FEDERAL COURT OF AUSTRALIA

Blue Rock Australia Pty Ltd v Kaushik [2025] FCA 176

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s interlocutory application dated 27 February 2025 be dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

SNADEN J:

1    The applicant operates a multi-discipline professional services firm. By an originating application dated 13 February 2025, it moves the court for relief—principally declaratory and injunctive relief—in relation to the departure from its employ of one of its accountants, the respondent, Ms Kaushik. Specifically, it hopes to hold Ms Kaushik to what it says are obligations that she owes to it under her now-terminated contract of employment and by operation of the Corporations Act 2001 (Cth).

2    On 27 February 2025, the applicant filed an interlocutory application by which it seeks, until the matter can finally be determined, to restrain Ms Kaushik from breaching what are said to be various post-employment contractual obligations. Initially by that application, injunctive relief was also sought under s 1324 of the Corporations Act; but that has since been addressed as between the parties and nothing further need be said about it.

3    It is to the interlocutory application of 27 February 2025, which was brought on for determination quickly, that these reasons relate. It is supported by four affidavits: one affirmed on 26 February 2025 by Mr Trevor James Gordijn, the applicant’s Chief Commercial Officer and Executive Managing Partner, Accounting; one affirmed also on 26 February 2025 by Ms Lisa Susan Marshall, its Managing Director, Accounting; another affirmed on 6 March 2025 by Mr Grant Klemm, the applicant’s solicitor; and a further affidavit that Mr Gordijn affirmed on 6 March 2025. Ms Kaushik resists the interlocutory application; and, to that end, relies upon an affidavit that she affirmed on 5 March 2025.

4    The interlocutory application came before me for hearing on Friday, 7 March 2025. Ahead of that hearing, the parties filed lengthy written outlines of submissions, to which I was unable to give more than cursory attention. At the conclusion of the hearing, I reserved my decision so that I might digest those submissions in greater detail, as I now have.

5    Additionally, an issue arose during the course of oral argument as to the precise form of the relief for which the applicant moved. Counsel for the applicant undertook to refine their proposed form of order; and a minute was circulated later that day. I indicated that I would hear further from the respondent about that proposed minute if it transpired that it would be necessary to do so.

6    It isn’t. For the reasons that follow, the interlocutory application should and will be dismissed.

7    Ms Kaushik is a 40-year-old accountant. She began her career in 2007 after joining a firm known as Red Consulting. In November 2020, Red Consulting was acquired by the applicant; upon which she continued her career in its employ. At and from the time of the commencement of her employment with the applicant, Ms Kaushik was engaged in the role of Senior Manager. She reported to Mr Kip Harding, who occupied the role of “Director”.

8    In June 2023, Ms Kaushik was promoted to the role of “Associate Director” (a position that she likens to that of a senior associate in a legal practice). In that role, she reported to Ms Marshall. Her duties involved what I would respectfully describe as those that one might expect of a standard accounting role. At the time of her departure from the applicant’s employ, she advised (and performed work for) approximately 30 clients (or client “groups”), many of which had been clients since her days working for Red Consulting. For that work, she received total remuneration of $160,000.00 per annum.

9    Ms Kaushik’s engagement in the role of Associate Director was the subject of written contractual terms, to which she consented on 27 June 2023. Amongst other things, those terms included a term that regulated her use of what was defined as “confidential information” and another that imposed upon her various restraints upon how she might conduct herself, including after her employment with the applicant was brought to an end. It is the latter provision that assumes significance to these reasons and it is convenient at this juncture to replicate it in its entirety:

32.    Restraint

During your employment with the Company you agree that you will not for yourself or for any other person do any of the following:

a)    interfere with or disrupt, or attempt to interfere with or disrupt, the relationship contractual or otherwise between the Company and any client or supplier of the Company, or the provision of services or goods by the Company to any client or by a supplier;

b)    solicit, entice away or accept work or instruction from, or attempt to solicit, entice away or accept work or instructions from, any person, company or entity who or which was;

I.    A client or supplier of the Company at any time during the last 12 months of the Employee’s employment or

II.    A client or supplier of the Company with whom the Employee had substantive personal dealings with relating to work or instructions in the last 12 months of employment;

c)    approach solicit or entice away or attempt to approach solicit or entice away, any employee, agent or contractor of the Company or its related bodies corporate or associated entities (as defined in the Corporations Act 2001), of whom you gained knowledge of during your employment;

d)    act in any way which may harm or prejudice the reputation or good name of the Company or its related bodies corporate or associated entities (as defined in the Corporations Act 2001), or have an adverse effect on its business, operations or affairs; or

e)    make any public statements about the Company or its related bodies corporate or associated entities (as defined in the Corporations Act 2001), or its clients or suppliers without the Company’s prior written consent.

f)    canvass, solicit, or accept any approach from any person, firm or company who was at any time during your employment a client or customer of the Company, with a view to obtaining the custom of that person, firm or company for a business that competes with the Company or provides the same or similar services as the Company;

g)    canvass, solicit, induce or encourage any person to leave our employ who was an employee of the Company or its related bodies corporate or associated entities (as defined in the Corporations Act 2001), at any time during your employment;

h)    provide services or accept any request to provide services (being services that are similar to those provided by the Company to its clients) to a person, firm or company who has been a client or customer of the Company during the last 12 months of your employment with the Company;

i)    accept employment with any client or customer of the Company, (being a client or customer to whom you provided services or advice as our employee);

j)    counsel, procure or assist any person or company to do any of the acts referred to in this clause.

This requirement also applies for a Relevant Time after you leave the Company (or for such a lesser time, as a Court may deem reasonable) within the Relevant Area.

Part of the remuneration payable to you under this Employment Agreement is paid in consideration for your agreement to the obligations in this clause. You agree that the provisions of this clause are reasonable, do not unduly restrict your ability to find appropriate employment after leaving the Company’s employ, and go no further than is necessary to protect the Company’s legitimate business interests.

You acknowledge that:

a)    you will obtain information concerning the business and finances of the Company and processes;

b)    disclosure of information could materially harm the Company;

c)    the restrictive covenants contained in this clause are reasonable and necessary for the protection of the goodwill of the Company;

d)    the remedy of damages may be inadequate to protect the interests of the Company and the Company is entitled to seek to obtain injunctive relief, or any other remedy, in any Court;

e)    in view of the restraints contained in this clause for the protection for the proprietary interests of the Company, this clause will survive the termination of your employment with the Company in all circumstances including repudiation of the Company for the remainder of this agreement.

In this clause, ‘Relevant Time’ means:

a)    for a period of 24 months or in the event that this is deemed unenforceable by a court;

b)    for a period of 12 months or in the event that this is deemed unenforceable by a court;

c)    for a period of 6 months or in the event that this is deemed unenforceable by a court;

d)    for a period of 3 months.

In this clause, ‘Relevant Area’ means:

a)    within the State of Victoria; or in the event this is deemed unenforceable by a court:

b)    within 50 kilometres of the city of Melbourne General Post Office.;

The Company may agree with the employee to reduce the terms of the above restraint or the restraint period, however, such agreement must be made in writing.

The Company may require the employee to provide it with evidence confirming the employee’s satisfaction of this clause and the Employee agrees to provide such evidence upon any reasonable request by the Employer.

Injunction Relief

The Employee acknowledges that:

a)    Any failure to comply with this clause would diminish the value of the Company;

b)    The restrictive undertakings of this clause are reasonable and necessary for the protection of the Company, its business and its goodwill and must be given full effect; and

c)    Damages alone would be an inadequate remedy for loss and damage likely to be suffered due to breach of this clause and the Company is thereby entitled to obtain interim and final orders restraining the Employee from any breach of this clause in addition to any other available remedies.

10    Ms Kaushik’s employment with the applicant came to an end on 14 February 2025 (or, on her account, possibly earlier). In late 2024, she accepted an offer of employment in the role of partner with one of its competitors, Nexia Australia Ptd Ltd. She gave written notice of her resignation to the applicant on 22 November 2024; at the same time informing Ms Marshall verbally of the reason for it. Under the terms of her contract of employment, she was obliged to give 12 weeks’ notice of her departure.

11    Initially, the applicant reacted to Ms Kaushik’s resignation by attempting to persuade her not to leave. Its means in that regard need not be particularised: it suffices to note that, although flattered, Ms Kaushik respectfully declined the applicant’s efforts to retain her and remained on her plotted course to partnership at Nexia Australia.

12    Thereafter, the relationship between the applicant and Ms Kaushik took something of a turn. Having been informed of her resignation, Mr Gordijn requested that Ms Kaushik keep it confidential. Soon thereafter, he learned that Mr Harding had been made aware it, a circumstance that Ms Kaushik readily accepted when confronted about it. That prompted a directly-worded email exchange.

13    On Friday, 29 November 2024, Mr Gordijn and Ms Kaushik exchanged further emails about her transition to Nexia Australia. Specifically, Mr Gordijn asked Ms Kaushik to advise by the close of business that day the name of the Nexia partner that had interviewed her. Ms Kaushik replied that she was not comfortable doing so. Mr Gordijn then sought to address her concerns, observing (amongst other things):

I naturally have concerns about protecting BlueRock’s interest and making sure Nexia is complicit in helping you comply with your post-employment obligations under your employment contract.

I don’t want to assume that by not providing this information that there are some other reasons for this. Particularly, after our request to keep your resignation confidential has not been maintained.

If I have to contact the CEO/Managing Partner of Nexia I will but I think it would be better if you advise the Partners [sic] name.

14    Ms Kaushik responded:

For records, I very well understand my obligations under my employment contract. There is no intention of doing anything inappropriate.

…

It is getting more and more stressful for me and below is my plan:

1.    I will put together all my clients list and summary of their status etc for Lisa to make the handover process easy and smooth by COB – Monday -2nd Dec 2024. Minh is across all my clients anyways.

2.    Handovers to be completed and me finishing on 20th Dec 2024.

3.    I am travelling back home (India) in January to see my parents as my dad is unwell. I will take my Annual Leave and Long Service Leave to cover this period with the balance of my leave entitlements to be paid as part of my final pay.

…

15    In mid-December 2024, Ms Kaushik submitted three leave requests via the computer system that the applicant maintained for that purpose. Specifically, she proposed that she would take annual leave between 20 December 2024 and 6 January 2025 (when the applicant’s office would be closed), followed by further annual leave between 7 January and 30 January 2025, followed by a period of personal or carer’s leave between 31 January and 7 February 2025.

16    Ultimately, the first two proposed forms of leave were approved; but not before the exchange of concerns about the “handover” of Ms Kaushik’s works in progress. Mr Gordijn was of the view that the applicant required Ms Kaushik to attend to what he described as a “full and complete handover in relation to her clients”, which he considered might be imperilled if she took the leave that she had proposed. Some resistance was offered to the leave that Ms Kaushik proposed to take in the first week of February 2025.

17    On 20 December 2024, there was a further souring of the relationship. Apparently concerned that she would be travelling within India, Mr Gordijn decided that Ms Kaushik’s access to the applicant’s information technology should be suspended. That, he maintained, was consistent with the firm’s “Geo Blocking Policy”, the terms of which were in evidence (but needn’t now be rehearsed).

18    That appears to have been effected at an inopportune time for Ms Kaushik. She considered that the suspension of her IT access was unwarranted and amounted to the repudiation of her contract of employment (although, as will soon be explored, that suggestion is not maintained for present purposes).

19    On 20 January 2025—when she was in India—the applicant, via its lawyers, sent correspondence to Ms Kaushik, an apparent purpose of which was to confirm with her that she was “…required to comply with both [her] current obligations as an employee and the post-employment obligations as contained in [her] Employment Agreement [of 21 June 2023]”. That correspondence acknowledged her concern about repudiation and denied that the applicant had done anything that sufficed in that regard. It also attached in draft a written undertaking that Ms Kaushik was directed to execute and return, failing which the correspondence noted that the applicant might “…seek urgent injunctive relief against you”.

20    The undertaking to which the letter referred need not here be replicated. It suffices to note that it contemplated, amongst other things, that Ms Kaushik would recommit herself to observing the obligations to which cl 32 of her contract of employment gave voice.

21    On 3 February 2025, Ms Kaushik’s lawyers responded to the 20 January letter, maintaining that the applicant had, by its conduct, repudiated her employment contract and declining its invitation that she proffer the signed undertaking that it had requested. Additional allegations, which needn’t here be repeated, were recorded under the heading “Workplace bullying and harassment”.

22    Ms Kaushik did not return to the applicant’s workplace to finish out her notice period, notwithstanding that she continued to be paid up until Friday, 14 February 2025.

23    On Monday, 17 February 2025, Ms Kaushik commenced in her new role as a partner at Nexia Australia. At or around that time, a post in the following terms appeared on Ms Kaushik’s “LinkedIn” social media page:

I’m thrilled to share that I have officially joined Nexia Melbourne as a Partner in the Business Advisory team!

After years of working with incredible clients, navigating complex business landscapes, and collaborating with talented professionals, I’m eager to take on this new leadership role.

At Nexia, I’ll be working closely with a team of experts to offer tailored business advisory services, helping companies grow, navigate challenges, and achieve long-term success. The road ahead is full of exciting opportunities, and I can’t wait to contribute to the firm’s continued success.

A big thank you to everyone who has supported me along this journey. Here's to new beginnings, growth, and making an even greater impact together! Let’s connect, collaborate, and continue to build meaningful partnerships in the business community!

You can reach me at skaushik@nexiamelbourne.com.au

24    Also at or around that time (most likely on Tuesday, 18 February 2025), an article appeared on Nexia Australia’s website in the following terms:

We are pleased to announce that Aaron March and Sangeeta Kaushik have joined our Business Advisory team, and Domenique Vasile has joined our Tax Consulting team. They join the Nexia Melbourne Partnership effective 17 February 2025, strengthening our next generation of leaders.

Broadening our client typology has been one of our long-term strategies, occurring in tandem with establishing our leadership team of the future, ensuring the Nexia Melbourne you see now still exists tomorrow – but even better. These appointments bolster our desire to shape success through expertise and kinship, elevating our presence in the market.

…

Sangeeta’s Experience

With close to 16 years of experience, Sangeeta’s career has seen consistent and solid growth. In her short career, she progressed from Account Manager to Associate Director. More notably, she was named one of the Top 50 Women in Accounting for 2024.

Sangeeta comes to Nexia Melbourne with an established portfolio of end-to-end client involvement, namely across the hospitality industry (something needed in a city that loves food), high-net-worth individuals, and their investments.

…

25    Underpinning the present application is the applicant’s concern that, in her new role with one of its competitors, Ms Kaushik “…will breach her obligations to Blue Rock, including by misusing confidential information and soliciting clients…” In his affidavit, Mr Gordijn identified six reasons giving rise to that concern, namely (emphases original, references omitted):

First, Ms Kaushik has asserted that she is not bound by the contractual restraints contained in the Employment Contract.

Second, Ms Kaushik has refused to comply with reasonable directions concerning onboarding and client transitioning, which raises concerns that she is seeking to impede transition of clients managed by her to other client managers at Blue Rock. Further, Ms Kaushik did not attend work on and from 3 February 2025 in breach of a lawful and reasonable direction to return to work after her approved annual leave expired.

Third, Nexia is a direct competitor of Blue Rock, and if Ms Kaushik sought to solicit clients from Blue Rock, she would be able to service them at Nexia.

Fourth, I have been informed by Ashwind Skinnon (a Director in the accounting division at Blue Rock) that Ms Kaushik told him in late November 2024, shortly before she resigned, that if she left Blue Rock the clients that she managed at Blue Rock would come with her.

Fifth, by reason of her seniority within Blue Rock, Ms Kaushik has had access to valuable confidential information, including client lists, managerial information and access to the financial information of the firm, which she could easily take advantage of, contrary to her obligations. By virtue of her Director role, Ms Kaushik also had access to the strategy of the accounting services line of Blue Rock. By nature of the oversight and autonomy she had over her client’s relationships with Blue Rock[,] Ms Kaushik has retained in depth knowledge of client history, objectives, strategies, business know-how and preferences which she has not provided to Blue Rock as part of the handover process. This is information that is not ascertainable upon review of a client file. This is information that Blue Rock could have sourced from Ms Kaushik during her twelve-week notice period had she fully engaged with the incoming Directors and allowed for appropriate transition discussions with her clients. This informs the rationale for requiring directors to serve a twelve-week notice period (rather than the four-week notice period required of a Senior Manager). In circumstances where Blue Rock can no longer seek this information, it is at a significant disadvantage when dealing with Ms Kaushik’s clients moving forward and leaves them at risk of solicitation from Ms Kaushik in circumstances where Ms Kaushik does not consider herself bound by her Employment Contract.

Sixth, I am aware that since commencing employment with Nexia, Ms Kaushik has posted on social media website, LinkedIn, notifying that she has commenced employment with Nexia and providing her Nexia email address, which would be available to her Blue Rock clients. I have also been made aware that Mr March has commenced employment with Nexia and has made a similar post to Ms Kaushik. Given Ms Kaushik and Mr March worked together in the same pod at Blue Rock to service these clients, I hold significant concerns that they have the means to service these clients together at Nexia.

26    This is a convenient point at which to record the circumstances in which this court might entertain an application for interlocutory injunctive relief. The principles that guide the court in that regard are well-established and were not in dispute. In Metro Trains Melbourne Pty Ltd v Australian Rail, Tram and Bus Industry Union [2019] FCA 1265, I summarised them as follows (at [38]-[41]):

…[T]he principles that govern the court’s discretion to grant interlocutory injunctive relief are well-settled and not in dispute. In order to qualify for the relief that it seeks, Metro Trains must demonstrate that it has a prima facie case and that the balance of convenience favours the grant of an injunction: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, 81-84 (Gummow and Hayne JJ, with whom Gleeson CJ and Crennan J agreed).

When considering the grant of an interlocutory injunction, the issue of whether an applicant has established a prima facie case and whether the balance of convenience favours injunctive relief are related inquiries. Whether there is a prima facie case is to be considered together with the balance of convenience: Samsung Electronics Co. Ltd v Apple Inc. (2011) 217 FCR 238, 261 [67] (Dowsett, Foster and Yates JJ).

In Bullock v FFTSA (1985) 5 FCR 464, Woodward J (with whom Smithers and Sweeney JJ relevantly agreed) stated (at 472):

…an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even. A more doubtful claim (which nevertheless raises “a serious question to be tried”) may still attract interlocutory relief if there is a marked balance of convenience in favour of it.

An applicant for interlocutory injunctive relief must, in showing that the balance of convenience favours that outcome, point to inconvenience for which an award of damages at trial would not be a sufficient remedy: Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148, 153 (Mason ACJ); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Blue Star Pacific Pty Ltd (2009) 184 IR 333, 339 (Greenwood J).

27    There is also no material dispute as to the circumstances in which injunctive relief might issue to restrain the contravention of post-employment covenants of the kind found within cl 32 of Ms Kaushik’s employment contract. In United Petroleum Pty Ltd v Barrie [2022] FCA 818, I set them out as follows (at [14]-[15]):

…As a general proposition, clauses in restraint of trade are presumed void; but that presumption may be rebutted where it might be said that circumstances render a particular clause reasonable as between the parties and not unreasonably contrary to the public interest: Just Group Ltd v Peck (2016) 344 ALR 162, 173-175 [30]-[36] (Beach and Ferguson JJA and Riordan AJA); Liberty Financial Pty Ltd v Jugovic [2021] FCA 607, [194] ([Beach J).

In Just Group Ltd v Peck, the Victorian Court of Appeal made the following relevant observations (at 174 [33]-[35]):

A restraint clause in favour of an employer will be reasonable as between the parties, if at the date of a contract:

(a)    the restraint clause is imposed to protect a legitimate interest of the employer; and

(b)    the restraint clause does no more than is reasonably necessary to protect that legitimate interest in its:

(i) duration; or

(ii) extent.

It is well established that employers do have a legitimate interest in protecting:

(a)    confidential information and trade secrets; and

(b)    the employer’s customer connections.

For the legitimate purpose of protecting the employer’[s] confidential information, a restraint clause does not need to be limited to a covenant against disclosing confidential information. It may restrain the employee from being involved with a competitive business that could use the confidential information.

(references omitted)

28    As to the existence of a prima facie case, the applicant’s contentions are founded largely upon the concerns that Mr Gordijn identified in his affidavit (above, [25]). It maintains that, unless restrained by the court, Ms Kaushik will proceed to do what cl 32 of her employment contract purports to prohibit her from doing. At the least, it maintains that there is a prima facie case that she might. For present purposes, its primary concerns mirror what is the subject of cls 32(b)(II) and 32(j): it seeks to have Ms Kaushik restrained from approaching or performing work for her former clients, and/or from procuring others to do so.

29    I pause to note that that limiting of the applicant’s claim has been relatively recent. By its interlocutory application, the applicant moved for relief directed to a wider array of the restraints for which cl 32 of Ms Kaushik’s employment contract provides. It was only by its written and oral submissions that the applicant fixed particularly upon those to which cls 32(b)(II) and 32(j) refer.

30    The suggestion that Ms Kaushik is poised to act in breach of her former employment contract has two dimensions to it. The first is that the court should be satisfied that, unless relief is granted, Ms Kaushik threatens to or will engage in conduct of the kinds prohibited by cl 32. The second is that, if she does, she will commit contractual breaches that this court ought to require, by injunction, that she not commit.

31    I shall address those contentions in turn.

32    There is no evidence presently that Ms Kaushik has approached any of her former clients, nor any direct evidence that she intends to do so. Ms Kaushik herself deposes that no such approaches have been attempted. In order that it might establish a basis for the relief for which it moves, the applicant must show, at a prima facie case level, that conduct of that kind is threatened, impending or probable (as opposed merely to being possible). In the absence of direct evidence, it can only do that by inference.

33    The evidence as it presently stands falls short of affording a proper basis upon which to infer that Ms Kaushik intends or is about to do any of the things that are enumerated in cl 32 of her former employment contract. None of the six circumstances upon which the applicant relied to that end gives rise to the inference that it invites the court to draw.

34    The closest that the evidence comes, in that regard, is the fourth of Mr Gordijn’s six concerns (regarding what Ms Kaushik is alleged to have observed about the likelihood that her clients would follow her if she resigned). Ms Kaushik denies having said what is attributed to her; but even assuming that that denial is rejected at trial, an observation that clients would follow her if she left the applicant’s employ is not to be equated with a suggestion that she might solicit or perform work for them in breach of the covenants recorded in cl 32 of her employment contract. The former simply is not a proper evidential basis upon which to infer the latter.

35    A similar observation might be made about Ms Kaushik’s refusal to give an undertaking that she will not solicit work from her former clients. The circumstances attending Ms Kaushik’s departure from the applicant’s employ have already been rehearsed and they could just as comfortably explain her reluctance to provide what was demanded as might any intention on her part, to indulge in the breach of her employment contract. In any event—and as counsel for the applicant properly conceded—what was demanded extended beyond what is now sought and what this court would likely consider enforceable. It cannot be inferred, from Ms Kaushik’s refusal in those circumstances to give an undertaking consistent with the requirements of cl 32 of her employment contract, that she intends to engage in conduct that would contravene enforceable parts of it.

36    Likewise, the evidence of the announcement that Nexia Australia made of Ms Kaushik’s appointment falls short of providing a sound basis for that inference. The applicant sought to make something of Nexia’s reference to Ms Kaushik having “an established portfolio of end-to-end client involvement”; equating it to an assertion that her former clients either are already or will soon be clients of Nexia Australia. That might well be a reality that Nexia Australia, via the agency of its existing management, hopes to enjoy; but it does not follow that it should warrant an assumption that Ms Kaushik is preparing to act in breach of cl 32 of her employment contract. The turn of phrase is unclear in its meaning: at face value, it appears to mean little more than that Ms Kaushik is an experienced accountant, which doesn’t appear to be in doubt. Regardless, I do not consider it sufficient for present purposes.

37    With respect, the concerns that Mr Gordijn outlines in his affidavit do not rise beyond speculation. Perhaps it might transpire that history vindicates his suspicions; but the court in the meantime should be slow to entertain injunctive relief on the basis of things that might occur, as opposed to things that are happening, or have been attempted or threatened.

38    That conclusion suffices to address the present application in its entirety. Nonetheless, I should say something about the specific restrictions that the applicant sought to enforce.

39    The applicant has a legitimate interest in protecting itself from the prospect of lost custom that inheres in Ms Kaushik’s undoubtedly good relations with those of its clients with whom she worked prior to her departure. The protection of that interest might warrant, for example—and, certainly, a prima facie case might be made that it would warrant—that Ms Kaushik should refrain from soliciting work from those clients for a short period to permit the applicant to convince them, if it can, that it will be able to attend to their needs as well as or better than Ms Kaushik could at her new firm.

40    Although he maintained other means of resistance (to which attention will shortly turn), Senior Counsel for Ms Kaushik accepted each of the propositions just summarised. It would follow (subject to those other arguments) that, if there were some basis for inferring an intention, on Ms Kaushik’s part, to solicit work from former clients in breach of cl 32(b)(II), the applicant would have succeeded in establishing a prima facie case for the relief that it seeks, at least insofar as it sought to restrain Ms Kaushik for the shorter restraint periods (three months or, maybe, six months). In that universe, the outcome of this application might have been different.

41    Before turning to the respondent’s contentions, there are some other features of the circumstances in this matter that warrant attention.

42    First, more than three months have passed since Ms Kaushik announced her resignation. The applicant has, thus, had a not insignificant period of time already to shore up its relationships with the clients with whom Ms Kaushik worked. Although the evidence does not permit of findings at this juncture, it would be surprising to learn that Ms Kaushik’s opportunities to interact with her clients over the course of her notice period weren’t limited, or that the applicant didn’t otherwise take steps to transition those clients to alternative staff. Regardless, what must always be borne in mind is that the law does not extend the remit of provisions in restraint of trade beyond the narrow compass of what is reasonably necessary for the protection of legitimate commercial interests.

43    Second, at least some of the timeframes that cl 32 of the employment contract contemplate appear to extend beyond what could sensibly be justified for the protection of legitimate commercial interests. It could not be said that there is no prospect that the applicant will be able to establish that its legitimate interest in protecting existing client relationships should require that Ms Kaushik be restrained from working for them for two years; but, on any view, that would be an unusually long period of restraint, which counsel for the applicant sensibly conceded was unlikely to be enforced. Particularly is that so given that the matter focuses not upon a partner-level employee in whom client relationships might traditionally inhere; but upon an associate director who was paid $160,000.00 per annum.

44    The applicant’s case, of course, focuses upon what it perceives to be the threat that Ms Kaushik is soliciting or threatens to solicit work from clients with whom she had substantive personal dealings in the last 12 months of her employment. As might by now be clear, I would more readily accept that there is a stronger prima facie case for holding that any work undertaken by Ms Kaushik for those clients would be undertaken in breach of an enforceable covenant provided for by cl 32; at least insofar as it was undertaken during the shorter three-month “Relevant Time” there referred to.

45    I come, then, to the other reasons that Ms Kaushik identified in opposition to the relief that is sought. The first is that the applicant’s conduct in failing to approve her leave was apt to repudiate her contract; and that, in consequence of that repudiation, it could not avail itself of any protections otherwise afforded by cl 32 of her employment contract. Although, by her early correspondence, Ms Kaushik claimed that the applicant’s conduct in suspending her access to its information technology was also repudiatory, that was not persisted with at the hearing before me.

46    I readily accept that an argument might be made as to repudiation and that it might succeed at trial. Nonetheless, I do not consider it to be so obviously significant in the present context that it should bear materially upon my assessment as to whether or not the applicant can demonstrate a prima facie case for the relief that it seeks.

47    It should go without saying that Ms Kaushik was entitled to take carer’s leave if she needed to; and, equally, was entitled to be paid for it. There was no suggestion to the contrary. But so too was the applicant entitled—particularly in the circumstances that were here in play (including, as they did, at least some measure of relationship deterioration)—to query the entitlement that Ms Kaushik asserted and make plain its concerns about the handover of her work. The most that might be said of the applicant’s conduct was that it was unfounded. Without purporting (or needing) to decide the point, Ms Kaushik’s repudiation contention does not strike me as strong. As history records, Ms Kaushik took the leave that she said that she would take and there is no suggestion that she did so with any loss of pay.

48    Ms Kaushik further submitted that, insofar as it purported to restrain her conduct after her employment with the applicant terminated, cl 32 served as a single covenant that was not severable from the extent that it trespassed beyond what the law might realistically enforce. As much was, she said, reflected in the reference that the clause makes to “[t]his [singular] requirement [applying] for a Relevant Time after [Ms Kaushik’s departure from the applicant’s employ]”.

49    Respectfully, that submission strikes me as ambitious; and, again, I do not consider that it should bear materially upon my assessment as to whether or not the applicant has established a prima facie case for relief. So to observe is not to doubt that the contention might have substance to it. For present purposes, however, the point is arguable both ways. Nothing more need be said about it.

50    Ms Kaushik also contended that the court should decline to grant injunctive relief on discretionary grounds; in particular on account of the applicant’s delay in applying for it. It was, she maintained, some three months since she gave notice to the applicant of her resignation—had it been minded to assume that she would act in breach of cl 32 of her employment contract, it ought to have commenced the present application more promptly than it did.

51    Again, that might well be something that bears upon the questions that will arise at trial; but it does not materially bear upon my assessment now as to whether the applicant has demonstrated a prima facie case for the relief that it seeks. Given that the applicant’s case is inferential, there is nothing especially significant about the fact that it waited until such time as the circumstances accumulated to a point at which it considered that an application was warranted. Had I reached a different view about the appropriateness of injunctive relief, I would not, for present purposes, have considered matters of timing to bear much on my discretion to grant it.

52    On the balance of convenience, having limited the case to the solicitation of former clients, I would be inclined to the view that it favours the applicant. There is no suggestion that Ms Kaushik should stop or be prevented from working; merely that she should refrain for a period from contacting her former clients. In the absence of injunctive relief, the applicant would stand to lose the opportunity that cl 32(b)(II) affords—that is to say, the opportunity to shore up its client relationships and, thereby, realise the benefit of the term to which Ms Kaushik consented. The value of that opportunity is plainly difficult to quantify. I do not consider that its loss could adequately be addressed by an order for damages.

53    Ms Kaushik is, of course, entitled in the normal course to compete for the custom of those clients that she serviced whilst employed by the applicant. The removal from her of that entitlement, for any period, rightly informs where it is that the balance of convenience lies; and might have been a factor sufficient to guard against the granting of relief insofar as restraints were sought for longer than the shortest three-month period referred to in cl 32. Nonetheless, in the absence of anything more than the removal from her of an abstract right that might or might not prove profitable, I consider that the balance of convenience lies with the applicant. Clause 32 was plainly agreed for its benefit.

54    As it is, I will decline the invitation to grant interlocutory relief; but only for want of a proper basis for inferring that Ms Kaushik threatens to act in contravention of her employment contract. Had I reached a different view on that subject, I would have been minded to grant the application, albeit only for the shortest of the time periods that cl 32 contemplates. A three-month restraint—on top of Ms Kaushik’s 12-week notice period—is arguably one that the law would intervene to enforce. Had it been necessary to do so, I would have granted relief consistent with that end.

55    The interlocutory application of 27 February 2025 should and will be dismissed. I will hear further from the parties as to appropriate case-management orders.

Associate:

Dated:    11 March 2025