JUDGE:	Steffensen AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	19 April 2024
DATE OF RULING:	5 July 2024
CASE MAY BE CITED AS:	Nelson v Goble (Security for Costs)
MEDIUM NEUTRAL CITATION:	[2024] VSC 388

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PRACTICE AND PROCEDURE – Application for security for costs – Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 62.02 – Where plaintiffs reside out of Victoria – Where only asset in the jurisdiction is shares in a Victorian company which owns trademarks – Relevance of assets in the jurisdiction – Whether trademarks are sufficient and appropriate form of security – Held not sufficient security – Application granted – Application of Yara Australia Pty Ltd v Oswal (2013) 41 VR 245 – Austin, Nichols and Co Inc v Lodestar Anstalt [2009] FCA 1228, Derma Pen LLC v Biosoft (Australia) Pty Ltd (Security for Costs) [2022] FCA 885, DIF III Global Co-Investment Fund, L.P. & Anor v BBLP LLC & Ors [2016] VSC 401 and NV Sumatra Tobacco Trading Company v British American Tobacco Australia Services Ltd (2008) 79 IPR 286 [2008] FCA 1542 considered.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	A Ford	O’Reilly Stevens Lawyers Pty Ltd
For the Defendants	M Hoyne	Media Arts Lawyers Pty Ltd

Contents

A.. Introduction

B.. Applicable principles

B.1          Relevance of assets in the jurisdiction
B.2          Assessing the asset as security
B.3          Security for costs authorities addressing trademarks

C.. The parties’ submissions

C.1 The defendants’ submissions
C.2 The plaintiffs’ submissions

D.. Consideration

E... Conclusion

HER HONOUR:

A Introduction

This decision concerns whether it is appropriate to require security for costs to be provided by foreign-resident plaintiffs, where the second plaintiff is the sole shareholder and director of an Victorian-registered company, Little River Band Pty Ltd (‘Company’). The first plaintiff does not have any assets in Australia. The second plaintiff does not have any assets in Australia other than his shares in the Company.
The Company owns trademarks registered in Australia, the United States and elsewhere connected with the Little River Band, a band that was particularly popular in the 1970s and 1980s. This proceeding concerns the plaintiffs’ entitlement to royalty payments in respect of albums that the band released in the 1980s. The band continues to perform today, and the business of the band is conducted mostly in the United States. It has not performed in Australia for many years.[1] The first plaintiff is, and has been for some time, the band’s singer and bassist.[2] The second plaintiff is a former member of the band, but has not toured with the band for many years.[3]
[1]See the letter to Groves & Partners Pty Ltd dated 26 February 2024, [13] (‘Valuer Instructions’), Affidavit of Thomas Stevens affirmed on 21…

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.

Continue reading Nelson v Goble (Security for Costs)

Details

AGLC: Nelson v Goble (Security for Costs) [2024] VSC 388
Case: [2024] VSC 388
Decision Date: 5 July 2024

CaseChat Overview and Summary

In the case of Nelson v Goble, the applicants, Nelson, sought an order for security for costs against the respondents, Goble, under rule 62.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic). The applicants, who reside outside Victoria, filed a claim against the respondents for infringement of copyright, passing off, and other related matters. The primary asset of the respondents in Victoria was shares in a company holding trademarks. The applicants argued that the shares were insufficient security for the costs, given their intangible nature and potential difficulty in realisation. The dispute centred on whether the shares and associated trademarks constituted appropriate and sufficient security for the costs of the proceedings.

The court had to determine if the shares in the company and the trademarks were an appropriate form of security and whether they were sufficient to cover the anticipated costs of the proceedings. The applicants argued that the shares were not a suitable form of security due to their intangible nature and the difficulty in realising them to cover the costs. The respondents contended that the shares and trademarks were sufficient and appropriate security. The court considered relevant case law, including Yara Australia Pty Ltd v Oswal, Derma Pen LLC v Biosoft (Australia) Pty Ltd, DIF III Global Co-Investment Fund, L.P. & Anor v BBLP LLC & Ors, and NV Sumatra Tobacco Trading Company v British American Tobacco Australia Services Ltd. These cases provided guidance on the nature of appropriate security and the circumstances in which it may be ordered.

The court held that the shares in the company and the associated trademarks were not an appropriate form of security due to their intangible nature and the difficulty in realising them to cover the costs. The court also found that the security provided was not sufficient to cover the anticipated costs of the proceedings. Therefore, the court granted the application for security for costs. The court ordered the respondents to provide a bank guarantee in the amount of $75,000 to cover the costs of the proceeding.

Orders