Karis v Digital CC Management Pty Ltd

BANKS-SMITH J: 1 On 8 April 2022 the applicant, Alexander Karis, commenced proceedings in this court against two companies incorporated in Australia, Digital CC Management Pty Ltd (the first respondent) and Digital CC Holdings Pty Ltd (the second respondent), and Mr Eugeni Tsvetnenko (the third respondent). 2 By this application heard today, Mr Karis seeks urgent ex parte relief in the nature of an anti-suit injunction to restrain Digital CC Management from taking any steps in proceedings it has commenced in the United States District Court for the district of Massachusetts, United States of America (US proceeding). Mr Karis has separately sought a stay of those proceedings in that Court for reasons of forum non conveniens, and the application is scheduled to be heard on 15 June 2022. 3 Mr Karis affirmed an affidavit in support of the interlocutory application and the facts that are summarised below are based on the pleading and his affidavit evidence. Because of the ex parte nature of this application, none of the evidence has been tested as yet.

The events and representations 4 The proceeding in this Court relates to a business that was developed and established in late 2013 and early 2014. 5 According to Mr Karis, in around November 2013, he came up with the idea for a business which would buy hardware to mine bitcoin and engage in arbitrage by trading between different bitcoin exchanges. Mr Karis discussed his idea with Mr Tsvetnenko and others, and they took steps in January 2014 and February 2014 to incorporate Digital CC Management and Digital CC Holdings. They also facilitated the acquisition in May 2014 of a listed Australian company for the purpose of capital raising, a company that became known as DigitalX Ltd. The three corporate entities were used for the purpose of conducting the business (and are referred to collectively in these reasons from time to time as the Digital CC Group, following Mr Karis' convention in his submissions). 6 In around January 2014, Mr Karis also set up seven bitcoin trading accounts for his personal use through which he purchased and sold bitcoin (Karis bitcoin trading accounts). 7 Mr Karis contends that during February and March 2014 a number of representations were made to him by some or all of the respondents. 8 In particular, Mr Karis pleads in this proceeding that in around January 2014 to March 2014, the respondents represented to him that: (a) if he assisted in raising capital for the proposed business, Mr Karis would receive equity in DigitalX (Equity Representation); (b) if he agreed to accept Digital CC Holdings' offer of employment as its chief executive officer, Mr Karis would receive regular and substantial bonuses comprising further equity in DigitalX in the form of newly issued shares or stock warrants for the acquisition of such shares (Bonus Representation); and (c) Digital CC Management would shortly pay Mr Karis for the transfer to it of the rights in the Karis bitcoin trading accounts and the bitcoin credited to them (Trading Account Representation). 9 In submissions filed in support of this application those contentions were expanded. It was explained that Mr Karis was to be paid his costs of acquiring the Karis bitcoin trading accounts in exchange for giving ownership of them to Digital CC Management pursuant to a document titled 'Trading Accounts Agreement' dated 6 March 2014 (Purported Agreement). It was also explained that Mr Karis would receive further equity in the form of bonuses and be guaranteed a significant severance payment if he accepted employment as the chief executive officer of Digital CC Holdings under an agreement titled 'Executive Employment Agreement' dated 20 April 2014 (Executive Employment Agreement). 10 Mr Karis pleads that he relied upon the representations in a number of ways. He agreed to become a director of Digital CC Holdings and Digital CC Management. In March 2014 he flew to Australia to assist Mr Tsvetnenko in raising capital for the proposed business, meeting with potential investors in Sydney and Perth. He signed the Purported Agreement, which stated that he held the Karis bitcoin trading accounts and the bitcoin credited to them on trust for the benefit of Digital CC Management. He executed the Executive Employment Agreement under which he would receive an annual remuneration package of $375,000. He became a director of DigitalX and received through his personal company (Digital Man LLC) fully paid ordinary shares in DigitalX that gave him 12.22% of the voting power. 11 In around mid-2016, Mr Tsvetnenko was charged by New York authorities with various offences for matters unrelated to the Digital CC Group. Mr Karis and other DigitalX directors made efforts to distance Mr Tsvetnenko from the Digital CC Group. Issues arose between Mr Karis and the other directors as to whether certain roles, including that of Mr Karis, needed to be undertaken by people residing in Australia. There was a deterioration of their various relationships. Discussions began as to how Mr Karis might exit the group. 12 On 16 December 2016, Mr Karis' employment pursuant to the Executive Employment Agreement was terminated by Digital CC Holdings. Mr Karis asserts that during the course of his employment, he did not receive any further equity in the form of bonuses. Nor did he receive a significant severance payment upon its termination or other entitlements owed pursuant to its terms.

The pleaded claims 13 Mr Karis claims that the representations were misleading or deceptive in that: (a) contrary to the Equity Representation, Digital CC Management now alleges that the provision of shares in DigitalX to Digital Man LLC was in exchange for transferring ownership of the Karis bitcoin trading accounts to Digital CC Management; (b) contrary to the Bonus Representation, Mr Karis did not receive regular and substantial bonuses by way of further equity in DigitalX as part of his employment, nor upon termination of his employment; and (c) contrary to the Trading Account Representation, Mr Karis did not receive any consideration from Digital CC Management for the Karis bitcoin trading accounts and the bitcoin credited to them. 14 Mr Karis claims that the respondents in making the representations engaged in conduct that contravened s 18 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL)); that further or alternatively, the respondents in making the Bonus Representation engaged in conduct that contravened s 31 of the ACL; and insofar as the Representations were made with respect to future matters, the respondents had no reasonable grounds for making them and so they were misleading within the meaning of s 4 of the ACL. 15 Mr Karis claims that as a consequence of the respondents' contraventions, he has suffered loss and damage; that he is entitled to recover the amount of his loss pursuant to s 236 of the ACL; and that he is entitled to orders declaring that the Purported Agreement is void pursuant to s 237 of the ACL. 16 Mr Karis also alleges the Purported Agreement is not supported by consideration and so is not binding at law. 17 Mr Karis claims that Digital CC Holdings repudiated the Executive Employment Agreement when his employment was terminated with immediate effect on 16 December 2016 and that he accepted the repudiation. 18 Mr Karis also claims that Digital CC Holdings breached the Executive Employment Agreement in that: (a) it failed to provide one month's written notice of termination to Mr Karis, or alternatively, one month's remuneration in lieu of such notice and so is indebted to Mr Karis in the sum of $31,250, or is liable to pay that sum by way of loss and damage; (b) it failed to pay Mr Karis any accrued but untaken annual leave upon the termination of the employment and so is indebted to Mr Karis in the sum of $12,692, or is liable to pay that sum by way of loss and damage; and (c) it failed to pay Mr Karis a lump sum termination payment to which he was entitled in the sum of $1,125,000, and so is indebted to Mr Karis in that sum or that sum is payable by way of loss and damage.

The competing proceeding 19 On 3 March 2022 Digital CC Management commenced the US proceeding seeking, amongst other things, a declaration that Digital CC Management is the rightful owner of two of the Karis bitcoin trading accounts. Those accounts are held on the Mt Gox exchange which is under the control of a trustee in bankruptcy in Japan (Trustee). The Purported Agreement is relevant in the US proceeding because of the question of ownership of those accounts. 20 The US proceeding also raises issues such as the basis upon which Mr Karis received equity in DigitalX and the circumstances of his employment, including with respect to the identity of his employer and the termination of his employment. Mr Karis disputes allegations made by Digital CC Management in the US proceeding in relation to these issues. Mr Karis' position raises matters relating to the Executive Employment Agreement.

The terms of the agreements as to law and forum 21 Clause 12 of the Purported Agreement states that: This Agreement shall be governed by and construed in accordance with the law of Western Australia and the parties submit to the non-exclusive jurisdiction of the courts of Western Australia. 22 Clause 28 of the Executive Employment Agreement states that: 28.1 This Agreement is governed by the law in force in Western Australia. 28.2 Except as provided in clause 28.3, the Parties submit to the exclusive jurisdiction of the courts of Western Australia or any competent Federal court exercising jurisdiction in Western Australia. The dispute must be determined in accordance with the law and practice applicable in the court. 28.3 The Employer may elect to initiate injunctive proceedings in any jurisdiction in the world, which but for 31.1 would have jurisdiction, against the Employee to enforce the terms of this Agreement or to seek a determination of any matter in relation to this Agreement as it sees fit.

Questions to be determined on application for anti-suit injunction 23 Mr Karis described the threshold questions to be determined as follows: (a) the Court must first consider its own jurisdiction to hear the dispute and determine whether it is a clearly inappropriate forum; and (b) the Court must then determine whether to grant an interlocutory injunction. This involves the consideration of whether there is a serious question to be tried and determination of where the balance of convenience lies.

Principles 24 The general principles in relation to the grant of an anti-suit injunction and the factors to be taken into account are set out in CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345. In Herold v Seally (No 2) [2017] FCA 543 Bromwich J usefully collected the relevant principles from CSR v Cigna and I respectfully adopt his Honour's summary: [34] CSR v Cigna remains the leading authority on anti-suit injunctions and any related or alternative stay of local proceedings, although prior and subsequent authority illuminates a number of issues. Academic discourse also informs consideration of certain aspects of that decision. The core principles from the majority decision may be stated as follows (from 389-394): (1) In some cases, the question of whether a dispute as to legal rights should be litigated in Australia and not overseas may be resolved by one court staying its proceedings in favour of the other, or by it granting an anti-suit injunction restraining a person amenable to its jurisdiction from commencing or continuing the overseas proceedings. (2) Sometimes, steps short of an injunction may be appropriate, such as the proceedings in the Australian court being held in temporary abeyance pending resolution of certain issues in the overseas proceedings. Other intermediate remedies may be appropriate, moulded to the circumstances. (3) The remedies of a domestic stay and of an injunction in relation to the overseas proceedings are not governed by the same principles. However, in some cases the power to grant an injunction may be an aspect of the power to stay proceedings. In other cases, the Court should not exercise the power to grant the injunction without first considering whether instead the Australian proceedings should be stayed. (4) The test for a stay of the Australian proceedings as stated by the plurality (Mason CJ, Deane, Dawson and Gaudron JJ) in Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 of a 'clearly inappropriate forum' derived from the judgment of Deane J in Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197, also applies as a threshold test for the grant of an anti-suit injunction. The summary by the plurality in Voth of Deane J's views in Oceanic Sun are expanded upon below, because the issue of whether these proceedings have been brought in a 'clearly inappropriate forum' applies to the competing relief sought by the parties. (5) The power to stay proceedings upon the ground of being an inappropriate forum is to be exercised (from Voth at 554) 'in accordance with the general principle empowering a court to dismiss or stay proceedings which are oppressive, vexatious, or an abuse of process and the rationale for the exercise of the power is the avoidance of injustice'. (6) The power to stay proceedings on grounds of forum non conveniens (in the absence of statutory power) is an aspect of inherent or implied power to prevent the processes of a court being used to bring about injustice. It is therefore focused on the integrity of the Australian court's own processes. (7) The counterpart of a court's power to prevent its process being abused is its power to protect the integrity of those processes. This has been the historic rationale for such things as Mareva injunctions to ensure that a judgment debt will be able to be met (now more commonly known as asset preservation orders). In some cases, protection of the Australian court's own processes will authorise the grant of an anti-suit injunction. While examples may be derived from prior cases, the categories are not closed. The power is to be exercised when the administration of justice so demands as being necessary for the protection of the Court's own proceedings or processes. (8) Independent of protection of its own proceedings or processes, the court may make orders in the exercise of its equitable jurisdiction to restrain unconscionable conduct or the unconscientious exercise of a legal right. Thus, if bringing or continuing proceedings elsewhere has that character, the equitable jurisdiction may be exercised to restrain them being advanced no matter where they are brought. (9) The power may extend to protecting legal rights in Australia, such as a contract not to sue, or to sue in a particular way or forum (not in issue in this case, but included for completeness and context). (10) A well-established category of case in which an injunction may be granted is when foreign proceedings are, according to principles of equity, 'vexatious or oppressive'. The High Court quoted with approval the test in Carron Iron Co v Maclaren (1855) 5 HLC 416 at 437 to the effect that where there are pending local proceedings in which 'complete relief may be had', commencing subsequent proceeding abroad may generally be considered as 'a vexatious harassing of the opposite party' and will restrain the continuation of the foreign proceedings [via an order addressed to a litigant in those proceedings]. (11) A long history of cases arising from competing foreign proceedings establish that the 'mere co-existence of proceedings in different countries does not constitute vexation or oppression', especially if the other proceedings give 'other or additional remedies beyond those attainable' in Australia. Foreign proceedings are to be viewed as vexatious or oppressive 'only if there is nothing to be gained by them over and above what may be gained in local proceedings'. However, they will be regarded as vexatious or oppressive if there is a 'complete correspondence between the proceedings' or if 'complete relief' is available in the local proceedings. (12) The exercise of the anti-suit injunction power does not involve any determination that the foreign proceedings are vexatious or oppressive in the sense that they are an abuse of that court's processes or even that they should be stayed on forum non conveniens grounds. (emphasis added)

US proceeding and the application of Western Australian law 25 Mr Karis has sought advice from Christopher Mingace, an attorney employed by Heinlein Beeler Mingace & Heineman, PC, which is representing Mr Karis in relation to the US proceeding. Mr Mingace affirmed an affidavit in this matter that was filed on 8 June 2022. Mr Mingace confirmed that he had received a copy of Mr Karis' affidavit filed in support of this application and verified certain matters which related to him. 26 Further, Mr Mingace deposed: From my experience in litigating in the District Court of Massachusetts, I believe that, in light of the choice of law clause in the document titled 'Trading Accounts Agreement' and dated 6 March 2014, the court will apply the law of Western Australia when determining the claims in relation to that agreement in the US Proceeding. However, I do not have experience with a claim including an Australian statutory claim for misleading and deceptive conduct and I am not sure of whether, or how, that statute will be applied by the District Court of Massachusetts. 27 Therefore, on the assumption that the US proceeding continues, there is currently a question as to whether and how Mr Karis' claims made under and with respect to misleading and deceptive conduct under the ACL will be pursued and determined by the District Court of Massachusetts. 28 The risk as to non-recognition of Australian statutory law in a United States court was acknowledged by Hargrave J in Babcock & Brown DIF III Global Co-Investment Fund LP v Babcock & Brown International Pty Ltd [2016] VSC 623. In this case, in proceedings instituted in Victoria the plaintiffs pleaded a statutory misleading or deceptive conduct case under s 1041 of the Corporations Act 2001 (Cth) and s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth). Proceedings were also instituted in New York. His Honour refused to stay the proceedings that had been instituted in Victoria, one reason being: [108] … there is a risk that the plaintiffs' statutory claims based on misleading and deceptive conduct may not be available to them in New York. These are important parts of the plaintiffs' case, and the plaintiffs will be prejudiced if they cannot pursue them.

Whether this Court is a clearly inappropriate forum 29 As noted, the claims raised by Mr Karis in this proceeding include allegations of contraventions of the ACL, in relation to which relief is sought. The Federal Court of Australia has jurisdiction to resolve the dispute pursuant to s 39B(1A)(c) of the Judiciary Act 1903 (Cth). Mr Karis has therefore regularly invoked the jurisdiction of this Court. 30 Mr Karis submitted that the Federal Court of Australia is not a clearly inappropriate forum having regard to the following: (a) the Executive Employment Agreement contains an exclusive jurisdiction clause in favour of the courts of Western Australia or any competent Federal Court exercising jurisdiction in Western Australia (cl 28 extracted above); (b) the Purported Agreement provides that the parties submit to the non-exclusive jurisdiction of the courts of Western Australia (cl 12 extracted above); (c) the Executive Employment Agreement and the Purported Agreement both provide that they are governed by the law in Western Australia; (d) there is a juridical advantage to Mr Karis of litigating in the Federal Court of Australia due to the risk that his claims pursuant to the ACL may not be available in the US proceeding, even though it ought to apply the law in Western Australia. Further, in light of s 138 of the Competition and Consumer Act, which confers exclusive jurisdiction on the Federal Court of Australia in any matter arising under the ACL (other than specified exceptions for matters before other Australian courts), there is a real question as to whether a foreign court can properly adjudicate on matters arising pursuant to the ACL; (e) this dispute relates to representations made to Mr Karis by, and agreements entered into by Mr Karis with Australian companies (Digital CC Management and Digital CC Holdings) and Mr Tsvetnenko who was, at the relevant time, an Australian resident; and (f) there is no issue of jurisdiction with respect to Digital CC Management because it is an Australian company and subject to the jurisdiction of this Court. 31 I accept Mr Karis' submissions for the purpose of this interim injunction and am satisfied that it is unlikely that it would be found that this Court is a clearly inappropriate forum.

Serious issue to be tried and balance of convenience 32 The principles to be applied in circumstances where an applicant seeks interlocutory relief by way of injunction are well-established: see, for example, Edelman J's summary in Ocean Dynamics Charter Pty Ltd v Hamilton Island Enterprises Limited [2015] FCA 460 at [26]-[34]. It is not necessary to state them further for the purpose of this application, but I have had regard to them in considering whether any interim relief should be granted. 33 Mr Karis relies for the purpose of this application on the category of case, referred to by Bromwich J in the extract from Herold v Seally reproduced above, in which an injunction may be granted when foreign proceedings are, according to principles of equity, vexatious or oppressive. The words 'vexatious or oppressive' have a special meaning in this context, as is apparent from Herold v Seally, in particular citing CSR v Cigna at 389-394. The limits of the power to grant such an injunction are determined by the dictates of equity and good conscience. The authorities refer to 'oppressive' as meaning 'seriously and unfairly burdensome, prejudicial or damaging' and to 'vexatious' as meaning 'productive of serious and unjustified trouble and harassment': Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 555-556. 34 Mr Karis submits that the following matters support the grant of the relief sought. 35 First, it is said that the relief sought by Digital CC Management in the US proceeding is available from the Federal Court of Australia. In Ace Insurance Ltd v Moose Enterprise Pty Ltd [2009] NSWSC 724 at [76], Brereton J concluded that having regard to the choice of law clause, the Californian court would be obliged to apply Australian law and so there would be no advantage in suing in California. An anti-suit injunction was granted. Mr Karis submitted that the position in the present case is analogous. In accordance with the choice of law clauses, the law of Western Australia will be applied in the US proceeding, and so there is nothing which can be gained by Digital CC Management from the US proceeding over and above what can be gained in this proceeding. 36 Second, Mr Karis submitted that while the US proceeding was commenced shortly before this proceeding, this is not determinative. The order of the commencement of proceedings was held by Brennan CJ in CSR v Cigna to be 'of little relevance either to the question whether the Supreme Court is a clearly inappropriate forum or to the question whether an interlocutory anti-suit injunction should issue' (at 379-380, in dissent but this point was not otherwise addressed). Accordingly Mr Karis submitted that the commencement of the US proceeding prior to this proceeding creates no preference. 37 Third, Mr Karis submitted that the US proceeding and this proceeding are in relation to the same controversy. The claims raised in the US proceeding are not as broad as those raised in this proceeding, but the essential controversy is the dispute between the parties in relation to Mr Karis' obligations and entitlements arising from his role in establishing and being employed by the Digital CC Group. He submitted that it is artificial, and likely to lead to error, to attempt to resolve part of this dispute without regard to the full context. It was submitted that the intertwined nature of the claims in the US proceeding and this proceeding can be understood from the following: (a) Mr Karis' conduct in entering into the Purported Agreement can only be understood in the context of his investment in the success of the Digital CC Group, including the equity he received and his employment by Digital CC Holdings; (b) Recital C of the Purported Agreement states to the effect that the Karis bitcoin trading accounts were acquired by Mr Karis with moneys provided for such purpose by Digital CC Management; (c) in the US proceeding, Digital CC Management does not allege that Mr Karis was paid for the Karis bitcoin trading accounts and, contrary to the representation that he would be paid, Mr Karis does not recall ever receiving payment from Digital CC Management for the Karis bitcoin trading accounts; (d) in the US proceeding, Digital CC Management alleges (in effect) that Mr Karis ultimately received a 23.88% share of Digital X (via Digital Man LLC) in exchange for transferring ownership of the (disputed) Karis bitcoin trading accounts; and (e) in contrast, Mr Karis alleges in his affidavit that the equity he received was in exchange for being a founder and a director of that company, or companies, assisting with the capital raising by way of the roadshows in March 2014 and for money he had loaned to Digital CC Holdings (his former employer). 38 Fourth, Mr Karis points to the risk (see [28] above) that even though the law of Western Australia ought to be applied in the US proceeding, Mr Karis' claims pursuant to the ACL may not be available. These are an important part of his case and he may be prejudiced if he cannot pursue them. 39 Fifth, Mr Karis contends that the US proceeding only covers part of the dispute between the parties. He submitted that it is not able to determine fully the issues which ought to be considered due to the operation of the exclusive jurisdiction clause in the Executive Employment Agreement. The context in which each of the representations were made cannot be understood in isolation. He submitted that it was 'the promise of the whole, of what being involved in the Business would mean and the incentives he was given to ensure that the Business was successful, that is integral to the different elements to which Mr Karis agreed'. This includes his employment by Digital CC Holdings. He submitted that the US proceeding seeks 'impermissibly and artificially to separate out the Purported Agreement from its context and to claim against Mr Karis on that basis, while he is denied, by operation of the exclusive jurisdiction clause in the Executive Employment Agreement, the opportunity to have the court consider and determine the full circumstances and to bring all counterclaims which may otherwise be available to him'. 40 I accept that there is sufficient relevance, substance and weight in these submissions to justify the grant of interim relief. Whilst I acknowledge that the interaction of the various claims will require close assessment in due course, the ACL claims are (on their face) of considerable relevance to the overarching relief, particularly as Mr Karis seeks an order under s 237 of the ACL that the Purported Agreement is void. 41 In all of those circumstances, it is sufficiently arguable that the US proceeding is vexatious and oppressive as those terms are to be understood in this context. 42 There is therefore a serious question to be tried as to whether Digital CC Management is to be restrained from continuing the US proceeding. 43 That question should not be considered in isolation from the balance of convenience. 44 I acknowledge that a concern has arisen as to whether Mr Karis might receive a distribution of assets from the Trustee at some point. It seems to me that such risk is relatively remote at this point, although it might become heightened as time goes on. At present, I am concerned only with an interim interlocutory injunction, and this risk can be re-visited once the interlocutory application is listed for further hearing. Mr Karis has indicated (and his senior counsel has confirmed in Court today) that he would be willing to undertake that any relevant funds received by him from the Trustee would be paid to his Australian solicitors and held on trust pending further orders. 45 I also acknowledge (based on Mr Mingace's affidavit) that the solicitors for Digital CC Management in the US proceeding told Mr Mingace that the Trustee had requested that there be an order from a United States Federal Court declaring Digital CC Management's ownership of the disputed Karis bitcoin trading accounts. Mr Mingace was not aware of whether an order from the Federal Court of Australia would be sufficient for the Trustee's purposes. This matter might well require further attention from the parties so that the requirements of the Trustee might be properly understood and tested. 46 The proposed orders will undoubtedly affect the hearing in the District Court of Massachusetts scheduled for 15 June 2022 and I acknowledge there may be some inconvenience to that Court. This is regrettable. However, I do not expect that the order sought by the Trustee would be made at the forthcoming hearing, were it to proceed. Therefore, I do not consider that the Trustee's interests are prejudiced in the short term (if at all) by the proposed orders. There will be delay, at least in the interim, in Digital CC Management pursuing its claim in the District Court. On balance, I do not consider these matters shift the balance of convenience in favour of Digital CC Management at this interim stage when one has regard to the potential risk to Mr Karis that part of his claim may be prejudiced, particularly if an anti anti-suit injunction were sought in the US proceeding. Further, any prejudice has to be viewed in the context that this injunction is to be granted on an interim basis only, pending a full hearing of the injunction application in due course. 47 Finally, I note that Mr Karis has proffered the usual undertaking as to damages (this Court's practice note GPN-UNDR). Senior counsel for Mr Karis informed me during the hearing that Mr Karis is a citizen of the United States and resides in Massachusetts. It was disclosed that Mr Karis has no assets in Australia. That is a fact that may well require further discussion in due course. 48 However, having regard to all of those matters, I am persuaded that it is appropriate to grant the relief sought by way of an interim injunction. Once the relevant papers are served on Digital CC Management, the injunction application will be programmed to a hearing.

Ex parte 49 Finally, it was appropriate in the circumstances of this case for Mr Karis to proceed ex parte in the first instance. Had Digital CC Management been on notice of Mr Karis' intention to seek this injunction, it might have immediately sought an anti anti-suit injunction from a US court, which (if granted) would have prejudiced Mr Karis' ability to pursue the proceeding in this Court and placed at risk the potential for him to pursue all aspects of the relief he seeks. There was evidence before the Court by way of communications between the respective solicitors for Mr Karis and Digital CC Management in which Digital CC Management asserted that the proceedings in Australia have been commenced only to frustrate the US proceeding, and that they intended to seek a stay of the Australian proceedings. 50 I also note that correspondence from Digital CC Management's Australian solicitors to Mr Karis' solicitors includes a number of allegations as to the veracity or otherwise of the causes of action pleaded by Mr Karis in this Court, raising questions including as to limitation periods, asserting the pleading is vague and embarrassing and should be struck out, and asserting it is an abuse of process. By way of preliminary assessment, I have not formed the view that those criticisms will inevitably succeed and it is appropriate that the parties have the opportunity to address them more fully in due course.

Orders 51 Accordingly, there will be an order to the effect that Digital CC Management is restrained until further order from taking any further step in the US proceeding, other than those steps as may be required to have the proceeding dismissed or stayed until further order. 52 I will hear the parties in due course as to further programming. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Banks-Smith.