The High Court has reserved to the trial judge a dispute over the costs of an interlocutory injunction application brought by software company Tekenable Limited against two former employees and Critical Village Limited, the company they later used to conduct business.
The injunction motion was settled in March 2012 when the defendants gave the court an undertaking concerning information obtained by the two individuals during their employment. The undertaking required them to deliver relevant confidential information to Tekenable, hold no documentation containing it, and keep the information confidential and secure indefinitely. The court made the undertaking a rule of court. It did not decide whether the injunctions sought would otherwise have been granted.
Tekenable had sought orders restricting use of information relating to its affairs, solicitation of its clients using that information, contracts with people or organisations solicited while the two defendants were employees, and requiring the return of relevant information. The company later delivered a statement of claim seeking damages for alleged breaches of contract and duties of trust and confidence. Those allegations remained part of the continuing proceedings; the defendants had denied using Tekenable’s confidential information.
Tekenable asked to recover the costs of the injunction motion. The defendants opposed an award, arguing that there should be no costs order or, alternatively, that costs should be left to the trial judge. They also argued that the injunction should not have been brought and that the undertaking differed from the relief requested.
Justice Laffoy said the court had not adjudicated on the merits of the injunction application. The parties’ agreement and the undertaking did not amount to a decision that Tekenable had succeeded. The underlying action was continuing, and the alleged wrongdoing being pursued for damages went beyond the undertaking. Deciding costs at this stage could therefore risk expressing a view on disputed issues that were better considered at trial, when evidence could be tested and further material might emerge.
The court ordered that the costs of the injunction application, including the costs of Tekenable’s separate application for costs, be reserved to the trial judge. Justice Laffoy also said parties settling an injunction motion while continuing the main action should consider agreeing how its costs will be handled. She observed that a party seeking costs in a contested application could face liability for the costs of that costs hearing if the result was to reserve the issue to trial.