Record companies claim Sharman in contempt

The music industry has started contempt proceedings against Sharman Networks over the peer-to-peer software provider's failure to meet a Federal Court deadline to comply with an assets disclosure order.The recording firms filed a notice of motion on 12 April against Sharman and associated companies for contempt of court for failing to comply with the court order made by Federal Court Justice Murray Wilcox on 22 March.

The music industry has started contempt proceedings against Sharman Networks over the peer-to-peer software provider's failure to meet a Federal Court deadline to comply with an assets disclosure order.

The recording firms filed a notice of motion on 12 April against Sharman and associated companies for contempt of court for failing to comply with the court order made by Federal Court Justice Murray Wilcox on 22 March.

The order required Sharman to file an affidavit no later than 8 April "that discloses with particularity the description and value of all his/her/its assets wherever situated and specifying whether those assets are held by that respondent beneficially or in trust for any other person or entity." This included bank details, trust arrangements, mortgages and contracts for sale.

The move came after Sharman hired a new law firm -- Piper Alderman -- to request a delay in supplying the affidavit, hours before the deadline expired. The Federal Court twice declined the company's request.

Senior executives associated with Sharman had previously agreed to freeze their personal assets until seven days after judgment.

The record companies had also asked Wilcox to order the respondents to file an affidavit detailing each executives' possessions. However, Wilcox opted to require only Sharman chief executive officer Nikki Hemming to make the filing.

Sharman's lawyers argued before Justice Peter Hely in the Federal Court on 8 April that -- because the company is incorporated in the Republic of Vanuatu -- disclosing sensitive information would put its accountants in breach of the International Companies Act.

However, Hely threw out the claim and ordered Sharman to pay costs citing the paucity of material produced, the absence of evidence of any changed circumstances and the delay in bringing the application as reasons for the dismissal.

Hely noted that there was no reason why Hemming could not swear the affidavit.

The case was back in Wilcox' hands and on April 15, he opted to deny the extension of time for compliance with the so-called 'mareva' injunction -- the freezing of funds or assets. He also questioned why Sharman only recently raised the issue of the International Companies Act in Vanuatu.

"Your clients are represented by experienced senior counsels who are aware of the Vanuatu legislation referred to numerous times," he said. "This argument was never put to me. On the basis of the arguments put to me, I formed an opinion and made some orders.

"Then to find the party ... go off to another judge seeking an extension of time on the basis of an argument that wasn't put, and wants to appeal against my order and that judge's order on something that was never put, it tends to leave a nasty taste in my mouth," Wilcox said.

Wilcox further questioned Sharman's appeal process, saying "I don't know to what extent there would be an infringement of the Vanuatu Act and frankly, I don't care. The responsibility is on the parties to comply with the order of this court. This whole thing just seems to me to be nothing but a stalling tactic."

Wilcox questioned why Sharman's former legal representatives did not immediately file the application after the assets order was granted in 22 March. "It is almost four weeks and now I am asked for an extension of time, so you can now appeal or seek to leave to appeal when you could have done that immediately after the event. Why should the court allow that sort of thing happen?" Wilcox said.

The contempt proceedings will be heard immediately after Wilcox releases his judgment on the copyright infringement case against Sharman.

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