The brutal legal war between HRX and Talent2 has opened on a new front, with HRX seeking to claim costs from Talent2 for legal expenses HRX incurred in its case against its former business development manager Stuart Scott.
Scott left HRX for Talent2 last year, and HRX took legal action soon afterwards, alleging he had breached the restraint clauses in his employment contract.
Justice Patricia Bergin of the NSW Supreme Court heard today that early in his time with Talent2, Scott had raised concerns about HRX's legal action, and made it clear he wouldn't be able to defend litigation without Talent2's financial support.
The court heard that Talent2 had initially paid the legal fees for Scott's defence, but in August last year opted to discontinue the funding. In his affidavit, Scott said this move by Talent2 "in effect, hung me out to dry".
HRX then settled with Scott, agreed not to pursue him for costs, and sought to recover costs from Talent2, which it alleged was making the "tactical decisions" for the defence, and was to all intents and purposes the litigant.
Legal costs were spiraling: Talent2
The court heard that when HRX initially sought to enforce Scott's restraint in July last year, he was referred by Talent2 to law firm Sparke Helmore.
Talent2 general manager of operations Sarah Galbraith told the court that Talent2 had previously used the firm, and she initially liaised with Sparke Helmore on Scott's behalf.
Under cross-examination, Galbraith told the court that Talent2 had reconsidered its funding of the case for a range of reasons, including that it was in the process of delisting from the ASX, had just posted a loss, and was under tight cost constraints.
She said all important decisions about the funding and management of the case were made by a committee of senior Talent2 executives including CEO John Rawlinson, CFO Martin Brooke, recruitment managed services global MD Andrew Grant, and company secretary David Patteson.
Counsel for HRX Peter Braham quoted previous transcripts from court cases between HRX and Talent2, which described their situation as "an ongoing war between the two organisations".
He submitted that Talent2 was funding Scott's case because it "had an interest in giving HRX a bloody nose".
Scott gave evidence that while he typically told his lawyers what he would like to happen, he always deferred to Talent2's opinion on the matter.
He said at one stage he felt he was "merely a party to the conversation" about his legal strategy, rather than the one leading it.
But counsel for Talent2 argued that Scott met with Sparke Helmore lawyers, and conducted lengthy telephone conversations where he had "ample opportunity" to provide his views.
Talent2 claimed that that Scott had ultimately opted to tailor his evidence to suit HRX's case, because he wanted the company to release him from paying damages, as well as costs.
The court also heard that Scott had taken a USB stick containing a range of HRX documents and intellectual property with him when he left HRX, and had provided this information to at least one Talent2 staff member.
The case is continuing.