Allied Express Transport Pty Ltd v Braim (No. 2)

[2023] NSWSC 4

Supreme Court

New South Wales

Medium Neutral Citation:

Allied Express Transport Pty Ltd v Braim (No. 2) [2023] NSWSC 4

Hearing dates:

On the papers

Date of orders:

24 January 2023

Decision date:

24 January 2023

Jurisdiction:

Equity - Expedition List

Before:

Williams J

Decision:

See paragraph [13]

Catchwords:

COSTS – costs of plaintiff’s unsuccessful claim for orders restraining alleged breaches or apprehended breaches of post-employment restraints and obligations of confidence – whether successful defendants’ costs should be paid by plaintiff on ordinary or indemnity basis – whether costs should be payable forthwith.

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98

Restraints of Trade Act 1976 (NSW), s 4

Uniform Civil Procedure Rules 2005 (NSW), r 42.7(2)

Cases Cited:

Bale v Kimberley Developments Pty Ltd (No. 2) [2022] NSWSC 1009

Category:

Costs

Parties:

Allied Express Transport Pty Ltd (Plaintiff)
Aram Braim (First Defendant)
ASOS Express Pty Ltd (Second Defendant)

Representation:

Counsel:
B Miles (Plaintiff)
P Reynolds (Defendants)

Solicitors:
Pendlebury Workplace Law (Plaintiff)
Asad Lawyers (Defendants)

File Number(s):

2022/47368

Publication restriction:

N/A

Judgment

1. These reasons concern the costs of the hearing conducted on 12-14 September 2022 for the purpose of determining separately and in advance of all other questions in the proceedings the plaintiff’s claims for final relief in prayers 2, 3 and 3A of its Amended Statement of Claim (the separate question hearing). Those claims were dismissed on 27 September 2022: Allied Express Transport Pty Ltd v Braim [2022] NSWSC 1298 (the principal judgment).

2. Familiarity with the principal judgment is assumed. Terms defined in the principal judgment have the same meaning in these reasons.

3. The question of costs was the subject of written submissions made on behalf of the defendants dated 4 October 2022, responsive written submissions made on behalf of the plaintiff dated 16 October 2022 and the defendants’ written submissions in reply dated 24 October 2022.

4. The plaintiff accepts that it is appropriate for the Court to order it to pay the defendants’ costs of the separate question hearing and of its earlier successful application for interim injunctions that were discharged upon the dismissal of its claims in prayers 2, 3 and 3A of its Amended Statement of Claim. The question for the Court is whether the plaintiff should be ordered to pay those costs on an indemnity basis (as the defendants submit) or on the ordinary basis (as the plaintiff submits). There is also a dispute between the plaintiff and defendants about whether the defendants’ costs of responding to two notices to produce issued by the plaintiff on 25 March 2022 should be included in the scope of the costs orders to be made, irrespective of whether those orders provide for the plaintiff to pay the defendants’ costs on the ordinary basis or on an indemnity basis.

5. Having considered all of the parties’ submissions in relation to costs, I have determined that the appropriate exercise of the discretion under s 98 of the Civil Procedure Act 2005 (NSW) in all the circumstances of this case is to order the plaintiff to pay the defendants’ costs of and incidental to the plaintiff’s interim injunction application and the separate question hearing on an indemnity basis in such amount as may be agreed or assessed, and to order that such costs be payable forthwith. That formulation of the order will cover the defendants’ costs of responding to the two notices to produce if they were issued for the purpose of the separate question hearing (as the defendants contend, but the plaintiff disputes). Neither party’s costs submissions referred to the terms of those notices or otherwise addressed the purpose for which they were issued. If the parties persist in dispute about that matter, then it will fall to the costs assessor to determine whether the defendants’ costs of responding to the notices are properly characterised as costs of or incidental to the separate question hearing.

6. It is appropriate to order that the costs be paid on an indemnity basis because the plaintiff’s claims that underpinned the interim injunction application and that were dismissed following the separate question hearing were based principally on unfounded assertions about the scope of the plaintiff’s work for SPL (for the purpose of which the plaintiff employed Mr Braim), exaggerated descriptions of the nature and scope of Mr Braim’s responsibilities whilst employed by the plaintiff, unfounded assertions about the confidentiality of information held by the plaintiff and mere speculation that Mr Braim might have accessed that information during the course of his employment. The plaintiff failed to identify the allegedly confidential information with any specificity and did not adduce any evidence to support its claims about the confidentiality of information, save for bare assertions. By the end of the separate question hearing, the plaintiff relied on only one alleged breach by Mr Braim of his obligations of confidence. The evidence manifestly failed to support that allegation. Contrary to the principles applicable to the application of s 4 of the Restraints of Trade Act 1976 (NSW), the plaintiff sought final injunctive relief in terms that were not directed to any alleged breach or apprehended breach by Mr Braim of any of the restraints in his employment contract. The evidence was wholly inadequate to establish any of the breaches that were alleged or any apprehended breach. Viewed in the context of the true nature and scope of Mr Braim’s position with the plaintiff, after stripping away the plaintiff’s bare assertions and exaggerations, the restraints would have been held to be contrary to public policy had it been necessary to determine their validity.

7. All of those matters have been addressed in the principal judgment. The plaintiff, properly advised, should have known that the evidence of its witnesses that consisted of mere assertions and speculation would not withstand scrutiny at trial and that it had no chance of success. I reject the plaintiff’s submission that the length of the principal judgment indicates that its claims cannot be said to have been frivolous or to have had no prospects of success. The length of the principal judgment is attributable to the need to address the credibility of four of the five witnesses called by the plaintiff, the contradictions and inconsistencies within their evidence, the collusion between the plaintiff’s Chief Executive Officer (after his cross-examination was completed) and the plaintiff’s National General Sales Manager (whilst he was still under cross-examination) about the evidence to be given by the latter on the second day of his cross-examination, and the need to provide reasons for rejecting each of the plaintiff’s unmeritorious assertions and submissions.

8. The order for indemnity costs is not made to punish the plaintiff, but to more fully compensate the defendants for the costs that they have incurred as a result of the plaintiff’s plainly unreasonable conduct in commencing and continuing with the claims for relief in prayers 2, 3 and 3A which they should have known had no chance of success: Bale v Kimberley Developments Pty Ltd (No. 2) [2022] NSWSC 1009 at [44]-[45] and the authorities there referred to.

9. I do not find it necessary to address the other matters relied upon by the defendants in support of their application for indemnity costs, including their Calderbank offer served on the plaintiff shortly before the separate question hearing.

10. Unless the Court orders otherwise, the costs of any application or other step in any proceedings are not payable until the proceedings have concluded: Uniform Civil Procedure Rules 2005 (NSW) r 42.7(2).

11. It is appropriate to order that the defendants’ costs of the interim injunction application and the separate question hearing be paid forthwith because these are discrete, separately identifiable aspects of the proceedings.

12. Having reached that conclusion, it is not necessary to consider the other matters relied on by the defendants as warranting an order that the costs be paid forthwith.

13. The order of the Court is as follows:

1. Order the plaintiff to pay the defendants’ costs of and incidental to:

1. the plaintiff’s application for interim relief that was the subject of the orders made by the Court on 10 March 2022; and

2. the hearing on 12-14 September 2022 of the plaintiff’s claims for relief in prayers 2, 3 and 3A of the Amended Statement of Claim,

on an indemnity basis in such amount as may be agreed or assessed.

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Decision last updated: 24 January 2023