Austin Engineering Ltd v Podulova (No 4)

This Federal Court decision sits inside a larger dispute between Austin Engineering and its former employee, Ms Podulova. Austin Engineering alleged that she copied, retained and later accessed or used a large volume of company documents, including technical and commercial materials such as drawings, plans, diagrams, schematics, tenders, proposals and correspondence. The company said those materials were confidential, were covered by express employment contract obligations, and also attracted copyright protection.

The application before the Court in May 2025 was not the final hearing of those claims. Instead, Austin Engineering urgently asked the Court, without notice to the other side, to make a freezing order over Ms Podulova's assets. It wanted an order restraining her from disposing of, dealing with or diminishing assets in Australia and elsewhere up to $210,000. The immediate trigger was an email from Ms Podulova saying that on 3 July she was moving overseas but would remain available online.

Austin Engineering argued that this email should be understood as a statement that she intended to leave Australia permanently and that it should be inferred she would remove assets, making any future judgment difficult to enforce. The Court had to decide whether that evidence, together with the broader allegations in the proceeding, justified one of the most intrusive forms of interim relief available in civil litigation.

The reasons set out the commercial background in some detail. Ms Podulova had been employed by Austin Engineering between December 2019 and 13 January 2023 under two written contracts of employment. Those contracts contained express terms dealing with return of confidential information on termination and with maintaining and not misusing Austin Engineering's confidential information.

Austin Engineering alleged that for the purposes of its business it had created a body of documents relating to its business and products. During Ms Podulova's employment, the company said she was provided with a computer for use at home and that Austin Documents were stored on it. It alleged that over time she transmitted Austin Documents from her work email account to her personal email account and copied documents onto external hard drives. It also alleged that in the final period before her employment ended, over 9,000 Austin Documents were downloaded from SharePoint and copied onto an electronic storage device.

The company further alleged that Ms Podulova commenced employment with Payload on 16 January 2023, and that Payload was part of the Schlam Group. Austin Engineering said that after leaving, she accessed and used retained Austin Documents during the course of that new employment and for the benefit of Payload or one or more Schlam entities.

In the main proceeding, Austin Engineering sought a mix of remedies. Some were non-monetary, such as declarations, injunctions and delivery up or destruction of information. Others were monetary, including damages, equitable compensation, an account of profits, and copyright remedies under section 115 of the Copyright Act.

This was not the first urgent step in the proceeding. The Court recorded that on 20 April 2023 it had already made ex parte orders restraining Ms Podulova from doing certain things with the Austin Documents she was alleged to have retained and, where the information was stored digitally, requiring her to produce it to the Court. There was then an inter partes hearing on 1 May 2023. At that hearing, continuation of the orders was not opposed, and Ms Podulova consented to further orders requiring her to disclose, broadly, where certain information was and how she had used it.

The Schlam parties opposed Norwich Pharmacal disclosure orders, but after a contested hearing disclosure orders were made against them in earlier reasons. That background matters because it shows Austin Engineering had already obtained significant preservation and disclosure relief directed to the documents themselves. The May 2025 application was different. It was aimed at assets, not just information.

For business readers, that distinction is important. Courts may be prepared to make orders preserving documents, requiring disclosure, or restraining use of confidential information on one evidentiary footing. A freezing order requires another. The fact that earlier protective orders were made did not mean a later asset-freezing order would follow automatically.

The legal question was whether the Court should make an urgent freezing order against Ms Podulova under the Federal Court Rules. The Court explained that the relevant danger is a real or substantial risk, not a remote, speculative or theoretical possibility, that a judgment or prospective judgment will be wholly or partly unsatisfied.

The reasons break the issue into practical components. First, did Austin Engineering have a good arguable claim for pecuniary relief, rather than only declaratory or injunctive relief? Secondly, was there evidence that one of the relevant events might occur, such as absconding or removal of assets? Thirdly, did any such event create the required danger that a future judgment would go unpaid? The Court also had to consider whether the application was properly brought without notice and whether the hearing should be closed to the public.

The Court emphasised that a freezing order is a drastic remedy that severely restricts a respondent's ability to deal with assets. Its purpose is not to provide security for a judgment an applicant hopes to obtain. That framing shaped the whole decision.

Austin Engineering also asked to have the Court closed for the hearing, arguing there was a risk that if Ms Podulova learned of the application she would remove assets and defeat the purpose of the application. The Court refused. Feutrill J stressed the importance of open justice and referred to the statutory obligation that, in general, the Court exercises jurisdiction in open court.

The reasons explain that exceptions to open justice are limited and require necessity, not mere convenience or sensible case management. The Court said that while freezing order applications can be made without notice, that would rarely justify excluding the public from the hearing. On the facts of this case, the Court said there was no proper justification for making the application without notice, let alone for closing the Court. The case was described as manifestly not one of the rare situations warranting that step.

At the same time, the Court did extend suppression and non-publication protection for certain confidential exhibits that had already been subject to an existing order. So the Court drew a practical line: confidential exhibits remained protected, but the hearing itself stayed subject to the ordinary principle of public justice.

One of the most useful parts of the judgment for business owners is the Court's clear separation between an arguable wrong and an arguable claim for money. Feutrill J accepted, for the purposes of this application, that Austin Engineering had a good arguable claim for breach of confidence, breach of contract and copyright infringement. That acceptance drew in part on the earlier procedural history, where it had not been in issue that Austin Engineering had an arguable claim that Ms Podulova retained confidential information, had possession of it while working for Payload, and may have used it in the course of that work.

But the Court said that was not enough for a freezing order. Austin Engineering had not demonstrated an arguable claim for equitable compensation, account of profits or damages on the evidence before the Court. There was no evidence on the application of any loss or damage caused by the alleged breaches, nor of any profit gained by Ms Podulova as a result of them. The Court also said Austin Engineering had not demonstrated that it may be entitled to anything more than nominal damages under section 115(2) of the Copyright Act.

That is a critical practical point. A business may have strong concerns, and even a good arguable case, that confidential information was taken or used. But if it wants a freezing order, it must still show an arguable basis for pecuniary relief of the kind the freezing order is meant to protect.

Austin Engineering tried to support the freezing order by relying on its claim for additional damages under section 115(4) of the Copyright Act. In oral submissions it argued that actual loss or damage did not need to be proved for that purpose. The Court did not accept that this supplied the necessary good arguable claim on the evidence before it.

The reasons refer to authority indicating that a copyright owner would not be entitled to additional damages under section 115(4) without first making out an entitlement to damages under section 115(2), although nominal damages may be sufficient for that purpose. The Court also noted that additional damages are punitive in character and depend on matters such as flagrancy, deterrence, post-infringement conduct, conversion into digital form, benefit to the defendant and other relevant matters.

Feutrill J did not rule out the possibility that Austin Engineering might ultimately persuade the Court to award additional damages. But on this application, the Court had not been taken to evidence supporting the statutory factors relied on. In other words, the claim existed in the pleadings, but the evidentiary foundation for using it to justify a freezing order had not been laid.

For businesses, this is a reminder that statutory damages arguments need evidence directed to the actual statutory criteria. It is not enough simply to point to a pleaded claim and say that because punitive or additional damages are available in principle, a freezing order should follow.

Austin Engineering also argued that the freezing order could be justified because it had a good arguable claim for a prospective costs order, at least in relation to the non-pecuniary relief it sought. The Court was not persuaded.

Feutrill J said he was not aware of authority in which a freezing order had been granted because there was a danger that a costs award on a claim for non-pecuniary relief might go unsatisfied. The Court accepted that in theory a freezing order could be made for that purpose, particularly in aid of a costs judgment that had actually been made. But where no more than a good arguable claim for non-pecuniary relief is established, the evaluative assessment and the drastic nature of the remedy usually point the other way.

The reasons explain that the Court's processes are engaged to determine the substantive relief claimed, not to obtain costs orders in favour of applicants. Costs are discretionary, and even a successful party may be denied costs in some circumstances. Unless the assets are themselves the subject matter of the final relief claimed, removal of assets from Australia would generally be unlikely to frustrate the grant of non-pecuniary relief. On that basis, the Court was not persuaded that a good arguable claim to a costs award supplied a sufficiently compelling reason for a worldwide freezing order.

The factual centre of the application was the 3 May 2025 email saying Ms Podulova was moving overseas on 3 July but would be available online. Austin Engineering said this should be read as a statement of permanent departure from Australia. The Court disagreed.

Feutrill J said the email was ambiguous. In context, it could mean moving overseas for an extended period, indefinitely, or permanently. It did not necessarily indicate a permanent departure from Australia, and it did not of itself convey an intention to abandon all emotional and financial ties to Australia. The Court also noted that in December 2024 Ms Podulova had emailed chambers seeking a leave of absence to travel overseas to care for a family member, and that in April 2025 she had appeared by telephone at a case management hearing and informed the Court she was in Australia and would not have difficulty complying with discovery orders.

The Court said it would expect a self-represented party in her position to bring any intention to permanently depart the jurisdiction to the Court's attention because that would affect the future conduct of the proceeding. Given her earlier conduct, the Court had no reason to think she currently intended to leave without notice or stop cooperating with the Court and the parties.

Just as importantly, the Court would not infer from the email that she intended to remove all assets from Australia or had started doing so. There was no evidence about her financial circumstances or the extent to which she had assets in the jurisdiction that would be available to satisfy a judgment. There was no evidence she had an interest in Australian real property. There was little evidence of moveable property in Australia beyond a bank account into which Austin Engineering had paid her salary. Assertions about ties to Russia and the possibility she may already have commenced transferring assets were treated as speculation.

That evidentiary gap was fatal. The Court was not satisfied that Ms Podulova might remove assets from Australia in a way that created a real danger that a prospective judgment would go unsatisfied.

Feutrill J refused to make the freezing order and any ancillary order at that time. Importantly, the application was refused but not dismissed. Instead, the Court adjourned the application to a date to be fixed and reserved costs. That procedural outcome matters because it shows the Court was deciding the application on the evidence then before it, not finally disposing of the underlying claims or necessarily foreclosing future steps if circumstances changed.

The Court also refused the request to close the Court to the public, while making a suppression and non-publication order in relation to certain confidential exhibits until 4.00 pm AWST on 5 May 2028 or further order.

The central reasons for refusing the freezing order were these: Austin Engineering had not shown a good arguable claim for meaningful pecuniary relief on the material before the Court, and it had not shown a real or substantial risk that a prospective pecuniary judgment against Ms Podulova would be wholly or partly unsatisfied. The balance of convenience also did not favour making the order.

For business owners, especially those dealing with employee departures, data retention issues or suspected misuse of technical material, this case is a useful reminder that urgent relief comes in different forms and each form has its own threshold. If the immediate problem is that documents have been copied or retained, the strongest early remedies may be preservation orders, delivery up, disclosure orders and injunctions restraining use. Those remedies are directed to the information itself.

A freezing order is different. It is directed to assets and is tied to the risk that a future money judgment will not be paid. That means your evidence must address not only the alleged wrongdoing but also the money side of the case and the enforcement side of the case. What loss has likely been caused? What profit may have been made? Is there evidence supporting statutory additional damages? What assets exist? What facts show a real risk of dissipation or non-payment?

The case also shows the danger of relying too heavily on a single piece of ambiguous evidence, such as an email about moving overseas. Courts will look at context, prior conduct, the person's obligations in the proceeding, and the actual evidence of assets. Suspicion may justify urgent investigation, but it will not necessarily justify a worldwide restraint on property.

Businesses should also note the Court's insistence on open justice. Even in urgent applications, the Court will not lightly close the courtroom or suppress the existence of a hearing. If confidentiality is genuinely at stake, targeted suppression of particular exhibits may be available, but broad secrecy is exceptional.

This page is based on the Federal Court decision Austin Engineering Ltd v Podulova (No 4) [2025] FCA 523, with judgment dated 19 May 2025 and reasons published on 20 May 2025. The decision concerns an urgent ex parte application for a freezing order, an application to close the Court, and a suppression and non-publication order relating to confidential exhibits.

The reasons clearly record that the freezing order was refused because the Court was not satisfied there was a real or substantial risk that a prospective pecuniary judgment would go wholly or partly unsatisfied, and because the evidence did not establish a good arguable claim for meaningful pecuniary relief on the material then before the Court. The application was adjourned rather than dismissed, and costs were reserved.

This is general information, not legal advice. If your business is dealing with suspected misuse of confidential information or considering urgent court relief, obtain advice on the specific evidence and remedies available in your matter.