ASB BANK LIMITED v NEL [2017] NZCA 559

ASB BANK LIMITED v NEL [2017] NZCA 559 [5 December 2017]NOTE: EMPLOYMENT RELATIONS AUTHORITY ORDER REQUIRINGCOMPLAINANT TO BE ANONYMISED AS "MS A" AND PROHIBITINGTHE PUBLICATION OF ANY INFORMATION THAT MIGHT LEAD TOHER IDENTIFICATION REMAINS IN FORCE.IN THE COURT OF APPEAL OF NEW ZEALANDCA311/2017CA508/2017[2017] NZCA 559BETWEEN ASB BANK LIMITEDApplicantAND ANDRE NELRespondentHearing: 20 November 2017Court: Miller, Cooper and Asher JJCounsel: S C Dench and S J Kopu for ApplicantC W Stewart and E L Taylor for RespondentJudgment: 5 December 2017 at 10 amJUDGMENT OF THE COURTA The application for leave to appeal in CA311/2017 is declined.B The application for leave to appeal in CA508/2017 is declined.C The applicant must pay the respondent one set of costs for a standardapplication on a band A basis and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Asher J)[1] We have before us two applications for leave to appeal two interlocutoryjudgments of Judge Corkill in the Employment Court. The first judgment was dated16 May 2017 and the proposed appeal relates to various orders made grantingdisclosure.1 The second judgment was dated 10 August 2017, dismissing anapplication for strike-out.2 The two applications have been consolidated and heardtogether.[2] The respondent, Andre Nel, was formerly employed by the applicant,ASB Bank Ltd. In 2015 he had been working there for approximately 18 years andwas a manager. Ms A reported to him. He developed romantic feelings for Ms A andsent her inappropriate emails, culminating in a Facebook message declaring his lovefor her. Ms A responded making it clear that she did not share Mr Nel's feelings andhe apologised. Ms A lodged a complaint which culminated in Mr Nel being dismissedon 6 October 2015.[3] Mr Nel raised a personal grievance alleging that his dismissal wasunjustifiable, raising amongst other things disparity of treatment.[4] The Employment Relations Authority rejected Mr Nel's allegation of disparityof treatment.3 However, it concluded that dismissal was not the appropriate outcomein all the circumstances and that Mr Nel had been unjustifiably dismissed. Mr Nelwould have been entitled to seven months of lost wages (less the sum he had receivedfrom income protection insurance) and $15,000 for hurt and humiliation, but theseamounts were reduced by 90 per cent having regard to his contribution to the dismissalcircumstances.4[5] Mr Nel and ASB each filed challenges to the Authority's decision in theEmployment Court. An interlocutory application was made by Mr Nel for disclosure,which was opposed by ASB but granted by the Court.5 ASB later applied for an orderstriking out a disparity of treatment cause of action, which the Employment Court1 Nel v ASB Bank Ltd [2017] NZEmpC 56 [EC disclosure decision].2 Nel v ASB Bank Ltd [2017] NZEmpC 97 [EC strike-out decision].3 Nel v ASB Bank Ltd [2016] NZERA Auckland 323 at [195].4 At [200]–[202] and [236]–[238].5 EC disclosure decision, above n 1.dismissed.6 We will deal first with the proposed appeal against the strike-out decision,as that decision raises squarely the availability of a cause of action based on disparityof treatment which the disclosure related to.The strike-out appeal[6] Mr Nel's core pleading as to disparity of treatment was as follows:d. The defendant's finding and action of dismissal amount to disparity oftreatment against the plaintiff in light of the defendant's workplaceculture of alcohol abuse and profane language and other incidentsinvolving serious concerns of bullying, use of recreational drugs, sexualand racial harassment and breach of confidentiality which the defendantwas aware but did not investigate and/or take disciplinary action [7] This was followed by three particular instances of disparity of treatment. SinceJudge Corkill delivered his first decisions on disclosure and strike-out, there has beenconsiderable disclosure. An amended statement of claim has now been filed. Itcontains the same pleading as para (d) quoted above but now sets out 16 particularinstances of disparity of treatment.[8] It was ASB's key argument that disparity of treatment as pleaded in the originalstatement of claim was not an argument that could succeed. It was argued that thepleaded circumstances had to be "truly parallel to" or "substantially similar to" thecircumstances in which Mr Nel was dismissed, and these plainly were not. It wasargued that this Court should follow the English decision of Hadjioannou v CoralCasinos Ltd which adopted a restricted meaning of disparity.7[9] There are two difficulties in challenging the strike-out decision in this Court.The first is that it is clear that at least some of the particular examples that are pleadedin the statement of claim of disparity of treatment arguably fall within the stringenttest put forward by ASB. For example, one of them refers to a branch managerbehaving in a sexually inappropriate manner towards a female employee, where thebehaviour was on its face much worse than that of Mr Nel and where the consequencesfor the employee in his employment were relatively minor. Indeed counsel for ASB,6 EC strike-out decision, above n 2.7 Hadjioannou v Coral Casinos Ltd [1981] IRLR 352 (EAT).Mr Dench, conceded that this and some other particulars could arguably fall withinthe test he was propounding. Thus if ASB prevailed in this argument, the disparitycause of action would not be struck out, but it would be a matter of going through theparticulars. It could not be said that this exercise would be of general or publicimportance, unless it was to establish at this interlocutory stage the boundaries of adisparity cause of action.8[10] This leads us to the second point, which is that it is not appropriate at thestrike-out stage to determine an argument that there has been a misstatement of thedisparity test. There is a considerable body of Employment Court authority relatingto the test for assessing disparity. These authorities note that the assessment ofdisparity is fact specific.9 Just as the courts should be cautious to strike out a claimalleging a novel duty of care,10 they should be similarly cautious in assessing asubmission of this type, challenging the parameters of a disparity cause of action. Thefacts have not yet been established and cover a range of possibilities. This meanscaution "is necessary both to prevent injustice to claimants and to avoid skewing thelaw with confident propositions of legal principle or assumptions about policyconsiderations, undisciplined by facts".11[11] All that was necessary was for the pleaded circumstances to be capable ofgiving rise to a disparity cause of action for the strike-out application to fail. If thepleading cannot confidently be shown to be wrong on its face, the claim should beallowed to proceed so that the issue of the parameters of the test can be determinedagainst a fully traversed and determined factual background. It would thus be wrongon an interlocutory application to attempt to finally define the correct test.[12] This Court has firmly discouraged interlocutory appeals that do not materiallyadvance matters below. It ought to have been apparent that this case falls into that8 Employment Relations Act 2000, s 214.9 See for example EC strike-out decision, above n 2, at [47] and [52]; Sutherland v Air New ZealandLtd [1993] 2 ERNZ 386 (EmpC) at 397–398; and Wikaira v The Chief Executive of the Departmentof Corrections [2016] NZEmpC 175, (2016) 10 NZELC 79-073 at [171]–[176].10 Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 at [2] and [33] per Elias CJ andAnderson J.11 At [32] per Elias CJ and Anderson J.category.12 Because the disparity cause of action cannot be struck out and thearguments raised will only concern the parameters of that cause of action, and becausein any event a strike-out application is not the appropriate way of determining theappropriate test for assessing disparity in an employment context, we decline leave toappeal.The disclosure appeal[13] The Employment Court relevantly ordered disclosure of the followingdocuments:13G: Email communications, correspondence, notes, minutes, anydocumentation whatsoever and/or recordings relating to any complaintsor concerns raised and/or the investigations, outcomes or disciplinaryaction in relation to those complaints or concerns raised, in relation tosexual harassment, racial harassment, bullying, intimidation, harassment,use of recreational drugs, alcohol abuse, breach of confidentiality,profane language, and/or breaches of the Code of Conduct within thedefendant over the five years prior to the termination of the plaintiff'semployment that had been escalated to any member of the defendant'sHR team and Mr John Toomey and Mr Paul Duncan who were Managersin his team[14] Disclosure was ordered on the following terms:14(a) Disclosure is to be restricted to circumstances that have been escalatedto any member of ASB's Human Resources team and/or to Mr JohnTwomey and Mr Paul Duncan. These circumstances must be confinedto the period of five years prior to Mr Nel's dismissal.(b) The range of circumstances is to be as pleaded in para 42(d) ofMr Nel's statement of claim (EMPC 257/2016).15(c) Disclosure should be by way of a document or documents whichsummarise the circumstances involved, and the outcome (if any). Forthe avoidance of doubt, a full set of documents for each particularcircumstance is not, at least at this stage, required to be disclosedunless that is necessary to achieve the disclosure which has beenordered.(d) The documents, as disclosed, are to be considered only by Mr Nel'scounsel and Mr Nel. They may not be provided to any other personwithout leave of the Court.12 Hardie v Round [2005] ERNZ 455 (CA) at [19].13 EC disclosure decision, above n 1, at [80].14 At [110].15 See at [6] above (this is a footnote which has been added to the quote).(e) Listing may be by reference to a one-line description of any individualcomplaint or concern, date, and number of disclosed documents.(f) Disclosure is to be to Mr Nel's counsel, and to Mr Nel, only in thefirst instance. The parties may need to discuss whether any furtherprotective directions are necessary at the substantive hearing if it isintended that any of the foregoing documents are to be produced.(g) Any individual instances to be relied on by Mr Nel at trial are to bespecifically pleaded in an amended statement of claim.[15] Following the hearing most of the relevant documents that had been sought incategory G quoted at [13] above were disclosed to Mr Nel's counsel on a strictlyconfidential basis. It was that disclosure which led to the addition of the newparticulars, and some of those new particulars obtained through the disclosure areclearly arguable as points of disparity.[16] Given that most of the documents that had to be disclosed under the challengeddisclosure order have in fact been disclosed, no question of law arises that is of generalor public importance. More importantly, the submissions that we received challengingthe width of the disclosure order relating to disparity were based on the arguments thatthe test for disparity is narrow and has been wrongly applied. As we have already said,that is not a matter appropriately dealt with on a strike-out application.[17] The test for disclosure under reg 38 of the Employment CourtRegulations 2000 is broad and based on the Peruvian Guano test.16 We do not discernany error in Judge Corkill's approach in making the disclosure orders he made, whichrelated to documents which were or "may" be relevant. The wording of the regulationis wide and includes documents that "directly or indirectly" "supports, or maysupport" the case of one party. It has not been shown that the documents sought areirrelevant, and indeed they have been the basis of the further particulars provided inthe second amended statement of claim, which set out arguable disparity claims.[18] No point of general or public importance arises, and for the reasons we haveset out it is plain that a challenge to the disclosure orders will not succeed.16 See The Compagnie Financiere et Commerciale du Pacifique v The Peruvian Guano Company(1882) 11 QBD 55 (CA) for the origins of the test. This test has now been modified in theHigh Court Rules and replaced by a standard disclosure approach where only documents of actualand direct relevance are disclosed: High Court Rules 2016, r 8.7.Result[19] The application for leave to appeal in CA311/2017 is declined. The applicationfor leave to appeal in CA508/2017 is also declined.[20] The applicant must pay the respondent one set of costs for a standardapplication on a band A basis and usual disbursements.