Matter arose from labour inspector’s attempt to recover wage or holiday arrears
In a proceeding involving an attempt to recover wage or holiday arrears, New Zealand’s Court of Appeal granted an application to recall its prior judgment awarding a labour inspector costs, to be paid by a person legally aided at the time.
The sole director and shareholder of a therapeutic massage company employed the applicant in this case, a massage therapist who also acted as a business manager with broad responsibilities.
In its first determination on 26 August 2022, the Employment Relations Authority found that the company had breached various minimum employment entitlements under the Employment Relations Act 2000, with the director and the applicant involved in some breaches under s 142W.
The Authority ordered the director to pay wage and holiday arrears to three former employees, plus an $8,000 penalty. Considering the applicant a party to the wage and holiday pay breaches and jointly liable for them, the Authority ordered him to pay a $4,000 penalty.
A labour inspector of the Ministry of Business, Innovation, and Employment – the respondent in this case – could not recover the arrears from the company, which had ceased trading, or from the director, who had apparently left the country.
On 13 December 2022, before the Authority, the labour inspector filed a memorandum seeking clarification on whether they could recover arrears from the applicant in connection with the breaches for which he had joint liability.
In its second determination on 21 August 2023, the Authority decided that the first determination had only held the applicant liable for a penalty.
The Authority said it could no longer determine the labour inspector’s legal question about the applicant’s liability to pay wage or holiday arrears. According to the Authority, the inspector could only pursue the issue by challenging the first determination before the Employment Court or by applying to reopen the investigation.
On 28 September 2023, the labour inspector applied to extend the time to challenge the Authority’s first determination before the Employment Court, as the issue date of the first determination had been more than a year prior.
Though some factors suggested that the application would not normally succeed, a judge of the Employment Court found it appropriate to extend the time because the public interest and the three employees’ interests tipped the balance in favour of granting an extension.
The applicant sought the following: first, an extension of time to seek leave to appeal; and second, leave to appeal the Employment Court decision extending the time for the labour inspector to challenge the Authority’s first determination.
On 27 February 2026, in Du v A Labour Inspector of the Ministry of Business, Innovation and Employment, [2026] NZCA 45, the New Zealand Court of Appeal extended the time for the applicant to seek leave to appeal, as he had sufficiently explained his minor delay of two working days.
However, the appeal court ultimately denied leave to appeal. The appeal court saw no general or public importance or any other reason warranting a determination of the applicant’s proposed legal questions, which all failed to meet the threshold for issuing leave to appeal.
The appeal court pointed out that the primary legal question regarding s 219 of the Employment Relations Act apparently rested on an untenable legal argument. The appeal court added that the other issues focused on the judge’s weighing of relevant factors, rather than identifying genuine legal questions.
Lastly, the appeal court ordered the applicant to pay the labour inspector standard application costs on a band A basis, plus the usual disbursements.
The applicant then applied to recall the judgment dated 27 February 2026. He alleged that the appeal court should not have ordered him to pay costs because he had received civil legal aid for his applications.
A deputy registrar waived the filing fee for the present proceeding due to the applicant’s inability to pay.
The applicant’s counsel advised that the applicant had secured legal aid on 26 June 2025, after filing his applications.
However, the appeal court did not know about the applicant’s legally aided status when it awarded costs against him because his counsel had overlooked notifying it of the grant of legal aid, as required under s 24 of the Legal Services Act 2011.
On 25 March 2026, in Du v Labour Inspector of the Ministry of Business, Innovation and Employment, [2026] NZCA 89, the Court of Appeal of New Zealand found it appropriate to recall its judgment.
Thus, the appeal court replaced its earlier order awarding costs against the applicant with an order that costs should lie where they fell. The appeal court also ordered that the costs in the present application should lie where they fell.
The appeal court saw no exceptional circumstances justifying an award of costs against the applicant for his applications for an extension of time and leave to appeal.
