Background
Peter Barber, a Singapore resident and former director of Blackmagic Design Pty Ltd, owns 28.33% of the company. The other shareholders, directors Grant Petty and Douglas Clarke, each hold 35.83%. Barber brought an oppression proceeding seeking principally an order that Petty and Clarke buy his shares, with alternative relief concerning a sale process, a receiver, or winding up.
The defendants sought $5 million in security for their costs, arguing that Barber’s only Australian asset—his Blackmagic shares—was illiquid and subject to registered security interests. Barber said the shares, held in Australia for relevant purposes, provided ample value to satisfy any future costs order. He had also undertaken not to seek winding up or costs against the company if it did not oppose the other relief, and to meet its reasonable discovery costs.
The Court’s Holding
Stewart J dismissed the security application, conditional on Barber undertaking not to further encumber his Blackmagic shares without giving Petty and Clarke 14 days’ written notice. If he did not give that undertaking within 14 days, he would instead have to provide initial security of $500,000, with the individual defendants able to seek further security after pleadings closed.
The Court inferred, from Blackmagic’s 2025 reported net assets of about $351.5 million and the defendants’ failure to adduce valuation evidence, that Barber’s holding was worth nearly $100 million. Even after existing encumbrances, its unencumbered value exceeded $80 million—far above the proposed $5 million security. The shares could be attached and sold to enforce a costs judgment; their lack of immediate liquidity did not make them inadequate. The company’s unexplained joint defence with the majority shareholders also strongly weighed against security, because the company had no apparent legitimate interest in actively defending relief not sought against it.
Key Takeaways
- Foreign residence does not automatically justify security for costs where the claimant has substantial Australian assets available for enforcement.
- Private-company shares may be sufficient security where their value comfortably exceeds likely costs, even if a sale would not be immediately liquid.
- A company’s participation in an oppression suit must be justified; it cannot simply fund the majority shareholders’ defence.
Why It Matters
The decision emphasises that security-for-costs applications turn on practical enforceability and overall fairness, not a rigid preference for cash or assets held by Australian residents. It also highlights close scrutiny of company-funded defences in shareholder oppression litigation, particularly where the company is effectively controlled by the alleged oppressors.