H v EMPLOYMENT RELATIONS AUTHORITY [2021] NZCA 507

H v EMPLOYMENT RELATIONS AUTHORITY [2021] NZCA 507 [4 October 2021]NOTE: ORDER OF EMPLOYMENT COURT IN [2018] NZEMPC 120PROHIBITING PUBLICATION OF THE NAMES AND ANY INFORMATIONLIKELY TO LEAD TO THE IDENTIFICATION OF H, C AND RPWREMAINS IN FORCE.IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA482/2020[2021] NZCA 507BETWEEN HApplicantAND EMPLOYMENT RELATIONSAUTHORITYFirst RespondentEMPLOYMENT COURTSecond RespondentBAY OF PLENTY DISTRICT HEALTHBOARDThird RespondentTURUKI HEALTHCARE CHARITABLESERVICESFourth RespondentRPWFifth RespondentCSixth RespondentANA PAULA DE JESUS E CRUZ COSTASHAWSeventh RespondentTRACEY SIMPSONEighth RespondentCourt: French and Brown JJCounsel: M W O'Brien for ApplicantNo appearance for First and Second RespondentM B Beech for Third RespondentA F Drake for Fourth RespondentS W Hood for Fifth RespondentNo appearance for Sixth, Seventh and Eighth RespondentsJudgment:(On the papers)4 October 2021 at 11.00 amJUDGMENT OF THE COURTA The application for judicial review is struck out.B The applicant must pay each of the third, fourth and fifth respondentscosts for a standard application on a band A basis and usualdisbursements.____________________________________________________________________REASONS OF THE COURT(Given by Brown J)Introduction[1] H is the sole director and shareholder of the sixth respondent, C. He filed inthis Court an application for judicial review of 16 directions and orders of theEmployment Relations Authority (the Authority) and seven decisions of theEmployment Court. These directions and decisions were made in the context of threeseparate employment disputes involving the third respondent, the Bay of PlentyDistrict Health Board (the Board), the fourth respondent, Turuki Healthcare CharitableServices (Turuki) and the fifth respondent, RPW.[2] While factually different, the three separate employment disputes follow thesame general theme: C representing an aggrieved employee, refusing to comply withdirections of the Authority, particularly with regard to publication of matters relatingto mediated settlements, and posting derogatory material on its Facebook page. As aconsequence penalties were imposed on both C and H personally.[3] In his third amended statement of claim H identifies the following question forthis Court on review:Did Parliament intend to give the Employment Relations Authority andEmployment Court jurisdiction:(a) over third parties to the employment relationship;(b) in relation to contracts other than employment agreements;(c) to enforce void or illegal arrangements;(d) to enforce contracts against third parties to those contracts; [and](e) to suppress the fundamental right of freedom of expression?[4] H also seeks interim orders prohibiting the Board, Turuki or RPW taking anyfurther action that is or would be consequential on the exercise of the statutory powersof the Authority and the Employment Court to make the determinations, decisions,directions and orders challenged in the review proceeding. He also seeks interimorders staying particular proceedings and a direction that no proceeding should beinstituted or continued on the basis of the challenged decisions.[5] The Board, Turuki and RPW jointly apply for orders that the judicial reviewproceeding be struck out on the grounds that it falls outside the limited scope of thisCourt's review jurisdiction in s 213 of the Employment Relations Act 2000 (the Act)and that it is an abuse of process and frivolous or vexatious.[6] This judgment addresses the application to strike out the judicial reviewproceeding. Because of our conclusions on that application, it has not been necessaryfor us to address H's application for interim orders.Factual background[7] Although the Board, Turuki and RPW are unrelated parties to separateemployment relationship dispute proceedings, the common thread lies in the fact thatH, through C, acted as advocate for employees of those three parties.The Board's employment dispute[8] In 2015 the seventh respondent, Ms Shaw, was dismissed by the Board. Herclaim for unjustified dismissal in the Authority was unsuccessful.1 The Authoritymade a series of directions which included:(a) H was not to make contact with the Board directly whilst the Board wasrepresented by counsel;2 and(b) H was directed to comply with the Authority's first direction and he wasdirected not to make any public comment regarding the Board and itsstaff on his Facebook page while the Authority's investigation wasongoing.3H was warned that if he failed to comply with the Authority's directions in relation toits investigation the Authority might consider imposing a penalty against him pursuantto s 134A of the Act.[9] On 25 February 2019 the Board's application for penalties, contempt and takedown orders in respect of the conduct of H and C was removed to the EmploymentCourt for determination.4 On 6 September 2019 Judge Corkill granted leave to C, Hand Ms Shaw to file a statement of defence out of time.5[10] C, H and Ms Shaw opposed the orders sought by the Board principally on theground that the Authority did not have jurisdiction to make the orders it had. Theparties agreed that the Employment Court should determine these jurisdictional issuesas "preliminary questions".[11] In a judgment dated 22 September 2020 Judge Corkill held that the Authorityhad jurisdiction to make the relevant directions.6 In the course of his judgment the1 The determination of the Authority was the subject of a de novo challenge in the EmploymentCourt. The Employment Court's decision remains pending as at the date of this judgment.2 Shaw v Bay of Plenty District Health Board NZERA Auckland 5593008, 23 May 2017.3 Shaw v Bay of Plenty District Health Board NZERA Auckland 5593008, 23 March 2018.4 Bay of Plenty District Health Board v [C] [2019] NZERA 101.5 Bay of Plenty District Health Board v [C] [2019] NZEmpC 122.6 Bay of Plenty District Health Board v [C] [2020] NZEmpC 149.Judge addressed the issue of whether directions could be issued to bind arepresentative as well as a party. After a comprehensive discussion of the roles ofrepresentatives under the Act the Judge concluded:[81] Where the conduct of a representative is relevant to the Authority'sobligation to the fair discharge of its statutory responsibilities, I am satisfieda direction may be issued in respect of that person.[86] In short, I am satisfied the Authority has the broad jurisdiction to issuedirections for the purposes of ensuring the fair conduct of proceedings beforeit; and that such directions can be issued against any person representing aparty.[12] The applications for contempt findings and penalties against C, H andMs Shaw are presently stayed pending the outcome of the application for review inthis Court.7Turuki's employment dispute[13] In 2017 C on behalf of a former employee of Turuki, which is a healthcareprovider in South Auckland, brought a personal grievance against Turuki. The partiesattended mediation which resulted in a record of settlement being drawn up.The settlement relevantly recorded:1. These terms of settlement and all matters discussed in mediation shallremain, so far as the law allows, confidential to the parties and to therepresentatives of [C].11. Neither party, including [C], shall make derogatory remarks ordisparaging comments about the other. Further, [C] shall not makeany reference whatsoever to this employment relationship problem inany publication, including social media.The record of settlement was not signed by H.[14] In response to actions of H and C, in March 2018 Turuki obtained ex parteinterim orders in the Authority that H, C and the eighth respondent, Ms Simpson(a former contractor for C), comply with the terms of the settlement, not make any7 Bay of Plenty District Health Board v [C] [2021] NZEmpC 131.further breaches of confidentiality, and not publish Turuki's name or the names of itsemployees or representatives.8[15] In a determination dated 1 May 2018 the Authority ordered that the interimorders be made permanent, made orders relating to suppression and ordered that C, Hand Ms Simpson pay a penalty under s 149(4) of the Act to Turuki.9[16] C, H and Ms Simpson challenged the Authority's 1 May 2018 determinationin the Employment Court on the ground that the Authority lacked jurisdiction to makethe orders against them. In a judgment dated 14 October 2020 their challenge waslargely dismissed.10 The Judge noted that although C, H and Ms Simpson did not havea contractual or employment relationship with Turuki, that did not mean that theAuthority lacked jurisdiction to make the challenged orders, noting that the use of theword "person" in s 149(4) of the Act (which provides for penalties in response tobreaches in an agreed term of settlement) was wider than the word "party" usedelsewhere in ss 137 and 149.11 Relying on Musa v Whanganui District Health Board,12the Judge ruled that:13A person who knows of the fact of the settlement having been achieved, andof the relevant terms of the settlement, and who then breaches an agreed termof the settlement, can be liable for a penalty for breach of s 149.RPWs employment dispute[17] C represented an employee engaged in an employment dispute with RPWwhich is a registered charity in the Waikato region. The dispute was resolvedculminating in a mediated settlement agreement on 5 March 2018. In addition to themediator, RPW and the employee, H signed the agreement. Clause 8 of the agreementrelevantly provided:8 Turuki Healthcare Services v Makea-Ruawhare [2018] NZERA Auckland 95.9 Turuki Healthcare Services v Makea-Ruawhare [2018] NZERA Auckland 136.10 [C] v Turuki Healthcare Services Charitable Trust [2020] NZEmpC 165. The challengesucceeded in relation to an order that C, H and Ms Simpson pay Turuki $3,000 as general damageson the basis that the Authority lacked jurisdiction to make an award of general damages: at [74].The Court also reduced the quantum of penalties ordered by the Authority: at [92].11 At [49]–[53].12 Musa v Whanganui District Health Board [2010] NZEmpC 120, [2010] ERNZ 236 at [55]–[57].13 [C] v Turuki Healthcare Services Charitable Trust, above n 10, at [53].Neither party, nor their representatives, shall make disparaging or negativeremarks about the other. [H] has agreed to sign the Record of Settlement toindicate his agreement at being bound to this term in the Record of Settlement.The agreement also recorded it was understood that once signed by the mediator itwould become final, binding and enforceable, and that: [section]149(4) of the Employment Relations Act 2000 provides that aperson who breaches an agreed term of settlement to which subs (3) applies isliable to a penalty imposed by the Employment Relations Authority.[18] Shortly after settlement H posted disparaging comments about RPW on C'sFacebook page and RPW took steps to enforce the settlement. This resulted in sevendeterminations of the Authority, including a determination of 16 August 2018 dealingwith issues of jurisdiction and granting RPW's application for compliance ordersagainst H and C in which they were ordered to comply with the terms of settlementand to remove disparaging comments on social media platforms.14[19] H challenged two of the Authority's determinations concerning the quantum ofpenalties and costs in the Employment Court. He also belatedly sought an extensionof time to file challenges to the earlier determinations of the Authority. In a judgmentdated 4 September 2020 Judge Perkins declined the application for an extension oftime and dismissed the challenges to the quantum of penalties and costs.15[20] In total, the review proceeding in this Court purports to challenge tendeterminations of the Authority and three decisions of the Employment Court made inthe context of the RPW employment dispute.The judicial review application[21] The third amended statement of claim dated 28 October 2020 is a discursivedocument. Mr O'Brien, counsel for H, responsibly acknowledges it requiresimprovement.[22] After reciting the question referred to at [3] above, the pleading states:14 R v [H] [2018] NZERA Auckland 253.15 H v RPW [2020] NZEmpC 141.The applicant seeks review of all the actions against him on the basisthat the MBIE institutions' powers and functions under the [Act] andthe jurisdiction of the Employment Court did not extend to him or hiscompany. There was no jurisdiction for the respondents to file or theAuthority to issue or entertain proceedings against him, or hiscompany. The directions, orders, determinations and decisions soughtand made against him were all without jurisdiction.[23] It then proceeds to traverse the details of each of the directions, determinations,decisions and orders which are the subject of challenge. Orders are sought quashingall the directions, determinations, decisions and orders addressed in the application.Costs and damages are sought in an unquantified amount.Judicial review under the Act[24] The Authority and the Employment Court have exclusive statutory jurisdictionto determine employment relationship problems as defined in s 5 of the Act.16Although the Act recognises a power of review, the scope of such review is narrowlyconfined.[25] With reference to review of the Employment Court, s 193 provides:17193 Proceedings not to be questioned(1) Except on the ground of lack of jurisdiction or as provided in sections213, 214, 217, and 218, no decision, order, or proceedings of the courtare removable to any court by certiorari or otherwise, or are liable tobe challenged, appealed against, reviewed, quashed, or called inquestion in any court.(2) For the purposes of subsection (1), the court suffers from lack ofjurisdiction only where,—(a) in the narrow and original sense of the term jurisdiction, it hasno entitlement to enter upon the inquiry in question; or(b) the decision or order is outside the classes of decisions ororders which the court is authorised to make; or(c) the court acts in bad faith.16 Employment Relations Act 2000, ss 161 and 187.17 The restriction on review of determinations, orders or proceedings of the Authority is containedin s 184.[26] Review applications in respect of the Employment Court are made to this Courtunder s 213:213 Review of proceedings before court(1) If, in relation to any proceedings before the court, any person wishesto apply for a review under the Judicial Review Procedure Act 2016or bring proceedings seeking a writ or order of, or in the nature of,mandamus, prohibition, or certiorari, or a declaration or an injunction,the provisions of subsections (2) to (4) apply.(2) Despite anything in any other Act or rule of law, the application orproceedings referred to in subsection (1) must be made to or broughtin the Court of Appeal.[27] However the review power in respect of the Authority is exercised by theEmployment Court. Section 194 relevantly states:194 Application for review(1) If any person wishes to apply for review under the Judicial ReviewProcedure Act 2016, or bring proceedings seeking a writ or order of,or in the nature of, mandamus, prohibition, or certiorari, or adeclaration or injunction, in relation to the exercise, refusal toexercise, or proposed or purported exercise by—(a) the Authority; orof a statutory power or statutory power of decision (as defined bysection 4 of the Judicial Review Procedure Act 2016) conferred by orunder this Act or any of the provisions of sections 17 to 21, subpart 4of Part 3, Part 4, and clauses 1 to 5 and 7 to 11 of Schedule 8 of thePublic Service Act 2020 or subpart 4 of Part 6 of the Education andTraining Act 2020, the provisions of subsections (2) to (4) of thissection apply.(2) Despite any other Act or rule of law, but subject to section 184(1A),the court has full and exclusive jurisdiction to hear and determine anyapplication or proceedings of the type referred to in subsection (1) andall such applications or proceedings must be made to or brought in thecourt.(3) Where a right of appeal (which includes, for the purposes of thissubsection, the right to make an election under section 179) isconferred on any person under this Act or the Public Service Act 2020or the Education and Training Act 2020 in respect of any matter, thatperson may not make an application under subsection (1) in respect ofthat matter unless any appeal brought by that person in the exercise ofthat right of appeal has first been determined.DiscussionThe parties' cases[28] The submissions of counsel for the Board, Turuki and RPW advance a numberof grounds in support of the application to strike out the review proceeding which canbe encapsulated under three broad headings:(a) The review proceeding discloses no reasonably arguable cause ofaction, is frivolous and vexatious or otherwise an abuse of the processof the Court.(b) The contentions advanced in the review proceeding involve questionsof law, not questions of jurisdiction in the narrow sense contemplatedby s 213 of the Act.(c) The challenges to the various determinations of the Authority are beingpursued in the wrong forum, contrary to the statutory regime in respectof judicial review of the Authority's actions.[29] Counsel emphasise the policy reasons for the limitation on rights of appeal inrespect of employment disputes, citing observations of this Court in AFFCONew Zealand Ltd v Employment Court.18 They contend that the scheme of the Actwhich is designed to limit access to this Court in light of the Authority and theEmployment Court being specialised bodies should be respected.[30] Mr O'Brien acknowledges that review under s 213 is only available on theground of lack of jurisdiction in the narrow and original sense of the EmploymentCourt not having been entitled to enter upon the inquiry in question, or where a power18 AFFCO New Zealand Ltd v Employment Court [2017] NZCA 123, [2017] 3 NZLR 603at[38]–[39].is wrongly assumed. However he maintains that H's review application is of thatnature, explaining:The factual setting for the review application is that the third and fourthrespondents each entered into a mediated settlement with one of theiremployees. The applicant did not sign the settlement agreement (re the fourthrespondent), nor was he a party to the agreements (contracts) (fourth and fifthrespondents). Despite this, the Court (and the Authority) found it hadjurisdiction to enforce the terms of settlement agreement against him as a non-party to that contract and impose penalties for the applicant having breachedthe settlement agreement.[31] In particular he submits that the reference to "person" in s 149(4) of the Actshould be given a narrower meaning than in Musa,19 drawing support from a decisionof the Human Rights Review Tribunal in Director of Proceedings v O'Malley.20[32] With reference to the review application so far as it applies to the Board,Mr O'Brien further submits:The review application regarding matters with the third respondent raise[s] anarguable case as to whether the Authority acted outside its jurisdiction indirecting the applicant not to contact the third respondent. It entails whetherthe Authority mistakenly applied s 160(1)(f) [of the Act] to give it powersoutside the scope of an investigation (and the Employment Court reinforcedthat baseless assumption of power in the subsequent challenge Judgment).[33] In summary Mr O'Brien contends that H has a strongly arguable case that theEmployment Court exceeded its jurisdiction in the narrow and original sense andgranted itself powers not conferred by the Act. While acknowledging that the pleadingwill require amendment, he notes that a court will generally allow an applicant theopportunity to amend pleadings instead of taking the draconian step of striking out aproceeding.21The challenges to the Authority's orders[34] Mr O'Brien does not squarely confront the objection taken that s 194(2) of theAct mandates that any application for review of actions of the Authority must be madeor brought in the Employment Court. In stating in his submission that "the Court (and19 Musa v Whanganui District Health Board, above n 12, at [55].20 Director of Proceedings v O'Malley [2008] NZHRRT 23.21 Citing Reay v Attorney General [2016] NZCA 519, [2016] NZAR 1672; and Marshall Futures Ltdv Marshall [1992] 1 NZLR 316 (HC).by association the Authority) had no jurisdiction", Mr O'Brien appears to assume thata review application to this Court in respect of a decision of the Employment Courtcan extend to orders or determinations of the Authority made in the same employmentdispute.[35] We agree with the submission of the strike-out applicants that s 194(2)precludes the making of applications for review to this Court in respect of orders ordeterminations of the Authority. It follows that the third amended statement of claimmust be struck out in respect of the challenges made to the 16 directions and orders ofthe Authority.The challenges to the Employment Court's decisions[36] We turn to consider the proceeding insofar as it challenges the seven decisionsof the Employment Court. It is plain that H seeks to ventilate in this Court the issueof whether various orders should have been made against him personally.Mr O'Brien's submissions frame that issue as a matter of jurisdiction which can bebrought before this Court by the pathway of s 213.[37] However it is apparent from the statutory scheme that the Employment Courtis the appropriate forum for challenges to orders and determinations of the Authority,whether by appeal or review. The Employment Court was considering within itsjurisdiction challenges to determinations of the Authority. No issue of a want ofjurisdiction thus arises justifying the exercise of this Court's s 213 power.[38] We agree with the submission advanced for Turuki and RPW that in relation tothe employment disputes involving those parties, H's challenge is more accuratelyviewed as an appeal on a question of law, challenging the Employment Court's finding(within its jurisdiction) that the power in s 149(4) extended to him. As Mr O'Briensubmits:The applicant's position is that the correct approach is to read s 149(4) [of theAct] in light of the wording of s 149(3)(a) , which sets out that the terms ofa settlement agreement are binding on the parties, not non-parties.[39] Similarly, in regard to the Board's employment dispute Judge Corkill held thatunder the provisions of the Act the Authority had jurisdiction to make the ordersdirecting H not to contact the Board whilst it was represented by counsel.22 We agreewith the submission for the Board that the proper avenue to challenge the EmploymentCourt's finding would be an appeal on a question of law.[40] Consequently we accept the submission for the strike-out applicants that theappropriate pathway for bringing such challenges to the Employment Court'sdecisions before this Court was by an application for leave to appeal pursuant to s 214of the Act. In order to do so of course, it is necessary to obtain leave by persuadingthis Court that the criteria for such an appeal are met.23 For this reason the balance ofthe third amended statement of claim seeking review under s 213 of the sevendecisions of the Employment Court is also struck out.[41] As an order for strike-out is inevitable for the reasons above, we do not find itnecessary to engage with the submissions that the review proceeding is otherwise anabuse of process and frivolous or vexatious. However we note two points. First thereis merit in the submission made for the Board that H agreed to the course of actionwhereby preliminary jurisdictional matters were addressed by the Employment Courtin the decision of 22 September 2020.24 Secondly H's challenge to the EmploymentCourt decision granting him an extension of time to file a statement of defence25 ismisconceived because that judgment favoured H. The fact that that decision isincluded in what counsel for Turuki describes, with some justification, as the"omnibus" application for review suggests that the selection of orders and decisionschallenged in the proceeding was somewhat indiscriminate.[42] As our conclusions on the strike out application are determinative of thejudicial review proceeding, it is unnecessary to address H's application for interimorders.22 Bay of Plenty District Health Board v [C], above n 6, at [110] and [122].23 We note that such an application would now be out of time.24 Bay of Plenty District Health Board v [C], above n 6.25 Bay of Plenty District Health Board v [C], above n 5.Result[43] The application for judicial review is struck out.[44] The applicant must pay to each of the third, fourth and fifth respondents costsfor a standard application on a band A basis and usual disbursements.Solicitors:Just Lawyers (NZ) Ltd, Auckland for ApplicantHolland Beckett Law, Tauranga for Third RespondentWynn Williams, Auckland for Fourth RespondentNorris Ward McKinnon, Hamilton for Fifth Respondent