Body Sculpting Clinics (Charlestown) Pty Ltd v Palmer

The plaintiff commenced these proceedings on an urgent basis on 2 March 2026. The first defendant is a former employee and director of the plaintiff. The second defendant is a company that operates a business offering the same or similar services to the plaintiff. The first defendant commenced employment with the second defendant on 10 February 2026 after resigning from her position with the plaintiff on 2 October 2025.

By way of final relief, the plaintiff seeks:

These reasons concern the plaintiff’s application for interim injunctive relief.

What follows is a summary of the salient aspects of the evidence adduced on the hearing of the plaintiff’s application for interim relief, and should not be understood as findings of fact.

The plaintiff – Body Sculpting Clinics (Charlestown) Pty Ltd (BSC Charlestown) – operates a Body Sculpting Clinics franchise at Shop 2071A, Charlestown Square Shopping Centre in Charlestown, New South Wales.

The majority shareholder of BSC Charlestown – Body Sculpting Clinics Holdings Pty Ltd (BSC Holdings) – is the holding company for Body Sculpting Clinics Franchising Pty Ltd (BSC Franchising), which operates the franchise network within which BSC Charlestown carries on its business.

Ms Dominika Gialouris is the director of BSC Holdings, BSC Franchising, and BSC Charlestown.

According to Ms Gialouris’ evidence, Body Sculpting Clinics businesses are operated either by franchisees or by BSC Holdings. Ms Gialouris refers to the business operated by BSC Holdings as “corporate locations”. Body Sculpting Clinics offer a variety of non-surgical cosmetic and body treatment services, including high-intensity focussed ultrasound treatments, fat reduction treatments, muscle sculpting treatments, cosmetic aesthetic treatments and skin treatments.

Ms Gialouris gave evidence describing the following features of the Body Sculpting Clinics franchise model:

According to Ms Gialouris’ evidence, the Body Sculpting Clinics head office manages the underlying programs and systems for the clinic businesses, including training, booking systems, and record keeping systems, and develops marketing materials. The Body Sculpting Clinics Group – which I infer is a reference to BSC Holdings and BSC Franchising – has invested significant time and expense into developing operations manuals and processes, treatment techniques, educational materials for employee training, and processes and templates for following up clients and assessing suitable procedures for clients.

The first defendant, Ms Breigh Palmer, was employed by BSC Charlestown in the role of Assistant Clinic Manager in November 2021 pursuant to an employment agreement dated 26 October 2021.

Ms Palmer and BSC Charlestown entered into a new employment agreement after she was promoted to the role of Clinic Manager in mid-2022. The copy of that employment agreement which was tendered in evidence bears the date 17 June 2022 on the front page, but bears the date 25 July 2022 on the execution page. I will refer to it as the 2022 employment agreement.

On or about 19 October 2022, Char Juan Pty Ltd (CJPL) – a company of which Ms Palmer is the sole director and shareholder – purchased the interests of the persons operating BSC Charlestown’s business as a franchise. CJPL became the owner of 25 per cent of the shares in BSC Charlestown while BSC Holdings retained the remaining 75 per cent of shares. Ms Palmer became the sole director of BSC Charlestown. As the 75 per cent shareholder, BSC Holdings had a right to appoint two directors pursuant to a Shareholders Deed between BSC Holdings, CJPL, BSC Charlestown, and Ms Palmer dated 27 October 2022.

BSC Franchising, BSC Charlestown and Ms Palmer entered into a Franchise Deed on or about 19 October 2022 pursuant to which BSC Franchising granted to BSC Charlestown the non-exclusive right and franchise to operate the business at the Charlestown Square premises under the name Body Sculpting Clinics (Charlestown) on the terms set out in the Deed. Those terms included that BSC Charlestown must appoint a “Nominated Operator” approved by BSC Franchising who will be responsible for the day-to-day management, supervision and operation of the business. Ms Palmer was identified in the schedule to the Franchise Deed as the Nominated Operator. Ms Palmer was also the guarantor who guaranteed the performance by BSC Charlestown of its obligations and the payment of all monies payable by BSC Charlestown to BSC Franchising under the Franchise Deed.

Pursuant to clause 24 of the Franchise Deed, BSC Charlestown and Ms Palmer (as the Nominated Operator and Guarantor) covenanted that they would not engage in “Restrained Conduct” while the Franchise Deed was in force and effect, and for the “Restraint Period” and within the “Restraint Area” after termination, expiry or surrender of the Franchise Deed.

The Restrained Conduct was described in clause 24.1(c) of the Franchise Deed as meaning any of the following conduct without the written consent of BSC Franchising:

The Restraint Period was defined as the maximum enforceable period of 36 months, alternatively, 24 months, alternatively 18 months, alternatively 12 months, or alternatively 6 months after the termination, expiry or surrender of the Franchise Deed.

The Restraint Area was defined as the maximum enforceable area of within 5 kilometres, alternatively three kilometres, or alternatively 1 kilometre of either the BSC Charlestown premises or any other BSC franchised business or corporate location that is operating as at the date of the Franchise Deed or that is opened during the term of the Franchise Deed or the Restraint Period. According to evidence given by Ms Gialouris, BSC franchised businesses and corporate locations are operating, or were operating at the time of the Franchise Deed, at the following locations in New South Wales: Bondi Junction, Darlinghurst, North Ryde, Parramatta, Wynyard, Warringah Mall, and Charlestown.

On 19 October 2022, “Body Sculpting Clinics” sent a letter to Ms Palmer stating:

The letter was signed by Mr Ben Gialouris as “CEO Body Sculpting Clinics”.

It will be recalled that the parties to the 2022 employment agreement were BSC Charlestown and Ms Palmer. Mr Gialouris was not a director of BSC Charlestown as at 19 October 2022.

Clause 9.1 of the 2022 employment agreement provided as follows, subject to certain exceptions that are not presently relevant:

Clause 9.5 provided that Ms Palmer’s obligations under clause 9 “will continue in full force and effect indefinitely unless and until they are expressly terminated by mutual agreement between the parties in writing”.

The term “Confidential Information” was defined as meaning:

The term “Intellectual Property Rights” was defined as meaning:

Clause 12.1 of the 2022 employment agreement provided:

The “Non-Solicitation Period” is defined as the period ending on the date that is 12 months after the date of cessation of Ms Palmer’s employment with BSC Charlestown.

Clause 12.2 provided:

The “Non-Compete Period” is the period ending 12 months after the date of cessation of Ms Palmer’s employment with BSC Charlestown.

The “Non-Compete Area” is defined as:

Ms Gialouris gave evidence that Ms Palmer’s performance of her roles as Clinic Manager from mid-2022 and Nominated Operated from October 2022 effectively made Ms Palmer the face of BSC Charlestown’s business. Ms Palmer had significant direct involvement with clients, including conducting client consultations and administering some treatments herself, and in maintaining relationships with clients. Ms Palmer was also responsible for working front of house, conducting marketing, selling treatment packages to clients, managing the finances and operation of the BSC Charlestown business, and supervising staff.

Ms Gialouris also gave evidence that, upon being appointed as the Nominated Operator and director of BSC Charlestown, Ms Palmer was given a higher level of access to confidential information of BSC Charlestown, including business strategy plans, sales and performance data, initiatives to be pursued by the business, and data stored on the “Mindbody” system which all Body Sculpting Clinics use to store client data and to book appointments.

During the period of time that is material to these proceedings, BSC Charlestown had two full time staff members (Ms Palmer as the Nominated Operator and a full-time dermal therapist, Ms Charlie Edwards), one part-time Assistant Manager (Ms Cassandra Shepherd), one casual staff member, and two registered nurses who undertook work at BSC Charlestown on a contract basis (Ms Kyah Croft and Ms Kristy Thompson).

Ms Palmer gave evidence that her relationship between Ms Gialouris and her husband Mr Ben Gialouris became strained following a Body Sculpting Clinics franchise network Christmas function held on 19 January 2025. It is not necessary to summarise the competing accounts of what occurred at, and in the aftermath of, that function. Ms Palmer asked Ms Shepherd to witness one telephone call that she had with Mr Gialouris in March 2025 in the aftermath of that function. According to Ms Palmer’s evidence, Ms Shepherd told her after that telephone call: “I can’t believe how Ben spoke to you on that call. I don’t want to work with him anymore. You’re the only reason I am staying. I really want to leave.” Ms Edwards told Ms Palmer after that function in January 2025 that Mr Gialouris had approached her about having her own franchise, saying: “I feel like he preyed on me. I work for you. I’m loyal to you, but I don’t want to work for Ben anymore”. Ms Palmer said words to the effect of: “I want to keep our team at Charlestown together. Let’s pretend the Christmas party never happened and move on.”

On 5 September 2025, Ms Palmer received a notice from the Therapeutic Goods Administration issued pursuant to s 45AB(1) of the Therapeutic Goods Act 1989 (Cth) requiring BSC Charlestown to give the Secretary of the Australian Government Department of Health, Disability and Aged Care information about the operation of the business of BSC Charlestown as a Body Sculpting Clinic franchise, about the purchase or importation and operation of medical devices known as an HIFU system, and about the drafting and publication of information on the bodysculptingclinics.com.au website and BSC Charlestown’s Instagram account (including identifying the persons involved in that process, their job titles and their responsibilities), and to produce specified documents relating to those matters (the TGA Notice).

Ms Palmer gave evidence that, after engaging in correspondence with Ms Gialouris and Mr Gialouris in relation to the TGA Notice and consulting BSC Charlestown’s insurance broker and Sparke Helmore, she became very concerned because:

According to Ms Palmer’s evidence, BSC Charlestown’s insurance broker told her at this time: “I think you should get out”. Ms Edwards and Ms Shepherd separately expressed discomfort to Ms Palmer about continuing to use the HIFU devices, saying that they did not want to work for BSC Charlestown anymore. According to the evidence of Ms Gialouris, the TGA investigation was later resolved without any findings being made against BSC Charlestown or any other companies in the Body Sculpting Clinics Group.

Ms Palmer gave evidence that, in September 2025, she also became concerned about the financial position of BSC Charlestown. According to her evidence, those concerns had arisen in circumstances where Mr Gialouris made or caused to be made payments out of BSC Charlestown’s bank account for franchise fees and head office fees, and regularly made other withdrawals out of the account for expenses that Ms Palmer either disputed or was unable to verify. Mr Gialouris gave evidence confirming that he was a signatory on BSC Charlestown’s bank account and that he did make payments to creditors out of that account, but said that Ms Palmer had never raised with him any dispute about any of those payments prior to 17 September 2025. Mr Gialouris also gave evidence that he does not understand why Ms Palmer had financial concerns about BSC Charlestown because, based on his weekly monitoring of the business, it was trading well and was about to come into its busiest months of the year in the run up to Christmas 2025. The financial statements for BSC Charlestown for the financial year ended 30 June 2025 record a profit of $63,327 after tax – approximately half of the after tax profit of $125,075 for the financial year ended 30 June 2024. The Australian Taxation Office sent correspondence to BSC Charlestown on 6 January 2026 demanding payment by 20 January 2026 of an overdue amount of $90,217.47 in respect of Business Activity Statements and further correspondence on 27 January 2026 demanding payment by 10 February 2026 of a tax debt of $76,429.97.

Given her concerns, Ms Palmer consulted an insolvency practitioner, Mr Michael Beck, concerning his potential appointment as voluntary administrator of BSC Charlestown. According to Ms Palmer’s evidence, Mr Beck advised her that, as the director, she was responsible for the funds of BSC Charlestown and that she should therefore move the funds from the present bank account to another account in the name of the company in order to prevent further withdrawals that had not been authorised by her as the sole director. Ms Palmer acted accordingly, and emailed to herself the following data from the Mindbody system on 14 September 2025:

According to Ms Palmer’s evidence, she emailed that Mindbody data to herself for the purpose of paying refunds for deposits that had been paid by clients of BSC Charlestown before the company went into administration. As will become apparent below, contemporaneous documentary evidence suggests that Ms Palmer used the Leads List for other purposes.

According to Ms Gialouris’ evidence, she and Mr Gialouris became aware on 16 September 2025 that Mr Gialouris had been removed as a signatory on the BSC Charlestown bank account without prior notice or discussion. That caused them to become concerned that Ms Palmer may have been misusing funds of the company. They therefore caused BSC Holdings to appoint Ms Gialouris as a director of BSC Charlestown on 16 September 2025.

According to Ms Palmer’s evidence, she received an email from Mr Gialouris on 16 September 2025 notifying her of the appointment of Mr Gialouris and Ms Gialouris as directors of BSC Charlestown. Ms Palmer understood that this meant that she would not be able put the company into voluntary administration unless Mr and Ms Gialouris agreed to this course. Ms Palmer was aware of the amounts paid by clients for treatments yet to be administered, and experienced extreme anxiety. Ms Palmer had been unhappy in the workplace as a result of her strained relationship with Mr Gialouris and Ms Gialouris since January 2025, and the issues raised by the TGA Notice received in early September 2025 and the resulting concerns of BSC Charlestown’s staff. However, it was the advice received from Mr Beck concerning the financial position of BSC Charlestown which caused her to decide to leave BSC Charlestown.

Solicitors acting for Ms Palmer and for Mr and Ms Gialouris and BSC Charlestown engaged in correspondence from 17 September 2025 in relation to Ms Palmer’s transfer of funds from the company’s bank account.

According to Ms Palmer’s evidence, she was locked out of Mindbody and other managerial systems used by BSC Charlestown on 17 September 2025. According to the evidence of Ms Gialouris, this did not occur until Ms Palmer resigned on 2 October 2025.

On 17 September 2025, the BSC Careers email address received letters of resignation from Ms Shepherd and Ms Edwards dated 20 August 2025 which nominated 17 September 2025 as their final day of work at BSC Charlestown. Resignation letters were received from the contract nurses Ms Croft and Ms Thompson on 26 September 2025. Contemporaneous messages between Ms Palmer and Ms Shepherd suggest that the resignation letters of Ms Shepherd and Ms Edwards were prepared on 17 September 2025 and backdated to 20 August 2025.

On 2 October 2025, Ms Palmer resigned as a director and as the secretary of BSC Charlestown.

Ms Gialouris prepared and exhibited to her affidavit sworn on 27 February 2026 a spreadsheet listing the names and contact details of customers of BSC Charlestown with whom Ms Palmer had some form of recorded or documented interaction, including by making bookings for the customer, conducting consultations with the customer, or administering treatments to the customer, in the period from the commencement of her employment at BSC Charlestown in November 2021 until her resignation on 2 October 2025. The spreadsheet was prepared using data from the Mindbody system. The spreadsheet lists 2154 customers. The parties referred to this as the Customer List, to distinguish it from the Leads List referred to above.

Ms Gialouris gave evidence that treatment packages purchased by BSC Charlestown clients generally extend over a period of between 12 to 24 months, with approximately six to eight weeks between treatment sessions. On average, clients would remain clients of BSC Charlestown for more than 12 months.

Documentary evidence tendered in these proceedings suggests that Ms Palmer opened the Leads List and other data which she had emailed to herself on 14 September 2025 on 16, 17 and 27 September 2025 and also after her resignation on 3 October and 15 October 2025, 25 November 2025, 16 December 2025 and 12 February 2026.

BSC Charlestown has tendered emails sent from Ms Palmer’s Body Sculpting Clinics corporate email address to her gmail address on 22 September, 1 October and 2 October 2025 (the day of her resignation) forwarding emails to or from Mr Gialouris which set out sales data and sales targets for BSC Charlestown, marketing techniques (including scripts for messages to and calls with clients), and revenue-generating techniques.

BSC Charlestown has also tendered an email from Ms Palmer’s gmail address to Ms Shepherd’s email address dated 17 December 2025 attaching a copy of the Leads List. Ms Palmer has not adduced any evidence explaining this email.

BSC Charlestown has also tendered messages between Ms Palmer and Ms Croft exchanged at some time before 27 January 2026 in which Ms Croft asks Ms Palmer: “Don’t you have all the clients numbers?” Ms Palmer replies: “Yea I have 3000 of them. I’ll send you the file”. Ms Palmer later sends a message to Ms Croft attaching a pdf document entitled “Client list” and then sends further messages stating: “I’ve just sent you the list. See if there are any clients on there you want me to reach out to”. Further messages were exchanged between Ms Palmer and Ms Croft on 27 January 2026 about “what would be the best way to do your [Ms Croft’s] contract?”.

BSC Charlestown has also tendered the following text message group chat exchange between Ms Palmer, Ms Shepherd and Ms Edwards on a date which is not clear from the messages:

BSC Charlestown has also tendered the following text message group chat exchange between Ms Palmer, Ms Shepherd and Ms Edwards on a date which is not clear from the messages:

As referred to in more detail below, Ms Gialouris has given evidence that, in the wake of the resignations of Ms Palmer, Ms Shepherd and Ms Edwards, clients of BSC Charlestown were being treated by, amongst other people, Mr Ben Gialouris and Ms Allison Ohlback.

BSC Charlestown has also tendered text messages between Ms Palmer and Ms Croft which discuss reaching out to clients who have indicated that they are “super supportive and wanting to come and see us in February”, and messages sent by Ms Palmer to several people thanking them for being a loyal client over the years and inviting them to “find and follow us” at the Instagram account definedaesthetics.au. Some of those messages refer to Ms Palmer not having been at BSC Charlestown since September and apologising for not being in touch to say goodbye before advising the recipient that she, Ms Shepherd and Ms Edwards would be opening “a new space in town” in mid-February.

Following the resignations of Ms Palmer, Ms Shepherd, Ms Edwards, Ms Croft and Ms Thompson, BSC Charlestown effectively began operating as a corporate location rather than as a franchise business. As the resignations all occurred within a short time frame, staff from other Body Sculpting Clinics were deployed to work at BSC Charlestown to keep the business operational and preserve its reputation and goodwill. Mr Gialouris also worked at BSC Charlestown during this transitional period. BSC Charlestown was nevertheless unable to service all of its clients, and to cancel over 100 bookings in the period up to 31 October 2025. At the time of the hearing on 16 March 2026, BSC Charlestown had not yet engaged long-term staff to fill the roles previously filled by Ms Croft and Ms Thompson and it was still trying to recruit more therapists and a Clinic Manager.

The limitations on BSC Charlestown’s ability to deliver services to its clients as a result of the staff shortages has reduced the revenue of the business. For example, revenue for September 2025 was approximately 19.5% less than for September 2024.

On or about 3 November 2025, Ms Gialouris became aware through social media posts by third parties that a new business was launching in the Newcastle area under the name “Defined Aesthetics”. Searches on ASIC’s database identified a newly registered company with a registered office in Charlestown under the name Defined Aesthetics Pty Ltd (DAPL). On or about 5 November 2025, Ms Gialouris became aware that the sole director and secretary of DAPL is Mr Gregory Brown, who was known to Ms Gialouris as Ms Palmer’s partner. DAPL is the second defendant in these proceedings.

On or about 18 November 2025, Ms Gialouris became aware that the definedaesthetics.au Instagram account had turned public, and that several former staff members of BSC Charlestown were following the account.

On 20 and 24 November 2025, Ms Gialouris saw posts on that Instagram account featuring Ms Palmer, Ms Shepherd and Ms Edwards in uniforms foreshadowing that a launch date would be announced in the near future together with a pre-launch sale.

According to Ms Gialouris’ evidence, she identified the likely location of DAPL’s business as an address at 3A/5 Honeysuckle Drive in Newcastle by searching commercial premises for lease on Seek Commercial and comparing photos of available premises with the background of the photographs on the Instagram posts referred to above. She was informed by Mr Gialouris that the leasing agent for 3A/5 Honeysuckle Drive told him in about late November that “three girls” were entering into a lease of the premises, and that the leasing agent told him in a further conversation about three weeks later that “the girls” were not going ahead with the lease because they had a fight. Ms Gialouris gave evidence that, on that basis, she believed that DAPL’s business may not be launching after all and she therefore did not think it was necessary to “pursue the issue” at that point when she was continuing to focus on maintaining the business of BSC Charlestown which was struggling to keep appointments and provide the full range of services to clients.

However, on 15 December 2025, a further post to DAPL’s Instagram account announced the launch of its website and stated: “Location reveal coming very soon”.

Between 15 December 2025 and 29 January 2026, Ms Gialouris was aware of further posts made on DAPL’s Instagram account and on its website indicating that the business was opening imminently in Newcastle and would be offering body sculpting and other treatments of the same kind as those offered by BSC Charlestown. Ms Gialouris undertook searches on 16 December 2025 which confirmed that DAPL was the registrant of that website. Ms Gialouris was already aware that DAPL was associated with Ms Palmer’s partner Mr Gregory Brown. The posts of which Ms Gialouris was aware during this period included a post from DAPL’s Instagram account which featured a photograph of Ms Palmer.

On 29 January 2026, Ms Gialouris became aware of a Google business listing for DAPL, including images of Ms Palmer and Ms Edwards and a list of treatment services offered by DAPL. After reviewing that list of services, Ms Gialouris formed the view that DAPL’s business was the same, or materially similar, to the business of BSC Charlestown. On 29 January 2026, Ms Gialouris also accessed DAPL’s online booking system through its website. Ms Gialouris noted that the booking system identified DAPL’s staff as “Breigh”, “Cassie” and “Charlie”, which she understood to be a reference to Ms Palmer, Ms Shepherd and Ms Edwards.

On 2 February 2026, Ms Gialouris became aware that DAPL’s website was advertising a “Pre-Launch Sale”.

On 5 February 2026, Ms Gialouris became aware that DAPL’s Instagram account had posted an image of an empty site stating: “Can you guess where we’re going to be located?”.

On 9 February 2026, Ms Gialouris became aware of the location of DAPL’s business at 167 King Street in Newcastle. It is common ground between the parties that this location is 9.7 kilometres from the location of the clinic operated by BSC Charlestown.

According to the evidence of Mr Brown and Ms Palmer, DAPL commenced trading on 10 February 2026 and Ms Palmer commenced employment with the company as a beauty therapist on that date. There is no dispute that Mr Brown is Ms Palmer’s partner.

Solicitors acting for BSC Charlestown wrote to Ms Palmer on 10 February 2026, and to Ms Palmer and DAPL on 23 February 2026 and 25 February 2026, seeking certain undertakings. No response was received to those letters before BSC Charlestown commenced these proceedings against Ms Palmer and DAPL, as the first and second defendants respectively, on 2 March 2026.

BSC Charlestown has tendered various text messages between Ms Palmer and each of Ms Edwards, Ms Shepherd and Ms Croft. Those text messages arguably support an inference that Ms Palmer solicited those persons to leave their roles at BSC Charlestown and follow her to the new business that was launched in February and is now operated by DAPL. Different inferences are also arguably available, particularly when those text messages are read in the context of Ms Palmer’s evidence referred to at [34] above.

Ms Gialouris gave evidence that, based on the evidence referred to at [49]-[56] above, she holds serious concerns that Ms Palmer has breached her confidentiality obligations to BSC Charlestown and that the information that Ms Palmer has accessed will be able to be used by Ms Palmer to solicit clients of BSC Charlestown for DAPL. Ms Gialouris is also concerned that Ms Palmer’s failure to maintain the confidentiality of client records will cause reputational damage to BSC Charlestown.

The evidence of Ms Palmer and Ms Gialouris raises a dispute between the parties about the extent of similarity or difference between client management and booking systems, the treatment machines used, and the marketing strategies and procedures used by DAPL and BSC Charlestown.

According to Ms Palmer’s evidence, there are twenty businesses in the Newcastle area that offer the same or similar treatments to both BSC Charlestown and DAPL. Ms Gialouris disputes that those businesses offer the same combinations of treatment as BSC Charlestown and DAPL.

According to Mr Brown’s evidence, DAPL is currently trading at a loss and has obligations to pay rent in the sum of $4,500 per month and to make ongoing payments in respect of treatment equipment purchased for the purpose of its business. If Ms Palmer is unable to work at DAPL, it will be unable to service all of its clients (many of whom specifically request Ms Palmer) and will have insufficient resources to provide the level of services to generate the revenue required to meet its obligations. Mr Brown anticipates that DAPL would be forced to wind up.

Ms Palmer gave evidence that she will suffer financial hardship if she is forced to relinquish her employment at DAPL because she has two dependent children from previous relationships (one of whom is a disabled young adult) and receives only very limited financial support from the father of one of those children. She owns no assets other than a 2015 motor vehicle. Her weekly income (including Centrelink benefits that supplement her income from DAPL) barely covers her expenses (including rent), her modest savings are dwindling, and she has no other sources of financial support.

As I have already mentioned, BSC Charlestown commenced these proceedings on 2 March 2026.

At an ex parte hearing on that date the Court made orders:

At an inter partes hearing on 5 March 2026, the Court noted that Ms Palmer and DAPL had delivered up two USB sticks to the Court, made orders for Ms Palmer and DAPL to comply with notices to produce documents issued by BSC Charlestown, and extended the orders that had been made on 2 March 2026 restraining dealings with Confidential Information and Intellectual Property up to and including 16 March 2026.

The orders restraining dealings with Confidential Information and Intellectual Property were made on 2 March 2026 and extended on 5 March 2026 upon BSC Charlestown giving to the Court the usual undertaking as to damages.

At the hearing on 16 March 2026, BSC Charlestown sought interim orders:

The interim orders referred to in (1) and (2) above are sought until further order of the Court. The interim orders referred to in (3) to (5) above are sought until 2 October 2026 (being twelve months after the cessation of Ms Palmer’s employment with BSC Charlestown) or earlier further order of the Court.

In circumstances where Ms Palmer and DAPL questioned the adequacy of the usual undertaking as to damages given by BSC Charlestown, that undertaking was offered by BSC Charlestown, BSC Holdings, BSC Franchising, and Ms Gialouris.

Ms Palmer and DAPL oppose the interim orders sought by BSC Charlestown. They offer undertakings to the Court in terms that are referable to a Serviced Clients List which they submit BSC Charlestown should create and provide to them identifying all customers of BSC Charlestown to whom Ms Palmer provided services in the 12 months prior to 17 September 2025. The defendants offer:

At the conclusion of the hearing which occupied most of the day in the Equity Duty Judge List on 16 March 2026, I made orders without opposition from Ms Palmer and DAPL extending the existing interim orders restraining the use and disclosure of Confidential Information and Intellectual Property pending delivery of judgment in relation to BSC Charlestown’s application. Those orders were made on the usual undertaking as to damages given by BSC Charlestown, that undertaking given by BSC Charlestown, BSC Holdings, BSC Franchising, and Ms Gialouris.

Ms Palmer and DAPL accept that the BSC Charlestown’s claims for final relief raise a serious question to be tried. The outcome of BSC Charlestown’s claims for interim relief therefore turns on the balance of convenience, including the strength (or otherwise) of BSC Charlestown’s case, whether or not it will suffer an irreparable injury for which damages will not be an adequate compensation if the interim injunctions are not granted, the hardship that will be suffered by Ms Palmer and/or DAPL if the interim injunctions are granted, and the capacity of BSC Charlestown, BSC Holdings, BSC Franchising and Ms Gialouris to satisfy the usual undertaking as to damages. [1]

In my opinion, the evidence referred to at [49]-[56] above discloses that BSC Charlestown has a strong case that the information in the Leads List is confidential, that Ms Palmer has breached her duty of confidentiality in relation to that information, and that Ms Palmer has actively sought to interfere with BSC Charlestown’s relationships with its customers by soliciting those customers to move their custom to DAPL in breach of the 2022 employment agreement. There is at least a serious question to be tried that the 2022 employment agreement continued to bind the parties after they entered into the Franchise Deed. That evidence therefore discloses a strong case for final injunctions restraining Ms Palmer and DAPL from using the information in that Leads List and restraining Ms Palmer for a period of 12 months from the cessation of her employment with BSC Charlestown from interfering with BSC Charlestown’s customer relationships with its customers with whom Ms Palmer interacted during her employment with BSC Charlestown (being the customers in the Customer List).

The evidence presently before the Court does not support the defendants’ contention that such injunctions should be limited to customers serviced by Ms Palmer in the last 12 months of her employment with BSC Charlestown. Ms Gialouris’ evidence is to the effect that, on average, clients would remain clients of BSC Charlestown for more than 12 months. [2] Ms Palmer’s own evidence is to the effect that she remembered her “old clients” and that she had not been servicing a lot of new clients when she ceased her employment with BSC Charlestown. [3]

Ms Palmer and DAPL do not claim to be entitled to use the information in the Leads List. Nor does Ms Palmer claim to be entitled during the period of 12 months after the cessation of her employment with BSC Charlestown to solicit customers with whom she interacted during her employment with BSC Charlestown. The evidence does not identify any harm that would be suffered by Ms Palmer, or DAPL, if they were subject to such restraints. On the other hand, BSC Charlestown would likely suffer harm for which damages would be an inadequate remedy if Ms Palmer and DAPL were to use that information or to solicit those customers.

However, Ms Palmer and DAPL submit that the terms of the order sought by BSC Charlestown restraining them from using confidential information relating to customers who are included in the Leads List is too wide, and could not be complied with, because many of the customers identified in that Leads List are identified only by a first name and a telephone number or other contact detail, and even the first name is sometimes subject to a question mark. I accept the submission that there is therefore a risk that Ms Palmer or DAPL could inadvertently breach an injunction in the very broad terms sought by BSC Charlestown by using information that they have obtained without reference to the Leads List, but which happens to relate to a customer included in the Leads List.

This problem arises because BSC Charlestown has failed to identify with appropriate specificity the confidential information that is to be protected by the proposed orders referred to at [81(2)] above. BSC Charlestown has also failed to identify with appropriate specificity the intellectual property that is to be protected by the proposed orders referred to at [81(1)] above. [4] I raised this issue with counsel for BSC Charlestown during the hearing, but no revised formulation of the proposed orders was forthcoming. The answer to the problem in this case is therefore to make an interim order restraining Ms Palmer and DAPL from accessing, downloading, copying, disclosing, communicating, publishing or otherwise using the information contained in the Leads List, and to accept the undertakings offered by Ms Palmer and DAPL referred to at [84(1)(b)] to [84(1)(e)] above in relation to other classes of confidential information and intellectual property. Notwithstanding the likely inability of BSC Charlestown and its related entities to satisfy the usual undertaking as to damages to which I refer below, the balance of convenience favours this course for the reasons I have explained above. I reject the submission made on behalf of Ms Palmer and DAPL that an injunction in relation to the Leads List is not necessary because they are no longer in possession of a copy of that document. As was submitted on behalf of BSC Charlestown, the injunction will restrain them from using any copy of that Leads List that may be in the possession or control of third parties, including Ms Shepherd and Ms Edwards.

For the reasons explained above, and notwithstanding the likely inability of BSC Charlestown and its related entities to satisfy the usual undertaking as to damages, the balance of convenience favours the grant of an interim injunction restraining Ms Palmer for a period of 12 months after the cessation of her employment with BSC Charlestown from interfering with BSC Charlestown’s customer relationships with those of its customers with whom Ms Palmer interacted during her employment (being the customers named in the Customer List save for the 18 customers that BSC Charlestown acknowledges should be excluded from the scope of the order). I accept Ms Palmer’s submission that the wording of the injunction proposed by BSC Charlestown is unduly broad in that it refers to any relationship between BSC Charlestown and a customer in the Customer List. The injunction will be granted in terms that is directed to the customer relationship.

Ms Palmer does not claim to be entitled during the period of 12 months after the cessation of her employment with BSC Charlestown to induce, encourage or solicit BSC Charlestown staff to cease their employment with the company. There is a serious question to be tried as to whether she has done so to date. Ms Palmer submits that an interim injunction restraining her from doing so is not necessary because all of the staff of BSC Charlestown with whom she had personal contact during her employment with the company have now left the company. In my opinion, however, such an interim injunction has utility in circumstances where there is evidence that BSC Charlestown is being staffed on an interim basis by staff from other Body Sculpting Clinics while Mr and Ms Gialouris endeavour to recruit permanent staff to replace Ms Palmer, Ms Shepherd, Ms Edwards and the registered nurses, it is likely that Ms Palmer may have had some personal conduct with those interim replacement staff through BSC Franchising events while she was employed with BSC Charlestown, and there is evidence of text messages between Ms Palmer, Ms Shepherd and Ms Edwards in which they appear to gloat over the news of the resignation of one of the interim replacement staff working at BSC Charlestown. Notwithstanding the likely inability of BSC Charlestown and its related entities to satisfy the usual undertaking as to damages, the balance of convenience favours the grant of an interim injunction in the terms sought by BSC Charlestown restraining Ms Palmer for a period of 12 months after the cessation of her employment with BSC Charlestown from inducing, encouraging or soliciting any of BSC Charlestown’s officers and employees with whom she worked or had personal contact during the course of her employment with BSC Charlestown to cease their employment, engagement or agency with BSC Charlestown.

Contrary to the submissions made on behalf of Ms Palmer and DAPL, the last day of the period of 12 months after the cessation of Ms Palmer’s employment with BSC Charlestown is 2 October 2026, not 17 September 2026. [5] The interim injunctions referred to at [92] and [93] above will therefore apply until 2 October 2026 or earlier further order of the Court.

It remains to consider BSC Charlestown’s application for an interim injunction restraining Ms Palmer until 2 October 2026 or earlier further order of the Court from carrying on, operating or being engaged, interested or employed in any other business or endeavour (including DAPL) that is the same as, is materially similar to, or competes with the business of BSC Charlestown, at any location within a 15 kilometre radius of BSC Charlestown’s premises, whether alone or jointly with or on behalf of anybody else (including in partnership or association with any other person, as an agent, representative, director, officer or employee of any other person, as a member or shareholder of any other person, or as a trustee of or consultant or advisor to any other person).

In my opinion, based on the evidence presently before the Court, BSC Charlestown’s case for a final injunction in those terms is very weak. The evidence does not disclose any reason why the legitimate interest of BSC Charlestown in protecting its confidential information and customer connection rendered it reasonably necessary when the 2022 employment agreement was entered into to impose a restraint applying in respect of areas within a 15 kilometre radius of BSC Charlestown’s place of business, [6] in circumstances where the Franchise Deed provides for a maximum restraint area of a 5 kilometres. [7] Contrary to the submissions made on behalf of BSC Charlestown, those restraints in clause 12.2 of the 2022 employment agreement and clause 24.1 of the Franchise Deed each applied to Ms Palmer, whose employed position at BSC Charlestown included all of the responsibilities of her role as Clinic Manager and, from the date of the Franchise Deed, some additional responsibilities as Nominated Operator. According to Ms Gialouris’ evidence, the roles were essentially the same save that Ms Palmer had a higher level of access to confidential information as Nominated Operator. [8] The discrepancy in the restraint areas between the 2022 employment agreement and the Franchise Deed gives rise to a strong argument, in the absence of evidence to the contrary, that a restraint area of more than 5 kilometres was not reasonably necessary for the protection of the legitimate interests of BSC Charlestown and was not reasonable in the interests of the public, and was and is therefore contrary to public policy and void. [9]

I reject the submission made on behalf of BSC Charlestown that the only potential harm that would result to the defendants from an interim injunction in the terms sought would be Ms Palmer’s loss of her salary with DAPL, and that the interim injunction would not preclude DAPL from operating its business. Mr Brown’s evidence of the detriment to DAPL in the event that Ms Palmer’s employment were to cease is broadly consistent with Ms Gialouris’ evidence about the difficulties that BSC has experienced in recruiting suitably qualified and experienced staff following the resignations of Ms Palmer, Ms Shepherd and Ms Edwards, the resulting limitations on its ability to service clients and the consequential reduction in its revenue. I accept Mr Brown’s evidence that, if DAPL were unable to continue employing Ms Palmer, it probably be unable to provide the level of client services required to generate sufficient revenue to meet its financial obligations, including in relation to rent and equipment payments, and that this may necessitate the winding up of DAPL.

That harm is an important factor in the assessment of the balance of convenience in this case because the evidence summarised at [59]-[70] above discloses that BSC Charlestown was aware from about 15 December 2025 that a new business associated with Ms Palmer was to be launched in the Newcastle area under the name “Defined Aesthetics”. No complaint was made about this until 10 February 2026, and these proceedings were not commenced until 2 March 2026. I infer that, during the period of that delay, DAPL was incurring the liabilities that Mr Brown has given evidence it will not be able to meet if it cannot continue employing Ms Palmer. I accept Mr Brown’s evidence that this may necessitate the winding up of DAPL. For the reasons explained below, BSC Charlestown, BSC Holdings, BSC Franchising and Ms Gialouris probably do not have sufficient resources to satisfy the usual undertaking as to damages that they now offer in respect of any such harm to DAPL.

I respectfully adopt the following explanation by McGrath J in May v Walker concerning the importance of the usual undertaking as to damages, and the relevance of the capacity of the party giving that undertaking to satisfy it if ultimately called on to so: [10]

As referred to at [38] above, BSC Charlestown’s profit after tax for the financial year ended 30 June 2025 – before Ms Palmer resigned – was half of the profit after tax for the previous financial year. BSC Charlestown adduced no management accounts demonstrating its financial position after 30 June 2025, although it adduced some evidence of declining revenue in the period after 2 October 2025. The correspondence from the Australian Taxation Office referred to at [38] above, which was annexed to Ms Palmer’s affidavit dated 9 March 2026, establishes that BSC Charlestown owed amounts totalling approximately $166,000 to the Australian Taxation Office by January 2026. BSC Charlestown did not adduce any evidence of any dispute in respect of those tax debts. Nor did it adduce any evidence explaining the circumstances in which those debts were incurred and whether (and, if so, when) they are to be paid.

BSC Charlestown tendered a financial statement for the year ended 30 June 2025 for BSC Franchising recording a loss in that financial year and a profit after tax of only $2,710 in the previous financial year. Counsel for BSC Charlestown emphasised that BSC Franchising has total assets of $1,437,054. However, none of those assets are of the kind that would be readily realisable in order to satisfy the undertaking as to damages if BSC Franchising were required to do so. Its current assets of $228,609 consist of accounts receivable ($195,467), cash on hand ($100), stock ($18,750) and sundry debtors ($12,298). Its non-current assets of $1,208,445 consist of property, plant and equipment ($70,562) and loans to related parties ($1,137,883) including a loan of $97,717 to Mr and Ms Gialouris and a loan of $311,621 to BSC Holdings. BSC Franchising has total current and non-current liabilities of $1,324,119, including loans from related parties totalling $130,970. Its related party lenders do not include Mr and Ms Gialouris or BSC Holdings.

BSC Charlestown did not tender any financial statements, tax returns or management accounts for BSC Holdings, but tendered a bank statement for a Commonwealth Bank transaction account in the name of BSC Holdings for the period from 3 November 2025 to 2 February 2026 which records a credit balance fluctuating during that period between approximately $110,000 and $152,000. As I have mentioned immediately above, BSC Holdings is indebted to BSC Franchising in the amount of $311,621 (or, at least, was so indebted as at 30 June 2025).

BSC Charlestown did not adduce any evidence concerning the financial position of Ms Gialouris. As I have mentioned above, Mr and Ms Gialouris are indebted to BSC Franchising in the amount of $97,717 (or, at least, were so indebted as at 30 June 2025).

The incomplete picture provided by that evidence of the financial position of BSC Charlestown and its related entities offering the usual undertaking as to damages is one of declining profits as at 30 June 2025 for BSC Charlestown and BSC Franchising and lack of assets that would be realisable by those two companies to satisfy the usual undertaking as to damages, borrowings by BSC Holdings and by Mr and Ms Gialouris from BSC Franchising notwithstanding the negligible or non-existent profits being generated by that company, and insufficient funds held by BSC Holdings to discharge its indebtedness to BSC Franchising. The evidence is silent as to the capacity of Mr and Ms Gialouris to discharge their indebtedness to BSC Franchising. The picture is incomplete by reason of the failure of BSC Charlestown to adduce more extensive financial evidence notwithstanding that the adequacy of the undertaking as to damages was squarely raised in the submissions served on behalf of Ms Palmer and DAPL prior to the hearing on 16 March 2026, and again during that hearing.

In my opinion, the evidence establishes that BSC Charlestown and its related entities offering the usual undertaking as to damages probably do not have sufficient resources to satisfy the usual undertaking in respect of their claim for an interim injunction restraining Ms Palmer from continuing her employment with DAPL or being engaged in any other business within a 15 kilometre radius of BSC Charlestown’s premises.

Having regard to the weakness of BSC Charlestown’s case for a final injunction restraining Ms Palmer until 2 October 2026 from working for DAPL or a competing business within an area of 15 kilometres from BSC Charlestown’s premises, the serious harm that DAPL would be likely to suffer in the event that such an injunction were granted on an interim basis, the probability that BSC Charlestown and its related entities giving the usual undertaking as to damages would not be able to satisfy that undertaking in respect of that harm, and the inadequacy of damages to repair that harm in any event if DAPL were to be wound up, I decline to grant that interim injunction in the terms sought by BSC Charlestown.

BSC Charlestown submitted that, if the Court concluded that a restraint in respect of a lesser geographic area would be reasonable, the Court should grant an interim restraint in respect of that lesser area. For the purpose of BSC Charlestown’s application for interim relief, Ms Palmer does not dispute that a restraint for a period of 12 months following the cessation of her employment in respect of a restraint area of a 5 kilometre radius from BSC Charlestown’s premises would be reasonable and valid. Indeed, Ms Palmer offered an undertaking to the Court substantially in those terms. [11] Provided that the restraint area was defined by reference to BSC Charlestown’s current premises at Shop 2071A Charlestown Square Shopping Centre in Charlestown, New South Wales, such an interim injunction would have utility in catering for the possibility that DAPL may move premises. Such an interim injunction would not result in the harm to DAPL to which I have referred above. Nor it would it cause the harm to Ms Palmer referred to at [76] above. The inadequacy of the usual undertaking as to damages offered by BSC Charlestown and its related entities therefore does not weigh against the granting of that interim injunction.

For all of the foregoing reasons, the orders of the Court are as follows: