New Zealand: Anton Piller Orders Get A Makeover

Last Updated: 3 June 2009
Article by Rick Hargreaves

Readers may recall that over the last three years there has been some controversy over whether the Employment Court and Employment Relations Authority (ERA) could issue Anton Piller orders. The resounding legal answer was – no they cannot. But after a recent revamp of the High Court Rules, the Employment Court, but not the ERA, now has jurisdiction to issue Anton Piller orders.

What Is It?

For those not familiar with the old Anton Piller order, this is the 'nuclear bomb' of civil remedies. It enables plaintiffs to enter private premises to search for confidential information or intellectual property if they can satisfy the court that this material has been wrongfully taken and may be on the premises. It is not a warrant in the sense of a 'police warrant' but it has a lot of similar qualities eg the legal searching of private premises.

These orders do not empower the employer's representatives to use force to gain entrance into an employee's premises. But if the employee does not allow the people authorised by the order entry to their premises, the employee could be held to be in contempt of court.

The Makeover

Anton Piller orders have now been formally incorporated into the High Court Rules and are known as 'Search Orders'. Basically, the former inherent power of the High Court to issue Anton Piller orders has been integrated into the High Court Rules.

The Employment Court can now also issue Search Orders because it can make any order provided for under the High Court rules. The ERA still does not have the jurisdiction to issue such orders.

When Might A Search Order Be Useful?

An employer may want to apply for a Search Order if an employee has taken the employer's confidential information or other property. 'Confidential information' could include client lists, pricing information and trade secrets.

A Search Order will help the employer not only to recover their information/property but may also provide strong evidence for claims against the employee. In one New Zealand case, the employer recovered over $2 million in damages and actual losses.

How Does It Work?

A Search Order is applied for without the person it is to be served on being notified. So an uncomfortable surprise is sprung on the errant employee.

The employer cannot participate in the execution of a Search Order themselves and neither can any director, officer, employee, partner or other person associated with the employer/applicant. Consequently, the people who execute a Search Order on behalf of an employer are likely to be either a solicitor or private investigator with the assistance of a computer forensic expert.

These factors plus the requirement that the applicant pay for an independent solicitor to attend the execution of a Search Order makes applying for, and executing, a Search Order an expensive process. So there has to be a real commercial issue at stake before an employer chooses the Search Order option over the usual court discovery processes.

What Will The Court Need To See?

Because of the invasive nature of a Search Order, an employer applying for one will have to be able to meet the strict criteria of showing:

  • A strong prima face case.
  • That they will suffer serious potential or actual damage if the Search Order is not granted.
  • Sufficient evidence that the employee/respondent has the relevant material and there is a real possibility that the employee/respondent might destroy or hide that material.

Limitations On Search Orders

The employer will still need to decide what court (High Court or Employment Court) they will use.

There is now no doubt that the Employment Court can grant a Search Order against an employee or ex employee. But it remains to be seen whether or not the Employment Court will be prepared to issue such orders against a person or entity that is or was not a party to the original employment relationship between the employer and employee.

There are also other matters that an employer may want to consider when they are 'forum shopping' to see which court they will go to. The Employment Court has a limited jurisdiction to hear tort related matters and it does not have the ability to decide matters that involve the torts of breach of confidentiality, conspiracy and deceit. Also, if there is no term in the employment agreement covering confidential information, then an employer may have to rely on common law breach. In these circumstances, where there are acts or omissions that are not breaches of the terms of employment, the High Court will be the best 'one stop shop' for both a Search Order and to hear the case.

So before an employer embarks on an application for a Search Order, it should consider what its ultimate plans are ie just to pursue the employee or to also go after the new employer or any other person who may have benefited from the employee's unscrupulous conduct.

Conclusion

If an employer is just pursuing an employee, then for economic and jurisdictional reasons they will need to seek a Search Order in the Employment Court. However, if the matter is more complicated and the employer is also pursuing a new employer and/or other associates of the employee, then the High Court jurisdiction is still the most appropriate forum for Search Order applications.

Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.

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