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Catchwords: CIVIL PROCEDURE — appointment of referee — no issue of principle

Legislation Cited: Civil Procedure Act 2005 (NSW), s 56
Uniform Civil Procedure Rules 2005 (NSW), rr 20.14, 20.17, 20.18, 20.20

Cases Cited: Chocolate Factory Apartments v Westpoint Finance [2005] NSWSC 784
Sheehan v Lloyds Names Munich Re Syndicate Ltd [2017] FCA 1340

Category: Procedural rulings

Parties: AXICORP FINANCIAL SERVICES PTY LTD (Plaintiff)
MYFX Markets Pty Ltd (First Defendant)
MYFX MARKETS PTY LTD (Second Defendant)
FINTECH PRO PTY LTD (Third Defendant)

Representation: Counsel:
M Youssef (Plaintiff)
A Kaufmann (Defendants)
Solicitors:
Ashurst (Plaintiff)
Spectre Linkers (Defendants)

File Number(s): 2023/00195722

Judgment – Ex Tempore revised from transcript

1. HIS HONOUR: The plaintiff, AxiCorp, moves on a notice of motion dated 16 March 2026, and seeks orders for the appointment of a referee to conduct an inquiry and prepare a report for the Court on the following questions:

“1. In respect of each Omnibus accounts is it possible to determine on the balance of probabilities the account balance as at 31 January 2025?

a. If the answer to this is no, why not?

b. If the answer to this is yes, what were the account balances as at 31 January 2025?”

2. The power to make such an order is found in Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) r 20.14. The application is consented to by the defendant.

3. By way of brief background, AxiCorp is a business providing foreign exchange services, principally through a trading platform known as the MetaTrader 4 platform.

4. In around 2014, AxiCorp and the first defendant entered into an agreement through which AxiCorp agreed to make its MetaTrader 4 platform available to the first defendant. Following entry into that agreement, one or more of the defendants made the platform available to its own clients to place trades.

5. The dispute between the parties, which has given rise to the substantive proceedings, principally relates to the balance of the defendants' accounts with AxiCorp as at 31 January 2025. The circumstances giving rise to that dispute can be summarised briefly and as follows.

6. First, it is said by AxiCorp that an error arose in the calculation of the defendants' balances, which caused those account balances to incorrectly indicate that the defendants had excess capital of approximately 9 million AUD in late 2019.

7. The defendants do not admit that this error occurred. If the error occurred, the defendants do not accept that their account balances were overstated by the amount now contended by AxiCorp.

8. Between September 2019 and June 2021, the defendants made a large number of withdrawals from their account. There is no dispute that the defendants made these withdrawals.

9. After correcting what it says was the error – and taking into account the withdrawals which had been made by the defendants – AxiCorp accepts that the defendants' true account balance sat at approximately -$4.7 million. This is denied by the defendants. As part of that denial, the defendants refer to what is said to be a long history of discrepancies in AxiCorp's reporting and frequent requests made by the defendants to correct what it believed to be errors in the calculation of its account balance.

10. AxiCorp has served a body of affidavit evidence, much of which is of a highly technical and detailed nature. That evidence addresses:

11. the composition and calculation of the defendants' account balances;

12. the identification and cause and effect of what is said to have been the error; and

13. the steps subsequently taken by AxiCorp to calculate what it says is the true balance of the defendants' accounts, including through a technical reconstruction exercise performed using AxiCorp's technical trading and accounting data.

14. This evidence includes lengthy affidavits and exhibits, principally consisting of spreadsheets, which occupy thousands of pages.

15. The defendants have also served affidavit evidence directed to what they claim to be discrepancies or errors in reports issued by AxiCorp over the course of their relationship, and which they claim casts doubt on the accuracy of AxiCorp's underlying data and the calculations performed based on that data through AxiCorp's reconstruction exercise.

16. It is in this context that the parties sought the appointment of a referee.

17. Any application for the appointment of a referee must be considered against the background provided by s 56 of the Civil Procedure Act 2005 (NSW). This includes a consideration of the relative speed with which a referee could hear and determine the issue in dispute, the relative flexibility and informality of the referee procedure, and the significant saving of time and legal costs which might be achieved were that exercise to be performed by a referee rather than a judge hearing the proceedings.

18. There is an ample body of authority which makes clear that orders for the determination of questions by a referee can be particularly useful when dealing with questions involving complex and technical issues that require a detailed examination of voluminous material: Chocolate Factory Apartments v Westpoin**t Finance [2005] NSWSC 784 at [7(5)]; Sheehan v Lloyds Names Munich Re Syndicate Ltd [2017] FCA 1340 at [9], [13] (per Allsop CJ). The issues to which I have referred in this case can fairly be characterised in that way.

19. Here, the proposed question to be referred to a referee involves a technical and complex analysis, computation, and consideration of:

20. the nature of AxiCorp's accounting platform and the way in which it is said by AxiCorp that the error arose;

21. the extent, if any, to which that error has impacted on the balance of the defendants' account from time to time; and, most significantly,

22. the position ultimately arrived at insofar as the defendants' account balance might be concerned, having regard to the withdrawals made from that account.

23. I am satisfied that an appropriately qualified and experienced forensic accountant (being the discipline the parties suggest would be most suitable to act as referee in this case), would be able to inquire and answer the proposed question more quickly and cheaply than would be the case if it were left to be resolved by a judge of this court at a final hearing. In those circumstances, I am comfortably satisfied that the principles underpinning s 56 of the Civil Procedure Act would be well served by the appointment of a referee.

24. There is also the possibility, alluded to by the solicitor for AxiCorp, that the proceedings may be more readily compromised by the parties, once the answer to the question which is proposed to be referred to the referee is known. This too favours the appointment of a referee prior to the hearing of any further issues in the proceedings.

25. For the above reasons, it is appropriate to make orders for the appointment of a referee to determine the question which has been proposed by the parties.

26. I make the following orders:

27. Pursuant to r 20.14 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) a referee as determined in accordance with order 2 below (Referee) is appointed to conduct an inquiry and prepare a report to the Court on the question set out at Annexure A to short minutes of order dated 7 May 2026.

28. Within 21 days of the Court's orders the parties are to provide to the Court:

(a) the name and qualifications of any agreed referee for approval by the Court; or (b) if the parties cannot agree on a referee, the name and qualifications of their respective proposed referees, together with submissions of no more than 1 page for determination by the Court.

3. Within 7 days of the Court approving or determining the identity of the Referee in accordance with order 2 above, the parties are to provide the Referee with a sealed copy of these orders.
4. The reference will commence within 14 days of the Court approving or determining the identity of the Referee in accordance with order 2 above, or such other date as determined by the Referee.
5. Pursuant to r 20.17 of the UCPR the Referee will provide the report to the Court on a date to be determined.
6. Pursuant to r 20.18 of the UCPR, without affecting the powers of the Court as to costs, the fees of the Referee are to be paid on the Referee's terms and, in the first instance, 50% by the plaintiff and 50% by the defendants.
7. Pursuant to r 20.20 of the UCPR the Referee is to prepare the report in accordance with the terms of reference set out in Annexure B to the short minutes of order dated 7 May 2026.
8. No order as to costs in respect of the Notice of Motion filed on 16 March 2026 (with the intent and effect that each party bear their own costs).

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