Ecopave Australia Holdings Pty Ltd v Adbri Masonry Group Pty Ltd

REASONS FOR JUDGMENT 1 This judgment concerns an interlocutory notice of motion. The proceedings in which the notice of motion was filed concern an appeal from a decision of the Registrar of Trademarks. The Registrar upheld opposition by the respondent to registration of a trademark sought by the applicant. The respondent to the appeal has sought an order for security for its costs of the appeal. The order sought is for security in the amount of $50,000. That application, which was made by notice of motion filed on 30 June 2011, was supported by an affidavit affirmed by Mr Matt Murphy, a solicitor with conduct of the matter for the respondent under the supervision of the partners of the firm which employs him, Thomsons Lawyers. The respondent also relies on the contents of an affidavit filed by the applicant's solicitors, that affidavit having been affirmed by Mr Shaun William Creighton on 4 August 2011. 2 Prior to the hearing of the notice of motion, the applicant's solicitors, Buchanan Law, sought leave to withdraw and cease to act in the proceedings for the applicant. That leave was granted. 3 In Mr Murphy's affidavit, he provided a detailed estimate of amounts he expected to be incurred by the respondent in preparing for and responding to the appeal. The total figure was $78,172 up to and including the first day of the appeal. No reason has been shown, and none appears to me on the face of Mr Murphy's affidavit, why his estimates should not be accepted as respectable and reasonable ones. In that context, the sum of $50,000 which is sought as security is not disproportionate to the amount the respondent might recover if the appeal fails, although that is not a matter for present assessment. 4 However, there are other matters which must be established in order to justify an order for security for costs. The written submissions which have been made by Mr Heerey on behalf of the respondent quite properly draw attention both to the provisions of s 56 of the Federal Court of Australia Act 1976 (Cth) and the provisions of 19.01 and 19.02 of the Federal Court Rules 2011 which commenced to operate on 1 August 2011. In particular, those submissions sought to rely upon paragraphs (a), (c) and (d) of rule 19.02. 5 The applicant is an Australian company. It appears to be active in the sense that it is clear that it is seeking registration of a trademark. Mr Murphy's affidavit annexes correspondence from the applicant representing that none of the applicant's three directors have significant assets. His affidavit also provides evidence that a demand was made for payment of costs of $2,635 in another matter against one of the directors of the applicant and that those costs have not been paid. In my view, that circumstance does not of itself demonstrate a lack of capacity in the applicant to meet a costs order, nor, for that matter, does it demonstrate that the director in question lacks the capacity to meet a costs order. 6 I also have evidence from the affidavit of Mr Creighton that the applicant has failed to meet an unquantified request by its own solicitors to put funds into a trust account on account of fees, but that also, in my view, is insufficient to establish that the applicant lacks the capacity to meet a costs order or that the applicant is impecunious. 7 The applicant is not a foreign company outside the jurisdiction or control of the Court if an order for costs must be enforced against it. 8 There is no other evidence before me about the assets or financial capacity of the applicant to ultimately meet a costs order against it if the appeal fails. I do not regard the fact that the paid-up capital of the applicant of $3 as sufficient or any evidence of impecuniosity. 9 I am not prepared to infer from the limited material before me that the applicant would not be able to meet an order for costs if one was made against it. It follows that a case for security for costs has not been made out. The notice of motion will, accordingly, be dismissed. 10 I will make no order for costs in relation to the notice of motion as it is far from evident that the applicant has incurred any costs in relation to the notice of motion. 11 The order of the Court will be that the notice of motion is dismissed. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.