obtain the penalty occurred after she filed her challenge disputing the lawfulness of the record of settlement.18 In other words, either the Vice-Chancellor should not have

_{continued with his claim for penalties until her challenge was resolved,
or penalties}

ought not to have been imposed by the Authority for the same reason. An additional point supporting a claim of abuse of process was that the reason for the Vice- Chancellor pursuing penalties was in an attempt “... to waylay that process” by impeding her ability to obtain evidence and to instruct a lawyer.

[21] What lies underneath this application is a potential cascade effect. If Dr Sawyer succeeds in EMPC 7/2017, and the record of settlement is not binding, the foundation for all enforcement-related action is removed. The order by the Authority requiring Dr Sawyer to comply with it would not be able to remain. It follows no penalty could have been imposed stemming from that record of settlement.

[22] Applying for a stay in this proceeding is, therefore, a logical part of Dr Sawyer’ strategy for dealing with what she considers to have been the Vice- Chancellor’s improper procurement of her signature on the record of settlement.

[23] I do not agree with Dr Sawyer’s submissions that there has been an abuse of process. Her arguments are, in reality, aspects of her on-going litigation over the validity of the record of settlement which is not in issue here. While she has attempted to link together all these proceedings, the reality is that, this challenge, and the stay which has been sought, are discrete matters. Even if it could properly be said that the penalty proceeding is inextricably linked to all of the other disputes between Dr Sawyer and the Vice-Chancellor, there is no basis for a stay in any alleged abuse of process. When the Vice-Chancellor applied for a compliance order and penalties he knew the Authority had previously held the record of settlement to be lawful and binding. He took steps to coerce compliance with a lawful and binding agreement. Doing so cannot be said to be an abuse of process. For the same reason it was not an abuse of process for the Vice-Chancellor to continue to seek a penalty after Dr Sawyer filed her challenge disputing the lawfulness of the record of settlement. As has been noted earlier, a challenge does not operate as a stay.19

[24] There was no duty on the Authority to defer completing its investigation into the proceeding seeking penalties until the challenges by Dr Sawyer were resolved. There has been no abuse by the Authority.

[25] While her submissions in reply provided information about what she says has been the Vice-Chancellor’s wrongdoing, that material does not explain why her ability to pursue this challenge would be rendered ineffectual in the absence of a stay. Complying with the order to pay a penalty will not prevent her from being able to present a comprehensive challenge; nor, if she is successful, will it lead to a fruitless outcome. For example, there is no evidence that the penalty is unlikely to be repaid if that is the outcome.

[26] I am not persuaded there is any evidence supporting the assertion that the Vice-Chancellor is trying to impede Dr Sawyer’s preparation by obtaining a penalty. A bare assertion was made attributing this motive to the him. A lot more would be required to succeed on such a claim.

[27] The relevance of the Protected Disclosure Act and the Bill of Rights Act to the application for a stay were not explained in submissions. I have approached them in a general way as being relied on to justify a stay because Dr Sawyer is concerned that her challenge might otherwise be compromised if they are not properly considered. However, in the absence of submissions explaining their relevance to a stay they do not advance her application for one.

[28] Dr Sawyer’s submissions about the use of incorrect evidence in the Authority similarly does not assist in deciding whether to grant a stay. That is a matter more appropriate to deal with as part of the challenge.

[29] For completeness, I do not accept the existence of a penalty could be described as having the effect of “prejudging the processes of the Court”. Complying with the determination will not impact on the Court’s ability to resolve Dr Sawyer’s challenge.

[30] Dr Sawyer’s ability to challenge the substantive determination to impose a

Whether the successful party in the first instance will be affected injuriously by a stay

[32] Dr Sawyer says that the Vice-Chancellor will not be adversely affected by a stay, describing him as a wealthy employer. The only effect she refers to is that a stay will prevent him from “hampering” her in continuing with the proceeding in EMPC

[33] The Vice-Chancellor has the benefit of a finding that the record of settlement was breached. None of the penalty was directed to be paid to him and it is difficult to see any impact on him if a stay is granted.

[34] Aside from not being paid there is no impact on Mr X and Mr Y if a stay is granted. In the meantime, they continue to have the benefit of a finding by the Authority that the emails disparaged them.

[36] The third parties mentioned by Dr Sawyer were her former professional advisors. She alluded to the necessity to take action against them, possibly for alleged negligence, if a stay is not granted. The reason to do so is, I assume, to assist her in funding the penalty. The prospect that she may take those steps is not relevant. Whether those proceedings are issued or not has no bearing on the criteria for a stay.

[38] The next point is a claim that a stay should be granted because the proceeding raises a novel and important question. Dr Sawyer said her application (and possibly the challenge) is novel and important because it falls within the scope of New Zealand’s international obligations under the United Nations Convention Against Corruption. Several Articles from that Convention were referred to including Articles

[39] Broadly the Convention deals with propriety in the public sector and in the use of public money. Attempting to demonstrate that there is a novel and important question she said:

Any failure to take an overview of what the [Vice-Chancellor], a public sector Chief Executive, is doing is likely to affect the reputation of the New Zealand employment system, for the reasons discussed particularly below in relation to the United Nations Convention Against Corruption. New Zealand will probably have to make a country report to the United Nations within the next few years. The operation of the New Zealand employment system will be reported at the international level for the first time. This is novel and important.

[40] The intention is to show that the Vice-Chancellor and the Authority are both in breach of this convention. The Court is also said to be bound by the convention.

[41] In support of those submissions, reliance was placed on the example from the Court of Appeal decision in Tavita v Minister of Immigration, because of how that case dealt with the exercise of a discretion.20 That case was a judicial review proceeding about the intended deportation of a person who was present in New Zealand in breach of his visa. The Associate Minister had been asked to cancel a removal warrant on humanitarian grounds when all other legal avenues had been exhausted. In making his decision the Minister had not considered a United Nations Protocol that applied where all available domestic law remedies had been exhausted. An issue was whether the Associate Minister had taken into account all relevant

[42] Because of New Zealand’s accession to the Protocol it was held to be part of the judicial structure. Individuals who are subject to New Zealand’s jurisdiction have direct rights of recourse to it. The Court was concerned that legitimate criticism could extend to New Zealand Courts if they accepted an argument that the Executive was free to ignore international rights, norms, or obligations because a domestic statute, which gave discretionary powers in general terms, did not mention them.

[43] Tevita does not help to explain that the criteria for a stay have been met. The

Authority was called on to consider a penalty under the Employment Relations Act

2000 and nothing more. On the present information, the connection between the UN Convention and the Authority decision to impose a sanction is tenuous at best. Unlike the situation in Tavita, the Authority was not exercising Executive powers when considering imposing a penalty.

[44] Dr Sawyer has not established a novel or important question in the sense described in Pais.

[46] On the available evidence this case does not raise any issues the resolution of which will have significance to the wider public.

[47] An ‘ability to pay’ argument was raised and needs to be considered. Dr Sawyer said since ending her employment with the Vice-Chancellor, her income has been limited. Her statement was not supported by evidence of her income, assets, outgoings and liabilities. She confined herself to a limited statement in her submissions about her recent income. All she referred to was income earned from modest amounts of work undertaken over the past year or so. The absence of sufficient evidence about her financial circumstances counts against a stay being granted on this basis.

[48] Furthermore, there is no evidence connecting the imposition of the penalty to

Dr Sawyer’s income-earning potential. This ground is insufficient to warrant a stay.

[49] If the stay is granted Dr Sawyer will not have to pay the penalty, but the record of settlement will still need to be complied with until her challenge to it is resolved. If a stay is not granted, Dr Sawyer will need to pay the penalty and, presumably, there is a prospect doing so will cause her financial inconvenience. She will still have to comply with the record of settlement. Whichever decision is made she will still need to comply with it and the restrictions placed on her in the remarks which can be made about the Vice-Chancellor, Mr X and Mr Y.

[50] If the penalty is paid there is no doubt the Vice-Chancellor is able to repay it. There are no other relevant considerations.

[51] The only impact of not granting a stay is financial and there is no evidence of hardship if payment must be made. The balance of convenience favours not ordering a stay.

[52] Weighing up these matters I am satisfied it is not in the interests of justice for a stay to be granted.

Employment Court of New Zealand

Sawyer v Vice-Chancellor of Victoria University of Wellington [2017] NZEmpC 166 (21 December 2017)