In Sunder v Vasona Networks Inc [2016] NZERA Wellington 69, Vasona Networks Inc (Vasona) was found to have unjustifiably dismissed a Mr Rajeev Sunder. Mr Sunder was awarded $10,000 by the Employment Relations Authority (ERA).
In a subsequent costs determination, the ERA had new information to examine. Most importantly, it emerged that Vasona had during the dispute made Mr Sunder an offer of $40,000 to settle the matter. This was framed as a Calderbank offer, a type of settlement offer often advanced prior to court hearings. If the other party turns down the offer and goes on to win the case, but the amount awarded is less than the offer, the party who advanced the offer can present it to the court for consideration in relation to costs.
Given that the Calderbank offer was substantial and was open for consideration for a reasonable time (one week), the ERA found that it was appropriate to take it into account in this case. Since accepting the offer would have resulted in a much better financial outcome for Mr Sunder than he achieved in the proceedings, it was equitable that he contribute to Vasona’s legal costs.
In the result, Vasona was not able to regain the full amount which it claimed in light of the Calderbank offer, but Mr Sunder had to pay half of Vasona’s costs ($12,058.05).
This case illustrates some of the pitfalls which may arise in employment disputes, and the value of genuine efforts to settle them – especially when an effective Calderbank offer is made.