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SLAPP-bringing crybaby – by Tristam Price

Updated: Nov 30, 2023

We were wrong. We thought Progress To Health’s claim against its former employee Julie Nicholson (who raised personal grievance claims against it in January 2020) had collapsed, or was about to collapse, or settled quietly along with the grievance.

Nicholson’s advocate Allan Halse is also a defendant in this SLAPP proceeding. Halse applied, unsuccessfully, to have the SLAPP struck out.

[4] Progress to Health filed a statement in reply (dated 11 February 2020), which included a counterclaim. The counterclaim alleged that Ms Nicholson had breached the confidentiality clause in her employment agreement and sought penalties against Mr Halse and CultureSafe for aiding, abetting, inciting or instigating that breach pursuant to s 134(2)…

We explained why we thought the SLAPP had collapsed, despite the non-strikeout:

But we are now surprised to see another interlocutory decision by Judge Kathryn Beck dated 24 November which indicates that the SLAPP proceedings are still alive – sort of.

Judge Beck noted that the SLAPP proceedings were holding up Nicholson’s personal grievance claims, which were filed nearly four years ago, which means that no date has been set for an Investigation Meeting in the Employment Relations Authority (ERA).

[36] Finally, the issue of the delay of the substantive matter between the parties remains a grave concern. As noted above, I encourage them to move to pursue this separately in the Authority. The stay of these proceedings need not impact those proceedings.

The parties obviously blame each other for that situation.

More than 10,000 grievances are raised each year in New Zealand. Most settle in mediation, and the ERA handles around 700 cases per year. A tiny fraction of these are SLAPPs; Halse and Nicholson are simply defending themselves from one.

The latest interlocutory decision was relatively mundane – an application by Halse to stay any costs order brought by Progress To Health. Halse succeeded on this occasion, with Judge Beck acknowledging:

[5] Progress to Health opposes these applications... In particular, it submits that the application for leave is a delay tactic and that the effect of the delay on it would be detrimental to its financial position, would undermine its right to justice, and could otherwise be injurious to it.

[14] ... the absence of a stay would require the expending of resource by him in relation to the issue of costs and his opposition to Progress to Health’s application. Mr Halse is correct when he says that a successful outcome in the Court of Appeal would result in Progress to Health not being entitled to costs and could also result in a claim by him against it.

But Progress To Health is not running a deficit. Its 2023 annual report indicates a surplus of $99,597, or about 4.7% of revenue. Sustaining a surplus is good governance – unless that surplus is used to fund a SLAPP!

[15] Progress to Health says that the effect of granting a stay would be detrimental to its financial position, delaying the recovery of costs. It also says that such a stay would delay its right to justice and to have its case heard. Counsel for Progress to Health has pointed to concerns set out in the affidavit of Karen Covell sworn on 15 May 2023 in relation to the impact on Progress to Health of the continued delays in relation to this proceeding. Ms Covell says that further delays will result in a strain on the funding it receives.

With the surplus factored in, it appears that Progress To Health is expressing frustration with Halse’s vigorous defence and just wants the fruits of its costs-weaponising operation by way of a costs award against him. We therefore suspect that what CEO Karen Covell referred to in her affidavit as “a strain on funding” has little to do with attempted recovery of legal costs, and much more to do with pressure from unappeased stakeholders such as the Ministry of Health, and the Department of Internal Affairs, which regulates charities. For example:

Under Section 50 of the Charities Act 2005 (Inquiries into charitable entities and other persons):

(1) [The Department of Internal Affairs] chief executive may, if it considers it reasonably necessary for the purposes of carrying out its functions and exercising its powers under this Act, examine and inquire into—

(a) any charitable entity:

(b) any person who has engaged in, or is engaging in, conduct that constitutes or may constitute—

(i) a breach of this Act; or

(ii) serious wrongdoing in connection with a charitable entity.

Under Section 4 (1) (d) “serious wrongdoing” is defined as:

an act, omission, or course of conduct by a person that is oppressive, improperly discriminatory, or grossly negligent, or that constitutes gross mismanagement.

SLAPPs, by definition, are highly oppressive. Whether or not maintaining a SLAPP for four years amounts to gross mismanagement or gross negligence is between Progress To Health and the Department of Internal Affairs.

And where is Tompkins Wake in all of this? Don’t blame the lawyers – they’re just acting on their surplus-operating crybaby client’s instructions.

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