Health Waikato Ltd v Van der Sluis CA42/96 [1997] NZCA 223; [1997] ERNZ 236; (1997) 5 NZELC 95,720; (1997) 10 PRNZ 514 (13 May 1997)

Last Updated: 13 February 2014

IN THE COURT OF APPEAL OF NEW ZEALAND CA 42/96

BETWEEN HEALTH WAIKATO LIMITED Appellant

AND JAN DIRK VAN DER SLUIS Respondent

Coram: Thomas J Barker J McGechan J

Hearing: 29 April 1997

Counsel: D J Taylor and S E Hillda for Appellant

P R Heath for Respondent

Judgment: 13 May 1997

_{JUDGMENT OF THE COURT DELIVERED BY McGECHAN J}

This is an appeal against an order of the Employment Court as to costs. The central question turns upon the approach to be taken to an asserted “Calderbank” letter. There are some subsidiary discretionary issues.

Some background as to the substantive proceedings is necessary.

The Respondent (whom we will term for convenience the “Doctor”) was a consultant psychiatrist employed by the Appellant (which we will term “HWL”). His contract contained a disciplinary clause in common form, empowering dismissal or lesser action in the event of serious misconduct detrimental to the quality and

efficiency of the health service. HWL brought over a Doctor C from USA. This was part of a recruitment policy designed to alleviate psychiatric staff shortages. Aspects of Doctor C’s clinical conduct, in particular administration of a potentially harmful drug, caused the Respondent Doctor concern. Indeed, he came to suspect Doctor C’s claimed qualification levels. The Respondent Doctor obtained a copy of Doctor C’s CV from relevant administration staff. It showed Doctor C had referred to himself as a “staff psychiatrist”. The Respondent Doctor reported his concerns, in somewhat controversial terms, to HWL administration. He also took it upon himself to telephone the Californian clinic at which Doctor C had served as a “Staff Psychiatrist”, enquiring as to the meaning of that term. It emerged the title could be regarded as inappropriate. The Respondent Doctor was asked, and gave, Doctor C’s name to the clinic.

The Respondent Doctor took matters further. We do not need to rehearse full details of the procedures and exchanges which followed within HWL. Suffice it to say the administration was angered. The Doctor’s conduct was seen by some as imperilling staff recruitment. There is room for a view that personalities may have intervened. HWL commenced disciplinary proceedings, within the employment contract, against the Doctor. In the end, after certain meetings at which charges were put and responses given, HWL issued a “final warning” based on asserted serious misconduct. The serious misconduct was said to have comprised gaining access to Doctor C’s CV, and telephoning Doctor C’s “referees” in the United States, both without authorisation. The warning was to be in place for six months from 4 March

1994. The Respondent was to undertake counselling.

This disciplinary proceeding, and that outcome, included some serious confusions. The Employment Court (Judge Travis) found HWL had not shown lack of authorisation, and that the telephone contact was not with “referees”. That was not all. The Doctor had been prevented from raising the matter of Doctor C’s prescribing activities, with the result his explanations were not properly considered. Further, HWL had assumed interference with recruitment, but it had not put the point properly to the Doctor. Even the final warning letter was defective, being wider and more demanding than the actual decision made and previously communicated. Judge Travis

found HWL had not discharged the onus upon it of showing the issue of a final warning was justified.

The Doctor, while ostensibly content with the outcome immediately after the final meeting, soon repented and sought to reopen the matter. His request was refused. A series of events occurred which were construed by the doctor as being related, and as adversely affecting his position at the hospital. They would later be invoked as matters of aggravation.

The Doctor issued proceedings, transferred up to the Employment Court. He sought declarations that the final warning and direction for counselling were invalid, and should be removed from his record; and compensation for asserted injury to feelings, loss of reputation, and expenses. The initial monetary claim was $20,000. A fortnight before hearing this was increased to $100,000, coupled with a claim for costs on a solicitor and client basis.

In due course, a fixture was obtained for 9 March 1995 in Auckland. As is common enough, negotiations took place over the weeks leading up to hearing. It suffices for the moment to note that HWL solicitors wrote on 16 February 1995, without prejudice, offering to concede liability, to give certain reputation and employment acknowledgements, and to pay $10,000 compensation. The letter made no express reference to costs. Clearly, it was “all in”. The Doctor’s solicitors replied on 21 February 1995 declining the offer, and counter-offering to settle on a basis inter alia of open Court statements and apologies, solicitor and client costs, and unspecified agreed compensation. The letter detailed, at considerable length, a basis for the solicitor and client costs claim to that date of some $45,000. The letter was expressed to be without prejudice, reserving rights to produce as relevant to costs. HWL solicitors responded on 23 February 1995 declining to negotiate further, and advising the matter would be fully defended. HWL solicitors then forwarded a further letter on

24 February 1995 stating (nominally as a request) that the letter of 16 February 1995 was to be treated “as a Calderbank letter, that is, without prejudice except as to costs”. It somewhat caustically observed that objection was not anticipated as to that course, given that the Doctor’s solicitors appeared to believe the Doctor would recover nearly

$50,000. This letter of 24 February 1995 said nothing more as to costs; and in particular said nothing, at least expressly, as to whether or not the claimed Calderbank character carried any entitlement on the Doctor’s part to costs to that date.

The matter went to hearing. (We pass over for the moment a so-called intermediate “voir dire”, which seems to have been an evidential device convenient to both sides). The substantive hearing occupied 8 days. As the later judgment makes plain, the Doctor sought to bring in wide questions as to standards of hospital management. The Doctor also sought to emphasise the post warning matters of aggravation referred to previously. HWL responded accordingly.

In the upshot, in a reserved decision delivered 11 August 1995 Judge Travis found the dismissal unjustified, awarded relief sought, and within that awarded

$10,000 (out of $100,000 claimed) monetary compensation.

Costs were reserved. In due course memoranda were filed, both sides claiming costs. HWL, despite the adverse outcome, claimed $50,000 (on an expenditure put at about $62,924.62) on a basis the letter of 16 February 1994 was a Calderbank letter. The doctor claimed solicitor and client costs on an asserted total outlay of

$133,144.20, although in the end leaving quantum to the Court.

Judge Travis delivered a reserved ruling on the question on 16 February 1996. The opening principle adopted was orthodox (italics added):

...there seems to be no basis to depart from the normal position that costs would ordinarily follow the event and should be a reasonable contribution towards the costs incurred by the successful party.

This, however, immediately was made to depend on whether the letters of 16 February and 24 February 1995

...together constitute a Calderbank offer which may be relied upon by (HWL) to place the burden of the costs incurred after a reasonable time from 24 February upon the (doctor)...

Judge Travis expounded his perception of Calderbank principles in the following terms (italics, other than case names, added):

The law relating to Calderbank letters in the context of Employment Court proceedings is conveniently set out in the decision Ogilvy & Mather (NZ) Ltd v Darroch [1993] 2 ERNZ 943 at 952 following. As is observed in Darroch a Calderbank offer owes its name to the case of Calderbank v Calderbank [1975] 3 All ER 333. In Darroch the Court there described its effect as follows:

As is well known, it is an offer, invariably in writing, made by one party to the other and expressed to be without prejudice except as to costs. It is an offer to compromise the action by some payment. Unless the offer is accepted, the letter is intended to be produced after the Court has dealt with the merits of the case but before it has dealt with costs. It is intended to induce the Court by this means to exercise its discretion against granting the plaintiff any costs if it has recovered less by proceeding with the case than it could have by accepting the offer. As with a payment into Court, costs down to the date of the offer would be additional to the amount offered unless otherwise stated but, subject to that, acceptance of the offer would be in final settlement unless the offer or any subsequent agreement provide otherwise. That is the philosophy behind the Calderbank offer. It is intended to put pressure on plaintiffs and discourage them from proceeding with litigation that may turn out to be unproductive simply for the sake of the cathartic day in Court. It is particularly suitable in situations in which it is not clear whether the payment into Court with denial of liability procedure is available or how it would operate. That is obviously the position where the case in the context of which the offer is made is concerned not only with a money claim but also with specific, prohibitive, or declaratory remedies.

Because a payment into Court or equally a Calderbank offer puts pressure on a plaintiff to acknowledge the possibility of uncertainty of outcome and accept something less than the amount claimed, safeguards are necessary to ensure that the pressure that is applied to a plaintiff is not unfair. The rules of procedure as to payment into Court in the interests of fairness provide for a modicum of time for calm reflection and the taking of advice before a decision has to be made whether to accept the offer or reject it, and the Court has also insisted upon a requirement that the offer should be transparent if the offeror is later to be given the protection that a payment into Court or a Calderbank offer furnishes.

The Judge particularly noted that Calderbank offers do not grant automatic protection in event of lesser recovery, but are merely a discretionary factor:

Once the Court has received evidence of the Calderbank offer, it can take into account the fact of its making and non-acceptance in the course of the exercise of its discretion on costs. Obviously, the Court will give greater weight to the making of such an offer if the plaintiff has in the Court’s view unreasonably proceeded with a claim that could have been readily settled and has then recovered less or not significantly more. (P 953).

The Judge then referred to two further and unreported applications of Calderbank in the Employment Court, the latter being Van der Maas v Life Education Trust (2

August 1995 AEC 75/95, Judge Finnigan). This latter was summarised as a case where the offer:

...did not mention costs and for this reason and the fact that the offer was made only five days before the hearing, the Court disregarded it.

Judge Travis stated, with apparent reference to Van der Maas, “I adopt the same approach”. That commendable simplicity then became somewhat convoluted. As to quantum of offer and recovery, the Judge observed:

As the earlier passage from Darroch above indicates, with a payment into Court and a Calderbank offer, costs down to the date of acceptance of the offer would normally be additional to the amount offered, unless otherwise stated. In the present case the effect of the correspondence was to indicate that the offer contained in the letters of 16 and 24

February was not intended to include costs. The letters from the applicant’s [doctor’s] solicitors showed that the costs incurred down to

17 February totalled $45,831.54. The applicant’s [doctor’s] success at trial would, in the absence of a Calderbank offer, have entitled the applicant to a reasonable contribution towards his costs. Because the offer of settlement contained in the letters declined to deal with the matter of costs it cannot be said that the applicant in rejecting the offer failed to recover more at trial. The applicant having succeeded obtained the right to costs. It cannot therefore be said that the applicant has recovered less by proceeding with the case than he could have by accepting the offer. For this reason the letters do not afford the respondent the protection in relation to costs that they sought to achieve.

Then as to the timing of the offer, the Judge observed:

I also accept [counsel for the Doctor’s] submission that the significance of a Calderbank offer on the overall assessment of costs must decrease as the case reaches trial. The offer was not made until 24 February and the voir dire was held on 27 February. The substantive trial commenced on 9 March. For all these reasons I reach the same conclusion as the Court in the Van Der Maas case and disregard the two letters for the purpose of assessing liability for the costs of trial.

With the Calderbank issue so dismissed, the Judge returned to his original

“follows event/reasonable contribution” principle; but on a particular analysis:

There appeared to be no issue between counsel as to the applicable principles to be applied in relation to the Court’s discretion under s108 of the Act to award costs. The parties cited NZ Air Line Pilots’ Assn IUOW v Registrar of Unions [1989] 2 NZILR 550 and Okeby v Computer Associates (NZ) Ltd [1994] 1 ERNZ 613 and the applicant’s submissions were developed on the basis of the six factors identified in that latter case, at p 619 as follows:

(1) The way in which the case was conducted. (2) The conduct of the parties at the hearing. (3) The importance of the case to the parties.

(4) The amount of time required for effective preparation over or under that which would ordinarily be inferred.

(5) Whether arguments lacking substance were advanced or whether unduly technical or legalistic points were needlessly taken.

(6) The actual costs incurred.

The Judge proceeded to findings under each enumerated heading. We can confine ourselves to issues which assume direct importance on this appeal.

As to (2) Judge Travis observed:

Turning to the conduct of the parties at the hearing, [counsel for the doctor] submitted that the conduct of the case by the respondent

[HWL] lengthened the trial unnecessarily. In view of the detailed and extensive allegations made by the [doctor], [HWL] was required to make appropriate responses and I am not persuaded that the conduct of the respondent [HWL] can be singled out for having unnecessarily lengthened the trial. Both parties however appear to be willing to commit almost unlimited resources to advancing their respective positions and this led to an inordinately long trial.

As to (3), it was accepted the case was “vitally important” to the doctor, but the Judge noted, adversely, an inclination on the doctor’s part to treat the matter if it were an enquiry into HWL’s management of psychiatric services in the Waikato, and as to some general “malaise” in that respect. The Judge referred to this as a “misconception” which “appears to have permeated the whole conduct of the hearing”, and which “unduly lengthened” what should have been “a simple enquiry” into whether the final warning and counselling decisions were justified.

As to (5) Judge Travis noted the Doctor’s submission that no arguments lacking in substance had been advanced on his behalf, but added somewhat sardonically:

However it is clear that a large amount of material was canvassed in extensive detail without any particular regard to the relative importance of each heading. All appeared to be treated with equal seriousness and the substance of the allegations did not always support such an approach.

As to (6) the Judge noted the hours and charge-out rates (two counsel) claimed for the doctor. It calculated $2,500 per day for nine days hearing, a total of $22,500, and then applied “multipliers” for preparation. The multiplier chosen was 2, which was said to produce a figure of $67,500. Clearly enough, the Judge took the basic courtroom time of $22,500, then added twice that sum, $45,000 reaching the $67,500 total. The Judge then discounted that outcome for excessive trial length:

However as I have observed, I consider that the trial was lengthened by the width of the enquiry undertaken by the applicant [doctor] and consider that a reasonable contribution towards the costs of trial and preparation, including the voir dire hearing, would be $45,000.

Judge Travis remarked he had paid regard to the outcome of a recent Full Court (Employment Court) case for unjustified dismissal involving hearing time of 14 days plus two days of interlocutories; with costs incurred of $157,000, and costs awarded

$75,000 plus disbursements $3,200.

The Judge then made some final adjustments, allowing $1,000 for an interim injunction, plus $5,500 assorted disbursements. The outcome was a provisional bottom line figure of $51,500 costs and disbursements.

Judge Travis then stood back. He concluded:

I accept Mr [counsel for HWL’s] submission, based on Okeby, where the Court stated at p 619:

It cannot grant an amount that is so high as to amount to a punishment of the unsuccessful party nor so low as to amount to a punishment of the successful party by taking away the remedies earlier awarded in equity and good conscience.

The main thrust of the [doctor’s] case was not for compensation but for vindication of the [doctor’s] position. This resulted in the incurring of costs which seem out of proportion to the main issue before the Court as to whether an expired warning was justified. Because of the total thoroughness in the way the matter was pursued on behalf of the [doctor], it is inevitable that he will be left substantially out of pocket but I do not consider it appropriate that [HWL] should be called upon to make up that deficit.

As I stated at the conclusion of the substantive case when awarding $10,000 out of the $100,000 claimed for compensation, it is necessary to endeavour to stand back from the mass of detail in this case and, with the desire to be fair to both the [doctor] who has established his grievance and to [HWL] which has obligations involving public expenditure in the provision of mental health and other medical services, and taking into account all the matters raised, to make an appropriate award. Applying that approach to the competing arguments I award the sum of $51,500 inclusive of disbursements as a contribution towards the [doctor’s] costs.

We turn to Calderbank principles.

The Calderbank letter procedure gained its first open recognition in England in Calderbank v Calderbank [1975] 3 All ER 333, a case in the matrimonial jurisdiction where payment into Court was not “a course which would be appropriate” (342 per Cairns LJ). Albeit obiter, the English Court of Appeal approved (ibid) the possibility of a protected offer which could be disclosed after substantive decision as bearing upon costs. After some intermediate development, and some doubts, the possibility was revisited and refined in Cutts v Head [1984] 1 All ER 597. The Court recognised an offer of settlement before trial, made without prejudice but expressly reserving the right to produce after substantive judgment on questions of costs, was available where issues extended beyond a “simple money claim”. For a claim of the latter variety, payment-in was the appropriate procedure. The practice gained some currency in New Zealand. This Court cautioned in Andrews v Parceline Express Limited [1994] 2

ERNZ 385; CA273/93, Judgment 11 October 1994 that like restraint was needed in relation to damages at common law, including general damages for distress, arising from breach of contract. The defendant in that case had made a Calderbank offer of

$30,000, each side to bear its own costs. On appeal, plaintiff’s damages were upgraded to $29,000. This Court, per Tipping J, observed:

While we heard no argument on the point we consider that Calderbank letters must not be allowed to subvert the rules relating to payment into Court. The present was a straight money offer and we can see no reason why at an appropriate time a payment into Court could not have been made. In hindsight, and even without it, Mr Andrews would have been wise to accept the offer made by Parceline as long ago as July

1991. However, Parceline cannot claim the costs advantage of a payment into Court.

The Court awarded the plaintiff and appellant Mr Andrews some costs,

but ... tempered as to quantum in the light of the pre-trial offer and the fact that the original claim was on any view of it completely unrealistic.

In cases heard from 1 February 1996 onward, regard will be necessary to implications if any of new High Court Rule 46A which now provides:

46A. Written offers “without prejudice save as to costs”—(1) A party to a proceeding may at any time make to any other party to that proceeding a written offer that—

(a) Is expressed to be “without prejudice save as to costs”;

and

(b) Relates to any issue in that proceeding.

(2) Where an offer is made under subclause (1),—

(a) The fact that such an offer has been made shall not be communicated to the Court until the question of costs falls to be decided; and

(b) The effect (if any) that the making of such an offer has on the question of costs shall be in the discretion of the Court.

On its face, the rule is widely framed. It was not available before or at the substantive trial in the present Employment Court case, and any reconciliation or modifications to traditional principle which may be necessary can await a more appropriate case. Rule

46A does, however, tend to demonstrate the modern acceptability, from a policy standpoint, of Calderbank practice on a fully discretionary basis, notwithstanding the continued existence of traditional payment-in procedures under Rules 347 et seq.

We are content for the present case, and in a general way, to adopt the pre Rule 46A Calderbank exposition by Chief Judge Goddard in Darroch’s case (supra); but with one qualification. The Chief Judge observed (in words previously italicised) “As with a payment into Court, costs down to the date of the offer would be additional to the amount offered unless otherwise stated...”. No authority was cited for that implicit a priori liability for pre-offer costs. Nor were counsel able to produce substantiating authority. Calderbank v Calderbank (supra) does not touch on the point itself. The only basis put forward in Darroch appears to be the stated analogy with payment into Court. We do not accept such an implication by analogy is the correct approach. The payment-in rules are a specific and somewhat arcane procedural world of their own. Costs consequences following upon payment in are spelt out very specifically in Rules 359(acceptance) and 360 (non acceptance). The Rules are well known. There are no questions of implication. By contrast, the Calderbank letter field is fully discretionary. Calderbank letters should be governed, at least primarily, by whatever the authors of such letters actually say; bearing in mind the proper need, in a discretionary area, for clarity (“transparency”). In the absence of

specific rules, others should not be artificially imported. Calderbank letters can readily spell out whether or not pre-offer costs are included; and if so whether, on a specified or “reasonable” basis. Cutts v Head, and Andrews v Parceline Express Limited, (supra) exemplify. In both, the offers were stated specifically to be without costs. That is the proper “transparent” approach which should be encouraged. We do not, of course, altogether rule out the possibility of implication one way or the other, as a matter of interpretation on ordinary principles. We do not agree, however, that there should be an implication that costs down to date of offer are to be paid in addition to amounts offered, simply because nothing else is said. Where nothing is said, the authors fairly bear the burden.

That has application in the present case. The letter of 16 February 1995 made no mention of costs. It is to be interpreted, when written, as “all in”. The letter of 24

February 1995 which renewed its terms on a Calderbank basis did not improve matters. The combination remained “all in”. There is no room for any implication that HWL accepted some unexpressed additional liability for pre-offer costs. These totalled a notified $45,000, and had been the subject of sardonic comment. It would have required clear words to imply acceptance of a costs liability. There were none.

We agree with Judge Travis that the Calderbank offer was “all in”, without acceptance by HWL of any liability for pre-offer costs.

We differ, however, on the question of adequacy of time. The offer was made, effectively, 24 February 1995. The trial proper did not begin until 9 March 1995. (The peculiar voir dire can be disregarded). There were 12 clear days between those dates. Trial preparation already was advanced. The Doctor’s solicitors’ letter of 23

February 1995 demonstrates. The case was not intrinsically complicated, once extraneous matters are put aside. We think 12 days was ample for a fair appreciation and decision upon the $10,000 (repeated) offer.

In that light, did the Judge err as a matter of law in his decision to “disregard” the Calderbank offer? The issue should not be fudged. The Judge did not give the offer some vague diminished weight. To “disregard” means what it says.

We consider it was open to Judge Travis to take the view the Calderbank offer, made without pre-offer costs, was inadequate to a point where it was to be disregarded. The formal reasoning, quoted supra, perhaps is expressed a little unhappily. The Judge appears to lean upon an analogy with payment-in; postulating (i) the Doctor succeeded at trial (ii) in absence of a Calderbank offer that success carried entitlement to costs (iii) the Calderbank offer did not offer costs (iv) the Doctor therefore did not recover less at trial than could have been obtained by acceptance. We do not think the attempted analogy was necessary, or indeed even entirely accurate: payment-in practice compares compensation paid in with compensation ultimately awarded, both exclusive of costs (except in the rare case of payment-in of the full claim). However, the Judge’s underlying thinking is clear and is tenable. HWL, when it offered $10,000 and nothing whatever for costs, quite simply did not offer enough. The Calderbank discretion is a broad one. It can encompass total figures, comprising both compensation and costs components. It was open to the Judge to consider an offer, without something significant added to cover the Doctor’s

$45,831.54 plus notified costs to that date, should be given no weight. That, in substance, is what happened. That is not the only view which could have been taken. The offer could have been given some diminished weight. However, this is a highly discretionary area, and we cannot say the Judge erred in law or in principle in adopting the approach taken. On a more general plane, those who offer sums without allowance for costs, aware that costs already have been incurred, do so at a risk that offer will prove insufficient.

As stated, we do not agree that insufficient time remained before fixture to enable fair assessment of the Calderbank offer made. The Employment Court decision is opaque as to whether the “quantum” point and “time” point, on the basis of which it dismissed the Calderbank letter, were several or cumulative. In the end, it does not matter. The “quantum” point, even taken alone, would justify the discretionary

decision reached. We have little doubt that is the outcome which would have resulted on a several approach, even if the approach actually taken was a cumulative one. Addition of the erroneous “time” point would have reinforced; but essentially is superfluous.

In sum, while the approach taken to the Calderbank letter presents some problems, we do not see error in law or principle in the ultimate outcome.

Once the Calderbank submission is dismissed, little remains. The Employment Contracts Act 1991 s108 provides that the Employment Court “may order” such costs and expenses “as it thinks reasonable”. It is a broad discretion. Moreover, the question of costs is an area in which Appellate courts traditionally are slow to intervene. Counsel for HWL developed various interrelated lines of complaint. A short summary will suffice. The starting point, it was said, should be “normal solicitor and client costs for the attendances necessarily involved”. The Court will then determine “a reasonable contribution”. In this latter exercise the Employment Court was said to have developed “something of a shortcut”, by applying a multiplier to reasonable costs for each day of trial. Judge Travis chose a multiplier of two, but was said in fact to have multiplied by three. The allowance for second counsel was said to have been excessive, given that the latter was seldom on his feet. Further, some weight should be given to the modest recovery compared to the amount claimed, both in its own right, and linked back as a matter of discretion to the Calderbank letter. Some allowance should have been made, it was said, for the effects upon HWL of “unnecessary” trial costs. The submission offered an alternative approach, assessing the Doctor’s costs on the basis of one counsel for 4 days plus disbursements for that length of trial, put as $15,000, with HWL’s costs and disbursements for additional “unnecessary” length of trial counter balancing.

We can leave open some of the points in principle raised or implicit in the submission. In particular, it is not necessary to express a view upon whether a Court should start with reasonable solicitor and client costs, or should start simply at the “reasonable contribution” level with allowance made for solicitor and client costs as

one factor. Even on the former approach, urged in submissions, the condign fact is that the Doctor sought solicitor and client costs of no less than $133,144, and recovered only $51,500, slightly under 39%. Judge Travis plainly recognised a heavy discount for time wasted (seen as not confined to the Doctor), and preparation wasted (doubtless likewise). The Judge was not prepared to view HWL as blameless on those aspects. That view was open. As to associated lesser matters, we see nothing of moment, given that ultimate outcome, in detailed points urged as to the multiplier, allowance for second counsel, or HWL’s asserted additional costs expenditure. To the extent there may be any basis for complaint, it was subsumed in the allowance made. We have expressed our view in relation to the Calderbank letter, as bearing on discretion, already. Judge Travis did not expressly mention the possible disproportion point in the course of earlier reasoning, but a reference to the relative figures is made at the final point in the decision, and we are not persuaded it was overlooked. The comparative virtue of non monetary declaratory relief received through a Court judgment, as compared with the somewhat vague proposals in the Calderbank letter, could also play some part Further, it should not be forgotten that HWL, in line with its indications on 16 February and in line with the realities later found, could always have stood up in the Employment Court and acknowledged liability, confining hearing to quantum, with considerable savings accordingly.

Having said all that, it perhaps is inappropriate to concentrate upon detail. The fixing of costs is a highly discretionary exercise, based to a considerable extent upon experience and judgment. It seldom is susceptible to any realistic fine analysis. When, at the end of his careful decision, Judge Travis stood back and saw the wood as well as the trees, he acted properly and reached a tenable outcome. It is not an outcome which was inevitable. We can accept the award made was higher than usual in a ‘final warning’ case, and higher than some courts might have made in the particular situation, but there was no error in law or in principle.

The appeal is dismissed.

The Respondent should have costs in this Court. We fix costs at $2,500 and disbursements to be approved by the Registrar.

Solicitors

Swarbrick Dixon, Hamilton, for Appellant

Stace Hammond Grace and Partners, Hamilton, for Respondent