ACN 656 077 020 Pty Ltd v Li (No 2) [2024] FCA 964

ACN 656 077 020 Pty Ltd v Li (No 2) [2024] FCA 964

There is a serious question to be tried that Ms Li breached statutory, fiduciary, and contractual duties by using confidential information obtained as a director and employee to solicit clients for her new company. There is also a serious question that MLI, as the company controlled solely by Ms Li, is liable as a knowing recipient and accessory. The balance of convenience favours granting interlocutory relief to protect the applicants' client relationships and confidential information, as damages may not be an adequate remedy and Ms Li’s financial position presents risks to any future compensation order.

Parties
First Applicant: ACN 656 077 020 Pty Ltd; Second Applicant: Oakwood Partners Pty Ltd; First Respondent: Manlin Li; Second Respondent: MLI Accounting and Taxation Services Pty Ltd
Jurisdiction
Australia
Judgment Date
23 August 2024
Procedural Posture
Application for Interlocutory Relief / Interlocutory Orders Made
Outcome
Interlocutory orders granted in favour of the applicants; costs reserved.
Legal Topics
Interlocutory Relief, Breach of Statutory Duty, Breach of Fiduciary Duty, Breach of Employment Contract, Accessory Liability, Confidential Information
Practice and Procedure Corporations Law Equity Interlocutory Relief Breach of Statutory Duty Breach of Fiduciary Duty Breach of Employment Contract Accessory Liability +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 25 Party arguments 2
Sign in to unlock

Parties

ACN 656 077 020 Pty Ltd

First Applicant

Oakwood Partners Pty Ltd

Second Applicant

Manlin Li

First Respondent

MLI Accounting and Taxation Services Pty Ltd

Second Respondent

Procedural Posture

Application for Interlocutory Relief / Interlocutory Orders Made

Legal Issues

  1. 1 Whether there is a serious question that the respondents breached s 183 of the Corporations Act 2001 (Cth)
  2. 2 Whether there is a serious question that fiduciary duties were breached by the first respondent
  3. 3 Whether there is a serious question that the employment contract was breached

Ratio Decidendi

There is a serious question to be tried that Ms Li breached statutory, fiduciary, and contractual duties by using confidential information obtained as a director and employee to solicit clients for her new company. There is also a serious question that MLI, as the company controlled solely by Ms Li, is liable as a knowing recipient and accessory. The balance of convenience favours granting interlocutory relief to protect the applicants' client relationships and confidential information, as damages may not be an adequate remedy and Ms Li’s financial position presents risks to any future compensation order.

Court Disposition

Interlocutory orders granted in favour of the applicants; costs reserved.

Orders

  • The respondents be restrained, until hearing and determination or further order, from soliciting or dealing with, or assisting another to solicit or deal with, any client listed in Annexure A.
  • The respondents be restrained, until hearing and determination or further order, from using or disclosing to any person the confidential information listed in Annexure B, other than for the purpose of complying with these orders.