auDA suspends Capital Networks' registrar accreditation

Posted by Jo Lim on 11 April 2005

Melbourne, 11 April 2005 - auDA (the manager of .au) has suspended the registrar accreditation of Capital Networks Pty Ltd (trading as TotalNIC).

In April 2004 Capital Networks Pty Ltd (Cap Net) commenced proceedings against auDA in the Federal Court of Australia claiming that auDA had no right to seek certain information from Cap Net under its registrar agreement with auDA.

auDA successfully defended Cap Net’s proceedings and was awarded costs by the Federal Court of Australia in June 2004.

Cap Net’s appeal to the Full Federal Court of Australia was dismissed with costs in December 2004.  Cap Net has sought special leave to appeal the Full Federal Court\\'s decision to the High Court of Australia.

Despite an agreement for the payment of the costs of the trial by instalments being made between the parties, a Federal Court costs order being made by consent and a Statutory Demand being issued by auDA, Cap Net has failed to pay any of the agreed instalments of the costs.

Under the Corporations Act, Cap Net\\'s failure to pay the debt set out in the Statutory Demand means that it is presumed to be insolvent for the purposes of a winding up application.  Cap Net could have applied to have the Statutory Demand set aside, but did not.  

Because of Cap Net\\'s failure to comply with the Statutory Demand, auDA filed an application in the Federal Court of Australia seeking that Cap Net be wound up in insolvency on 21 March 2005. The application is due to be heard on 28 April 2005.   

On 23 March 2005 auDA also notified Cap Net of its intention to suspend its accreditation unless it satisfied auDA of its solvency by 11 April 2005. As Cap Net has not satisfied auDA of its solvency, auDA has decided to suspend Cap Net\\'s registrar accreditation.  This action does not prevent the resumption of Cap Net\\'s registrar accreditation in the future if Cap Net demonstrates its solvency to auDA\\'s reasonable satisfaction.

auDA will become the temporary registrar for all Cap Net’s .au registrants and will be contacting them to inform them of the action taken and to provide them with information on their rights and obligations.


Chris Disspain

CEO – auDA