LK Law Pty Ltd v Karas

In the Federal Court, Karas sued LK Law Pty Ltd, which was his former employer, for breach of confidence. LK Law sought to have specific paragraphs of Karas's statement of claim struck out and for interlocutory injunctions to restrain Karas from using certain confidential information. The court considered whether the information was received in circumstances importing an obligation of confidence and whether the documents had the necessary quality of confidence. The court also considered whether the information within the documents in question disclosed a breach of fiduciary duty and misleading and deceptive conduct so as to comprise an iniquity. The court found that Karas had established a prima facie case that LK Law had acted in breach of confidence but dismissed the interlocutory application seeking interlocutory injunctions and the application for striking out. The court held that the inconvenience or injury which Karas would be likely to suffer if an injunction were refused did not outweigh the injury which LK Law would suffer if an injunction were granted.
The court further found that the extent of any confidentiality in Karas’ documents/information was not a matter that could be determined on an application such as this. The court accepted that the confidential information may well have been received in circumstances importing an obligation of confidence. The court held that the separation agreement did not alter the confidentiality status of the information, and the information remained confidential. The court also held that the information within the documents in question disclosed a breach of fiduciary duty and misleading and deceptive conduct so as to comprise an iniquity. The court dismissed the interlocutory application seeking interlocutory injunctions and the application for striking out. The court extended the orders for the costs of and incidental to the interlocutory application until the first day of the trial of the claim and cross-claim in this matter. The court also granted dispensation with compliance with r 8.06 of the Federal Court Rules 2011 (Cth) in relation to service of the originating documents in these proceedings on the fourth respondent. The court listed the matter for a case management hearing on 19 July 2022.