Nominet UK v Diverse Internet Pty Ltd [2005] FCA 669 (19 May 2005)

Last Updated: 26 May 2005

FEDERAL COURT OF AUSTRALIA

Nominet UK v Diverse Internet Pty Ltd [2005] FCA 669

Corporations Act 2001 (Cth) s 471B





















NOMINET UK v DIVERSE INTERNET PTY LTD, INTERNET PAYMENTS PTY LTD, BRADLEY STEDMAN NORRISH, CHESLEY PAUL RAFFERTY, (UK INTERNET REGISTRY LTD and AUSTRALIAN SECURITY AND INVESTMENTS COMMISSION
NSD 1040 of 2003

NICHOLSON J
19 MAY 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	NSD 1040 OF 2003

BETWEEN:	NOMINET UK APPLICANT
AND:	DIVERSE INTERNET PTY LTD (ACN 096 827 619) FIRST RESPONDENT INTERNET PAYMENTS PTY LTD (ACN 097 324 868) SECOND RESPONDENT BRADLEY STEDMAN NORRISH THIRD RESPONDENT CHESLEY PAUL RAFFERTY FOURTH RESPONDENT (UK) INTERNET REGISTRY LTD FIFTH RESPONDENT AUSTRALIAN SECURITY AND INVESTMENTS COMMISSION SIXTH RESPONDENT
JUDGE:	NICHOLSON J
DATE OF ORDER:	19 MAY 2005
WHERE MADE:	SYDNEY

UPON THE APPLICANT BY ITS COUNSEL UNDERTAKING TO:

(a) submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of these Orders or any continuation thereof; and
(b) pay the compensation referred to in (a) to the person there referred to,

THE COURT:

1. Grants leave to the Applicant to file an Amended Notice of Motion in Court.
2. Directs that the Motion be returnable instanter.
3. Dispenses with the requirements of Federal Court Rules Order 20 rule 2(1).
4. Orders that, until further order, the Third Respondent be restrained by himself, his servants or agents, from removing or causing or permitting to be removed from Australia, or selling, charging, mortgaging or otherwise dealing with or disposing of, or causing or permitting to be sold, charged, mortgaged or otherwise dealt with or disposed of, all or any assets:

4.1 in his name; or
4.2 under his control; or
4.3 in which he has an interest,

within Australia including, but without affecting the generality of the foregoing:

(a) the proceeds from the transfer of Lot 2 on Strata Plan 13794, being the property located at Unit 2, 47 Forrest Avenue, East Perth;
(b) a Ferrari F1 360 Spider Convertible motor vehicle;

PROVIDED that this Order:

(i) Shall not apply to so much of the assets of the Third Respondent within Australia as exceed in value the sum of $4 800 000;
(ii) Shall not prevent the First Respondent from paying ordinary living expenses up to an amount of $500 per week;
(iii) Shall not prevent any bank, building society or financial institution from exercising any right of set-off which it may have in respect of any facilities afforded by it to the Third Respondent prior to the date of this Order.

5. Orders that, until further order, the Third Respondent be restrained by himself, his servants or agents, from selling, charging, mortgaging or otherwise dealing with or disposing of, or causing or permitting to be sold, charged, mortgaged or otherwise dealt with or disposed of, all or any assets:

5.1 in his name; or
5.2 under his control; or
5.3 in which he has an interest,

outside Australia PROVIDED that this Order shall not prevent the Third Respondent from moving the assets to a location within Australia (any such location to be disclosed to the Applicant).
6. Orders that the Third Respondent within 5 days of the service of a copy of the these orders, deliver or cause to be delivered to the Applicant's solicitors, Allens Arthur Robinson, Level 17, 2 Chifley Square, Sydney, a full and detailed affidavit sworn by the Third Respondent setting out:

(a) The name and address of any bank, building society or other financial institution at which there is an account in his name, or under his control, together with the number of such account, the name of that account and the balance of that account at the date of service of a copy of these orders upon him;
(b) The name and address of any person or persons indebted to the Third Respondent at the date of service of a copy of these orders upon him, and the amount of the indebtedness;
(c) An itemised inventory of all business assets in the Third Respondent's name, under his control or in which he has an interest;
(d) An itemised inventory of all personal assets in the Third Respondent's name, under his control or in which he has an interest;
(e) An itemised inventory of any and all property whether real or personal:

(i) owned by the Third Respondent;
(ii) controlled by the Third Respondent; and
(iii) in which the Third Respondent has any interest.

(f) In respect of the property referred to in paragraphs (a) to (e) above, whether that property has been given as security for any debt and, if so, the nature of the security

7. Grants leave to the Applicant to issue a subpoena to the Bank of Western Australia Ltd (BankWest), such subpoena to be issued forthwith and be made returnable on Monday, 23 May 2005, seeking documents relating to the transfer of Lot 2 on Strata Plan 13794 from Bradley Stedman Norrish.
7A. Grants leave to the Applicant to issue a subpoena to Harman Settlement Services (Harman), such subpoena to be issued forthwith and be made returnable on Monday, 23 May 2005, seeking documents relating to the transfer of Lot 8 on Strata Plan 8708.
8. Orders that, until further order, the Fourth Respondent be restrained by himself, his servants or agents, from removing or causing or permitting to be removed from Australia, or selling, charging, mortgaging or otherwise dealing with or disposing of, or causing or permitting to be sold, charged, mortgaged or otherwise dealt with or disposed of, all or any of his assets:

8.1 in his name; or
8.2 under his control; or
8.3 in which he has an interest,

within Australia including, but without affecting the generality of the foregoing:

(a) the proceeds from the transfer of Lot 8 on Strata Plan 8708;
(b) Mercedes CLK 320 motor vehicle with Victorian registration number RTC171;
(c) a silver Magna sedan motor vehicle, registration number 1AED417;
(d) a blue motor cycle, registration number 1BH477,

PROVIDED that this Order:

(i) Shall not apply to so much of the assets of the Fourth Respondent within Australia as exceed in value the sum of $4 800 000;
(ii) Shall not prevent the Fourth Respondent from paying ordinary living expenses up to an amount of $500 per week;
(iii) Shall not prevent any bank, building society or financial institution from exercising any right of set-off which it may have in respect of any facilities afforded by it to the Fourth Respondent prior to the date of these Orders.

9. Orders that, until further order, the Fourth Respondent be restrained by himself, his servants or agents, from selling, charging, mortgaging or otherwise dealing with or disposing of, or causing or permitting to be sold, charged, mortgaged or otherwise dealt with or disposed of, all or any of assets:

9.1 in his name; or
9.2 under his control; or
9.3 in which he has an interest,

outside Australia including, but without affecting the generality of the foregoing, PostFinance Swiss Post account number 91-274880-1, PROVIDED that this Order shall not prevent the Fourth Respondent from moving the assets to a location within Australia (any such location to be disclosed to the Applicant).
10. Orders that the Fourth Respondent within 5 days of the service of a copy of the these orders, deliver or cause to be delivered to the Applicant's solicitors, Allens Arthur Robinson, Level 17, 2 Chifley Square, Sydney, a full and detailed affidavit sworn by the Fourth Respondent setting out:

(a) The name and address of any bank, building society or other financial institution at which there is an account in his name, or under his control, together with the number of such account, the name of that account and the balance of that account at the date of service of a copy of these orders upon him;
(b) The name and address of any person or persons indebted to the Fourth Respondent at the date of service of a copy of these orders upon him, and the amount of the indebtedness;
(c) An itemised inventory of all business assets in the Fourth Respondent's name, under his control or in which he has an interest;
(d) An itemised inventory of all personal assets in the Fourth Respondent's name, under his control or in which he has an interest;
(e) An itemised inventory of any and all property whether real or personal:

(i) owned by the Fourth Respondent;
(ii) controlled by the Fourth Respondent; and
(iii) in which the Fourth Respondent has any interest.

(f) In respect of the property referred to in paragraphs (a) to (e) above, whether that property has been given as security for any debt and, if so, the nature of the security given and the debt so secured.

11. Orders that each of the First and Fifth Respondents, within 5 days of the service of a copy of the these orders, deliver or cause to be delivered to the Applicant's solicitors, Allens Arthur Robinson, Level 17, 2 Chifley Square, Sydney, a full and detailed affidavit sworn by that respondent setting out:

(a) The name and address of any bank, building society or other financial institution at which there is an account in its name, or under its control, together with the number of such account, the name of that account and the balance of that account at the date of service of a copy of these orders upon it;
(b) The name and address of any person or persons indebted to that respondent at the date of service of a copy of these orders upon it, and the amount of the indebtedness;
(c) An itemised inventory of all assets in that respondent's name, under its control or in which it has an interest;
(d) An itemised inventory of any and all property whether real or personal:

(i) owned by that respondent;
(ii) controlled by that respondent; and
(iii) in which that respondent has any interest.

(e) In respect of the property referred to in paragraphs (a) to (e) above, whether that property has been given as security for any debt and, if so, the nature of the security given and the debt so secured.

12. Orders that service on the Third Respondent of these orders be permitted by attaching an electronic copy of the orders, together with electronic copies of the affidavit of Carla Therese Degenhardt sworn on 18 May 2005 (without exhibits) and the affidavit of Michael Steele sworn on 19 May 2005 to an email delivered to the email addresses ‘[e-mail]’ and ‘[e-mail]’.
13. Directs that the Third Respondent be given additional notice of the orders by being telephoned on mobile telephone number 0419 943 638.
14. Orders that the orders be taken to have been served on the Third Respondent upon the earlier of the sending of the email described in paragraph 12 or the telephone notification referred to in paragraph 13.
15. Orders that sservice on the Fourth Respondent of these orders be permitted by attaching an electronic copy of the orders, together with electronic copies of the affidavit of Carla Therese Degenhardt sworn on 18 May 2005 (without exhibits) and the affidavit of Michael Steele sworn on 19 May 2005 to an email delivered to the email address ‘[e-mail]’.
16. Directs that the Fourth Respondent be given additional notice of the orders by being telephoned on mobile telephone number 0417 000 500.
17. Orders that the orders be taken to have been served on the Third Respondent upon the earlier of the sending of the email described in paragraph 15 or the telephone notification referred to in paragraph 16.
18. Orders that service on BankWest of these orders be permitted by sending a faxed copy of the orders, together with electronic copies of the affidavit of Carla Therese Degenhardt sworn on 18 May 2005 (without exhibits) and the affidavit of Michael Steele sworn on 19 May 2005 to fax number [phone], marked to the urgent attention of the Securities Department.
18A. Orders that service on Harman of these orders be permitted by sending a faxed copy of the orders, together with electronic copies of the affidavit of Carla Therese Degenhardt sworn on 18 May 2005 (without exhibits) and the affidavit of Michael Steele sworn on 19 May 2005 to fax number [phone].
19. Orders that the orders be taken to have been served on BankWest and Harman 2 hours after the faxes described in Orders 18 and 18A above have been sent.
20. Grants leave to the Applicant pursuant to s 471B of the Corporations Act 2001 (Cth) to proceed with this proceeding as against the First and Fifth Respondents, to the extent necessary.
21. Directs that entry of these orders be expedited.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	NSD 1040 OF 2003

BETWEEN:	NOMINET UK APPLICANT
AND:	DIVERSE INTERNET PTY LTD (ACN 096 827 619) FIRST RESPONDENT INTERNET PAYMENTS PTY LTD (ACN 097 324 868) SECOND RESPONDENT BRADLEY STEDMAN NORRISH THIRD RESPONDENT CHESLEY PAUL RAFFERTY FOURTH RESPONDENT (UK) INTERNET REGISTRY LTD FIFTH RESPONDENT AUSTRALIAN SECURITY AND INVESTMENTS COMMISSION SIXTH RESPONDENT

JUDGE:	NICHOLSON J
DATE:	19 MAY 2005
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 The Court is moved in terms of an amended notice of motion for certain orders. Those orders are in the form of a Mareva injunction in respect of the third and fourth respondents. Other orders are also sought ancillary to that purpose and in respect of the first and fifth respondents but in a non-Mareva form.

2 A Mareva injunction may be granted if the circumstances are such that there is a danger of a respondent absconding, or of assets being removed from the jurisdiction dissipated or disposed of within the jurisdiction, or otherwise dealt with so that there is a danger that the applicant will be denied the fruits of any judgment that may have been obtained.

3 The circumstances relevant to this amended notice of motion are set out in the affidavit of Ms Degenhardt sworn on 18 May 2005 as supplemented by the affidavit of Mr Michael Steele sworn on 19 May 2005.

4 The current status of the proceedings as disclosed by the affidavit of Ms Degenhardt is:

‘3. The current status of these proceedings is that:

(a) Orders were made by Justice French on 21 June 2004 by consent against the First, Second and Fourth Respondents pursuant to an offer of compromise which included damages to be assessed, declaratory and final injunctive relief in relation to:

(i) copyright infringement as against each of the First, Second and Fourth Respondents; and
(ii) breaches of the Trade Practices Act 1974 (Cth), Fair Trading Act 1987 (WA) and Fair Trading Act 1999 (Vic) as against the Fourth Respondent;

(b) Orders were made by Justice French on 22 June 2004 by consent against the Fifth Respondent pursuant to an offer of compromise which included damages to be assessed, declaratory and final injunctive relief in relation to breaches of the Fair Trading Act 1987 (WA) and Fair Trading Act 1999 (Vic);
(c) pursuant to Order 23 Rule 11 of the Federal Court Rules, Nominet is entitled to at least party/party costs as against the First, Second, Fourth and Fifth Respondents in relation to the proceedings up to 21 June 2004, although Nominet is seeking a higher level of recovery as discussed in paragraph 4 below;
(d) the Judgment of Justice French was delivered on 22 September 2004 and consequent Orders were made on that day against the Third Respondent which included costs and damages to be assessed, declaratory and final injunctive relief in relation to copyright infringement and breaches of the Fair Trading Act 1987 (WA); and
(e) the hearing to assess damages and costs as against each of the Respondents is set down for 23 and 24 June 2005, to begin at 10:15 am on 23 June 2005.

4. Based on its evidence, the Applicant is seeking at the hearing on 23 and 24 June:

(a) an award of damages against the various Respondents as follows:

(i) in the order of $1,810,000, representing damages pursuant to section 115(2) of the Copyright Act against the First, Second, Third and Fourth Respondents jointly and severally;
(ii) a similar amount, namely $1,810,000, representing additional damages pursuant to section 115(4) of the Copyright Act against the First, Second, Third and Fourth Respondents jointly and severally jointly and severally (sic) having regard to the flagrancy of their conduct and the other matters that are relevant under section 115(4); and
(iii) an amount in the order of $175,000 representing damages pursuant to the Trade Practices Act 1974 (Cth), Fair Trading Act 1987 (WA) and the Fair Trading Act 1999 (Vic) against the Third, Fourth and Fifth Respondents jointly and severally,

and
(b) costs on an indemnity basis against the Respondents jointly and severally in the amount of approximately $1 million.’

5 The basis for the fear which has arisen in the applicant that it will not be able to have the fruits of its judgment in the proceedings arises as a result of a number of factors which are expressed in the following way in Ms Degenhardt's affidavit:

‘2. ...

(a) the comments made by the Third Respondent at the directions hearing on 18 April 2005 and his failure to respond to subsequent correspondence from AAR;
(b) the fact that the First Respondent is currently in administration and the Third Respondent has been deregistered by the Australian Securities and Investments Commission (ASIC);
(c) the fact that the Fifth Respondent is a foreign company which, to the best of the Applicant’s knowledge, does not have any assets in Australia;
(d) the Respondents’ failure to provide certain assurances and information regarding their assets as sought by the Applicant and the Fourth Respondents’ disposal of his property to his parents;
(e) the difficulties which the Applicant has faced in attempting to contact the Respondents since they ceased being represented in this proceeding;
(f) the Respondents’ failure to comply with orders made in these proceedings; and
(g) information which the Applicant has obtained regarding other business activities and legal proceedings in which the Respondents have been involved,

as described in more detail in this affidavit.’

6 In respect of the third respondent the orders sought are of restraint in relation to general and specific property within Australia subject to certain limitations reflecting the value of the potential total liability of that respondent, namely, the sum of $4.8 million, but with provision for ordinary living expenses. Also sought against the third respondent is an order in respect of property outside Australia. Further there is an ancillary order requiring the third respondent to make full and detailed affidavit disclosure of assets.

7 The existence of circumstances disclosing the requisite danger for the granting of relief in the form of Mareva injunction is apparent from the affidavit of Ms Degenhardt. It appears that at a directions hearing in the proceeding on 18 April 2005, the third respondent disclosed that respondent companies were being placed into administration and he would probably be moving from his current address. Subsequent searches have disclosed that he has in fact sold his property being the strata plan lot identified in the proposed form of order. I am satisfied that in respect of him the requisite danger is supported in the evidence to which I have been taken during the applicant’s oral submissions.

8 Mareva relief is also sought in respect of the fourth respondent in similar terms to that which I have outlined in relation to the third respondent. In his case there is evidence that he had previously sold the asset being the strata plan lot to his parents and that those parents are now in the process of transferring or have transferred the lot. That leaves hanging the question whether he has control over the proceeds and consequently relief is sought in respect of him and his assets in Australia and elsewhere. In respect of overseas assets there is also evidence from him of the existence of a Swiss account and that is specifically identified in the proposed order.

9 In respect of the fourth respondent, I am satisfied from the evidence that the requisite evidence of circumstances of the danger of the assets being dissipated or disposed of has been made apparent. In reaching that view I considered the evidence in respect of him in the context also of the evidence of the nature of the proceedings and the evidence which I have referred to relating to the third respondent. In my view the evidence needs to be considered in the total context in that manner and cannot be isolated in the case of the fourth respondent from the evidence relating to the third respondent. It is a relevant circumstance, although it is the whole of the evidence against the fourth respondent that I rely upon in his case.

10 An order is also sought in respect of the first and fifth respondents which, as I have said, is not in the form of Mareva relief but an order directed to obtaining full and detailed affidavits from those respondents for purposes appropriate to the finalisation of the proceedings. I am satisfied that the case for making such order is supported by the evidence.

11 Leave is sought in the amended notice of motion for the issue of subpoenas to the settlement agents who have or are dealing with the transfers in respect of each of the strata lots of the third and fourth respondents. Leave is also sought in respect of the first and fifth respondents to the extent necessary pursuant to s 471B of the Corporations Act 2001 (Cth) inasmuch as there is evidence that those companies may be in liquidation.

12 Provisions are made in the amended notice for the manner of service. They include not only advice to email addresses which the evidence supports as being the relevant email addresses but also telephone calls where there is evidence of telephone numbers. In my view that is a desirable step given the affidavit evidence to which I have referred showing that the email addresses alone may not be a satisfactory form of service.

13 Having granted leave to the filing of the amended notice of motion and to the hearing instanter, I am prepared to make the orders proposed in the amended notice of motion subject to a further amended notice of motion being filed in my chambers; amending par 7 and par 18 to reflect the reference to the settlement agent not presently referred to there, and amending par 8.3(a) to refer to lot 8 on strata plan 8708 and par 20, which is the paragraph dealing with leave under the Corporations Act, to add the words ‘to the extent necessary’.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson.

Associate:

Dated: 26 May 2005

Counsel for the Applicant:	SG Finch SC
Solicitor for the Applicant:	Allens Arthur Robinson
Date of Hearing:	19 May 2005
Date of Judgment:	19 May 2005