Hardie v Round

[2009] NZCA 421

IN THE COURT OF APPEAL OF NEW ZEALAND

CA220/2008
[2009] NZCA 421

BETWEENJOHN DAVID HARDIE

Appellant

ANDMARTIN CHARLES ROUND

Respondent

Hearing:17 September 2009

Court:Hammond, Harrison and Miller JJ

Counsel:Appellant in person

C P Blake for Respondent

Judgment:21 September 2009 at 11 am

JUDGMENT OF THE COURT

A        The appeal is dismissed.

BThe respondent will have indemnity costs and usual disbursements.  The process for fixing the indemnity costs is set out in [28] of the reasons for judgment.

REASONS OF THE COURT

(Given by Hammond J)

Introduction

[1]       Dr Round was dismissed summarily by Mr Hardie in August 1999.  At that time the Employment Contracts Act 1991 (“ECA”) was still in force.  Mr Hardie now appeals to this Court from the decision of the Employment Court, which determined that the dismissal was unjustified: (2008) 8 NZELC 99,315.  Under the ECA he does not need leave to appeal.

Dr Round is dismissed

[2]       Dr Round was a newly-qualified lawyer who obtained employment with Mr Hardie in his intellectual property practice.  He was paid by the hour and his timesheets were the basis of the remuneration paid to him.  There was no written employment contract.

[3]       In July 1999, Mr Hardie received second-hand information that Dr Round was falsifying his timesheets.  Mr Hardie gave a senior staff member, Mrs Burgess, the task of monitoring and comparing Dr Round’s hours with his timesheets.  Mr Hardie also kept a record to compare with that of Mrs Burgess.  These observations occurred on ten dates, and were not disclosed to Dr Round.

[4]       At 5:30 pm on 13 August 1999, after other staff members had left for the day, Dr Round was called to a meeting with Mr Hardie and Mrs Burgess.  At the meeting, Mr Hardie told Dr Round that there were discrepancies between his “observed” hours and his recorded hours, and that he was to be dismissed summarily unless he could produce “some earth-shattering revelation of why his recorded hours did not match his observed hours”.  Dr Round was neither given the records nor was he given the chance to have a representative with him.  He was given a letter of dismissal and escorted from the building.

[5]       Dr Round brought proceedings before the Employment Tribunal claiming unjustified dismissal under the ECA.

[6]       The Employment Tribunal determined that this dismissal was unjustified and directed Mr Hardie to pay lost wages, compensation for distress and costs.

The Employment Court appeal

[7]       Mr Hardie appealed to the Employment Court.  After various interlocutory judgments and appeals from them over the course of seven years, the Employment Court heard Mr Hardie’s appeal against the Tribunal’s substantive and costs decisions.

[8]       In the Employment Court, Mr Hardie claimed that the Employment Tribunal had substituted its own decision for that of the employer.  He claimed that his dismissal of Dr Round was justifiable and that he had carried out a full and fair investigation into his allegation of misconduct of Dr Round before dismissing him.

[9]       Chief Judge Colgan rejected Mr Hardie’s arguments in their entirety.  He held:

(a)The Tribunal did not substitute its decision for that of the employer.  It concluded correctly that Dr Round was dismissed unjustifiably. Mr Hardie could not reasonably have come to the conclusion that Dr Round falsified his claims of time worked.

(b)The Tribunal correctly found that there was no full and fair investigation of the allegations of serious misconduct.  The requirement to inform an employee of serious allegations of misconduct includes giving the employee a proper opportunity to consider and reflect on allegations and a proper opportunity, if they are contested, to establish that disagreement by reference to independent witnesses and facts.

(c)Dr Round did not receive sufficient notice of the allegations or information about the evidence that Mr Hardie was relying upon.  He was expected to account, to an exceedingly high standard, for his whereabouts over a period of almost three weeks with less than an hour’s notice.  The failure to offer Dr Round the opportunity to obtain advice and representation created significant unfairness in the process.

(d)Mr Hardie did not give Dr Round’s explanation an unbiased consideration free from predetermination.  This was evidenced by his pre-preparation of Dr Round’s letter of dismissal and final pay before the meeting took place, as well as the fact that Mr Hardie changed the nature of Dr Round’s work around the time he found out about the allegations of falsified timekeeping.

(e)Where an employer decides to undertake covert surveillance, the duration of that surveillance before an employee is told about it and of the results must be commensurate with an ability for the employee to recall the relevant events and to challenge the employer’s account of them.

(f)A reasonable explanation for an allegation of serious misconduct by an employee is the employee’s own explanation assessed for reasonableness.  It is not the employer’s own guess.  Mr Hardie took it upon himself to consider whether Dr Round may have had any reasonable explanation for what were regarded as the deficiencies.  The information he collected was self-serving information, and no substitute for Dr Round’s own explanation.

[10]     Chief Judge Colgan concluded:

[54]     I have assessed each of these complaints by Mr Hardie of error by the Tribunal against the transcript of the evidence and the relevant documents produced to it.  Not only am I satisfied that the Tribunal was fully entitled to reach the conclusions that it did, but to the extent that I can do so also on appeal, I agree with its conclusions.

[55]     I conclude, as did the Tribunal, that Mr Hardie could not have come reasonably to the conclusion that Dr Round falsified his claims of time worked for unearned remuneration.  In this regard it should be said clearly that Dr Round should not bear the stigma of this unproven and therefore unwarranted allegation.  It follows that the Tribunal concluded correctly that he was dismissed unjustifiably.

[56]     In these circumstances there is no real challenge to the remedies for the consequences of the summary dismissal that were provided …

[11]     In a subsequent costs judgment, Chief Justice Colgan determined that this was an appropriate case for indemnity costs and awarded Dr Round $9,700 (plus GST): EC AK AEC 7/01 5 June 2008.

This appeal

[12]     The sole ground of appeal in the appellant’s Notice of Appeal dated 21 April 2008 is that “the decisions of the Employment Court are erroneous in point of law”.

[13]     The appeal was initially set down for hearing on 1 July 2009.  Mr Hardie was notified that his submissions were due on 3 June.  He did not file his submissions on that date.  Ms Turner filed submissions for Dr Round on 17 June, albeit they were limited by Mr Hardie’s failure to comply with this Court’s timetable.  On 12 June, Mr Hardie notified this Court that his inability to file submissions was due to family illness.

[14]     By a Minute of the Court dated 19 June, O’Regan J treated this notification as an application for an adjournment.  He reluctantly granted the application because “the prolonging of this seemingly endless litigation is clearly prejudicial to the interests of the respondent” (at [5]).  However, O’Regan J made it clear that “there will be no further indulgences provided” (at [12]).

Section 135 of the ECA

[15]     Unlike s 214 of the Employment Relations Act 2001, the leave of this Court for an appeal is not required under s 135 of the ECA.  Nevertheless, appeals under the earlier statute are restricted to questions of law.

[16]     In EDS (NZ) Ltd v Inglis [2001] ERNZ 59, this Court viewed with disapproval attempts to “dress up” questions of fact as questions of law (at [10]):

The appeal to this Court is of course limited to questions of law … the Court will intervene only where the lower Court has come to a conclusion for which there was no evidence or which is inconsistent with the evidence and contradictory of it.  In this case, as in others, we are faced with an unrealistic attempt to dress up questions of fact as a question of law.

[17]     Mr Hardie himself has been put on notice of this question of law requirement at an earlier stage of proceedings.  In Hardie v Round [2003] 2 ERNZ 455, Blanchard J for this Court held (at [12]):

An appeal under [s 135] is limited to a question of law.  Mr Hardie appeared not to have appreciated the difficulty that such limitation created for his appeal.  He accepted that he was unable to point to any error of law in the way in which either the Tribunal or the Employment Court had instructed itself concerning the principles governing applications for a rehearing, including the test for admissibility of further evidence.  He sought instead to attack the way in which the decisions below had applied those principles to the facts of the case. 

Mr Hardie’s submissions

[18]     Despite being aware that appeals under the ECA are only to advance to this Court on questions of law, Mr Hardie’s submissions as filed disregard this requirement.  For example:

I start with the premise that any decision must be able to survive scrutiny to see whether it gives a reasonable portrayal of the facts and the conclusion to be drawn from them.  It is obvious that if the facts recited are only those which will justify the decision but there is no logical discounting of those which do not justify that decision, the way is open for totally biased or, as in this case, incompetent decisions far removed from justice.

This is a case where the adjudicator and the Employment Court both substituted their views for those of the employer.  By selectively but illogically opting for certain “facts” without first analysing who was telling the truth they also led themselves deeper into forbidden territory.  Not only that but there was wholesale misrepresentation of the actual evidence which was judicially massaged to say what suited the eventual decision.

(Emphasis added.)

[19] The submissions as filed are devoted to a criticism of supposed factual errors made by the adjudicator in the Employment Tribunal, including his “blind acceptance of the truth of all that Round told him”. However, these issues have already been ventilated before, and dismissed by, Chief Judge Colgan: at [54].

[20]     Mr Hardie’s submissions proceed to go through the Employment Court judgment on a line by line basis, affirming the correctness or otherwise of the factual content.  In short, the bulk of his written submissions are more akin to pleadings at the statement of defence stage than appellate submissions on a question of law.

[21]     On 20 August 2009, Mr Hardie filed an application seeking leave to amend his Notice of Appeal.  This was not included in the Case on Appeal and came to our attention only when we pressed Mr Hardie as to what questions of law he was seeking to have this Court address.

[22]     The answers he gave us in the course of oral argument were difficult to follow, and ranged from no evidence, to insufficient articulation of his position within the Employment Court judgment.  Gradually however it became clear that the gravamen of his concern is that, on the facts, Dr Round’s conduct was so bad that Mr Hardie was entitled to pre-empt the usual processes attendant on a summary dismissal.  In some sense that involves a proposition of law, but it is so hopelessly wrong that it does not need further discussion.  The thrust of employment law in New Zealand, for many years, has been that appropriate processes have to be followed, otherwise there will routinely be inappropriate outcomes.

[23]     To put all this another way, Mr Hardie is still saying that the plain facts took him outside the usual rules.  But the Employment Tribunal and the Employment Court did not accept his view of the facts.  However it is put, his argument turns on a challenge to the fact finding in the lower courts.

Dr Round’s submissions

[24]     We have considerable sympathy for Ms Turner who complied with this Court’s timetable but, in the absence of submissions from Mr Hardie, had to speculate as to the possible grounds of appeal.  

[25]     In her written submissions, Ms Turner submits that the appeal should be dismissed because:

(a)The Employment Court did not err in law in determining Dr Round’s dismissal was unjustified.  Mr Hardie’s dismissal of Dr Round was procedurally and substantively flawed, and the Employment Court did not err in upholding the findings of the Employment Tribunal that there was no full and fair investigation undertaken by Mr Hardie prior to effecting Dr Round’s dismissal.

(b)The award of remedies made by the Employment Tribunal and the Employment Court were reasonable exercises of their discretion.

(c)Similarly, the award of costs in this matter were reasonable exercises of the discretion to award costs and should stand.

[26]     We did not find it necessary to call on Mr Blake.

Disposition

[27]     This appeal is dismissed.  Mr Hardie is a qualified lawyer.  He must know the meaning of the phrase “a question of law”.  He had the significance of that phrase carefully pointed out to him by Blanchard J earlier in this litigation.  In our view, he has not raised any such question, or even pointed in the direction of something which could be formulated as an appropriate question of law for this Court.  He simply wants to say that the Employment Tribunal and the Employment Court got it wrong on the facts.  That is exactly what the legislation does not permit.

[28]     During the hearing, Mr Hardie accepted that if this appeal failed, this is an appropriate case for indemnity costs.  Mr Blake should submit a costs memorandum, within 14 days, to the Registrar of this Court, for approval by this Court.  The quantum will be confirmed by Minute, to enable a judgment to be sealed.

Solicitors:
Simpson Grierson for Respondent