University of Sydney v Objectivision Pty Ltd

The University of Sydney, along with Visionsearch, sought security for costs against Objectivision Pty Ltd in the Federal Court of Australia. The University and Visionsearch were seeking substantial amounts of security for costs in relation to cross-claims made by Objectivision regarding copyright infringement and breach of confidence. Objectivision, on the other hand, resisted the application for security for costs, arguing that such an order would stymie litigation and that the amounts claimed were excessive.

The primary legal issue before the court was whether the University and Visionsearch were entitled to security for costs against Objectivision, given the latter's financial situation. Objectivision argued that the University and Visionsearch would also benefit from its success in the case, and that the amount of work necessary to defend the claims had decreased. The court considered the principle that a party who is a defendant or respondent must bring a cross-claim that is substantively defensive, and that the responding party is not in the same position as a person who brings a cross-claim that is independent.

The court found that Objectivision was required to provide security for costs, as the directors were not prepared to pay security from behind the corporate veil, and the company had been offered a lesser amount without justification. The court ordered that Objectivision provide security for the University of Sydney's and Visionsearch's costs of and incidental to the claim pleaded in paragraphs 60 to 91 of the Third Further Amended Statement of Cross-Claim dated 21 September 2015 (Copyright Infringement and Breach of Confidence Cross-Claims), payable in the tranches set out in orders 2 and 3. The court also ordered that in default of compliance with any of the steps for the provision of security, the proceeding against the University of Sydney in respect of the Copyright Infringement and Breach of Confidence Cross-Claims be stayed until further order.

In conclusion, the court granted the University of Sydney and Visionsearch's application for security for costs against Objectivision, and ordered that Objectivision provide security in the amounts and within the timeframes specified in the orders. The court also ordered that in default of compliance with any of the steps for the provision of security, the proceeding against the University of Sydney and Visionsearch be stayed until further order.