Mr Powell’s employment contract with Hally Labels Ltd (Hally) imposed upon him confidentiality obligations and a restraint of trade. He resigned to work for a competitor, Geon Ltd.[1]
[1]His employer was Kiwi Labels Ltd, which is described as a division of Geon, but nothing turns on that. For convenience, we refer to these two companies as “Geon”.
Hally brought parallel proceedings against him in the Employment Court and the High Court for breach of his employment contract, seeking declarations, orders for recovery of confidential information which Mr Powell was said to have taken, and damages.
In the Employment Court proceeding Hally moved to enforce the restraint, and it succeeded on 13 June 2011.[2] The judgment left for later resolution other issues between the parties, notably claims for damages.
[2]Hally Labels Ltd v Powell [2011] NZEmpC 60 (result decision). For the reasons see Hally Labels Ltd v Powell [2011] NZEmpC 62, [2011] ERNZ 233 [Employment Court reasons decision].
In the High Court proceeding Hally also sued Geon, and it obtained ex parte search orders on 20 May 2011 on the strength of an allegation that Mr Powell had taken and shared with Geon 17 specified confidential documents. The search revealed that Mr Powell did indeed have a number of Hally’s documents, although not those identified by Hally, but he had not shared them with Geon.
Hally pursued its High Court proceedings for 17 months, during which it sought and obtained extensive discovery, but without uncovering further evidence of wrongdoing. In the meantime, Mr Powell protested jurisdiction.[3] After completing discovery Hally discontinued its High Court proceedings against Geon and Mr Powell, electing to proceed against him in the Employment Court. Its claim is part heard there.
[3]High Court Rules, r 5.49.
In the High Court Associate Judge Matthews ordered Hally to pay costs to Geon on the discontinuance, including disbursements of the discovery exercise.[4] Mr Powell was in a second costs decision refused costs.[5] Instead he was ordered to pay Hally’s costs, including its costs and disbursements of the discovery exercise against both him and Geon.[6]
[4]Hally Labels Ltd v Powell HC Christchurch CIV-2011-409-867, 1 February 2013 [first costs decision].
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Powell v Hally Labels Ltd [2014] NZCA 572
Case
[2014] NZCA 572
Decision Date
CaseChat Overview and Summary
Powell appealed against a costs order made in the High Court by Associate Judge Matthews. The appeal concerns the costs order made against Powell following the discontinuance of the proceeding by Hally, Powell's former employer, who sought damages for breach of contract. The Court of Appeal held that the High Court erred in its discretion to award costs against Powell. The Court of Appeal set aside the costs order and reserved the costs in the High Court pending the outcome of the Employment Court proceedings, so preserving the High Court's power to award costs should they remain in issue at that time. The Court of Appeal also reserved the costs in the Court of Appeal pending submissions.