CIP Group Pty Ltd v So

Background 6 As property developers, Mr Clancy and Mr So have undertaken a number of subdivisions and developments over the years. 7 Their present and most recent development involves property within the Logan City Council local government area and is referred to as the "Carver's Reach Estate". 8 The So and Clancy interests have utilised the operating companies as corporate vehicles for the purposes of undertaking this development. Each of the several companies has a differentiated role to play in the project. The participation of the thirteenth respondent in this matter is minimal, although that is irrelevant for present purposes. 9 The second respondent, GGPG Pty Ltd (GGPG) is the trading entity and borrower of funds for the development project. The eleventh respondent, Park Ridge Development Management Pty Ltd (PRDM) is the development management entity for the project. 10 The clear impression from the evidence is that the relationship between Mr Clancy and Mr So was more or less in the nature of a partnership, albeit conducted through corporate entities. In the written submissions made on behalf of the So interests, it was specifically asserted that the joint venture was conducted as a quasi-partnership even though neither Mr Clancy nor the applicants make any specific claim in that respect. Though there is some doubt about that characterisation, the evidence suggests that whilst Mr Clancy and Mr So were the active controlling minds of the venture, the quasi-partnership existed, if at all, between their corporate entities. For present purposes there is no need to reach a final conclusion on that issue. 11 Mr So assumed the role of chief financial officer within GGPG and the other operational companies. Conversely, Mr Clancy's role might properly be described as chief operations officer in that he oversaw the carrying out of development works. 12 The Carver's Reach Estate project, which is a staged development, has been ongoing for some time and Mr Clancy asserts that it will return profits towards its final stages. That is a somewhat uncontroversial proposition given that it is notorious that the financial results of land developments trend along such lines. 13 For a period, the financing of the development had generally occurred through loans from external lenders who held security over the land on which the development was occurring. 14 In November 2019, a loan agreement, which was to further finance the development, was entered into between Ultimate and GGPG for an amount of around $8 million with a term of two years and is referred to as the, "Ultimate Advance". The other operating companies were, amongst others, guarantors of the loan. Prior to this Ultimate's provision of finance to the project was somewhat informal. 15 The applicants have prepared a draft statement of claim outlining the proposed derivative causes of action. In it they assert that, prior to entering into the Ultimate Advance, Mr So and Ultimate gave assurances to Mr Clancy, GGPG and the guarantors, that the loan would not be called in save in certain circumstances which, to date, have not occurred. Mr Clancy deposed to these matters in his supporting affidavits. 16 It is further alleged that Mr So, as the financial controller of the development venture, knew that a reasonable period of time was required for refinancing the project when any facility became due. 17 In December 2021, Ultimate sought repayment of the loan facility which was then overdue and proceeded to enforce its rights under its security. It did so without warning and without affording the operating companies any time or opportunity to refinance. It appointed receivers to the operating companies including GGPG. It is said that Mr So's omission to warn GGPG and the operating companies of the need to refinance the Ultimate Advance or to secure refinancing, resulted in the appointment of the receivers to them and consequent loss. It is further said that had notice been given, GGPG would have been in a position to arrange refinancing and, would have completed the development at a profit. Necessarily, issues of causation arise around this point. 18 The proposed statement of claim asserts that Mr So's omissions amounted to breaches of ss 180, 181 and 182 of the Act relating to the obligations of company officers and directors and that they also constituted breaches of the fiduciary or other common law duties which he owed to the operating companies. It is alleged that Ultimate was knowingly concerned in the breaches of the corporate duties or was a knowing participant in Mr So's breach of fiduciary duty. 19 The applicants also claim that the assurances given by Mr So and Ultimate at the time that the Ultimate Advance was entered into, constituted misleading or deceptive conduct which caused damage to the operating companies. 20 Although not presently pleaded, the applicant companies claim that some of the foregoing conduct of the fourteenth to sixteenth respondents constituted conduct within that described in s 232 of the Act and that orders should be made under s 233 to relieve the applicants of the consequences of that conduct. At a high level of generality, the claim appears to be that the conduct of the So interests which amounted to breaches of duty, including the breach of the fiduciary duty, also constituted oppressive conduct.

The nature of the derivative actions sought to be advanced 21 The action was commenced by an Originating Application filed with an Interlocutory Application seeking leave pursuant to ss 236 and 237 of the Act to commence some of the claims set out in the Originating Application as derivative actions. As mentioned, at present no pleading has been filed and all that has been produced is a proposed draft statement of claim. Whilst that document contains sufficient allegations to demonstrate the nature of the applicants' complaints, some not insignificant reorganisation and refinement of it is required before a sufficient pleading emerges. Significantly, it only articulates the claims on which the derivative actions are based. Although it is said that the oppression claims will be based on substantially the same facts, some enunciation will be required of how Mr So's conduct should be attributed to those against whom relevant relief under s 233 is sought, being the fourteenth to sixteenth respondents. At present, no relief under that section is sought against Mr So. 22 The general nature of the main claims articulated in the draft pleading include the following: (a) Mr So and Ultimate made misrepresentations to the effect that: (i) the Ultimate Advance did not need to be repaid on the due date unless there was default in relation to other finance facilities; and (ii) Ultimate would provide reasonable notice of the obligation to repay the loan before enforcing securities; (b) Mr So breached the duties he owed to the operating companies and, in particular, GGPG, by failing to warn of the need to repay the Ultimate Advance, or to refinance it; (c) Mr So breached his fiduciary duty and the duties owed under the Act by acting in the interests of Ultimate as opposed to the interests of GGPG and the operating companies; (d) Ultimate was knowingly involved in a dishonest and fraudulent scheme, being Mr So's breach of duty which had the object of bringing the Carver's Reach Estate project to an end with the intention of it benefiting Mr So and Ultimate; (e) Ultimate breached its agreement with GGPG by reason of it failing to give reasonable notice of the obligation to repay; (f) Ultimate and Mr So engaged in misleading or deceptive conduct by the misrepresentations made prior to the entry into the Ultimate Advance and caused the operating companies loss by the enforcement of the securities.

Legislation 23 The source of the Court's power to grant relief in relation to oppressive conduct occurring in the course of corporate management is found in ss 232 and 233 of the Act which relevantly provide: 232 Grounds for Court order The Court may make an order under section 233 if: (a) the conduct of a company's affairs; or (b) an actual or proposed act or omission by or on behalf of a company; or (c) a resolution, or a proposed resolution, of members or a class of members of a company; is either: (d) contrary to the interests of the members as a whole; or (e) oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity. For the purposes of this Part, a person to whom a share in the company has been transmitted by will or by operation of law is taken to be a member of the company. 233 Orders the Court can make (1) The Court can make any order under this section that it considers appropriate in relation to the company, including an order: (a) that the company be wound up; …. (d) for the purchase of any shares by any member or person to whom a share in the company has been transmitted by will or by operation of law; … (g) authorising a member … to institute, prosecute, defend or discontinue specified proceedings in the name and on behalf of the company; … 24 The power to grant leave to a member to bring derivative claims on behalf of a company is found in ss 236 and 237 of the Act which provide: 236 Bringing, or intervening in, proceedings on behalf of a company (1) A person may bring proceedings on behalf of a company, or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for those proceedings, or for a particular step in those proceedings (for example, compromising or settling them), if: (a) the person is: (i) a member, former member, or person entitled to be registered as a member, of the company or of a related body corporate; or (ii) an officer or former officer of the company; and (b) the person is acting with leave granted under section 237. (2) Proceedings brought on behalf of a company must be brought in the company's name. … 237 Applying for and granting leave (1) A person referred to in paragraph 236(1)(a) may apply to the Court for leave to bring, or to intervene in, proceedings. (2) The Court must grant the application if it is satisfied that: (a) it is probable that the company will not itself bring the proceedings, or properly take responsibility for them, or for the steps in them; and (b) the applicant is acting in good faith; and (c) it is in the best interests of the company that the applicant be granted leave; and (d) if the applicant is applying for leave to bring proceedings - there is a serious question to be tried; and (e) either: (i) at least 14 days before making the application, the applicant gave written notice to the company of the intention to apply for leave and of the reasons for applying; or (ii) it is appropriate to grant leave even though subparagraph (i) is not satisfied. …

Matters not in dispute for s 237(2) 25 As is apparent from the terms of s 237(2), if the Court is satisfied of the five matters in sub-paragraphs (a) to (e), it is obliged to make an order granting, inter alia, a member leave to bring derivative proceedings. 26 In relation to the requirement in s 237(2)(a), it was not in dispute that it is probable that the second to thirteenth respondents will not bring claims against Mr So and Ultimate. Mr So has an interest, either directly or indirectly, in each of the second to thirteenth respondents and is a director of each of them. There is no discernible reason as to why he would permit them to bring such claims. The companies have not sought to do so despite the lapsing of almost a year since the occurrence of the conduct in respect of which complaint is made. 27 There was also no question raised as to whether the applicants were acting in good faith, being the requirement in s 237(2)(b). There is sufficient evidence for the purposes of this application that the consequence of the actions of Ultimate was the collapse of the Carver's Reach Estate development. It is fairly clear that whatever profits were to be made by the operating companies from it would have been derived at the latter stages and the opportunity to do so has now been lost. That is not to say Ultimate and or Mr So necessarily engaged in any wrongdoing in calling in the loan as that is a matter yet to be determined, though there exists an argument about Mr So's and Ultimate's liability, and this is not a case where it might be said that the claims lack any merit. 28 This is confirmed by the respondents also acknowledging that a serious question to be tried had been raised for the purposes of s 237(2)(d). Despite that concession, in the absence of any response from Mr So to the issues raised in the proposed pleading and the affidavit material that he failed to warn the operating companies of the need to refinance or to obtain finance, the strength of the case rises higher than merely a serious question. Whilst that position may well change, on the material presently available, his failure to explain his conduct suggests that there may be substance in the applicants' case. This is considered further below in the light of the evidence that Mr So's actions may have been motivated by his desire to terminate his relationship with Mr Clancy. 29 In relation to s 237(2)(e), the applicants did not give 14 days' notice to the second to thirteenth respondents of the intention to apply for leave. Nevertheless, given the progress of the application which was filed in March 2022, the respondent companies will not have sustained any prejudice. Moreover, as Mr So would not have permitted them to undertake the proceedings themselves, the provision of notice would have been redundant. In those circumstances if the applicants are able to make out the other grounds leave should be granted even though subparagraph 237(2)(e)(i) is not satisfied.

Best interests of the companies 30 It follows that the only issue in dispute was for the purposes of s 237(2)(c), whether it is in the best interests of the companies on whose behalf derivative proceedings are sought to be taken that the applicants be granted leave.

The principles relating to the "best interests" of a company 31 The principles which have developed around this issue are fairly well established. 32 The concept of "best interests" is cast at a high level of generality, but directs attention to the company's separate and independent welfare. The specifics will alter according to the status of the company from time to time. It may reflect the interests of the shareholders taken together in light of the corporate objects but, in times of financial stress, it may reflect those of the creditors: Charlton v Baber (2003) 47 ACSR 31, [52], [53]; Walker v Wimborne (1976) 137 CLR 1; Spies v R (2000) 201 CLR 603; Maher v Honeysett and Maher Electrical Contractors [2005] NSWSC 859 at [44]. In Re Gladstone Pacific Nickel Ltd (2011) 86 ACSR 432 , Ball J stated at 445 [57]: [57] The requirement that the court be satisfied that it is in the best interests of the company that the applicant be granted leave raises two questions. One is whether it is in the best interests of the company that the action be brought. The other is whether it is in the best interests of the company that it be brought by the applicant. The court must consider the interests of the company as a whole. … 33 In Swansson v RA Pratt Properties Pty Ltd (2002) 42 ACSR 313, Palmer J identified a series of useful observations as to the operation of s 237(2)(c) and the requirement of the best interests of the company. They included the following: (a) The Court must be satisfied that the proposed derivative action is in the best interests of the company, not that it may be or appears to be. In this sense the company's best interests needs to be established on more than a prima facie level. (b) The requirement in s 237(2)(c) is that the applicant must establish, on the balance of probabilities, that the granting of leave is in the company's best interests taking into account all of the relevant circumstances. That generally includes: (i) evidence of the character of the company, as different considerations will be involved if the company is closely held or a publicly listed company. Where the company is a joint venture company with a deadlocked directorship, the proposed derivative action might be seen as being for the purpose of vindicating one side's position; (ii) evidence of the company's business position so that the impact on that can be assessed; (iii) whether the substance of the redress sought can be achieved by a means which does not require the company to be drawn into litigation which it has not determined to pursue. Palmer J said (at 324 [59]): … So, for example, if the applicant can achieve the desired result in proceedings in his or her own name it is not in the best interests of the company to be involved in litigation at all... (iv) evidence of the ability of the defendant to meet a substantial portion of any judgment obtained. 34 Whilst the foregoing might be accepted, it is also true that applications for leave under s 237(2) should not become mini trials of the issues in the proposed litigation: MG Corrosion Consultants Pty Ltd v Vinciguerra (2011) 82 ACSR 367 [59]. Further, the issue of prospects of success of any action is tempered by the criteria in s 237(2)(d) that the Court is to consider whether a serious question to be tried has been raised. It would render that requirement redundant if, in establishing what is in the best interests of the company, the applicant was required to establish the prospect of a higher level of success. 35 The position in relation to the application of s 237 in the context of joint venture companies is slightly problematic. Such companies are often merely the vehicles through which the co-venturers have conducted their operations and their corporate purpose is only to advance the venturers' interests rather than their own. In Fiduciary Ltd v Morningstar Research Pty Ltd (2005) 53 ACSR 732, 743 [47] Austin J observed: It seems to me that, where the company in question is a joint-venture vehicle and one of the venturers alleges that the other has acted unlawfully causing the company loss, it will usually be appropriate to allow the complaining venturer to bring proceedings in the company's name against the other venturer and its representatives on the board, even though there are no other shareholding interests than those of the litigants and the effect of success of the litigation will be indirectly to benefit the complaining venturer proportionately to its shareholding. 36 These observations were referred to with apparent approval by Connock J in Re Orico Australia Pty Ltd [2019] VSC 313 [68] where it was said: It may be in the best interests of the company to grant leave for the company to bring proceedings against shareholders where there is a deadlock and the proceeding is a suitable means by which the deadlock can be resolved. Joint venture companies in which no one shareholder has a controlling interest have a real potential to become bogged down in a stalemate where shareholders cannot agree how to conduct the business of a company. A grant of leave may be a suitable means by which to resolve deadlocks of that kind. (Citations omitted). 37 It is noted that Palmer J in Swansson v RA Pratt Properties Pty Ltd had observed that derivative proceedings were not useful in resolving deadlocks in joint venture companies. In doing so he relied upon the observations in Talisman Technologies Inc v Queensland Electronic Switching Pty Ltd [2001] QSC 324, although that decision was subsequently overturned by the Court of Appeal in Metyor Inc (formerly Talisman Technologies Inc) v Queensland Electronic Switching Pty Ltd [2003] 1 Qd R 186. There, McPherson JA (with whom Williams JA and Wilson J agreed) accepted that the position of joint venture companies is somewhat different and derivative proceedings provides a useful means of resolving inter-party disputes. 38 It would appear to be settled that it is not a requirement for granting leave that the intending claimant is unable to seek redress through means other than a derivative action: MG Corrosion Consultants Pty Ltd v Vinciguerra [60]; Blakeney v Blakeney (2016) 113 ACSR 398 [62]. There is no need to suppose that an oppression proceeding would be less impactful on the company's affairs than would a derivative action. On the other hand, the availability of relief otherwise than through a derivative action can be relevant to the determination of whether the granting of leave is in the company's best interests.

Status of the operating companies 39 Given the foregoing, the status of the operating companies as joint venture vehicles used by the So and Clancy interests to conduct the particular development at Carver's Reach Estate, is not unimportant. As the above cases reveal, it is not uncommon for Courts to permit the undertaking of derivative actions by one joint venture on behalf of a corporate vehicle for the purposes of resolving disputes between co-venturers. The present case is an archetypical instance of that albeit in the context of a corporate apparatus and no other shareholder interests to consider. It is undoubted that it would advance the interests of the operating companies for the disputes which have deadlocked the companies' operations, to be resolved. 40 Additionally, as the operating companies are no longer trading following the appointment of receivers by Ultimate, it is not likely that the conducting of litigation by the Clancy interests in their name will interfere in their usual day-to-day operations.

Prospects of success 41 As the respondents conceded that the applicants had raised a serious question to be tried, minimal submissions were made in relation to the substance of the claims. Nevertheless, the respondents submitted that the applicants' case was "highly problematic" as it would require overcoming a sequence of difficult hurdles including establishing that the operating companies could have refinanced the Ultimate Advance through an alternative financier. 42 Whilst there is some superficial force in those submissions, when the evidence is analysed something more than a mere arguable case emerges. There was no question that, as a director of the operating companies, Mr So owed them statutory and fiduciary duties in the performance of his obligations which, in broad terms, were that he was to act in their interests in preference to his own. Although it was submitted that those duties were mollified by allegations that Mr Clancy had breached the duties which he owed to those companies, no authority was advanced for the proposition that such activity, if established, altered the nature and content of Mr So's obligations. It is not immediately self-evident why a breach or an alleged breach of duty owed by one director to a company, relieves or minimises the obligations of another director. 43 It also did not appear to be in contest that Mr So was the controlling mind of Ultimate and was aware of its intentions in relation to the calling in of the Ultimate Advance and, indeed, the appointment of receivers. There is an argument that, at least at the point that Ultimate formed such an intention if not before, Mr So was in a position of conflict in relation to his obligations to GGPG and the operating companies on the one hand, and his and Ultimate's interests on the other. On that basis, any omission of Mr So to inform Mr Clancy and or GGPG or the operating companies that refinancing was needed or even the omission to secure appropriate finance, may well have had the consequence that several of the onerous directors' duties were breached. 44 Mr Hodge KC submitted that it was noticeable that Mr So had not given any evidence explaining why he had not mentioned to Mr Clancy that the indebtedness to Ultimate needed to be repaid. At least for the purposes of this application, there is no evidence that accounts for Mr So's actions despite there being, at least prima facie, obligations on him to act in the operating companies' interests. In the circumstances of ascertaining whether the undertaking of the derivative proceedings is in the interests of the operating company, the omission indicates that Mr So is unable to give any useful evidence on this topic. That is, perhaps, even more relevant in circumstances where Mr So addressed many other matters in his affidavit. 45 Nor is it necessarily the case that the applicants will have difficulty in establishing that the operating companies suffered loss and damage on the basis that there were alleged impediments to refinancing. It appears that the Carver's Reach Estate development had successfully proceeded in a staged manner and had been adequately financed along the way. It is not as if the operating companies did not have a track record on which they might rely when seeking alternative finance. Although no conclusion needs to be reached in relation to this issue, for the purposes of this application the material suggests that, had the operating companies been given sufficient time, alternative finance could have been available. That is consistent with the evidence from the non-bank financiers, who had previously financed the development, indicating that they were willing to finance it into the future. 46 Mr Dunning KC, on behalf of the respondents, submitted that refinancing would not have been available to GGPG because Mr So has deposed in his affidavit of 26 September 2022, that he would not have agreed to any alternative financing arrangement. Mr So claimed that he had fallen out with Mr Clancy by mid-2021 and that he no longer wished to do business with him. The difficulty here is, however, that Mr So's intended refusal to agree to the refinancing seemingly relates to his views of Mr Clancy and not what would have been in the interests of GGPG or the operating companies. He does identify what he says was the precarious position of Mr Clancy's companies and the difficulties which might arise for the further funding of the development, and there is no doubt that these may have provided some impediment. However, Mr So's evidence of his knowledge of these matters only emphasises the importance of the performance of his duties in relation to the financial affairs of the operating companies in a timely manner. Again, although it need not be determined on this application, it may be that in these circumstances Mr So's duties to GGPG and the operating companies required him to be proactive from an early stage to ensure the ongoing availability of finance for the development. These matters tend to negate the submission that the applicants' case is weak. Moreover, it is not likely that Mr So can rely on his own breach of duty by refusing to agree to a refinance, as founding a defence to the applicants' claim that refunding the development was possible: see JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity Doctrines and Remedies (2015, 5th ed, LexisNexis Butterworths) [23-425]; Oliana Foods Pty Ltd v Culinary Co Pty Ltd (in liq) [2020] VSC 693 [506] and Anderson v Canaccord Genuity Financial Ltd (2022) 161 ACSR 1 [2496]. 47 In this respect Mr Hodge KC on behalf of the Clancy interests submitted also that some care needs to be taken in relation to Mr So's evidence. Mr So seemed to depose that from mid-2021 he was no longer interested in doing business with Mr Clancy and that, if there were to be any refinancing he would feel compelled to disclose that to any financier. However, in a subsequent affidavit Mr Clancy identified that some refinancing took place in October 2021 at Mr So's direction, and it is apparent Mr So did not then feel the need to advise the financier of the deteriorating relationship between the co-venturers. Mr So has not responded to that affidavit and, for the purposes of this application only, some doubt has been cast on the suggestion that alternative finance would not have been forthcoming. 48 The strength of the case against Ultimate is relatively equivalent to that against Mr So. Mr So can be taken as being its guiding mind such that it knew what he knew and his intention was its as well. Whilst the claim against Ultimate requires the existence of a fraudulent and dishonest design: Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89: there is sufficient evidence on the material to show that such a case exists. That is not to say that it will be established at trial, but that there is more than a serious question to be tried in relation to that issue. 49 Although little was said by the parties about the misleading or deceptive conduct claims, there appears to be some merit to these as well. The affidavit evidence suggests that the representations were made by Mr So's solicitor, Mr Wong, at a meeting on the day the Ultimate Advance was entered into and which Mr So attended. His evidence is that he did not understand a lot of what was said due to it being in English, but slightly curiously asserts that his solicitor did not make the representations alleged. Mr Wong did not make any affidavit. 50 The necessary conclusion is that the submission on behalf of the So interests that the applicants' case is weak should be rejected. That supports the conclusion that the pursuit of the claims by the applicant companies would be in the best interests of the operating companies.

The worth of the proposed respondents 51 Palmer J in Swansson v RA Pratt Properties Pty Ltd identified that evidence of the worth of the proposed respondents was relevant to the question of whether leave would be granted to bring a derivative action. In the present matter, there was little evidence of this in the material before the Court and Mr Dunning KC characterised this as a serious omission. 52 Whilst there is some force in that, there are countervailing considerations. First, if it be assumed that judgment is granted against Ultimate for the sum of $14 million or, alternatively, $11 million, it may stand as a counterclaim to the debt owed by GGPG and the guarantors which will enhance the asset position of the operating companies to that extent. Second, being a private company it is not particularly easy to ascertain its wealth. As Mr Hodge KC submitted, the financial status of Mr So and Ultimate are matters peculiarly within Mr So's knowledge and he did not provide any sufficient evidence of it. Whilst he did give some evidence of some of his and Ultimate's financial transactions and obligations, his evidence contains stark omissions as to his or the company's asset position or overall financial standing. The reliance by the applicants on these omissions on this issue does not reverse the onus on the application, but is merely an example of the inference which follows from the party with sole knowledge of a circumstance in dispute not producing any evidence of the same. Third, although the wealth of Mr So is unclear, it is not unreasonable to infer for the purposes of the present application that he is a person of some substance given the nature of his undertakings and his ability to secure large amounts of finance. 53 It can be concluded that Mr So has not sought to adequately address the actual financial position of himself and Ultimate because that evidence would not assist his or Ultimate's case. In any event, if the action is successful, GGPG's liability to Ultimate will be diminished which is a substantial benefit to it and the operating companies. 54 Although the lack of information as to the financial standing of the respondents is a factor which might weigh against the conclusion that the derivative action is in the best interests of the operating companies, for the reasons given that weight is not significant.

The provision of security 55 In order to provide a level of protection for the operating companies in relation to the costs of the action, the applicants have provided or are prepared to provide a sum of $750,000 to be deposited in an account in the name of their solicitors to be kept as security to meet any adverse costs order made against the operating companies. 56 In assessing the import of that undertaking it is relevant that, on the basis of the evidence before the Court, the claims sought to be advanced by the Clancy interests can be said to have more than some substance to them. That renders the making of an adverse order against the operating companies less likely than it might otherwise be. 57 There was a debate on the material as to the amount of costs which Mr So and Ultimate might incur in the action for which the operating companies may be liable. Mr Guthrie, who was the applicants' solicitor, deposed that the costs expected to be incurred up to the first day of trial were around $430,000. He was not cross-examined. Conversely, Ms Rosati, a solicitor who specialises in costs and associated issues, deposed that the costs which might be recovered in the action by the So respondents on a party / party basis were between $952,758 and $1,067,406. Ms Rosati was not cross-examined either. 58 It is relevant that Ms Rosati assessed the amount which the "So Respondents" and the Receiver would incur on an indemnity basis in the event that leave was granted to conduct the derivative action and that the trial was of two weeks' duration. She also gave her opinion of the likely party / party costs which would be incurred in the event that the proposed derivative action is wholly unsuccessful. 59 There is an initial difficulty with Ms Rosati's report in that she purports to assess the costs of the "So Respondents" which include the costs of the fourteenth to sixteenth respondents. Relief in the proceedings is sought against them only in respect of the oppression claims. Their costs do not respond to the causes of action sought to be advanced as derivative claims. Although this is a product of the instructions given, the fact remains that Ms Rosati's evidence does not appear to differentiate between the several claims sought to be advanced. 60 In addition, the assumption underpinning Ms Rosati's report is that the operating entities will become liable for the full costs of the action which is not necessarily so. The Clancy interests are pursuing oppression claims against the fourteenth to sixteenth respondents based on the same facts which found the derivative actions and there was no suggestion that Mr So and Ultimate will obtain separate and independent representation. In this scenario it is apparent that those respondents to the oppression claims will incur the costs of litigating the issues in any event and any order for costs in the proceedings may well take that into account given that the derivative claims are an adjunct to the oppression action, not vice-versa. 61 Further, it is far from certain that this matter will require a full trial on all issues. In an era of intensive case management, such an occurrence is less likely. As often occurs in oppression actions, it may be appropriate to assess whether any conduct satisfying s 232 has occurred prior to hearing evidence as to the value of the company for the purposes of ascertaining the price at which one of the interests should acquire the shareholding of the other. Should the claims fail no further expense would be incurred, thereby saving the costs involved in litigating the share value issue which would involve substantial expense. There is no evidence as to the cost of litigating the issue of liability only. 62 It remains the fact that there is a risk that the operating companies may become liable for Mr So's and Ultimate's costs of the derivative claims and that the amount in question may not be insubstantial. The report of Ms Rosati provides a guide as to what they may be, but a perusal of it suggests that it is on the higher side. Whilst the draft proposed statement of claim renders the matter more complex than it needs to be and should be redrafted, the issues involved are not difficult and nor do they involve any challenging questions of law. It is, with respect, not particularly easy to see how, in an action of this nature, the pleading costs for Mr So and Ultimate could amount to $66,000.00. Similarly, it appears that Ms Rosati was instructed to undertake the evaluation of costs on the basis that substantial discovery will be required. That too is far from certain and, indeed, might be unlikely. Although, as a consequence of the asymmetry in the information available to the respective parties, discovery is usually ordered in oppression actions, it often takes effect in stages and is closely controlled by the Court. 63 In these circumstances, and adopting somewhat of a broad brush approach, it can be concluded that there is a risk that the operating companies may become liable to an order for costs which may exceed $500,000. Such an exposure is sufficiently covered by the undertaking to lodge $750,000 into an account maintained by the applicants' solicitor as security in respect of an adverse costs order against the operating companies in the derivative actions. 64 The applicants have agreed to indemnify the operating companies against any adverse costs orders in relation to the derivative actions and, whilst that should be required, little store should be placed on it when the overall financial position of those companies is not evidenced. Mr Dunning KC's submission that in assessing the value of the applicant companies it is inappropriate to take into account the worth of their choses-in-action against the fourteenth to sixteenth respondents should be accepted. Their value will only become relevant if the claims are successful, in which case there is no need to consider any question of indemnity. The relevant issue is the worth of the applicants if the action is not successful. Whilst the lodgement of security can be considered tangible, an unsupported undertaking to indemnify is of no moment. 65 The above discussion proceeds on the basis that the operating companies are without assets or that such assets should not be used for the purposes of litigation. On the assumption that they have assets, the Clancy interests are apparently entitled to half their value such that, to the extent to which the companies are required to meet any order for costs, the obligation will fall partly on those interests. Whilst that is of no comfort to the So interests, it is often the inevitable consequence of disputations between joint venturers. In addition, when consideration is given to the interests of the operating companies it should be kept in mind that, if the actions are successful, they will receive a substantial return which will enure to the benefit of those companies amongst the So interests which are their members.

The ability to bring the claims as part of the oppression proceedings 66 The major issue which divided the parties at the application's hearing was whether the applicants could, effectively, litigate derivative claims against Mr So and Ultimate in the oppression action. The So interests submitted that they were able to do so, such that there was no purpose in granting leave under ss 236 and 237, which could have the only effect of exposing the operating companies to a liability to an order for costs. The essence of these submissions was that the scope of power in s 233 was sufficiently wide to give the operating companies relief in relation to the alleged breaches of fiduciary duty. It was submitted that the allegations of breach against Mr So and Ultimate could be raised in the oppression action and, if made out, orders could be made requiring them to pay compensation to the operating companies. That would result in an enhancement of their value which would be relevant to the price at which an order for purchase might be made. 67 The submission that such claims could be pursued is founded upon the alleged scope of the Court's power in ss 232 and 233 of the Act. In particular, reliance is placed on the words of the chapeau of the latter section which provide, "The Court can make any order under this section that it considers appropriate in relation to the company …". It was submitted that the authorities support the proposition that those words enable the Court to make orders in relation to claims which the company, the subject of the oppression proceedings, has against third parties. Reliance was also placed on s 233(1)(g) which provides that the Court can make an order authorising a member to, inter alia, institute specified proceedings in the name and on behalf of the company. 68 Sections 232 and 233 operate conjointly. Specifically, the powers under s 233 arise only once the circumstances in s 232 are satisfied. Although the words of a subjective jurisdictional fact are not used, the power to make any order under s 233 is necessarily conditioned upon the establishing of the circumstances specified in s 232: LPD Holdings (Aust) Pty Ltd v Phillips (2013) 281 FLR 227, 236 - 237 [40] (LPD Holdings v Phillips); Campbell v Backoffıce Investments Pty Ltd (2008) 66 ACSR 359, 387 [122]. For present purposes, those circumstances can be referred to as "oppressive conduct" though it is accepted that such a generalisation is, perhaps, technically inaccurate. 69 If the Clancy interests establish that the fourteenth to sixteenth respondents engaged in oppressive conduct, the Court might make any order it considers appropriate in relation to the company including, pursuant to s 233(1)(g) an order permitting the Clancy interests to institute proceedings against Mr So and Ultimate in respect of wrongs done to the operating companies. However, the So interests submitted that the Court can make such an order now, allowing the Clancy interests to commence the third party proceedings in the oppression action or permitting them to make claims which will, if they are successful, provide them with equivalent relief. There is, of course, a temporal inconsistency between that submission and the manner in which the power in s 233 is enlivened. No explanation was given as to the basis on which the Court might utilise the power in s 233(1)(g) prior to the conditions for its exercise being satisfied. 70 The decision of the New South Wales Court of Appeal in Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672, 695 [140] (Fexuto) is important in this context. There, Fexuto Pty Ltd brought proceedings claiming that the affairs of Bosnjak Holdings Pty Ltd, in which it was a shareholder, were being conducted oppressively. It alleged, amongst other things, that directors of Bosnjak Holdings had engaged in a breach of fiduciary duty by taking for themselves and a third party company which they controlled, a commercial opportunity which became available to them by virtue of their position as directors. The primary judge held that the claim was made out and ordered an account of profit from the errant directors. Before the Court of Appeal it was submitted that the order for an account of profits should not have been made in the oppression action. That was rejected by the Court, which held that the power to make it was supported by the wide words of s 260(2) which is the progenitor of s 233(1). Although the reasons of the primary judge appeared to rely upon s 260(2)(g) as the foundation for the orders made, the Court of Appeal held that he, in fact, relied upon the broader power in the section's chapeau. At 696 [142] Spigelman CJ observed that the primary judge proceeded "on the basis that an order permitting Fexuto to bring proceedings for account on behalf of the company had been made, with a view to the court granting the order in the same proceedings". In effect, the primary judge utilised the broad power in s 260(2) to make orders based on the fiction that an antecedent order had been made permitting the plaintiffs to bring a derivative action on behalf of the company and that it had been successful. 71 Spigelman CJ further held that, "it would have been absurd for [the primary judge], after hearing the entirety of the case in this respect, to have ended only with an order authorising Fexuto to bring proceedings in the future". The words emphasised (although not in the original text) demonstrate that the issues of whether some of the directors had breached their fiduciary duty to the company, or whether third parties had been knowingly concerned in that breach, had been fully agitated and that all relevant interests were parties to the oppression action. 72 The Chief Justice continued and added (at 696 [143] - [144]): [143] His Honour [the primary judge] went on to refer to the introductory words at s 260(2), as quoted above, to the effect that the court is empowered to make "such order or orders as it thinks fit". His Honour said that he agreed with the approach that the amendments to s 260 had been designed to ensure that the court was invested with plenary power to deal with all kinds of oppression with whatever weapons seem just and equitable. I agree with his Honour in this regard and also with the reasons of Priestley JA to similar effect. Once his Honour had formed the opinion for which s 260(2)(a) provides, then an order for an account of profits in the two respects which his Honour identified was both permissible and appropriate. [144] In my opinion, in the circumstances of this case, the order is supported by the introductory words of s 260(2): "such order . . . as it thinks fit". 73 It is, with respect, difficult to conclude that the Chief Justice did other than accept that the primary judge had utilised the broad power in the chapeau of s 260(2) to make the orders which he did, which were not inappropriate in the circumstances of the case where all relevant parties were before the court and all appropriate issues were raised and ventilated. 74 Priestley JA was prepared to give s 260 a wide interpretation and held that it allowed a shareholder to make a claim for breach of fiduciary duty within the scope of an oppression action. He held (at 763 [528]) that it authorised two things. First, to permit a member to carry on the equivalent of a derivative proceeding either within or concurrently with an oppression case. That was authorised by the opening words of s 260 or by sub-paragraph (2)(g). He then said that sub-paragraph (2)(e) gives the court power to order the purchase of shares and to state the manner in which they are to be valued, including by taking "into account the consequences of the breaches of fiduciary obligation established in the proceedings". Here, his Honour was considering the "equivalent of a derivative proceeding" rather than the prosecution of an actual derivative action which necessarily would have involved the making of an additional claim. However, some inconsistency arises by his reference to carrying it on "either within or concurrently with an oppression case". Mr Dunning KC submitted that those words indicated that his Honour had in mind that a separate action could be undertaken or the proceedings could be pursued within the oppression claim itself. If that is a correct interpretation of Priestley JA's reasoning, it is apparent from the preceding discussion that it was not acquiesced in by Spigelman CJ, even though the Chief Justice reached a similar outcome. 75 There is some doubt as to the precise ratio of Fexuto. As the subsequent authorities make clear, it is unlikely that s 260(2)(g), or now s 233(1)(g), could be used to authorise the commencement of derivative proceedings prior to satisfaction of the conditions of s 232. For a similar reason, the generally expressed power in the chapeau of s 233(1) does not provide the power either. It is axiomatic that none of the powers in s 233 are enlivened until the oppressive conduct is established, with the result that it is difficult to envisage how they might be used to authorise the carrying on of a derivate action concurrently with oppression proceedings. The consequence is that the circumstances which existed in Fexuto would infrequently arise in relation to parties against whom it is alleged were knowingly concerned in a breach of a director's duty. 76 Some much needed clarity on this issue has been provided by the erudite analysis of McMurdo J in LPD Holdings v Phillips. There, the shareholder brought oppression proceedings naming certain of the directors as the first defendants and claiming that their conduct had caused it loss and damage, including a diminution in the value of its shareholding. The allegations of improper conduct were broad, but included alleged oppressive conduct which also amounted to breaches by the directors of their duties owed to the company under the Act as well as breaches of fiduciary duties. The plaintiff sought relief which required the directors to pay to him a portion of the value of the damage caused to the company. The directors sought to strike out those claims on the basis that they were bad in law because the causes of action on which the plaintiff relied were vested in the company. They submitted that s 233 was not sufficiently wide to enable a court to make an order that they, as directors, make a payment of compensation to a shareholder and that, if the claims for breach of duty were available, they should be pursued pursuant to a derivative action under s 237. It was submitted that the requirements of ss 236 and 237 should not be bypassed by allowing derivative actions to be pursued under s 233. 77 McMurdo J initially observed (at 236 - 237 [40]) that the power to make orders under s 233 was conditioned on the demonstration of grounds under s 232, which is, or should be, wholly uncontroversial. He also noted that there will be many occasions on which the alleged conduct, if established, will justify the making of an order under that section and will also constitute a breach of a director's duty. In such cases there was potential for the operation of both ss 233 and 236, and the scope of the former would be unduly restricted were the applicant to be confined to pursuing a derivative action under the latter. Nevertheless, he held (at 237 [43]) that the presence of ss 236 and 237, which specifically provide for a prosecution in the company's name, could be relevant to the exercise of the Court's discretion under s 233 in some cases. 78 His Honour recognised that the directors' conduct in question in Fexuto had the dual character referred to, and that the Court there held that relief in the nature of an account of profits from those directors in respect of their breach of fiduciary duty could be granted under the equivalent of what is now s 233 of the Act which was specifically intended to outflank the rule in Foss v Harbottle. He referred to several authorities supporting the proposition that the Court's wide powers in oppression proceedings permitted the making of orders that directors, who were parties to the proceedings, pay damages directly to the company in respect of any damage caused: Atlasview Ltd v Brightview Ltd [2004] BCC 542. However, he also observed, that no such order should be made unless two matters were satisfied. First, that any such order would correspond with that to which the company would have been entitled had the allegations in question been successfully prosecuted in an action by it (or in a derivative action in its name); and, secondly, that no claim for compensation should be permitted in such cases "unless it is clear at the pleading stage that a determination of the amount, if any, of the director's liability at law to the company can conveniently be dealt with in the hearing of the [oppression claim]": Re Chime Corporation Ltd (2004) 7 HKCFAR 546 at [62]. It was also suggested that the making of such orders should be "rare and exceptional". 79 McMurdo J referred also to the decision of the Privy Council in Gamlestaden Fastigheter AB v Baltic Partners Ltd [2007] 4 All ER 164, 172, where it was held that a court's powers in an oppression action (in the form of s 233) were sufficiently broad to allow for the making of orders for a payment of damages to the company by a person who has caused it loss, so long as the persons against whom the order was to be made was a party to the action. The Privy Council's opinion was applied in Campbell v Backoffıce Investments Pty Ltd (2008) 66 ACSR 359, 387 [122] where it was held that the power in s 232 to make any order under s 233 if one of the several alternative requirements were met, indicated a precondition to the exercise of the power and the purpose for which the order was to be made, namely to bring about an end to the oppression. Basten JA (at 403 [199]) expressly identified that the wide powers in s 232 should not be used to subvert the established constraints on the availability of derivative actions, but likewise the fact that the conduct in question is actionable by the company does not preclude relief under s 233. These conclusions in the decision of the New South Wales Court of Appeal were not upset on appeal. 80 McMurdo J concluded (at 240 [51]) that to allow for the possibility in some cases of compensation being paid to the company in the context of an oppression action would not negate the efficacy of ss 236 and 237. The relief under s 233 is only available where the applicant has established the existence of oppressive conduct. Moreover, it is discretionary and the authorities provide that an order for payment of compensation should be refused if the appropriate or more appropriate course is for an action on behalf of the company to be pursued in reliance on s 237. He also held (at 240 - 241 [52]) that the proceedings in s 232 are not proceedings brought on behalf of a company and nor do they become so merely because the nature of the relief granted benefits the company directly. They are proceedings which prosecute a cause of action belonging to the company, but are brought in reliance on the grounds in s 232 and the discretionary relief which might be granted must relate to those demonstrated grounds. Merely because the relief may correspond with that which the company might achieve against its director does not mean that the action is brought on behalf of the company. 81 Importantly, he held (at 241 [53]) that whether relief in the nature of an order that a person pay money to the company will be made in a particular case: … will depend upon the connection or otherwise between that relief and the ground or grounds for the claim, as well as a wide range of discretionary considerations affected by the circumstances of the particular case, such as the need for or desirability of an extensive litigation of a company's entitlement to compensation within proceedings under Pt 2F.1 where there might be other appropriate relief, including an order under s 233(1)(f). 82 The above observations of McMurdo J appear to have been accepted by Parker J in Blong Ume Nominees Pty Ltd v Semweb Nominees Pty Ltd (2017) 123 ACSR 19, 28 [56]; by Black J in Re JGS Investment Holdings Pty Ltd (2014) 32 ACLC 14-063 809 - 810 [18] - [20] and Taxa Australia Pty Ltd v Wang [2016] NSWSC 1913 [23]; and by K Martin J in Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd (No 7) (2015) 107 ACSR 575. 83 Fexuto cannot be taken to stand for the proposition that ss 232 and 233 permits any claim against a third party which is in some way connected to the allegations in an oppression action, to be pursued as part of that action. Such a proposition was said to be derived from the judgment of Priestley JA although his Honour's reasons (at [526] - [528]) should not be understood as being so wide. In Fexuto the relief, which was essentially the same as might be obtained in a derivative action, was sought from entities who were already parties to the action and, as Spigelman CJ observed, all of the issues relevant to the claim had been ventilated at the trial. There is, with respect, nothing in Priestley JA's reasons which suggests that the then s 260 could provide relief against entities which were not proper parties. Even if Priestley JA's reasons could be given the wider construction, there is nothing in the judgments of Spigelman CJ or Fitzgerald JA which indicates any concurrence with them. 84 In this context it is not irrelevant to return to the undeniable proposition that the powers in s 233 are exercisable only after one of the matters in s 232 has been established. Prior to then and the favourable exercise of the Court's discretion under s 233(1)(g), there is no claim against a third party who is not otherwise a proper party to the oppression proceeding. Whatever be the width of s 233, it does not extend to making an entity a party to a proceeding in which there is no existing cause of action against them where all that is said is that, if oppressive conduct is established, an order might be made requiring them to make a payment to the company in respect of which the oppression claim is brought. 85 This is consistent with the observations of Parker J in McMillan v Coolah Home Base Pty Ltd (No 4) [2022] NSWSC 584 [458] where his Honour observed: [458] Examples of orders addressed to a single oppressive transaction are orders under s 233(1)(f) and (g) for the company, or a member of the company in its name and on its behalf, to bring specified proceedings. The power to make orders of this type in cases of oppression pre-dates the statutory derivative action regime (CA ss 236-242), and must now be exercised with an eye to the restrictions on the court's power to authorise such derivative actions: Campbell v BackOffice Investments Pty Ltd [2008] NSWCA 95 at [199] per Basten JA. But orders for the bringing of proceedings by or on behalf of the company can still be made in proper cases. Also, if satisfied that a party to the proceedings is liable to the company, the court can make a direct order for an account or compensation in the company's favour: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97 at [138], [527]-[528], [698]; LPD Holdings (Aust) Pty Ltd v Phillips (2013) 281 FLR 227 at [44]-[53]. (Emphasis added). 86 The observation in the last sentence accurately reflects McMurdo J's conclusions. There is nothing to suggest that s 233 has any wider operation. It is directed at the conduct of the affairs of the company, actual or proposed acts or omissions by the company, or resolutions or proposed resolutions of members or a class thereof. A third party who is not involved in the affairs of the company or the shareholders and who commits an actionable wrong against the company obviously does not fall within the scope of s 233. 87 A similar conclusion can be inferentially drawn from the decision of Rees J in Re Ter Wisscha Holdings Pty Ltd [2021] NSWSC 1447 [44], where, on an application under s 237, her Honour noted that all of the claims sought to be pursued against entities who were otherwise parties to the oppression action could be brought within the scope of that action with the result that the application was refused. 88 It must necessarily be recognised that what was, in fact, decided in Fexuto was relatively narrow; being that those directors who engaged in oppressive conduct who simultaneously breached their fiduciary duty could be held liable to the company for the profits they gained or for the loss they caused. In that case the issues relevant to the breach of fiduciary duty were intertwined in the oppression claims and all relevant persons were parties to the action. The wide power in s 260(2) (now 233(1)) was sufficient (once the oppressive conduct had been established) to provide appropriate relief in the circumstances. Fexuto does not suggest, contrary to the So interests' submission, that prior to any finding of oppression, an order may be made under s 233(1) permitting a claim to be advanced against a third party who is not a proper party to a claim that one of the circumstances in s 232 are satisfied. The Court was not taken to any order made in the Fexuto litigation which suggested to the contrary.

The inclusion of Ultimate as a defendant 89 In the course of submissions Mr Dunning KC, after referring to the observations of Priestley JA at [528] in Fexuto, submitted that the Court could make an order at the end of an oppression hearing against Mr So and Ultimate under s 233(1)(g) giving relief in relation to the alleged breach of fiduciary duty. As mentioned, the purpose of this submission was to advance the proposition that no useful purpose was to be served in granting leave to bring a derivative action because all the relief sought could be given in the oppression proceedings. He submitted: And so what his Honour there contemplates is that either the plenary opening words are sufficient to do it, therefore you could do it within, or you could do it concurrently with, and then in addition, there's the power under subparagraph (g) to make that part of the relief granted in the oppression proceedings. … 90 It was subsequently submitted that in the present matter the applicants could commence an action against Ultimate by making it a respondent in reliance on s 233(1)(g), that the applicants can make allegations that they satisfy s 232, and that if they are established an order can then be made against Ultimate under s 233 which will be an order in relation to the company. It was further submitted that this was the approach of Priestley JA in Fexuto and was adopted by both Spigelman CJ and Fitzgerald JA. 91 As the reasons of McMurdo J in LPD Holdings v Phillips reveal, that is an incorrect articulation of what Fexuto decided. Moreover, it is apparent from the observations of Spigelman CJ at 696 [143] - [144] that he relied upon the broad power to make such order as the court thinks fit, as the source of the ability to make an order that a third party pay compensation to the company as part of the relief which is available in an oppression action. He did not identify s 260(2)(g) as the source of the power and, in particular, the order was not made prior to the satisfaction of the matters on which the exercise of the power was conditioned. 92 In this case Ultimate cannot be held responsible for any conduct of the type exemplified in s 232(a) - (c) and it is not a proper party to the oppression claims. The conduct alleged against it principally concerns its being knowingly concerned in Mr So's breach of fiduciary duty rather than engaging in the conduct which caused the affairs of the company to be conducted oppressively. Whilst Mr So's alleged conduct may be described as having the dual characteristics of being in breach of the duties owed to the operating companies as well as being oppressive, the same cannot be said of Ultimate's. No order against it to pay damages would coincide with relief available under s 233. The claims against it in relation to Mr So's alleged breaches of duty cannot be subsumed within the scope of the proposed claims against the fourteenth to sixteenth respondents. 93 Additionally, the claims against Mr So and Ultimate founded upon misleading and deceptive conduct, have no correlation to the alleged oppressive conduct. The conduct in that respect is alleged to have occurred prior to the oppression occurring. Again, the relief which might be obtained by the applicants in the oppression action does not subsume and nor is it co-ordinate with, any loss or damage which may become payable under the ACL. 94 It follows that none of the claims sought to be made against Ultimate could be properly advanced in the oppression proceedings, and neither could any of the claims relating to misleading or deceptive conduct. 95 Although it was not argued, it might be questioned whether a court could make an order under s 236 of the ACL that a third party pay damages to the company under s 233 in the context of an oppression action. Section 236 only permits the claimant which has suffered loss or damage to make a claim against the person who caused the loss. In the present matter, it is unlikely that any order could be made that Mr So or Ultimate pay damages to the operating companies, other than in a suit by those operating companies or one brought in their name. 96 Though it may have been possible for the Court to make orders in the oppression action that Mr So pay the operating companies compensation for breach of his duties to them, no such power exists with respect to the other proposed derivative claims. As leave to bring those other claims should be given, leave should be given in respect of them all. That is particularly so given the uncertainty in this area. 97 The applicants have established that it is in the best interests of the operating companies that leave be given to bring the proposed derivative claims against Mr So and Ultimate.

Conclusion 98 It follows that the application for leave to commence the derivative actions against Mr So and Ultimate should be allowed. 99 The application was vigorously opposed by Mr So and Ultimate and there is no reason why costs should not follow the event. Certainly no sustainable reason was put in the submissions for adopting any other course. The respondents should pay the applicants' costs of the application.

Post script 100 At the delivery of the reasons for judgment the parties agreed that the question of the costs of the application be deferred to a later date and, consequently, no order was made in that regard though directions were given to facilitate the making of further submissions. I certify that the preceding one hundred (100) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Derrington.

Associate: Dated: 16 December 2022 SCHEDULE OF PARTIES QUD 93 of 2022 Respondents Fourth Respondent: PARK RIDGE 96 AND 98 PTY LTD ACN 618 802 618 (RECEIVER AND MANAGER APPOINTED) Fifth Respondent: PARK RIDGE 132 PTY LTD ACN 619 053 735 (RECEIVER AND MANAGER APPOINTED) Sixth Respondent: 168 PARK RIDGE PTY LTD ACN 619 549 334 168 (RECEIVER AND MANAGER APPOINTED) Seventh Respondent: PARK RIDGE 180 PTY LTD ACN 616 431 157 (RECEIVER AND MANAGER APPOINTED) Eighth Respondent: ROCHEDALE HOLDINGS PTY LTD ACN 610 535 076 (RECEIVER AND MANAGER APPOINTED) Ninth Respondent: ROCHEDALE HOLDINGS NO. 1 PTY LTD ACN 610 550 199 (RECEIVER AND MANAGER APPOINTED) Tenth Respondent: GGPG DEVELOPMENTS (NO.48) PTY LTD ACN 608 771 857 (RECEIVER AND MANAGER APPOINTED) Eleventh Respondent: PARK RIDGE DEVELOPMENT MANAGEMENT PTY LTD ACN 627 401 094 (RECEIVER AND MANAGER APPOINTED) Twelfth Respondent: COORPAROO HOLDINGS PTY LTD ACN 609 979 446 (RECEIVER AND MANAGER APPOINTED) Thirteenth Respondent: AXIS NORTH PTY LTD ACN 609 653 821 (RECEIVER AND MANANGER APPOINTED) Fourteenth Respondent: SIP GROUP PTY LTD ACN 610 480 914 (RECEIVER AND MANAGER APPOINTED) Fifteenth Respondent: SIP PTY LTD ACN 611 408 925 (RECEIVER AND MANAGER APPOINTED) Sixteenth Respondent: MT FAMILY PTY LTD ACN 605 720 947 Seventeenth Respondent: ULTIMATE INVESTMENT PORTFOLIO PTY LTD ACN 611 531 778