Background
De Kretser Pty Ltd (DK P/L) and its associated employer entity Dulcime Pty Ltd operate an accountancy firm in Victoria, controlled by Patrick and Suzie De Kretser. Their daughter, Atisa De Kretser, served as a director, shareholder, and senior accountant in the business for many years before ceasing her employment on 20 March 2023. She was not subject to any post-employment restraint of trade clause. In November 2025, Atisa incorporated De Kretser Accountants Pty Ltd (DKA P/L) and began providing accountancy services in direct competition with her parents’ firm. By the time of the hearing, 17 former DK P/L clients had transferred their engagements to DKA P/L, sending Ethical Letters in accordance with professional standards to facilitate the transfer.
The applicants alleged that, before resigning, Atisa downloaded the entirety of DK P/L’s database — including client tax returns, financial statements, trust and SMSF deeds, working papers, correspondence, and the firm’s own business and employment records — and retained that material for use in establishing and operating her competing firm. They brought claims under ss 180–183 of the Corporations Act 2001 (Cth) (breach of directors’ duties), breach of fiduciary duty, and breach of an implied contractual duty of fidelity. DK P/L obtained a search order, executed on 15 May 2026, under which electronic devices were seized from Atisa and examined by an independent forensic expert.
The applicants then sought an interlocutory injunction restraining the respondents from accessing the downloaded information and from using it to service clients. Following execution of the search order and before the 16 June 2026 hearing, Atisa engaged independent forensic firm McGrathNicol to permanently erase all firm files from her devices and cloud accounts, and her solicitors wrote to the applicants’ lawyers offering to provide a forensic deletion report and a sworn affidavit — on the basis that the injunction application would thereby be rendered redundant.
The Court’s Holding
Charlesworth J held that a serious question to be tried had been established. The unchallenged forensic evidence that Atisa had downloaded and retained the entirety of DK P/L’s database, combined with the inference that she did so with subjective intent to gain a commercial headstart, was sufficient to raise genuine triable issues under ss 180–183 of the Corporations Act, in breach of fiduciary duty and (arguably) implied contractual terms. The Court noted, however, that the precise pleaded causes of action were still incomplete, no statement of claim had been filed, and questions remained as to consent, the public-domain status of claimed confidential information, and the effect of a Deed of Settlement and Release dated 30 January 2026.
Notwithstanding that threshold finding, the interlocutory injunction was refused. The Court applied the Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 framework and concluded that the balance of convenience and the overall justice of the case clearly favoured refusal. The critical factors were: (i) the low likelihood of any continuing contravention, given Atisa’s voluntary engagement of McGrathNicol to permanently delete all firm files; (ii) the adequacy of damages as a remedy for any proven loss; (iii) the insufficiency of substance in the applicants’ undertaking as to damages — a relevant consideration where an acrimonious family relationship would compel the respondents to remain in prolonged litigation to call upon that undertaking if the applicants’ claims ultimately failed; (iv) evidence that the applicants had themselves engaged in conduct interfering with the respondents’ lawful entitlement to compete; and (v) the interests of third-party clients, who had a lawful right to choose their own accountant and who faced real disruption to their accountancy arrangements at a time when tax compliance deadlines were imminent.
The application was dismissed. The Court set a pleadings timetable, directing the applicants to file a statement of claim by 26 June 2026 and the respondents to file a defence (and any cross-claim) by 24 July 2026, with the matter to proceed to a case management hearing before the docket judge.
Key Takeaways
- Satisfying the “serious question to be tried” threshold does not determine an interlocutory injunction application; the balance of convenience and overall justice of the case remain independently decisive.
- Voluntary and credible post-proceeding remediation — here, engaging an independent forensic firm to permanently delete downloaded files and offering sworn evidence of deletion — can substantially undercut the case for ongoing relief by reducing the perceived risk of continuing harm.
- An undertaking as to damages must have sufficient substance to support the grant of an injunction; where the parties are in acrimonious family litigation and the respondent would face prolonged proceedings to vindicate the undertaking, its weakness weighs against granting the order.
- Third-party interests are a legitimate factor in the balance of convenience: clients who have exercised their lawful right to change accountants, and who face disruption during a tax compliance period, are affected by injunctive relief and their interests must be weighed.
- Conduct by the applicants that interferes with the respondents’ lawful entitlement to compete — whether as a discretionary bar in equity or under the Corporations Act — is a relevant consideration when the court exercises its discretion to grant or withhold the injunction.
- A former director or employee has no general prohibition on soliciting or accepting former clients absent a contractual restraint; only the manner in which competition is pursued (e.g., misuse of downloaded confidential information) is actionable.
Why It Matters
This decision offers a practical lesson for applicants in employment-related confidential information disputes: obtaining a search order and establishing a serious question to be tried will not automatically carry an interlocutory injunction if the respondent moves swiftly to remediate and the underlying risk of ongoing harm is thereby substantially neutralised. Courts applying the O’Neill framework will scrutinise the adequacy of the applicant’s undertaking as to damages, the realistic prospect of continuing breach, and whether the grant of the injunction would work injustice on innocent third parties — considerations that can collectively outweigh even a strong prima facie case.
The judgment also illustrates the complexity that family dynamics introduce into corporate disputes. While the family context was treated as of limited direct relevance to the interlocutory analysis, the Court acknowledged that the prospect of locking a family member into prolonged adversarial litigation as the price of preserving the undertaking is a legitimate factor in the exercise of the equitable discretion. Practitioners should anticipate heightened judicial scrutiny of the substance of any undertaking as to damages and the proportionality of injunctive relief in disputes where family relationships or other acrimonious personal relationships sit beneath the corporate surface.