Sun Asia Group Pty Ltd ATF Sun Asia Group Trust v Invigor Group Ltd

The plaintiffs

1. There are six plaintiffs. Only one of the plaintiffs, the fourth plaintiff Geoffrey Anthony Shannon, is an individual. The other plaintiffs are all companies.
2. The first plaintiff, Sun Asia Group Pty Ltd (SAG), sues in its capacity as trustee of the Sun Asia Group Trust. SAG was registered on 22 May 2019, which is the date of the initial transaction the subject of these proceedings. Mr Shannon is the sole director, secretary and shareholder of SAG.
3. The other corporate plaintiffs were registered at various dates before 22 May 2019.
4. The second plaintiff is Sunasia Farm No 10 Pty Ltd (receivers and managers appointed) (SF10). The shares in SF10 are wholly owned by Sun Asia Corporation Pty Ltd. Mr Shannon is its sole director and secretary.
5. The third plaintiff is Sun Asia Corporation Pty Ltd (receivers and managers appointed) (SAC). Mr Shannon is the only shareholder in SAC, and is its sole director and shareholder.
6. Nationlink Solutions Pty Ltd (Nationlink) is the fifth plaintiff. Nationlink was registered on 2 May 2019, just before the initial transaction the subject of these proceedings took place. The sole shareholder in Nationlink was Suzanne Marie Bennett, but is now Mr Shannon. Mr Shannon is the sole director of Nationlink and Ms Bennett is its secretary.
7. The sixth plaintiff is Emerald Affordable Accommodation Pty Ltd (EAA). Ms Bennett was the sole shareholder in EAA but it is now Mr Shannon. Ms Bennett was also the sole director of the company but Mr Shannon now is.

The defendants

1. There are five active defendants, in two groups, which are separately legally represented.
2. The first defendant in the first group is the first defendant, Invigor Group Ltd (Invigor). Invigor is listed on the Australian Securities Exchange (ASX). Invigor was subject to a trading halt on 28 October 2019, and from 30 October 2019 to date it has been suspended from quotation.
3. The second defendant in the first group is the second defendant, Gary Michael Cohen. I understand that the defendants do not challenge the allegation in the statement of claim that, at all material times, Gary Cohen has been a director, the executive chairman and CEO of Invigor.
4. The third defendant in the first group is the eighth defendant, Marcel Equity Pty Ltd (Marcel Equity). The statement of claim alleges that Gary Cohen and Gregory Cohen are directors of Marcel Equity.
5. The second defendant, Nehoc Investments Pty Ltd (Nehoc), is the first defendant in the second group.
6. The fourth defendant, Mr Gregory Hyam Cohen, is the second defendant in the second group. Gregory Cohen is the sole director and shareholder of Nehoc. He is also a director and the CFO of Invigor.
7. The fifth to seventh defendants are the persons who have been appointed as receivers and managers of SF10 and SAC. They were appointed by Nehoc under security documents that are the subject of these proceedings.
8. The fifth to seventh defendants have not sought security for costs from the plaintiffs. A solicitor appeared for them at the hearing of the notices of motion, but exercised a watching brief. Prayers 7 and 8 in the statement of claim seek declarations that the appointments of the receivers and managers were invalid. Save for that, the plaintiffs do not seek any relief against the fifth to seventh defendants personally. Prayer 9, which seeks damages, expressly excludes any claim against the fifth to seventh defendants.
9. I raised with the solicitor who appeared for the fifth to seventh defendants at the hearing whether those defendants would take any active part in the defence of the proceedings, or whether they would submit to the orders of the Court. The solicitor was not in a position to make a formal response to the question. Normally, receivers and managers in the position of the fifth to seventh defendants would not have a personal interest in the validity of their appointment, provided that no relief was sought against them personally. Ordinarily, they would have a deed of indemnity from their appointor, and look to that deed for protection if necessary. I informed the parties that I proposed, in the absence of any indication to the contrary, to deal with the applications for security for costs on the basis that the fifth to seventh defendants would not take part in the proceedings in a way that would complicate them or increase the costs incurred by the other defendants.

The plaintiffs' claims

1. The Plaintiffs make three separate and distinct claims in these proceedings.
2. The first, made in pars 2 to 59 of the statement of claim, is the most complex and contentious. The relevant plaintiffs seek orders setting aside related transactions whereby SAG invested $1,000,000 in Invigor by subscribing for shares. That $1,000,000 was borrowed by SF10 from Nehoc. Nehoc paid the money directly to Invigor. The plaintiffs say that the money borrowed by SF10 was loaned by it to Mr Shannon, who in turn loaned it to SAG to enable SAG to pay the subscription price for the shares. SF10 and SAC gave securities to Nehoc over properties owned by them. The receivers and managers were appointed under those securities. SAC and Mr Shannon guaranteed the obligations of SF10 to Nehoc under the Deed of Loan.
3. The second claim is made in pars 60 to 76 of the statement of claim. SAC makes a claim against Invigor based on an agreement claimed to have been made in the period 21 May 2019 to 2 July 2019. It is alleged that the agreement provided for SAC, or its nominees, to provide consulting services to Invigor for a fee. The claim is that those services were provided by Mr Shannon and Ms Bennett, and that SAC is entitled to a payment of $208,338.35. SAC also claims that the agreement entitled it to reimbursement from Invigor of the rent of a home unit at Potts Point that was leased in order to permit the consultancy services to be provided. The amount of rent claimed is $21,719.07. The total claim is $230,057.42.
4. The third claim made by the plaintiffs is pleaded in pars 76A to 76I of the statement of claim. The claim is by EAA against Gary Cohen and Marcel Equity, on the basis that EAA loaned $250,000, in three payments, to Marcel Equity at the request of Gary Cohen, and that Gary Cohen promised to guarantee repayment of the money. EAA puts its claim on the basis of contract or alternatively money had and received.

The plaintiffs' first claim

1. For the purpose of dealing with the two notices of motion, it is only necessary for the Court to analyse in detail the first claim made by the plaintiffs. In essence, the plaintiffs seek orders declaring void or setting aside the agreements that they respectively entered into with Invigor and Nehoc. They also seek orders declaring invalid or setting aside actions taken by the defendants under the agreements.
2. It is necessary to consider the sets of agreements separately. I will start with the agreements to which Invigor is a party.

SAG's claim against Invigor

1. The plaintiffs plead that, in the period April to 22 May 2019, Mr Shannon and Gary Cohen discussed the possibility that the interests associated with Mr Shannon could do business with Invigor. The negotiations were between Mr Shannon and Gary Cohen, not Gregory Cohen, although one conversation involved a Mr Ian Lazar. Notably, one alleged representation was made by Gary Cohen in an email on 21 May 2019.
2. The first agreement entered into was a binding heads of agreement (HOA) between Invigor and SAG made on 22 May 2019. It is not necessary to set out the terms of the HOA in any detail, as the object of the plaintiffs' proceedings is to obtain a declaration that the HOA is invalid, rather than to enforce its terms. The object of the HOA was to provide for Invigor to acquire the business of SAG "comprising the IP, the customers and key contracts, the know-how and key staff, particularly GS" (meaning Mr Shannon). The evidence does not explain the nature of SAG's business, given that it was incorporated on 22 May 2019, the date of the HOA. The HOA provided for Invigor to pay $2,000,000 for the acquisition of the business of SAG by $250,000 in cash, $500,000 by the issue of 125,000,000 shares and $1,250,000 by the issue of 312,500,000 performance shares, together with 125,000,000 options at 0.005 cents an option. The HOA was subject to a number of conditions precedent including board approval, approval of shareholders to the proposed issue of shares, and the parties raising $1,000,000 to enable performance of the initial contractual obligations.
3. Although the evidence did not deal with the issue, it appears that the conditions precedent for the HOA, which also contemplated that the parties would enter into formal documentation, were not satisfied.
4. The statement of claim then pleads that SAG and Invigor then entered into a number of transactions. The relationship between these transactions and the terms of the HOA is not entirely clear.
5. Paragraphs 5, 6 and 10 of the statement of claim allege that, on 29 May 2019, SAG and Invigor entered into a First Placement Agreement by which SAG subscribed for 125,000,000 shares in Invigor for a price of $0.004 per share, giving a total price of $500,000. SAG was required to pay $500,000 by 29 May 2019.
6. In pars 12 and 13 of the statement of claim, it is pleaded that, on 30 May 2019, SAG and Invigor entered into a Second Placement Agreement, under which SAG subscribed for a further 125,000,000 shares in Invigor at a price of $0.004 per share, giving a total price of $500,000. SAG was required to pay the further $500,000 by 30 June 2019.
7. The evidence does not explain the relationship between the HOA and the two Placement Agreements. The HOA required Invigor to issue 125,000,000 shares with a value of $500,000, as part of the price for the acquisition of SAG's business.
8. The statement of claim also contains an allegation in pars 7, 8 and 11 that, on 29 May 2019, SAG entered into a Note Agreement under which it was required to pay $500,000 to Invigor by 7 June 2019 for the issue of Convertible Notes by Invigor. Invigor issued 100,000,000 Convertible Notes to SAG.
9. Finally, it is alleged in par 9 of the statement of claim that, on 29 May 2019, Invigor issued to SAG 50,000,000 options. The relationship between this number of options and the 125,000,000 options referred to in the HOA is obscure.
10. All of the transaction documents that were executed by Invigor were signed by both Gary and Gregory Cohen.
11. The only parties to these transaction documents were SAG and Invigor. That introduces the possibility that SAG may succeed or fail on this aspect of the claim, while the opposite result may occur with the other plaintiffs on the balance of the claim involving Nehoc.

Claims against Nehoc

1. The statement of claim contains an allegation in par 14 that, on 12 June 2019, SF10 and Nehoc entered into a Deed of Loan under which Nehoc agreed to lend SF10 $1,000,000.
2. In fact, by the definition of "Purpose" in clause 1.1 of the Deed of Loan and clause 9.1(a), SF10 was required to lend the amount borrowed to Mr Shannon to assist with the acquisition of the shares in Invigor.
3. Gregory Cohen signed the Deed of Loan on behalf of Nehoc as its sole director.
4. SF10 executed a mortgage over a particular property owned by it as well as a general security agreement in favour of Nehoc to secure its obligations under the Deed of Loan.
5. SAC and Mr Shannon executed a guarantee of SF10's obligations to Nehoc under the Deed of Loan.
6. SAC also granted a mortgage to Nehoc over a particular property owned by it.
7. Although SF10 borrowed $1,000,000 from Nehoc, SAG was required to pay $1,500,000 to Invigor; $500,000 each for two tranches of issued shares and $500,000 under the Note Agreement. There was evidence that explained this discrepancy in the following way.
8. On 1 July 2020, Invigor executed a deed poll called "Set-Off Deed Poll". By the deed poll, Invigor appears unilaterally to have set off its obligation to pay SAG $500,000 on 29 May 2020 in relation to the $500,000 worth of Convertible Notes that it issued to SAG on 29 May 2019, against SAG's obligation to pay it $500,000 in respect of the Second Placement Agreement dated 30 May 2019. It is not necessary to consider these transactions in detail. It appears that SAG only paid Invigor $1,000,000 from the money borrowed by SF10 from Nehoc. It appears that Invigor treated the $1,000,000 as paying for one tranche of the issued shares and the issue of the Convertible Notes. That left the $500,000 payment for the issue of the second tranche of shares outstanding. When the date for repayment of the Convertible Notes arrived, Invigor unilaterally set off its obligation to repay SAG the $500,000 under the Convertible Notes against the outstanding obligation of SAG to pay the $500,000 for the issue of the second tranche of the shares.
9. It is to be noted that the plaintiffs' claims depend upon the allegation that the agreements were entered into on the faith of representations that were made expressly or by silence to Mr Shannon that were, in the circumstances, misleading and deceptive, so that the agreements were all void, or should be set aside, under s 237 and s 243 of the Australian Consumer Law. The plaintiffs' claim is not that the agreements were entered into in provisional performance of the HOA, so that they should be set aside because the HOA did not become unconditional.
10. It is not clear whether Invigor had to get, or obtained, formal board and shareholder approval for the issue of the 250,000,000 shares to SAG. That is not an issue raised by the statement of claim.
11. The claims by the plaintiffs to the agreements with Nehoc that those agreements should be set aside on the basis of misleading and deceptive conduct depend completely on the claim that Gregory Cohen, and through him Nehoc, were persons involved in the misleading and deceptive conduct of Invigor and Gary Cohen by silence. The statement of claim does not allege specific facts that might give rise to an obligation on Gregory Cohen to inform Mr Shannon of the true financial position of Invigor.

Representations relied upon by the plaintiffs

1. In pars 20 to 41 of the statement of claim, the plaintiffs, in effect, plead that they all entered into the various agreements that they made with Invigor and Nehoc because Mr Shannon, on his own behalf and as the sole director of the other plaintiffs, caused the plaintiffs to enter into the agreements acting on the faith of representations made to him by Invigor, Nehoc and Gary and Gregory Cohen.
2. The representations are pleaded in a series, in a somewhat complicated way, and it is not necessary to set them out in detail.
3. In essence, the plaintiffs allege that the substance of the representations was twofold. First, that Gary Cohen expressly represented to Mr Shannon that the value of the shares in Invigor would increase by at least tenfold, if Mr Shannon procured the sale of SAG's business to Invigor, and if other potential deals which Invigor was negotiating with third parties were successfully completed. A different version of this representation was that Gary Cohen represented that, on the same basis, the value of the shares in Invigor would rise to 1 dollar per share. The second representation was that Gary Cohen and Gregory Cohen failed to disclose to Mr Shannon that Invigor was having financial difficulties and that it may have been insolvent and was unable to pay its debts to creditors as and when they fell due, including the payment of outstanding wages to staff from as early as May 2019. For the sake of economy, I have not attempted to set out the representations in the specific forms alleged in the statement of claim.
4. In par 20(e) of the statement of claim, the plaintiffs give particulars of the incapacity of Invigor to pay staff wages at various times from 12 June 2019; that, in September 2019, Invigor settled a dispute with a creditor in connection with a statutory demand; that, on 28 October 2019, Invigor requested a trading halt on its securities on the ASX; and that, from 30 October 2019, Invigor requested a voluntary suspension of its securities on the ASX.
5. The statement of claim contains allegations that Gary Cohen made express representations to Mr Shannon on behalf of Invigor concerning the anticipated value of the shares in Invigor on certain contingencies.
6. However, the representations concerning the financial position of Invigor are alleged to have been made by silence by both Gary Cohen and Gregory Cohen.

Evidence

1. The evidence on the applications took the form of affidavits sworn by the solicitor for the plaintiffs and the solicitors for each group of defendants, as well as communications between the parties and other documentary evidence.
2. I will defer for the moment any consideration of the evidence given by the solicitors in respect of their estimates of the legal costs that are likely to be incurred by the defendants in these proceedings.

Evidence of David Armstrong

1. Mr David Armstrong is the solicitor for Invigor, Gary Cohen and Marcel Equity.
2. In relation to SAG's claim against Invigor, Mr Armstrong, on information and belief from Gary Cohen, denied that the representations were made, and in respect of the email written by Gary Cohen upon which SAG relies, said that the defence was that the forecast made in the email was made on a reasonable basis. Mr Armstrong elaborated this basis in par 7 of his 28 June 2021 affidavit.
3. In relation to the second claim, being SAC's contract claim based upon the alleged consultancy agreement, Mr Armstrong said that Invigor's position was that there was no enforceable agreement. Mr Armstrong did not say that Invigor denied that the services had been provided.
4. The letter upon which SAC relies was in evidence. It was written by Mr Gary Cohen, as Executive Chairman of Invigor, to Mr Shannon at SAC, and is dated 1 July 2019. It says : Re Sun Asia Australia - Consultancy As per the agreement we have reached to acquire Sun Asia Australia we have agreed to engage with Sun Asia Corporation Pty Ltd or its nominee to act as a consultant to Invigor Group Limited. As per the agreement we have agreed the amount of the Consultancy is $500,000 per annum including expenses. Accordingly we will arrange to pay to you $41,666 per month commencing 1 July 2019. We will reflect this arrangement in a formal consultancy agreement.
5. SAC gave relatively specific particulars in its statement of claim of the consultancy services that were provided.
6. While the issue is not to be decided now, it may be observed that this letter appears to record a final agreement, and that the last paragraph does not say that the agreement was subject to formal documentation.
7. So far as is relevant to the present application for security for costs, it may be observed that the second claim made by SAC is not a complex one. It will involve the determination of the proper construction of the letter. It is probable, in the light of the nature of the allegations, that Mr Shannon and Ms Bennett did provide substantial services as nominees of SAC. It will not be necessary at the hearing of the claim to determine the value of the services, because the agreement was that an amount of $41,666 per month would be payable.
8. There may be a real issue as to whether the claim for the rent is a proper one, as the letter recorded that the $500,000 per annum included expenses.
9. As matters stand, Invigor's response to this claim by SAC does not appear to be a strong defence. It is relevant to the application for security for costs, because Invigor may well have denied SAC an amount of at least $208,338.35 that SAC could have used to provide security for the defendants' costs.
10. As to the third claim, the EAA claim for recovery of the $250,000, all Mr Armstrong said was that Gary Cohen and Marcel Equity denied the existence of any contractual arrangement with EAA. Mr Armstrong did not say that the defendants denied that EAA had paid the $250,000 to Marcel Equity.
11. Given that EAA's claim is in both contract and for money had and received, it does not appear that the defence of Gary Cohen or Marcel Equity is a strong one. Both defendants are refusing to pay the $250,000 to EAA, without denying the allegation that Marcel Equity was paid the money by EAA.
12. The legal costs of Gary Cohen and Marcel Equity in defending this claim should not be substantial.
13. If Marcel Equity received the amount, and Gary Cohen and Marcel Equity had repaid EAA, then the plaintiffs would have had a further $250,000 to provide security for the defendants' costs.
14. Mr Armstrong expressed the opinion that, on his current understanding of the proceedings, it would be necessary for four witnesses to give evidence, being Mr Shannon, Mr Lazar and Gary and Gregory Cohen.
15. Mr Armstrong also opined that two expert witnesses on the issue of Invigor's solvency would be required. As to the evidence of solvency, that may depend upon precisely how SAG puts its claim. It is true that in the statement of claim the representation is pleaded in conventional terms of solvency. However, at this stage, it appears that SAG primarily relies upon objective evidence consistent with Invigor experiencing financial difficulties.
16. Mr Armstrong gave evidence of significant investigations having been undertaken, on behalf of the defendants for whom he acts, of the apparent financial position of the plaintiffs. For reasons that will appear below, it is not necessary to record that evidence in detail. It is sufficient to note that Mr Armstrong recorded that there was no evidence that any of the plaintiffs had substantial assets, and that the properties owned by SF10 and SAC that have been mortgaged to Nehoc are the subject of at least two additional mortgages to other lenders.
17. In a subsequent affidavit, Mr Armstrong acknowledged that he had not initially given SAG credit for the 14,583,334 shares that he acknowledges that SAG owns in Invigor. Mr Armstrong said of those shares that trading in Invigor's shares had been suspended from quotation from 30 October 2019 to date.
18. Mr Armstrong annexed to his 29 March 2021 affidavit a copy of a letter from the plaintiffs' solicitor to his firm dated 17 March 2021. That letter, referring to the two Placement Agreements dated 29 May and 30 May 2019, under which two tranches of 125,000,000 shares in Invigor were issued to SAG, each for a price of $500,000, said: 5. In relation to the above share issues, we understand that pursuant to the share consolidation undertaken by Invigor in about October 2019, the ordinary share capital in Invigor was reduced on a ratio of 20:1. That being the case, and by virtue of the share issues by Invigor to SAG, it should be the case that SAG presently holds 12,500,000 ordinary shares in Invigor, being the Invigor Shares. Please let us know if that is incorrect. We will note that it is our understanding that the position of your clients is that the issues of the Invigor Shares are valid notwithstanding that SAG challenges such validity in the Proceedings. 6. With respect to the Invigor Shares and your clients' motion as against SAG, and the apparent demand for evidence regarding SAG's asset position, it is apparent that your clients are seeking to establish that SAG is impecunious. However, it is unclear why your clients' Motion does not address the existence of the Invigor Shares and simply concludes that SAG has no meaningful assets in the jurisdiction. As such, the relevant inference to be drawn is that your clients concede that the Invigor Shares are worthless. Please clarify your clients' position in this respect. … 8. In any event, our corporate clients accept the asset position as presented above and the Motion for the purposes of the Motion and they do not propose denying that they are presently impecunious (however, and with respect to SAG, our clients do require clarification from your clients as to their position concerning the Invigor Shares as per paragraphs 4 to 6 above). Despite this concession, our corporate clients deny that they are required to pay your clients any security for costs, and we will write to you later in this regard as the relevant issues are unrelated to the Notice.
19. This letter was apparently written by the plaintiffs' solicitor in relation to a dispute concerning a notice to produce served by Mr Armstrong.
20. By this letter, the plaintiffs' solicitor conceded that the corporate plaintiffs were impecunious, for the purpose of the defendants' applications for security for costs. He did not concede that security for costs should be ordered. The concession concerning SAG was plainly qualified. SAG had paid to Invigor $1,000,000 for the issue of shares in Invigor. Invigor had taken steps that had caused the suspension of its securities from being quoted on the ASX. Only Invigor fully knew the reasons for the suspension of quotation, whether quotation may be reinstated, or what the inherent value of the shares held by SAG was. The solicitor clearly suspected that the defendants contended that the shares were worthless, as otherwise - from SAG's perspective - the defendants ought not to have contended that it was impecunious. The solicitor was seeking clarification of the defendants' position.
21. Mr Armstrong replied to the plaintiffs' solicitor's 17 March 2021 letter on 19 March 2021. Relevantly, Mr Armstrong said, in response to the enquiry in par 5, that Invigor had issued 125,000,000 shares to SAG pursuant to the First Placement Agreement and 166,666,667 shares pursuant to the Second Placement Agreement, which, following the share consolidation resulted in SAG holding 14,583,000 shares.
22. Mr Armstrong said that his clients were not prepared to concede the position in par 6 of the letter and that: "As at the most recent trading of the shares they had a value of 0.025c per share".
23. On that basis, the value of the shares in Invigor held by SAG would be $364,575.
24. It appears that, because the plaintiffs did not make an unqualified concession that all of the corporate plaintiffs were impecunious, Mr Armstrong continued to agitate the need for SAG to answer the notice to produce that had been served upon it. Mr Armstrong wrote a further letter to the plaintiffs' solicitor on 24 March 2021. In par 2 of that letter, he referred to an email of 22 March 2021 from the plaintiffs' solicitor in which he had conceded that the corporate plaintiffs other than SAG were impecunious for the purposes of the application for security for costs, but Mr Armstrong added: … However, in respect of the First Plaintiff (SAG), you appear to have resiled from the position set out in Your 17 March 2021 Letter by asserting that the concession given by SAG in Your 17 March 2021 Letter is "predicated on an inference that it draws regarding certain shares that it holds in the first defendant." We presume that the reference to "an inference" in that email is a reference to the inference you sought to draw in paragraph [6] of Your 17 March 2021 Letter, being that "[our] clients concede that the Invigor Shares are worthless". Relevantly, by Our 19 March 2021 Letter, we advised you that our clients do not concede that the Invigor Shares held by SAG are worthless. Our clients maintain this position. As such, we understand that it is now your clients' position that, unlike the other Corporate Plaintiffs, SAG does not concede impecuniosity for the purposes of the Motion…
25. Later in the letter Mr Armstrong said: "… unless we receive confirmation in writing, that SAG concedes, without qualification, that it is impecunious for the purposes of the Motion …", Mr Armstrong's clients would press the notice to produce against SAG.
26. Mr Armstrong repeated his clients' position that the Invigor shares held by SAG were not worthless.

Evidence of Benjamin Neil Wibo Dibden

1. Mr Dibden is the solicitor for Nehoc and Gregory Cohen.
2. Mr Dibden's evidence covered substantially the same ground as did the evidence of Mr Armstrong, which tends to demonstrate the reality that, where lawyers represent two groups of defendants in the same proceedings, there is a substantial amount of duplication and the legal costs that are incurred tend to double.
3. Mr Dibden gave evidence that, on 16 March 2021, the plaintiffs' solicitor sent to him a letter that was materially the same as the 17 March 2021 letter received by Mr Armstrong.
4. It appears from Mr Dibden's 18 March 2021 reply that his response to the question asked about the value of SAG's shares in Invigor was simply to say: "In circumstances where the Corporate Plaintiffs have now admitted that they are currently impecunious, the first limb required under our clients' Notice of Motion has been established and the discretion of the Court under rule 42.21(1A) of the UCPR has been enlivened".

Evidence of Gary Ian Rogers

1. Mr Rogers is the solicitor for the plaintiffs.
2. Much of Mr Rogers' first affidavit was an explanation of the reasons why the Court should not make orders for security for costs in favour of the defendants.
3. However, in par 17 of his 20 May 2021 affidavit, Mr Rogers referred to the evidence that he submitted was capable of supporting the assertion made by Mr Shannon, which he referred to in par 19, that Invigor and Gary and Gregory Cohen had not disclosed to him that: "Invigor was having financial difficulties and/or that it may have been insolvent prior to the Invigor Agreements being signed and/or issued…" That evidence was the 28 October 2019 announcement by the ASX that the securities of Invigor would be placed on a trading halt at its request. On 30 October 2019, the ASX announced that the securities would be suspended from quotation at Invigor's request pending the review of documents regarding Invigor's then financial position. On 11 November 2019, Invigor published an ASX announcement which stated that: "The Company has met with the ASX and at present they have expressed prevailing concerns regarding the financial condition of the Company and in particular the comparatively large debt on its Balance Sheet. The ASX requires these concerns to be addressed before reinstatement…" On 27 March 2020, Invigor published an ASX announcement relating to its financial year 2019 results. In outline, Invigor reported operating earnings before interest tax, depreciation, amortisation and interest of a half yearly $4.67 million loss. The net loss after tax for the consolidated entity for the year was $13.06 million.

Defendants' solicitors' tax invoices

1. The plaintiffs tendered the defendants' solicitors' tax invoices that had been produced on notices to produce.
2. The tax invoices contained information relevant to the defendants' claims that it was reasonable for the defendants to split into two groups for the purpose of retaining full separate legal representation. The reason given was that there was a conflict of interest between Gary Cohen and Gregory Cohen, and that the course of the proceedings could lead to Gregory Cohen making a cross claim against Gary Cohen.
3. It may be accepted that there are material differences between the legal positions of Gary Cohen and Gregory Cohen in the proceedings. The plaintiffs have alleged that only Gary Cohen made express representations to Mr Shannon. Gregory Cohen will only personally be liable if he is found to have made representations by silence.
4. Further, Mr Dibden gave evidence that Nehoc was able to lend $1,000,000 to SF10 because it had borrowed that money from Gregory Cohen and his wife, and they, in turn, had borrowed the money from another company. Consequently, if the conduct of Gary Cohen and Invigor has the result that Nehoc cannot recover the $1,000,000 loan from SF10, then Gregory Cohen will suffer a personal loss.
5. However, if Gregory Cohen perceives that he has a conflict of interest with Gary Cohen, such that it is necessary and appropriate for him and Nehoc to retain separate legal representation, then both sets of defendants should act upon that basis and conduct their defences at arm's length, to avoid the risk that both sets of legal representatives would be required to withdraw from the proceedings, if Gregory Cohen decided to make a claim against Gary Cohen.
6. In fact, the solicitors' tax invoices demonstrate that, in preparing their responses to the plaintiffs' claim, each solicitor has engaged in a significant number of conferences and communications for the purposes of obtaining instructions that have involved one or both of Gary and Gregory Cohen, and in a considerable number of cases only the Mr Cohen for whom the particular solicitor did not act.
7. The following is an analysis of the solicitors' tax invoices. As all of the attendances occurred in 2021, I have only listed the day and the month. I have inserted the number of units recorded by the solicitors in brackets. Sometimes the units relate to more legal work than just the communication with the clients.

Mr Dibden's tax invoices

1. Telephone conference calls with Gregory and Gary Cohen: 11/1 (10); 13/1 (4); 13/1 (12); 1/2 (3); 1/2 (3); 15/2 (6); 15/2 (5); 9/3 (4); 18/3 (5); 18/3 (5); 31/3 (7); 31/3 (4); 6/4 (8); 6/4 (5); 3/5 (4); and 7/6 (8).
2. Telephone calls with Gary Cohen: 15/1 (1); 28/1 (8); 28/1 (2); 28/1 (2); 1/2 (5); 1/2 (2); 11/2 (2); 15/2 (4); 2/3 (2); 9/3 (2); 31/3 (1); 31/3 (1); 5/5 (2); 5/5 (5); 21/5 (11); 21/5 (1); and 3/6 (1).
3. Emails from or to Gregory and Gary Cohen: 23/2 (2); 16/3 (3); 4/3 (1); 31/3 (16); 7/6 (1); 22/6 (1); 24/6 (1); and 28/6 (2).
4. Emails from or to Gary Cohen: 12/2 (2); 15/2 (1); 15/2 (1); 22/2 (1); 16/3 (1); 16/3 (1); 29/3 (1); 31/3 (1); and 28/6 (1).

Mr Armstrong's tax invoices

1. Telephone conferences with Gary and Gregory Cohen (alone or with others) 15/1 (2); 22/1 (5); 10/2 (11); 10/2 (10); 11/6 (11); and 24/6 (3).
2. Email from Gregory Cohen 18/3 (1); and 15/6 (1).
3. Both Mr Armstrong and Mr Dibden conferred at length and on numerous occasions in conference and by email with both Gary and Gregory Cohen, and on a considerable number of occasions with the Mr Cohen who was not their client. This occurred more frequently with Mr Dibden than with Mr Armstrong. I do not accept that this approach is consistent with each solicitor acting on an arm's length basis for one set of defendants because his clients have a conflict of interest with the other set of defendants. The manner in which the defendants are conducting the litigation is only consistent with them duplicating the legal work required on the basis that, if at some time in the future the litigation takes a course that may cause one set of defendants to make a claim against the other, each set of defendants will have in place its own team of legal representatives. It is difficult to see how, if that event occurred, either set of lawyers could continue to act in the proceedings.

Consideration

1. Section 1335(1) of the Corporations Act provides: Where a corporation is plaintiff in any action or other legal proceeding, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence, require sufficient security to be given for those costs and stay all proceedings until the security is given.
2. Uniform Civil Procedure Rules r 42.21 is, relevantly, in the following terms: (1) If, in any proceedings, it appears to the court on the application of a defendant - … (d) that there is reason to believe that a plaintiff, being a corporation, will be unable to pay the costs of the defendant if ordered to do so, or … the court may order the plaintiff to give such security as the court thinks fit, in such manner as the court directs, for the defendant's costs of the proceedings and that the proceedings be stayed until the security is given. (1A) In determining whether it is appropriate to make an order that a plaintiff referred to in sub-rule (1) give security for costs, the court may have regard to the following matters and such other matters as it considers relevant - (a) the prospects of success or merits of the proceedings, … (c) the impecuniosity of the plaintiff, (d) whether the plaintiff's impecuniosity is attributable to the defendant's conduct, (e) whether the plaintiff is effectively in the position of a defendant, (f) whether an order for security for costs would stifle the proceedings, … (1B) If the plaintiff is a natural person, an order for security for costs cannot be made merely on account of his or her impecuniosity. (2) Security for costs is to be given in such manner, at such time and on such terms (if any) as the court may by order direct. …

Ability of the plaintiffs to pay costs orders

1. The threshold to enliven the Court's discretion to make an order that the plaintiffs provide security for the defendants' costs is a finding that there is reason to believe that the plaintiffs will not be able to pay those costs, if ordered to do so in the proceedings.
2. There is clearly reason to believe that the corporate plaintiffs will be unable to pay the costs of the defendants, if ordered to do so at the end of these proceedings. That is conceded in Mr Rogers' 16 and 17 March 2021 letters to the solicitors for the defendants.
3. The qualification made by Mr Rogers in respect of the financial position of SAG does not mean that there is no reason to believe that SAG will be unable to pay the costs of the defendants against whom it has made claims, if ordered to do so. As Invigor's securities are at present suspended from quotation on the ASX, and there is no way to know when, if ever, that suspension will be lifted, there is a risk that SAG will not be able to meet an order for costs, because it will not be able to realise the value of its shares in Invigor within a reasonable time.
4. However, as will be seen below, the fact that SAG may have a valuable asset in its Invigor shares will be relevant to the order that should be made on the applications for security for costs.

Discretionary considerations

1. It will be convenient to consider the issues in the order in which they are set out in UCPR r 42.21(1A).

Prospects of success or merits of the proceedings

1. Generally, the Court is concerned only with reaching a level of satisfaction that the plaintiffs' case is reasonably arguable: Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; (2004) 208 ALR 564 at [37]-[39]. As was noted in Live Board Holdings Pty Ltd v Cody Live Pty Ltd [2017] NSWCA 302 at [99]-[109], the Court is not prevented from forming a view on the prospects of success of a plaintiff's case and factoring that matter into the exercise of its discretion.
2. In respect of SAG's claims against Invigor based upon alleged express representations, the fact that those claims largely depend upon the oral evidence that will be given concerning the making of the alleged representations by Gary Cohen makes it unsafe for the Court, at this stage of the proceedings, to form any view about the merits of the claims.
3. The Court is entitled to be doubtful about whether SAG will make out its claims based upon the alleged positive representations, in so far as they concerned an expectation that Invigor's share price would increase significantly after certain announcements were made and other potential deals with third parties were successfully completed. Even if those representations were made, they were inherently contingent, and depended upon the occurrence of events that may never have occurred.
4. However, the position is different in relation to the representations concerning the financial circumstances of Invigor. There appears to be objective evidence that is consistent with the possibility that Mr Shannon was misled by the relevant defendants' silence into thinking that Invigor was financially sound, when he caused SAG to invest $1,000,000 in it. At this stage of the proceedings, the Court should say no more than that it is satisfied that SAG has real prospects of success on this aspect of the case.
5. The other plaintiffs' claims against Nehoc and Gregory Cohen are more problematic, because they depend upon establishing that representations were made by silence, and also on establishing that the circumstances that may vitiate SAG's transactions with Invigor also vitiate the other plaintiffs' transactions with Nehoc. As mentioned above, the plaintiffs have not pleaded in a transparent way how Gregory Cohen's involvement in the transactions subjected him to a duty to inform Mr Shannon that Invigor was experiencing financial difficulties.

Impecuniosity of the plaintiffs

1. As noted above, SAG holds 14,583,000 shares in Invigor, which cost SAG $1,000,000 and had a value of about $364,500 when last traded. That, as I understand it, was on about 28 October 2019, when Invigor's securities were placed by the ASX on a trading halt. Mr Armstrong, as the solicitor for Invigor, has denied that the shares have no value.
2. SAG has no basis for knowing when, if at all, Invigor's securities will be reinstated for quotation on the ASX. At this stage of the proceedings, SAG has no convenient way to establish what the inherent worth of its shares in Invigor may be. As the Court understands it, Invigor is continuing to do business, albeit that its shares cannot be traded, and so realised by its shareholders by transfers on the market.
3. The defendants submitted that, for the purpose of the Court determining whether there was reason to believe that SAG would be unable to meet any costs order that may be made against it, the simple reality is that trading in Invigor's shares has been suspended. I have accepted that submission. However, it does not follow that, in exercising its discretion in relation to the making of orders that the corporate plaintiffs provide security for costs, the Court should ignore the value of SAG's shares in Invigor.
4. The primary aspect of SAG's case against Invigor is that it acquired the shares in Invigor on the basis of misleading and deceptive representations concerning the financial viability of Invigor. Whatever may be the outcome of SAG's claim, it has ultimately paid $1,000,000 for shares in circumstances where it cannot realise the value of those shares because of the suspension of trading in those shares announced by the ASX. Invigor may have a good reason for not enlightening the Court with respect to the real value of those shares. If they are valueless, Invigor may not wish to inform the market of that fact, or to make an admission in those terms for the purposes of these proceedings. Invigor simply denies that the shares have no value. So be it!
5. I consider that the impecuniosity of the plaintiffs, as a factor in determining whether the Court should make an order that the plaintiffs provide security for costs, entitles the Court to look further than simply whether the impecuniosity is such as to disable the plaintiffs from paying a costs order within a reasonable time, or whether the impecuniosity was caused by the very wrongful conduct alleged against the defendants in the proceedings. The Court is entitled to look at the nature and reasons for the apparent impecuniosity, and whether there are reasonable prospects for it to be reversed.
6. In the present case, SAG has an apparently valuable asset, and the only reason it cannot be realised is that Invigor maintains a state of suspension of the quotation of its shares on the ASX. Invigor has not said when the suspension may be lifted, and, while denying that the shares have no value, has not provided any information as to their value, when that information is solely within the knowledge of Invigor. It is also within the knowledge of Gary and Gregory Cohen as executive directors of Invigor.
7. This state of affairs is, in my opinion, quite exceptional, and is a factor that the Court is entitled to take into account in fashioning an appropriate order for the provision by the plaintiffs of security for the defendants' costs.

Cause of the plaintiffs' impecuniosity

1. The plaintiffs have not claimed that the defendants' conduct has caused their impecuniosity, in the sense that it is the alleged wrongful conduct of the defendants that has led to the result that the plaintiffs do not have the financial wherewithal to meet any future order for costs made in favour of the defendants.

Are the plaintiffs effectively defendants?

1. In Willey v Synan (1935) 54 CLR 175 at 184, Dixon J (with whom Rich J agreed) approved of the statement of Scrutton LJ in Maatschappij voor Fondsenbezit v Shell Transport and Trading Co (1923) 2 KB 166 at 177, as to a circumstance when a plaintiff should not be ordered to provide security for the defendant's costs: "The position, I think, extends to every case where the person against whom security is sought is really defending himself against attack, even if he be nominally a plaintiff, but really defending himself against defendants' previous action against him".
2. In Heller Factors Pty Ltd v Arnold's Surf Shop Pty Ltd (in liq) (1979) 4 ACLR 492, the Full Court of the South Australian Supreme Court applied this principle in a case where the liquidator of the plaintiff sued to obtain an injunction to restrain a secured creditor from proceeding with a threatened sale of the plaintiff's assets in the exercise of rights under a guarantee secured by a debenture.
3. This principle will apply differently to the claims of some of the plaintiffs as opposed to others, and its true application may not become clear until the defendants have filed their defences and any cross claims that they may wish to file.
4. It is clear that SAC and EAA are both the effective plaintiffs in the second and third claims that I have described above in my analysis of the statement of claim.
5. The better view is that SAG is also the true plaintiff in relation to the first claim, where it seeks orders that apparently valid transactions that it entered into are void or should be set aside on the ground that they were entered into as a result of Mr Shannon acting on representations that were misleading and deceptive.
6. However, Nehoc has appointed receivers and managers of SF10 and SAC under the securities granted by those companies, and their actions to set aside those appointments and the underlying transaction documents may fall within the principle that they are not the effective plaintiffs.
7. The position concerning Mr Shannon is unclear. He appears to be the effective plaintiff, in so far as he has joined in the actions of SF10 and SAC, but, if he were to be sued upon his guarantee by way of cross claim by Nehoc, then the principle would suggest that his action was defensive in substance.
8. This factor relevant to the exercise of the Court's discretion is relatively finely balanced at the present time, which suggests that it may be wise for the Court to defer finally ruling on the applications for orders requiring the plaintiffs to provide security for costs until the pleadings in these proceedings have been completed.

Will an order for security for costs stifle the proceedings?

1. Mr Shannon is the sole shareholder of each of the corporate plaintiffs other than SF10. Though, Mr Shannon is the sole shareholder of SAG, which in turn is the sole shareholder of SF10.
2. Mr Shannon has not offered any undertaking to meet any orders for costs that may be made in these proceedings against the corporate plaintiffs. It may not have mattered even if Mr Shannon had proved that he is financially unable personally to meet costs orders, but he has not tendered evidence to prove that fact.
3. Consequently, the possibility that orders for security for costs will stifle the proceedings by the corporate plaintiffs is not, as matters stand, a valid ground for denying the defendants security for costs: see Bell Wholesale Co Pty Ltd v Gates Export Corporation (1984) 2 FCR 1 at 4 and Murray John Carter v Ian Mehmet ATF Ian G Mehmet Testamentary Trust [2021] NSWCA 32 at [21].

The significance of Mr Shannon being a plaintiff

1. The plaintiffs submitted that the Court should not order the corporate plaintiffs to provide security for the defendants' costs because the Court would not order that Mr Shannon provide security, and the proceedings that will be prosecuted by Mr Shannon will determine all of the issues that are raised by the claims made by the corporate plaintiffs.
2. In the present case, it cannot be said that there is complete identity in the claims prosecuted by the individual plaintiff, being Mr Shannon, and the corporate plaintiffs: see Street v Luna Park Sydney Pty Ltd [2006] NSWSC 1317 at [28]-[29]. This is not a case where all of the claims made by the plaintiffs must succeed or fail together.
3. Mr Shannon has an interest in the claims made by SAG to vitiate its transactions with Invigor, in SAC's consultancy agreement claim against Invigor, and in EAA's claim against Marcel Equity, but he is not a party to those claims. Even though Mr Shannon was the person allegedly misled and deceived by the representations pleaded in the statement of claim, he did not suffer a personal loss as a result of SAG entering into the various transactions with Invigor.
4. The most that can be said concerning the application of this factor to the exercise of the Court's discretion is that there is some overlap between the issues that arise in the case being prosecuted by Mr Shannon and the cases of the corporate plaintiffs. By reason of the guarantee granted by Mr Shannon to Nehoc, he is a party to the various corporate plaintiffs' claims in respect of the vitiation of the agreements with Nehoc.

Separate representation for two groups of defendants

1. I am not satisfied that the defendants have established that the corporate plaintiffs should be ordered to provide almost identical amounts of security for costs for the separate legal representation of the two groups of defendants.
2. On the basis of the analysis of the solicitors' tax invoices that I have set out above, I am simply not satisfied that, in reality, the separate groups of defendants have decided that there is an actual conflict of interest between Gary Cohen and Invigor on the one hand, and Gregory Cohen and Nehoc on the other hand, such as has made it necessary and proper for the two groups of defendants to retain separate legal representation and conduct separate defences.
3. The separate groups of defendants are entitled to make their own judgments and to incur the legal costs of separate representation if they choose to do so. Whether or not, if they succeed in defeating the plaintiffs' claims, they will be entitled to separate costs orders against the plaintiffs is a matter to be determined at the end of the proceedings.
4. However, I do not accept that the two groups of defendants are each entitled to substantial orders for security for costs against the corporate plaintiffs, in almost equivalent amounts, just to enable the defendants to exercise separate representation if, at some stage in the future, Gregory Cohen and Nehoc choose to cross claim against some of the other defendants.
5. As I would not order the corporate plaintiffs to provide the double amounts of security for costs sought by the defendants, the quantum of the security for costs that the Court might order be provided must be substantially reduced.

Conclusion

1. The evidence would, in my view, justify the Court in making an order against the corporate plaintiffs that they provide an appropriate amount for the security of the defendants' costs - albeit only on the basis of representation by a single set of lawyers - were it not for the unresolved question of the value of SAG's shares in Invigor. The concessions made by the corporate plaintiffs concerning their impecuniosity were subject to the possibility that the shares may have a sufficient value to enable SAG to pay any costs orders that may be made in favour of the defendants against the corporate plaintiffs.
2. The position that Invigor has taken on this issue is extraordinary. SAG paid to Invigor the sum of $1,000,000 for the issue of the shares in Invigor. In the manner explained above at [42], the $1,000,000 may be taken to be the price paid by SAG for the shares. The $1,000,000 was borrowed by SF10 from Nehoc, but on the express condition that it be used to pay the price for the issue of the shares. Invigor has therefore had the benefit of the $1,000,000 from that time. Invigor's shares on the ASX were subject to a trading halt at Invigor's request on 28 October 2019, and quotation was suspended on 30 October 2019. That was little more than 4 months after the $1,000,000 was paid over to Invigor. The evidence of the circumstances in which SAG lost its ability to realise the value of its shares in Invigor is referred to above at [86]. At that time the shares had a market value of about $364,500.
3. Invigor has declined to concede that the shares held by SAG in Invigor are worthless. Invigor and its executives, who include Gary and Gregory Cohen, are the only parties in possession of information relevant to the true value of SAG's shareholding in Invigor, and whether and in what circumstances SAG may be able to realise that value by the reinstatement of Invigor for quotation on the ASX.
4. The defendants want the Court to determine their applications for security for costs on the basis that SAG is impecunious, but Invigor at least will not accept that it is impecunious and will not shed light on the true position. It would therefore be unfair for the Court to decide the applications for security for costs on the basis that SAG is devoid of assets capable of meeting costs orders against the corporate plaintiffs in favour of the defendants.
5. If SAG fails in its claim against Invigor, it will retain the shares that it holds in Invigor. In the absence of evidence that the shares are worthless or that Invigor's shares will not be reinstated for quotation on the ASX, I will proceed upon the basis that, in the event of failure of its claim, SAG will retain an asset whose value could be applied to meeting costs orders made against the corporate plaintiffs.
6. Further, if SAG's claim fails, the likelihood is that the other corporate plaintiffs' claims will also fail, as the plaintiffs other than SAG rely upon the same representations by silence that SAG has pleaded. SAG's case may be stronger than those of the other corporate plaintiffs because it also relies upon alleged express representations.
7. If SAG's claim succeeds, it is possible that relief will only be granted to it on the basis that the issue of shares to it by Invigor is set aside in order to ensure the restoration of the status quo before the transaction occurred. That would only happen concurrently on Invigor returning the purchase price of $1,000,000 to SAG. The consequence is that it is possible that, as a result of the proceedings, SAG's shareholding in Invigor may be replaced by the return of the price by Invigor.
8. Although it may appear to be an unlikely outcome, it is possible that SAG's claim based upon the alleged express representations will succeed, and the claims of all of the corporate plaintiffs based upon the alleged representations by silence will fail. In that case, the other corporate plaintiffs' capacity to pay any costs orders made against them would require the application by SAG of the fruits of its successful claim against Invigor in payment of those costs.
9. There remains a possibility that, even if SAG succeeds in its claim against Invigor, either its shareholding in Invigor or any relief that it obtains against Invigor may ultimately prove to be worthless. In that event, SAG may not be able to meet any costs orders made against the other corporate plaintiffs in favour of the defendants. While that is a possibility, in the absence of evidence from the defendants as to the likelihood of it occurring, it would not in my view be just to require the corporate plaintiffs to provide security for the defendants' costs on the basis of a mere possibility.
10. These considerations in principle cause me to conclude that the appropriate course will be for the Court to give SAG the opportunity to grant a security over the shares it holds in Invigor, as well as any replacement asset for those shares that it acquires as a result of these proceedings, to secure payment to the defendants of all costs orders made in the proceedings against the corporate plaintiffs.
11. During the course of the hearing, counsel for the plaintiffs advised the Court that SAG was prepared to grant a security over its interest in its shareholding in Invigor, if the Court was otherwise not prepared to dismiss the defendants' applications for security for costs outright. When I enquired whether SAG was prepared to take this course, I had not realised that it would be necessary for SAG also to charge any alternative asset that it acquired as a result of these proceedings.
12. As, apparently, Mr Shannon loaned to SAG the $1,000,000 that SF10 borrowed from Nehoc, it would be necessary for Mr Shannon to enter into an agreement subordinating any rights that he has against SAG in favour of the defendants. For more abundant precaution, the other plaintiffs should do the same thing.
13. It appears that SAG is a special purpose vehicle established for the purpose of holding Mr Shannon's interests in Invigor, and that it otherwise has not traded. A submission was made to that effect by counsel for the plaintiffs at the hearing. However, as I do not consider that the evidence tendered by the plaintiffs is adequate to prove that fact, the defendants are entitled to an order that SAG prove by affidavit that its interest in the shares in Invigor is unencumbered.
14. Invigor, Gary Cohen and Marcel Equity have not provided separate estimates of their costs of defending the consultancy agreement claim by SAC and the debt claim by EAA.
15. As I have explained above, it appears to me that both of those claims are relatively simple, and at this stage of the proceedings, the relevant defendants have not demonstrated to the Court that they have strong defences to those claims.
16. Although defendants are required to act with expedition in bringing claims for security for costs, and the defendants have done so in this case, the circumstances are that the Court is required to determine whether it should order security for the costs of the defendants to the consultancy agreement and debt claims without either having separate estimates of the costs of defending those claims, or an adequate indication of the real issues that will be in contest.
17. I consider that the Court should not make that determination until after the relevant defendants have filed their defences. The claims are of a nature that the Court can expect more than non-admissions from the defendants. If the services were provided or the payments were made, that should be admitted. The defences should identify the real issues in dispute between the parties.
18. As I have observed above, the outcome of the consultancy agreement case is likely to turn on the construction of a single letter, and whether the rental claim falls within the entitlement to reimbursement.
19. I do not know what the defence of Gary Cohen and Marcel Equity could be to the debt claim, if, in fact, EAA paid the $250,000 to Marcel Equity as claimed.
20. I consider that the existence of these two claims is relevant to the determination of the claim for security for costs in relation to the plaintiffs' claims to vitiate the Invigor and Nehoc transactions.
21. If the defendants to the consultancy agreement and debt claims are simply denying the relevant claimants an amount of over $450,000 to which they are collectively entitled, then the relevant defendants are depriving the plaintiffs of money that they could be required to pay into Court as security for the defendants' costs.
22. That is why I consider that the final determination of the defendants' notices of motion should be deferred until after the defendants have served proper defences.
23. The parties should consider these reasons and confer and provide appropriate short minutes of order to deal with the completion of the pleadings, so that the Court can make a final determination of the claims made by the defendants in their notices of motion. The short minutes of order should also deal with the provision by the plaintiffs of the affidavit referred to at [153] above. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 August 2021