Stern Electronics Pty Ltd v Vascular Enhancement Technology Pty Ltd

Stern Electronics Pty Ltd, the plaintiff, brought an action against Vascular Enhancement Technology Pty Ltd, the defendant, concerning a dispute related to a technology license agreement. The plaintiff sought relief related to the alleged breach of the agreement. The case was heard in the Federal Court of Australia. The central issue before the court was whether the plaintiff, a corporate entity lacking financial means, should be required to provide security for the defendant's costs of and incidental to these proceedings. Additionally, the court had to determine the appropriate amount of security to be provided.

The plaintiff argued that it had no means to provide security for the defendant's costs, and thus, an order for security should not be made. The defendant contended that the plaintiff had the means to provide security and that the court should order the plaintiff to provide such security to protect the defendant from potential financial loss. The court considered the discretionary factors relevant to the decision, including the plaintiff's financial position, the merits of the case, and the potential prejudice to the parties if security were or were not ordered. The court found that the discretionary factors favoured ordering security, and the plaintiff was required to provide security in the form of an irrevocable bank guarantee. The court set the amount of security at $40,000, and further allowed the defendant to apply for additional security at the commencement of the trial.

The court ordered that the plaintiff provide security for the defendant's costs by way of an irrevocable bank guarantee in the sum of $40,000. The court also directed the Registrar to edit an affidavit filed by the plaintiff, removing references to settlement discussions and destroying an exhibit related to those discussions. The court granted the defendant leave to apply for further security on the first day of the trial of the action.