Sportsbet Pty Limited v ArcNames Ltd
[2022] VSC 666
•4 November 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
INTELLECTUAL PROPERTY LIST
S ECI 2022 01879
BETWEEN:
| SPORTSBET PTY LIMITED | Plaintiff |
| and | |
| ARCNAMES, LTD | First Defendant |
| and | |
| SPIRE MARKETING CONSULTANTS LTD | Second Defendant |
---
JUDGE: | M Osborne J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 21 October 2022 |
DATE OF JUDGMENT: | 4 November 2022 |
CASE MAY BE CITED AS: | Sportsbet Pty Limited v ArcNames Ltd |
MEDIUM NEUTRAL CITATION: | [2022] VSC 666 |
---
PRACTICE AND PROCEDURE – Discharge of freezing orders – Whether respondent required to establish change of circumstances – Significance of freezing orders being made ‘until further order’.
FREEZING ORDERS – Whether requirements established - Balance of convenience – Whether disconformity between freezing orders and Practice Note.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M Darke SC and Mr C Smith SC | Corrs Chambers Westgarth |
| For the Defendant | Ms K Foley KC and Ms M Marcus | Mills Oakley |
HIS HONOUR:
Introduction
By summons dated 2 September 2022 and filed 12 October 2022 (‘the Summons’), the defendants seek to set aside freezing orders (‘the freezing orders’) made 2 June 2022. The freezing orders are found in paragraphs 7 and 8 of the orders made 2 June 2022 and provide that:
7.Until further order, ArcNames Limited must not transfer the domain name sportsbet.com to a third party, or transfer registration of that domain name to another registrar.
8.Until further order, each of CSC Corporate Domains, Inc and Corporation Service Company (Aust) Pty Ltd must not assist or allow ArcNames Limited to breach paragraph 6 (sic)[1] above insofar as it is within each company’s power to prevent such a breach from occurring, including (without limitation) by placing the sportsbet.com domain name into “Lock” status (where “Lock” means a set of measures that a registrar applies to a domain name, which prevents at a minimum any modification to the registrant and registrar information by the first respondent, but does not affect the resolution of the domain name or the renewal of the domain name, as defined in rule 1 of the Rules for Uniform Domain Name Dispute Resolution Policy).
[1]Clearly, the reference to order 6 was an error.
CSC Corporate Domains Inc (‘CSC Domains’) is the registrar with whom the sportsbet.com domain name is registered, and is part of a group of companies which include Corporation Service Company (Aust) Pty Ltd (‘CSC Aust’).
The defendants rely upon the following affidavits:
(a) Affidavit of James Lawrence made 2 September 2022;
(b) Affidavit of Stephen Theofani Theodoropoulos made 5 October 2022; and
(c) Affidavit of Stephen Theofani Theodoropoulos made 18 October 2022.
Mr Lawrence is the instructing solicitor for the defendants in this proceeding. Mr Theodoropoulos resides in the Philippines and is the authorised representative of ArcNames, Ltd (‘ArcNames’) and the second defendant (‘Spire’). Mr Theodoropoulos is also the sole director of Doyen Advisory Ltd (‘Doyen’). Doyen is the sole corporate director of ArcNames, and has been given power of attorney by NDS Limited (‘NDS’) to manage the business of Spire. Doyen is the sole corporate director of Spire. Each of ArcNames, Spire, Doyen and NDS[2] are incorporated overseas and none has any presence or assets in Australia.
[2]Although the basis for the claim is less than clear, a claim of confidentiality has been made by the defendants with respect to the corporate registration details of ArcNames, Spire and Doyen and NDS. Sportsbet took no issue with this at the hearing of the application, although the affidavit of David Fixler made 18 May 2022 had condescended to such details as Mr Fixler had been able to discern in relation to ArcNames. To the extent that Mr Fixler’s affidavit disclosed such information, it has been incorporated in these reasons.
The plaintiff (‘Sportsbet’) opposes the application and relies upon six affidavits:
(a) Affidavit of David Fixler made 18 May 2022;
(b) Affidavit of Lachlan Gepp made 18 May 2022;
(c) Affidavit of David Fixler made 2 June 2022;
(d) Affidavit of David Fixler made 14 July 2022;
(e) Affidavit of Lachlan Gepp made 16 September 2022; and
(f) Affidavit of David Fixler made 17 September 2022.
Mr Fixler is the instructing solicitor for Sportsbet in this proceeding and Mr Gepp is Sportsbet’s senior corporate counsel.
In order to understand the basis upon which the application is brought and Sportsbet’s opposition, it is necessary to set out some of the background facts and procedural history.
Factual background
Sportsbet offers betting services to Australian consumers and is the largest online bookmaker in Australia. Sportsbet is the owner of various Australian trademark registrations containing the word ‘Sportsbet’ (‘the Sportsbet trademarks’). Sportsbet began using the sportsbet.com.au domain name as an active website promoting Sportsbet and its betting services from September 1999 and commenced offering betting services on the sportsbet.com.au website from January 2001.
ArcNames is the owner of the sportsbet.com domain name. Registration details disclose that ArcNames’ registered address is a PO Box in the city of St Johns in Antigua Barbuda. A search of Antigua Barbuda’s online registry for companies does not reveal any registered company known as ArcNames. The contact email address for the sportsbet.com domain name is arcnames.com. When arcnames.com is entered into the address of a web browser, no website is displayed and instead the user is redirected to the address A search of the domain name arcnames.com does not reveal the domain name owner but instead shows that the domain name is registered with Jewella Privacy LLC (‘Jewella’) which is a company that enables domain name registrants to keep their identity private. An internet search for ArcNames Ltd disclosed via a Panama Papers leaks database shows that ArcNames was a company registered in Seychelles although a search of the Seychelles online company registry does not show a company registered by that name.
The sportsbet.com domain name is registered with CSC Domains. CSC Domains is part of a group of companies bearing similar names associated with Corporations Service Company (‘CSC’). CSC’s office locations include an office in Melbourne, and CSC Domains is registered for GST and has an Australian Business Number allowing it to trade in Australia. CSC Aust, which is an affiliated entity of CSC Domains, is an accredited registrar for domain names in the .au domain space.
From about 2008 until November 2018, Sportsbet engaged in an affiliate program in respect of the sportsbet.com domain name and website located at the URL (‘the sportsbet.com website’). Such programs are apparently common in the online betting and wagering industry and the affiliate promotes the online bookmaker services in exchange for payment. The website operated by the affiliate usually features the online bookmaker’s brand and hosts a link to the online bookmaker’s website. It would appear that in about April 2008 Sportsbet and Spire[3] first entered into an affiliate relationship in respect of the sportsbet.com website. The affiliate arrangement ceased on about 28 November 2018.
[3]Spire was added as a defendant to the proceeding by order made 2 August 2022. Although it is not the subject of the freezing orders, it joined with ArcNames in this application. For convenience and save where necessary, reference is made in these reasons to ‘the defendants.’
In about June 2021, Sportsbet ascertained that the sportsbet.com website began to focus on sports and leagues popular with Australian consumers, such as the Australian Football League, National Rugby League and Australian horseracing. The sportsbet.com website displayed links that read ‘bet on Australian sports now’, and if clicked on, would redirect to the website (‘the Bet365 Australian website’). Bet365[4] is a competitor of Sportsbet.
[4]Bet365 is actually a trading name owned by Hillside (Australia News Media) Pty Limited (ABN 75 148 920 665). For convenience, the name ‘Bet365’ is used in these reasons.
On 21 July 2021, Sportsbet wrote to Bet365 in respect of Bet365’s use of the sportsbet.com website to redirect to the Bet365 Australian website. The letter set out Sportsbet’s concerns regarding the infringement of the Sportsbet trademarks and contravention of the Australian Consumer Law (‘the ACL’), and requested that Bet365 cease its conduct immediately and commit to not engage in the conduct again. Shortly afterwards, Bet365 responded via email confirming that it had ceased the conduct of concern and would not repeat it, and advised that Bet365 would not continue to have any links with that operator in relation to its services in Australia. On the same day that Bet365 received the letter from Sportsbet, Bet365 emailed the defendants requesting that they remove all Bet365 ads from the sportsbet.com website.[5] The defendants replied advising that they were working to take the links down which should be achieved in a few hours’ time.
[5]The email was sent to the address ads-serve.com.
However in about March 2022, Sportsbet became aware that the hyperlinks on the sportsbet.com website had been reactivated and were redirecting internet users once again to the Bet365 Australian website as well as to another website, The content of the sportsbet.com website appeared to be substantially the same as it was in around May and June 2021.
Sportsbet commenced proceedings against ArcNames on 24 May 2022 alleging that by its conduct ArcNames has engaged in trademark infringement (‘the trademark infringement claim’), misleading or deceptive conduct contrary to ss 18 and 29 of the ACL (‘the ACL claim’), and the tort of passing off. By way of relief, Sportsbet seeks injunctions, declarations, damages or an account of profits for trademark infringement, additional damages contrary to s 126 of the Trademarks Act 1995 (Cth) (‘TMA’) and damages pursuant to s 236 of the ACL. In addition, the relief sought by Sportsbet extends to an order requiring ArcNames to transfer the domain name sportsbet.com to Sportsbet. The paragraphs in Sportsbet’s prayer for relief relevant to this application read:
And the Plaintiff claims against the First and Second Defendants:
AA permanent injunction under section 126 of the Trade Marks Act 1995 (Cth) (Trade Marks Act) restraining the First and Second Defendants, whether by themselves, their directors, officers, employees or agents or otherwise howsoever, from using the name sportsbet.com or any sign that is substantially identical with or deceptively similar to any of the Sportsbet Trade Marks in the course of trade in relation to the services in respect of which the Sportsbet Trade Marks are respectively registered, and in respect of closely related services, services of the same description or goods that are closely related to the registered services, without the licence or authority of the Plaintiff, in Australia.
BA permanent injunction under section 232 of the Australian Consumer Law restraining the First and Second Defendants, whether by themselves, their directors, officers, employees or agents or otherwise howsoever, from:
(a)representing that the First and/or Second Defendant’s betting or wagering services, or the betting or wagering services offered by any business to whom the First and/or Second Defendant directs consumers, are provided by the Plaintiff or have the sponsorship or approval of, or are affiliated or connected in the course of trade with, the Plaintiff; and
(b)offering betting or wagering services or providing information in connection with betting or wagering using the name sportsbet.com that is directed to or targeted at consumers in Australia.
CAn order requiring the first defendant to transfer the domain name sportsbet.com to the plaintiff.
Sportsbet was concerned that as domain names can be transferred relatively quickly and with ease, there was a real and substantial risk that once ArcNames was served with the writ and statement of claim in the proceeding it would transfer the domain name to either or both of a new entity and a new registrar.
Sportsbet was also concerned that ArcNames could take steps to hide the identity of the new registrant. Sportsbet contends that ArcNames has already taken such steps to obfuscate the identity of the registrant in respect of its arcnames.com domain name.
Because ArcNames is unable to transfer the sportsbet.com domain name without the assistance of the registrar CSC Domains, the ex parte orders obtained by Sportsbet on 26 May 2022 (‘the 26 May Orders’) included the following:
6.ArcNames Ltd must not transfer the domain name sportsbet.com to a third party, or transfer registration of that domain name to another registrar.
7.Each of CSC Corporate Domains Inc and Corporation Service Company (Aust) Pty Ltd must not assist or allow ArcNames Ltd to breach paragraph 6 above, insofar as it is within each company’s power to prevent such a breach from occurring including (without limitation) by placing the sportsbet.com domain name into “Lock” status (where “Lock” means a set of measures that a registrar applies to a domain name, which prevents at a minimum any modification to the registrant and registrar information by the first respondent, but does not affect the resolution of the domain name or the renewal of the domain name, as defined in rule 1 of the Rules for Uniform Domain Name Dispute Resolution Policy).
8. Each of CSC Corporate Domains, Inc and Corporation Service Company (Aust) Pty Ltd must provide written confirmation to the applicant’s solicitor … that the sportsbet.com domain name has been placed into “Lock” status and that the Registrar will not implement any transfer of the sportsbet.com domain name contrary to this order.
9.Each of CSC Corporate Domains, Inc and Corporation Service Company (Aust) Pty Ltd must not notify ArcNames Limited or any other person (other than a lawyer or other adviser to their company) of this application or court proceeding until they have complied with paragraphs 7 and 8 above.
Paragraph 2 of the 26 May Orders specified that the freezing orders had effect and continued until the return date of 2 June 2022. The orders made also allowed for substituted service.
The practical effect of the ex parte 26 May Orders was that it permitted CSC Domains and CSC Aust to be served first, and they would place a lock on the domain name before such time as ArcNames was notified of the orders.
Sportsbet served documents including the 26 May 2022 orders on ArcNames on 29 May 2022 by email, and on 2 June 2022 Mills Oakley filed an appearance on behalf of ArcNames.
At the further return before Justice Riordan on 2 June 2022, ArcNames was represented by counsel. ArcNames requested until 15 June 2022 to file any affidavits in answer to the application but did not oppose the continuation of the orders.
Accordingly, on 2 June 2022, the Court made further orders that by midday on 15 June 2022 ArcNames file and serve any affidavit material on which it intends to rely in opposition to the plaintiff’s summons filed 24 May 2022 and made the freezing orders.[6]
[6]See [1] above.
The proceeding was listed for further directions on 16 June 2022.
On 16 June 2022, the matter came before me. Both parties had submitted proposed orders in advance of the hearing. Both sets of orders provided a timetable with agreed dates for the filing of pleadings to be followed by a case management conference in July 2022. The only difference in the orders submitted by the parties was that the ArcNames form of order also proposed for the proceeding to be listed for trial an estimate of 3-4 days. The freezing orders were made in terms that they operated ‘until further order’ and as a consequence were left untouched. ArcNames had not filed any affidavits in opposition to the freezing orders or otherwise conveyed that it sought to have the existing freezing orders discharged.
Both parties were represented by Counsel at the 16 June 2022 hearing. The only matter of debate was whether the proceeding should be listed for trial or not. ArcNames pressed for the matter to be listed for trial sooner rather than later, and submitted that this was the ‘quid pro quo of not challenging the freezing order’. In support of that position, Counsel observed that it had been open to ArcNames to challenge the freezing orders but it took the view that if the matter could be brought on expeditiously, it would not do so. Sportsbet opposed the listing of the proceeding for trial. Sportsbet noted that the issues in the proceeding had not yet crystallised, given that a defence had not been filed, and submitted that the freezing orders were cast narrowly and did not prevent the defendants from carrying on their business, including the use of the sportsbet.com domain name in a legitimate manner.
In the result, on 16 June 2022, I made orders that subject to further order, the proceeding would be listed for trial on 3 October 2022 on an estimate of 3-4 days (‘the October trial date’) and made orders for pleadings (‘the 16 June Orders’). The 16 June Orders noted in the ‘Other Matters’ section that the order setting the matter for trial was made notwithstanding the absence of the filing of a defence and without prejudice to Sportsbet’s ability to raise at the next directions hearing[7] matters that went to the practicality of the trial proceeding on 3 October 2022.
[7]Scheduled for 15 July 2022.
When ArcNames subsequently filed its defence to the amended statement of claim and its counterclaim, ArcNames sought in its counterclaim, inter alia, orders for the cancellation of the Sportsbet trademarks.
Accordingly, when the matter came back before me for directions on 15 July 2022, Sportsbet sought orders vacating the trial date on the basis that the scope of the proposed hearing had expanded from that reasonably anticipated on 16 June 2022, and that the October trial date would not allow sufficient time for Sportsbet to respond to the cancellation claim now advanced by way of the counterclaim.
ArcNames pressed for the October trial date to be maintained. Although ArcNames opposed the vacation of the trial date including on the basis that ArcNames was the subject of freezing orders, it did not file evidence pointing to any specific prejudice occasioned by the freezing orders, nor make any application for their discharge. Counsel reserved ArcNames’ position in relation to such application and further stated that the freezing orders imposed some restrictions in relation to what ArcNames could do in relation to administrative matters such as billing and the like, aside from the prohibition on transfer.
I made orders vacating the October trial date, for the provision of evidence in support of the claim and counterclaim, for discovery, and for a mediation to be conducted by 26 August 2022. The matter was otherwise listed for directions on 2 December 2022, and in ‘Other Matters’ it was noted that at the directions hearing on 2 December 2022 the Court would allocate a trial date preferably to take place within the first term of 2023 on an estimated duration of six days, with the trial to be confined in the first instance to questions of liability including any entitlement to, but not the calculation of, the quantum of additional damages.
The parties subsequently participated in a mediation which was unsuccessful. On 2 September 2022, the defendants served the Summons and the parties obtained consent orders postponing the filing of their trial evidence until the adjudication of the application.
Threshold issue - onus
In light of the above, a threshold issue arises as to onus. Sportsbet contends that ArcNames must establish a relevant change of circumstances since the making of the freezing orders on 2 June 2022 before those orders can be set aside. ArcNames submits that because the freezing orders were made ‘until further order’ and were made without argument on the merits, the burden is cast on Sportsbet to establish the appropriateness of their continuation by reference to the usual principles governing the making of such orders. Whilst Sportsbet denies that this is so, it submits that it has in any event established that the maintenance of the freezing orders are necessary to preserve the possibility of it obtaining meaningful final relief, and that the orders are appropriate having regard to the usual principles applied in the making of freezing orders.
Generally, in any application to vary an injunction, the applicant must establish the existence of a change in circumstances sufficient to justify the Court varying the original order.[8] Whilst the Court has a discretion to vary or discharge an interlocutory injunction, it should not permit an attempt to relitigate the merits of the original order. Ordinarily, a variation of an injunction will only be permitted when new facts come into existence or are discovered which render its enforcement unjust.[9]
[8]Optus Networks Pty Ltd v City of Boroondara [1997] 2 VR 318, 338 (Charles JA).
[9]Jindra v Tech-Rentals Pty Ltd [2000] VSC 122, [23] (Warren J) (‘Jindra’); Redwin Industries Pty Ltd v Feetsafe Pty Ltd [2002] VSC 427, [41] (Habersberger J) (‘Redwin’).
The defendants submit that this situation does not apply in the present instance. First, they stress that they are not attempting to relitigate the merits of the original orders because those merits have never been determined. The orders were first obtained ex parte on 26 May 2022 and thereafter continued on 2 June 2022, and were not sought to be discharged on 16 June 2022 in anticipation of the October trial date.
Secondly, the defendants argue that the party seeking freezing orders always bears the burden of demonstrating that the circumstances of the case warrant such an intrusive remedy before the case is fully heard. They further argue that freezing orders (or other such injunctions) made ‘until further order’ signify that the respondent is at liberty to apply to the Court at any time prior to final determination of the proceeding in order to ask the Court to exercise its discretion afresh as to whether the orders should be continued.
The defendants submit that where a defendant consents to a freezing order ‘until further order’ but then brings the matter back before the Court for further consideration, it remains the burden of the party who obtained the orders to satisfy the Court that the orders should be continued. They submit that the mere fact that a respondent has previously consented to a freezing order ‘until further order’ does not reverse the burden so that the defendant must then satisfy the Court that the orders should be discharged.[10]
[10]Commonwealth Bank of Australia v Saleh & Ors [2005] NSWSC 843, 11 (Palmer J) (‘Saleh’).
The defendants refer to Zhen v Mo,[11] where Forrest J stated that the applicant bears the onus of satisfying the Court that the freezing order should be continued. [12] However, his Honour stated this in the context of a contested application on the first return after ex parte orders had been made, which is distinguishable from the present case.
[11](2008) VSC 300 (Forrest J).
[12]Ibid, [24].
The defendants further rely on In the matter ofBlack Eagle Media Pty Ltd[13] (‘Black Eagle Media’). In that case, Black J considered whether a freezing order made initially ex parte and thereafter in a different form by consent should be continued. His Honour accepted that the onus rested on the party seeking the further extension of the freezing order to justify its extension, rather than for the respondent to demonstrate why it should not be continued in circumstances where the freezing orders had been extended by consent for specified periods.[14] Black Eagle Media is also distinguishable; the freezing orders the subject of consent in that case extended to a specified date. That is not the case here.
[13][2014] NSWSC 1778 (Black J).
[14]Ibid, [16].
Black J referred[15] to Palmer J’s observation in Commonwealth Bank of Australia v Saleh[16] that it is commonplace for an interlocutory injunction to be granted by consent ‘until further order’ with liberty to apply reserved. In such a case, the defendant is at liberty to apply to the Court at any time before the final determination of the proceedings to ask that the Court exercise its discretion afresh. In such an instance, Palmer J considered that the mere fact that the defendant had previously consented to the injunction ‘until further order’ did not mean that the defendant bore the burden of establishing that the injunction should be discharged; as a general rule, it remains the burden of the plaintiff who obtained the injunction to satisfy the Court that it should be continued. However, Palmer J observed that this general rule would not apply where the terms of the orders show that the parties had a different intention.[17]
[15]Ibid, [15].
[16]Saleh (n 10), [10]-[12].
[17]Ibid, [12].
At one level, so much is obvious; orders can be made on an interim basis, so as to apply only to a specified date pending the matter returning to Court for a contested hearing. In some cases the wording of the order may be ‘until 4.00 pm on X June 2022, or further order’; in other cases the wording ‘until further order’ is deployed but other orders make it clear that the orders are to have interim effect only until such time as a hearing as to their merits can be held. In yet other instances, the phrase ‘until further order’ is deployed as an equivalent to ‘until the trial and determination of the proceeding or further order’.
In the present case, it is clear that the orders made 2 June 2022 considered in isolation were intended only to have an interim effect. The order that provided for the defendant to file and serve any affidavit material in opposition to the continuation of the orders by 15 June 2022 and the related listing of the matter for directions on 16 June 2022 plainly contemplated that the freezing orders were to remain in place only until the defendants had time to determine whether to oppose their continuation or not, which was to occur by 16 June 2022. Had the defendants filed affidavit material in opposition, there is no question that Sportsbet would have borne the onus of establishing the basis for the continuation of the freezing orders.
However, it is clear that by 16 June 2022 the defendants had chosen not to contest their continuation. No affidavits in opposition had been filed and the orders proposed by the defendants on that day did not seek any discharge or variation of the freezing orders. Because the freezing orders then in place applied ‘until further order’, no order varying their terms was sought or required.
In my view, the mere fact that the freezing orders remained ‘until further order’ did not mean that ArcNames was entitled at a whim to change its mind and require Sportsbet to justify the grounds for the orders at a later inter partes hearing when it had not previously put those matters in issue. It is inconsistent with case management principles for a party who had the opportunity to contest the freezing orders but assented to their continuation to then apply for the discharge of those orders absent a material change in circumstances.[18]
[18]In Blue Visions Management Pty Limited v Chidiac(No 2) [2017] NSWSC 755, Ball J referred at [7]–[8] to similar considerations although in a different context.
However, I accept that ArcNames’ assent to the continuation of the orders on 16 June 2022 was as a matter of practical reality accompanied by its expectation of an expedited hearing. Given that the proffering of rival orders and the arguments advanced on that day necessarily contemplated that such a hearing might not be ordered, and ArcNames had not filed material in opposition or formally agreed on the freezing orders being continued only on the basis that a hearing date was set, the potential vacation of that date was also contemplated.
A strict approach to the requirement to identify a change of circumstances may suggest that the vacation of the trial date was not a change as that possibility was known on 16 June 2022. However, a pragmatic approach to the continuation of interim injunctions (freezing orders or otherwise) should be encouraged. Too strict an approach to the question of what may constitute a change in circumstances may serve to discourage such an approach.
In the present circumstances, I would be reluctant to take such a strict approach. Notwithstanding that the potential vacation of the trial date was a circumstance known as at 16 June 2022, when the vacation resulted, it remained open to the defendants to apply for the discharge of the freezing orders. The hearing on an expedited basis, which was the basis of the non-opposition to the freezing orders, was no longer available.
However, a reservation in those terms only assists the defendants so far. The mere vacation of the contemplated hearing date is not of itself sufficient to justify the discharge of the freezing orders. Not every change of circumstance is sufficient to justify a variation of orders. Much will depend upon whether the new facts which came into existence or were discovered are such as to render the continued maintenance of the order unjust.[19] It is not difficult to conceive of the prejudice that may arise if an injunction, freezing order or otherwise, was to be maintained for a period longer than anticipated because of the inability to obtain an expedited hearing date. For example, an injunction which restrains an employee from commencing employment with a competitor of his or her former employer might become unjust if it remains in place for a long period where the injustice might not be present if an expedited hearing date could be obtained. Similarly, freezing orders in wide-ranging terms which permit the respondent from dealing with its own moneys of limited amounts and for limited purposes only may become an instrument of injustice if they are to remain in place for a long period of time; such an injustice may arise where a hearing date is lost, so as to support an application for variation of the injunction.
[19]Jindra (n 9), [23] (Warren J); Redwin (n 9) [41] (Habersberger J).
In the present case, however, the freezing orders are of a relatively limited nature; ArcNames has been the registrant of the sportsbet.com domain name since 11 April 1999. The freezing orders do not prevent ArcNames from making use of the domain name in the usual course of its business. All that the freezing orders do is prevent the domain name from being transferred by ArcNames to a third party or to another registrar who may assist in the transfer of the registration of the sportsbet.com domain name to another entity.
Relevantly, the defendants have not identified any specific prejudice arising from the maintenance of the freezing orders, much less any prejudice occasioned by the vacation of the October trial date, with the trial now listed on 8 May 2023.[20]
[20]The parties were informed of the new trial date at the hearing of the application on 21 October 2022.
In my view, it is not open to the defendants to rely upon the mere fact that the existing orders remaining in place ‘until further order’ and now change their minds and assert that the onus is on Sportsbet to establish a basis for the making of freezing orders. It is incumbent on them to identify a relevant material change in circumstances from the making of the freezing orders, which they have not done. They have not adduced any evidence or advanced any submission to the effect that the freezing orders have been rendered unjust by reason of the fact that the October trial has been vacated and instead the trial will now take place on 8 May 2023. Whilst there has been a change of circumstances, the change is not material such as to render the continuation of the freezing orders unjust.
Whilst that is sufficient to dispose of the application, given that the application for the freezing order was argued on the merits as if it was a matter in respect of which Sportsbet bears the onus, it is appropriate to consider that question in any event.
Has Sportsbet established that the freezing orders are appropriate ?
Relevant principles
The defendants seek the setting aside of the freezing order and rely upon three broad matters; first, they submit that there is little realistic prospect that the Court would make an order by way of final relief for the transfer of the domain name; secondly, they assert that the value of the assets covered by the freezing order exceeds the likely maximum amount of the applicant’s claim including interest and costs and as such is contrary to paragraph 4.9 of the Practice Note, and thirdly, they submit that Sportsbet has not established that there is a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied because the prospective judgment debtor disposes of or deals with the assets in such a way as to frustrate the processes of the Court.
The doctrinal basis for the making of freezing orders is conveniently set out in Cardile v LED Builders Pty Ltd (‘Cardile’)[21] where the majority quoted with approval[22] the following statement in the joint judgment of Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia: [23]
… The Mareva injunction is the paradigm example of an order to prevent the frustration of a court’s process … . The moulding of an interlocutory injunction must depend upon the circumstances of each case. As Brennan J observed in Jackson v Sterling Industries Ltd:[24]
“A judicial power to make an interlocutory order in the nature of a Mareva injunction may be exercised according to the exigencies of the case and, the schemes which a debtor may devise for divesting himself of assets being legion, novelty of form is no objection to the validity of such an order.”
The general principle which informs the exercise of the power to grant interlocutory relief is that the court may make such orders, at least against the parties to the proceeding against whom final relief might be granted, as are needed to ensure the effective exercise of the jurisdiction invoked.
[21](1999) 198 CLR 380, 399 [41] (Gaudron, McHugh, Gummow and Callinan JJ).
[22]Ibid, 400 [41].
[23](1998) 195 CLR 1, 32 [35].
[24](1987) 162 CLR 612, 621.
In Rozenblit v Vainer,[25] (“Rozenblit’) McLeish JA and Niall JA noted that applications for freezing orders were required to be made under Order 37A of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’) which enables the Court to make a freezing order for the purpose of preventing the frustration or inhibition of the Court’s process by seeking to meet a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied.[26] Their Honours observed that order 37A closely reflected the principles enunciated in Cardile[27] and noted that r 37A.02(4) requires the Court in making a freezing order to have regard to the Practice Note concerning freezing orders.[28] That Practice Note issued by the Court on 30 January 2017 contains the following requirements:
4.2The purpose of a freezing order is to prevent frustration or abuse of the process of the Court, not to provide security in respect of a judgment or order.
4.3 A freezing order should be viewed as an extraordinary interim remedy because it can restrict the right to deal with assets, even before judgment, and is commonly granted without notice.
…
4.9 The value of the assets covered by a freezing order should not exceed the likely maximum amount of the applicant’s claim, including interest and costs.
[25][2019] VSCA 164.
[26]Ibid, [10].
[27]Ibid, [14].
[28]Ibid, [13].
Further, their Honours noted that r 37A.05 (4) states that the Court may make a freezing order if it is satisfied that there is a danger that a judgment or prospective judgment will be wholly or partially unsatisfied because the prospective judgment debtor might dispose of or deal with its assets.[29] Their Honours observed that the word ‘might’ in r 37A.05(4) had been held to mean ‘a reasonable possibility, not fanciful or unreal, but not necessarily more than 50 per cent’.[30]
[29]Ibid, [12].
[30]Ibid, [15].
In Rozenblit, the Court also expressed a preference for an approach which treated the balance of convenience as one of multiple discretionary considerations which pertain to the making of the order rather than as a mandatory requirement.[31]
Good arguable case ?
[31]Ibid, [17].
In the present case, the defendants did not dispute that Sportsbet had a good arguable case in respect of each of the causes of actions advanced.
That concession, however, was subject to one important qualification. The defendants assert that there is little realistic prospect of Sportsbet obtaining by way of final relief an order as framed in paragraph C of the prayer for relief:
CAn order requiring the first defendant to transfer the domain name sportsbet.com to the plaintiff.
By extension therefore, the defendants argue that because the transfer order could not be realistically obtained by way of final relief, there is no basis for the continuation of the freezing orders.
In support of its submission that there is little realistic prospect of the Court making orders by way of final relief for the transfer of the domain name, the defendants seek to distinguish each of the cases relied upon by Sportsbet when obtaining the original freezing order.[32]
[32]ACCC v Purple Harmony Plates Pty Ltd (No 3) [2002] FCA 1487; CSR Ltd v Resource Capital Australia Pty Ltd (2003) 128 FCR 408; Macquarie Bank v Seagle (2008) 79 IPR 72 (‘Seagle’); Bing! Software Pty Ltd v Bing Technologies Pty Ltd (2008) 79 IPR 454; Mantra Group Pty Ltd v Tailly Pty Ltd (2010) 183 FCR 450; Speedo Holdings BV v Evans (No 2) [2011] FCA 1227; Ariix LLC v Mahilall [2014] FCA 429.
Whilst each of those cases involved instances of the grant of final relief, it is trite to observe that all cases depend to a large extent on their own facts. In my view, there is little to be gained at this stage before evidence has been filed, much less tested, in determining whether an order may be made in terms of final relief transferring the sportsbet.com domain name to Sportsbet. Much will depend upon whether the conduct apparently engaged in by the defendants was engaged in deliberately[33] and with an intent to mislead Australian consumers.
[33]In argument, Sportsbet made plain reference to the conduct being represented in 2022 as indicative of deliberate wrongdoing.
Sportsbet submits that to focus on the strengths of Sportsbet’s case for an order by way of final relief in terms of the transfer order is erroneous, but in any event submits that it has nevertheless established a good arguable case for the transfer order.
Rather, Sportsbet submits that the correct approach is to consider the strength of Sportsbet’s arguable case for the final injunctive relief contained in paragraphs A and B of the prayer for relief;[34] and whether it is also likely that the Court will make such ancillary orders as are necessary to ensure that the injunctive relief in paragraphs A and B is effective. Sportsbet submits that if the Court is satisfied that such orders will be made accompanying the paragraphs A and B injunctions, but there is a risk that meaningful final relief might not result, absent the continuation of the freezing orders, they should be maintained.
[34]See [15] above.
In addition to being the registrant of the sportsbet.com domain name, ArcNames also is the owner of various other domain names which include derivatives of Sportsbet. Some of the less colourful derivations are sportsbets.com; sportsbet.blog; sportsbet.casino; sportsbet.football; sportsbet.tennis; sportsbet.poker; sportsbet.press; sportsbet.vegas (‘the ArcNames domain names’).
Until about 24 July 2022, the registrar of the ArcNames domain names was CSC Domains.
However, between approximately 24 July and 30 August 2022, Mr Theodoropoulos caused the ArcNames domain names to be transferred to a different registrar, DNC Holdings Inc (‘DNC’) ‘because DNC’s fees to act as registrar are significantly lower than CSC’s fees’.[35] At that time, Mr Theodoropoulos also transferred the ArcNames domain names from ArcNames as registrant to Nortech (a related company to the defendants) ‘for business reasons’ and in some cases to Jewella. Mr Theodoropoulos describes Jewella not as a registrant but rather as a privacy service that enables customers of some registrars to keep the registration details of domain names private.
[35]Paragraph [15] of Mr Theodoropoulos’ affidavit of 5 October 2022.
Sportsbet’s case is that if it succeeds in its claims for trademark infringement and breach of the ACL, it will be entitled to permanent injunctions against the defendants under s 126 of the TMA and s 232 of the ACL. In the case of the trademark infringement claim, the injunction would prevent the defendants from using the name ‘sportsbet.com’ or any mark that is substantially identical with or deceptively similar to any of the Sportsbet trademarks. In the case of the ACL claim, the injunction would prevent the defendants from representing that their betting or wagering services or those offered by any business to whom the defendants direct consumers are provided by Sportsbet, or have the sponsorship or approval of, or are affiliated or connected in the course of trade with, Sportsbet (in the case of the ACL contravention).
However, because of the absence of any connection by the defendants with the jurisdiction of the Court, Sportsbet submits that it is likely that it will also be able to obtain ancillary relief at trial in the form of orders necessary to ensure that the injunctive relief is effective. In particular, it emphasises that Sportsbet’s claim against the defendants include claims of misleading consumers in contravention of the ACL and that those claims engage the broad power to grant injunctive relief in the public interest under s 232 of the ACL.
In short, it argues that given the absence of any connection of the defendants with the jurisdiction, there is a risk that the granting of injunctive relief in terms of paragraph A and B of the prayer for relief will be ineffective absent the grant of some form of appropriate ancillary relief. Sportsbet points to the fact that such final injunctions would in a practical sense be unenforceable if they were disobeyed: no officer of either defendant could be committed as those officers are corporations, Doyen and NDS, which corporations are in any event wholly outside the jurisdiction. Further, it submits that no effective order for sequestration of the property of either defendant or an officer of the defendants could be made for the same reasons.
Sportsbet argues that the form of such ancillary relief may include orders for the transfer of the sportsbet.com domain name as is sought in paragraph C of the prayer for relief; it submits that such orders are commonly granted in applications of this nature.
However, in oral submissions, Sportsbet accepted that it may be the case that at trial the form of ancillary relief ordered may be in a form less disadvantageous to the defendants. It suggested that ancillary orders might be made in final form substantially to the same effect as the freezing orders, and be limited to orders preventing the transfer of the sportsbet.com domain name to another registrar and/or to a third party. Such a form of ancillary relief may be sufficient in the circumstances to preserve the utility of the injunctions the subject of paragraphs A and B.
Sportsbet also argues that it does in any event have a good arguable case for the transfer of the domain name. It points to, inter alia, Macquarie Bank v Seagle[36] where Jagot J made orders for the transfer of a domain name to the applicant. Her Honour accepted that such orders were appropriate because the websites were instruments of the respondent’s misleading and deceptive conduct and the Court has inherent jurisdiction in effect to order delivery up and destruction of those instruments from the respondent’s hands. The Court found that the orders were necessary to prevent the respondent’s use of the infringing articles in derogation of the applicant’s rights, and would operate in aid of the primary injunctions and that the orders were analogous to orders commonly made in the case of trademark infringement for delivery up and destruction which includes not only the infringing articles but also items used to manufacture the infringing articles.
[36]Seagle (n 32).
In short, Sportsbet submits that the freezing orders are necessary to preserve the possibility of Sportsbet obtaining meaningful final injunctive relief restraining the defendants from resuming the conduct about which Sportsbet complains.
Since being served with the freezing orders, CSC Domains has continued to recognise the Court’s authority and is observing the orders. Sportsbet adverts to a concern that if ArcNames is able to transfer the registration of the sportsbet.com domain name from CSC Domains, which is in Australia and is observing the orders, to a registrar which does not have an Australian presence or may not recognise and observe the jurisdiction of this Court, any such final injunctive relief may be unenforceable. It submits that CSC Domains is observing the freezing orders because it is within the jurisdiction and is related to CSC Aust, preventing the defendants from taking steps to resume the conduct the subject of Sportsbet’s complaint.
Evidence at trial as to the actual prejudice which may attach to an order being made in terms of paragraph C of the prayer for relief, and whether Sportsbet’s interests can be sufficiently protected by a less intrusive order such as an order in final form in terms essentially equivalent to the freezing orders now in place will be relevant to the final relief ordered.
Further, I accept that the relevant question is not so much whether Sportsbet has a good arguable case as to the making of an order by way of final relief in terms of paragraph C, but rather whether the existing freezing orders are necessary to preserve the possibility of meaningful final injunctive relief in whatever form that final injunctive relief may be granted.
Thus, the relevant question is whether the existing freezing orders are necessary to preserve the effectiveness of final injunctive relief sought in paragraphs A and B of the prayers for relief, together with appropriate final ancillary relief necessary to ensure the effectiveness of the paragraph A and B injunctions. In any event, I accept that the authorities identified by both parties establish that in appropriate instances a court may grant an order for transfer of the domain name. Whether those circumstances are present in the instant case is a matter for trial.
Value of assets exceeded by the amount of the freezing order
Nor do I accept that the submission that the alleged disconformity between the terms of the freezing orders and paragraph 4.9 of the Practice Note has any significance. Whilst I accept for the purposes of this application that the value of the domain name sportsbet.com may substantially exceed the commissions earned by the defendants as a result of the alleged infringing conduct, that does not represent any impediment to the continuation of the freezing order in its present form.
Plainly, the Practice Note is drawn with reference to the form of the freezing order in its most common form, which freezes the defendants’ assets at a level which should not exceed the likely maximum of the claim. The Practice Note is clearly referable to a final monetary judgment.
Here, the freezing orders are more limited; they restrain only the dealing with a particular asset in circumstances where the interim preservation of that asset is necessary to preserve the possibility of meaningful final injunctive relief. They are not concerned with steps being taken to frustrate execution of a future monetary judgment. Further and in any event, the Practice Note does not operate such as to fetter the Court’s jurisdiction to make such injunctive orders as are necessary in order to prevent frustration of its processes. The moulding of the particular injunction ordered will inevitably depend upon the circumstances of each case.
Risk of the defendants taking steps to frustrate or impede final relief ?
The most pertinent question is whether Sportsbet is able to point to admissible evidence which supports the proposition that there is a danger that the possibility of meaningful final injunctive relief will be impeded absent the continuation of the existing freezing orders.
The defendants submit that there is no such evidence; it notes that ArcNames has appeared in the proceeding, has ceased the conduct in 2022 complained of, and has offered, by way of an undertaking from Mr Theodoropoulos, that if the freezing orders are discharged, ArcNames and Spire will provide security for the total amount of money received by Spire (in the form of commissions) from each of Bet365 and PlayUp in respect of the alleged infringing conduct in 2021 and 2022.
In my view, the evidence establishes a clear basis for the inference that unless the freezing orders remain in place, there is a realistic possibility that ArcNames will transfer the registration of the sportsbet.com domain name from CSC Domains to a registrar which has no association with Australia and which may not recognise and observe the orders made of this Court. There is a risk that ArcNames may transfer the domain name to some other related entity which is not a party to the proceeding and whose identify may well be concealed. This is precisely how ArcNames has recently dealt with the ArcNames domain names which are not the subject of the freezing orders.[37] If this occurs, the consequence is that registration of the sportsbet.com domain name will pass out of the jurisdiction. If that occurs, then the power that the Court currently possesses to restrain its use in a manner which contravenes or infringes Australian law will be lost.
[37]See [67] above.
I note that the defendants have not adverted to any specific prejudice at all occasioned by the maintenance of the freezing orders in their present form, nor have the defendants undertaken not to deal with the sportsbet.com domain name in the same way that they have dealt with the ArcNames domain names. The disclosed basis of the transfer of the ArcNames domain names to DNC is because the fees of the latter are ‘significantly lower’ than those of CSC Domains. This circumstance is not relied upon as basis for the discharge. This is not surprising. The amount of the lower savings is not identified and in any event is met by Sportsbet’s undertaking as to damages. It would have been an easy matter for Mr Theodoropoulos to have explained why he sought the discharge of the freezing orders or otherwise deposed on oath that the defendants did not intend to deal with the sportsbet.com domain name in the way in which they have dealt with the ArcNames domain names, but he has not done so.
Discretionary considerations
The absence of any evidence as to the inconvenience or prejudice occasioned by the continuation of the freezing orders is also relevant to the balance of convenience, which is a relevant discretionary consideration.
On the basis of the material before me, the existing freezing orders do no more than preserve the status quo; they allow the defendants to continue to operate their business and merely require them to maintain the domain name with the current registrar.
Conversely, if the freezing orders are set aside, it would be open to the defendants to take exactly the same steps that they have taken in relation to the ArcNames domain names with the result that the sportsbet.com domain name could be transferred to a new registrant (such as Jewella) whose identity may well be kept private, effectively severing any jurisdiction with this Court.
Conclusion
Having regard to the above matters, the application to discharge the freezing orders is dismissed.
2
13
6