In the matter of Andrew Sallway and Duncan Clubb (provisional liquidators) as the joint and several provisional liquidators of Crown Group Holdings Pty Ltd (provisional liquidators apptd) and others named in the Schedule

Before: Black J

Decision: Further Amended Interlocutory Process dated 24 February 2026 dismissed with no order as to costs
Provisional Liquidators’ costs of and incidental to the application be paid from the assets of the First Plaintiff

Catchwords: JUDGMENTS AND ORDERS – variation of earlier orders – where relief sought would not address the concerns of the provisional liquidators – where earlier orders were made based on particular representations by the provisional liquidators – where there exist preferable ways of addressing the relevant issues – relief sought not granted
COSTS – costs of unsuccessful interlocutory application – where provisional liquidators acting in complex provisional liquidation and seeking to resolve issues

Legislation Cited: Insolvency Practice Schedule (Corporations) s 90-15

Category: Procedural rulings

Parties: Crown Group Holdings Pty Ltd (provisional liquidators appointed) (First Plaintiff) and others
CII Group Pty Ltd (First Defendant) and others

Representation: Counsel:
N Bailey (Applicant – Provisional Liquidators)
C Bova / A Chowdhury (Interested Parties)
Solicitors:
Johnson Winter Slattery (Applicant – Provisional Liquidators)
Madison Marcus (Interested Parties)

File Number(s): 2022/352887 (026)

JUDGMENT – ex tempore (Revised 9 March 2026)

Nature of the application

1. By Further Amended Interlocutory Process dated 24 February 2026, Messrs Sallway and Clubb, as provisional liquidators (“Provisional Liquidators”) of several entities within the Crown Group of companies, seek the following relief:

"To the extent necessary vary order 7 of the orders made on 24 May 2024 as varied by o 3(a) of the orders made on 20 November 2024 such that the power to pay any creditors whose debts are due and payable (set out in subparagraph 3(a)(a)(ii) of the 20 November 2024 orders) does not preclude payment to Sathio Investments Pty Ltd [(“SIPL”)] of amounts which Crown Group employees received from [SIPL] by way of Crown Group employee entitlements."

2. I have been informed that the earlier form of orders made on 24 May 2024 are not in evidence, but this may cause no particular inconvenience, where it appears that the orders made on 20 November 2024 substituted a new form of order 7 which conferred powers on the Provisional Liquidators, relevantly, a power in paragraph 3(a)(a)(ii) of the 20 November orders, for the purpose of maintaining and securing the assets of the Crown Group, the carrying on of the business of each of the Crown Group companies, and otherwise to the extent necessary, for the conduct of the provisional liquidation of the Crown Group to pay any creditors whose debts are due and payable.

3. An issue arises in respect of that order, so far as it is clear that the Court was informed, when that order was made, that it would be used in a limited way. Counsel who then appeared for the Provisional Liquidators advised Ball J at the time the order was made that:

"Mr Sallway has told your Honour he doesn't propose to pay the debts until, first, the process of reconciliation of those debts has occurred, and, secondly, the shareholders have agreed those debts can be paid. The reason that form of language has been adopted is to avoid the need to come back again once those steps occur."

4. Counsel then observed that:

"On one view we would need to have to come back, having regard to what we have said for this application in order to get them the [sic] remove the parenthetical that we have otherwise inserted into the order."

5. Although the language of that reservation is not entirely clear, it appears to assume that a payment would not be made to shareholders or, possibly, entities associated with shareholders, as the Provisional Liquidators appear to have understood the reservation, until a then contemplated reconciliation of shareholder debts had occurred, and there had been agreement by shareholders to payment of those debts. Here, as will emerge, the reconciliation of those debts has not yet been completed, so far as the Provisional Liquidators have completed their work in respect of that reconciliation but shareholders have not completed their responses, and there is no agreement as to the payment of the amounts claimed by SIPL which are in issue in this application.

Affidavit and other evidence

6. The parties to this application read voluminous evidence, to which I will briefly refer, although it seems to me that it should ultimately be determined on grounds that are more fundamental and largely do not depend upon the detail of that evidence. The Provisional Liquidators read several affidavits of Mr Sallway, one of the Provisional Liquidators and of an intervening party, Mr Sunito and Crown Cornerstone Pty Ltd (“CCPL”) (together, “Sunito Interests”), a company associated with him and also tendered other affidavits of Mr Sallway. Exhibits were also tendered in respect of Mr Sallway's affidavits. I will first refer to the affidavits, in date order.

7. The Sunito Interests relied on the affidavit dated 16 May 2024 of Mr Sallway, which outlined aspects of the factual background to the application. The Provisional Liquidators and the Sunito Interests both relied on a second affidavit dated 14 November 2024 of Mr Sallway. Mr Sallway there referred to the structure of the Crown Group, and noted that shares in Crown Group Holdings Pty Ltd were owned by corporations controlled and ultimately owned by Mr Sathio on the one hand and Mr Sunito on the other. He referred to the existence of a shareholders dispute between the parties, which adversely affected decision-making within the companies, and led to the appointment of the Provisional Liquidators. They have since been in office for a significant period, and have been engaged in realising assets of the Crown Group companies and discharging third party debts.

8. Mr Sallway also there referred to the process which was then understood would be adopted in respect of "shareholder debts" which would be addressed by the "shareholder loan reconciliation"; and he indicated that he did not propose to pay those debts until the shareholder loan reconciliation process was complete and both shareholders provided their written consent to the payment and, in the absence of a consent position, that he proposed to approach the Court for relief. He did not there identify how that relief would be sought, although obvious possibilities, to which I will return, would include an application for declaratory relief brought by the Provisional Liquidators, joining the shareholders or their companies as defendants, or inviting the respective shareholders to commence proceedings to assert their rights. The reference, in that affidavit, to approaching the Court for relief was not directly reflected in the observations made by Counsel before Ball J, to which I have referred above, although it was plainly a sensible qualification.

9. The Provisional Liquidators in turn read an affidavit of Mr Sallway dated 1 September 2025, which again refers to the circumstances of his appointment and addresses the position in respect of what he describes as the "Wage Payments Loan", which was an amount advanced by SIPL which was not itself a shareholder in the Crown Group of companies, in respect of wages payable to particular employees. There is a dispute between Mr Sathio and Mr Sunito, to which Mr Sallway refers, as to the circumstances of that advance, and the extent to which it benefited the Crown Group on the one hand or companies associated with Mr Sathio, with which those employees either had or would obtain employment on the other. Mr Sallway there recognises that Mr Sunito did not authorise payment of relevant wages, superannuation, termination payments and other entitlements to the relevant employees. In those circumstances, it appears implicit that it would be difficult to establish that SIPL made a loan to the Crown Group companies in respect of the relevant employees, notwithstanding any payment made by SIPL in respect of those employees, by reason of the lack of corporate authority for the Crown Group companies to enter into any such loan arrangement.

10. Ms Bailey, who appears for the Provisional Liquidators, submits that the Crown Group companies would have paid the employees had SIPL not done so. That may be the case, but it does not much advance matters, where it amounts to no more than a proposition that the facts could be different from those which presently exist.

11. Mr Sallway there expresses the view that it is reasonable and appropriate to repay the so-called Wage Payments Loan, for several reasons, including that the payments which comprise that amount were in fact paid by SIPL to or for employees of the employing entities; those employees provided services to Crown Group, and Crown Group had the benefit of those services; and, because Crown Group obtained the benefit of the employee services, Crown Group would have been liable to pay those costs on a quantum meruit basis, although the employment of the employees may have been a matter of dispute between Mr Sathio and Mr Sunito at the relevant time. He also expresses the view that the reconciliation of entries on the shareholder loan ledgers would not impact the Wage Payments Loan because it was advanced after a specified date, and addresses the result of his calculations as to the relevant amounts, although he also recognises that the Wage Payments Loan is undocumented.

12. Three observations should be made as to that evidence. The first is that, while Mr Sallway has formed the view that it is "reasonable and appropriate" to pay the Wage Payments Loan, the question that is in issue, so far as Mr Sunito is concerned, is not whether it is reasonable and appropriate to pay those amounts, but whether the Crown Group companies are obliged to do so. Second, the characterisation of the amounts as a “loan” may be ambitious, for the reasons noted above, and particularly given the absence of corporate authority for any Crown Group company to enter into a loan arrangement with SIPL. Third, it is by no means apparent that Mr Sallway has engaged with the complexities of restitutionary principles, particularly so far as they affect payments made by a volunteer, in making the assessment that Crown Group would have been liable to repay the relevant amounts on a quantum meruit basis. Mr Sallway in turn addresses, at some length, the steps which he has taken in assessing the amount of the Wage Payments Loan, which is largely not necessary to address where the relief he now seeks is not directed to the detail of that amount.

13. By a further affidavit dated 3 November 2025, Mr Sallway addressed correspondence with the parties in respect of relevant matters, which has emphasised the issues in dispute, and further investigations which he has undertaken in respect of the amounts which are the subject of the Wage Payments Loan. As I noted above, as events have developed, the question in this application does not turn on the amount of that loan but, to the extent that issues are raised by Mr Sunito, on whether there is in fact an obligation of the Crown Group companies to pay any such amount to SIPL on the basis that it is a loan or otherwise.

14. By an affidavit dated 5 December 2025, Mr Sallway recognises evidence led by Mr Sunito as to the dispute between Mr Sunito and Mr Sathio in respect of dealings with the particular employees, and refers to the position in respect of the reconciliation of the shareholder loan ledgers and the question of delays in performing the shareholder loan reconciliation.

15. By another affidavit dated 9 February 2026, Mr Sallway leads evidence to seek to establish that the Crown Group companies will remain solvent after the amounts that he seeks to pay out are paid. Here, however, the issue is less as to whether the disputed payment will prejudice the companies' solvency and more as to whether it is properly made, in circumstances that the legal basis for the payment is disputed; no agreement has been reached between the shareholders as to that matter; and that dispute has not been determined by any Court.

16. Mr Sunito in turn reads his two affidavits dated 21 November 2025 and 3 March 2026. His first affidavit dated 21 November 2025 refers to the breakdown in the relationship between Mr Sathio and Mr Sunito and the dispute as to payment of the relevant employees. Mr Sunito denies that he was aware that SIPL was paying funds to employees or former employees of the Crown Group companies, and his evidence is that he never approved, voted on, or was consulted in respect of any "loan" being offered by SIPL to the Crown Group companies in that respect. By his second affidavit dated 3 March 2026, Mr Sunito responds to evidence, which it will ultimately not be necessary to address, which sought to suggest that he, or his companies, have contributed to a delay in the wider performance of the shareholder loan reconciliation.

Submissions and determination

17. As I noted above, Ms Bailey appears for the Provisional Liquidators and submits that the relief that is sought should be granted, because there is an ambiguity, or possible ambiguity, as between the wording of the orders made by Ball J and the representations that had been made to the Court at the time the orders were made. She submits that, on a plain reading of the orders, an element of uncertainty exists, and the relief sought would cure that uncertainty in respect of the so-called Wage Payments Loan. As will emerge below, I do not accept either aspect of that submission. Ms Bailey also identifies a question, which plainly arises, whether the relief sought in the Provisional Liquidators’ Further Amended Interlocutory Process should be granted at this point, and I will conclude below that the answer to that question is no, because there are other and plainly better means of addressing the relevant issues.

18. Ms Bailey in turn submits that the relief should be granted at this point, because the Crown Group companies are solvent and there is an expected surplus of at least $66 million on the completion of the provisional liquidation; there is no reason for the Provisional Liquidators to hold onto funds which they consider should be paid to creditors; and there is no prejudice to other creditors in payment being made now. The difficulty with that proposition is that it assumes that SIPL is entitled to be paid the relevant amounts, whereas that entitlement is disputed by Mr Sunito, and the issues which go to that dispute, in particular the question as to the authority to enter into a loan arrangement and the availability of a restitutionary claim, are not resolved by the Provisional Liquidator's evidence as to his reasoning process. The fact that the Crown Group companies are solvent is no answer to a complaint, articulated by Mr Sunito, that a payment of this character would pay amounts to SIPL that are not properly due to it.

19. Ms Bailey also refers to the evidence of Mr Sallway that, even if the Wage Payments Loan payment is not made, he still does not anticipate any shareholder distribution being made to Mr Sunito’s companies, and that no loss or damage would be suffered by those companies resulting from payment of the Wage Payments Loan. That proposition is somewhat qualified by the acknowledgement that a non-Sathio shareholder entity, CII Group Pty Ltd (in liq) (“CII”) could be impacted by that payment, which neither consents to nor opposes the application, but has, as I will note below, relied upon Mr Sunito’s opposition to the application.

20. Ms Bailey also refers to the fact that SIPL has been demanding payment of the Wage Payments Loan, and submits that the Provisional Liquidators consider that that payment should be made. I will return to the significance of that demand and one obvious way in which it could be addressed below. Ms Bailey in turns submits that:

"Were [SIPL] to commence proceedings against Crown to seek payment of the Wage Payments Loan (noting Mr Sallway's comments that any requisite application for leave would likely be successful in circumstances where Crown is solvent...) all that would be achieved would be the incurring of costs, the diversion of resources including resources otherwise dedicated to the progress of the provisional liquidation, and, quite foreseeably, the bringing of an application akin to the [Further Amended Interlocutory Process] to obviate the costs and time expenditure of a protracted proceeding."

21. I do not accept that submission. First, the commencement of proceedings by SIPL would achieve the determination of the contested question as to whether it is entitled to payment. Second, the determination of that question would likely not, if properly addressed by the Provisional Liquidators, lead to the incurring of wasted cost by the Provisional Liquidators. Plainly, the Provisional Liquidators could give notice to the Sunito Interests that they do not propose to defend the application and that, if the Sunito Interests wished to do so, they should seek leave to do so in the Court's inherent jurisdiction on the company's behalf. There is little doubt that such leave would be granted if sought, and the issues in dispute could then be resolved between the parties that are in contest about them, without cost to the provisional liquidation. I return to that matter below.

22. Ms Bailey in turn refers to the delays in the shareholder loan reconciliation and to concerns as to the level of mutual engagement by the relevant parties. That is an unfortunate development, to say the least, particularly if it raises the risk of further disputes arising between the parties in respect of the shareholder loan reconciliation which may need to be resolved by the Court in the future. Here, however, delay has to be approached in the context of a provisional liquidation that is already long-running and, given other orders made by the Court in other applications, will continue for at least another 12 months, unless the Provisional Liquidators are in the meantime appointed as liquidators of the Crown Group companies and a liquidation takes place in a way that will realise the company's assets and resolve its creditors' and contributories' claims. While there may be no immediate prospect that the shareholder loan reconciliation will conclude, there is also no apparent prospect that the provisional liquidation, or any liquidation, will conclude in the immediate future so as to give rise to any immediate urgency in the resolution of that issue.

23. The Sunito Interests in turn made written submissions in opposition to the application. They submitted, inter alia, that there had been no material change in circumstances since the orders were made by Ball J. I did not call upon Mr Bova, who appears for the Sunito Interests to make oral submissions and it will not be necessary to address the question of change of circumstances given the conclusions that I have reached on other grounds. The Sunito Interests also submitted that the Court should not exercise its discretion to make the orders sought, and I will conclude below that the order sought should not be made for several reasons.

24. As I noted above, CII did not appear, and neither consented to nor objected to the relief that is sought. CII, by its liquidators, accepted that there was no immediate likelihood that the shareholder loan reconciliation would be completed, so far as it was involved in it, by reason of difficulties in obtaining documents. The liquidators of CII also noted that they had been informed by solicitors for Mr Sunito that their requests for documents from him were being addressed. Nonetheless, the position of CII was not that it supported the relief being sought by the Provisional Liquidators, and CII emphasised that it took a neutral position, on the basis that the Sunito Interests were the natural contradictors to the Provisional Liquidators' application.

Determination

25. I have concluded that the orders sought by the Provisional Liquidators should not be made, for several reasons, which are not exhaustive and depend upon matters of principle, rather than upon the detail of the affidavit evidence led by the parties.

26. First, it seems to me that the orders sought would not address the concerns which the Provisional Liquidators have identified and would have no utility. I have referred above to the form of order 7 previously made by Ball J, as further varied on 20 November 2024, which confers, on its face, an unqualified power on the Provisional Liquidators to pay any creditors whose debts are due and payable. There is no utility in varying that order to now state that the form of the order does not preclude payment to SIPL of amounts which Crown Group employees received from SIPL by way of Crown Group employee entitlements. It is plain enough that the form of order does not preclude that payment.

27. Second, the Provisional Liquidators’ difficulty arises, not from the form of order, but from the representations made by the Provisional Liquidators (by their Counsel) to the Court as the basis upon which that power should be conferred on them, by which they acknowledged that it would be exercised only in a particular way. The variation of the order, to confirm that it says what it says, would not displace those representations, and would not authorise the Provisional Liquidators to depart from those representations in a way that would appear, on its face, to be potentially inconsistent with the proper conduct of the provisional liquidation. Ms Bailey rightly noted that the order could be varied, to seek some different relief, if it might otherwise be made in order to address the issues raised by the Provisional Liquidators. There are several reasons why that is not an available course in these circumstances.

28. The first is that it is not apparent that, where the Court has made orders on a particular basis, based on a representation made by the Provisional Liquidators that they will be used in a particular way, the Court now has power to, in effect, release the Provisional Liquidators from the effect of that representation. That raises questions akin to those which might arise in a claim for conventional estoppel which may arise where parties proceed on an agreed basis, reflected in the making of the orders on that basis. Second, for the reasons noted below, it is not apparent to me that the orders should be made, where there are, in my view, preferable ways in which to address the issue raised by the Provisional Liquidators.

29. The second basis on which the order should not be made is a matter of evidence. The evidence which the parties have led is obscure, in the extreme, as to the current position in respect of the Commercial List Proceedings in which the orders were made by Ball J. It is not apparent whether the appointment of the Provisional Liquidators was intended to displace the determination of contested issues in the Commercial List Proceedings or whether those issues were intended to be determined in the Commercial List Proceedings, such that the Provisional Liquidators would be bound by their determination. There is no evidence before me as to the present status of the Commercial List Proceedings, or whether they have been placed on hold by the parties while the provisional liquidation continued, possibly in the hope that the provisional liquidation would resolve some of the disputed issues. That gap in the evidence is fundamental because it is not apparent why I should now take steps which are intended to empower the Provisional Liquidators to make a distribution on a particular basis (putting aside the fact that I have concluded that they would be ineffective to achieve that result), if that issue is contested or contestable in the Commercial List Proceedings, so that the basis on which the Provisional Liquidators seek to act may ultimately be falsified by a determination of the Court. To put that proposition more simply, it is not apparent why I should authorise the Provisional Liquidators to act on this particular matter (even if the orders sought would have been effective to do so) if a contrary result remains open in the Commercial List Proceedings. There is no evidentiary basis to determine whether that is the case or not.

30. Third, and also fundamentally, there seems to me to be preferable ways of addressing the relevant issues, all of which would more readily resolve them to the advantage of the provisional liquidation, than the grant of the order sought by the Provisional Liquidators. The first, which I have noted above, is for the Provisional Liquidators to simply draw SIPL’s attention to the fact that its claim is disputed by the Sunito Interests; invite SIPL to commence proceedings, or to amend the Commercial List Proceedings, to establish its claim; and submit to the extent necessary, if so advised, to the claim then brought by SIPL, leaving it open for the Sunito Interests to seek leave to contest the claim, on the Company’s behalf. That, as I noted above, would bring about a binding determination of the dispute in a manner that does not expose the Provisional Liquidators, creditors, or contributories to the costs of that dispute, which would be borne by the relevant parties.

31. Second, if the Provisional Liquidators take the view that they can in fact be satisfied that a loan exists, notwithstanding that it is not apparent that the company had authority to enter into such loan or that SIPL has a proper restitutionary claim and notwithstanding any issue which arises as to whether any payment made by it may have been made as a volunteer, then they can seek a declaration to that effect. The orthodox approach, in a complex question involving significant factual and legal disputes, would be for an insolvency practitioner to seek a declaration as to the relevant position, although I appreciate that s 90-15 of the Insolvency Practice Schedule (Corporations) (“IPSC”) has allowed a wider application in recent years. I bear in mind, however, that that approach may be more costly to the Crown Group companies and less advantageous to their creditors and contributories than the Provisional Liquidators simply submitting to any orders made in a claim by SIPL in that respect, leaving it to the Sunito Parties to contest that claim.

32. Third, it would be open to the Provisional Liquidators to allow the shareholder loan reconciliation to continue, as originally contemplated before Ball J, although I recognise that that course may be less attractive if it has become apparent that it will not complete, because of difficulties in the parties' participation, or because, at least in respect of this matter, of their inability to reach agreement as to fundamental matters.

33. Finally, it seems to me that an alternative which is plainly available, where this provisional liquidation which has now been in place for some two years and is likely to continue for a third, is to recognise that, in truth, it has less in common with a provisional liquidation than with a liquidation, and to apply for appointment of the Provisional Liquidators as liquidators of the relevant companies to bring in assets and distribute amounts due to creditors and contributories. In that case, the ordinary provisions that are applicable in a liquidation in respect of the adjudication of proof of debts, appeals from proof of debts, and the distribution of the surplus with the approval of the Court would apply. That also seems to me to be preferable to the process by which the Provisional Liquidators proceeded, on the basis of an assessment which has not resolved the fundamental issues in dispute between the shareholders in respect of the Wage Payments Loan.

34. For these reasons, I will not grant the relief sought by the Provisional Liquidators.

Costs of the application

35. Notwithstanding that I have reached that view, my preliminary view is that this is a matter of extreme complexity, where the Provisional Liquidators have found themselves in the unfortunate position of having to address disputes between well-informed and well-represented shareholders; and this application was brought in a proper and reasonable attempt to seek to resolve those disputes, at least in respect of this issue, although it has been unsuccessful in doing so. For that reason, I would still likely make an order that the Provisional Liquidators' costs of and incidental to this application be paid from the assets of Crown Group Holdings Pty Ltd (provisional liquidators appointed), as was sought by the Provisional Liquidators.

36. Mr Bova submits that the Sunito Interests should have their costs of the application and that the companies should not bear the Provisional Liquidators' costs of the application. I accept that Mr Bova put several matters in respect of that proposition which warrant consideration. The first was that, as he submitted, the orders that were here sought could not have been made, in their original form, under IPSC s 90-15. I likely accept that proposition, although I recognise that the boundaries between applications under IPSC s 90-15 and declaratory relief are less absolute than was the case in respect of liquidators' applications for directions under the former provisions.

37. Mr Bova also submits that the Sunito Interests had pointed to the difficulty in the Provisional Liquidators obtaining relief from the assurances that had been given to the Court, which were the basis on which previous orders had been made. He submits that, as I noted above, the order now sought by the Provisional Liquidators would not have addressed or cured the difficulties which arose from those assurances. I have accepted that proposition above. Mr Bova also submits, rightly, that there was a substantial amount of evidence led in this application and that detailed submissions have been made, and submits that the Sunito Interests have been put to costs in the application. I broadly also accept that proposition.

38. Having said that, I do not accept that those matters lead to a different consequence from that which I had indicated as my preliminary view. The Provisional Liquidators are here acting in a complex provisional liquidation, and the application was brought in order to resolve issues in the application. The evidence that has been led is likely useful to both shareholders in respect of any further agitation of the dispute, at least so far as it crystallises relevant issues of quantification, and provides a starting point from which the relevant shareholders may advance their own positions. The Provisional Liquidators’ application was brought, as I noted above, in order to seek to resolve the issue, although it has not been successful in doing so; and the submissions have identified the matters which may ultimately need to be resolved by some other method.

39. In these circumstances, I am not satisfied that the Provisional Liquidators should be left to bear their own costs of the application. I am also not satisfied that, in a contentious setting and where both shareholders are acting to protect their own interests and the Provisional Liquidators are seeking to protect the Crown Group companies’ interest in the context of the differences between their shareholders, an order for costs should be made in favour of the Sunito Interests in respect of the application. They have acted to protect their own interests in the application; they have been successful in doing so; but it does not follow that the companies, still less the Provisional Liquidators personally, should pay the Sunito Interests’ costs of protecting their position in that respect.

Orders

40. For these reasons, I make the following orders:

41. The Further Amended Interlocutory Process dated 24 February 2026 be dismissed.

42. Subject to Order 3, there be no order as to the costs of and incidental to the Further Amended Interlocutory Process dated 24 February 2026, or earlier iterations of that document.

43. The Provisional Liquidators’ costs of and incidental to this application be paid from the assets of Crown Group Holdings Pty Ltd (provisional liquidators appointed).

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