Farrimond v Caffe Coffee (NZ) Limited - [2017] NZCA 34

IN THE COURT OF APPEAL OF NEW ZEALAND

CA468/2016
[2017] NZCA 34

BETWEEN	SUNE FARRIMOND Applicant
AND	CAFFE COFFEE (NZ) LIMITED Respondent

Hearing:	27 February 2017
Court:	Kós P, Wild and Brown JJ
Counsel:	C T Patterson for Applicant D J Clark and J S Clark for Respondent
Judgment:	27 February 2017 at 3.22 pm

ORAL JUDGMENT OF THE COURT

AThe application for leave to appeal is declined.
BThe applicant must pay the respondent costs for a standard application on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Brown J)

Introduction

The applicant, Mr Farrimond, applies for leave to appeal under s 214(1) of the Employment Relations Act 2000 against a costs decision of Judge Corkill in the

Employment Court.[1] Leave may be granted if, in the opinion of this Court, a question of law involved in the proposed appeal is one that, by reason of its general or public importance or for any other reason, ought to be submitted to this Court for decision.[2]

Background

[1]Caffe Coffee (NZ) Limited v Farrimond [2016] NZEmpC 105 [Employment Court costs judgment].

[2]Employment Relations Act 2000, s 214(3).

The respondent, Caffe Coffee (NZ) Limited (Caffe Coffee), employed Mr Farrimond in its coffee roasting business. After Mr Farrimond departed to establish his own coffee roasting business, the Village Roaster Limited, Caffe Coffee became aware of what it considered to be numerous breaches of his employment obligations and brought proceedings in the Employment Relations Authority (the Authority). The Authority determined that there had been only one minor breach by Mr Farrimond, namely the incorporation of the Village Roaster without written consent.[3] It concluded that the imposition of a penalty was not justified in the circumstances,[4] and ordered Caffe Coffee to pay Mr Farrimond $14,000 towards his legal costs.[5]
[3]Caffe Coffee (NZ) Limited v Farrimond [2015] NZERA Auckland 186 at [40] and [65] [Authority substantive judgment].
[4]At [72]–[73].
[5]Caffe Coffee (NZ) Limited v Farrimond [2015] NZERA Auckland 328 [Authority costs judgment].
Caffe Coffee challenged the Authority’s determinations in the Employment Court on a de novo basis.[6] Judge Corkill ruled that Mr Farrimond breached his contractual obligations when he incorporated the Village Roaster, when he was concerned in its business without the prior written consent of the chief executive of Caffe Coffee and by failing to report to the chief executive on matters that impacted on the performance of Mr Farrimond’s duties.[7]
[6]Employment Relations Act, s 179(3)(b).
[7]Caffe Coffee (NZ) Limited v Farrimond [2016] NZEmpC 65 at [120] [Employment Court substantive judgment].
The Judge was not satisfied that the remaining allegations concerning the undertaking of preparatory steps were established and dismissed the causes of action relating to the use of confidential information post-employment and breach of intellectual property rights. While the claim for damages was dismissed, penalties totalling $10,000 were imposed, half of which were to be paid to Caffe Coffee.[8]
[8]At [230] and [233].
Each party claimed to be successful and sought costs. Mr Farrimond…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] NZCA 34
Decision Date: 27 February 2017 at 3.22 pm

CaseChat Overview and Summary

The Court of Appeal of New Zealand heard an application for leave to appeal from Sune Farrimond against Caffe Coffee (NZ) Limited. The applicant, Mr Farrimond, sought leave to appeal against a costs decision made by Judge Corkill in the Employment Court. The matter involved the Employment Relations Act 2000 and the Employment Relations Authority's earlier determinations regarding Mr Farrimond's employment obligations and subsequent legal proceedings brought by Caffe Coffee.

The legal issues in this case centred on whether there were errors of law in the Employment Court's handling of the costs decision, specifically in relation to the Calderbank offers made by Mr Farrimond, the proportionality of costs awarded, and the necessity for Caffe Coffee to bring the proceedings to obtain vindication. The Court of Appeal examined these issues to determine if there were grounds for granting leave to appeal under section 214(1) of the Employment Relations Act.

In its reasoning, the Court of Appeal found that the Employment Court did not err in law when it exercised its discretion under rule 14.11 of the High Court Rules in relation to the Calderbank offers. The Court noted that while the rule created a presumption of entitlement to costs, the discretion remained with the court, and the Employment Court did not misuse this discretion. Furthermore, the Court found no error in the Judge's approach to the proportionality of costs and the necessity for Caffe Coffee to bring the proceedings for vindication. The Court concluded that there were no errors of law that warranted granting leave to appeal, and the application was declined.

The Court of Appeal also ordered Mr Farrimond to pay Caffe Coffee the costs of the application on a band A basis and the usual disbursements.

Orders