In the matter of Sol Sana Pty Ltd [2018] NSWSC 570

EX TEMPORE Judgment

1. HIS HONOUR: By amended interlocutory process filed today, the defendants, SC Creative Pty Ltd and Ms Sara Caverley, move pursuant to s 1337H of the Corporations Act 2001 (Cth) for proceedings commenced in this Court on 10 April 2018 to be transferred to the Federal Court of Australia, New South Wales District Registry, there to be heard and determined together with other proceedings commenced on either 10 or 11 April 2018 between, substantially, the same parties.
2. Originally, reliance was also placed upon s 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW), but the present proceedings being proceedings to which Part 9.6A of the Corporations Act applies, the New South Wales Act is excluded by reason of s 1337A(2)(a). While there are general similarities between the two provisions which permit transfer of proceedings between these two Courts, it is as well to note that there are different mandatory relevant considerations applicable to an application under s 5 (to which some of the parties' written submissions were addressed) and, as was pointed out in the applicant's written submissions, the operation of s 5 is mandatory, in the sense that if the Court is satisfied of any of the three matters identified in s 5(1)(b)(i)-(iii) then the Court "shall transfer" the relevant proceedings to the Federal Court: see BHP Billiton v Shultz (2004) 221 CLR 400; [2004] HCA 61 at [14], whereas s 1337H confers a discretion.
3. The question for me under the section which is applicable, s 1337H, is whether it "appears to the transferor court that, having regard to the interests of justice, it is more appropriate for [this proceeding] to be determined by [the Federal Court]." If so satisfied, then this Court "may" transfer the proceedings to the Federal Court. This is what underlay what Black J said In the Matter of Webster Consolidated (Holdings) Pty Ltd [2016] NSWSC 376 at [7], namely, that the power is discretionary rather than mandatory.
4. In order to assess (a) whether the transfer is "more appropriate", and (b) if so, whether to exercise the discretion, it is necessary to say something of the factual background, and something more about the procedural background to the two proceedings.

Factual background

1. The applicant in the Federal Court is Sol Sana IP Pty Ltd. That company owns three registered Australian marks. It is controlled as to 45% by Magnamail Holdings IP, the plaintiff in the proceedings before me and which is controlled by Mr Mohamed Rafique Majam, and as to 55%, by the first defendant to this proceeding, SC Creative Pty Ltd, which in turn is controlled by the second defendant, Ms Caverley. It is not disputed that in around May 2016, Sol Sana IP granted a licence to Sol Sana Pty Ltd, a company owned and controlled by Mr Majam, to use those registered trademarks, and that Sol Sana Pty Ltd is the entity which sells various products (including, it appears, footwear), under that brand.
2. It appears from Sol Sana IP's financial statements as at 28 January 2018 (the most recent in evidence) that Sol Sana IP has received zero income for the last two and three quarter financial years. That is, so it has been said without opposition from the Bar table, because royalties under the Licence Agreement are calculated by reference to net, rather than gross, sales of the various chattels bearing the registered marks. In each of those years, that is the financial years ending 30 June 2017 and 30 June 2016 and the nine months ended March 2018, Sol Sana IP has incurred a liability of interest on a loan account in the order of $110,000-120,000 for the full financial years and $90,000 for the part financial year. In each of those years in its balance sheet, Sol Sana IP has recorded a loan to Mr Majam's company, Magnamail Pty Ltd, of between some $2.4 and $2.8 million. The balance sheets show precisely one significant asset of Sol Sana IP, which is "the trademarks at carrying value", valued in each case in the order of $2.3 million. There is also a relatively small asset (ranging from $34,279 in 30 June 2016 to $103,478 in March 2018) being a debt owed by Ms Caverley.
3. It is admitted on the pleadings in this Court that in March 2018 Sol Sana IP's Licence Agreement was terminated (see Points of Claim and Defence, para 18). That occurred pursuant to a Shareholders' Agreement, most of whose details are presently irrelevant, but which in cl 9 made provision for initial and subsequent funding.
4. Clause 9.7 provided relevantly that: "In the event that further funding is not forthcoming ... then Sol Sana shall be at liberty to terminate the License Agreement and in which case, this agreement shall be terminated and the provisions of cl 23 shall apply."
5. Relevantly in cl 23, an obligation is imposed by cl 23.4: "Upon termination (for whatever reason), the Business is to be sold and the proceeds of sale are to be distributed in the same manner and priority as set out in cl 14.4 above."
6. "Business" is defined in cl 1.1(d) to mean: "the provision of intellectual property rights by the Company."
7. It is accepted, in my view entirely properly, that cl 23.4 imposes an obligation to sell the registered marks. It also appears to be accepted, and in any event I am prepared to proceed upon this basis, that, in the absence of any identification in the Shareholders' Agreement as to time, those assets are to be sold within a reasonable time: see Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 at 517-518; [1982] HCA 29. A reasonable time in any particular case is a question of fact depending on all the relevant circumstances: see for example K & M Prodanovski Pty Ltd v Calliden Insurance Limited [2012] NSWCA 117 at [48].
8. What a reasonable time is was left a little unclear on the evidence and submissions before me. The defendants/applicants maintained that as of today, a reasonable time had not elapsed. They did not indicate what they considered a reasonable time would be. However, the evidence does demonstrate that some steps were taken, reasonably urgently, by the natural persons standing behind Sol Sana IP to achieve the sale of the registered marks.
9. A series of e-mails between 21 February and 2 March 2018 resulted in an offer from a United States corporation described in the evidence only as "Zigi", with a corporate office in North Miami, Florida, making an offer of $200,000 for Sol Sana IP's global trademarks and $50,000 for "Sol Sana Pty Ltd URL and all social media assists (Facebook, Instagram, Twitter)."
10. That offer was withdrawn on 2 March 2018, but on 14 March 2018 Ms Caverley emailed Mr Majam as follows: "Hi Rafique, I was able to convince Zigi to come back to the table and resubmit their offer. Please see attached. Whilst it is not a large amount it is a start given they had walked away. I think we should continue to negotiate to see if we can get them to increase the amount but if not and there are no other offers we should give this offer some serious thought. Many thanks Sara." The renewed offer, in the same amounts, was attached on Zigi letterhead.
11. On 20 March 2018, Mr Majam made an offer by e-mail which was very substantially larger. The offer was for Magnamail Holdings IP Pty Ltd to purchase: "all the trademarks registered to Sol Sana IP Pty Ltd for an amount of AUD $1.5M." Mr Majam said that the transaction could be completed very quickly and that: "This offer is valid until 5.00pm Sydney Australia time, Tuesday 27 of March 2018."
12. He requested advice of whether Ms Caverley accepted the offer and stated that: "Our IP lawyers can prepare the transfer with the trademark documents within 3-5 workings days and these can be forwarded to you by email for signature and completion."
13. On 4 April 2018, Mr Majam sent a further email stating that the acquirer was to be Magnamail Pty Ltd and not Magnamail Holdings IP Pty Ltd as previously stated. It is not entirely clear what the duration of the amended offer was to be, and I note nothing much turns upon it for present purposes in light of the nature of the proceedings in this Court, which seeks orders for a compulsive sale at that price.
14. There was a response from Ms Caverley dated 20 March 2018, to the effect that a counter-offer should be made to "Michael", who may be associated with Zigi. Of present relevance, Ms Caverley said in that email: "The brand will be significantly devalued if we are out of market for any period of time. We are now in mid-March and the reality now is that Sol Sana will need to skip a season in the market because no future product has been developed. This is in neither of our interests as shareholders."
15. I pass over communications on 21 and 22 March in which Ms Caverley contended that, in light of the termination of the Licence Agreement, Sol Sana Pty Ltd was no longer entitled to advertise, produce or sell goods with the mark and turn to a Notice of Meeting of the two members of Sol Sana IP Pty Ltd dated 4 April 2018 in which Magnamail Holdings IP (the 45% minority shareholder), proposed, one, an abridgement of the time for giving notice of the meeting, but substantively, three, that: "the sale by the company of all trademarks registered to Magnamail Pty Ltd at a price of AUD $1.5 million in accordance with its offer of 4 April 2018."
16. At that meeting, there is no dispute that a majority of members declined to abridge the time for giving notice of meeting, with the consequence that the first resolution was not carried and the third resolution not reached. That meeting took place on 10 April 2018, which was a very busy day for the parties. The precise timing of events is not clear but it may well be that shortly after the meeting which Magnamail Holdings IP had called, proceedings were commenced in this Court, as well as (either on that day or the following day) in the Federal Court. That happened in the following way (I shall omit some minor aspects).

Procedural background

1. The solicitor for the plaintiff, Magnamail Holdings IP, gave notice mid-morning of an intention to approach the Corporations Judge that afternoon. In the early afternoon, an originating process was filed by Sol Sana IP in the Federal Court, although the documents suggest it was not processed until the following day. Later in the afternoon of 10 April 2018, an originating process was, as had been anticipated, filed in this Court, and orders for substituted service upon Ms Caverley were sought and obtained. The attitude of Ms Caverley to service may be difficult to reconcile with an exclusive jurisdiction clause in cl 31.5(b) of the Shareholders' Agreement but the order was made in light of Ms Caverley's email to Mr Majam dated 29 March 2018 advising that the solicitors who now are retained by her, Mills Oakley, had instructions to accept service for SC Creative Pty Ltd, but adding: "otherwise I await service in NYC should you seek to join me as an individual."
2. The issues in the Supreme Court proceedings have, as of last Friday, been refined by the filing of Points of Claim and Points of Defence. Magnamail Holdings IP seeks orders that the majority shareholder SC Creative Pty Ltd give its consent to a sale of the registered marks to Magnamail in accordance with the offer and various ancillary orders, and alternatively, expressly based upon the proceedings in the Federal Court, seeks an order that Sol Sana IP be wound up.
3. In the Federal Court proceedings Sol Sana IP seeks declaratory relief in relation to the various marks and final injunctions preventing Sol Sana Pty Ltd and Mr Majam (who are the first and second respondents) from importing selling offering for sale and so on any of the footwear or other goods which are the subject of those marks. The originating process also seeks delivery up of all footwear bearing any of those marks which are presently in the possession of either respondent. It also seeks damages including additional damages pursuant to s 126(2) of the Trade Marks Act 1995 (Cth) and an account of profits. The originating process was filed together with a "Concise Statement", the gravamen of which is that from 6 March 2018, when the licence agreement was terminated, Sol Sana Pty Ltd (and Mr Majam who controls it) has infringed the marks by - I infer - doing precisely what they had been doing for some months or years beforehand, namely, offering for sale and selling shoes containing the marks.
4. It is said that Sol Sana IP has suffered and will continue to suffer substantial loss and damage, unless restrained. It is said that the respondents have made profits and unless restrained will continue to make profits. The Concise Statement does not indicate with any particularity what those damages or profits might be. It asserts that Sol Sana IP is entitled to additional damages because so it is said the respondents' conduct is flagrant, there is a need for deterrence and there was benefit to them from their infringement of the registered marks. It was conceded, in my view entirely properly, that particulars would need to be provided of how it could be said that this conduct amounted to a flagrant infringement so as to give rise to an entitlement to additional damages.
5. The pending proceedings in the Federal Court have not yet been before a judge. That in part is because no interlocutory relief has been sought. There is some suggestion in the evidence that by filing a Concise Statement, ordinarily a proceeding would come before a judge of the Federal Court within two or three weeks. However in the present case, the matter is to be listed for directions before the judge allocated to it on 17 May 2018. In the meantime, the respondents have filed an application for security for costs, which has been preceded by communications directed to whether there was an ability for the applicant to meet any adverse costs order.
6. Much was made before me of the relative activity of the proceedings in this court and relative inactivity of proceedings in the Federal Court. It is appropriate to say that, I would infer in response to the submissions made by the plaintiff/respondent, that the applicants/defendants have now undertaken to promptly move the Federal Court, for expedition and a timetable directed to obtaining as early a date for hearing as may be. That undertaking is conditional upon success of their motion which involves transferring the pending proceedings in this court to the Federal Court.

Applicants' submissions

1. I have had the benefit of quite detailed written submissions from both sides, and oral submissions over some 2.5 hours earlier today on a matter which is not without its unusual features. The applicants put forward five matters (which to some extent overlap) in support of the conclusions for which they, as the matter has now been refined, contend, namely a finding that it is more appropriate that this proceeding be heard by the Federal Court and an exercise of discretion that I should transfer it to that court.
2. The first submission is that there is considerable overlap between the two sets of proceedings. Two particular issues are emphasised. The first is the valuation of the registered marks which are the substantial asset of Sol Sana IP. Notwithstanding strenuous submissions to the contrary that were made by the plaintiff/respondent, I consider that it is fairly plain that a central issue in both sets of proceedings is the value of the registered marks. In the pending proceedings in this court, on the primary relief which is sought which is the compulsive sale of those assets to Mr Majam's company, it will be essential to have some regard at least to their value in order to evaluate the appropriateness of the AUD $1.5 million offer which has been made. In the Federal Court proceedings, if infringement be made out (and there is of course at present no order for separation of issues of liability and quantum), then the valuation of those assets will be in all likelihood a critical integer to the calculation of damages to which the applicants say they are entitled. It is true that there is some differentiation between the two issues, and in particular, that it may well be that in the proceedings presently in this Court, a conclusion as to the appropriateness (or otherwise) of the compulsive order for sale which is sought could be reached without reaching a final view as to the valuation of those assets. For example, if it was plain that the value of the assets was many millions of dollars, that would bear directly upon the appropriateness of the offer; likewise if it appeared that the valuation was a small fraction of the $1.5 million, the same would be true. In either case, it would not be necessary to reach a concluded view as to the present value. But enough has been said to show that there is an overlap in issues, with the familiar consequences that flow from that, namely, the potential for duplication of evidence, inefficiency in terms of parallel pieces of litigation, and the risk of inconsistent findings between two different courts.
3. The second area of overlap is the matter relied upon for the winding up of the applicant in the Federal Court proceedings, which was the commencement, so far as appears in the evidence, without board resolution or members' resolution of proceedings by the company suing one of its directors for, inter alia, damages including additional damages and injunctive relief. As noted, that is the basis on which a winding up order is sought, but the pleadings assist in this regard because in substance, there is no dispute that Ms Caverley personally gave instructions to Mills Oakley to commence those proceedings (Points of Claim and Defence para 33), that that occurred in the absence of any directors' resolution or members' resolution authorising either the commencement of the proceedings or the retainer of the firm (Points of Claim and Defence para 34A-D), and that this occurred without any prior consultation with Mr Majam (Points of Claim and Defence para 34E).
4. It is plain, although no defence has yet been filed in the Federal Court proceedings, that the appropriateness (I deliberately use a general term) of the commencement of proceedings in that court will be an issue in those proceedings, just as it is in the proceedings presently in this Court. The nature of that issue, however, appears principally to be one of law, because Ms Caverley and SC Creative allege that no directors or members resolutions are required in order for her to cause the company of which she owns the majority of shares to commence proceedings against inter alia her fellow director. She also maintains that to the extent that such a resolution is required, ratification will be available.
5. The second point advanced takes the matter no further. It is that there is a "direct link" between the proceedings. That is a reference to the fact that the only matter relied upon for seeking a winding up order is the institution of the Federal Court proceedings.
6. The third matter relied upon is that there has been no application for the pending proceedings in the Federal Court to be transferred to this court. That is entirely true, but I am not minded to think that the absence of such an application, which would merely give rise, on one view, to a race before two judges of two different courts to make determinations under cognate legislation, is of any real significance.
7. Further on this point, reference was made to the Federal Court being the "natural forum" for the dispute. That was made by reference to the fact that the majority of proceedings under the Trade Marks Act are litigated in the Federal Court and that, in the event that the proceeding was cross-vested to this court and heard here, an appeal would lie before Federal Court under s 195 of the Trade Marks Act. However, I did not understand this submission to be made in relation to the Corporations Act proceeding which is presently before this Court.
8. The fourth point is that so it is said there is nothing to suggest that the transfer of proceedings to the Federal Court would prejudice the interests of either party. It was emphasised that this Court should approach the power on the assumption that all appropriate steps will be made in the interests of justice, in whichever court ultimately prepares the matters for hearing. I have no difficulty in making that assumption. I will return in a moment to the submissions made in response to this point about whether it should be found that the Federal Court proceedings have been moving unduly slowly. I note for present purposes that in the written submissions it was submitted at least twice that regard should be had to the fact the proceedings were commenced earlier in the day on 10 April 2018 in the Federal Court. It is far from clear to me whether that is factually true having regard to the annotation on the originating process as to its being accepted on the following day, but in any event that submission was withdrawn during argument, and rightly so, having regard inter alia to what was said in Pegasus Leasing Ltd v Cadoroll Pty Ltd (1996) 59 FCR 152 at 158 about the inappropriateness of relying on which proceeding is commenced first in time.
9. The fifth and final matter raised was the question of costs. It was said that running separate proceedings in two separate courts was likely to increase the overall costs of the parties. Again, in principle, I have no difficulty accepting that submission.

Consideration

1. The exercise of power under 1337H requires what has been described as a "nuts and bolts" management decision of the interests of justice and whether it is more appropriate that litigation be determined in one court rather than another: Bankinvest AG v Seabrooks (1988) 14 NSWLR 711 at 714. At the forefront of the plaintiff's/respondent's submissions before me was the submission that Ms Caverley should be found to have proceeded slowly with the Federal Court proceedings. Emphasis was given to the relative inactivity of the litigation in that Court, the absence of any interlocutory relief being sought, the absence (save for the undertaking mentioned above) of an application for expedition, and the delay between 3 March 2018 - when notice of termination was given - and 10 April 2018 (some five to six weeks) when proceedings were not commenced and appear only to have been commenced in response to notice that this Court was to be approached on 10 April. This submission was advanced under the rubric that I should infer that Ms Caverley was adopting a "go slow" approach. As I pointed out during the hearing, that is a moderately serious allegation to make. Although not mentioned during the hearing, on one view, the submission carries with it an allegation that either or all of counsel, solicitor and client are contravening the obligations upon them which are equivalent to those in s 56 of the Civil Procedure Act 2005 (NSW), namely, ss 37M and 37N of the Federal Court of Australia Act 1974 (Cth). It will commonly in litigation suit one party, rather than the other, for proceedings to proceed more slowly, and it is a serious thing to submit that proceedings are deliberately and unduly being delayed in order to obtain an advantage, contrary to the obligation to further the overriding purpose. I do not accept the submission, and I note that there was no application for cross-examination of the deponent (Ms Caverley's solicitor) who swore the affidavits on which she relied.
2. But the factual matters underlying that submission falling short of the attribution of an improper purpose to the applicants and their lawyers are in my view directly relevant to the identification of what is in the interests of justice and whether it is more appropriate that litigation in this Court be determined here rather than being transferred to the Federal Court of Australia.
3. The unchallenged evidence of Mr Majam, contained in his first affidavit sworn 10 April 2018, to which there has been ample opportunity for there to be a response if there be any response that can be put, is that Sol Sana Pty Ltd holds stock valued at some AU$1.6 million and has forward orders of AU$4.7 million. He says, and this is consistent with the email from Ms Caverley of 20 March 2018 referred to above, that: "If the value of the brand and not of the trademark is to be preserved, based upon my experience, it is important that any 'Sol Sana activity' be conducted with minimal or no interruption." (Contrary to a submission which at one stage was advanced, this is precisely the sort of lay evidence going to the value of intellectual property which is entirely admissible - and in any event to which no objection was made before me on the interlocutory application - and which the deponent is well placed to give.)
4. Mr Majam goes on to say, that: "In my experience, the value of the products in stock will diminish if there is any delay in dealing with them."
5. The position then, is that both principals are conscious that the substantial asset of Sol Sana IP is a wasting asset. That is to say, it is an asset whose value is apt materially to decrease in the event that, because the co-owners controlling the company which owns it are in dispute, there continues to be an inability to market or sell or develop new lines of product exploiting the marks. It is for that reason that in my view very significant attention should be given to the immediate future of that wasting asset in light of litigation which has presently engulfed the parties.
6. As I have said, there is a pending application in the Federal Court of Australia for the provision of security of costs. That application may or may not be heard and determined at some stage in the future; it may of course be resolved consensually. Mr Goldsmith said that the applicant in the Federal Court proceedings was "hopelessly insolvent", and in response no evidence was pointed to to displace what prima facie flows from the financial information from the last three years' profit and loss and balance sheets referred to above, nor was anything said against what was said (I think merely from the Bar table) that Ms Caverley herself, or someone other than the company, was causing its solicitors to be put in funds. That is an inference I would readily draw; it does not appear that Sol Sana IP has any liquid assets to speak of, at least so far as is shown in the balance sheet referred to above.
7. I cannot, in those circumstances, discount the possibility, which, may go so far as to be a probability, that unless Ms Caverley or someone else provides security for costs, the Federal Court proceedings will be stayed, perhaps indefinitely, because it appears on the face of things that there is a sound basis for that application.
8. It is also plain, as I have said, that there is a second, as it were, threshold issue in the Federal Court proceedings. That issue is whether the Federal Court proceedings themselves were properly commenced, having regard to what is admitted on the pleadings in this Court as to the absence of any authority from the board or members of the company. Of course, the order in which interlocutory issues are determined, and the timing of their determination, and most of all the result of the determination of those issues, are very much matters for the Federal Court of Australia, and nothing I have said in these reasons is intended in any way to prejudge any of those matters. But if I am to apply, in accordance with authority, a "nuts and bolts" approach to determining appropriateness in the interests of justice, I think I must have regard to what I presently see as a real risk that the entirety of proceedings in the Federal Court may be significantly delayed by reason of either or both of the application for security of costs and an early determination of whether the Federal Court proceedings themselves were validly commenced.
9. This is in circumstances when there is an acknowledged obligation to cause the intellectually property rights to be sold within a reasonable time. Last month, both parties appear to have been proceeding on the basis that there was real urgency, measured in days or a few weeks, and that any significant period of delay thereafter would materially diminish the values of these rights.
10. It would have been open to Ms Caverley to respond in advance of the hearing today to the question of potential delay associated with the application for security for costs by producing evidence of a person undertaking say, to meet those costs or perhaps (given that she at least in recent times seems to be residing in the State of New York) arranging for funds to be deposited into a joint account held by their solicitors, but that has not occurred.
11. The upshot of the foregoing is, as I previously mentioned, an application which has some unusual features. I accept the applicants' submission that there are material overlapping factual issues between the two proceedings commenced at about the same time in this Court and in the Federal Court between substantially the same parties. I accept that that overlap may give rise to some inefficiency, in the form of duplicated evidence and costs and perhaps even the risk of inconsistent findings. I suspect the latter risk is relatively low in relation to the commencement of the Federal Court proceedings having regard to the admissions that have been made, but I acknowledge that it remains real, at least insofar as the valuation evidence goes. I am acutely conscious of the basic principle underlying the cross-vesting legislation, as stated, for example, by White J in Vaughan v Frost [2010] NSWSC 492 at [11]: "It is almost always preferable that a controversy be determined in a single proceeding to avoid potentially conflicting findings and ultimately to reduce the costs for all parties."
12. But against those considerations, there is the evidence, which is unchallenged, as to the potential diminution in value of the marks and the real difficulty that is faced by the company in possession of $1.6 million of goods bearing the registered mark, and forward orders of about triple that volume, only being able to satisfy those orders at the risk of contributing to infringement impending trademark proceedings in which final but no interlocutory relief is sought.
13. If the only question were whether a final hearing between the parties could be heard and determined more expeditiously in this Court or the Federal Court, I would be unwilling to act other than on the basis of evidence and would give substantial weight to the overlap in issues which is at the forefront of the applicants'/defendants' submissions. But I think there is on the unchallenged evidence a very real risk that, by reason of the prima facie properly founded interlocutory issues raised by the respondents to the Federal Court proceedings, there will be significant delay, in terms of months and perhaps not even until next year, such that if the Supreme Court proceedings were transferred to the Federal Court, they would not rapidly be heard and determined.
14. I am conscious that against this possibility, it was said that in the event that the pending Federal Court proceedings were stayed and the proceedings presently in this Court were transferred to the Federal Court, then the Corporations Act proceedings could be heard and determined by the Federal Court and the trade mark proceedings stayed pending the provision of security. That is so, although, once again the difficulty with that submission is that it leaves the result being two pending proceedings and overlapping issues in the same court between substantially the same parties being heard and determined sequentially. That is not significantly different from the position which presently obtained with those two sets of proceedings, proceeding in two separate courts.
15. In short, because the subject matter of these proceedings is a company with one large asset, which on the evidence is quite likely a wasting asset whose value will significantly diminish if the litigation is not resolved in the next small number of months, because that company has a relatively large debt, because on the face of its balance sheets there are, to say the least, very real doubts about its solvency, and because its 55% majority shareholder has commenced pending proceedings in the Federal Court with the result that trade in goods already produced and the fulfilment of orders already placed can only occur with the risk of accountability in the pending trademark proceedings, I have reached the view that the applicants have not discharged the onus that they bear of persuading me that it is "more appropriate" for those proceedings to be determined in the Supreme Court of New South Wales. On that basis, I do not reach the discretionary second aspect of s 1337H.

Orders

1. [discussion about form of orders.]
2. Orders: 1. Grant leave to file an amended interlocutory process under s 1337H of the Corporations Act 2001 (Cth). 2. Dismiss the interlocutory application under s 1337H of the Corporations Act, with costs. 3. Direct the plaintiff to file and serve all remaining evidence (lay and expert) on or before 17 May 2018. 4. No further evidence in chief may be relied upon by the plaintiff not filed and served by 17 May 2018 without leave. 5. Stand the proceedings over for further directions before the Corporations Judge on Monday 21 May 2018.

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