O'Donovan v Over-C Technology Ltd

• Jurisdiction: Ireland
• Judge: Mr Justice David Keane
• Judgment Date: 03 July 2020
• Neutral Citation: [2020] IEHC 327
• Docket Number: [2020 No. 708P]
• Court: High Court
• Date: 03 July 2020

BETWEEN

DONAL O'DONOVAN

PLAINTIFF

AND

OVER-C TECHNOLOGY LIMITED

AND

OVER-C LIMITED

DEFENDANTS

[2020] IEHC 327

David Keane J.

[2020 No. 708P]

THE HIGH COURT

CHANCERY

Interlocutory order – Costs – Stay – Plaintiff seeking costs of an interlocutory injunction application – Whether it was appropriate to grant a stay on the proposed interlocutory order pending appeal

Facts: The High Court (Keane J), on 12 June 2020, gave judgment granting the plaintiff, Mr O’Donovan, an employment injunction against the defendants, Over-C Technology Ltd and Over-C Ltd (the Over-C companies): [2020] IEHC 291. Keane J invited the parties to seek agreement on any outstanding issues, including the costs of the application, failing which they were to file concise written submissions, which would then be ruled upon remotely unless a further oral hearing was required in the interests of justice. There was little direct engagement, and no agreement, between the parties. Consequently, they each filed written submissions addressing a range of issues, including: the appropriate terms of the proposed interlocutory order; the appropriate directions to facilitate an early trial; the appropriate order on costs; and whether it was appropriate to grant a stay on the proposed interlocutory order pending appeal. Neither side suggested that an oral hearing was required on any of those issues.

Held by Keane J that, since he was not persuaded by the arguments of either side for a different or modified form of order, he would grant an interlocutory injunction in the terms proposed at paragraph 67 of the judgment. Keane J held that these proceedings should proceed to trial with all reasonable dispatch in accordance with the applicable rules of court rather than specific directions made as part of a case management process not generally available to other litigants pursuing comparable claims.

Keane J held that, as Mr O’Donovan succeeded before him in establishing both that he had a strong case to make at trial and that the balance of convenience favoured the grant of an injunction, he would grant an order similar to that made in Paddy Burke (Builders) Ltd (In liquidation and receivership) v Tullyvaraga Management Company Ltd [2020] IEHC 199, making only Mr O’Donovan’s costs of the interlocutory injunction application, and not those of the Over-C companies, costs in the cause. Keane J held that the uncontroverted, albeit untested, evidence before him was that Mr O’Donovan could not discharge his household and living expenses without the benefit of the interlocutory order Keane J proposed; that tilted the balance of convenience decisively against placing a stay on that order pending appeal.

Plaintiff's costs only of the interlocutory injunction application to be costs in the cause.

RULING of Mr Justice David Keane delivered on the 3rd July 2020

Introduction

1 On 12 June 2020, I gave judgment granting Mr O'Donovan an employment injunction against the defendants (whom I will refer to collectively as ‘the Over-C companies’). This ruling should be read in conjunction with that judgment, which can be found under the neutral citation [2020] IEHC 291. In accordance with the joint statement made by the Chief Justice and the Presidents of each court jurisdiction on 24 March 2020 on the delivery of judgments during the Covid-19 pandemic, I invited the parties to seek agreement on any outstanding issues, including the costs of the application, failing which they were to file concise written submissions, which would then be ruled upon remotely unless a further oral hearing was required in the interests of justice.

2 Regrettably, there has been little direct engagement, and no agreement, between the parties. Consequently, they have each filed written submissions addressing a range of issues, including: the appropriate terms of the proposed interlocutory order; the appropriate directions to facilitate an early trial; the appropriate order on costs; and whether it is appropriate to grant a stay on the proposed interlocutory order pending appeal. Neither side has suggested that an oral hearing is required on any of those issues. Hence, this is my ruling on each of them.

The terms of the proposed order

i. a liquidated sum?

3 Mr O'Donovan submits that the interlocutory order I propose, which he refers to as a final order, should be modified to reflect what he describes as the precise sum due and owing to him under the judgment. That submission misunderstands the nature of the proposed order, the specific terms of which are set out at paragraph 67 of the judgment. It provides that the Over-C companies are to continue to pay Mr O'Donovan the salary – as well as any bonus or other benefit – due to him under his contract of employment for as long as they wish to assign any of the duties of CFO to him and, in any event, for no less than the period of six months from the end of January 2020 ( i.e. the period of six months to the end of July 2020), on the provision by Mr O'Donovan of an undertaking to the court to carry out any such duties. It follows that, if and when Mr O'Donovan provides the necessary undertaking (preferably on affidavit, given the present circumstances), he will have an immediate entitlement to whatever arrears of salary and other benefits have accrued to him by that date, as well as a prospective entitlement to whatever salary and other benefits fall due to him from then on, either for as long as he is required to perform any of the duties of CFO or until the end of July, whichever is later. That is not an order directing the payment of a liquidated sum, nor is it necessary to attempt to convert it into one, in whole or in part.

ii. the date from which the six-month payment period is to run

4 The Over-C companies submit that the six-month period covered by the proposed order should not run from the end of January 2020 but rather from 7 January, because that is the date upon which they purported to terminate Mr O'Donovan's employment, later paying him one month's salary from that date in lieu of notice.

5 Perhaps because of the reference in the judgment to the decision of the Supreme Court in Fennelly v Assicurazioni Generali S.P.A. (1985) 3 ILT 73, limiting the duration of the salary payments in that case to six months, the Over-C companies appear to argue either that six months should be considered as a general or inflexible limit on the duration of such payments or that the order proposed in the judgment was intended to apply a strict six-month limit to the duration of the payments that Mr O'Donovan was to receive in this case, mistakenly failing to take account of the payment that the Over-C companies made to Mr O'Donovan on 30 January to cover the period of one month from 7 January.

6 I do not accept that, in fixing the duration of the salary payments to be made by the employer in Fennelly, the Supreme Court was setting a general limit, or creating a specific and inflexible rule, on the appropriate duration of such payments in respect of all such orders. Hence, the order I propose is not intended to provide Mr O'Donovan with precisely six month's salary from the date of the purported termination of his employment. Rather, in identifying the least risk of injustice, I have judged it fair that Mr O'Donovan should continue to receive his salary (and any other benefits to which he is entitled under his contract of employment), during the further period of six months from the end of January 2020; that is, until the end of July 2020. In doing so, I have not overlooked the payment that the Over-C companies made to Mr O'Donovan on 30 January.

7 Any such salary payment is, of course, subject to the deduction of tax in the usual way by operation of law. Contrary to the submission made on behalf of Mr O'Donovan, I do not believe that it is necessary to include a recital to that effect in the proposed order.

8 In summary, since I am not persuaded by the arguments of either side for a different or modified form of order, I will grant an interlocutory injunction in the terms proposed at paragraph 67 of the judgment.

Directions to facilitate an early trial

9 Mr O'Donovan would like an early trial and submits that the court should give certain specific directions, and engage in general case management, to that end. However, he does not identify any grounds of urgency in support of that application.

10 As the judgment notes (at para. 68), Mr O'Donovan's claim is in reality one for a fair termination process rather than for reinstatement in the role of CFO. That is so for the following reasons. First, in suing the Over-C companies for defamation and misrepresentation as well as wrongful dismissal, Mr O'Donovan effectively acknowledges that the employment relationship of mutual trust and confidence between them has irreparably broken down. Remember, the Over-C companies contend that Mr O'Donovan's employment as CFO was terminated for sub-standard performance during his probationary period and now also allege that, while in that position, he wrongly disclosed sensitive commercial information to a third party in breach of confidence. All of that is very different from the position in Fennelly, where Costello J noted that the parties retained the highest regard for one another and the reason relied on for the termination of the applicant's employment was a massive down-turn in the respondent employer's business. Second, it is common case that Mr O'Donovan's employment may be lawfully terminated by either party on one month's notice in the first year and on three months' notice thereafter. And third, Mr O'Donovan is thus effectively free to pursue other employment opportunities, while plainly under a legal duty to mitigate his loss. Although the Covid-19 pandemic may have adversely affected the job market, I do not see how that unfortunate circumstance can be laid at the door of the Over-C...