Case: Chellaram &amp; Co. Ltd v China Ocean Shipping Co. (1991) 102 ALR 321
Outcome: cited
BAT relies upon the broad unfettered discretion conferred upon the Court by s 56 of the Federal Court of Australia Act 1976 to order an applicant to give security for the payment of costs that may be awarded against that party. The jurisdiction is not delimited by Order 28, r 3 ( Bell Wholesale Co. Ltd v Gates Export Corporation (No. 2) (1984) 2 FCR 1 ; Chapman v Luminis Pty Ltd [2002] FCA 496 ; James v Australia &amp; New Zealand Banking Group Ltd (No. 1) (1985) 9 FCR 442). In exercising the discretion under s 56 , the practice in Australia for a very long time has been that a party who is not ordinarily resident in this country and has no assets within the jurisdiction, is normally ordered to give security for costs. These two factors are regarded as circumstances of "great weight" in determining whether such an order should be made ( Chellaram &amp; Co. Ltd v China Ocean Shipping Co. [1991] HCA 36 ; (1991) 102 ALR 321 ; (1991) 65 ALJR 642). The qualification upon the weight to be attributed to these factors was put by McHugh J in Chellaram at p 323 (ALR) and at p 643 (ALJR) in these terms, "... unless that party can point to other circumstances which overcome the weight of the circumstance that that person is resident out of and has no assets within the jurisdiction". These well established principles have been applied more recently in Logue v Hansen Technologies Ltd [2003] FCA 81 ; (2003) 125 FCR 590 at [38] and [39]; Tan Kah Hock v AWAP SGT 26 Investment Ltd [2008] FCA 540 [7] and [8]; Cheng XI Shipyard v The Ship "Falcon Trident" [2006] FCA 759 at [9] . 21 Accordingly, I would not regard the presence of registered trade marks within the jurisdiction in NVS, at least in this case on the evidence before me, as assets within the jurisdiction against which an order for costs might easily be enforced. Moreover, I do not regard the international disputation which has taken place as an "other factor" in terms of McHugh J's qualification in Chellaram which overcomes the circumstance that the applicant is resident out of the jurisdiction and has no readily isolated assets of any utility within the jurisdiction, easily converted to a fund to satisfy a costs order. 22 However, the real difficulty is that BAT's evidence upon which an informed decision might be made by the Court as to any security to be ordered, is scant. The only evidence put on by BAT in the application is the statement by Mr Stern set out at [11]. The further difficulty is this. NVS has commenced a proceeding by filing a Notice of Appeal which is confined to the question of whether s 44 of the Act prohibits registration of each mark on the footing that the mark is deceptively similar to BAT's mark identified by the Registrar's delegate. BAT has cross-appealed and puts in controversy all of the matters upon which it was unsuccessful and in respect of which it would seek to call evidence, including expert evidence of reputation and other consumer survey evidence. BAT estimates the party and party costs recoverable by BAT in the proceeding as $75,000 which necessarily assumes costs both in relation to the appeal and the cross-appeal. 23 NVS contends that in an appeal from a decision of the Registrar's delegate not to register an accepted trade mark, the opponent should be characterised as the aggressor and instigator of the controversy with the result that when an appeal is taken to the Federal Court from the delegate's decision, the opponent to registration should be equally regarded as the principle contradictor and aggressor in the proceeding. Thus, it is not appropriate to make any order for security for costs. However, says NVS, in a proceeding which is characterised by an appeal by NVS confined to the question it raises and a cross-appeal by the opponent in which a broader field of issues are agitated as part of the controversy, it is not appropriate to order security for costs of the proceeding at large. Any order for security for costs should be confined to responding to the matters put in issue by the appellant. NVS says that it is for BAT to isolate the steps to which it would be put in dealing with the appellant's contentions; identify the evidence it would need to call to do so; and identify the likely costs to be incurred associated with taking responsive steps.