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[2026] NSWSC 468
General information, not legal advice.
Supreme Court of NSW
2026-04-30
Elkaim AJ
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Giezekamp v Kogan [2026] NSWSC 468
Hearing dates: 30 April 2026
Date of orders: 30 April 2026
Decision date: 30 April 2026
Jurisdiction: Common Law
Before: Elkaim AJ
Decision: 1. Each of the First Plaintiff and Second Plaintiff, jointly and severally, are to indemnify each of the Third Plaintiff and Fourth Plaintiff against: (a) any costs incurred by the Third Plaintiff and/or the Fourth Plaintiff in these proceedings; (b) any liability for costs of (including by way of an adverse costs order made against) the Third Plaintiff and Fourth Plaintiff to the Defendants (or any of them) in these proceedings. 2. The First Plaintiff and the Second Plaintiff are to provide security in the form of payment of money into Court for the indemnity in favour of the Defendants in Order 1 above, such security by way of payment into Court to be in the amount of $175,000. 3. The security referred to in Order (2) above is to be provided within 60 days of the date of these orders. 4. If the security ordered in Order (2) above is not paid into Court within the 60 days allowed by the order, the proceedings brought by the third and fourth plaintiffs are stayed pending further order. 5. The first and second plaintiffs are to pay the costs of the notice of motion filed on 18 December 2025. 6. No order is made as to the costs of the adjournment notice of motion filed on 29 April 2026.
Catchwords: CIVIL PROCEDURE — Adjournment application to allow gathering of evidence on stultification and allow all plaintiffs to acquire representation — overriding purpose — application refused as already sufficient evidence and plaintiffs’ interests in alignment
COSTS — Where directors of two companies purport to exercise their residual authority to bring claims against receivers — whether directors be required to indemnify the companies — whether directors required to give security in addition to the indemnity — principles to be applied — alternate claim for security for costs
Legislation Cited: Civil Procedure Act 2005 (NSW), s 56, 57, 58
Corporations Act 2001 (Cth), ss 180, 420A, 425, 1317H, 1317J, 1335
Uniform Civil Procedure Rules 2005 (NSW), r 42.21
Cases Cited: Aboughattas v Oak Capital Mortgage Fund Pty Ltd [2021] VSC 577
ANZ v Mio Amico Pty Ltd [2013] NSWSC 716
BHG Investment 100 Pty Ltd v Nanevski Developments Pty Ltd [2025] NSWSC 936
Pearsall v National Australia Bank Ltd [2024] NSWSC 1493
Tred Nominees Pty Ltd v Albarran [2021] VSC 494
Category: Procedural rulings
Parties: David Renaud Giezekamp (First Plaintiff)
Cary Mark Giezekamp (Second Plaintiff)
Callagher Estate Agents Pty Ltd (Third Plaintiff)
William A Kelly & Co Pty Ltd (Fourth Plaintiff)
Barry Kogan (First Defendant)
Katherine Sozou (Second Defendant)
Macquarie Bank Limited (Third Defendant)
Representation: Counsel:
D Giezekamp (First Plaintiff, self-represented)
M Castle (Second Plaintiff)
D Krochmalik (First, Second & Third Defendants)
Solicitors:
Monardo Legal (Second Plaintiff)
Maddocks (First, Second & Third Defendants)
File Number(s): 2025/341313
Publication restriction: No
These proceedings were commenced with the filing of a statement of claim on 5 September 2025. The first and second plaintiffs ran real estate agencies through the corporate structure provided by the third and fourth plaintiffs. In the course of their business the third defendant provided loan facilities to the third and fourth plaintiffs. The first and second plaintiffs are the directors of the third and fourth plaintiffs.
For reasons that will emerge below, I will refer to these proceedings as the Damages Case.
On 1 November 2023, the third defendant (a bank) appointed receivers (the first and second defendants) to the plaintiff companies.
The first and second plaintiffs allege that the receivers breached the duty of care they owed to the plaintiff companies arising from s 420A of the Corporations Act 2001 (Cth) (the Act). In addition, the first and second plaintiffs allege that the receivers breached their duties as “officers” of the plaintiff companies contrary to s 180 of the same Act.
As a consequence of the alleged breaches, the plaintiffs say they have suffered loss and damage.
The plaintiffs also allege that the receivers charged excessive fees which were deducted from the proceeds of the sale of the plaintiffs’ assets and thereby diminished the value of the assets.
By their defence, filed on 20 October 2025, the defendants deny all of the allegations of wrongdoing made against them.
One of the prayers for relief in the statement of claim is that the proceedings be joined with separate proceedings in which the defendants are the plaintiffs and the plaintiffs, plus two other persons, are the defendants. In those proceedings, in which an amended statement of claim was filed on 20 June 2025, the plaintiffs seek possession of certain properties owned by one or more of the defendants.
I will refer to the proceedings filed in June 2025 as the Possession Case. As I understood the procedural relationship of the two cases, they are being dealt with together but no specific orders as to their joint hearing have been made.
The matter before me is a notice of motion filed on 18 December 2025 by the defendants in the Damages Case. The orders sought in the motion are for the first and second plaintiffs to indemnify the third and fourth plaintiffs in respect of costs or a liability to pay costs and also for the first and second plaintiffs to provide security by the payment of money into court. The payment of money is said to be the only means of giving any value to the indemnities.
I note the first and second plaintiffs are brothers.
As an alternative the defendants seek orders that the first and second plaintiffs provide security for the costs of the defendants in the sum of $500,000, the orders to be made pursuant to s 1335 of the Act or r 42.21 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR).
At the commencement of the hearing of the motion an application was made for an adjournment. The application was made on behalf of the second plaintiff who had now acquired legal representation, and personally by the first plaintiff. As I understood Ms Castle, who appeared for the second plaintiff, the first, third and fourth plaintiffs were not yet represented, but may also retain the same solicitors as the second plaintiff.
The second plaintiff relied upon an affidavit of his solicitor, Mr Vince Monardo, dated 29 April 2026, in support of the adjournment. The affidavit does not so much establish any grounds for an adjournment as give a history of the plaintiffs and the business that they have operated for some time.
The defendants also read an affidavit in respect of the adjournment application. It is by Mr Andrew Ng and is dated 29 April 2026. Mr Ng is the defendants’ solicitor, and he sets out a procedural history of the matter highlighting the many failures on the part of the plaintiffs to adhere to court orders and timetables.
Ms Castle, in oral submissions, focused on the most relevant point in favour of an adjournment, which was to gather evidence to show that the ordering of security being paid into court by the first and second plaintiffs would stultify the proceedings. Ms Castle also highlighted the benefits that would come from all of the plaintiffs being legally represented.
The defendants, in opposing the adjournment application, pointed out that the change of solicitors was not a valid basis for an adjournment, that the adjournment application was at the last moment and that there would be a continuing prejudice to the defendants by the growing debt owed to the third defendant. In addition, general prejudice, and the exhortations of ss 56-58 of the Civil Procedure Act 2005 (NSW) were relied upon.
In relation to stultification, if it is relevant, there is already significant evidence to show that the first and second plaintiffs are in a parlous financial position if not impecunious.
Taking into account the existence of evidence about the first and second plaintiff’s financial position, combined with the procedural history of the matter and the principles set out by Davies J in ANZ v Mio Amico Pty L**td [2013] NSWSC 716 from [56] but in particular at [61]-[62], I refused the adjournment. I was also mindful that although Ms Castle appeared only for the second plaintiff, the first plaintiff’s interests aligned with those of the second plaintiff, and it is envisaged that he may retain the same solicitors.
I gave Ms Castle a short time to familiarise herself with the court book. She indicated that she would rely on those parts of the court book which included the affidavit of her client, dated 27 February 2025, and that of his previous solicitor, Mr Calabretta, dated 2 March 2026.
The motion of 18 December 2025 is supported by affidavits of Ms Danielle Funston dated 18 December 2025, and 22 April 2026. Ms Funston is a solicitor acting for the defendants. Ms Funston describes her experience as a litigation solicitor, gives a background to the proceedings, makes observations about the plaintiffs’ financial positions, and gives an estimate of the costs of the proceedings.
The second plaintiff, in his affidavit, gives his version of the background to the litigation including the attempts that were made to pay off the debt to the third defendant. He says that prior to the appointment of the receivers he and the first plaintiff were on the cusp of selling the businesses for $14 million. The businesses had the very valuable asset of rent rolls. The affidavit sets out the complaints made about the receivers, and he says he cannot reconcile the alleged continuing debt owed to the bank.
At para 32 of his affidavit the second plaintiff states:
“I am willing to provide an indemnity to the Third and Fourth Plaintiffs for adverse costs. I am informed and verily believe that David (the first plaintiff) is also willing to provide such an indemnity. I had always assumed that I would be liable for adverse costs.”
I asked the first plaintiff to confirm his brother’s belief. He did so, stating that he was also willing to provide the indemnity.
These facts seem clear:
The third and fourth plaintiffs have not paid monies owed to the bank within the time required for repayment. By May 2023, the amount owed exceeded $11 million.
As already noted, the receivers were appointed on 1 November 2023.
The assets of the third and fourth plaintiffs were sold by the receivers on 29 November 2024 for sums which did not satisfy the debt owed to the bank.
The extent of the remaining debt is in dispute. The bank says the debt is over $6 million. The second plaintiff seems to suggest, that at least as at May 2023, the amount owing was about $1.3 million.
On 24 September 2024, the receivers and the bank commenced the Possession Case against the guarantors under the facilities that had been provided to the third and fourth plaintiffs. As stated above, an amended statement of claim was filed on 20 June 2025.
The investigations carried out by Ms Funston suggest that other than mortgaged properties the first and second plaintiffs have little in the way of assets. I note that in a directions hearing in the Possession Case on 16 April 2026 the plaintiffs appeared in person. The second plaintiff told Faulkner J that:
“… Since our lawyers ceased to act I’ve been talking to other lawyers to try to get them on to take on the case and also as we don’t have a lot of money right at the moment we are trying to find people to do it either pro bono or on a discounted thing so that’s what we’re working on at the moment.”
“Your Honour, it feels like we’ve been in purgatory for the last three years, we can’t borrow money, we can’t, I’m literally trapped either which way I go so financially it’s been quite a problem. We ended up with Andrew bailing out a couple of weeks ago which for us wasn’t really - we were on a good trajectory at that point, we were making payments and then it was another 20 K. I don’t know where I’m going to find 20 K to keep pushing this further. I am concerned about my financial being, my financial - my mental headspace around this whole process.
… I can’t literally borrow any money, I couldn’t even buy a $20,000 car so I’m riding a motorbike now….”
The third and fourth plaintiffs have no assets because their former assets have been realised by the receivers and distributed to pay the debts of the companies. It must follow that even if it was permissible for the plaintiff companies to sue without the consent of the receivers, the companies do not themselves have the funds to prosecute their claims or meet any adverse costs orders.
My observation in subparagraph (8) of the previous paragraph concerning the ability of the plaintiff companies to take action at all assumes a capacity for the directors to exercise a residual power to bring the proceedings by the companies without the consent of the receivers. I do not think this power is controversial, but it may carry with it an obligation on the directors to provide an appropriate indemnity. In Tred Nominees Pty Ltd v Albarran [2021] VSC 494, Heytey AsJ said, at [28]:
“The Company contends that the indemnity application is novel. In fact, the call for such an indemnity appears to be conventional. The weight of authority clearly supports the proposition that where a director initiates and maintains a proceeding in the name of a company in receivership without the consent of the receivers, he/she is usually required to satisfactorily indemnify the company against any liability for costs. In Ernst & Young v Tynski, the Full Court of Federal Court explained the requirement in this way:
The requirement that directors who initiate and maintain proceedings in the name of the company to challenge the debenture under which a receiver was appointed must ordinarily provide the company with a satisfactory indemnity against costs, is a requirement that exists for the benefit of the debenture holder: Brooklands Motor Co Ltd (in rec) v Bridge Wholesale Acceptance Corp (Aust) Ltd [1993] MCLR 448 per Thomas J at 452; Newhart Developments Ltd v Co-operative Commercial Bank Ltd [1978] QB 814 per Shaw LJ, with whom Stephenson LJ agreed, at 819. If, as here, neither the debenture holder nor the receiver requests the provision of an indemnity against costs, it may be assumed that the debenture holder’s interests do not require the protection that would be afforded by an indemnity.” (Footnotes omitted)
A difficulty which immediately arises is the value of an indemnity imposed upon the directors if the directors themselves do not have assets capable of being realised to meet the costs of and payable by the companies.
In BHG Investment 100 Pty Ltd v Nanevski Developments Pty Ltd [2025] NSWSC 936, Faulkner J said at [83]-[84]:
“The Plaintiff’s application in this case requires a judgment to be made about whether the indemnity to be given by the Directors will be satisfactory. More precisely, the question is whether, on the facts of this case, the interests of the Plaintiff will be prejudiced by the assets of the Defendant being threatened or imperilled if no security is given for the Directors’ indemnity.
As a matter of fact I make that finding. The indemnity is worth no more than the Directors’ ability to pay if called upon. The estimate of the Plaintiff’s costs, which is not challenged, means an adverse costs order may be approximately $475,000. In the face of that figure the Directors concede that they do not have any assets with which to provide security for their indemnity ...”
As I have already noted, the first and second plaintiffs are willing to give an indemnity.
The question therefore is not so much whether the directors should give the indemnity but whether there should be a payment of security attached to the indemnity.
An important element arising from BHG is whether it is appropriate to make an order for security at all. At [81] Faulkner J said:
“If, absent an indemnity, the secured creditor may be prejudiced then the directors do not have the authority to cause the company to bring the proceedings. On those facts, the response of the Court is to dismiss (as in the Deangrove case) or stay (as in the Pearsall case) the proceedings. It is not for the Court to make some form of order to remediate the factual situation, such as an order that the directors give an indemnity.”
“The alternative approach is for the Court to order that the indemnity and security be provided and stay the proceedings until they are provided (as in Mainland Property Holdings Pty Ltd v Haplend Pty Ltd) which is in substance the same approach.”
The “alternative approach” is precisely the approach taken by the defendants here. I think it is the sensible way to proceed because it will identify the need for security and the amount of security which will give comfort to the defendants (via the third and fourth plaintiffs) and enable the individual plaintiffs to adopt a means of progressing their claims. I will however take a different approach to the stay which I think is consistent with the Damages Case being for the benefit of both the individuals and the companies.
I think this is a convenient point to say a little bit more about the Damages Case. A clear distinction is to be made between the case brought by the first and second plaintiffs as individuals, that is for their personal benefit, and the case brought by them through the two companies.
The orders sought under para 7 of the Relief Claimed in the statement of claim seems to be the only claim is available to the individual plaintiffs. The rest are claims which can only be brought by the corporate plaintiffs. The damages sought under s 1317H of the Act are subject to s 1317J which restricts the capacity to bring a case to a corporation.
Similarly, an order made under s 425 of the Act is only available to certain persons which do not include the first and second plaintiffs, either as individuals or as directors.
It should now be evident that in my view the fundamental question in the motion comes down to the value of the indemnity that the individual plaintiffs are able and prepared to give, and if that value is nil, whether the indemnities should be given a value by requiring the individual plaintiffs to pay a monetary sum, by way of security, into court.
My initial view in deciding upon the question of security was that it should be approached in the same manner as an application for security for costs, bringing in the same considerations that would apply in such an application. These are the type of considerations listed in UCPR r 42.21(1A).
Ms Castle, on behalf of the second plaintiff, emphasised that a primary consideration should be whether the necessity to provide security would stultify all of the claims brought by all of the plaintiffs.
It was argued that if the companies had no assets and the individuals had little funds available to them, then the proceedings would be stultified.
The defendants submitted that approaching the matter as if it were an application for security for costs would not be correct because the question was one of the value of the indemnities, and therefore to be distinguished from the normal approach to security for costs.
I think the correct position lies somewhere between the respective submissions of the parties. In BHG Faulkener J said at [83], quoted above, that the directors of a company will harm the interests of the company if they cannot provide a viable indemnity. However, the issue of whether or not to order a security attached to the indemnities must incorporate a discretion, in particular as to the quantum of the security. The discretion, in turn, must logically involve factors such as stultification, the merits of the case and whether there has been any delay in bringing the application.
Faulkner J, in BHG, at [82] might be read as saying there is no available discretion. His Honour points to the apparent conflict between Aboughattas v Oak Capital Mortgage Fund Pty Ltd [2021] VSC 577 at [36] and the decision of Ball J in Pearsall v National Australia Bank Ltd [2024] NSWSC 1493, at [22]. As I read these cases the absence of a discretion may only apply to the ordering of an indemnity, not whether or not to also order the providing of a security. In the present case the giving of the indemnity is conceded, distinguishing the facts from those cases where the issue concerns a discretion to order an indemnity.
There is no suggestion of any delay in the bringing of the motion. It is difficult for me to reach any conclusion on the merits of the Damages Case other than, as I have already mentioned, to note that the claim by the plaintiff companies relies on the directors having a residual discretion to bring the claim without the consent of the receivers and the limitations on whether or not the individual directors can bring the corporate claims at all. I have already referred to the effects of ss 425 and 1317J of the Act.
As noted above, the directors are almost certainly impecunious. It was suggested that there might be funds available to them following the sale of the three properties owned by the individual plaintiffs jointly with their respective wives. The valuations put forward by the respective sides of the three properties are not vastly different but if there is any spare money it is likely to go to the third defendant in any event.
I think my main concern is the stultification of the case because of the absence of funds to provide the security.
The first plaintiff said that he adopted the submissions made by Ms Castle, but he added a comprehensive background of the trading of the companies and his perception of the injustice that had been imposed upon the plaintiffs by the conduct of the third defendant. I gave the first plaintiff free rein in his address on the basis that I could take into account what he said in the exercise of the discretion to order payment of a security amount.
Ultimately, I think there must be some security paid. To not do so would be to diminish the accepted indemnities to being almost, if not completely, worthless. Stultification is a relevant factor but not so significant that it obviates the need for security where the potential for unsatisfied and large adverse costs orders are evident. I also think stultification can be taken into account in the quantum and terms of the security.
Turning to quantum, Ms Funston, who has significant litigation experience, has estimated the costs of the Damages Case, assuming it proceeds to full hearing over 5 days, at $649,112.75. The amount sought in the motion by way of security is $500,000 representing a discount on the estimate of 35%. The discount has only been applied to solicitor – client costs and not counsel’s fees.
Mr Calabretta sets out his experience as a solicitor which includes involvement in “complex and multi-party commercial litigation across superior courts both in New South Wales and nationally.” In his view the estimate given by Ms Funston is too high, and he says “the most that the Defendants could claim as security for costs is $301,621.54 (inclusive of GST).” Mr Calabretta annexes a schedule showing the differences between his estimate and that of Ms Funston.
I have already mentioned that the Damages Case and the Possession Case are ‘tracking’ together. The defendants confirmed to me that the five-day estimate upon which Ms Funston’s figures are based, is for a hearing of both cases being heard together. This motion however, is only in the Damages Case so that some reduction of the five days must occur. The defendants suggested that if the Damages Case was heard alone, it would still take some days, perhaps three or four. They conceded that some consequential reduction needed to be made to Ms Funston’s figures.
Another relevant and related factor is that, if the two cases are being heard together, presumably as a result of an order made for good reason, then it would be unfortunate to prevent this occurring, in particular because of the s 56 Civil Procedure Act considerations that are attached to a joint hearing. A joint hearing would no doubt obviate the need for substantial overlapping of evidence.
Taking account of the above considerations, I think that an indemnity with attached security should be ordered but not to the extent requested. In my view an appropriate figure is $175,000.00, which should be paid into Court within 60 days. Ms Castle requested that if I did make an order for security, that the amount should be payable in tranches. I think the discount that I have made to the requested security is significant to the extent that it provides an advantage to the individual plaintiffs. In addition, I have allowed an extended period of 60 days for payment into court.
The orders sought by the defendants include an immediate stay of the proceedings by the third and fourth plaintiffs and then a ‘guillotine order’ if the security is not paid. I am not prepared to make these orders. I think the matter should be able to progress over the next 60 days but that a stay should then come into force if the security has not been paid into Court.
It is not necessary for me to consider the alternative claim of security for costs as set out in the motion.
As to costs of the motion, I think the defendants have succeeded and costs should follow the event. I do not intend to make any costs order in respect of the adjournment motion.
I make the following orders:
Each of the First Plaintiff and Second Plaintiff, jointly and severally, are to indemnify each of the Third Plaintiff and Fourth Plaintiff against:
(a) any costs incurred by the Third Plaintiff and/or the Fourth Plaintiff in these proceedings; (b) any liability for costs of (including by way of an adverse costs order made against) the Third Plaintiff and Fourth Plaintiff to the Defendants (or any of them) in these proceedings.
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Giezekamp
Kogan