Culturesafe director and employment advocate Allan Halse has a meeting with Hon. Michael Wood, Workplace Relations Minister, in Wellington on 9 March. No doubt some of the issues raised by his lawyer two weeks ago will be discussed at that meeting.
Back in Hamilton, bankruptcy proceedings that were commenced a year ago by Turuki Healthcare against Mr Halse will take place in the High Court. Due to some unfortunate scheduling that caused the two events to clash, Mr Halse won’t be able to put his case in person, to set aside his bankruptcy application.
We set out Turuki’s journey to cash cow status in October, after Judge Holden had significantly reduced the penalties awarded against Mr Halse, Culturesafe and its contractor at the time, Ms Simpson. The original penalties awarded by then ERA Chief Crichton were either $33,000 or $43,000 in total, joint and several - which means any one of the three parties, even Ms Simpson, could have been liable for the whole lot. Judge Holden stripped away the joint and several status and reduced the penalties. Depending on the outcome of the Judicial Review in the Court of Appeal in April, on whether penalties against third parties are possible in the first place, either Mr Halse will be liable for a $5,000 penalty, or nothing (and may be entitled to a contribution towards his costs).
We last updated the status of the bankruptcy petition in November , and this is a further update, just a few days out from the bankruptcy hearing.
This may look like a simple problem to a High Court judge, but a lawyer who has practiced insolvency law, and has also acted for Mr Halse in the Bay of Plenty DHB and RPW matters, believes it’s not that simple.
When Turuki petitioned for bankruptcy in March 2020, after first registering the 2018 ERA award with the District Court, the debt was $33,000 or $43,000. After a three day hearing in June, the Employment Court reduced Mr Halse’s personal liability by way of penalty award to $5,000, and even that will fall away if the three Court of Appeal judges find that while a settlement agreement may bind employers and employees, it does not bind third parties. Turuki was the first case in the then 18 year history of the Employment Relations Act where third parties were penalised, although there has been one other since then (RPW, also under the same Judicial Review).
Let’s leave aside for now, the legality of the order that the $5,000 debt is based on, and whether it will be set aside next week pending the decision of the Court of Appeal. Let’s say it stands in the meantime, and it’s not a crippling amount. Why doesn’t Mr Halse just put principles aside and pay the $5,000 to get the bankruptcy proceedings off his back, and hopefully claw it back later if the Judicial Review goes his way?
The reason is that under insolvency laws the original alleged debt of $33,000 cannot be changed to a different one of $5,000, yet Turuki, having been advised by Wynn Williams, are pushing on basing their claim on the original penalty. This is the kind of thing that happens when two different jurisdictions compete with each other over the same matter.
Perhaps this scenario is so uncommon that we should not be surprised that there is nothing in the Insolvency Act that specifically deals with it. The only valid outcome we can see is that the petition would have to be set aside or fall away and Turuki can, in theory, attempt to enforce a $5,000 debt with a fresh enforcement action. But to avoid unnecessary legal expenses (again), Turuki might want to wait for the Judicial Review.
It goes without saying that if a person owes $5,000 and can pay it, it would be a grotesque miscarriage of justice to bankrupt that person for failing to pay $33,000. But we are witnessing the actions of an increasingly desparate cabal that appears to be prepared to do whatever it takes to put Culturesafe and Allan Halse out of action.
Currently the four entities that have been funding that cabal are three healthcare organisations and one local authority. We look forward to being in a position to report how the powers that be deal with that issue.
Fun fact: We received a takedown notice by a Wynn Williams partner, who has since left the firm, in February 2020, under the threat of a defamation claim against the writer of a blog ("Cartel"). In that same correspondence I was also threatened with defamation proceedings, and the basis of that could only be that I happened to be the Deputy leader of Leighton Associates. For a defamation claim to succeed, the thing said needs to be untrue. We think that is why Wynn Williams tried to use the employment process against Mr Halse - so Wynn Williams could say that everyone, including Mr Halse, was bound by his client's "non-disparagement" clause. Readers of Culturesafe's Facebook will know that Anthony Drake of Wynn Williams first of all threatened Allan Halse with defamation proceedings for posting a request for a Ministerial investigation of Turuki's finances. Knowing he couldn't win, he proceeded to the spurious "employment" case that has cost Turuki six figures - and is now being contested in the Judicial Review.