RNZ, its CEO, the journo & her husbandby The Listener
What may be the longest-running employment case in New Zealand legal history has finally concluded.
Update: April 2, 2014, by Karl du Fresne:
The judge’s decision in the epic case of Snowdon v. Radio New Zealand could hardly have been more emphatic – or crushing for the losing side.
After acrimonious judicial and legal manoeuvrings dating back 11 years, Judge Tony Ford of the Employment Court threw out all the claims brought against the state broadcaster by its former head of news, Lynne Snowdon.
Snowdon not only claimed she was unjustifiably dismissed. She also accused RNZ of fraud and pursued several claims that she was unfairly disadvantaged by the broadcaster’s treatment of her.
But after a hearing lasting 47 days, the judge held that Snowdon was “substantially responsible” for the irreconcilable breakdown in the employment relationship.
The court heard that Snowdon had been hired by Sharon Crosbie, then chief executive of RNZ, but the relationship had deteriorated over several years. Crosbie became increasingly concerned at Snowdon’s failure to control spending but Snowdon was convinced the problems were due to underfunding. She alleged during the hearing that money intended for the news division had been diverted to other departments.
Snowdon went on sick leave in January 2003 and commenced action against RNZ that same year. She was eventually dismissed in 2005 by Crosbie’s successor, Peter Cavanagh, on the basis that trust and confidence had broken down.
Judge Ford said Cavanagh had approached the employment issue with an open mind and taken all reasonable steps to achieve a settlement, but Snowdon had displayed the same “aggressive and uncompromising” stance toward him as she had toward Crosbie.
Dismissing the fraud allegation, Ford said Snowdon’s key witness, forensic accountant Wayne Kedzlie, had produced “extraordinary” and “bizarre” documents suggesting RNZ had committed more than 130,000 criminal offences involving the possible theft of public funds totalling $795,000. He said Kedzlie’s credibility had been shattered under cross-examination.
The judge referred, as had previous judges before him, to the tortuous history of the case: 23 interlocutory (preliminary) hearings, six applications for leave to appeal to the Court of Appeal and 70 formal minutes, orders and rulings in the years leading up to the final substantive hearing. As far back as 2010, the Court of Appeal had commented that “the time has come for the procedural music to stop”.
Ford made pointed comments about the role of Snowdon’s husband, lawyer John Hickling, saying one expert witness – accountant David Vance – had been “hopelessly compromised” by Hickling’s input into the case.
He noted that according to Hickling, Snowdon and her family had incurred costs of more than $3.5 million even before the substantive hearing – in which Snowdon was represented by a legal team of four, including leading QC Colin Carruthers – began last September. Ford commented that what appeared to be a relatively straightforward employment dispute had “spiralled out of control”.
He ruled that Radio New Zealand was entitled to costs, which RNZ says could come to $1.5 million. The case has already taken a huge toll on the parties, financially and emotionally, but may not have finished with them yet.
The case coverage below was first published in the Listener on January 8, 2014:
A key person is missing from the epic Employment Court case in which former Radio New Zealand head of news Lynne Snowdon is challenging her sacking in 2005.
The significant absentee is Snowdon’s husband, Wellington lawyer John Hickling. He hasn’t given evidence in the proceedings – in fact he has hardly been seen. But he casts a long shadow.
When cross-examining witnesses appearing in support of Snowdon, Radio New Zealand counsel Michael Quigg repeatedly asked searching questions about Hickling’s involvement in the case. And when RNZ’s turn came to make its opening statement, Quigg left no doubt that he saw Hickling as playing a central role in the drama, even though his name doesn’t appear on the official cast list. “Mr Hickling’s influence in this ongoing litigation cannot be underestimated,” Quigg told Judge Tony Ford.
Quigg referred to a 400-page affidavit filed in 2008, when Snowdon sought to have Judge Coral Shaw – then dealing with the case, but now retired – withdraw on the ground of alleged bias.
That affidavit was written in the name of forensic accountant David Vance, an expert witness in the case, but Quigg said it had emerged under questioning that Hickling prepared the first draft and was primarily responsible for the compilation of thousands of supporting documents that filled 25 Eastlight folders.
“That episode provides some insight as to why this case has gone on for so long and who, other than Miss Snowdon, may be very much part of it,” Quigg said.
Hickling had also prepared the first draft of the brief of evidence given by Vance in his capacity as an independent expert – an action Quigg said he viewed as totally improper in law.
Under cross-examination, Vance confirmed he had been under the impression that Hickling was involved in the case as assisting counsel. Asked whether he knew the court had directed in 2008 that Hickling could not appear as counsel because of the possibility of a conflict of interest, Vance answered: “I was not aware of that.”
Gesturing to the 25 Eastlight folders prepared in support of Vance’s 2008 affidavit, which were wheeled into court precariously balanced on a trolley, Quigg asked whether Vance had had time to go through them all. He replied that he would have relied on Hickling to compile most of them.
Earlier, as proceedings got under way on day 21, Vance had sprung a surprise. Entering the witness box to continue giving evidence under cross-examination, he revealed that after testifying the previous day he had received a phone call from Hickling at his office. Hickling had suggested that he should refer to certain documents.
Vance, a subpoenaed witness, was commended by the judge for his “entirely proper” action in bringing the phone call to the court’s attention.
Vance’s disclosure prompted an immediate disclaimer and apology from Snowdon’s counsel, Richard Fletcher. “Frankly, I am appalled and embarrassed,” Fletcher told the judge. Quigg later described the phone call as an attempt to influence Vance’s evidence.
It was one moment of drama among many in a hearing that began at the start of October and will resume on January 27. Already described as the longest-running employment law case in New Zealand history, Snowdon vs Radio New Zealand took 10 years to proceed to a substantive hearing and has now assumed the character of an endurance test for the two legal teams and the judge.
If there’s a judicial equivalent of the marathon dance contests of the Depression era, this is it.
THE STORY SO FAR
For the benefit of latecomers to this agonisingly prolonged piece of legal theatre, Snowdon is not only challenging her dismissal. She is also alleging RNZ committed fraud by diverting money intended for her news division and executed an elaborate cover-up.
In a separate action commenced in 2005, Snowdon brought defamation proceedings against RNZ, accountancy firm Deloitte – which investigated the news division at RNZ’s request in 2003 – and Sharon Crosbie, the state broadcaster’s former chief executive (and before that, one of its star performers). Crosbie told the court she and RNZ were being sued for $1.45 million and Deloitte for $1.2 million.
It was Crosbie who, in 1994, first approached Snowdon, then working for the BBC in London, about coming back to New Zealand to work for RNZ. Crosbie, then manager of National Radio, told the court there were concerns at the time about the quality of RNZ’s news.
Crosbie, whose partner had previously worked with Snowdon, had lunch with Snowdon and asked her to listen to Morning Report to see what she thought of it.
She recalled that the then head of RNZ, English-born Nigel Milan, was excited about the prospect of hiring Snowdon and appointed her as news operation manager. She became managing editor of news in December 1996, a year after Crosbie had taken over as chief executive. Snowdon was one of only two applicants for the job.
The court heard that Crosbie had initially enjoyed working with Snowdon and praised her for raising journalistic standards within RNZ. Before her appointment, news staff had been pulling press releases off the teleprinter and putting them straight to air, Crosbie said. “Ms Snowdon stopped that.”
However, from about 1997 onward, Crosbie had become increasingly concerned about Snowdon’s management style, which was the subject of complaints from news staff and the human resources department. Snowdon had little regard for HR protocols and complained of “silly policies”, Crosbie said.
On one occasion, after Snowdon had appointed a Maori issues correspondent, it transpired the appointee was often absent from work. “When clarification was sought, it became apparent that verbally there was agreement that the appointee was allowed to simultaneously hold a separate position with a separate organisation and thereby gain two salaries.”
Crosbie said the issues apparent from this incident – which breached RNZ’s conflict of interest policy – were characteristic of Snowdon’s approach to management.
The employment relationship ultimately unravelled, however, over budgetary issues. From 1998 onwards, letters and emails went back and forth with increasing frequency between Crosbie and Snowdon. Crosbie was concerned that Snowdon was failing to control her budget, whereas Snowdon believed that news was underfunded – and told her staff so, to Crosbie’s consternation.
Crosbie said other senior managers recognised the need to work within the limits of available funding, but “Lynne swam against the tide in this regard”.
Matters came to a head late in 2002. By then, problems in the newsroom had become “an almost daily concern” and Crosbie was troubled by a news personnel budget overspent by $157,000. On the same day that Crosbie asked Snowdon what she proposed to do about the overspending, she was told Snowdon had initiated a personal grievance procedure.
Snowdon subsequently went on sick leave. She remained away from work on full pay until April 2005, when her employment was finally terminated by Crosbie’s successor, Australian Peter Cavanagh. As the Listener reported on November 12 last year, she has done little work since, apart from a part-time stint as an ophthalmologist’s receptionist on $21 an hour.
Recruitment consultant Sandra Fanselow testified that Snowdon’s career as a senior manager or international journalist was probably over. Her litigation history, health issues and allegations by RNZ, even if disproved, would go against her.
As for Crosbie, she’s retired and living in Horowhenua, where she does community and charitable work.
“PROCEEDINGS SUSTAINED BY OBSESSION”
Crosbie told the court that allegations she had bullied Snowdon were unfair and untrue. She also presented figures indicating that during Snowdon’s tenure, RNZ’s news budget had increased by more than $1 million.
Quigg said the litigation was not, as some thought, the result of a falling-out between two mature women. “What has sustained these proceedings … is an obsession that is blinded to the reality or facts of the matter.”
He told the court: “The real story is one of a senior manager who wanted a larger budget for her division.
“Miss Snowdon, with advice from Mr Hickling, her then partner, now husband, was either unable or unwilling to operate within the budget she was given.
“When Miss Snowdon failed to live within her budget, rather than take the necessary remedial steps to bring the news division’s spending under control, she simply argued she did not have enough money in the first place.”
Quigg went on: “Instead of accepting her fundamental responsibility as a senior manager, Ms Snowdon has spent the past 13 years developing an ever-changing array of fanciful and highly damaging conspiracy theories to absolve herself from that fundamental responsibility.”
The court heard that the events unfolded against a backdrop of continuing financial pressure. Crosbie said she constantly had to fight for Government funding – a campaign she applied herself to with “infinite subtlety”.
There was also unrest in the RNZ newsroom. Morale was low and journalists were watching their colleagues go off to earn twice as much in television, or to work in public relations.
She agreed that RNZ journalists had a distinct culture of their own – “bolshie would be one word”. The workplace was highly unionised and salaries were largely determined by a grading structure agreed with the union.
Well-known names cropped up in evidence. The court was told that a letter written to the RNZ board chairman expressing concern about understaffing and rumoured cuts in services was signed by, among others, Brent Edwards (now RNZ’s political editor), long-time sports reporter Stephen Hewson and Julian Robins, then a political reporter and later a media adviser to the Labour Party.
Earlier, RNZ deputy chief executive Ken Law had referred to $100,000 that was budgeted for staff retention and said the single biggest recipient was Al Morrison, then the political editor. Morrison later moved to the Department of Conservation, where he became chief executive, and now occupies a top position with the State Services Commission.
“SQUARE PEGS IN ROUND HOLES”
Central to Snowdon’s case is a claim that the news division never received $300,000 intended for it under a “new money” grant of $889,000 made by the Labour Government in 2000. It’s this claim that has led to allegations of fraud – allegations pursued not just by Snowdon but also by her key expert witness, Auckland forensic accountant Wayne Kedzlie.
Independently of Snowdon, Kedzlie has laid fraud complaints against RNZ with the police and the Serious Fraud Office. This is in addition to Snowdon’s complaints to the police, the SFO, the Auditor-General, the Ombudsman and the Prime Minister, among others. Not one of those complaints had been progressed or found to have substance, Quigg told the court.
“Mr Kedzlie has gone about trying to make square pegs fit into round holes,” Quigg said. “Where they do not fit, he alleges criminal wrongdoing by Radio New Zealand and its advisers.”
At times the proceedings have been tense, even acrimonious – at no time more so than during the several days when Kedzlie was under cross-examination by Quigg. Kedzlie accused RNZ of lies, fabrication and forgery and claimed to have identified, in the course of his investigations, more than 230,000 criminal offences.
Part of the cross-examination revolved around the role of Law, who was (and remains) RNZ’s chief financial officer as well as deputy chief executive. The court heard that Kedzlie had looked into Law’s assets, including a Wairarapa holiday home and a yacht moored in Nelson, and concluded that the only way they could be explained was if Law had come into a substantial inheritance since joining RNZ.
Quigg put it to Kedzlie: “That is the only possible explanation according to you.” Kedzlie responded: “No, no, I’m wrong there. A lottery win would also get you there, Mr Quigg.”
Law has rejected the allegations against him and, under cross-examination by Colin Carruthers, QC, leading Snowdon’s legal team, dismissed Kedzlie’s figures as full of errors.
Kedzlie also testified that five CD-Roms of financial data provided by RNZ to Snowdon’s team under a discovery order was in a form that could not be deciphered, requiring a special forensic program that ran 24 hours a day from January till May. But Quigg pooh-poohed the claim, saying that John Fisk, a partner in the accounting firm PwC, would testify that it took less than five minutes to transfer the data into Microsoft Office format.
MORE WITNESSES TO COME
Several witnesses are still to be heard when the hearing resumes, after which Judge Ford will have the unenviable job of sifting through thousands of pages of transcripts and thousands more background documents before reaching a decision.
It’s a case that has demanded sustained concentration because of the sheer volume of documentation, the complex financial detail and the opposing parties’ conflicting analysis of the figures. Through it all, Ford has been unfailingly patient, composed and courteous – a calming influence even when the opposing sides were at their scratchiest.
Crosbie and her successor, Cavanagh, have been in attendance most days, as has Law. Snowdon is the only other regular attender, sitting alone in a rear corner of the small courtroom.
And all the while, the costs continue to mount. Quigg referred to an email from Hickling to Kedzlie in 2011 in which Hickling said he, his wife and other members of the family had spent $4.5 million pursuing the case to that point. For his part, Kedzlie is said to have incurred costs of at least $1 million and possibly $1.5 million.
The amount spent by RNZ defending the case, through innumerable court hearings dating back years, can only be guessed at. The one prediction that can be made with total confidence about the ultimate outcome is that someone will be left much the poorer.
See also: Karl du Fresne's November 2013 article on the case, Radio New Zealand in the dock.
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