The employer was a software development company working on secure data storage projects. Following a series of disputes, a number of directors and other employees left Allfiled to set up their own competing business. There was a question about whether these actions breached fiduciary duties owed to the company by the former directors, and whether the employees had acted in accordance with restrictive covenants and confidentiality obligations in their contracts of employment. The ex-employer applied for an injunction to prevent any misuse of Allfiled's confidential information and to prevent the employees from competing with the business pending a trial.
One issue for the court was whether the company had waited too long to apply for interim relief. Although the company wrote to the ex-employees threatening legal action on 20 January 2015, it did not commence proceedings against them for a further eight weeks. The company explained this delay on the basis that it had been too occupied in shoring up its business following the mass resignations to proceed with legal action. Further, it was only in late February or early March that evidence emerged that the directors and employees may have acted in breach of their fiduciary and contractual duties.
The Court acknowledged that the employer had taken a risk by waiting two months to initiate proceedings once it had issued a letter before action. However, given that the evidence showed that there was a serious issue to be tried, the delay was not fatal. It was still possible to preserve the employer's position by issuing injunctions subject to provisos that allowed the employees to continue in business provided that this did not involve the misuse of the employer's confidential information or the supply of technology to its established or prospective clients.