Sequence, a subsidiary of estate agent Connells, has been ordered to pay £8,000 to a broker it used to employ after a county court found the company had been “unreasonable” in its litigation of a claim it had brought against him.
The broker, Prabhakar Kapadia, was pursued by Connells due to an alleged breach in his contract.
The estate agency argued he broke his restrictive covenant, which stipulates an ex-employee must not service any clients obtained through Connells within the first 12 months of leaving the firm.
Kapadia left Sequence back in December 2018 after spending more than four years at the firm. He now runs his own appointed representative firm under the Sesame network.
At the end of 2020, Connells filed a claim via the Small Claims Court against Kapadia alleging £9,500 of loss of earnings and future income as a result of him soliciting the estate agents’ clients during the year following his employment.
Kapadia took legal representation and filed his defence on Christmas Eve. The value of the claim later changed to £6,000, with Connells arguing the initial figure was based on an estimate and that the new figure was informed by new information.
Then two weeks before the claim was due to be heard in court in September 2021, Connells submitted a discontinuance to the court.
It argued it had a good case, but that it was low value and that its only witness was not available to stand trial because his grandparent had passed away. The estate agent therefore decided a withdrawal could lead to savings in costs.
By this point, however, Kapadia had racked up substantial legal costs. In order to recoup some of these costs, he took the case to a Costs Application Hearing.
On May 9, 2022, Luton County Court published the following judgement: “Upon the court making a finding of unreasonable conduct, the claimant do pay the defendant’s costs, summarily assessed at £8,000, within 14 days of this service order.”
Kapadia confirmed to FTAdviser Connells has now paid him the amount ordered by the court. He had argued in the hearing that his legal bill had climbed to £19,000, more than double the final figure awarded.
A Sequence spokesperson said: “We will always take appropriate steps, which might include legal action, in the event of an ex-employee’s breach of their contractual obligations.
“We are pleased that on May 9 the court only allowed a small proportion of Mr Kapadia’s costs.
“The decision relates to the facts of this case and the judge found that there were good grounds for issuing the proceedings in the first place.”
In his cost hearing, Kapadia argued he knew all three clients Connells took issue with before being employed by Sequence, and took home appointments with them in his own time. “It’s unreasonable to claim they are their clients,” he said.
Connells, however, argued it was “clear and compelling” he was in breach of the covenant and caused the estate agency a loss.