Fraser v Gorilla Rush Pty Ltd

Legislation Cited: Corporations Act 2001 (Cth).
District Court Act 1973, s 47.
Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK).
Supreme Court Act 1970.
UCPR, rr 13.4, 14.7, 14.9, 14.28 & 42.21.

Cases Cited: CGM Investments Pty Ltd and Others v Chelliah and Others [2003] FCA 79; (2003) 196 ALR 548, [17]-[18].
Co-ownership Land Development Pty Ltd v Queensland Estates Pty Ltd (1973) 47 ALJR 519.
Cox v Journeaux (No 2) (1935) 52 CLR 713 at 720.
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, 129 – 130.
Hospitals Contribution Fund of Australia Ltd v Hunt (1982) 44 ALR 365.
Inglis v English Language Company Australia Pty Ltd [2020] NSWSC 1058, [42]-[44].
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189; [1995] FCA 76 at 197.
Mills v Central Sydney Area Health Service [2002] NSWSC 728.
Nu Lime Construction Group Pty Ltd v Fowler [2014] NSWCA 51, [105]-[108].
Pioneer Park Pty Ltd (In liq) & Ors v Australia and New Zealand Banking Group Limited [2007] NSWCA 344 at [51].
PS Chellaram & Co Ltd v China Ocean Shipping Co [1991] HCA 36; (1991) 102 ALR 321; (1991) 65 ALJR 642 at [7].
Ryder & 1 Ors v Frohlich & 1 Ors [2004] NSWCA 472, [135]-[138].
Spellson v George (1992) 26 NSWLR 666.

Texts Cited: A.F. Rath QC, Principles and Precedents of Pleading (N.S.W.), Law Book Co of Aust Ltd, 1961, [10] p 3.

Category: Procedural rulings

Parties: Plaintiff – Paul Fraser
First Defendant – Gorilla Rush Pty Ltd
Second Defendant – Samuel Oliver Johnson

Representation: Counsel:
Plaintiff – Mr Vernier, A.
First & Second Defendants – Mr Fagir, O. (26 February) & Mr Haines, B. (28 February).
Solicitors:
Plaintiff – My General Counsel
First & Second Defendant – Holding Redlich

File Number(s): 2024/00272199

Publication restriction: Nil.

Judgment ON MOTIONS

1. HIS HONOUR: By Statement of Claim filed on 24 July 2024, Paul Fraser, who in the affidavit verifying the pleading, gives his address as a flat in 520 Chiswick High Road, Chiswick, London, claims £171,625 stg for, on one view of the evidence, what could be described as wages, for work done by him between 4 October 2022 and 31 December 2023. He claims that sum, converted into Australian dollars from Gorilla Rush Pty Ltd (ACN 659 612 012) registered in accordance with the Corporations Act 2001 (Cth), having its registered office at 205 Leitchs Road, Brendale, Queensland 4500 and from Samuel Oliver Johnson who is alleged to be the sole director of Gorilla Rush Pty Ltd and its secretary and, through the intervention of SJI No 2 Pty Ltd ACN 659 598 535, its sole shareholder.

2. On 20 September 2024, Gorilla Rush Pty Ltd (hereafter “Gorilla Rush”) filed a defence. On 9 October 2024, Samuel Oliver Johnson (hereafter “Johnson”) filed a defence. On 18 November 2024, both defendants, acting together, filed two Notices of Motion, albeit that only one Notice was required. The relief sought in the first Notice is this:

“1. Pursuant to rule 42.21(1)(a) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), the Plaintiff to provide security for the First Defendant and Second Defendant’s costs of the Plaintiff’s claim in the following tranches:

a. $90,000 to be paid within 28 days; and

b. a further $50,000 to be paid within 42 days of the court setting the matter down for trial.

2. The security be paid by payment into Court, or such other form as may be agreed with the Registrar or between the parties.

3. Until the security ordered in paragraph 1(a) is provided, the proceedings are stayed.

4. If the security is not provided within one (1) calendar month of any dates specified in paragraph 1, the plaintiff’s claim be dismissed against the First Defendant and Second Defendant pursuant to rule 42.21(3) of the UCPR.

5. The Plaintiff pay the costs of the First Defendant and Second Defendant of and incidental to this Notice of Motion.

6. The Defendants are at liberty to apply for further security if required.

7. Any further orders as the Court deems fit.”

The relief sought in the second Notice is this:

“1. Pursuant to rule 14.28 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) that the whole of the Statement of Claim affirmed on 24 July 2024 (Claim) be struck out.

2. In the alternative to order 1 above:

a. pursuant to rule 14.28 of the UCPR, that paragraphs 10, 14, 25 and 26 of the Claim by struck out; and

b. pursuant to rule 13.4 of the UCPR, that paragraphs 17, 18 and 25(a) to (c) of the Claim be dismissed.

3. The Plaintiff pay the costs of the First Defendant and Second Defendant of and incidental to this Notice of Motion.

4. Such further or other orders as the Court deems fit.”

3. In an affidavit affirmed on 15 January 2025, the plaintiff described himself as a “Product Consultant (Gaming)”. As I understand it he is a computer programmer specialising in online gambling products. As I understand the material before me Johnson is an entrepreneur in the field of online gambling. In evidence is an email from Johnson to the plaintiff dated 25 August 2022 concerning “Head of Gaming/Esports”. It is this:

“Hi Paul,

Thanks for your email and your pitch deck; this is very interesting.

I would be interested in offering you an opportunity to both help me start this casino alongside another head of gaming and also create this esports business with a view to transitioning over to the esports business exclusively once it is self-sustainable, hence the requirement for a dual head of gaming role from the beginning.

The way I see this work is that I form a new entity (AU or offshore) for the employment of you and your team on the esports side, this may be just you at the beginning, but I would be open to employing more people from the start. I would fund the entire project, and I would be the sole director of the esports business; however, you / your team would receive 45% of the revenue; this would be contracted and not tied to shares, as this creates issues when bank accounts etc. are opened where I need to disclosure all beneficial owners.

My funding would be a debt on the balance sheet and repaid before profits are distributed.

The casino side of the deal would simply be a salaried position plus bonuses. Once you transition to the esports business, you would continue to be eligible for bonuses from the casino, although having no day-to-day involvement.

If the above is something you would like to explore further, it would be good to understand your salary expection [sic] would be for the casino and esports roles (this would be two separate employment agreements). Also, if we are bringing the team on, what would the expected salary be for those people also?

I look forward to speaking with you soon.

Regards,

Sam Johnson

Director”

There is in evidence an “Employment Agreement” between Gorilla Rush and the plaintiff, signed on behalf of Gorilla Rush on 10 October 2022 and by the plaintiff on 8 October 2022. Clause 1 of that agreement (“Definitions and Interpretation”) provides that the “Commencement Date means Monday, 4 October 2022”. That is the date of the commencement of the plaintiff’s claim in the statement of claim. Clause 14.3 provides this:

“Governing Law

(a) The laws of the state or territory applicable to the Location and the Commonwealth of Australia apply to this Agreement to the exclusion of any other law.

(b) The Parties submit to the exclusive jurisdiction of the courts of the state or territory of the Location.”

There is no nexus between the parties, the subject matter of their dispute and this State. However, no party has submitted that this Court does not have jurisdiction: see District Court Act 1973 s 47. I shall return to this “Employment Agreement” later.

Picaterre Ltd

4. One of the documents before me is a “Business Plan – Picaterre Ltd”, prepared for the Alderney Gambling Control Commission dated 23 September 2022. The “Executive Summary” of this document is this:

“Picaterre Limited (the “Applicant”) will be a company incorporated in Alderney to operate an online B2C gambling website www.luckiest.com offering RNG casino and Live Dealer to .com markets where online gambling is permitted and where it does not require a domestic gambling licence to offer such services. The Applicant will apply for Category 1 eGambling licence from the Alderney Gambling Control Commission (“AGCC”).

The management team behind the Applicant have extensive experience in the online gambling sector. The CEO and beneficial owner Samuel Johnson has always had a keen interest in the online gambling space and has years of marketing experience in the field. Samuel has identified Alderney as a robust Tier 1 licensing regime, with vast experience in the gambling space and a superior understanding of operating in pre-regulated markets under a Tier 1 licence, which has resulted in Alderney being the licensing regime of choice for the Applicant.

Joining the management team, the COO, Leon Walters has over 20 years of experience in the online gambling space holding high profile positions such as General Manager of Coinpoker.com, Chief Product Officer of Playtech Systems, a leading software supplier in the Bahamas and acting in a consultant role advising various gaming and technology companies. Mark Archbold is the appointed Compliance Manager and MLRO and he previously held the role of Deputy Director, Technical and Compliance at the AGCC from 2009-2020. To demonstrate that compliance is at the core of the Applicant’s decision making, the company has engaged the services of Andre Wilsenach on a consultancy basis to act in an independent, non-executive capacity as Chairman of the Compliance Committee.

The board of directors and the management team of the Applicant have the depth in experience and understanding of the online gambling space and the regulatory landscape to launch a successful B2C online gambling business. The board of the Applicant is currently in the process of recruiting additional key individuals to join their team in advance of the business becoming operational.

The Applicant will offer to the market premium high quality casino content, all providers will either hold a Category 2 eGambling Licence (B2B) or a Core Services Associate Certificate granted by the AGCC. Post launch of the operations, it is the intention that the Applicant will also offer a comprehensive sportsbook product to its players to help with customer retention and attract new traffic to the website.

The Applicant will not be affecting the gambling transactions and is currently in discussions with B2B providers and will shortly be in a position to decide and confirm who will be its preferred business partner(s). Management is aware that should it decide to proceed with a partner that does not hold a AGCC Category2 licence, it will need to make sure that appropriate sign-posting is deployed to ensure complete transparency to the players that they will be leaving the jurisdiction of Alderney.”

The next page of the Business Plan provides a “Company Structure and Ownership”. It is, in essence, this:

“The below organisational diagram shows the proposed ownership structure of the Applicant.

Figure 1 – The Applicant Proposed Ownership Structure

Samuel Oliver Johnson

UBO 100%

Name TBC Limited

Australian Ultimate Parent Hold Co

100%

Equity Holding Company to finance Picaterre � Solum Limited

Alderney Hold Co

100%

Alderney Cat 1 eGambling Licence Applicant � Picaterre Limited

Alderney B2C Gaming Co

www.luckiest.com

5. Picaterre Ltd was incorporated in Alderney in May 2023, being given company number 2050. A document found at Court Book (“CB”) Volume 1 page 253 identifies the Australian Ultimate Parent Holding Company as MBN No 1 Pty Ltd and that Johnson was the sole director of Solum Ltd and also the sole director of Picaterre Ltd. On 8 August 2024, Mr John Ayres, the liquidator of Picaterre Ltd wrote this report:

“I write further to my appointment as the Liquidator of the above-named Company on 20 May 2024 following the approval of a Special Resolution by the sole member in accordance with the winding up provisions of Part XVII of the Companies (Alderney) Law 1994 (“the legislation”).

The Company’s affairs are now concluded, and this is the Liquidator’s account of the winding-up.

1. Introduction

The Company was incorporated in Alderney in May 2023, company number 2050. The Company operated as an online casino, and between its incorporation and May 2024 trading losses of approximately Euros 2.2m were incurred. As a result, the Company was insolvent and the sole Director, Samuel Johnson, and sole member, Solum Limited, took steps to place the Company into liquidation.

2. Assets

At the time the liquidation commenced the Company had no remaining realisable assets, therefore there have been no realisations or payments made during the course of the liquidation, other than the costs of registering and advertising the liquidation with the States of Alderney. The Liquidator disbursed those payments himself.

3. Creditors

According to the Director’s statement of affairs, which had been converted into sterling and which was signed on 14 June 2024, there were trade and expense creditors totalling £426,485 and inter company (group) balances totalling £1,608,668, at the time of liquidation. The total creditor balances were therefore in the order of £2,035,153.

A number of completed claim forms have been received from creditors, however no further work has been done in this regard given there are no assets with which to pay a dividend.

In addition, the Company’s tax affairs were overseen by The States of Guernsey Revenue Service (“GRS”) and I’ve subsequently notified them of my appointment as Liquidator. No further information has been requested by the GRS, primarily because of the limited trading period of the Company.

4. Other matters

A brief review of the Company’s historic balance sheets has been carried out which has identified no areas for additional investigation in accordance with s137 of the legislation.

5. Liquidator’s fees

As the Company has no assets the fees of the Liquidator are to be paid by the sole member, Solum Limited. These fees are capped at £10,000. To date, the costs of the liquidation are approximately £17,000, significantly more than the agreed fee. The excess balance will be written off by the Liquidator.

6. Final meeting

In accordance with s119 of the legislation, a Liquidator is required to convene a general meeting of the Company at the conclusion of the liquidation. This meeting will be held at the offices of Kroll Guernsey Limited, 10 Lefebvre Street, St Peter Port, Guernsey, GY1 2PE on Friday 30 August at 2pm. Should any creditors wish to attend the meeting in person please notify the Liquidator of this intention. A dial-in number for the meeting can also be provided by the Liquidator upon request. This written account of the liquidation will be presented to the meeting.

Following the general meeting the Liquidator will provide notice to the Registrar of the holding of the meeting and the date it was held. On the expiration of a period of 3 months beginning on the date of registration of such notice, the company is then deemed to be dissolved.”

Gorilla Rush and Picaterre Ltd

6. Exhibit 2 is an affidavit of Stephen John Trew, solicitor, sworn on 18 November 2024. Mr Trew is a partner in Holding Redlich, the firm acting for the defendants. Paragraph [8] of that affidavit annexes a copy of a “Services Agreement”, “pursuant to which the First Defendant provided a range of administrative support services to Picaterre Limited, including operational support.” That document is found at CB Volume. 1 page 145. It commences thus:

“THIS SERVICES AGREEMENT (the “Agreement”) is made and entered into as of 16th December 2022 (the “Commencement Date”) by and between:”

The “agreement” has been signed twice by Johnson, firstly as Director of Picaterre Ltd and secondly as Director of Gorilla Rush Pty Ltd. No date is given as to when he placed his signatures on the “agreement”. If the Liquidator of Picaterre Ltd be correct, it was not incorporated until May 2023 (it certainly did not exist as at 23 September 2022 (see [4] supra)). If so, this “agreement” is of questionable validity. However, it is evidence of Johnson’s intention that all work done for Picaterre Ltd was done on its behalf by Gorilla Rush.

The Plaintiff and Picaterre Ltd

7. There is a further agreement annexed to Mr Trew’s affidavit last quoted at [10]. It is called “Independent Contractor Agreement”. The parties to this Agreement are Picaterre Ltd and “Paul Fraser as trustee for eigaming Ltd of Second Floor, 14 Athol Street, Douglas, 1M1 21A Isle of Man (Contractor).” This document has been signed by Johnson as “director/authorised representative” on 11 August 2023 and his signature had been witnessed. It has also been signed by Paul Fraser on the same date and his signature has been witnessed by Yukiko Fraser. Clause 1.1 contains Definitions. One of those is this:

“Commencement Date means the date specified in of [sic] Schedule 1. This contract is dated as at the commencement date even though the parties may have executed after said date. The parties entered into an [sic] verbal agreement on 4th October 2022 for the contractor to provide services to the principal. This agreement memorialises the parties verbal agreement.”

Schedule 1 provides that the Commencement Date is 4th October 2022.

8. Clause 3 bears a heading “Commencement and Term”. It provides:

“The terms of this Agreement will apply to the provision of Services by the Contractor to the Principal on and from the Commencement Date and will continue to apply for the duration of the Term.”

“Term” is defined in clause 1.1 to mean “the period commencing on the Commencement Date and continuing until either Party terminates the Agreement in accordance with clause 15.” Clause 15 provides for termination by either party, with or without notice.

9. Clause 7 is headed “Acknowledgements.” Clause 7.3 is this:

“Contractor

The parties agree and acknowledge that it is their intention that the Contractor is to provide the Services as an independent contractor and will not, for any purpose, be considered a servant, employee or agent of the Principal.”

Clause 18.1 is headed “Governing law” and provides this:

“(a) The laws of Queensland and the Commonwealth of Australia apply to this Agreement to the exclusion of any other law.

(b) The Parties submit to the exclusive jurisdiction of the courts of Queensland.”

10. Schedule 1 contains reference to Payment for Services which is formally provided for in Clause 9. The items in Schedule 1 are these:

| Item 6 – Fee for Service | 13,750 GBP per month (£165,000.00 GBP per anum [sic]) | | Item 7 – Additional Fee | Bonus 10% of the base annual fee for service upon the launch of the care platform in the English language, a further 10% upon launch into a secondar [sic] language market and a further 10% subject to performance on key roles and responsibilities. An additional fee may be paid by the Principal to the Contractor in addition to the Fee for Service as determined at the sole discretion of the Principal.” |

11. There are a significant number of anomalies in this document indicating to me a “scissors and paste” provenance. The cover sheet (at CB Volume 1 page 152) denotes the Contractor as “Paul Fraser” albeit that the Contract itself describes the Contractor as I quoted in [7] above. Each page has a header and a footer. The footer on each page is “BNEDOCS 230166 – Independent Contractor Agreement – Paul Fraser.” Clause 18.5 bears a heading “Survival” and provides this:

“Clauses 1, 4, 101, 112, 123, 14 and 189 survive the termination of this agreement.”

There are eighteen numbered clauses. Clauses 101, 112, 113, 123 and 189 do not exist. Item 3 in Schedule 1 is this:

“Key Personnel Paul Fraser.”

However, the words Key Personnel are not used anywhere in the 18 clauses, nor is there any other form of words which could amount to that concept.

12. The commencement date for this contract is the same commencement date as the Employment Agreement between Gorilla Rush and the plaintiff. The renumeration under each contract is the same. However, formally, the parties are different. In the Employment Agreement the parties are Gorilla Rush and the plaintiff. In the Independent Contractor Agreement the parties are Picaterre Ltd, incorporated in the Channel Isle of Alderney and “Paul Fraser as trustee for eigaming Limited of the Isle of Man”. Why two such companies would provided that their agreement was to be governed by the law of Queensland and be subject to the exclusive jurisdiction of the Courts of that State is inexplicable, ex facie.

13. eigaming Ltd appears to be a real company. One of the documents annexed to the affidavit of the plaintiff affirmed on 15 January 2025 (Exhibit A) is a draft agreement between:

“eigaming Limited, an Isle of Man company registered under company number 021106V whose registered office is at 36 Hope Street, Douglas, 1M1 1AR, Isle of Man……and Picaterre Limited Company Registration Number 2050 of Millenium House, Ollivier Street, Alderney, GY9 3TD…”

There is also an email from Johnson, using a Gorilla Rush company signature dated 7 April 2024 which contains a screen shot of the eisports web page headed “about eisports”. That displays “TEAM EISPORTS”. Below that are photographs of three individuals and underneath each individual photograph is a “blurb”. Going from left to right, the individual’s name and blurb are:

“Paul Fraser (FBCS) – Co-Founder

20+ years working at the cutting edge of Esports and Gaming Product, Platforms, Commercial Development and Asian Strategy Building multi-million-pound gaming platforms time and again.

Marc Lee – CTO

15+ years experience in Esports and Gaming 27+ years in the technology world. Delivering and operation of initiative technology platforms and solutions worldwide. Produced Scalable Asian Gaming Platforms.

Kirsty Thompson – Co-Founder

20+ years experience in Esports and Gaming in Asia. Voted one of the most powerful people in poker and has won multiple awards. Spearheaded the Ronaldo and Neymar sponsorship deal for Pokerstars.”

Beneath those matter is another photograph of another lady who is described above it as:

“Yukiko Ishikuro – Director of Asia.”

The email from Johnson to the plaintiff is this:

“Hi Paul,

We have now been served with a demand, stamped by the courts of the Isle of Man, for the outstanding amount allegedly owed to Fluidity.

We can’t finalise our side until this fluidity issue is resolved, as you are the one with the relationship with them.

I need you to prepare a statement that has detailed issues with Fluidity and Marc Lee in particular. What they missed, what they never did, how much over budget etc.

I wasted so much money because of these guys and they have the hide to try and sue me, these were meant to be your mates, and they fucked me and cost me well over a million dollars because of their delays and lack of skills to complete the project.

I know that you and Marc are in business together, but you need to resolve this. This demand from their lawyers needs to be killed.”

The issue about “Fluidity” is not discussed elsewhere and I have no other information about it. However, this evidence suggests that one of the defendants or Picaterre may have had dealings with others involved in eigaming Ltd.

The Plaintiff’s Evidence

14. In his affidavit affirmed on 15 January 2025 (Exhibit A) the plaintiff said this:

“26. Two email chains from my records are at the following pages of the Bundle:

| | Bundle page | | Email chain in the period 6 – 10 October 2022 between me and Johnson | 63-66 | | Email chain in the period 7 – 25 April 2024 between me and Johnson | 67-74 |

27. In addition to the above, I recall a series of slack messages with Mel Cook, the HR manager at Gorilla Rush (Ms Cook), on or about 14 March to 17 April 2024, in which Ms Cook explained that it was no longer possible to rely upon the agreement with Picaterre, the Gorilla Rush employment agreement would continue to apply and that I should resubmit my invoices addressed to Gorilla Rush. Gorilla Rush has explained via their solicitors that (in response to a Notice to Produce) these messages were deleted in accordance with a slack setting that deleted messages after 120 days.

Chronology

28. In about August/September 2022, I was approached by Johnson, to help him start a casino and esport business (Project). The whole Project was to be funded by Johnson.

29. On 10 October 2022, I entered into an employment agreement with Gorilla Rush, which was a company owned and controlled by Johnson. I was to be paid GBP 165,000 per annum. A copy of the employment agreement is found at 41-59 of the Bundle.

30. During the time that I worked on the Project, my email address was: paul.fraser@gorillarush. com. My email sign off contained the Gorilla Rush logo and the privacy message at the bottom of the emails I sent made reference to Gorilla Rush.” As an example, see page 60 of Exhibit SJT-2.

31. In about December 2022, Johnson (and Ms Cook [Mel Cook, HR manager at Gorilla Rush]) told me that the employment agreement I had entered into with Gorilla Rush was not lawful as I was not an Australian citizen. At that time, Johnson had told me that I would need to enter into an agreement with another entity and that there may be tax advantages to me in doing it this way. He did not tell me the name of the other entity nor provide me with any other details.

32. I now understand that my employment agreement was valid and that Johnson’s representation to me about my employment agreement was false.

33. In any event, I did not enter into another agreement until 8 November 2023. That was an independent contractor agreement with Picaterre, which I signed as the trustee for a company called EIGaming Limited (EGL), which was registered on 25 August 2023. A copy of the independent contractor agreement is found at pages 41 to 57 of Exhibit SJT-2. At this stage (November 2023) I was owed a substantial amount of salary and I wanted to be paid. I was told by Johnson that I had to enter into the independent contractor agreement to get paid. This, in addition to my belief that my employment agreement was not valid, were the main reasons for me to enter into the agreement with Picaterre.

34. An agreement between Gorilla Rush and Picaterre dated 16 December 2022 is at pages 34 – 38 of Exhibit SJT-2 (without the Appendix A referenced in clause 1.1). I have never seen this agreement before.

35. Johnson controlled both Gorilla Rush and Picaterre. From my observations during my employment with Gorilla Rush, Johnson, called all of the shots in the Project. He made a number of promises or representations to me that I relied on to come and work for him, and those representations were not met. The representations are set out in the Statement of Claim. In particular, on 25 August 2022 Johnson sent me an email where he stated that he would fund the entire project (see page 33 of the Bundle). I relied on this representation to enter into the employment agreement as it made me feel safe in that I would get paid.

36. Johnson also represented to me that I would get paid for the work that I had performed. That also was a representation that he did not keep (see email sent on 14 March 2024 found at pages 60-61 of the Bundle).

37. The first payment of salary that I received from Gorilla Rush/Johnson was a payment of GBP 5,000 from Johnson on or about 7 – 9 February 2023. Johnson paid this to me in cash when we were both at a gaming conference in the UK.

38. Between December 2022 (when I was told that my employment with Gorilla Rush was not lawful) and November 2023 (when I entered into the agreement with Picaterre) I did not request payment of the amounts due to me. This was because:

(a) I believed it was not lawful for Gorilla Rush to pay me;

(b) I did not yet have an alternative entity and bank account to received payment; and

(c) of Johnson’s constant assurance I would be paid.

39. On or about 30 October 2023 I sent the email and invoice at pages 39 and 40 of SJT-2. The email was sent to a number of people at Gorilla Rush and the invoice was addressed to “Samuel Johnson, CEO Picaterre.” As set out in paragraph 33 above by this stage I was owed a substantial amount, wanted to be paid and believed that my employment agreement with Gorilla Rush was not valid, therefore I went along Johnson’s instructions about agreements and entities. This invoice was issued as soon as EGL’s bank account was established. An email from Brendon Dorf approving this invoice is at page 75 of the bundle.

40. Around this time, I was becoming desperate for some income. It had been over a year since I last received a payment. I was told to issue invoices so I did so in the hope that I would get paid. I tried to comply with the requests made by Johnson and Ms Cook regarding invoices because all I wanted was my income.

41. On or about 15 December 2023, I sent the email and invoices at pages 60 to 64 of SJT-2. The email was sent to staff at Gorilla Rush and the invoices were addressed to “Samuel Johnson, CEO Picaterre”. The email at p69 of SJT-2 suggests that Ms Cook had sent me an email asking me to submit these invoices. I do not have a copy of that email.

42. On or about 22 December 2023, I received another payment being GBP 20,000. This payment was made to an account in the name of EGL that appears on page 40 of SJT-2. This is the last payment that I received in relation my relationship [sic] with Gorilla Rush/Johnson.

43. In or about the end of January 2024 I decided that I would leave Gorilla Rush and no longer work for Johnson. I had a conversation with Ms Cook about this in about mid-February 2024 (when I returned from sick leave).”

There was then further correspondence.

15. Amongst that correspondence was an email from Johnson to the plaintiff, copied to Ms Cook (inter alios), re “Update on Employment Agreement” and dated 14 March 2024. The substance of this communication is this:

“Hi Paul,

I'm writing to address a few matters concerning our ongoing business operations and your role within the organisation.

Firstly, it's important to clarify that we are unable to replace the employment agreement entered into between Gorilla Rush and yourself, in October 2022. Despite any discussions or considerations to the contrary, we cannot enter into a new agreement that would supersede the original. This decision is rooted in the potential limitation of our rights under a new contract. Moreover, it's relevant to note that Picaterre is on the verge of liquidation. Given this context, initiating a new agreement at this juncture would not be pragmatic, as future dealings, including payment matters, would need to be negotiated with the liquidator.

Furthermore, it's crucial to inform you that we are currently conducting an internal investigation into all matters that have led to the pending liquidation. This comprehensive review encompasses all employee interactions and financial transactions. An area of particular interest in our inquiry is your relationship with Fluidity. As you're aware, Fluidity's involvement has been identified as a principal factor contributing to the significant losses encountered in this project. Recent revelations and accounts regarding this partnership have raised serious concerns, which we are diligently working to fully understand.

I want to be explicitly clear that my intention is to ensure fair compensation for work genuinely completed. It is not in my interest to withhold rightful earnings. However, it is imperative that we maintain integrity and accountability in our financial dealings, especially in light of our current circumstances. Therefore, it is essential that we differentiate between legitimate work and any periods of inactivity that should not be billed.

I appreciate your understanding and cooperation as we navigate through these challenging times. My priority is to resolve these issues in a manner that is just and equitable for all parties involved. Please feel free to reach out if you have any questions or require further clarification on any of the points raised or if you have any additional information in relation to the above that can assist us with our investigations.

Thanks

Regards,

Sam Johnson

CEO”

This, in my view, can be validly construed as a re-affirmation of the original “Employment Agreement” signed by Gorilla Rush on 10 October 2022 and by the plaintiff on 8 October 2022 – see [3] supra.

Application to Strike Out the Whole Proceedings

16. The defendants seek relief under UCPR 13.4 and UCPR 14.28. The first of those rules is this:

“13.4 Frivolous and vexatious proceedings

(1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings—

(a) the proceedings are frivolous or vexatious, or

(b) no reasonable cause of action is disclosed, or

(c) the proceedings are an abuse of the process of the court,

the court may order that the proceedings be dismissed generally or in relation to that claim.

(2) The court may receive evidence on the hearing of an application for an order under subrule (1).”

As I understand the defendants’ case, they rely on subrule (1)(b). The power to dismiss claims at an interlocutory stage is only appropriately exercised where the plaintiff’s claim is so clearly deficient that it would be inappropriate to allow the proceedings to continue: Cox v Journeaux (No 2) (1935) 52 CLR 713 at 720 (“very likely” unsustainable allegations of conspiracy and fraud; or “obviously untenable”: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129-130. The case law consistently emphasises the exceptional nature of this power and the restricted circumstances in which its exercise is appropriate: Co-ownership Land Development Pty Ltd v Queensland Estates Pty Ltd (1973) 47 ALJR 519 (the absence of a cause of action must be very clear). If the proceedings require the determination of seriously disputed questions of fact, summary dismissal should be refused: Spellson v George (1992) 26 NSWLR 666. Summary dismissal may be refused where the claim involves a material dispute on a question of law: Hospitals Contribution Fund of Australia Ltd v Hunt (1982) 44 ALR 365; Mills v Central Sydney Area Health Service [2002] NSWSC 728.

17. The second of those rules is this:

“14.28 Circumstances in which court may strike out pleadings

(1) The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading—

(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or

(b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or

(c) is otherwise an abuse of the process of the court.

(2) The court may receive evidence on the hearing of an application for an order under subrule (1).”

As I understand the defendants’ case, they rely on subrule (1)(a). In essence, the defendants’ case is that the proceedings are doomed to fail. The case law which I have just quoted is applicable to this aspect of the defendants’ case.

18. The gravamen of the defendants’ case is succinctly stated in the defendants’ written submissions (MFI 2):

“17. The gravamen of the plaintiff’s claims against the defendants is that:

(a) he was, between October 2022 and December 2023 (Claim Period), employed by Gorilla Rush under an employment agreement made on 22 October 2022;

(b) he was entitled under the employment agreement to a salary of GBP 13,750 per month;

(c) for the Claim Period he was entitled to a total salary of GBP 196,625, but was paid a total of GBP 25,000; and

(d) he is therefore owed GBP 171,625.

18. In short, the plaintiff’s contention is that he “was employed by, and performed services for, Gorilla Rush, pursuant to the GR Employment Agreement, for the period 4 October 2022 to 31 December 2023”.

19. The defendants say, in short, that Gorilla Rush has no liability to the plaintiff under any employment agreement. They say that an employment agreement was made, but was, at the plaintiff’s initiative, immediately or almost immediately discharged and replaced with a different arrangement. Under the substituted arrangement the plaintiff’s corporate vehicle, EIGaming Limited, provided services to an entity known as Picaterre Limited. The defendants contend that the work which the plaintiff performed (if any) was performed pursuant to a services contract between EIGaming Limited and Picaterre Limited, not an employment contract between the plaintiff and Gorilla Rush.

Consideration

20. It may be accepted that the power to strike out pleadings because they disclose no reasonable cause of action should be exercised only in plain and obvious cases. A case is not “plain and obvious” where there is a real issue to be tried, whether it is one of fact or law. The tests stated in the authorities as to whether it is appropriate that a case be disposed of by the entry of summary judgment include statements such as that the matter is “so obviously untenable that it cannot possibly succeed”; “manifestly groundless” or “would involve useless expense”.

21. The objective facts of this case are that:

(a) On 10 October 2022 the plaintiff and Gorilla Rush entered an employment agreement.

(b) On the same day, the plaintiff and Gorilla Rush agreed that the plaintiff would for the first three months be paid a monthly salary based on timesheets which the plaintiff would submit. This was because the plaintiff would not be devoting all of his time to Gorilla Rush. However, there is no suggestion that any timesheet was ever submitted.

(c) The plaintiff, as trustee of EIGaming Limited, executed a contract for services contractor agreement (Contractor Agreement) between Picaterre Limited and EIGaming Limited on 8 November 2023.

(d) The Contractor Agreement applied to the provision of services by EIGaming Limited to Picaterre Limited from 4 October 2022 onward. The Contractor Agreement recorded that “This contract is dated as at the commencement date even though the parties may have executed it after said date” and that “The parties entered into a verbal agreement on 4th October 2022 for the contractor to provide services to the principal*.* This agreement memorialises the parties [sic] verbal agreement.”

(e) On 9 November 2023, the amount of 20,000GBP, which the plaintiff alleges was paid to him by Gorilla Rush under an employment agreement, was paid by Picaterre Limited to EIGaming Limited.

(f) The plaintiff caused EIGaming Limited to issue invoices to Picaterre Limited in respect of the Claim Period in an amount of GBP 13,750 per month.

22. It is against the backdrop of these objective facts that the plaintiff seeks to persuade the Court that he is entitled to the payment of salary under the employment agreement for the whole of the Claim Period.

23. The defendants contend that it is inevitable in that context that the Court will conclude that the parties agreed that any employment agreement between the plaintiff and Gorilla Rush was discharged effective no later than 8 November 2023, and that any work performed by the plaintiff involved the provision of services under the Contractor Agreement rather than service under any employment agreement between the plaintiff and Gorilla Rush. Simply put, there is no other logical explanation for the objective facts summarised above.

24. It follows that the plaintiff’s claim under the employment agreement is manifestly groundless, and that allowing it to continue would involve useless expense. It is therefore appropriate to exercise the power under r13.4 and/or r14.28, notwithstanding the high threshold for the exercise of the power.

25. The allegations regarding an employment agreement are the foundation for the entire claim including the alleged misrepresentation claims, and the rejection of the alleged employment arrangement is fatal to the whole of the claim. If however the Court is minded to dismiss the claim only to the extent it directly involves suit under the alleged employment agreement, it is appropriate that paragraphs 17, 18, and 25(a)–(c) be struck out.”

19. There is no real dispute that the plaintiff and Gorilla Rush both executed an Employment Agreement in early October 2022 with effect from 4 October 2022. There is no dispute that work was done by the plaintiff pursuant to that arrangement for some time, albeit that there appears to be a dispute about the extent of that work (a question of fact). According to the plaintiff Johnson told him in or about December 2022 that contract was not lawful as he was not an Australian citizen. This is pleaded in paragraph [13] of the Statement of Claim and is denied by Johnson who alleges in paragraph [13] of his Defence that in the week commencing 21 November 2022 the plaintiff proposed that he provide services as an independent contractor which eventually led to the execution of the Independent Contractor Agreement with Picaterre Ltd on 8 November 2023 (a number of questions of fact including a curious delay of nearly 12 months). Despite the defendants’ relying on this Independent Contractor Agreement, the plaintiff, in effect, relies on what he said in [33] of his Affidavit which I quoted at [14] supra that he only signed this agreement because of financial distress and in the (mistaken) belief that the Employment Agreement was void, that mistaken belief being induced by what he was told by Johnson. Then, the plaintiff relies on the email of 14 March 2024 which appears to reaffirm the Employment Contract.

20. This is not a clear case of the Employment Contract being replaced wholly by the Independent Contractor Agreement as the defendants submitted. There are a number of questions of fact which must be determined. Another question which arises is whether the Employment Contract could be replaced by the Independent Contractor Agreement when the parties are different: in the latter contract, the contractor is eigaming Ltd acting through a trustee and the second party to each contract is different: Gorilla Rush is the first and Picaterre Ltd is the second. There is no suggestion that there was ever a formal agreement annulling the Employment Agreement by those who entered into it.

21. In his oral submissions, Mr Fagir raised the concept of mutual abandonment of the original Employment Agreement and its replacement by the Independent Contractor Agreement, albeit that the parties to each agreement are different. In CGM Investments Pty Ltd and Others v Chelliah and Others [2003] FCA 79; (2003) 196 ALR 548. Finkelstein FCJ said this:

“[17] Whenever parties make a contract it is possible that they have conducted themselves in such a way that it can be said by implication that they have agreed to rescind their bargain: Tallerman & Co Pty Ltd v Nathan's Merchandise (Victoria) Pty Ltd (1957) 98 CLR 93, 114; Commissioner of Taxation of the Commonwealth of Australia v Sara Lee Household & Body Care (Australia) Pty Ltd (2000) 201 CLR 520, 534. This was dealt with by Isaacs J in Summers v Commonwealth (1918) 25 CLR 144. In that case the parties had entered into a contract for the supply of a specified number of blocks of marble each of a certain dimension. For some time neither party took any step to perform the contract. It was held that the parties had abandoned or abrogated the contract. Isaacs J said (at 151-152):

"Whatever the terms of contract may be, it is possible for the parties so to conduct themselves as mutually to abandon or abrogate it. A position not too altogether dissimilar arose in the case of De Soysa v De Pless Pol [1912] AC 194. There, neither party had repudiated or refused to perform the contract, nothing in the nature of recission had occurred, but, said Lord Atkinson for the Privy Council: - 'One party to a contract is not bound to give the other unlimited time after a day named to do that which the other has contracted to do. There must be some point of time at which delay or neglect amounts to refusal...In truth, the project seems to have been, to a great extent, if not altogether, abandoned by all the parties concerned.' In my opinion, that is the legal position here. Informally, but effectively, the parties have so acted in relation to each other as to abandon or abrogate the contract."

Summers v Commonwealth has been applied by the High Court in D T R Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423. This case concerned a contract for the sale of land. The purchaser purported to rescind the contract on the basis that the vendor had repudiated the contract by not complying with a condition. The vendor asserted that the purchaser's rescission constituted a wrongful repudiation and that the contract was thereby at an end. Stephen, Mason and Jacobs JJ (with whom Aickin J concurred) said (at 434):

"[T]here can be no doubt that...when these proceedings were commenced, neither party, whatever may have been their reasons, regarded the contract as still being on foot. Neither party intended that the contract should be further performed. In these circumstances the parties must be regarded as having so conducted themselves as to abandon or abrogate the contract."

[18] In my view, the authorities to which I have referred establish not only that an agreement can be abandoned by conduct, but also that the question whether an agreement has been abandoned does not require one to examine whether the parties actually had the intention of abandoning the agreement; only whether their conduct, when objectively viewed, manifests that intention. This conclusion accords with the objectivist theory of contract which is now irrevocably entrenched in our law: Taylor v Johnson (1983) 151 CLR 422. See also Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309, where McHugh JA (as his Honour then was) said (at 336) that "[t]he weight of authority in favour of the objective theory is too great".”

In Ryder & Anor v Frohlich & Anor [2004] NSWCA 472 McColl JA, with whom Hodgson and Ipp JJA agreed said this:

“Abandonment

135 Where it is plain from the conduct of parties to a contract that neither intends that the contract should be further performed the parties will be regarded as having so conducted themselves as to abandon or abrogate the contract: DTR Nominees Pty Limited v Mona Homes Pty Limited [1978] HCA 12; (1978) 138 CLR 423 at 434 (per Stephen, Mason and Jacobs JJ with whom Aickin J agreed); Summers v The Commonwealth [1918] HCA 33; (1918) 25 CLR 144 at 151 – 152 per Isaacs J. The inference of abandonment will be drawn where “an ‘inordinate’ length of time has been allowed to elapse, during which neither party has attempted to perform, or called upon the other to perform, a contract made between them … What is really inferred in such a case is that the contract has been discharged by agreement, each party being entitled to assume from a long-continued ignoring of the contract on both sides that … ‘the matter is off altogether’ ”: Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 at 432 per Dixon CJ and Fullagar J.

136 Whether there is abandonment or abrogation of a contract is a matter of fact to be inferred from an objective assessment of the conduct of the parties: see CIC Insurance Limited v Bankstown Football Club Limited (1995) 8 ANZ Ins Cas ¶61 – 232 per Kirby P; Wallera Pty Limited v CGM Investments Pty Limited [2003] FCAFC 279 at [2] per Ryan J, at [30] – [32] per Kiefel J; at [57] per Gyles J; Marminta Pty Limited v French [2003] QCA 541 at [22] per Jerrard JA, Williams JA and Philippides J agreeing.

137 The underlying premise of the abandonment cases is that a period of time elapses during which neither party to the contract manifests any intention to perform the contract, leading to the inference that the contract has been abandoned. It is clear that the question whether an “inordinate length of time has been allowed to elapse” is relative. In DTR Nominees Pty Limited v Mona Homes Pty Limited the High Court was prepared to infer abandonment after a period of less than five months had elapsed during which neither party took any steps to perform the contract. In Fitzgerald v Masters it was held that a contract for the sale of land had not been abandoned even though proceedings for its specific performance were not commenced until 26 years after its execution.

138 In this case where Mr Ryder evinced an immediate intention to abandon his obligation under the partnership by taking the position at Salomons which Mr Frohlich accepted and thereafter assumed all the duties the two men had hitherto performed, I am of the opinion that the partnership arrangement was abandoned on 2 March 2001.”

Nu Lime Construction Group Pty Ltd v Fowler [2014] NSWCA 51 was an appeal from Ward J sitting in the Equity Division ([2012] NSWSC 587; [2012] NSWSC 816) which involved restitution resulting from unenforceable incomplete, illegal or void contracts. Barret JA raised the common law relating to abandonment, by analogy:

“105 I respectfully agree that an analogy with contract cases is apposite. There are, however, questions as to how the contract principles are to be applied to a case such as the present where payment has been made under or by reference to mere consensus or common intention. A concept of "failure to materialise" tends to imply some expressed or mutually expected time of fruition that is not met. That is not the situation here. It is not possible to point to a shared understanding that a particular deadline applied. The situation was one in which an agreement in principle was reached, solicitors were instructed to make the legal arrangements necessary to translate the non-binding agreement into a contract for sale, payments were made by the prospective purchaser to the prospective vendor in anticipation of that translation and the translation was never achieved.

106 In such a case, "failure to materialise" occurs, in my view, when the parties no longer share the common intention. The necessary inquiry is, to some extent, akin to that which must be made when it is alleged that parties to a contract have abandoned that contract, in the sense recently discussed in Fazio v Fazio [2012] WASCA 72 and Cedar Meats (Aust) Pty Ltd v Five Star Lamb Pty Ltd [2014] VSCA 32. In the former case, Murphy JA said at [74]:

"The abandonment of a contract, in the sense of the mutual release of future obligations, being an inferred agreement, does not depend upon the subjective intention of the parties, but upon whether their conduct (both acts and omissions) viewed objectively manifests an intention to discharge the contract: Summers v The Commonwealth [1918] HCA 33; (1918) 25 CLR 144, 151 - 152; Wallera Pty Ltd v CGM Investments Pty Ltd [2003] FCAFC 279 [2], [40], [57]; DTR Nominees Pty Ltd v Mona Homes Pty Ltd [[1978] HCA 12; (1978) 138 CLR 423]; Marminta Pty Ltd v French [2003] QCA 541 [21] - [22]."

107 There is reference here to the parties' "conduct (both acts and omissions)" and to an objective assessment of it. A particular kind of "conduct" is inactivity. In Marminta Pty Ltd v French [2003] QCA 541 (at [22]), the Queensland Court of Appeal approved the observation of Finkelstein J in CGM Investments Pty Ltd v Chelliah [2003] FCA 79; (2003) 196 ALR 548 (at [22]), that, in order to show that a contract has been abandoned by inactivity on both sides, it is necessary to establish that the inactivity produces the clear inference that one party does not wish to proceed with the contract and the other consented to that situation. That observation was not challenged on the subsequent appeal (Wallera Pty Ltd v CGM Investments Pty Ltd [2003] FCAFC 279) and is consistent with what was said by Dixon CJ and Fullagar J in Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 at 432:

"There can be no doubt that, where what has been called an 'inordinate' length of time has been allowed to elapse, during which neither party has attempted to perform, or called upon the other to perform, a contract made between them, it may be inferred that the contract has been abandoned. A good example is to be found in Pearl Mill Co Ltd v Ivy Tannery Co Ltd [[1919] 1 KB 78]. See also Mathews v. Mathews [[1941] SASR 250 at p 255] and G W Fisher Ltd v. Eastwoods Ltd [[1936] 1 All ER 421, especially at p 426], per Branson J. What is really inferred in such a case is that the contract has been discharged by agreement, each party being entitled to assume from a long-continued ignoring of the contract on both sides that (in the words of Rowlatt J) 'the matter is off altogether'."

108 Similar reasoning may, I think, be applied to abandonment of common intention, but with important qualifications and, in the end, somewhat different results. The law is obviously more astute to protect contractual relationships than it is to qualify, in terms of legal consequences, the freedom of non-contracting parties to withdraw from an agreement in principle or mere shared intention. A shared intention to enter into a contract (or to seek to do so) leaves each party perfectly free to break off the relationship at any time and, subject to that possibility, implies effectuation of the intention within a time that is reasonable in the circumstances. As time passes and there is no effectuation, the expectation of non-contracting parties must be the opposite of that of contracting parties. Where there is a contract, the expectation is that the passage of time has no effect unless the contract itself so provides (or the delay is of the "inordinate" kind warranting an inference of agreement to abandon); but in case of mere shared intention to work towards a contract, the passage of time, coupled with inaction on both sides, will indicate progressive evaporation of the intention. It follows that a shared intention to enter into a contract should be taken to have ended if a contract has not been concluded by the time impliedly envisaged by the shared intention and there is, in an objective sense, no sufficient evidentiary basis for a finding that the mutual commitment continued beyond that time. Unless the parties' conduct shows some contrary consensus, the envisaged time for the making of the contract will be the time that is reasonable in the circumstances of the case.”

Whether “abandonment” has occurred is a factual matter needing to be determined after a trial. My reading of the plaintiff’s affidavit does not suggest that he ever abandoned the concept of his being paid for the work he did.

22. The inevitability alleged by the defendants cannot be discerned without a hearing on the merits. This relief is refused.

Application to Strike Out the Collateral Contract Claim

23. The defendants’ submission is this:

“26. Paragraph 10 of the statement of claim pleads that:

[10] As a consequence of the matters in 4, 5, 6, 7 and 9 above a collateral contract was formed between Fraser and Johnson to the effect that Johnson would ensure that Fraser was paid pursuant to the GR Employment Agreement (the Collateral Contract).

27. Paragraphs 4, 5, 6, 7 and 9 do not plead any of the elements of a contract between Johnson and Fraser. Paragraph 10 pleads a legal conclusion unsupported by any relevant material fact, and is liable to be struck out on that basis, together with paragraph 26(a) (which is seemingly a prayer for relief for damages for breach of the alleged collateral contract).

28. It is appropriate that the Court order under rr13.4 and/or 14.28 of the UCPR that paragraphs 10 and 26(a) of the statement of claim be struck out.”

24. Those paragraphs of the statement of claim are these:

“4 On 25 August 2022, Johnson represented to Fraser that, Johnson:

(a) was interested in offering Fraser an opportunity to both help him start a casino and create an esports business; and

(b) would fund the entire project (the Funding Representation).

Particulars

Email from Johnson to Fraser dated 25 August 2022.

5 On or about 27 September 2022, Johnson represented to Fraser that, Johnson was interested in:

(a) employing Fraser to help him start a casino; and

(b) creating an esports business with Fraser.

(the Lunch Representations).

Particulars

Conversation between Fraser and Johnson over lunch on 27 September 2022.

6 On 27 September 2022 Johnson provided Fraser with a Business Plan for Picaterre Limited (Picaterre), which states that (amongst other things):

(a) Picaterre “will be a company incorporated in Alderney to operate an online B2C gambling website www.luckiest.com”; and

(b) Johnson will be its “UBO [Ultimate Beneficial Owner] 100%”.

7 The Funding Representation was:

(a) promissory in nature;

(b) made in trade or commerce; and

(c) furthered by the statement in 0 above in the Picatarre Business Plan.

8 By employment agreement executed on or about 10 October 2022 Gorilla Rush employed Fraser in the position of Chief Commercial Officer – luckiest.com (GR Employment Agreement).

Particulars

The GR Employment Agreement is wholly in writing.

9 Fraser relied upon and was induced by the Funding Representation when agreeing to and entering into the GR Employment Agreement.

10 As a consequence of the matters in 4, 5, 6, 7 and 9 above a collateral contract was formed between Fraser and Johnson to the effect that Johnson would ensure that Fraser was paid pursuant to the GR Employment Agreement (the Collateral Contract).

…….

26 Fraser claims from Johnson the sum of GBP 171,525 pursuant to:

(a) the Collateral Contract; and

(b) in the alternative to (a), Section 236 of the Australian Consumer Law from Misleading and Deceptive Conduct in breach of Section 18 and/or Section 31 of the Australian Consumer Law in respect of the Funding Representation, the Payment Representation and the Second Payment Representation.”

I have quoted [26] in full to put the allegation in its proper context.

25. Under the modern system of pleading, a pleading must contain only a summary of the material facts on which the pleading relies, and not the evidence by which those facts are to be proved (UCPR 14.7). A pleading is required to be as brief as the nature of the case allows (UCPR 14.8). If any documents or spoken words are referred to in a pleading, the effect of the document or spoken words must be stated but the precise terms of the document or spoken words must not be stated, except so far as those terms are themselves material (UCPR 14.9). Compare this to the situation in this State prior to the commencement of the Supreme Court Act 1970:

“[10] The following are fundamental rules of pleading:-

1. Pleadings must allege matters of fact and should not allege matters of law.

2. The legal effect of transactions is to be stated and the evidence by which such transactions would be shown to exist is not to be stated.

3. Only material facts are to be stated.

4. In a declaration all facts necessary for the existence of the cause of action must be alleged; and in subsequent pleadings all facts necessary to establish the matter of reply must be alleged.

5. All transactions must be alleged with such particularity as will enable the opponent to determine precisely what is alleged against him.

6. Pleadings must be framed clearly and without prolixity.”

(A.F. Rath QC, Principles and Precedents of Pleading (N.S.W.), Law Book Co of Aust Ltd, 1961, [10] p 3).

26. One can discern in [4] of the statement of claim an allegation of a statement made by Johnson, identified by the pleading on the “funding representation” which is alleged to be a promise in [7]. This “promise” can be considered as an offer which was accepted by the plaintiff by his agreeing to enter into the Employment Contract as alleged in [9] and this “Collateral Contract” is, in essence, alleged to be a personal guarantee by Johnson, upon which the plaintiff now seeks to rely, the plaintiff’s damages against Johnson being the same damages as are sought from Gorilla Rush. I do not accept the categorisation of [10] of the statement of claim as submitted by Mr Fagir.

27. There are a number of cautions I should express on this aspect of the case. Firstly, there was on the afternoon of 26 February arguments between Mr Fagir and Mr Vernier as to whether relief under the Australian Consumer Law as governed by the Commonwealth Act, is available to the plaintiff. The applicable case law was not cited me. I make no ruling or comment on that issue, which can be determined by the trial judge. Secondly, a number of representations are alleged by the plaintiff. As far as the “funding representation” is concerned, the plaintiff’s case is, clearly, that it was made by Johnson personally, not on behalf of Gorilla Rush, or the proposed Alderney company (Picaterre) or by another company controlled by Johnson. Whether the plaintiff was or is entitled to assume so is a question of fact, and will probably need to be determined according to the usual practice in the relevant industry and of the experience of each of the plaintiff and Johnson in the business world. However, common experience is that if one engages a plumber, electrician or other tradesman, or, indeed, a medical practitioner or dental practitioner one will generally receive an account and or receipt with the matter “Pty Ltd” inserted after the name of the provider.

28. I refuse to strike out these parts of the statement of claim.

Security for Costs

29. There is no dispute that the plaintiff is a resident of the United Kingdom. In PS Chellaram & Co Ltd v China Ocean Shipping Co [1991] HCA 36; (1991) 102 ALR 321; (1991) 65 ALJR 642, McHugh J said at [7]:

“To make or refuse to make an order for security for costs involves the exercise of a discretionary judgment. That means that the court exercising the discretion must weigh all the circumstances of the case. The weight to be given to any circumstance depends not only upon its own intrinsic persuasiveness but upon the impact of the other circumstances which have to be weighed. A circumstance which may have very great weight when only two or three circumstances have to be weighed may be of minor significance when many circumstances have to be weighed. However, for over 200 years, the fact that a party, bringing proceedings, is resident out of the jurisdiction and has no assets within the jurisdiction has been seen as a circumstance of great weight in determining whether an order for security for costs should be made. Indeed, for many years the practice has been to order such a party to provide security for costs unless that party can point to other circumstances which overcome the weight of the circumstance that that person is resident out of and has no assets within the jurisdiction.”

30. Security for costs is now governed by UCPR Division 6. The principle to which I have just referred is reflected in UCPR 42.21(1)(a). Matters to be considered in the exercise of the Court’s discretion are reflected in UCPR 42.21(1A) and (1B). Those provisions are:

“(1A) In determining whether it is appropriate to make an order that a plaintiff referred to in subrule (1) give security for costs, the court may have regard to the following matters and such other matters as it considers relevant—

(a) the prospects of success or merits of the proceedings,

(b) the genuineness of the proceedings,

(c) the impecuniosity of the plaintiff,

(d) whether the plaintiff’s impecuniosity is attributable to the defendant’s conduct,

(e) whether the plaintiff is effectively in the position of a defendant,

(f) whether an order for security for costs would stifle the proceedings,

(g) whether the proceedings involves a matter of public importance,

(h) whether there has been an admission or payment in court,

(i) whether delay by the plaintiff in commencing the proceedings has prejudiced the defendant,

(j) the costs of the proceedings,

(k) whether the security sought is proportionate to the importance and complexity of the subject matter in dispute,

(l) the timing of the application for security for costs,

(m) whether an order for costs made against the plaintiff would be enforceable within Australia,

(n) the ease and convenience or otherwise of enforcing a New South Wales court judgment or order in the country of a non-resident plaintiff.

(1B) If the plaintiff is a natural person, an order for security for costs cannot be made merely on account of his or her impecuniosity.”

Those provisions largely reflect pre-existing case law.

31. In his affidavit of 15 January 2025, the plaintiff deposed to this:

“My Financial Position

Overview

4 I commenced these proceedings against Gorilla Rush and Johnson to recover unpaid salary for the period October 2022 to December 2023.

5 The total due to me for this period was GBP 196,625.00, of which I have been paid GBP 25,000.00. My claim is therefore for GBP 171,625.00 (excluding interest and costs). This equates to AUD 346,682.50 (using an exchange rate of GBP 1 = AUD 2.02, from Google on 30 December 2023. I use this exchange rate to calculate AUD equivalents throughout this affidavit).

6 Clearly to work for the period October 2022 to December 2023 and only receive a small portion of what is due to me has had a negative effect on my financial position. In particular I have reduced my savings to pay for my living expenses whilst also not being able to increase my savings with a portion of the salary due to me.

7 The net effect of this (without considering interest, investment returns or the legal costs associated with these proceedings) is that I am approximately GBP 102,416 (AUD 206,880) worse off than I would have been if I had been paid what is due to me (this is my calculation of the after tax amount I would have received had I been paid the amount of my claim).

8 In addition for the whole of 2024, I have not worked nor earned a salary. The reasons for this are that:

(a) in January to March 2024, I was exhausted by the Gorilla Rush work and on sick leave (without pay) whilst still employed by Gorilla Rush. At this point I did not want to resign as I have major concerns about getting paid and believed that resigning would reduce my leverage. A copy of the leave register produced by Gorilla Rush in answer to a Notice to Produce is at pages 1-2 of the Bundle;

(b) from 4 January 2023 I was suffering from a condition that only allowed me to walk very short distances, before experiencing extreme pain, migraines and issues with vision; a patient report from a Radiologist dated 4 January 2023 is at page 3 of the Bundle. After a series of medical investigations were undertaken, on or about 13 September 2024 I was diagnosed with a ‘lower limb ischaemia’ – essentially blockages in the arteries in my legs, which meant that I could only work from home until resolved. A letter from Professor Alun H. Davies dated 13 September 2024 in relation to this diagnosis is at pages 4-5 of the Bundle;

(c) on 12 November 2024 I had a triple bypass: ‘aorto-bifemoral bypass surgery’ to resolve my lower limb ischaemi. My doctors have required that I recuperate for 6 to 8 weeks from this surgery, with the following guidance “If you’re recovering well and your job isn’t physically strenuous, you can usually go back to work in about 6 to 8 weeks.” A discharge summary in relation to this surgery dated 21 November 2024 is at pages 6-12 of the Bundle.

(d) the state of the gaming industry and therefore opportunities for me to work.

9 To be clear I do not seek to make Gorilla Rush or Johnson responsible for the factors in 8(b), 8(c) or 8(d) above.

Assets and Liabilities

10 As at the date of this affidavit I have the following assets:

| Asset | GBP | AUD | Comments | | Savings | 20,000 | 40,400 | Can access immediately | | Car | 1,500 | 3,030 | Could realise in ~4 weeks | | Pensions: | | | | | Catena Media | 25,795 | 52,106 | Not accessible until I am 55 (in 2026) | | Grosvenor (Rank Group) | 717 | 1,448 | | | Sub-total | 26,512 | 53,554 | | | Full State Pension | 11,502 | 23,234 | This is an annual entitlement, to which I am entitled when 66 (in 2036); it cannot be accessed as a lump sum | | Total | 59,514 | 120,218 | | | Total Accessible | 21,500 | 43,430 | |

11 I do not own any real property in the United Kingdom or elsewhere nor do I have any assets in Australia.

12 I do not have any liabilities, apart from an unknown amount of unpaid income tax and possibly income tax fines related to my claim in these proceedings. I have retained an accountant who will be assisting me to resolve these tax liabilities in 2025. At this stage I estimate the total liability to be approximately GBP 69,209 plus accountant and tax consultant fees (calculated on the basis that I am paid the full GBP 171,625 that I claim in these proceedings).

13 My asset position is not strong. The main reason for this is that over the years I have helped my brother financially. He had long periods without employment and at these times I would assist him financially. In addition:

(a) the costs of living in London are high (see below);

(b) I did not work for approximately a year during the Covid outbreak in 2019/2020;

(c) I have not received what I claim in these proceedings; and

(d) the matters set out in 8 above.

Monthly Income and Expenses

14 I commenced a new full time contractor role on 3 January 2025. My monthly income and expenses with the salary from this role is as follows (based on a full month’s income):

| | GBP | AUD | | Monthly Income | 10,833 | 21,883 | | Less tax/NI | 4,054 | 8,189 | | Net Income | 6,779 | 13,693 | | Monthly Expenses | | | | Rent | 2,000 | 4,444 | | Council Tax | 240 | 485 | | Gas | 170 | 343 | | Electricity | 110 | 222 | | Water | 139 | 281 | | Car Insurance | 243 | 491 | | AA car recovery | 17 | 34 | | Parking | 200 | 404 | | Gym | 148 | 299 | | Subscriptions | 50 | 101 | | Pet Insurance | 43 | 87 | | Food | 500 | 1010 | | Other | 500 | 1010 | | Total Monthly Expenses | 4,560 | 9,211 | | Net Monthly Income | 6,779 | 13,693 | | Less Monthly Expenses | 4,560 | 9,211 | | Monthly Surplus (Deficit) | 2,219 | 4,483 |

15 The above calculation does not include the legal fees for these proceedings, which to-date have been funded by savings and in the future will be funded by the above surplus and savings.

Conclusion and Intentions

16 I have:

(a) accessible assets in the sum of GBP 21,500/AUD 43,430;

(b) ‘pension assets’ that will not be accessible until 2026 in the sum of GBP 26,512/AUD 53,554;

(c) an entitlement to a full state pension from 2036 in the sum of GBP 11,502/AUD 23,234 (per annum); and

(d) a monthly surplus of income over expenses (from 03 January 2025 in the sum of GBP 2,219/AUD 4,483 (excluding the costs associated with these proceedings).

17 My poor financial position has been largely caused by the unpaid salary that is the subject of these proceedings. I would have been in a much better financial position had my salary been paid.

18 However, if I were required to pay security for costs in the amount sought by Gorilla Rush and Johnson (AUD 150,000 in total) then I would not be able to continue with these proceedings. This would be unfair.

19 If I am ultimately unsuccessful in these proceedings and a costs order is made against me, then my intention would be to (after the costs order has been quantified) try to honour that obligation by paying the amount due in instalments.”

When the matter came before me on 26 February 2025, the relevant exchange rate was 1£ stg = $AUD 2.00. I shall proceed on that being the appropriate exchange rate.

32. It should immediately be noted that the plaintiff has no assets in Australia.

33. As far as [8](b) and (c) are concerned, I have read the medical reports annexed to the affidavit and I accept the validity of what is stated by the plaintiff in those paragraphs. Those medical records also tell me the plaintiff’s date of birth.

34. As far as the Assets and Liabilities statement is concerned, I accept that the plaintiff has:

| | £ | $ | | Savings | 20,000 | 40,000 | | Pension Funds | 26,512 | 53,024 (available in November 2026) | | State Pension | | 11,502 (available in November 2037) |

35. As far as income and Expenditure is concerned I accept that the plaintiff’s current position concerned:

| | £ | $ | | Monthly Income (post tax) | 6,779 | 13,558 | | Monthly Expenses | 4,560 | 9,120 | | Net Monthly Income | 2,219 | 4,438 |

This Indicates to me that the plaintiff will have a further sum of $13,300 ($4,438 x 3) by 15 April 2025 available as savings. In short, on the figures provided by the plaintiff he could give securely in the sum at, say, $53,000 by 17 April 2025, next Maundy Thursday.

36. The originally estimated hearing date of these proceedings was 10 August 2025. Because of these motions, a possible hearing date may become available towards the end of the current year. Based on that assumption, the plaintiff ought to have further savings of say ($4,438 x 6) $26,600 which would be more than adequate to fund a trip to Sydney for a hearing lasting less than 10 days.

37. The defendant’s written submissions advance these arguments:

“4. The plaintiff is a resident of the United Kingdom, is not a resident of Australia, and has no assets in Australia. He has filed an affidavit in respect of the application for security in which he asserts, in summary, that:

(a) he is a resident of the United Kingdom and has no assets in Australia;

(b) he has limited assets totalling GBP 59,514 of which GBP 21,500 are accessible;

(c) his “asset position is not strong” because he has assisted his brother financially over the years, because he did not work at all for a year in 2019/2020 or in the year 2024, and because he has not been paid the amounts he claims in this proceeding;

(d) he could not meet the order for security sought by the defendants and if security were ordered he would not be able to continue the proceedings;

(e) if costs are awarded against him, he intends to “try to honour that obligation by paying the amount due in instalments”.

5. The plaintiff’s assertions are not accompanied by any supporting evidence. Although the plaintiff has served a lengthy exhibit, the exhibit does not include any bank statement, tax return or any other document relevant to his financial position or the application for security.

Consideration

6. The power to award security for costs under r42.21 of the UCPR is a broad discretionary one and requires consideration of all the relevant circumstances. However, a plaintiff’s residence outside the jurisdiction is a factor weighing heavily in favour of the grant of security and is ordinarily decisive. As McHugh J explained in PS Chellaram & Co Ltd v China Ocean Shipping Co [1991] HCA 36; 65 ALJR 642 at [7]:

To make or refuse to make an order for security for costs involves the exercise of a discretionary judgment. That means that the court exercising the discretion must weigh all the circumstances of the case... However, for over 200 years, the fact that a party, bringing proceedings, is resident out of the jurisdiction and has no assets within the jurisdiction has been seen as a circumstance of great weight in determining whether an order for security for costs should be made. Indeed, for many years the practice has been to order such a party to provide security for costs unless that party can point to other circumstances which overcome the weight of the circumstance that that person is resident out of and has no assets within the jurisdiction.

7. There are in this case no “other circumstances which overcome the weight of the circumstance that that person is resident out of and has no assets within the jurisdiction”. Rather, the evidence weighs decisively in favour of the grant of security for at least the following reasons.

8. First, there is little apparent prospect that the defendants will recover their costs against the plaintiff if costs are ordered, given his overseas residence and his claimed financial position.

9. Second, it is far from clear that an order for security would stultify the proceeding. The plaintiff bears the onus of establishing that an order for security would stultify proceedings and that financial support is not available to him. This requires proof, and is not made out simply by demonstrating that the plaintiff is impecunious.

10. The plaintiff’s mere assertion that he could not give security is unaccompanied by evidence which would persuade the Court of that fact. The plaintiff has not explained what if any capacity he has to obtain credit or make other arrangements. Nor has he explained why he is able to fund his own costs of the case but unable to provide security for the defendants’ costs. The Court could not, in those circumstances, find that security would stultify the proceedings.

11. Third, the prospects of the plaintiff’s claim are limited, for the reasons set out below in respect of the applications to strike out the pleadings.

12. Fourth, the plaintiff’s assertions in his affidavit that his impecuniosity has been caused by the defendants is contradicted by his own evidence, which suggests that he has not worked for significant periods of time and has financially supported family members.

13. The plaintiff bears the onus of establishing the adequacy of his financial position before his dealings with the defendants. He has not done so. Rather his evidence indicates that his finances are tenuous for reasons unrelated to the defendants.

14. For these reasons it is appropriate that an order for security be made in the terms sought in the defendants’ notice of motion.”

38. There are two parts to the defendant’s first argument. The first of these can be described as the plaintiff’s “overseas residence”. It is in London, the capital of the United Kingdom. It is not Beijing, Ulan Bator, Phnom Penh or a South American Capital. The registration of an order of this Court in England can be done under the Foreign Judgments (Reciprocal Enforcement) Act 1933 aka 1933 Cap 13, 23 and 24 Geo. V. See MFI 1. The second part of the defendants’ first argument concerns the plaintiff’s claimed impecuniosity, albeit that, on my assessment the plaintiff can provide some security as I have set out above. Under UCPR 42(21)(1A) the following matters are pertinent:

(c) the impecuniosity of the plaintiff,

(d) whether the plaintiff’s impecuniosity is attributable to the defendants’ conduct,

(f) whether an order for security for costs would stifle proceedings,

(n) the ease and convenience or otherwise of enforcing a New South Wales court judgment or order in the country of a non-resident plaintiff.

On the evidence given by the plaintiff, his lack of ease in giving security for costs is because he has not been paid by the defendants for the work done by him, which, without interest amounts to $343,250.

39. The defendants second argument deals with UCPR 42.21(1A)(f), presumably on the basis that the plaintiff has failed to prove that financial support is not available to him. There is a degree of cynicism in that submission. The plaintiff has attested by an affirmation made by him as to his financial status. True it is that he has not annexed e.g. bank statements or the like, or a letter from his current employer, but that is only necessary if what he says in his affidavit has been challenged, but he was not required for cross-examination. Furthermore, one must ask rhetorically what financial institution is going to lend him money to prosecute a case in this country when he resides in England and has no assets that can be offered as security. In argument, Mr Fagir raised the plaintiff’s marital status. He pointed out that the plaintiff’s signature on the Employment Agreement has been witnessed by Yukiko Fraser and Yukiko Ishikura is the Director of Asia for eigaming Ltd. Are these two persons or one? If the same person, why does she use the plaintiff’s surname? Are the plaintiff and Yukiko married? If so, what is her income, what are her assets? We have come a long way in the law from the ancient principle that a husband and wife are one and that a married woman’s property becomes that of her husband. Without proof that Ms Fraser/Ms Ishikura is the wife of the plaintiff; I can not infer that they are, nor can I infer that she has assets which she could lend to the plaintiff.

40. In his written submission cited above, Mr Fagir cited Pioneer Park Pty Ltd (In liq) & Ors v Australia and New Zealand Banking Group Limited [2007] NSWCA 344 at [51] for the proposition that proof is required to establish impecuniosity by a party, not the mere averment that the party is impecunious such that the giving of security would stultify the proceedings. However, the full paragraph is this:

“51 The likelihood that an order for security would stifle or stultify the proceedings, if established, is a factor which will tend against an order for security. However, that factor is not made out merely by reference to the company’s impecuniosity, but requires proof, as explained in the passage from Bell Wholesale at [43] above. As noted by Austin J in Fiduciary Ltd v Morningstar Research Pty Ltd (2004) 208 ALR 564 at [74], referring to the judgment of Clarke J in Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542 at 545, “the mere fact that the corporate plaintiff is financially unable to provide security does not lead inevitably to the conclusion that the making of an order for security will stultify the plaintiff’s claim. It may be that there is someone else who will satisfy the order on the plaintiff’s behalf”.

These authorities apply to corporate parties, not natural persons. There may be persons standing behind a corporate party who might come to the party’s rescue. If the outcome of proceedings brought by a natural person might bankrupt him or her, the same could occur to another natural person who gives security on behalf of a natural party.

41. The defendants’ third argument is that the prospects of the plaintiff’s claim “are limited” but, with respect, on my reading of the evidence, as set out in this judgment in dealing with the strike out applications, I disagree. As Beazley FCJ (as her Excellency then was) said in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189; [1995] FCA 76 at 197:

“As a general rule, where a claim is prima facie regular on its face and discloses a cause of action, in the absence of evidence to the contrary, the Court should proceed on the basis that the claim is bona fide with a reasonable prospect of success.”

42. The defendants’ fourth argument is that the plaintiff has failed to prove that his alleged impecuniosity has been caused by the defendants. Allowance must be made for the vicissitudes of life. The plaintiff is now 53 years old. He is a Londoner. He points out in [13] of his affidavit that the costs of living in London are high – a fact well known to Australians visiting that city. Over the years he has assisted his brother financially i.e. he was making an adequate income so that “profit” could be shared with his sibling. For approximately one year he did not work because of the Covid-19 pandemic, probably from early 2020 to early 2021, rather than 2019/2020 stated in his affidavit. His work was substantially affected by his ill health in 2024 as deposed to in [8] of his affidavit. If he had been paid the salary he claims he would be £171,625 / $343,250 less tax, plus interest to date better off, and not have had to bring these proceedings. I am not persuaded that this is a valid argument.

43. There is a counter argument. The plaintiff is a resident of the United Kingdom. As I understand the case, his work was done in that realm, probably mainly in London. The courts of England and Wales would have jurisdiction over the subject matter of this claim. The plaintiff could have brought proceedings in the courts of England and Wales. If the defendants decided to defend such proceedings, the plaintiff could have asked the defendants to give security for costs. By commencing proceedings in Australia, the plaintiff has forgone his ability to seek security for costs, causing the current defendants/applicants an easier path than they might otherwise have been required to follow: a boon for them.

44. In Inglis v English Language Company Australia Pty Ltd [2020] NSWSC 1058 Ierace J said this:

“42 Rule 42.21(1B) reflects the well-settled principle that poverty “is no bar to a litigant”: Cowell v Taylor (1885) 31 Ch D 34 at 38; Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11. However, it may be a relevant factor in terms of the balancing process between the parties: r 42.21(1A)(c).

43 The defendant bears the evidential burden of establishing a prima facie entitlement to a security for costs order due to the plaintiff’s impecuniosity. Once the defendant has established that there is reason to believe that the plaintiff would be unable to pay the cost of litigation if unsuccessful, an evidentiary onus then falls on the plaintiff to establish why, taking into account all relevant factors, the court’s discretion should be exercised by refusing an order for security: Idoport Pty Ltd v National Australia Bank Ltd at [62] and [65].

44 A related consideration, as highlighted in r 42.21(1A)(d), is whether the plaintiff’s impecuniosity can be attributed to the defendant. The plaintiff bears the onus in establishing this, and must demonstrate a real causal connection between the defendant’s conduct and the plaintiff’s impecuniosity: see Jazabas Pty Ltd v Haddad (2007) 65 ACSR 276; [2007] NSWCA 291 at [94]-[95] (McClellan CJ at CL, with Mason P agreeing); The Owners - Strata Plan 87265 v Saaib [2019] NSWSC 289 at [44] per Stevenson J.”

I intend to apply what his Honour described as the “balancing process”: to order the provision of security for costs but not such amount of costs as would stifle these proceedings.

45. I make the following orders:

46. The Notice of Motion filed on 18 November 2024 at 5:08pm (numbered at top right hand side of computer-generated cover sheet 002) seeking total or partial dismissal of these proceedings, is dismissed.

47. The defendants are ordered to pay the plaintiff’s costs of that Motion.

48. I order the plaintiff to provide security for the defendants’ costs of the plaintiff’s claim in the sum of $53,300 by 17 April 2025 either by paying that sum into Court or in such other form as may be agreed with the Registrar or between the parties.

49. If the security is not provided by the 17 April 2025 at 4:00pm, these proceedings are stayed and, if the security is not provided by 4:00pm on 30 April 2025, the plaintiff’s claims against each of the defendants are dismissed pursuant to UCPR 42.21(3).

50. The costs of the second Notice of Motion filed on 18 November 2024 at 5:08pm (numbered at top right hand side of computer-generated cover sheet 003) are the defendants’ costs in the cause.

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Amendments

07 April 2025

Amendment to Plaintiff's address given in [1].