IN THE EMPLOYMENT COURT AUCKLAND [2018] NZEmpC 58 EMPC 98/2017. Plaintiff. SCOTT TECHNOLOGY NZ LTD TRADING AS ROCKLABS Defendant

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1 IN THE EMPLOYMENT COURT AUCKLAND IN THE MATTER OF AND IN THE MATTER AND IN THE MATTER BETWEEN AND [2018] NZEmpC 58 EMPC 98/2017 a challenge to a determination of the Employment Relations Authority of an application for stay of proceedings of an application for costs CALIN IOAN Plaintiff SCOTT TECHNOLOGY NZ LTD TRADING AS ROCKLABS Defendant Hearing: On the papers filed on 13 March, 13 and 20 April and 2 May 2018 Representation: H Gilbert, counsel for plaintiff G Bevan and R Brazil, counsel for defendant Judgment: 30 May 2018 COSTS JUDGMENT OF JUDGE J C HOLDEN AND ON APPLICATION FOR STAY OF PROCEEDINGS [1] When I dismissed the challenge brought by Mr Ioan I reserved costs and said that Rocklabs could apply for costs if they were unable to be agreed. 1 Rocklabs now has applied for costs, seeking $22,000. [2] Mr Ioan has sought a stay of the application for costs pending the outcome of his proceedings in the Court of Appeal. If a stay is not granted, Mr Ioan makes submissions in relation to the quantum of costs that ought to be awarded, and asks that the order provide for part payment of costs over time. 1 Ioan v Scott Technology NZ Ltd t/a Rocklabs [2018] NZEmpC 4. CALIN IOAN v SCOTT TECHNOLOGY NZ LTD TRADING AS ROCKLABS NZEmpC AUCKLAND [2018] NZEmpC 58 [30 May 2018]

2 [3] The parties have agreed that the application for a stay and for costs if that application proceeds ought to be considered on the papers. No affidavit evidence was filed. [4] For the reasons set out below, I have declined the application for a stay and awarded $22,000 in costs to Rocklabs. The Court has a broad power to award costs [5] The Court s power to award costs is found in cl 19, sch 3 to the Employment Relations Act 2000 (the Act), as augmented by reg 68 of the Employment Court Regulations 2000 (the Regulations). Its power is broad. [6] From 1 January 2016, the Court has adopted a scale of costs that will guide it in making costs orders pursuant to cl 19 (the costs guideline). 2 This costs guideline is similar to that in the High Court Rules 2016, so that costs are assessed by applying a daily recovery rate to the time considered appropriate for each step reasonably required to be taken in a proceeding. The Court assigned this proceeding a 2B categorisation for costs purposes under the costs guideline. Appropriate to determine costs before considering Mr Ioan s application for a stay [7] Mr Ioan has applied for leave to appeal the substantive judgment in this case. [8] The first issue is whether a stay would be appropriate prior to costs being fixed, or whether costs should be fixed in any event, prior to considering a stay application. In my view, the latter approach is appropriate. [9] Both parties are entitled to know the amount of the costs awarded, and fixing those costs is not an overly complex exercise. The principal issue is whether Mr Ioan should be required to pay costs at this stage. 2 Practice Direction Costs Guideline scale < at 18.

3 What costs are appropriate? [10] As noted, the Court s approach is to consider costs in terms of the costs guideline but taking into account any other matters it considers relevant to the issue, including those set out in reg 68. [11] Here the defendant says its actual costs were $30,750 (excluding GST and disbursements). Rocklabs has provided copies of the invoices that confirm its costs. [12] Rocklabs has also provided a schedule showing that scale costs would total $25,630. It does not seek any allowance for second counsel and no GST is sought. [13] Rocklabs seeks an order for costs of $22,000, which represents a discount of approximately 14 per cent on the scale costs. [14] Mr Ioan does not dispute that costs generally follow the event and Rocklabs was successful in the Court. However, he asks the Court to take into account the period of time he has been without employment, the evidence of his financial difficulties given at trial, and that he has incurred costs himself, which he says total $60, [15] I accept that Mr Ioan was out of work from 21 April 2017 until the hearing, which commenced on 30 October The evidence was that, prior to him becoming unemployed in April 2017, he had worked as an engineer for 25 years. No evidence was given as to Mr Ioan s savings or other assets. [16] Without any such evidence, there is no basis for me to allow a discount beyond that already included in Rocklabs application. The costs were properly incurred and reasonable; there is no reason to depart from the scale to any significant degree; the defendant s proposed discount on scale costs recognises the difficulties Mr Ioan has had in recent times, but nothing further is justifiable. [17] Accordingly, I order that costs of $22,000 are payable by Mr Ioan to Rocklabs.

4 Should a stay be granted? [18] I now turn to whether there ought be a stay of execution of the order. [19] The starting point is that a judgment takes effect, notwithstanding an appeal. But the Court has a discretion to grant a stay. In PB v BJB, Katz J summarised the position: 3 The general rule is that a party is entitled to enjoy the fruits of a judgment in its favour, even when an appeal has been filed. However, the Court has a discretion to grant a stay where there is a need to preserve the position in case the appeal is successful. In exercising its discretion, the Court will engage in a balancing exercise, weighing up the position of both parties. [20] Both parties refer to the factors the Court will consider in such an application. Relevant factors here are: 4 (a) whether the appeal is bone fide and has been prosecuted thus far with diligence; (b) the public interest in the proceeding; (c) the novelty and importance of the questions in the appeal; (d) whether the applicant s right of appeal will be rendered nugatory if no stay is granted; and (e) whether the successful party will be injured or prejudiced by a stay. [21] I accept that Mr Ioan is genuine in his seeking leave to appeal the judgment; it is not being pursued for tactical reasons only. While it has not been conducted as expeditiously as it might have been to date, I accept that genuine attempts were made to lodge an application for leave to appeal within time and, for the purposes of this application, I operate on the basis that it will be pursued expeditiously from now on. 3 PB v BJB [2016] NZHC 2710 at [6] (footnotes omitted). 4 Dwyer v Air New Zealand Ltd [1997] ERNZ 156 (EmpC) at

5 [22] I also accept that the correct application of s 67B of the Act is of importance to employers and employees alike. The Court of Appeal has not previously considered the section. In that sense, the appeal involves a novel and important issue. [23] However, this is not a case where, without a stay preserving the position, the appeal becomes futile. Mr Ioan does not suggest that he would not be able to recover the amount paid in costs, should he ultimately be successful on appeal and the costs judgment is reversed. [24] Nor does Mr Ioan offer to make a payment into Court, which is a common basis upon which a stay is ordered. Rather, he is seeking an order that no payment is required to be made pending the outcome of the appeal. He submits that he will experience extreme difficulty in paying a costs award made against him and this will directly affect his ability to fund his appeal. However, if Mr Ioan s appeal proceeds and is unsuccessful, those difficulties will be exacerbated, and Rocklabs will be prejudiced. [25] In any event, there is insufficient evidence to conclude that, without a stay, Mr Ioan likely would be unable to pursue his appeal. [26] Accordingly, the application for a stay of the costs order is declined. [27] There also is insufficient evidential foundation for an order that costs be paid over time. However, I encourage the parties to reach a sensible agreement as to a schedule for payment. [28] There is no order for costs on the applications. Judgment signed at 4.15 pm on 30 May 2018 J C Holden Judge