Costa Nicodemou in his capacity as Receiver & Manager of Coronam Holdings Pty Ltd in its own capacity and as trustee for Coronam Property Trust v Crown

[2025] NSWSC 1243

Supreme Court

New South Wales

Medium Neutral Citation:

Costa Nicodemou in his capacity as Receiver & Manager of Coronam Holdings Pty Ltd in its own capacity and as trustee for Coronam Property Trust v Crown [2025] NSWSC 1243

Hearing dates:

3 October 2025

Date of orders:

23 October 2025

Decision date:

23 October 2025

Jurisdiction:

Equity - Commercial List

Before:

Ball JA

Decision:

(1) A declaration that the first defendant has engaged in misleading or deceptive conduct in trade or commerce in contravention of s 18 of the Australian Consumer Law by making representations to the effect that:

(a)   The trustees of the Trusts have been removed as trustees of those trusts;

(b)   The plaintiffs have no legal authority to deal with trust assets of the Trusts;

(c)   The plaintiffs have no legal or beneficial interest in the trust assets of the Trusts;

(d)   The plaintiffs have no authority to act on behalf of the Trusts;

(e)   The plaintiffs have no authority to receive rental income;

(f)   All rental income should have been directed to the (purportedly) duly appointed new trustees of the Trusts;

(g)   The trustees of the Trusts ceased to act in that capacity at law immediately upon the plaintiffs’ appointment;

(h)   The plaintiffs appointments relate to corporate entities only, not to the Trusts or their assets;

(i)   No access or information should be provided to any third party purporting to act for any of the Trusts without the defendants’ authority;

(j)   The plaintiffs have incorrectly diverted rental income; and

(k)   The land the subject of the Trusts is managed via their new trustees, who have not granted access or authority to the receivers or their agents.

“Trusts” means:

(i)   Coronam Holdings Pty Ltd ACN 621 784 950 as trustee for Coronam Property Trust ABN 85 674 051 341;

(ii)   Resilient Investment Holdings Pty Ltd ACN 636 822 332 as trustee for the Resilient Investment Trust;

(iii)   Netherfield Holdings Pty Ltd ACN 154 617 606 as trustee for the trustee of Pemberley Family Trust ABN 27 265 410 422;

(iv)   Evandale Property Pty Ltd ACN 654 842 207 as trustee for Evandale Property Trust ABN 79 962 782 585;

(v)   Leets Vale Property Pty Ltd ACN 654 842 378 as trustee for Leets Vale Property Trust ABN 84 926 373 658;

(vi)   Mereworth Property Pty Ltd ACN 654 841 871 as trustee for Mereworth Property Trust ABN 80 194 362 136;

(vii)   Panawanica Property Pty Ltd ACN 654 842 832 as trustee for the Panawanica Property Trust ABN 88 504 560 733.

(2)   A declaration that the trustees of the following trusts were not removed merely upon appointment of the plaintiffs over them:

(a)   Coronam Holdings Pty Ltd ACN 621 784 950 in its own capacity and as trustee for Coronam Property Trust ABN 85 674 051 341;

(b)   Resilient Investment Holdings Pty Ltd ACN 636 822 332 in its personal capacity and as trustee for the Resilient Investment Trust;

(c)   Netherfield Holdings Pty Ltd ACN 154 617 606 in its personal capacity and as trustee for the trustee of Pemberley Family Trust ABN 27 265 410 422;

(d)   Evandale Property Pty Ltd ACN 654 842 207 in its own capacity and as trustee for Evandale Property Trust ABN 79 962 782 585;

(e)   Leets Vale Property Pty Ltd ACN 654 842 378 in its own capacity and as trustee for Leets Vale Property Trust ABN 84 926 373 658;

(f)   Mereworth Property Pty Ltd ACN 654 841 871 in its own capacity and as trustee for Mereworth Property Trust ABN 80 194 362 136;

(g)   Panawanica Property Pty Ltd ACN 654 842 832 in its own capacity and as trustee for the Panawanica Property Trust ABN 88 504 560 733;

(3)   A declaration that the following trustees act as bare trustee over the trust assets of the respective trusts:

(a)   Coronam Holdings Pty Ltd ACN 621 784 950 in its own capacity and as trustee for Coronam Property Trust ABN 85 674 051 341;

(b)   Resilient Investment Holdings Pty Ltd ACN 636 822 332 in its personal capacity and as trustee for the Resilient Investment Trust;

(c)   Netherfield Holdings Pty Ltd ACN 154 617 606 in its personal capacity and as trustee for the trustee of Pemberley Family Trust ABN 27 265 410 422;

(4)   A declaration that each of the trustees referred to in (2) above has a right of indemnity out of the trust assets;

(5)   A declaration that Resilient Investment Holdings Pty Ltd ACN 636 822 332 in its personal capacity and as trustee for the Resilient Investment Trust is the legal and beneficial owner of 10,432,818 shares in Ailo Holdings Pty Ltd ACN 608 601 485;

(6) An order, pursuant to s 232 of the Australian Consumer Law, that the first defendant (by himself, his employees or agents) be permanently restrained from making representations to the effect set out in (1)(a) to (k) above; and

(7)   The defendants to pay the plaintiffs’ costs.

Catchwords:

CONSUMER LAW – misleading or deceptive conduct – where defendant admits conduct was misleading and deceptive – remedies – damages, declaratory and injunctive relief sought – scope of declarations

CORPORATIONS – receivers and managers – standing of receiver and manager to seek relief in respect of shares – whether shares formed part of secured property – whether shares transferred by defendant in compliance with company constitution – shares formed part of secured property – standing of receiver and manager confirmed

Legislation Cited:

Australian Consumer Law, ss 18, 232

Corporations Act 2001 (Cth), s 176

Cases Cited:

Attorney-General (NSW) (Ex rel Corporate Affairs Commission) v Australian Softwood Forests Pty Ltd [1979] 2 NSWLR 73

Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286; [1974] HCA 18

Category:

Principal judgment

Parties:

Costa Nicodemou in his capacity as Receiver & Manager of Coronam Holdings Pty Ltd in its own capacity and as trustee for Coronam Property Trust ABN 85 674 051 341 (First Plaintiff)
Costa Nicodemou in his capacity as Receiver & Manager of Resilient Investment Holdings Pty Ltd in its own capacity and as trustee for Resilient Investment Trust ACN 636 822 332(Second Plaintiff)
Costa Nicodemou in his capacity as Receiver & Manager of Netherfield Holdings Pty Ltd in its own capacity and as trustee for Pemberley Family Trust ABN 27 265 410 422 (Third Plaintiff)
Costa Nicodemou in his capacity as Receiver & Manager of Evandale Property Pty Ltd in its own capacity and as trustee for Evandale Property Trust ABN 79 962 782 585 (Fourth Plaintiff)
Costa Nicodemou in his capacity as Receiver & Manager of Leets Vale Property Pty Ltd in its own capacity and as trustee for Leets Vale Property Trust ABN 84 926 373 658 (Fifth Plaintiff)
Costa Nicodemou in his capacity as Receiver & Manager of Mereworth Property Pty Ltd in its own capacity and as trustee for Mereworth Property Trust ABN 80 194 362 136 (Sixth Plaintiff)
Costa Nicodemou in his capacity as Receiver & Manager of Panawanica Property Pty Ltd in its own capacity and as trustee for Panawanica Property Trust ABN 88 504 560 733 (Seventh Plaintiff)
Costa Nicodemou in his capacity as Receiver & Manager of Angelwood Investments Pty Ltd ACN 153 364 786 (Eighth Plaintiff)
Thomas Peter Crown (First Defendant)
Coronam Family Office Custodian Pty Ltd ACN 681 056 940 (Second Defendant)

Representation:

Counsel:
J Dooley with A Sivanathan (Plaintiffs)
P Wiggins (Defendants)

Solicitors:
Hamilton Locke (Plaintiffs)
FCW Lawyers (Defendants)

File Number(s):

2025/303644

Publication restriction:

None

JUDGMENT

Introduction

1. On 26 March 2025, the plaintiff, Mr Costa Nicodemou, was appointed receiver and manager of a group of companies controlled by the first defendant, Mr Thomas Peter Crown (together, the Crown Group), by MC Coronam Pty Ltd (referred to as Merricks) following default by companies in the Crown Group in repaying money lent to them by Merricks under the terms of a land facility agreement dated 3 May 2022 (subsequently amended on 29 November 2022) (the Facility Agreement). Merricks claims to be owed $122,398,363.24 as at 28 August 2025.

2. The borrowers’ obligations under the Facility Agreement were secured by a General Security Deed dated 3 May 2022 (the GSD). Under that Deed, members of the Crown Group granted security over the assets they held both in their own right and as trustees of various trusts controlled by Mr Crown. Mr Nicodemou was appointed by Merricks exercising rights granted to it under that Deed.

3. From about July 2025, Mr Crown made a series of representations to specific individuals that certain companies in the Crown Group had been removed as trustees of the relevant trusts with the consequence that Mr Nicodemou had no legal authority to deal with the assets of those trusts or to receive income generated by them.

4. On 8 August 2025, Mr Nicodemou in his capacity of receiver commenced these proceedings initially seeking interim relief restraining Mr Crown from continuing to make those representations. That relief was granted by Peden J on 14 August 2025 and the matter was fixed for a final hearing on 3 October 2025.

The issues

5. Originally, the proceedings raised a substantial number of issues concerning the assets that fell within the scope of the receivership, whether by making the representations he did, Mr Crown had engaged in misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law (ACL) and, if so, whether Mr Nicodemou was entitled to claim damages in respect of that conduct. By the commencement of the hearing, many of those issues had fallen away.

6. Subject to one qualification to which I will come, Mr Crown concedes that the relevant companies had not been removed as trustees of the relevant trusts and that, as a consequence, Mr Nicodemou’s receivership extends to the assets of those trusts. Mr Crown also concedes that he engaged in misleading and deceptive conduct when he made the representations that he did and that in those circumstances, and again subject to one qualification, he consents to the permanent injunctions sought by Mr Nicodemou restraining him from continuing to engage in that conduct.

7. Three issues remain to be determined.

8. First, there is a question whether the Court should make the declarations sought by Mr Nicodemou with or without the qualifications sought by Mr Crown. Second, there is a question whether Mr Nicodemou is entitled to recover damages in respect of Mr Crown’s contravention of s 18 of the ACL. Third, and most significantly, there is a question whether Mr Nicodemou is entitled to seek relief in respect of an asset held by Resilient Investment Holdings Pty Ltd (RIH) as trustee of the Resilient Investment Trust consisting of shares in Ailo Holdings Pty Ltd. If he is not, Mr Crown submits that the injunctions and any declarations made by the Court should reflect that qualification.

9. It is convenient to deal with the second and third questions before dealing with the issue whether the declarations concerning misleading and deceptive conduct should be made and, if so, in what form.

Damages

10. Originally, Mr Nicodemou sought to recover damages in the nature of rent or agistment fees that had been withheld by the persons liable to pay those amounts on the basis that those persons were uncertain about who was entitled to receive them. It is plain that as a consequence of the concessions made by Mr Crown, that Mr Nicodemou is entitled to receive them and it is to be expected that when the Court makes its orders the relevant amounts will be paid to him. In those circumstances, Mr Nicodemou does not press his claim for damages in respect of those amounts.

11. The only other damages now claimed by Mr Nicodemou are additional costs he claims he incurred as a consequence of Mr Crown’s representations. In an affidavit sworn on 2 October 2025, Mr Nicodemou says that his firm (Newpoint Advisory) “has incurred fees and costs in the amount of $21,752.90 … in addressing the representations made by Mr Crown which are the subject of these proceedings, and the consequences of those representations”. He then gives this evidence:

An updated breakdown of these fees (including the amounts identified at paragraph 33 of my Second Affidavit), as recorded in Newpoint’s WIP report, is set out in the table below. I believe these fees were reasonably and properly incurred in the course of carrying out my duties as Receiver.

Entity	Amount excl GST ($)
Coronam	3,597
Evandale	14,185.25
Leets Vale	308.00
Mereworth	512.75
Panawanica	522.00
Resilient	2,627
Total	21,752.90

12. Details of those amounts are given in a “WIP Report” exhibited to Mr Nicodemou’s affidavit. However, without additional information, it is not possible for the Court to reach a proper conclusion on whether there is a sufficient connection between the work done and the representations to be able to say that the fees charged for that work are damages resulting from the misleading and deceptive conduct. Accordingly, this part of the claim must fail.

The Ailo Holdings shares

The issues

13. By an amended summons, Mr Nicodemou seeks the following declarations:

“10A.    A declaration that the document entitled ‘Australian Standard Transfer Form’, purporting to transfer 10,432,818 shares in Ailo Holdings Pty Ltd from Resilient Investment Holdings [that is, RIH] to Coronam Family Office Custodian Pty Ltd [the second defendant], dated 26 September 2024 (September 2024 Share Transfer), was not effective to transfer shares in Ailo Holdings Pty Ltd from Resilient Investment Holdings to Coronam Family Office Custodian Pty Ltd.

10B.    A declaration that the purported transfer of shares in Ailo Holdings Pty Ltd from Resilient Investment Holdings to Coronam Family Office Custodian Pty Ltd was not in compliance with the Constitution of Ailo Holdings Pty Ltd and is void.

10C.    A declaration that the purported transfer of shares in Ailo Holdings Pty Ltd from Resilient Investment Holdings to Coronam Family Office Custodian Pty Ltd was not in compliance with the Shareholders’ Agreement in respect of Ailo Holdings Pty Ltd (as amended and restated on 30 November 2017, and amended on 10 February 2018) and is void.

10D.    A declaration that Coronam Family Office Custodian Pty Ltd is not the owner of shares purportedly transferred by the September 2024 Share Transfer.

10E.    A declaration that Resilient Investment Holdings Pty Ltd ACN 636 822 332 in its personal capacity and as trustee for the Resilient Investment Trust is the legal and beneficial owner of 10,432,818 shares in Ailo Holdings Pty Ltd ACN 608 601 485.”

14. Mr Crown contends that Mr Nicodemou does not have standing to seek those declarations because the shares in Ailo Holdings are not part of the secured property of RIH. He does not take issue with the form of the declarations themselves, although it is still necessary for the Court to be satisfied that it is appropriate to make them.

15. The way the issue has been presented to the Court is somewhat curious. Mr Nicodemou does not seek a declaration that the shares in Ailo Holdings form part of the secured property. Nor does Mr Crown seek a cross-declaration that the shares are not part of the secured property. Instead, both parties skirt around that issue. Mr Nicodemou does so by confining the declarations he seeks to the rights of RIH. He submitted that he had standing to seek those declarations whether or not the shares in Ailo Holdings formed part of the secured property, although he did advance an argument that the shares in Ailo Holdings did form part of the secured property. Mr Crown contested Mr Nicodemou’s standing to seek those declarations. Although his position is not entirely clear, the way Mr Crown appears to put his argument is that in order for Mr Nicodemou to seek the declarations he does, he must establish that the Ailo Holdings shares are part of the secured property and Mr Nicodemou has failed to do that.

16. Notwithstanding the position of the parties, it seems sensible to start with the question whether the shares in Ailo Holdings formed part of the secured property, since it is common ground that if they did, Mr Nicodemou has standing to seek the declarations he does. The only question, then, would be whether the Court should in the exercise of its discretion make those declarations.

Further background

17. Before addressing the question whether the shares in Ailo Holdings formed part of the secured property, it is necessary to give some further background.

18. By cl 1 of a Deed of Accession dated 23 January 2020 (the Accession Deed), RIH agreed to be bound by an Amended and Restated Shareholders Agreement dated 30 November 2017 between the then shareholders of Ailo Holdings (the SHA). By cl 2 of an Accession Deed, RIH:

“a.   consents to be a member of the Company [that is, Ailo Holdings];

b.   agrees to the terms of the Company’s constitution;

c.   authorises the Company to register it as a holder of 6,944,445 fully paid ordinary shares in the Company to be issued to it on or around the date of this deed poll; and

d.   confirms that these 6,944,445 ordinary shares are to be recorded as being held non-beneficially by it.”

19. According to the register of Ailo Holdings, as at 30 April 2025, RIH held 10,432,816 shares in Ailo Holdings. It is unclear when RIH acquired the additional shares.

20. On 13 June 2025, Mr Crown sent an email to Mr Ben White at Ailo Holdings purporting to attach a letter dated 26 September 2024 addressed to the Company Secretary of Ailo Holdings attaching a share transfer form dated 26 September 2024 and signed by Mr Crown which shows a transfer of the shares in Ailo Holdings from RIH as trustee for the Resilient Investment Trust to Coronam Family Office Custodian Pty Ltd (CFOC), the second defendant.

21. On 19 June 2025, Mr White replied to Mr Crown’s letter saying:

“As I mentioned on the call, the transfer of shares in Ailo is not an ‘admin update’ - any transfer, in order to be effective, must occur in accordance with the processes under the shareholders agreement. In any event, the copy of the letter dated 26 September 2024 and, based on my investigations, the transfer document which you emailed to me below were never received prior to this email. Also, re the document:

they purport to transfer 10,432,817 shares in Ailo when the register indicates that Resilient Investment Holdings P/L atf the Resilient Investment Trust holds 10,432,816 shares;

besides any documentation not having been received, the shares could not have been transferred because of the above and as no Deed of Accession accompanied the transfer form (as required by the shareholders agreement), along with the other approvals required to be obtained under the shareholders agreement; and

the copies of transfer forms dated 18 February 2025 that have been provided to me, appear to have been executed by you on behalf of Resilient Investment Holdings Pty Ltd atf the Resilient Investment Trust to [redacted] (for 194,993 shares) and to [redacted] (for 649,979 shares).

As such, at this point, Resilient Investment Holdings Pty Ltd (ACN 636 822 332) as trustee for the Resilient Investment Trust is the registered holder of 10,432,816 shares in Ailo…”

22. Mr Crown continued to assert in correspondence with Ailo Holdings (and with Mr Nicodemou) that the shares had been transferred to CFOC. That claim was resisted by Ailo Holdings which maintained that the September 2024 documents were not received by Ailo Holdings and that (to quote from a letter dated 5 September 2025 sent by Ms Alexandra Coleman on behalf of Ailo Holdings) “In fact, an email dated 13 June 2025 enclosing copies of documents (the metadata for which indicate they were created on 30 May 2025) was the first time Ailo was provided these documents”.

23. Mr Nicodemou disputes the authenticity of the letter and transfer. In doing so, he points to an email chain starting with an email dated 8 February 2025 from an unknown sender to Mr Crown concerning an investment in Ailo Holdings. One email in that chain dated 20 March 2025 from Mr Crown says:

“Hi [Redacted]

Further to the below, I checked with my CFO today and the attached forms were sent on 18Feb25 to finalise the share transfers. Might have been missed while you were away?

Copies attached again for finalisation of the transfers of Ailo shares to you and Dave.

Regards,”

24. Apparently attached to that email were two share transfer forms both dated 18 February 2025, and both signed by Mr Crown. One shows the transfer of 194,993 shares in Ailo Holdings from RIH as trustee for the Resilient Investment Trust to a transferee, whose name has apparently been redacted, for a consideration of $300,000. The other shows the transfer of 649,979 shares in Ailo Holdings from RIH as trustee for the Resilient Investment Trust to an unnamed transferee for $1 million. Mr Nicodemou submits that it is to be inferred from that email and those share transfers that RIH continued to own the shares in Ailo Holdings and that the purported transfer to CFOC is a sham.

The terms of the GSD

25. Clause 2 of the GSD relevantly provides:

“2.1   Creation

(a)   Subject to clause 2.2, each Grantor grants a security interest in the Collateral to the Secured Party to secure the payment of the Secured Money.

(b)   This security interest is a transfer by way of security of Collateral consisting of:

(i) accounts and chattel paper (each as defined in the PPSA) which are not, or cease to be, Revolving Assets; and

(ii)   each Material Document.

To the extent any Collateral is not transferred, this security is a charge. If for any reason it is necessary to determine the nature of this charge, it is a floating charge over Revolving Assets and a fixed charge over all other Collateral.

(c)   Each Grantor grants this security interest in respect of Collateral other than Trust Assets which it owns or will own as beneficial owner.

(d)   Each Grantor which is a trustee of any Trust grants this security interest in respect of Collateral comprising Trust Assets as sole trustee of each relevant Trust.

2.2   Relevant Collateral

(a)   The security interest granted under clause 2.1 does not, at any time, extend to the following Collateral:

(i)   any lease, licence, contract or rights under any lease, licence or contract; or

(ii)   equity interests in any person other than a wholly owned Subsidiary,

in each case where under the relevant lease, licence, contract or constituent document with a Counterparty as at the date of this document (as applicable) (and not at a later date) (such lease, licence, contract or constituent document being the Relevant Contract) the consent of the relevant Counterparty is required before the relevant Grantor may:

(iii)   grant a Security Interest in such Collateral; or

(iv)   it will be a breach of, or give rise to an event of default or termination event (however described) under, the Relevant Contract for the relevant Grantor to grant a Security Interest in such Collateral,

unless the relevant Counterparty has consented to the granting of the Security Interest over such Collateral under this document.

(b)   Except to the extent that any proceeds of any Relevant Collateral would by operation of clause 2.2(a) also be Relevant Collateral, Relevant Collateral does not include any proceeds of Relevant Collateral and any such proceeds are the subject of the security interest granted under clause 2.1.

(c)   This clause 2.2 operates to exclude any Relevant Collateral from the security interest granted under clause 2.1 only for as long as the operation of clause 2.2(a) results in any such Collateral being Relevant Collateral. If at any time clause 2.2(a) no longer operates to cause any such Collateral to be Relevant Collateral, then:

(i)   that Collateral is no longer Relevant Collateral; and

(ii)   from that time, the security interest under clause 2.1 immediately extends and attaches to such Collateral and such Collateral is subject to the security interest granted under clause 2.1.

(d)   Each Grantor must:

(i)   without limiting clause 2.2(d)(ii), use best endeavours to ensure that there is no restriction on granting Security Interest in any new or renewed or amended contract, lease or licence to which any Grantor is party; and

(ii)   comply with any requirement in any Finance Document:

(A)   to seek consent to the grant of a security interest over any Relevant Collateral; and

(B)   not to agree to any restrictions on granting a security interest in respect of any Collateral.

(e)   This clause 2.2 applies despite any other provision of a Finance Document.”

26. Clause 16.1(a) of the GSD relevantly provides:

Each Grantor will, and will procure that all persons having or claiming any estate or interest in the Collateral from time to time after the date of this document will, on demand by the Secured Party (and at the entire cost and expense of the Grantors) perform all acts and execute and deliver all further documents as the Secured Party, acting reasonably, requires:

(i)   for more satisfactorily securing to the Secured Party the payment of the Secured Money;

(ii)   to perfect the Security Interest created by this document over the Collateral;

(iii)   …

…

27. “Grantor” includes RIH in its own capacity and as trustee. “Collateral” is defined broadly. In relation to RIH, it plainly includes any shares it holds in Ailo Holdings either for itself or as trustee. The issue is whether those shares are excluded under cl 2.2(a)(ii) because Ailo Holdings is not a wholly owned Subsidiary (a term defined by reference to the Corporations Act 2001 (Cth)) of RIH.

28. Clause 2.2(a)(ii) only applies “where under the relevant … constituent document with a Counterparty … the consent of the relevant Counterparty is required before the relevant Grantor may … grant a Security Interest in such Collateral … unless the relevant Counterparty has consented to the granting of the Security Interest over such Collateral under this document”. “Counterparty” is defined to mean “a third party who is not an Obligor or a related entity of an Obligor”.

29. Although the clause is somewhat clumsily expressed, it seems clear that what the clause is saying is that the limitation only applies to “equity” in a company where the company’s “constituent document” contains a prohibition on the granting of a Security Interest in its equity without the company’s consent and that consent has not been given “under this document”. If the company’s constituent document does contain such a prohibition and the consent has not been given, then under cl 2.2(d)(i) each Grantor must “comply with any requirement in any Finance Document … to seek consent to the grant of a security interest over any Relevant Collateral”.

30. Clause 2.2(d)(i) itself does not appear to contain an obligation to seek consent. Rather, it simply states that each Grantor must comply with any obligation to seek consent that is to be found elsewhere (in any Finance Document). The only apparent obligation under a Finance Document (which is defined to include the Facility Agreement and the GSD) to seek consent is cl 16.1(a) of the GSD, which imposes an obligation on each Grantor to “perform all acts and execute and deliver all further documents as the Secured Party, acting reasonably, requires” to perfect the Security Interest. Under cl 2.2(c), it appears that once consent is given, the equity becomes the subject of a security interest under the GSD. Moreover, if the Collateral is sold, the proceeds of sale become part of the secured property under cl 2.2(b).

31. Clause 2 recognises that the constitutions of some proprietary companies contain restrictions on dealing with the company’s shares without the consent of the company. It excludes shares in companies of that type from the security taken under the GSD unless and until the relevant consent is obtained. The clause uses the broader (and undefined) term “equity” rather than “shares”, recognising that some equity interests may be in other forms, such as units in a unit trust. Similarly, the clause uses the broader (and undefined) term “constituent document”, which would, for example, include a trust deed. However, those points do not change the essential effect of the provision.

The constitution of Ailo Holdings and the SHA

32. The constitution of Ailo Holdings contains no restrictions on the transfer of the shares in it. Clause 19.1 provides:

“Subject to this constitution, a member may transfer all or any of the member’s shares by instrument in writing in any form that the directors approve.”

33. There is no other provision of the constitution that limits the operation of that clause. However, cl 20.1 provides:

“The directors may in their discretion refuse to register a transfer of shares without giving any reason for refusal.”

And cl 21.1 provides:

“A person transferring shares remains the holder of the shares until the transfer is registered and the name of the person to whom they are being transferred is entered in the register of members in respect of the shares.”

34. Clauses 10 and 16 of the SHA relevantly provide:

“10.1   A Shareholder must not Dispose of any Shares except as specifically provided or permitted under this Agreement.

10.2   …

10.3   Subject to clause 16, a Disposal is permitted (Permitted Disposal):

(1)   with the written consent of all Ordinary Shareholders;

(2)   on the death of the Associate Principal of Reezeh if some or all of the Shares of Reezeh are Disposed of to Avenue C and, if applicable a Disposal pursuant to Ashley’s will of any or all of the balance of the Shares;

(3)   on the death of the Associated Principal of Avenue C if some or all of the Shares of Avenue C are Disposed of to Reezeh and, if applicable a Disposal pursuant to Ben’s will of any or all of the balance of the Shares.

10.4   An Ordinary Shareholder must not unreasonably withhold consent to another Shareholder transferring its Shares to an Affiliate who:

(1)   complies with clause 16 by signing and delivering a Deed of Accession; and

(2)   undertakes to immediately transfer the Shares back to the relevant Shareholder if it ceases to be an Affiliate of that Shareholder.

…

16.   New shareholders

16.1   No party may transfer or issue, or grant any interest in or Encumbrance over, Shares to a person not already a Shareholder unless that person has executed and delivered to each Shareholder and the Company a Deed of Accession.

16.2   The Company must not register in its records or otherwise recognise any interest in or Encumbrance over Shares unless a Deed of Accession has been executed and delivered as required under clause 16.1, and unless all obligations of the Shareholder under this Agreement have been satisfied.”

35. “Dispose” is defined broadly to mean “sell, transfer, Encumber or otherwise dispose of a legal or beneficial interest in a Share”. It plainly includes the creation of a charge.

Conclusion on standing

36. It follows from what has been said the effect of the GSD is to create a charge over the secured property where the GSD cannot operate as a transfer of the “Collateral”. That is the position in relation to the shares in Ailo Holdings, since any transfer would require the consent of the directors of Ailo Holdings under cl 20.1 of its constitution; and it is plain from the share register of Ailo Holdings, which still shows RIH as the shareholder, that no such consent has been given.

37. The SHA requires the consent of ordinary shareholders to the creation of that charge, but neither the constitution nor the SHA requires the consent of the company itself to the creation of the charge. Consequently, even if it could be said that the SHA forms part of the constituent documents of Ailo Holdings, it cannot be said that the condition for the operation of the limitation contained in cl 2.2(a)(ii) of the GSD (that is, “where under the relevant … constituent document … the consent of the relevant Counterparty [ie Ailo Holdings] is required before the relevant Grantor [ie RIH] may … grant a Security Interest in such Collateral”) has been satisfied. The ordinary shareholders of Ailo Holdings may have a claim against RIH for breach of the SHA because their consent to the creation of the charge was neither sought not given, but that does not affect application of cl 2.2(a). That exception does not apply because Ailo Holdings’ consent was not required to the creation of the charge.

38. In view of that conclusion, it is unnecessary to consider the question whether Mr Nicodemou would have had standing to seek the declarations he seeks even if Merricks had not obtained a valid charge over the Ailo Holdings shares held by RIH.

Should the declarations be made?

39. It is not clear why all the declarations sought by Mr Nicodemou are necessary or appropriate.

40. The starting point is that RIH as trustee of the Resilient Investment Trust is shown as the holder of 10,432,816 shares in Ailo Holdings in Ailo Holdings’ Register of Members. In the absence of evidence to the contrary, that is evidence that RIH in that capacity is the legal and beneficial owner of the shares: see Corporations Act 2001 (Cth), s 176. CFOC does not seek to displace that evidentiary presumption. Moreover, in order to displace the presumption, CFOC would need to establish that the requirements of Ailo Holdings’ constitution and of the SHA had been satisfied. However, it is plain that the constitution has not been satisfied because the purported transfer to CFOC has not been registered. Moreover, the directors have a discretion to refuse registration without giving a reason for their refusal. It appears that they have exercised that discretion against registration.

41. In addition, under cl 16.1 of the SHA “No party may transfer … any interest in …Shares to a person not already a Shareholder unless that person has executed and delivered to each Shareholder and the Company a Deed of Accession”. There is no evidence that CFOC has executed a Deed of Accession. It must follow that RIH as trustee of the Resilient Investment Trust remains the legal and beneficial owner of the shares in Ailo Holdings and those shares continue to form part of the secured property under the GSD.

42. In view of what I have said, it is neither necessary nor appropriate to make all the declarations sought by Mr Nicodemou on this aspect of the case. In the light of what has happened, there may be questions as between Ailo Holdings and CFOC concerning whether CFOC was entitled to be registered as the owner of the shares held by RIH, although given the broad discretion conferred on the directors of Ailo Holdings by cl 20.1 of the constitution it is not apparent that CFOC could succeed in that claim. Moreover, such a claim would raise a question of priority as between Merricks and CFOC. Those various issues could only be determined in properly constituted proceedings to which Ailo Holdings was a party. It is not appropriate to resolve the factual issues relevant to those issues by declarations made in these proceedings. However, given what has happened, it is appropriate to make a declaration that recognises that the shares in Ailo Holdings continue to be held by RIH in its capacity as trustee of the Resilient Investment Trust to resolve any question of who is entitled to deal with them. That is best done by making a declaration in the form of para 10E of the Amended Summons, which reflects the position as shown in the Ailo Holdings share register.

The declarations

43. Two issues arise in relation to the declarations concerning misleading and deceptive conduct. One is whether they should be made. The second is their form.

44. In my opinion, it is appropriate to make declarations that Mr Crown has engaged in misleading and deceptive conduct as well as granting injunctive relief. Generally, a court will not make declarations unless there is some utility in doing so and the declarations are not merely prefatory to other relief: Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286; [1974] HCA 18; Attorney-General (NSW) (Ex rel Corporate Affairs Commission) v Australian Softwood Forests Pty Ltd [1979] 2 NSWLR 73 at 76. The declarations will have utility in this case because they will make it clear to persons who have acted on the misleading and deceptive conduct by withholding money from Mr Nicodemou what the true position is.

45. The question remains what form those declarations should take. There needs to be no qualification on the declarations and permanent injunctions in relation to the shares in Ailo Holdings held by RIH, since those shares form part of the secured property.

46. Mr Nicodemou seeks declarations that mirror the form of the permanent injunctions that Mr Crown accepts should be granted. Mr Crown, on the other hand, proposes more limited declarations which are tied precisely to the conduct he engaged it. So, for example, he proposes a declaration that by sending a specific email he engaged in misleading and deceptive conduct by making the specific representations made in that email in relation to the specific companies in the Crown Group that are referred to in that email.

47. I prefer the approach proposed by Mr Nicodemou. The form of declarations proposed by Mr Crown are apt to lead to confusion because, by focusing on specific representations in relation to specific companies, they may give the wrong impression that the position is different in relation to other companies in the Crown Group that are not the subject of the declarations. However, by making the specific statements, Mr Crown gave the broader impression that the position applied to all companies in the Crown Group and it is because of that that the permanent injunctions are expressed more broadly. It is appropriate in those circumstances that the declarations mirror the injunctions.

Costs and orders

48. Mr Nicodemou has been substantially successful. Although he failed in his claim for damages, that claim was such a minor part of the case that no special costs order should be made to reflect that failure. And although Mr Nicodemou has not been successful in obtaining all the declarations he sought in the amended summons, he has been successful on the question of standing, which was the main issue between the parties. Mr Nicodemou has also been successful in establishing that Mr Crown had engaged in misleading and deceptive conduct and in obtaining the primary relief he sought. In those circumstances, the defendants should pay his costs.

49. Accordingly, the orders of the Court are:

1. A declaration that the first defendant has engaged in misleading or deceptive conduct in trade or commerce in contravention of s 18 of the Australian Consumer Law by making representations to the effect that:

1. The trustees of the Trusts have been removed as trustees of those trusts;

2. The plaintiffs have no legal authority to deal with trust assets of the Trusts;

3. The plaintiffs have no legal or beneficial interest in the trust assets of the Trusts;

4. The plaintiffs have no authority to act on behalf of the Trusts;

5. The plaintiffs have no authority to receive rental income;

6. All rental income should have been directed to the (purportedly) duly appointed new trustees of the Trusts;

7. The trustees of the Trusts ceased to act in that capacity at law immediately upon the plaintiffs’ appointment;

8. The plaintiffs appointments relate to corporate entities only, not to the Trusts or their assets;

9. No access or information should be provided to any third party purporting to act for any of the Trusts without the defendants’ [should this be first defendant’s] authority;

10. The plaintiffs have incorrectly diverted rental income;

11. The land the subject of the Trusts is managed via their new trustees, who have not granted access or authority to the receivers or their agents.

12. “Trusts” means:

1. Coronam Holdings Pty Ltd ACN 621 784 950 as trustee for Coronam Property Trust ABN 85 674 051 341;

2. Resilient Investment Holdings Pty Ltd ACN 636 822 332 as trustee for the Resilient Investment Trust;

3. Netherfield Holdings Pty Ltd ACN 154 617 606 as trustee for the trustee of Pemberley Family Trust ABN 27 265 410 422;

4. Evandale Property Pty Ltd ACN 654 842 207 as trustee for Evandale Property Trust ABN 79 962 782 585;

5. Leets Vale Property Pty Ltd ACN 654 842 378 as trustee for Leets Vale Property Trust ABN 84 926 373 658;

1. Mereworth Property Pty Ltd ACN 654 841 871 as trustee for Mereworth Property Trust ABN 80 194 362 136;

2. Panawanica Property Pty Ltd ACN 654 842 832 as trustee for the Panawanica Property Trust ABN 88 504 560 733.

2. A declaration that the trustees of the following trusts were not removed merely upon appointment of the plaintiffs over them:

1. Coronam Holdings Pty Ltd ACN 621 784 950 in its own capacity and as trustee for Coronam Property Trust ABN 85 674 051 341;

2. Resilient Investment Holdings Pty Ltd ACN 636 822 332 in its personal capacity and as trustee for the Resilient Investment Trust;

3. Netherfield Holdings Pty Ltd ACN 154 617 606 in its personal capacity and as trustee for the trustee of Pemberley Family Trust ABN 27 265 410 422;

4. Evandale Property Pty Ltd ACN 654 842 207 in its own capacity and as trustee for Evandale Property Trust ABN 79 962 782 585;

5. Leets Vale Property Pty Ltd ACN 654 842 378 in its own capacity and as trustee for Leets Vale Property Trust ABN 84 926 373 658;

6. Mereworth Property Pty Ltd ACN 654 841 871 in its own capacity and as trustee for Mereworth Property Trust ABN 80 194 362 136;

7. Panawanica Property Pty Ltd ACN 654 842 832 in its own capacity and as trustee for the Panawanica Property Trust ABN 88 504 560 733;

3. A declaration that the following trustees act as bare trustee over the trust assets of the respective trusts:

1. Coronam Holdings Pty Ltd ACN 621 784 950 in its own capacity and as trustee for Coronam Property Trust ABN 85 674 051 341;

2. Resilient Investment Holdings Pty Ltd ACN 636 822 332 in its personal capacity and as trustee for the Resilient Investment Trust;

3. Netherfield Holdings Pty Ltd ACN 154 617 606 in its personal capacity and as trustee for the trustee of Pemberley Family Trust ABN 27 265 410 422;

4. A declaration that each of the trustees referred to in (2) above has a right of indemnity out of the trust assets;

5. A declaration that Resilient Investment Holdings Pty Ltd ACN 636 822 332 in its personal capacity and as trustee for the Resilient Investment Trust is the legal and beneficial owner of 10,432,818 shares in Ailo Holdings Pty Ltd ACN 608 601 485;

6. An order, pursuant to s 232 of the Australian Consumer Law, that the first defendant (by himself, his employees or agents) be permanently restrained from making representations to the effect set out in (1)(a) to (k) above; and

7. The defendants to pay the plaintiffs’ costs.

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Decision last updated: 23 October 2025