Victoria University of Technology v Wilson [2003] VSC 299

Victoria University of Technology v Wilson [2003] VSC 299 - VSC 2003 case summary — Zoe

[19]

"16 Until 4.15p.m. on 12 June 2003 or until further order: 16.1 IP3 Systems by its directors servants or agents pay into an interest bearing trust account at National Australia Bank or such other Australian Bank ordered by the Court under the control of a person appointed by the Court, all moneys received or receivable, due or payable arising from any exploitation, sale or transfer of: (a) the invention the subject of: (i) Provision Patent Application No. PQ6289 filed in Australia on 16 March 2000; (ii) PCT Application No. PCT/AU/01/00299 filed in Australia on 16 March 2001; (iii) any patent applications or patents derived from or related to either of the above Applications filed in Australia or countries other than Australia; (b) any improvements or modifications to the invention the subject of any of the above patent applications; (c) any computer programs, software, data or information used for the working or exploitation of the invention the subject of the above patent applications including any improvements or modifications thereof. 16.2 The said moneys shall remain in the said account bearing interest until the trial and determination of this proceeding or further order save that there may be allowed to be withdrawn therefrom such moneys as are necessary and accounted to the Plaintiff's Solicitors from time to time for: (a) the preservation, maintenance or enhancement of any of the matters or things referred to at 16.1 (a) to (c) above including professional fees and charges to persons in respect of the maintenance in force of any of the said patent applications or patents; (b) necessary legal expenses related to this proceeding; (c) ordinary business expenses of IP3 Systems. 16.3 Wilson, Feaver, Jahupa Pty Ltd and Coap Pty Ltd pay into the trust account referred to at paragraph 16.1 any moneys received or receivable, due or payable to them or each of them arising from: A. Any exploitation, sale or transfer of any of the matters or things referred to at paragraph 16.1 above. B. The sale or transfer or other disposition of the shares held by each of Jahupa Pty Ltd and Coat Pty Ltd in IP3 System. C. The sale, transfer or other disposition of shares: (a) held by Wilson in Jahupa Pty Ltd; and (b) held by Feaver in Coap Pty Ltd. 17. Until 4.15p.m. on 12 June 2003 or further order, IP3 Systems, by its directors, servants or agents or otherwise howsoever be restrained from selling, transferring, disposing of or encumbering: (a) patent applications in Australia being: (i) Provisional Patent Application No. PQ6289 entitled "E-Commerce Facilitation"; (ii) PCT Application No. PCT/AU01/0299 entitled "E-Commerce Transaction Facilitation System and Method". (b) any invention or any improvement or modification to the invention(s) described in the patent applications referred to in sub-paragraph (a) hereof. (c) any patent applications in Australia or in countries other than Australia based on or relating to the invention(s) described in the patent applications referred to in sub-paragraph (a) above or any improvement(s) or modification(s) thereof or any patents resulting therefrom. (d) any computer programs, software, data or information necessary or required for or used for the working or exploitation of the invention(s) described in the patent applications referred to in sub-paragraph (a) above or any improvements or modifications thereof and whether in Australia or in countries other than Australia. 18. An order that within seven (7) days of the date of this order, the Defendants and each of them file and serve an affidavit verifying the moneys received and hereafter receivable the subject of the orders at 16.1 to 16.3 hereof. 19. Until 4.15p.m. on 12 June 2003 or further order, each of Jahupa Pty Ltd and Coat Pty Ltd, by its directors, servants, agents or otherwise howsoever be restrained from assigning, transferring, disposing of, encumbering or dealing in any manner whatsoever with the shares respectively held by them in IP3 Systems. 20. Until 4.25p.m. on 12 June 2003 or further order, each of Wilson and Feaver be restrained from assigning, transferring, disposing of, encumbering or dealing in any manner whatsoever with the shares respectively held by them in Jahupa Pty Ltd and Coap Pty Ltd."

[29]

To maintain a Mareva or asset preservation order, as described by Kirby, J. in Cardile v LED Builders Pty Ltd,[14] a plaintiff must show that it has a good arguable cause of action and that there is a real risk of dissipation of assets that the defendant has within the jurisdiction, such that any judgment would not be satisfied: See Cardile v LED Builders Pty Ltd; Jackson v Sterling Industries Ltd;[15] Glenwood Management Group Pty Ltd. v Mayo;[16] Patterson v BTR Engineering (Aust) Ltd;[17] National Australia Bank Ltd v Dessau;[18] and Liquorland (Australia) Pty Ltd & Anor v Anghie & Ors.[19] The power to grant the order is part of the inherent jurisdiction of the court to prevent the frustration of its process: See Cardile v LED Builders Pty Ltd;[20] Patrick Stevedores Operation (No.2) Pty Ltd v Maritime Union of Australia (No 3);[21] and Frigo v Culhaci.[22] The court will not by injunction require a defendant to give security to a plaintiff's claim: See National Australia Bank Ltd v Bond Brewing Holdings Ltd.[23] A mere claim by the plaintiff that the defendants intend to place assets beyond the plaintiff's reach will be insufficient: See Frigo v Culhaci.[24] The function of the Mareva order is to reduce the risk of an unscrupulous defendant seeking to render itself judgment-proof or to dispose of assets in a manner prejudicial to the plaintiff's ability to satisfy any potential judgment in the action: See Third Chandris Shipping Corporation v Unamarine SA (The Pythia; The Angelic Wings: The Genie;[25] Jackson v. Sterling Industries Ltd;[26] Liquorland (Australia) Pty Ltd v Anghie & Ors[27]and Western Australian Real Estate Investment Ltd v Pontoon Holdings Pty Ltd:[28] See also Spry, The principals of e_quitable remedies_[29] and Meagher et al, Equity: doctrines and remedies.[30] The court will look to the effect rather than the purpose of the defendant's conduct in determining whether the court's processes are likely to be abused or frustrated: See Glenwood Management Group Pty Ltd v Mayo;[31] Beach Petroleum N L v Johnson;[32] Northcorp Ltd v Allman Properties (Australia) Pty Ltd;[33] and Hayden v Teplitzky.[34] The court's power to make such orders is discretionary but, like other injunctive relief, the balance of convenience between the parties must also be considered: See Consolidated Constructions Pty Ltd v Bellenville Pty Ltd.[35] The granting of the Mareva order, even to an innocent plaintiff, can wreak havoc with a defendant's business: See Meagher et al[36] and Frigo v Kulhachi.[37] Consequently, a high degree of caution is required when the court is invited to make such orders: See Cardile v LED Builders Pty Ltd. It is a drastic order which should not lightly be granted.

[31]

The plaintiff's claim, therefore, is different in one sense from most cases in which Mareva orders are sought, arising out of claims for moneys owed, but disputed. Here, the plaintiff's claim is for an equitable interest in these assets controlled by the defendants, who are, the plaintiff submits, thus dealing with entrusted assets beneficially owned by the university. It therefore seeks, inter alia, that IP3 holds these inventions, programs and software on trust for the university and it seeks an injunction to prevent the dissipation of assets held on trust and to restrain the trustee from dealing with such assets or the proceeds thereof. It is not disputed that it is necessary for the plaintiff to establish that there is a real risk of these assets being removed before judgment is satisfied. The plaintiff in its written and oral submission relies on what it describes as the clandestine conduct of the first and second named defendants and their lack of frankness with the university, in conjunction with the e-mail of Dr Feaver [Exhibit BV40], as leading to the conclusion that there is a real risk of dissipation. The plaintiff relies on the fact that the assets the subject of dispute are easily transmissible. Mr Kendall, who appeared with Mr Hess for the plaintiff, submitted that I should not accept the first and second named defendants' denials of these serious allegations made by the plaintiff against them concerning their conduct and their lack of frankness with the university. In particular, the plaintiff submitted that I should not accept the explanations proffered by the defendants as to the use of the university's equipment and information, their denial that their research activities extended to the making of the invention, and the inconsistencies in their account of their activity with the contemporaneous documentation. The plaintiff places substantial reliance upon the claim that the first and second named defendants failed to make any candid disclosure of their activity to the university over a two-year period.

At a glance

Court

Decision date

Before

Source

Judgment (100 paragraphs)

Parties

Cases Cited (15)