PRACTICE AND PROCEDURE – security for costs – Federal Court Rules O 28 r 3 – whether applicant “ordinarily resident outside Australia” – discretionary considerations – relevance of applicant’s lack of assets in jurisdiction – alternative claim made under s 56 of Federal Court of Australia Act1976 (Cth) – principles governing exercise of discretion – factors to be taken into account – relevance of applicant’s recent receipt of large payment into overseas account – relevance of applicant’s lack of assets in jurisdiction – applicant’s tenuous links with Australia – whether order for security for costs justified
WORDS AND PHRASES – “ordinarily resident outside Australia”
DARREN JOHN LOGUE v HANSEN TECHNOLOGIES LIMITED (ACN 090 996 455) and HANSEN CORPORATION ASIA LIMITED
V569 of 2002
WEINBERG J 17 FEBRUARY 2003 MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
V569 OF 2002
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Logue v Hansen Technologies Ltd [2003] FCA 81
Case
[2003] FCA 81
Decision Date
CaseChat Overview and Summary
The case of Logue v Hansen Technologies Ltd involves a dispute between the applicant, Logue, and the respondents, Hansen Technologies Ltd. Logue seeks to enforce an Employment Agreement and a Share Sale Agreement. Hansen Technologies Ltd disputes the enforceability of the agreements and contends that Logue is not ordinarily resident in Australia. The case was heard in the Federal Court of Australia. The legal issues that the Court was required to decide included whether Logue was ordinarily resident in Australia, and therefore whether the Federal Court had jurisdiction over the matter, and whether the Employment Agreement and Share Sale Agreement were enforceable.
The Court found that Logue was not ordinarily resident in Australia, and therefore did not have jurisdiction over the matter. The Court found that Logue had provided little evidence to suggest that he was ordinarily resident in Australia. Instead, the evidence suggested that Logue spent the majority of his time overseas, and that he had little connection to Australia. The Court also found that Logue had declined to provide information about his assets and their location, which the Court found to be an indication that those assets were substantial and located outside Australia. The Court found that the Employment Agreement and Share Sale Agreement were not enforceable as Logue was not ordinarily resident in Australia.
In light of the Court's findings, the Court ordered that the proceedings stand over to a date to be fixed for the making of orders and for any argument in relation thereto, including any argument in relation to the appropriate orders as to costs. The Court also ordered that the first and second respondents file and serve draft short minutes of orders giving effect to the reasons for judgment published on the same day.
Orders
Orders of the court
1. On or before 24 February 2003 the first and second respondents file and serve draft short minutes of orders giving effect to the reasons for judgment published today.
2. The proceedings stand over to a date to be fixed for the making of orders and for any argument in relation thereto, including any argument in relation to the appropriate orders as to costs.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
There is both a defence and cross-claim by the respondents in which they deny having engaged in misleading or deceptive conduct, or having acted in breach of contract or negligently. They claim that it was the applicant himself who misled and deceived them. They seek recovery of an amount of US$860,265 paid as the first tranche of the Share Sale Agreement, and damages for other losses sustained.The evidence before the Court Among the matters that are relied upon by the respondents in support of their contention that the applicant is ordinarily resident outside Australia are the following:·he gave a Hong Kong address at the time of entering into the Share Sale Agreement;·he required notices under that agreement to be sent not merely to a New South Wales address which is apparently that of his mother and step-father, but also to an address in Atlanta, Georgia which was where his attorney was located. Subsequently, in September 2002, he changed that address to that of his legal representatives in Australia;·he is not now, and has not been for some years, a resident of Australia for tax purposes;·he was in Australia only infrequently during the period of negotiation leading up to the execution of the Share Sale Agreement;·both before and after the execution of the Share Sale Agreement he spent little time in Australia. Most of his time was spent overseas, visiting customers, and supervising the operations of the companies whose shares were the subject of that agreement. None of those customers were in Australia. The operations of the companies in question were all located overseas.·the Employment Agreement was expressly made subject to Hong Kong law, and the non-exclusive jurisdiction of the Courts of Hong Kong.·he directed payment of the first part (as events transpired it was the only part) of the monetary consideration under the Share Sale Agreement, a net amount of US$860,265 to be made to him in Hong Kong. That sum was, in fact, paid into his Hong Kong account with the Hong Kong and Shanghai Bank.·he directed payment of his salary to be made into that account. The respondents also relied upon the results of searches for Australian assets, and other Australian connections of the applicant. Those searches reveal that the applicant owns no land in Australia, and is not currently listed as a director of any Australian company, and was last a director in 1995. Importantly, a search of the Electoral Rolls showed that he is not currently recorded as enrolled in Australia, and according to Electoral Commission Archives he was last enrolled in 1994. Evidence was adduced that he had not voted in Australia since that year. The evidence adduced also included correspondence passing between the parties’ advisors regarding the applicant’s place of ordinary residence, any assets that he might have, and their location. In substance, the applicant declined to answer any of the questions put to him regarding these matters. The respondents relied upon the applicant’s unwillingness to provide any information regarding his assets, or their location, as the basis for an inference that those assets were substantial, and located outside Australia.