In 2019 an Auckland beekeeper Mr McCurdy was made redundant because his employer Zelande Ltd was affected by the collapse of its biggest customer TTM. Zelande was also involved in a commercial dispute with TTM, or its liquidator, in the High Court. Mr McCurdy eventually found a beekeeping job elsewhere.
A few months after Mr McCurdy left Zelande, the liquidator of TTM reached out to Mr McCurdy and as a result of their lengthy discussions, Mr McCurdy agreed to provide a sworn affidavit in relation to the commercial dispute between Zelande and TTM, much of it around the treatment of hives affected by the varroa mite.
Zelande brought an action against Mr McCurdy in the ERA for a Compliance Order (which was granted) and four other things it eventually abandoned: restraint of trade enforcement, a penalty, damages and costs.
Let’s walk that back: Mr McCurdy provided a sworn affdavit that was entered into evidence in High Court proceedings. Evidence submitted to a higher court (or any court) should have shielded the witness from proceedings in the ERA, but instead Mr McCurdy, faced with the prospect of the ERA actually entertaining this action, quickly withdrew his evidence.
Thus the ERA interfered with High Court evidence. The ERA Member left the ERA soon after. We regard the issuing of the Compliance Order as a mistake.
As previously mentioned, Zelande did not go on to apply for a penalty, damages and costs, probably because issues that the High Court action might raise would almost certainly undermine such claims.
We have no knowledge of the High Court complaining about the ERA interfering with evidence before it. We believe that the High Court would have been within its rights to intervene in the ERA proceedings and to ensure that no penalty or costs order arose from the Compliance Order – and as it happens, none did.
For whatever reason, Mr McCurdy did not challenge the validity of the Compliance Order to the Employment Court. That means, perversely, Zelande v McCurdy could be advanced by other lawyers as a precedent for their own clients, however illegitimate that precedent might be.
A similar situation happened in 2010 where the Employment Court found in Musa that a non-disparagement clause bound a third party (a DHB board member), but declined to make an order against either the employer or the third party. They therefore made an empty, negative precedent but it was not going to be challenged. It was first used as a precedent in Turuki in 2020 to uphold a penalty against another third party – this time an employment advocate.
If a lawyer or advocate advances an obscure precedent in support of their client’s claim hoping that opposing counsel or the ERA Member don’t have time to check its validity, a rubbish argument could slip through.
But we would like to think that wouldn't happen because employment lawyers know better.