In an upcoming four-part series we’ll set out how legal costs can be weaponised, with two examples from the UK and two from New Zealand, all in the employment jurisdictions.
Spoiler alert for our UK audience – these will feature the Midgley and McDermott whistleblower retaliation matters (Vossloh Cogifer UK contracting to Network Rail, and Sellafield / Nuclear Decommissioning Authority).
In the meantime anti-bullying activist and lay employment advocate Allan Halse, 72, is due in the Hamilton High Court on Monday 19 August to find out whether or not he’ll be bankrupted on the outstanding amount of a costs order, which is around $28,000 (£13,000).
Halse, his then company Culturesafe NZ Ltd (in liquidation since 2022) and Tracey Simpson, a counsellor who was working on a voluntary basis at the time of a purported third party breach of a 2018 Record of Settlement (similar to a COT3, or NDA), were ordered to pay a combined $43,000 in penalties, damages and costs. The order was made by James Crichton, then Chief of the Employment Relations Authority after Halse had called for Crichton’s dismissal. A bizarre aspect of the award is that it was joint and several, which means that if Halse and Culturesafe became insolvent, Turuki could claim the whole lot, plus enforcement costs, from Simpson.
That’s right, from a volunteer. Nice.
In 2020 the Employment Court confirmed that non-parties could be penalised, relying on an obscure 2010 near-precedent called Musa, but reduced the penalties to a combined $10,000, and not joint and several.
The employer party to the Record of Settlement was a charitable trust called Turuki Healthcare, pictured above. Turuki’s lawyer throughout has been Anthony Drake who is also the President (since late 2022) of the Employment Institute of New Zealand, Inc (ELINZ). Drake’s then ELINZ executive colleague Sam Hood acting for a rest home Rangiura Trust Board managed to have Halse’s company Culturesafe put into liquidation on 1 August 2022, but that didn’t disrupt Halse’s advocacy work as much as we’re sure Hood would have hoped.
New Zealand is believed to be the worst and second worst in the OECD for schoolyard and workplace bullying respectively. Bullying complaints are big business for the legal industry and Halse does his best to make advocacy relatively affordable which his competitors are probably not too happy about. He’s been targeted with about half a dozen SLAPPs since 2018, one of which cost the taxpayer more than $600,000 (£280,000) before collapsing, representing a humiliating defeat to its main signatory, former Bay of Plenty District Health Board CEO Peter Chandler.
Monday’s hearing is Turuki’s fourth attempt to bankrupt Halse, and we understand that in a payment arrangement that may be disputed, he made three $1,000 payments towards a $30,800 costs award that the Employment Court refused to stay, pending an appeal to the Court of Appeal. In New Zealand tariff-based costs awards are generated almost automatically whenever a party loses a case or even an interlocutory application. Halse has been attempting to have the employment jurisdiction’s third-party enforcements judicially reviewed but these applications have been struck out.
We reported on the first attempt, way back in March 2020. Maybe it’s in our constitution that every Kiwi has the right to carry a grudge forever – but that’s not our area of expertise!
As our four-part series will show, it is a lot easier to weaponise legal costs against financially weaker parties in New Zealand than in the UK, although we are aware of some egregious examples of whistleblowers being pursued for massive costs awards, including by the NHS. Dr Usha Prasad’s matter is the best example we could find:
The 20-odd Capsticks lawyers employed to pursue whistleblower Dr Usha Prasad – by David Hencke (UK) 26 August 2023
Anyway, we’re not saying our employment jurisdiction is any better, or worse, than the British system – that’s in the eye of the beholder. We’ll post an update next week when we know what happened in Hamilton.
Tristam Price, Editor
Leighton Associates turns 5 26 July 2024
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