Court strikes out 191-page pleadings that appear to be AI generated.

Summary

In Ulasowski v Neurophysiology Services Australia Pty Ltd [2026] FedCFamC2G 1641, the Federal Circuit and Family Court of Australia (Division 2) struck out, in full, a 191-page Amended Statement of Claim because it was unnecessarily prolix, confusing, and failed to identify material facts with the clarity required by the Rules, and granted leave to re-plead.

The Court also made significant interlocutory orders to protect employer confidential information (including sensitive patient information) that the former employee admitted retaining after termination, requiring a verified affidavit list, delivery up of hard copy documents and relevant storage devices, permanent deletion from personal devices where necessary, and an injunction restraining use/copying/disclosure without consent or court order.

Background

The applicant (a neurophysiology scientist) alleged she was dismissed on or about 29 May 2025 and commenced a general protections dispute in the Fair Work Commission under s 365 of the Fair Work Act 2009 (Cth), receiving a certificate under s 368(3)(a) before starting Court proceedings under s 370.

In the Court proceeding, she alleged contraventions including: general protections/adverse action (Part 3-1), coercion and misrepresentation (ss 343–345), Award breaches (s 45), National Employment Standards contraventions (s 44), and record/pay slip and payment issues (ss 323, 535–536), and she also alleged “serious contraventions” under s 557A and accessorial liability against the director/CEO under s 550.

Pleadings became the central procedural issue. After an earlier statement of claim, the applicant filed a lengthy Amended Statement of Claim (accepted for filing 15 May 2026), and the respondents said they could not properly plead to it, seeking strike-out.

A separate dispute emerged about confidentiality. The applicant provided a bundle of documents to the respondents’ solicitor that included internal emails containing private and sensitive patient information, and the respondents sought orders compelling disclosure by verified affidavit and return/deletion of confidential information.

Decision

Pleadings struck out and leave to re-plead

The Court emphasised the function of pleadings being that they identify the material facts and define issues for trial with clarity sufficient to allow the opposing party to understand and meet the case. The Court confirmed that pleadings must be as brief as the nature of the case permits, state material facts (not evidence), identify statutory provisions relied upon, and specify relief sought.

In general protections matters, pleadings have particular significance because s 361 of the Fair Work Act creates a rebuttable presumption as to alleged reasons/intent for adverse action, and procedural fairness requires respondents to understand the case they must rebut, particularly where penalties and “serious contravention” allegations are made.

The Court found the Amended Statement of Claim should be struck out in whole and that the applicant should be granted leave to re-plead, accepting the respondents’ proposed approach that they identify the paragraphs they could not plead to and briefly explain why, to assist the re-pleading process.

Confidential information, affidavit, delivery up / deletion, and injunction

The Court accepted the respondents’ case that the applicant held employer confidential information, including sensitive patient and internal business information, and that the applicant’s personal undertaking not to misuse it was not an adequate substitute for proper protective orders in the circumstances.

The Court relied on contractual definitions and obligations in the employment contract (including broad “Company Property” and “Confidential Information” definitions covering patient details and internal documents, and contractual obligations to keep information confidential, only use it for employment duties, notify of unauthorised use, and not copy or record confidential information after termination).

The Court was satisfied the applicant was in possession of confidential information in breach of contractual and equitable duties, and that it should be returned, and that any documents the applicant contended were relevant to the proceeding should instead be sought through orthodox disclosure processes (voluntary disclosure or discovery) after pleadings issues were resolved.

Consistently with the Court’s approach to confidentiality and controlled access, the Court noted that discovery in Division 2 is not available as of right for non-family law proceedings and requires a declaration under s 176 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) that it is appropriate in the interests of justice.

The Court made orders requiring:

1. a verified affidavit listing all “Company Property” and/or “Confidential Information” in the applicant’s possession and where/how it was stored;

2. delivery up of hard copy confidential documents and electronic storage devices;

3. permanent deletion from personal devices where applicable;

4. verifying affidavits after delivery up/deletion; and

5. an injunction restraining use, copying or disclosure without consent or court order.  

Employer Takeaways

Ensure employment contracts clearly:

1. define ‘Company Property’ and ‘Confidential Information’;

2. include post-employment restrictions on retention/copying. In this case, the Court relied on broad contractual definitions and confidentiality obligations in ordering return/deletion and restraining use/disclosure;

3. prohibit the use of confidential information, commercially sensitive information, personal or sensitive information as defined under the Privacy Act 1988 (Cth) being uploaded into AI during or after employment;

4. keep in mind the risks of staff using AI in the workplace where inadvertant disclosure of confidential, personal or sensitive information could cause your business legal exposure that can be avoided.

If you require assistance with implementing a privacy policy that addresses AI in the workplace, or a review of your employment contracts to ensure they include express clauses regarding AI usage, please contact us on reception@jeslegal.com.au or call to arrange an initial consultation on 07 4599 3009.