A pending criminal case just stalled Open Country Dairy's damages claim against an employee
Open Country Dairy wanted its damages claim heard now. On 26 June 2026, Judge M S King ruled the employee's criminal case comes first.
The dispute traces back to a June 2025 decision in which the Employment Relations Authority found the employee had breached the confidentiality provisions in his employment agreement, along with the duties of confidentiality, fidelity and good faith he owed to the dairy company. What the Authority had not yet worked out was the cost. A further investigation meeting was set down to decide what penalties and damages, if any, Open Country Dairy could recover.
The situation changed in August 2025, when the employee told the Authority he had been charged by the Serious Fraud Office and asked for the remedies process to be paused until the criminal prosecution was resolved. The Authority agreed and adjourned the matter in September. Open Country Dairy pushed back, taking the issue to the Employment Court and arguing the delay would leave it unable to recover anything.
The company's concern was financial. It pointed to the employee's precarious finances and the slim equity left in his family home, which it had already tied up with a freezing order. By the time the Authority reached the damages claim, the company argued, there might be nothing left to enforce against.
Judge King was not persuaded. The general principle, the judgment noted, is that "Authority proceedings should not be interrupted by challenges at a pre-determination stage." The judgment set that against the Authority's purpose of resolving employment problems as quickly and cheaply as possible, with the right of challenge left until a final determination has been made.
The judgment found the freezing order already preserved the employee's main asset, and there was no evidence he was drawing down the equity in his home or otherwise depleting his assets. He was representing himself and appeared to be acting frugally. Running the damages claim alongside the SFO prosecution, the judgment added, carried a real risk to the employee's rights, forcing him to weigh whether to put forward evidence in the Authority against protecting his fair trial rights, including his privilege against self-incrimination.
That left the central question in the decision, was the adjournment a procedural step, which cannot be challenged under section 179(5) of the Employment Relations Act 2000, or did it affect the company's substantive rights? The judgment came down on procedure.
There was no evidence the claim would be lost for good. This was not a case, the judgment said, borrowing a phrase, where "the horse has bolted." The Authority had reserved the ability to revisit the adjournment if the prosecution dragged on, and nothing suggested its investigation would fail to resume once the criminal matter was dealt with.
Judge King found the adjournment had no substantive effect on either side and was a matter of procedure caught by section 179(5), so the company's challenge could not go ahead. As the successful party, the employee, who had run his own defence, was awarded costs against Open Country Dairy on a category 1, band B basis, payable within 28 days.
