Ryanair v Bellew
| Jurisdiction | Ireland |
| Judge | Mr. Justice Allen |
| Judgment Date | 27 January 2020 |
| Neutral Citation | [2020] IEHC 26 |
| Docket Number | [2019 No. 6239 P.] |
| Court | High Court |
| Date | 27 January 2020 |
[2020] IEHC 26
Allen J.
[2019 No. 6239 P.]
THE HIGH COURT
Costs – Discovery – Injunction – Defendant seeking costs – Whether there should be an order as to costs
Facts: The High Court (Allen J), for the reasons given in a judgment delivered on 23rd December, 2019, came to the conclusion that the claim of the plaintiff, Ryanair DAC, for an injunction restraining the defendant, Mr Bellew, from going immediately to work for a competitor of the plaintiff failed, and that the action must be dismissed. The defendant asked for the costs of the action on the basis that they should follow the event. The plaintiff argued the trial had taken much longer than it should have, that the defendant lost more than he won, and that he should have to contribute to the plaintiff’s costs, or at least that there should be no order as to costs.
Held by Allen J that, having applied Veolia Water UK plc v Fingal County Council (No. 2) [2007] 2 I.R. 81, he was persuaded that the defendant added to the cost of preparation of the case and prolonged the trial, but not that the circumstances were such that there should be no order as to costs. Allen J held that the defendant, having won, should have an order for costs. The defendant having raised and lost two issues that significantly added to the costs, Allen J held that there must be a substantial adjustment to the order. Allen J was not satisfied that he had sufficient insight into the work done in preparing for the case to be able to safely impose a percentage restriction on the recoverable costs but what was clear to Allen J was that the discovery, on both sides, was necessitated by the issues raised by the defendant.
Allen J held that it would be unjust to order the plaintiff to pay the defendant’s costs of making discovery in relation to the issues on which he failed, or the defendant’s costs of the additional days spent at trail. Allen J held that the costs order should reflect the fact that the defendant had increased the plaintiff’s costs, but Allen J was not satisfied that the justice of the case would be met by simply setting off four days against four days. In Allen J’s view, the justice of this case was to be met by making an order for payment by the plaintiff of the defendant’s costs, excluding the costs of discovery, and limited to two hearing days.
Limited costs ordered.
For the reasons given in a quite a long judgment delivered on 23rd December, 2019 I came to the conclusion that the plaintiff's claim for an injunction restraining the defendant from going immediately to work for a competitor of the plaintiff failed, and that the action must be dismissed.
I put back the question of costs to allow the parties time to consider my judgment and heard counsel on 15th January, 2020.
Mr. Rogers, for the defendant, asks for the costs of the action on the basis that they should follow the event.
Mr. Hayden, for the plaintiff, quite rightly accepted that the burden of displacing the general rule that costs should follow the event rested with the unsuccessful plaintiff. He argued the trial had taken much longer than it should have, that the defendant lost more than he won, and that he should have to contribute to the plaintiff's costs; or least that there should be no order as to costs.
The trial of this action occupied the court for two weeks. The case was fought tooth and nail on both sides. Perhaps with the benefit of hindsight, or perhaps in the light of my judgment, the parties are now agreed that the trial took much longer than it might have. Each blames the other for the prolongation of the trial.
The statement of claim was short and focussed. The defendant, it was said, had signed a contract of employment which incorporated post termination restrictions, in particular a covenant that he would not for a period of twelve months after the termination of his employment work for any competitor. The defendant, it was said, had given six months' notice of his resignation and intended to go immediately to a direct competitor. The defendant, it was said, in the course of his employment, was privy to confidential and sensitive commercial and operational information, which would be valuable to the plaintiff's competitor, and the disclosure or use of which would be damaging to the plaintiff.
The defence admitted that the defendant had signed what he had signed but raised three defences. Firstly, it was said, the consideration for the post termination restriction had wholly failed. Secondly, it was said, the restraint was excessive, unnecessary and unenforceable at law. Thirdly, it was said, the conduct of the plaintiff and in particular its chief executive officer towards the defendant had been such that it was entirely appropriate for the defendant to have terminated his employment and that, if the restraint was enforceable, it would be unjust and inequitable to make an order enforcing it.
The plaintiff delivered quite a long reply. The response to the defendant's third line of defence was particularly robust. Having joined issue with the defendant's allegations of unfair and unreasonable treatment, the plaintiff countered that the defendant had resigned from his position in recognition of his inability and incompetence to perform his functions in a company of the size and dynamism of the plaintiff.
The defendant had given his notice in July, 2019 and soon after announced his intention to join the plaintiff's competitor on 1st January, 2020. The plaintiff promptly issued proceedings, and the parties co-operated in the exchange of pleadings, particulars and discovery with a view to having the action disposed of by the end of the year. The trial opened on 3rd December, 2019.
In practical terms, the issue which the court needed to decide was whether the defendant would be allowed to take up his new employment on 1st January, 2020.
Mr. Hayden now argues that the defendant lost on every issue other than the breadth of the restraint. He submits that the reason why the case took so long was that the defendant threw in the kitchen sink. He points in particular to para. 24 of the defence where the defendant introduced his allegation of unfair and unreasonable treatment.
Mr. Rogers agrees that the kitchen sink was thrown in but argues that it was the plaintiff and not the defendant who really threw it in. He points in particular to para. 20 of the reply, where the defendant's competence and ability to perform his functions was put in issue.
I am quite clear in my view that it was the defendant who put in issue the manner in which he was treated during his employment. That plea was directed to engaging the discretion of the court not to enforce a covenant which it might have found to be enforceable. Paragraph 20 of the reply addresses, specifically, para. 24 of the defence. While it is true that the discretion which the defendant invoked would not have been engaged unless the clause was otherwise enforceable, the issue needed to be addressed, on both sides, in the preparation and presentation of the case.
Mr. Rogers now argues that what he calls the equitable defence raised by para. 24 of the defence would only arise if the clause was enforceable. I agree. He goes on, however, to suggest that it was unnecessary for Mr. Hayden to have led evidence in relation to the defendant's allegation of unfair and unreasonable treatment until he had established that the clause was enforceable. I cannot agree. There was no application in this case for a modular trial. Both parties needed to present their evidence in relation to all of the issues disclosed by the pleadings. The plaintiff had to go first and had to meet the case pleaded and particularised. Mr. Hayden could not, except by agreement and the permission of the court, have safely confined the evidence to the justification for the clause. Had he done so, Mr. Hayden would have allowed the defendant a free run at any issue, including the alleged failure of consideration and the alleged unreasonable treatment of the plaintiff, which had not been addressed.
The issue as to the enforceability of the covenant called for evidence as to the nature and extent of the confidential information which it was said it was necessary to protect. A split trial would have meant recalling some or all of the witnesses as to the nature and extent of the confidential information to deal with the allegations of unfair and unreasonable treatment. No less, such a course would very likely have left the parties without a decision by the end of the year: which was what they had been striving for.
I find that the issues as to the defendant's treatment, including his participation in the share option scheme, were introduced by the defendant and that once they had been introduced, the plaintiff had no option but to deal with them. It is common case that these issues added significantly to the length of the trial, and it is the fact that the defendant lost on them.
The principles of law to be applied on an application such as this are reasonably well established. There is broad agreement between the parties as to what the law is, but some difference of emphasis as to how it is to be applied in this case.
The starting point is the long established rule in O. 99 of the Rules of the Superior Courts that unless there is good reason otherwise, the costs should follow the event. The event in...
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