Canterbury-Bankstown Council v Cossu

[2025] NSWSC 717

Supreme Court

New South Wales

Medium Neutral Citation:

Canterbury-Bankstown Council v Cossu [2025] NSWSC 717

Hearing dates:

3 July 2025

Date of orders:

3 July 2025

Decision date:

03 July 2025

Jurisdiction:

Equity - Applications List

Before:

McGrath J

Decision:

Pursuant to s 67 of the Civil Procedure Act 2005 (NSW), these proceedings be stayed as against all defendants subject to conditions.

Catchwords:

CIVIL PROCEDURE — stay of proceedings — potential for concurrent civil and criminal proceedings — same subject matter — prejudice to applicant.

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 56, 57, 58, 67

Crimes Act 1900 (NSW), ss 249B(1)(a)(ii), 249B(1)(b), 249B(2)(a)(ii), 249B(2)(b)

Cases Cited:

Australian Competition and Consumer Commission v The Construction Forestry Mining and Energy Union [2016] FCA 504

Australian Securities and Investments Commission v Flugge (2008) 21 VR 252; [2008] VSC 473

Beecee Group Ltd v Barton (1980) 5 ACLR 33

Broadway Plaza Investments Pty Ltd v Broadway Plaza Pty Ltd [2019] NSWSC 410

Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46; [2015] HCA 5

Construction, Forestry, Mining and Energy Union v Australian Competition and Consumer Commission (2016) 242 FCR 153; [2016] FCAFC 97

Grassby v The Queen (1989) 168 CLR 1; [1989] HCA 45

Gregg v Fairfax Media Publications Pty Ltd [2017] FCA 440

Jago v District Court (NSW) (1989) 168 CLR 23; [1989] HCA 46

ML v Australian Securities and Investments Commission (2013) 276 FLR 1; [2013] NSWSC 283

National Australia Bank Ltd v Human Group Pty Ltd [2019] NSWSC 1404

Re Plutus Payroll Australia Pty Ltd [2017] NSWSC 1854

Wallace v Heavy Mechanics Pty Ltd (2017) 83 MVR 130; [2017] VSC 772

Western Freight Management Pty Ltd v Hyde [2023] NSWSC 1247

Wigmans v AMP Ltd (2019) 103 NSWLR 543; [2019] NSWCA 243

Category:

Principal judgment

Parties:

Canterbury-Bankstown Council (Plaintiff)
Pietro Cossu (First Defendant)
Project W Pty Ltd (formerly PMLV Invest & Const Pty Ltd) (ACN 166 336 858) (Second Defendant)
Jeremy Peter Clarke (Third Defendant)
General Works & Construction Pty Ltd (ACN 642 420 399) (Fourth Defendant)
Ivan John Webb (Fifth Defendant)
ACN 660 240 522 Pty Ltd (Sixth Defendant)
Brixie Investments Pty Ltd (ACN 682 521 375) (Seventh Defendant)

Representation:

Counsel:
J Alderson (Plaintiff)
M Swanson (First and Seventh Defendant)
Third and Fourth Defendant (self-represented)

Solicitors:
Hall & Wilcox (Plaintiff)
ITC Law Pty Ltd (First and Seventh Defendant)
Third and Fourth Defendant (self-represented)

File Number(s):

2024/00393023

Publication restriction:

Nil

EX TEMPORE Judgment (REVISED)

INTRODUCTION

1. This is an application by the first defendant, Pietro Cossu, by amended notice of motion filed 31 March 2025 seeking a stay of the proceedings against him or, alternatively, against all seven defendants pending the resolution of prospective criminal proceedings arising from the “Operation Mantis” investigation conducted by the New South Wales Independent Commission Against Corruption (ICAC) and the report published at the conclusion of that investigation (Operation Mantis Report).

2. The seven defendants in the proceedings are:

1. Mr Cossu;

2. Project W Pty Ltd (formerly known as PMLV Invest & Const Pty Ltd) (ACN 166 336 858);

3. Jeremy Peter Clarke;

4. General Works & Construction Pty Ltd (GWAC) (ACN 642 420 399);

5. Ivan John Webb;

6. ACN 660 240 522 Pty Ltd (ACN Co); and

7. Brixie Investments Pty Ltd (ACN 682 521 375).

3. The proceedings were commenced by the plaintiff, Canterbury-Bankstown Council, by summons filed on 23 October 2024 seeking declaratory and other relief arising from alleged misappropriation of monies and assets by Mr Cossu, Project W, Mr Clarke, GWAC and Ivan Webb. ACN Co and Brixie Investments were subsequently added as parties to the proceedings.

4. The Council consents to the stay of the proceedings against all defendants on particular terms to ensure that the stay:

1. preserves the effect of any extant asset preservation orders and undertakings;

2. does not impede the Council’s ability to issue subpoenas and seek other limited procedural steps necessary to ensure the integrity of its claims; and

3. protects against the dissipation of assets during the period of any stay.

5. The stay sought by Mr Cossu is the subject of consent by the second, fifth, sixth and seventh defendants (Project W, Ivan Webb, ACN Co and Brixie Investments, respectively) but was initially opposed by the third and fourth defendants (Mr Clarke and GWAC) unless the undertakings provided by Mr Clarke are released, the stay is made permanent and subpoenas for banking records for the period after December 2023 onwards are not permitted. During the hearing of the application, it appeared that Mr Clarke and GWAC shifted their position to wanting to obtain the benefit of a stay of the proceedings upon understanding that they could still apply to discharge or vary asset preservation undertakings that they had given to the court.

6. I have determined that a stay of the proceedings should be ordered pending a determination by the Office of the Director of Public Prosecutions (ODPP) either not to charge Mr Cossu and Mr Clarke with a crime arising out of the Operation Mantis Report; or, if Mr Cossu or Mr Clarke is charged with a crime arising out of the Operation Mantis Report, the final determination of any relevant criminal proceedings brought against them. The form of the stay will be on terms that preserve the effect of all extant asset preservation orders and undertakings, unless discharged or varied by further order of this court, and which permit the Council, with the prior leave of the court, to request the issue of subpoenas to third parties relating to matters relevant to those asset preservation orders and undertakings.

RELEVANT FACTS

ICAC investigation and Operation Mantis Report

7. On 6 December 2022, ICAC commenced the conduct of the Operation Mantis investigation into the functions of the Council and its employees/contractors, namely former Council employee Benjamin Webb (who is not a party to these proceedings), Mr Cossu, Mr Clarke and the balance of the defendants in these proceedings.

8. On 2 March 2023, ICAC escalated the matter to a full investigation.

9. On 12 March 2024, ICAC determined it was in the public interest to hold a public inquiry in connection with the Operation Mantis investigation. The public inquiry ran between 3 and 20 June 2024, following which written submissions were provided by the parties. On 11 November 2024, the last of those submissions were received by ICAC.

10. On 5 December 2024, ICAC issued the Operation Mantis Report.

11. In the Operation Mantis Report, ICAC made referrals to the ODPP to consider the prosecution of Mr Cossu for charges under ss 249B(1)(a)(ii), 249B(1)(b), 249B(2)(a)(ii) and 249B(2)(b) of the Crimes Act 1900 (NSW). ICAC provided a summary of the basis of its reasoning with respect to those possible offences, being that they involved Mr Cossu:

1. corruptly giving financial benefits to Benjamin Webb, as an agent of the Council, in relation to a recruitment scheme for contingent workers who were engaged by Project W and subcontracted to the Council; and

2. as an agent of the Council, corruptly receiving financial benefits from Mr Clarke and GWAC in relation to a scheme of improperly assisting GWAC obtaining contracts for capital works with the Council in exchange for payments.

12. In the Operation Mantis Report, ICAC made referrals to the ODPP for the prosecution of Mr Clarke for charges under ss 249B(2)(a)(ii) and 249B(2)(b) of the Crimes Act. ICAC provided a summary of the basis of its reasoning with respect to those possible offences, being that they involved Mr Clarke corruptly giving financial benefits to Mr Cossu, as an agent of the Council, in relation to a scheme of improperly assisting GWAC obtaining contracts for capital works with the Council in exchange for payments.

13. The ODPP has not yet charged Mr Cossu or Mr Clarke with any criminal offence arising from the Operation Mantis Report.

Procedural history

14. On 23 October 2024, the Council commenced the proceedings by filing in court a summons, notice of motion and supporting affidavit seeking freezing orders against Mr Cossu, Project W, Mr Clarke, GWAC, Ivan Webb and ACN Co.

15. On 25 October 2024, Pike J made asset preservation orders against Mr Cossu which, in summary, restrained him dealing with particular real property and companies, and required him to provide an asset disclosure affidavit within 28 days and file an application if he wished to object to providing that affidavit on the basis that it may tend to incriminate him.

16. On 31 October 2024, in summary, Hammerschlag CJ in Eq:

1. granted the Council leave to discontinue its application against Ivan Webb seeking asset preservation orders;

2. accepted undertakings to the court by Project W not to remove any of its assets from Australia or deal or dispose of any of its assets other than in the ordinary course of business and to pay its legal costs;

3. ordered Project W to provide an asset disclosure affidavit within 28 days;

4. accepted undertakings by Mr Clarke, also on behalf of GWAC, up to and including 5 December 2024 or earlier order of the court, not to remove from Australia or in any way dispose of, deal with or diminish the value of any of their assets in Australia up to the unencumbered value of $3 million, with the proviso allowing Mr Clarke to pay $1,500 per week for ordinary living expenses and either Mr Clarke or GWAC paying up to $50,000 for reasonable legal expenses, or dealing with or disposing of any of their assets in the ordinary and proper course of their business provided they give at least two working days written notice, with the undertaking ceasing to have effect if they pay $3 million into court.

17. On 13 December 2024, in summary, Hmelnitsky J accepted undertakings to the court from Mr Clarke and GWAC not to remove from Australia or in any way dispose of, deal with or diminish the value of their assets in Australia up to the unencumbered value of $3 million.

18. On 6 February 2025, the Council filed the statement of claim.

19. On 10 February 2025, the Council filed a notice of motion seeking leave for ACN Co to be joined as a party to these proceedings.

20. On 19 February 2025, by consent, Registrar Walton ordered that:

1. the Council file and serve an amended statement of claim (ASOC) by 21 February 2025;

2. any defendant who wished to file a defence before the determination of the stay application must do so by 7 March 2025;

3. the Council to serve any evidence by 21 March 2025;

4. the defendants to serve any evidence by 22 April 2025; and

5. the proceedings be stood over to 5 May 2025.

21. On 19 February 2025, also by consent, Justice Brereton vacated orders 3 and 4 made by Registrar Walton, as extracted above, and in doing so made orders to the effect that:

1. Brixie Investments be joined as a party to the proceedings;

2. the Council to file and serve the ASOC within 21 days;

3. Brixie Investments be restrained from selling, encumbering or otherwise dealing with its interest in particular real property without 14 days’ notice to the plaintiff;

4. Mr Clarke and GWAC to file and serve any evidence and short submissions addressing any application they wish to make in relation to the extant asset preservations orders by 30 May 2025;

5. any other party file and serve any evidence in response together with brief submissions by 6 June 2025; and

6. list the matter for directions on 27 June 2025.

22. On 6 March 2025, Mr Cossu filed a notice of motion seeking to stay the proceedings.

23. On 12 March 2025, Project W and ACN Co filed their respective defences.

24. On 19 March 2025, the Council filed subpoenas for production of documents on IMB Bank, Macquarie Bank, National Australia Bank, Commonwealth Bank of Australia and St George Bank.

25. On 26 March 2025, Ivan Webb filed his defence.

26. On 31 March 2025, Mr Cossu filed an amended notice of motion seeking a stay of the proceedings against all defendants.

27. On 4 April 2025, at the return of subpoena Senior Deputy Registrar Czerwinski made general access orders in relation to the packets received from IMB Bank, Macquarie Bank and National Australia Bank.

28. On 10 April 2025, at the return of subpoena Senior Deputy Registrar Krikorian made general access orders in relation to the packet received from Commonwealth Bank of Australia.

29. On 22 April 2025, at the return of subpoena Senior Deputy Registrar Krikorian made general access orders in relation to the packet received from St George Bank.

30. On 13 June 2025, the Council filed the ASOC.

The Council’s claims in these proceedings

31. In the ASOC, in summary, the Council seeks:

1. declarations that the defendants hold misappropriated funds, assets or their traceable substitutes as constructive trustees for the Council;

2. orders against the defendants for the tracing of misappropriated funds or their traceable substitutes into the hands of third parties;

3. an account of profits received by the defendants as a result of their conduct; and

4. orders against the defendants for restitution of misappropriated funds or their traceable substitutes.

32. In [46]–[52] of the ASOC, the Council pleads a particular unauthorised arrangement pursuant to which it is alleged that Mr Cossu and Project W improperly profited from the recruitment of contingent workers at the Council (PMLV Procurement Scheme).

33. In [53]–[59] of the ASOC, the Council pleads a particular arrangement pursuant to which it is alleged that Mr Cossu, Mr Clarke and GWAC would use confidential tender information for various construction and infrastructure projects provided to GWAC to assist GWAC in securing project work with the Council, and in which it is alleged that GWAC would then transfer payments to Project W as a subcontractor (GWAC Scheme).

34. In summary, it is alleged that Mr Cossu and Project W ([72]–[77] of the ASOC):

1. breached fiduciary duties they owed to the Council;

2. failed to disclose their financial interests and personal and financial relationships to the Council;

3. misused Mr Cossu’s position to improperly influence procurement decisions of the Council;

4. derived improper financial benefits under the PMLV Procurement Scheme and the GWAC Scheme;

5. actively concealed their misconduct from the Council; and

6. failed to act honestly and impartially in the performance of their duties and prioritise the best interests of the Council.

35. The Council claims that it has suffered loss and damage as a result of these breaches, including by the payment of inflated charges and fees under the PMLV Procurement Scheme, the payment of inflated invoices and unjustified variations under the GWAC Scheme and additional costs incurred in investigating and addressing Mr Cossu’s misconduct ([78] of the ASOC).

36. The Council also alleges that Mr Cossu breached his contractual obligations to the Council by ([80] of the ASOC):

1. participating in the GWAC Scheme;

2. participating in the PMLV Procurement Scheme;

3. failing to comply with the Council’s code, procurement policies and governance standards for the performance of his subcontracting services under the PMLV Procurement Scheme;

4. issuing misrepresented invoices under the PMLV Procurement Scheme, leading to inflated payments by the Council;

5. failing to disclose conflicts of interest;

6. concealing the true nature of financial arrangements; and

7. retaining profits derived from misapplied public funds under the PMLV Procurement Scheme.

37. The Council claims that it has suffered loss and damage as a result of these breaches, including the payment of inflated charges under the PMLV Procurement Scheme and the deprivation of a fair and competitive procurement process for contingent worker services ([81] of the ASOC).

38. Further allegations made by the Council against Mr Cossu are that ([88]–[96], [103]–[104] and [113]–[117] of the ASOC):

1. he was involved in a conspiracy with Project W and Benjamin Webb in relation to the PMLV Procurement Scheme;

2. he was involved in a conspiracy with Mr Clarke and GWAC in relation to the GWAC Scheme;

3. he knowingly assisted breaches of fiduciary duties owed by Benjamin Webb and GWAC; and

4. he was unjustly enriched by receiving and retaining funds misappropriated from the Council at the Council’s expense.

39. The Council alleges that Mr Clarke and GWAC breached fiduciary duties owed to the Council by participating in the GWAC Scheme which resulted in GWAC securing Council projects and the Council paying inflated invoices and unjustified contract variations which benefited Project W and GWAC ([83] of the ASOC). The Council claims declarations, an account of profits, equitable compensation, a declaration of constructive trust and tracing orders arising from these allegations ([84] of the ASOC).

40. The Council also alleges that GWAC, acting through Mr Clarke, breached its contractual obligations to the Council by ([85] of the ASOC):

1. participating in the GWAC Scheme;

2. failing to deliver services and works in accordance with the specifications required under its contracts;

3. submitting false or misleading tenders on invoices;

4. failing to disclose subcontracting arrangements with Project W; and

5. engaging in improper practices to inflate payments.

41. The Council claims that it has suffered loss and damage as a result of these breaches, including the payment of inflated charges under the GWAC Scheme and the payment of unjustified contract variations that were improperly approved ([86] of the ASOC).

42. Further allegations made by the Council against Mr Clarke and GWAC are that ([92]–[96], [100]–[102] and [107]–[117] of the ASOC):

1. they were involved in a conspiracy with Mr Cossu and Project W in relation to the GWAC Scheme;

2. GWAC knowingly received trust property;

3. Mr Clarke knowingly assisted breaches of fiduciary duties by Mr Cossu, Project W and GWAC;

4. GWAC knowingly assisted breaches of fiduciary duties by Mr Cossu and Benjamin Webb; and

5. they were unjustly enriched by receiving and retaining funds misappropriated from the Council at the Council’s expense.

LEGAL PRINCIPLES

43. The applicable legal principles for the granting of a stay pending criminal proceedings are not in issue. Those legal principles can be summarised as follows:

1. The court has a statutory power to stay civil proceedings under s 67 of the Civil Procedure Act 2005 (NSW) (CPA) which states:

Subject to rules of court, the court may at any time and from time to time, by order, stay any proceedings before it, either permanently or until a specified day.

2. The court also has an inherent power to stay proceedings to prevent injustice: Jago v District Court (NSW) (1989) 168 CLR 23, Mason CJ at 25 and Deane J at 56; [1989] HCA 46.

3. The exercise of the court’s discretion to stay proceedings involves an assessment as to whether the dictates of justice require such a remedy: s 58 of the CPA. This assessment must have regard to the overriding purpose of the CPA and rules of court, being to facilitate the just, quick and cheap resolution of the real issues in the proceedings, although it is a larger task than one of mere “case management”: Wigmans v AMP Ltd (2019) 103 NSWLR 543; [2019] NSWCA 243, Bell P at [95].

4. It is appropriate to order a stay of proceedings where the interests of justice require such an order: Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46; [2015] HCA 5, French CJ, Hayne, Kiefel, Bell and Keane JJ at [36]; Construction, Forestry, Mining and Energy Union (CFMEU) v Australian Competition and Consumer Commission (2016) 242 FCR 153; [2016] FCAFC 97, Dowsett, Tracey and Bromberg JJ at [22].

5. A plaintiff is prima facie entitled to have his, her or its civil action tried in the ordinary course and a stay therefore requires justification on proper grounds, with the applicant for a stay bearing the burden of demonstrating proper grounds: Zhao, at [39].

6. A court will not grant a stay of a civil proceeding merely because related charges have been brought against an accused and criminal proceedings are pending: Zhao, at [35], as cited with approval in CFMEU, at [22].

2. To warrant a stay of the civil proceedings, it must be apparent that the accused is at risk of prejudice in the conduct of his or her defence in the criminal trial: Zhao, at [35]; CFMEU, at [22].

3. The risk of prejudice must be real and, in considering what the interests of justice require, that risk is to be weighed against the prejudice that a stay of the civil proceedings would occasion: Zhao, at [47] and [50]; CFMEU, at [22].

4. Prejudice may arise where a civil defendant is compelled to choose between defending the civil claim and preserving the right to silence or the privilege against self-incrimination, where civil proceedings risk prematurely disclosing the accused’s criminal defence or the possibility of publicity that might reach and influence jurors: Zhao, at [42]–[47] and [50]; CFMEU, at [23] and [44]–[46].

5. The court need not require the accused to articulate the specific matters of prejudice in detail because to do so may reveal information about the proposed defence which would itself defeat the privilege against self-incrimination and render the risk of prejudice a reality: Zhao, at [43].

6. In determining where the interests of justice lie, each case turns on its own merits with all relevant factors to be balanced, including the risk of prejudice to the civil defendant weighed against the countervailing prejudice to the plaintiff from the delay in the civil proceedings: Zhao at [47] and [50]; Australian Competition and Consumer Commission v CFMEU [2016] FCA 504, Middleton J at [50]–[51], citing ML v Australian Securities and Investments Commission (2013) 276 FLR 1; [2013] NSWSC 283, Rothman J at [23]–[26].

7. The same considerations as set out above arise in respect of a stay if criminal proceedings could be commenced against a defendant constituted by substantially the same conduct raised in the civil proceedings but have not yet been commenced: Australian Securities and Investments Commission v Flugge (2008) 21 VR 252; [2008] VSC 473, Robson J at [18] and [27].

8. The court retains a discretion to tailor the scope and effect of a stay and may preserve extant interlocutory orders (such as asset preservation orders) or permit limited procedural steps where necessary during the course of a stay: National Australia Bank Ltd v Human Group Pty Ltd [2019] NSWSC 1404, Henry J at [38]–[39], citing Gregg v Fairfax Media Publications Pty Ltd [2017] FCA 440, Rares J at [25]; Grassby v The Queen (1989) 168 CLR 1, Dawson J (with whom Mason CJ, Brennan Deane and Toohey JJ agreed) at 16–17; [1989] HCA 45; Beecee Group Ltd v Barton (1980) 5 ACLR 33, Waddell J at 38–39; Wallace v Heavy Mechanics Pty Ltd (2017) 83 MVR 130; [2017] VSC 772; Re Plutus Payroll Australia Pty Ltd [2017] NSWSC 1854, Brereton J. See also Western Freight Management Pty Ltd v Hyde [2023] NSWSC 1247, Henry J at [11].

9. A party seeking a stay of civil proceedings on conditions has an onus to establish why each condition is necessary or in the interests of justice: Gregg, at [26].

44. Another relevant principle in relation to a condition of the stay which would allow the issuing of subpoenas is that the subpoena process should not be used as a substitute for discovery or discovery against a third party, otherwise it may be set aside as an abuse of process: Western Freight, at [31] citing Broadway Plaza Investments Pty Ltd v Broadway Plaza Pty Ltd [2019] NSWSC 410, Ward CJ in Eq at [126].

SUBMISSIONS

45. Mr Cossu submits that he would be prejudiced if a stay was not granted because it would prejudice his right to silence or privilege against self-incrimination and from the possibility of publicity that might reach and influence potential jurors.

46. Mr Cossu points to the significant overlap of factual and legal issues between the potential offences identified by ICAC which were referred to the ODPP and the causes of action which have been pleaded by the Council in these proceedings. In a non-exhaustive way, Mr Cossu says that there is overlap between the potential offences and the claims made by the Council in the following way:

1. the engagement, employment and roles with the Council of each of Mr Cossu and Ivan Webb, including whether they were acting as a public official or an agent of the Council;

2. the factual and legal basis for the alleged exercise of a public function by Mr Cossu;

3. the factual details and operations of the alleged PMLV Procurement Scheme which covers the same conduct alleged in chapter 4 of the Operation Mantis Report and is the subject of the referrals to the ODPP contained in that chapter;

4. the factual details and operations of the alleged GWAC Scheme which covers the same conduct alleged in chapter 5 of the Operation Mantis Report and which is the subject of the referrals to the ODPP contained in that chapter;

5. the conduct of Mr Cossu in relation to the alleged payments made by him to Ivan Webb; and

6. the conduct of Mr Cossu in relation to the alleged receipt of payments made by Mr Clarke and/or GWAC to Mr Cossu and/or Project W.

47. Mr Cossu submits that the circumstances relevant to these proceedings and the referrals made to the ODPP in respect of Mr Cossu are substantially identical or significantly similar and, if Mr Cossu was required to defend these proceedings, his right to silence would be waived which would in turn prejudice any potential defence of Mr Cossu in a criminal trial.

48. Mr Cossu argues that although he has not currently been charged with any offences arising from the Operation Mantis Report, ICAC has exercised its statutory power in relation to the particular offences by referring them to the ODPP for consideration, which places him at a real risk that charges in relation to those potential offences may be laid by the ODPP. Mr Cossu says the risk that he may be the subject of criminal proceedings relating to those potential offences is real and significant.

49. In summary, Mr Cossu submits that if a stay of these proceedings is not granted, he will be exposed to civil procedures which will contain admissions, denials and answers to the very same referrals which have been made by ICAC to the ODPP which would have the effect of exhausting his right to claim privilege against self-incrimination.

50. The Council supports Mr Cossu’s application for a stay on the grounds put forward by Mr Cossu, but says that there should be conditions imposed as part of the stay which preserve the Council’s ability to recover any judgment ultimately obtained. The conditions to the stay which the Council seeks are:

1. all existing orders preserving property and undertakings must remain in force;

2. the Council must retain the ability to issue subpoenas and notices to produce, particularly to financial institutions and related entities; and

3. any application to vary or discharge existing restraints must be made on notice and supported by evidence.

51. Mr Clarke and GWAC opposed a stay unless it is granted on terms that include:

1. the release or dismissal of the undertakings given by them;

2. the stay be made permanent;

3. any subpoenas for banking records for the period after December 2023 onwards for all entities not be admissible in court on the basis that they have no relevance; and

4. the proceedings be limited to only those events occurring from August 2020 to February 2024, with the Council to have no access to material from February 2024 to the current date.

52. Mr Clarke and GWAC submit that a stay being granted with the existing undertakings they have given remaining in place would be onerous as it will cause a loss to them due to the fact that their activities are restricted and their revenues reduced. They say that the allegations and the other activities of the Council have already caused real financial and reputational damage to them, and that any delay in these proceedings will further add to this damage.

53. Mr Clarke and GWAC also argued that a stay would prejudice their ability to have a fair trial, could create concurrent proceedings in courts operating civil proceedings and criminal proceedings in parallel and a potential outcome from the ODPP could cause prejudice to the defendants in their defence of these proceedings. They point to the delay by the Council in bringing these proceedings, some 12 months from when the Council initially was involved in ICAC, and seeking asset preservation orders and undertakings some four months after the litigation commenced.

54. While not consenting to the stay, during the hearing it appeared that Mr Clarke and GWAC shifted their position to wanting to obtain the benefit of a stay of the proceedings on the understanding that they could still apply to vary or discharge the asset preservation undertakings that they had given to the court. Mr Clarke and GWAC are self-represented in these proceedings so it was necessary for me to explain to Mr Clarke that his right to silence and privilege against self-incrimination would also be at risk if there was no stay of these proceedings.

CONSIDERATION

55. This is clearly a case in which it is in the interests of justice that there be a stay of these civil proceedings.

56. The Council’s claims arise from the same factual substratum as has been referred by ICAC to the ODPP for the determination of whether criminal charges should be brought against Mr Cossu and Mr Clarke. At the centre of these civil proceedings, and the possible criminal proceedings, are serious allegations against Mr Cossu and Mr Clarke concerning procurement manipulation, undisclosed conflicts of interest and misuse of public funds. Their acts are alleged to have been undertaken in concert with Project W and GWAC. The very same PMLV Procurement Scheme and GWAC Scheme are each at the heart of the matters in dispute in these proceedings as have been the subject of the referral to the ODPP.

57. The continuation of these proceedings poses a real risk of prejudice to the operation of the right to silence, the privilege against self-incrimination and the rights of Mr Cossu and Mr Clarke to obtain a fair trial of any criminal proceedings which might eventuate.

58. Because of the nature of the claims which are advanced by the Council, particularly those involving knowing receipt and assistance, the conduct of Mr Cossu cannot be separated from that of the other defendants. A partial stay of the proceedings only against Mr Cossu would fragment these proceedings, compel participation by Mr Cossu and undermine the proposed protective purpose of the stay. If the proceedings continued as against some of the defendants while there is a stay of the proceedings against other defendants, it would result in significant procedural inefficiency, duplication of process and hearings, and potentially inconsistent findings. This would thwart the overarching purpose of requiring civil proceedings to be conducted in a just, quick and cheap manner, as required under ss 56 and 57 of the CPA.

59. For the same reasons as apply to Mr Cossu, Mr Clarke will also be able to obtain the benefit from a stay of these proceedings in light of the fact that criminal charges may possibly be brought against him arising from the referral to the ODPP by ICAC.

60. Mr Clarke initially asserted that he would be prejudiced by any stay because it would have the effect of delaying the lifting of the asset preservation undertakings that he and GWAC have given to the court. During the hearing, I explained to Mr Clarke that even if a stay is granted, he would be at liberty to make an application to discharge or vary the asset preservation undertakings with supporting material to be provided if there was a basis for doing so. In any event, I think that any prejudice to Mr Clarke from the delay which arises from a stay cannot outweigh the prejudice to Mr Cossu if a stay is not granted. In addition, as I have said, Mr Clarke will also be able to obtain exactly the same benefits from a stay as those which apply to Mr Cossu.

61. It is appropriate that conditions be imposed as part of the terms of the stay in order to preserve the Council’s ability to recover any judgment which it might obtain. Accordingly, all of the asset preservation orders which have been made, and the undertakings which have been given by the various defendants, should remain in place so that if the stay is lifted the Council continues to obtain the benefit of them.

62. If any defendant wishes to vary or discharge any of the asset preservation orders made or the undertakings which have been given, then they should continue to have the ability to do so despite the stay of the proceedings. Any such application should be made to the court in the usual way on notice to the Council and all other defendants and be supported by appropriate affidavit evidence.

63. I also consider that, with the leave of the court, the Council should be permitted to request the issuing of subpoenas for the purpose of gathering material that may be relevant to the asset preservation orders or undertakings remaining in place, being discharged or varied.

ORDERS

64. For the reasons set out above, I propose to make the following orders:

1. Pursuant to s 67 of the Civil Procedure Act 2005 (NSW) and subject to orders 4 and 5 below, these proceedings be stayed as against all defendants pending:

1. a decision by the Office of the Director of Public Prosecutions not to prosecute each of the first defendant and the third defendant in relation to matters arising from the Operation Mantis investigation conducted by the New South Wales Independent Commission Against Corruption; or

2. the final determination of any criminal proceedings brought against each of the first defendant and the third defendant in relation to matters arising from the Operation Mantis investigation conducted by the New South Wales Independent Commission Against Corruption.

2. The first defendant is to inform the plaintiff and the court within 72 hours of either of the events in order 1 occurring in relation to him.

3. The third defendant is to inform the plaintiff and the court within 72 hours of either of the events in order 1 occurring in relation to him.

4. The stay of the proceedings in order 1 is granted on condition that the following asset preservation orders and undertakings remain in place, subject to the liberty of the parties to apply to discharge or vary them:

1. the asset preservation orders made against the first defendant; and

2. the undertakings provided to the court by the second, third and fourth defendants.

5. The stay of the proceedings in order 1 is granted on condition that the plaintiff may apply for leave of the court to issue any subpoenas to third parties relating to matters relevant to the asset preservation orders and undertakings during the period of the stay.

6. The proceedings are stood over for directions before the Equity Registrar on 8 December 2025, to review the status of the proceedings, including the operation of the stay in order 1.

7. The parties have liberty to apply on two days’ notice to vary or discharge these orders.

8. The costs of all parties in relation to the application by the first defendant for a stay of the proceedings are costs in the cause.

**********

Decision last updated: 04 July 2025