In the matter of Crestmount Funds Management

Jurisdiction: Equity - Corporations List

Before: Brereton J

Decision: The statutory demand is set aside

Catchwords: CORPORATIONS – application to set aside creditor’s statutory demand under s 459G of the Corporations Act 2001 (Cth) – whether there is a genuine dispute about the existence of the debt – where there is uncertainty as to the legal relationship underpinning the debt – statutory demand set aside

Legislation Cited: Corporations Act 2001 (Cth)

Cases Cited: In the matter of B & B Legal Pty Ltd trading as Borthwick and Butler Solicitors [2025] NSWSC 587
Ligon 158 Pty Ltd v Huber [2016] NSWCA 330; 117 ACSR 495
Realestate.com.au Pty Ltd v Hardingham; RP Data Pty Limited v Hardingham (2022) 227 CLR 115; [2022] HCA 39
Re Wollongong Coal Ltd [2015] NSWSC 1680; 110 ACSR 134

Texts Cited: N.A.

Category: Principal judgment

Parties: Crestmount Funds Management Pty Ltd (plaintiff)
Nigel Todd (defendant)

Representation: Counsel:
M R Davis (plaintiff)
S Scott (defendant)
Solicitors:
Birchgrove Legal (plaintiff)
Kardos Scanlan (defendant)

File Number(s): 2025/449451

Publication restriction: N.A.

JUDGMENT

1. The defendant, Mr Nigel Todd, served a statutory demand dated 30 October 2025 on the plaintiff, Crestmount Funds Management Pty Ltd (Crestmount). The statutory demand asserted that Crestmount owes Mr Todd $500,000, stated to be “the debt arising from funds transferred to [Crestmount] that have not been repaid”. By an originating process filed on 20 November 2025, Crestmount seeks an order under s 459H(1)(a) of the Corporations Act 2001 (Cth) that the statutory demand be set aside.

2. Crestmount contends that there is a “genuine dispute” about the existence of the debt to which the demand relates, within the meaning of s 459H(1)(a). If I am satisfied that there is a genuine dispute, I must set aside the statutory demand. If I am not so satisfied, the statutory demand will stand, there being no other reason advanced by Crestmount to set it aside.

3. For the reasons outlined below, I am satisfied there is a genuine dispute. The statutory demand will be set aside.

The relevant principles

4. The applicable principles in determining whether a genuine dispute exists within the meaning of s 459H(1)(a) are well-established and were not in dispute.

5. Both parties referred to the decision of Barrett AJA (McColl and Meagher JJA agreeing) in Ligon 158 Pty Ltd v Huber [2016] NSWCA 330; 117 ACSR 495 at [8], which endorsed the statement of principles outlined by Black J in Re Wollongong Coal Ltd [2015] NSWSC 1680; 110 ACSR 134 at [9]-[22]. Barrett AJA summarised the principles as follows (at [9]):

(1) While there must be evidence showing a serious question to be tried or an issue deserving of a hearing, that evidence cannot and need not conclusively prove the claim or otherwise be incontrovertible or substantially non-contestable.

(2) The short time allowed by s 459G(2) for the preparation of the affidavit supporting the claim for an order setting aside the demand militates against the presentation of the fullest and best evidence in some cases.

(3) In determining whether there is evidence of a genuine dispute regarding the debt, the court is generally not concerned to engage in an enquiry as to the credit of the deponent of the supporting affidavit. At the same time, it is not required to accept uncritically every statement in the affidavit that is inconsistent with undisputed contemporary documents, is inherently improbable, does not have sufficient prima facie plausibility to merit further investigation or is an assertion of facts unsupported by evidence.

(4) Inconsistent contemporaneous documents are not necessarily sufficient to defeat the company’s challenge even though they might pose difficulties for the ultimate proof of the case that it would advance if the dispute were litigated.

6. There are many other cases that address the proper approach to be taken to determine whether there is a genuine dispute, some of which were referred to by the parties. While I am conscious of the authorities, none of them displace the language of the Corporations Act and the seemingly simple task of determining whether the dispute is a genuine one or not. That requires precise identification of the alleged debt that is the subject of the demand and a consideration of whether the matters raised in defence to that alleged debt mean that the Court can be satisfied that there is a genuine dispute as to its existence.

The background to the alleged debt and the dispute

7. There is no dispute that Mr Todd deposited $500,000 into a bank account controlled by Crestmount on about 4 October 2022. There is no dispute that Crestmount has not repaid that amount to Mr Todd. Crestmount contends that it does not have to do so.

8. In order to understand the alleged debt, and then to consider whether it is genuinely disputed, it is necessary to consider some relevant background.

9. Since 6 July 2016, Crestmount has served as the trustee of the Cresco-Piety High Yield Fund (HY Fund). Mr Danny Masri is the general manager of Crestmount and manages its day-to-day operations. The fund is a unit trust, established for the purpose of funding various real estate developments. The HY Fund operates as a mezzanine lender, providing finance to equity partners in the relevant project to help fund their investments in those developments.

10. The HY Fund has provided finance to an entity known as Telbest Pty Ltd as trustee for the Tino Carusi Family Trust (Telbest) to invest in various projects. Mr Tino Carusi controls Telbest. Crestmount maintained a ledger for each debtor to the HY Fund, including a ledger for Telbest. The balance of the Telbest ledger as at 30 June 2019 was a debt of $4,136,544.03. From time to time, Mr Carusi would transfer, or direct the transfer of, money into and out of the HY Fund and those funds would be recorded against the Telbest ledger.

11. Mr Todd’s evidence is that he has known Mr Carusi and Mr Masri for over 20 years. Mr Carusi introduced Mr Todd to Mr Masri. Mr Carusi and Mr Masri have had a longstanding business relationship, but have now fallen out. Mr Todd’s evidence is that Mr Carusi has presented investment opportunities to him from time to time.

12. In 2019, Mr Todd invested in a development project in St Leonards being conducted by Crestmount and Telbest. The investment was managed by Crestmount through the HY Fund. In early September 2022, at around the time that Crestmount was returning to Mr Todd the funds that he had invested in the St Leonards project, Mr Carusi encouraged Mr Todd to invest in a new project called “Enliven Housing”, which was a plan to establish disability accommodation.

13. On 17 September 2022, Mr Masri received an email from Mr Carusi noting that Mr Todd was “in for 500k”. Mr Todd contends that he informed Mr Carusi that his contribution would be sourced from his investment return from the St Leonard’s project.

14. On 19 September 2022, Mr Carusi sent Mr Todd a text message asking him whether he was “good to go another 12 months” because, if so, he was “very keen to share the final IM” with Mr Todd when he visited in October.

15. On 20 September 2022, Mr Carusi sent an email to Mr Todd, copied to Mr Masri, stating: “Here are the account details for HYF. Will get the final IM across to you early October 2022”. The email included a screenshot of account details for an account associated with the HY Fund.

16. On 27 September 2022, Mr Carusi sent a text message to Mr Todd stating: “[Mr Masri] is bad at updating me so let me know when you the transfer otherwise I probably won’t know for weeks…”

17. On 4 October 2022, Mr Todd deposited the funds into the HY Fund bank account, as per Mr Carusi’s email of 20 September 2022. He communicated that fact to Mr Carusi via text message.

18. As at 4 October 2022, the proposed Enliven SDA Fund (being a fund to assist in the financing of the Enliven Housing project) had not been established and the $500,000 could not be applied to that fund. Crestmount’s case is that Mr Masri (and hence Crestmount) understood the $500,000 was being transferred by Mr Todd for Mr Carusi’s benefit, pursuant to an agreement between Mr Todd and Mr Carusi, and as such would be dealt with at Mr Carusi’s direction. Crestmount’s case is that based on this understanding, it allocated the $500,000 received from Mr Todd to the Telbest ledger. That is, Crestmount proceeded on the basis that the $500,000 was deposited by Mr Todd for the benefit of Telbest and it was for Mr Carusi or Telbest (not Mr Todd) to give directions about how that money was to be dispersed.

19. On 16 November 2022, Mr Carusi provided an information memorandum to Mr Todd by way of email and stated: “Here is… where I plan to place your last investment from St Leonard’s into…” The information memorandum stated that: “Distribution will be paid upon maturity of the investment in line with maturity of the mezzanine loan being, December 2024”. Mr Todd’s evidence was that his understanding was that his $500,000 payment had been invested in the Enliven SDA Fund.

20. On 9 March 2023, Crestmount received an application from Mr Todd for units in the Enliven SDA Fund, for an investment of $300,000. On the same day, Mr Todd transferred $300,000 to Crestmount for the purpose of that investment. On about 16 March 2023, a unitholder’s certificate was issued to Mr Todd, reflecting the investment of $300,000. There is no evidence that the earlier $500,000 was the subject of any communication at this time. The $300,000 was separate from the $500,000.

21. Crestmount’s case is that between May and September 2023, Mr Carusi requested Crestmount to make payments on his behalf, which resulted in the $500,000 deposited by Mr Todd, which was allocated to the Telbest ledger, being drawn down in its entirety. There is no suggestion that Crestmount sought or took instructions from Mr Todd about these payments.

22. In about September 2024, the relationship between Mr Masri and Mr Carusi soured. There has been litigation between Crestmount and Telbest.

23. On 8 March 2025, Mr Masri informed the Enliven SDA Fund investors that the convertible note had matured and that he was preparing distribution of the investment returns and capital. On the following day, Mr Todd sent an email to Mr Masri attaching a withdrawal form and a request to close his Enliven SDA Fund investment.

24. On 11 March 2025, Mr Todd’s $300,000 investment in the Enliven SDA Fund was returned, together with “profit” of $72,395. On the same day, Mr Carusi emailed Mr Masri and noted that Mr Todd was “expecting the return of $500K which was transferred on 4 October 2022”. He asked Mr Masri to advise on that transaction.

25. Crestmount has not paid the $500,000 to Mr Todd. On 21 October 2025, Mr Todd (through his solicitors), demanded repayment of the $500,000. As I have noted, the statutory demand was issued on 30 October 2025.

The debt

26. It is fair to say, no doubt influenced by the advantage of hindsight, that the circumstances surrounding the payment of $500,000 by Mr Todd to Crestmount were casual. There is no evidence of any formal receipt or any contemporaneous document recording the basis upon which the funds were deposited. Mr Todd’s case is that he thought he had invested the $500,000 (with the other $300,000) in the Enliven SDA Fund, but he did not complete an application for the investment of the $500,000 in that fund and no unitholder’s certificate was issued in respect of that amount.

27. During the course of oral argument, counsel for Mr Todd characterised the legal basis for the debt in various ways.

28. It was first suggested that the basis for the claim for the $500,000 was for money had and received. The underlying legal basis for such a claim, which is not a contractual claim, was not developed. There are circumstances where the deposit of money has been said to give rise to an action for money had and received. An example is where money is held by a stakeholder: see In the matter of B & B Legal Pty Ltd t**rading as Borthwick and Butler Solicitors [2025] NSWSC 587 at [49]. It is not clear how the claim in restitution arises in this case. There is no suggestion, for example, that the money was deposited by Mr Todd by mistake or under duress.

29. Counsel for Mr Todd also submitted that the debt had a contractual foundation. It was submitted that there was a tripartite agreement between Mr Todd, Mr Masri and Mr Carusi that was partly oral and partly written. The reference to Mr Masri and Mr Carusi may have been shorthand for Crestmount and Telbest. I understand that the contract that is propounded involves the $500,000 being invested in the Enliven SDA Fund, and thus being held under the same terms that governed other investments in that fund. On that basis, Mr Todd would be entitled to the return of the $500,000, plus the “profit” to which investments in the fund were entitled.

30. It is possible to conceive other legal relationships that could govern the respective rights between Mr Todd and Crestmount. One thing that seems very clear is that the payment was not a gift.

31. While the precise characterisation of the legal relationship and circumstances giving rise to the alleged debt have not been clearly articulated, nor has Crestmount’s explanation as to why it does not have to pay Mr Todd at least $500,000. There was little explanation from Crestmount as to why it could legitimately take instructions from Mr Carusi, to the exclusion of Mr Todd, in respect of the $500,000 deposited into the HY Fund bank account.

32. However, given that Mr Todd asserts that there was a contract between himself, Mr Masri and Mr Carusi, it gives rise to the possibility that the contractual arrangements permitted and contemplated that Mr Carusi could give directions to Mr Masri (or Crestmount) about the use of the $500,000. Mr Masri acted on the basis that Mr Carusi controlled the $500,000. Mr Masri knew that it was Mr Carusi who conveyed the bank account details to Mr Todd. The communication of 16 November 2022 from Mr Carusi to Mr Todd, in which Mr Carusi states “Here is… where I plan to place your last investment” is consistent with Mr Carusi having authority to deal with the $500,000. Given the informal way in which Mr Todd, Mr Masri and Mr Carusi conducted themselves in respect of the $500,000, the identification of all of the terms of any contract (including implied terms), having regard to the conduct of the parties and what may be inferred from that conduct, will not necessarily be a straightforward task: see Realestate.com.au Pty Ltd v Hardingham*;* RP Data Pty Limited v Hardingham (2022) 227 CLR 115; [2022] HCA 39 at [51] per Gordon J.

33. If Crestmount legitimately paid away the $500,000 that was referable to the deposit from Mr Todd on instructions from Mr Carusi, Crestmount would have a defence. The defence does not find a great deal of support in the evidence but I am not able to conclude that it is frivolous. The true legal relationship between the relevant parties cannot be deciphered on the evidence. There is a prospect that Crestmount did act legitimately in dispersing the $500,000 for the benefit of Telbest, on the basis that the contractual relations gave Mr Carusi (or Telbest) the right to give instructions about how the $500,000 was to be dispersed. That prospect cannot be considered to be so low that the defence lacks bona fides. I am satisfied that the dispute is genuine.

34. If Mr Todd wishes to pursue Crestmount (or Telbest or Mr Carusi) for the $500,000, he will need to do that by commencing legal proceedings to recover that amount. Any debt in respect of the $500,000 is not amenable to a statutory demand.

Conclusion

35. The statutory demand must be set aside. I am not conscious of any reason why costs should not follow the event.

Orders

36. I make the following orders:

37. The statutory demand dated 30 October 2025 issued by the defendant on the plaintiff is set aside.

38. The defendant is to pay the plaintiff’s costs.

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