Pattison v May (No 2) [2005] VSC 465

What the court decided

As background, on 31 October 2005 Whelan J heard an ex parte application by Mr Pattison, liquidator of Global SDR Technologies Pty Ltd (Global SDR), seeking a warrant to seize Global SDR's property and its books in the possession or control of Mr Roger May and Mr Jason May (the Mays) [1]–[2]. On the basis of affidavits of the liquidator and Mr Simon Cleary, his Honour concluded that Global SDR had acquired all the intellectual property in the SpectruCell software and defined associated hardware [2]. The warrant issued under an order made that day [5], [35].

On 8 November 2005 Mr Pattison applied under sections 530C(4) and 479(3) to dispose of seized items (the disposal application) [5]. Mr Roger May appeared in person on 11 November 2005 and sought to file an affidavit [7]. At the adjourned hearing on 18 November 2005 he eventually said he was concerned only with the seized hardware and equipment [11], [13]. His affidavit of that date said this equipment belonged to Global Investments Fund Pty Ltd (GIF) [14]. Late that day Mr Roger May raised a concern that the equipment might be sold other than with the SpectruCell intellectual property, which both Mays later pressed by affidavit; the liquidator's solicitor said Mr Pattison would be content for any orders to rule that out [31].

His Honour's principal conclusion on the material was that it was "of the utmost importance" that Mr Pattison have every opportunity to complete a SpectruCell sale [27]. Nothing Mr Roger May put indicated to his Honour any relevant prejudice to GIF from the equipment's sale, provided the proceeds were retained pending further direction or order [28].

Whelan J gave a direction under section 479(3) and made an order under section 530C(4), considering Mr Pattison "clearly entitled" to a direction's protection [32]. He was not authorising any particular sale on any particular commercial terms, nor finally determining that Global SDR owned all the property in issue [26], [33].

Under that direction Mr Pattison may properly sell a test kit and documents relating to SpectruCell patents, listed in exhibit "PAP-2" to his affidavit sworn 17 November 2005, but only as part of the sale of the SpectruCell technology and its related hardware and software, and is to keep the proceeds of any such sale until further order; the section 530C order reached such seized items as the direction covered [35]. His Honour proposed to defer considering Mr Pattison's remuneration and expenses until Mr Pattison held a fund, as insufficient notice of an application for them appeared to have been given [34].

Mr Pattison's solicitor sought indemnity costs from the Mays on both applications, but his Honour was prepared "at the moment" only to order them to pay the disposal application costs incurred after 11 November 2005 [36]. A renewed indemnity costs claim was not precluded on more material and express notice to each May of "precisely what order as to costs" was sought [36]. The costs order rested on Mr Roger May having pursued an argument unsuccessfully; costs to 11 November were excluded because an application that day was needed "even if it had been unopposed" [37]. The reasons record that indemnity costs discussion followed [38].

Why it matters

The section 479(3) direction protected the liquidator in selling listed items within the SpectruCell sale with related software and hardware, while separate section 530C authority reached seized property and books within that direction [32], [35]. Readers will need to check the current text of sections 479 and 530C.

Numbers in square brackets are paragraph numbers of the judgment. This note summarises a decided case for education and is not legal advice. See how the notes are written.