Cool Sonic International Inc v Cool Sonic Research Pty Ltd (in li q)

The parties involved in this case were Cool Sonic International Inc, an American corporation, and Cool Sonic Research Pty Ltd, an Australian company that was in liquidation. The dispute centred around a claim by the American company seeking an injunction against the Australian company to prevent it from selling its assets. The American company argued that such a sale would jeopardise its ability to recover damages it was owed by the Australian company. The matter was heard in the Supreme Court of New South Wales.

The legal issues before the court included determining the criteria to be applied when assessing the amount of security for an undertaking for damages, especially in the case of a foreign party. The court also needed to consider whether evidence of the alleged devaluation of an Australian company's asset should be necessary to grant an injunction. The American company argued that it should not be required to provide evidence of the devaluation, as it was not a party to the Australian court proceedings.

The court held that the criteria for assessing the amount of security for an undertaking for damages should take into account the foreign party's circumstances and the nature of the asset being protected. The court found that it was not necessary for the American company to provide evidence of the alleged devaluation of the Australian company's asset. Instead, the court relied on the affidavit of the American company's representative, which outlined the potential impact of the sale on the company's ability to recover damages. Based on this, the court granted the injunction, requiring the Australian company to provide security for the amount of damages claimed by the American company.

The court further held that the method of assessing the amount of security should be flexible and take into account the specific circumstances of the case. The court noted that the American company's affidavit provided sufficient evidence to support its claim for an injunction. The court also found that the Australian company's liquidator had not provided any evidence to counter the American company's claim. Therefore, the court was satisfied that the American company would suffer irreparable harm if the injunction was not granted. The court ordered the Australian company to provide security for the amount of damages claimed by the American company, which was set at AUD 500,000.