Belsham v Ports of Auckland Limited [2014] NZCA 206 (29 May 2014)

Last Updated: 4 June 2014

IN THE COURT OF APPEAL OF NEW ZEALAND
CA 753/2013 CA835/2013 [2014] NZCA 206
BETWEEN	DANNY BELSHAM Applicant
AND	PORTS OF AUCKLAND LIMITED Respondent

Hearing:	12 May 2014
Court:	Ellen France, Randerson and French JJ
Counsel:	S R Mitchell for Applicant R J McIlraith for Respondent
Judgment:	29 May 2014 at 10:00 am

JUDGMENT OF THE COURT

1. The applications for leave to appeal in CA753/2013 and CA835/2013 are both dismissed.
2. The respondent is entitled to one set of costs against the applicant as for a standard application on a Band A basis with usual disbursements.

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REASONS OF THE COURT

(Given by Randerson J)

Introduction

[1] The applicant, Mr Belsham, was dismissed from his employment with the respondent on 16 October 2012 for serious misconduct. His complaint of unjustified dismissal was raised as a personal grievance but was dismissed by the Employment Relations Authority^[1] and later by the Employment Court after a de novo hearing.^[2]
[2] Mr Belsham now seeks leave under s 214 of the Employment Relations Act 2000 (the ERA) to appeal to this Court on questions of law. He also seeks leave to appeal a subsequent judgment of the Employment Court awarding costs against him in favour of the respondent Ports of Auckland Ltd (POAL).^[3]

Background facts

[3] In the Employment Court, Judge Perkins made a number of factual findings based on the viva voce evidence he heard from both parties along with relevant documentary evidence, including notes made by the participants of relevant discussions and investigations. We now summarise those findings.
[4] On 21 August 2012 a vessel arrived at the port of Auckland. Prior notice had been given of a potential issue relating to the discharge of a container known to be spilling chemicals. Arrangements were made to deal with this upon the vessel’s arrival. Mr Belsham was kept informed of developments. Upon the vessel’s arrival, the POAL allocator reorganised the roster for the first shift. Mr Belsham was allocated to drive a straddle crane to unload the vessel. The shift manager, Mr Kitching, briefed the members of the shift about the container and how it was to be handled. There was no demur from any of the members of the shift including Mr Belsham.
[5] At approximately 6.45 am, Mr Belsham approached Mr Kitching and a discussion took place. Mr Kitching asked Mr Belsham on more than one occasion to operate the crane but he refused to do so. He did not operate it on the first shift that day although he did so later.
[6] After the meeting with Mr Kitching, Mr Belsham went to the mess room to await the arrival of Mr Kirwan, POAL’s senior shift manager, stevedoring. Mr Kitching conceded in cross-examination that he asked Mr Belsham to stand down to await the arrival of Mr Kirwan after Mr Belsham had refused to man the crane. Thereafter, an investigation meeting took place at 8.12 am. At various points, Mr Belsham raised a health and safety issue relating to the leaking container. However the Judge found, contrary to Mr Belsham’s evidence, that this was not the reason for Mr Belsham refusing to operate the crane. Rather, the Judge found that Mr Belsham’s refusal was because he objected to being taken away from his previously rostered duties as ship foreman.
[7] After the initial investigation, POAL wrote to Mr Belsham advising him that a disciplinary procedure was to be brought against him. The purpose of the inquiry was to decide whether Mr Belsham’s refusal to operate the crane amounted to serious misconduct justifying dismissal.
[8] The Judge found that Mr Belsham had adopted an obstructive and antagonistic attitude during the disciplinary process. He was advised after a further meeting that his actions could be regarded as serious misconduct and was given a further opportunity to respond. After a final meeting, he was dismissed by letter dated 16 October 2012.

The conclusions reached by the Judge

[9] The Judge commenced his assessment by setting out the statutory test for justification in terms of s 103A of the ERA as interpreted by a full Court in Angus v Ports of Auckland Ltd.^[4] He concluded that although Mr Belsham had refused to work for a relatively short period, his conduct in the prevailing circumstances was “quite a substantial dereliction of duty”.^[5] He took into account the prevailing circumstances at the time. Mr Belsham’s refusal to operate the crane would have exacerbated the difficulties POAL was already facing on that day. These related to the potential risk from the chemical spillage on the vessel and the need to reallocate duties under the roster. The Judge considered a reasonably stern response was clearly necessary.
[10] The Judge also took into account that Mr Belsham had been given a previous warning by POAL; he had set out to frustrate the early engagement of the crane to work the vessel and discharge its cargo; his raising of the health and safety issue was found to be a retrospective justification for his insubordination; he had been deceitful; and his obstinate and obstructive behaviour during the disciplinary process had severely tested the trust and confidence which must exist in the employment relationship.
[11] In all the circumstances, the Judge concluded that Mr Belsham’s dismissal was an action which a fair and reasonable employer could take.

The questions of law raised by the applicant

[12] On Mr Belsham’s behalf, Mr Mitchell has raised several points of law for which he submits leave should be granted to appeal. Although expressed differently in Mr Belsham’s formal application for leave, the points raised come down to three:

(a) Was there evidence to support the finding of serious misconduct?

(b) Did the Employment Court take into account irrelevant considerations?

(c) How is s 103A of the ERA to be interpreted and, in particular, must there be a finding of serious misconduct in order to justify the summary dismissal of an employee?

[13] As to the first and second questions, we are satisfied there was a proper evidential foundation to support a finding of serious misconduct. The factual conclusions reached by the Judge were firmly grounded in the evidence carefully considered by the Judge. We are not persuaded that the relatively short period of time involved before Mr Belsham was asked to stand down and await Mr Kirwan’s arrival meant there was no proper justification for the dismissal. The Judge properly focused on the period up to that point and was entitled to take into account all the prevailing circumstances as he found them to be. We are not persuaded that any of the matters he took into account were irrelevant.
[14] In essence, Mr Belsham seeks to dispute factual findings that were clearly open to the Employment Court. No question of law is raised.
[15] On the third question, Mr McIlraith accepted on behalf of POAL that serious misconduct had to be established for the purposes of the justification test under s 103A of the ERA. Reading the Employment Court’s decision as a whole, it is clear that Mr Belsham’s actions were found to constitute serious misconduct. Amongst other things, the Judge pointed out that a refusal to carry out proper work instructions was referred to in the relevant Collective Agreement as an example of conduct that might constitute serious misconduct and might warrant instant dismissal.^[6] And, in adopting the full Court’s decision in Angus v Ports of Auckland Ltd, Judge Perkins accepted the requirement to establish serious misconduct.^[7]
[16] We accept that the present version of s 103A introduced on 1 April 2011 has not been the subject of any decision of this Court but the point Mr Belsham seeks to have ventilated does not arise on the facts of this case.
[17] It follows that the application for leave to appeal in CA753/2013 is dismissed.

Costs appeal

[18] The Employment Court awarded costs against Mr Belsham of $26,000. It did so by applying two-thirds of reasonable costs which were assessed at $40,000. The Court rejected a submission made on Mr Belsham’s behalf that the Court should fix costs by analogy with the scale of costs under the High Court Rules. The Judge said:^[8]

[12] Submissions that the Court should adopt a scale type approach rather than two thirds of actual and reasonable costs are often made in this Court. No scale of costs has ever been enacted for this Court. The Court’s approach that generally two-thirds of actual and reasonable costs should apply is well established and has approval from binding authority in the Court of Appeal. Nevertheless, the matter is one for the Court to exercise its discretion having regard to the circumstances prevailing on a case by case basis. Matters such as the nature of the litigation, the level of seniority of counsel required, the extent of repetition of work already carried out in the Authority, the means of the party against whom costs are sought and so on are all relevant in exercising the discretion.

[19] Mr Mitchell submitted that there had been substantial variation in the costs awards made in the Employment Court and that a consistent approach was required. Mr McIlraith submitted there was no reason not to apply the approach currently adopted in the Employment Court which allowed for flexibility.
[20] We are not persuaded that any question of law arises. The Employment Court has power in any proceedings to order any party to pay to any other party such costs and expenses as the court thinks reasonable.^[9] Regulation 68 of the Employment Court Regulations 2000 also provides:

68 Discretion as to costs

(1) In exercising the court’s discretion under the Act to make orders as to costs, the court may have regard to any conduct of the parties tending to increase or contain costs, including any offer made by either party to the other, a reasonable time before the hearing, to settle all or some of the matters at issue between the parties.

(2) Under subclause (1), the court—

(a) may have regard to an offer despite that offer being expressed to be without prejudice except as to costs; but

(b) may not have regard to anything that was done in the course of the provision of mediation services.

[21] The Judge nevertheless accepted that the High Court scale “does provide some assistance in deciding what are reasonable costs in the circumstances”.^[10]
[22] This Court has recognised that it is open to the Employment Court, if it chooses to do so, to adopt the High Court approach to costs but it is entitled to follow its existing practice in terms of which costs actually and reasonably incurred are the relevant starting point.^[11] This Court has also said that the primary principle is that costs follow the event and that the amount of costs is generally approached on the principle of a reasonable contribution to costs actually and reasonably incurred.^[12] Other factors specific to the case may then be applied as appropriate to increase or decrease the award. Given the discretion vested in the Employment Court, we cannot discern any point of law for which leave should be given to appeal to this Court. If change is required, it may more properly be a matter for Parliament’s attention.
[23] We are aware that in Snowdon v Radio New Zealand Ltd this Court granted leave to appeal relating to the approach to costs in the Employment Court but the hearing of the appeal has not been pursued.^[13] The grant of leave in that case does not cause us to alter our conclusion that leave should not be granted in this case.
[24] Accordingly the application for leave to appeal in CA835/2013 is also dismissed.

Costs

[25] The respondent is entitled to one set of costs against the applicant as for a standard application on a Band A basis with usual disbursements.

Solicitors:
Oakley Moran, Wellington for Applicant
Russell McVeagh, Auckland for Respondent

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^[1] Belsham v Ports of Auckland Ltd [2013] NZERA Auckland 136.

^[2] Belsham v Ports of Auckland Ltd [2013] NZEmpC 190 [Employment Court judgment].

^[3] Belsham v Ports of Auckland Ltd [2013] NZEmpC 205 [Costs judgment].

^[4] Angus v Ports of Auckland Ltd [2011] NZEmpC 160, (2011) 9 NZELC 94,015 at [24].

^[5] Employment Court judgment, above n 2, at [46].

^[6] Employment Court judgment, above n 2, at [18].

^[7] Angus v Ports of Auckland Ltd, above n 4, at [24].

^[8] Costs judgment, above n 3, at [12].

^[9] Employment Relations Act 2000, sch 3, cl 19(1).

^[10] Costs judgment, above n 3, at [13].

^[11] Health Waikato v Elmsly [2004] 1 ERNZ 172 (CA) at [51].

^[12] Victoria University of Wellington v Alton-Lee [2001] NZCA 313; [2001] ERNZ 305 (CA) at [47]; Binnie v Pacific Health Ltd [2002] 1 ERNZ 438 (CA) at [7].

^[13] Snowdon v Radio New Zealand Ltd [2009] NZCA 557.