Kumaran v Employsure Pty Ltd (No 2)

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Kumaran v Employsure Pty Ltd (No 2) [2022] NSWCA 247

Hearing dates:

On the papers (last submissions 29 November 2022)

Date of orders:

6 December 2022

Decision date:

06 December 2022

Before:

Gleeson JA; Leeming JA; Kirk JA

Decision:

(1)   The plaintiff pay 65 per cent of the defendants’ costs of the proceedings at first instance as agreed or assessed.

(2)   The respondent to pay the appellants’ costs of the appeal as agreed or assessed.

(3)   For the avoidance of doubt, order (2) does not include any costs in this appeal referable to the “protectable interest” issue.

Catchwords:

COSTS – costs at first instance following different outcome on appeal – costs of appeal – whether costs should follow the event, or whether fractional costs order should be made

Legislation Cited:

Restraint of Trade Act 1976 (NSW)

Uniform Civil Procedure Rules 2005 (NSW), r 42.1

Cases Cited:

Calvo v Ellimark Pty Ltd (No 2) [2016] NSWCA 197

Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219

McMurchy v Employsure Pty Ltd; Kumaran v Employsure Pty Ltd [2022] NSWCA 201

Windsurfing International Inc v Petit [1987] AIPC 90-441

Category:

Costs

Parties:

Arumugam Kumaran (First appellant)
ELMO Software Limited Pty Ltd (ABN 13 102 455 087) (Second appellant)
Employsure Pty Ltd (ABN 40 145 676 026) (Respondent)

Representation:

Counsel:
I M Neil SC / P Lowson (Appellants)
P J Brereton SC / P Moorhouse (Respondent)

Solicitors:
K & L Gates (Appellants)
Kardos Scanlan (Respondent)

File Number(s):

2021/328225

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Equity Division

Citation:

[2021] NSWSC 1179

Date of Decision:

26 October 2021

Before:

Sackar J

File Number(s):

2021/16210; 2021/53385

Judgment

1. THE COURT: The Court delivered judgment in two related appeals on 11 October 2022: McMurchy v Employsure Pty Ltd; Kumaran v Employsure Pty Ltd [2022] NSWCA 201 (the appeal judgment). The McMurchy appeal was dismissed with costs. In the Kumaran appeal, the Court held that the primary judge erred in finding that a post-employment restraint against competition for a duration of nine months was reasonable. The Court allowed the appeal and set aside several orders below, including an order that the defendants (Mr Kumaran and ELMO Software Ltd (ELMO)) pay the plaintiff’s (Employsure) costs of the proceedings as agreed or assessed, and in lieu, ordered that the summons filed 24 February 2021 be dismissed. The Court reserved the question of costs on appeal and directed the parties to file and serve submissions as to appropriate consequential costs orders in this Court and below, noting that the question of costs would be determined on the papers. Those submissions have now been received.

Costs at first instance

2. Mr Kumaran and ELMO seek an order that Employsure pay their costs of the proceedings below as agreed or assessed, relying upon the usual rule in Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 42.1, that costs should follow the…