What Is The Price Of A Pyrrhic Victory In Court?

By Brenton Allen, Lawyer, MST Lawyers

Did you know that a party in litigation can be notionally successful, but still be required to pay the opponent’s legal costs? 

MST Lawyers recently acted (for a defendant) in a Victorian Magistrates Court dispute between a plaintiff company and a defendant former employee involving alleged breaches of post-employment duties. 

To summarise two years of litigation and four days of final trial, the plaintiff alleged that our client had disclosed confidential information to her new employer after ceasing employment with the plaintiff.  The plaintiff sought a broad range of sanctions, including a permanent injunction, delivery up of confidential information, damages, interest and costs. 

At the trial’s conclusion, the Court found that our client had, on one single occasion, disclosed confidential information about two of the plaintiff’s customers to her new employer. Our client was ordered by the Court to pay the plaintiff nominal damages in the sum of $1.00, as the plaintiff suffered no financial loss.  The Court also found that there was no risk of ongoing unauthorised disclosure of confidential information by our client. 

The Court dismissed the plaintiff’s case for a permanent injunction, delivery up and interest. 

What outcome did the plaintiff achieve? $1.00. 

What outcome did our client achieve? $25,000.00 on account of their legal costs. 

The favourable costs order for our client was a product of the Court’s finding that, while the plaintiff was ‘notionally successful’ for having established a breach of contract, a plaintiff who establishes only nominal damages at trial will generally not be regarded as the successful party on the question of who should pay legal costs.  On this issue, the Court found that our client had been the successful party and ordered for costs to be paid by the plaintiff. 

Lessons That Can Be Gained From The Case? 

Be aware that it is possible for pyrrhic victories to occur during legal proceedings. Always obtain legal advice when you receive or before you commence a legal claim.  For employment-related disputes, please contact the MST Lawyers’ Employment Law Team by email or call +61 3 8540 0229.