The High Court deferred its final decision on the costs of an injunction application brought by an employee against his employer, after the company proposed an independent investigation that made the scheduled hearing unnecessary.
In a judgment delivered on 21 February 2024, Mr Justice Kennedy said the employee had substantially succeeded in his application and that the starting point was a presumption that he was entitled to the application’s costs. But the judge postponed finalising that decision because concerns about aspects of evidence from both sides might require directions under court rules. He invited submissions on whether there should be a stay or an interim payment.
The employee had sought to prevent the company holding a disciplinary inquiry or dismissing him following an investigation, and to require an independent investigation. The injunction hearing was due to begin on 7 February 2024. At its outset, the company offered to undertake an independent investigation without prejudice to its position that its earlier investigation was fair and that the employee was not entitled to relief. The parties were agreeing terms of reference and arrangements.
The employee argued that the offer effectively ended the original process and granted a key part of the relief he sought. The company opposed an immediate costs decision, saying the merits of the injunction application had not been determined and the wider proceedings remained unresolved. The judge said it would also be premature to deal with costs of the proceedings generally.
The dispute arose from the company’s investigation of payments linked to Brolen Trading Ltd, jointly owned by the employee and a former colleague. The company alleged that, from 2015, a supplier paid Brolen fees or commission connected to its business with the company, recouping those payments through invoices. It also alleged the employee shared confidential commercial information. The employee denied fraud or concealment and said the arrangements were known to, approved by and beneficial to the company. The company disputed that account.
The judge did not decide whether the earlier investigation was fair, whether the allegations were established, or the substantive merits of the proceedings. He described the background as a high-level summary and said significant legal issues might arise even on the employee’s account, but stressed that the facts would need to be established before conclusions could be reached.
The judgment also noted a discrepancy between affidavit accounts of the purpose of a small number of Brolen transactions before 2008 and a contemporaneous document. The judge said the discrepancy and any tax, accounting or governance implications had not been explained, and left those matters for appropriate examination. He made no finding on them.