In the matter of Mayne Pharma Group Limited

[2025] NSWSC 1204

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

In the matter of Mayne Pharma Group Limited [2025] NSWSC 1204

Hearing dates:

22–26, 30 September 2025, 1, 7–10 October 2025

Date of orders:

15 October 2025

Decision date:

15 October 2025

Jurisdiction:

Equity - Corporations List

Before:

Black J

Decision:

Judgment to be given in favour of the Plaintiff; Cross-Claimant’s Cross-Summons to be dismissed; parties to bring in short minutes of order.

Catchwords:

CONTINUOUS DISCLOSURE — where scheme implementation deed required parties to comply with applicable laws including ASX Listing Rules and Corporations Act — where bidder contends scheme company’s delay in disclosing letter from industry regulator in breach of ASX Listing Rules — held that no breach of continuous disclosure obligation established

CONTRACT — material adverse change provision — where bidder claims material adverse change occurred in relation to scheme implementation deed by reason of decline in scheme company’s sales performance and/or following receipt of letter from industry regulator — held that scheme company’s sales performance declined in relevant period —sales decline and other matters did not meet specified quantitative threshold for material adverse change

CONTRACT — representation and warranty — construction — whether representation and warranty clause extended to content of each document disclosed in due diligence materials — held that clause extended only to collation and preparation of totality of documents produced and not the content of each individual document — held that no breach of representation and warranty clause established

CONTRACT — termination — election — where scheme company contends that facts establishing bidder’s purported right to terminate known to the bidder when bidder executed amendment of the scheme implementation deed, then entered into deed poll in respect of scheme and then supported approval of the scheme at first Court hearing and reserved its position as to only one of the matters giving rise to the claimed right to terminate — whether any of these matters constituted election between inconsistent rights — whether “anti-waiver” clause in scheme implementation deed prevented election — held that bidder elected not to terminate the scheme implementation deed by reason of matters then known to it by amendment of scheme implementation deed and again by its conduct at first Court hearing — held that “anti-waiver” clause did not prevent election in the circumstances

CORPORATIONS — scheme of arrangement — where Court made orders convening meeting of members of scheme company to consider scheme proposal — where bidder seeks declaration that scheme implementation deed validly terminated and associated orders for payment of break fee — where scheme company seeks orders that scheme implementation deed not validly terminated

MISLEADING OR DECEPTIVE CONDUCT — where scheme implementation deed required parties to comply with applicable laws including the Australian Consumer Law — where bidder contends scheme company’s disclosure to market of its response to industry regulator letter constituted misleading and deceptive conduct in breach of the Australian Consumer Law — held that scheme company’s response not misleading or deceptive — where bidder contends scheme company engaged in misleading and deceptive conduct in representing that it “expected” its FY25 EBITDA “would be” specified figure — held that alleged representation was not made, given the nature of and context of the relevant forecast — held that misleading and deceptive conduct claims not established

Legislation Cited:

- Australian Consumer Law, ss 236, 237, 243

- Australian Securities and Investments Commission Act 2001 (Cth), ss 12DA, 12GF, 12GM

- Competition and Consumer Act 2010 (Cth)

- Corporations Act 2001 (Cth), ss 411, 1041H, 1041I, 1319, 1325

- Evidence Act 1995 (NSW), ss 76, 79, 136, 140

- Uniform Civil Procedure Rules 2005 (NSW), rr 31.19, 31.28, Sch 7

- Supreme Court (Corporations) Rules 1999 (NSW), r 2.13

Cases Cited:

- Akorn Inc v Fresenius Kabi AG, 2018 WL 4719347, CA No 2018-0300-JTL (Del Ch 2018)

- Ali v Insurance Australia Ltd [2022] NSWCA 174- Allianz Australia Insurance Limited v Delor Vue Apartments CTS 39788 (2022) 277 CLR 445; [2022] HCA 38

- Androvitsenas v Members First Broker Network [2013] VSCA 212

- Armagas Ltd v Mundogas SA [1985] 1 Ll R 1

- Australia and New Zealand Banking Group Limited v Australian Securities and Investments Commission (2024) 305 FCR 383

- Australian Competition and Consumer Commission v Telstra Corporation Ltd (2004) 208 ALR 459; [2004] FCA 987

- Australian Competition and Consumer Commission v Telstra Corporation Ltd (2007) 244 ALR 470; [2007] FCA 1904

- Australian Competition and Consumer Commission v Woolworths Group Ltd (2020) 281 FCR 108; [2020] FCAFC 162

- Australian Pipeline Ltd v Hastings Funds Management Ltd (2014) 103 ACSR 343; [2014] NSWCA 398

- Australian Securities and Investments Commission v Big Star Energy Limited (No 3) [2020] FCA 1442

- Australian Securities and Investments Commission v GetSwift Ltd [2021] FCA 1384

- Australian Securities and Investments Commission v Southcorp Ltd (No 2) (2003) 130 FCR 406; [2003] FCA 1369

- Australian Securities and Investments Commission v Vocation Limited (In Liquidation) (2019) 136 ACSR 339; [2019] FCA 807

- BM Brazil 1 Fundo De Investimento Em Participacoes Multistrategia & Ors v Sibanye BM Brazil (Pty) Ltd & Anor [2024] EWHC 2566 (Comm)

- BotanyBayCityCouncil vMinister for Planning and Infrastructure [2014] NSWCA 141

- Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34

- Butcher v Lachlan Elder Realty (2004) 218 CLR 592; [2004] HCA 60

- Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25

- Canberra Advance Bank Ltd v Benny (1992) 38 FCR 427; (1992) 115 ALR 207; (1992) 9 ACSR 179

- Charter Reinsurance Co Ltd v Fagan [1997] AC 313

- Crowley v Worley Ltd (2022) 293 FCR 438; [2022] FCA 33

- Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588; [2011] HCA 21

- Daynes v I-MED Central Queensland Pty Ltd [2025] NSWCA 150

- Demagogue Pty Ltd v Ramnesky (1992) 39 FCR 31

- Earglow Pty Ltd v Newcrest Mining Ltd (2015) 230 FCR 469; [2015] FCA 328

- Elders Ltd v E J Knight & Co Pty Ltd [2009] NSWSC 1462

- Elder’s Trustee and Executor Co Ltd v Commonwealth Homes and Investment Co Ltd (1941) 65 CLR 603; [1941] HCA 31

- Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd (2014) 251 CLR 640; (2004) 306 ALR 25; [2014] HCA 7

- ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24

- Firmtech Aluminium Pty Ltd v Xie; Zhang v Xu; Xie v Auschn Conveyancing & Associates Pty Ltd [2024] NSWSC 1293

- Forty Two International Pty Ltd v Barnes (2014) 97 ACSR 450; [2014] FCA 85

- Fysh v The Queen [2013] NSWCCA 284

- Grandview Ausbuilder Pty Ltd v Budget Demolitions Pty Ltd (2019) 99 NSWLR 397; [2019] NSWCA 60

- Grant-Taylor v Babcock and Brown Ltd (in liq) (2015) 322 ALR 723; [2015] FCA 149

- Grant-Taylor v Babcock & Brown Ltd (in liq) (2016) 245 FCR 402; [2016] FCAFC 60

- Harvard Nominees Pty Ltd v Tiller (2020) 282 FCR 530; [2020] FCAFC 229

- HDI Global Specialty SE v Wonkana No 3 Pty Ltd (2020) 104 NSWLR 634; [2020] NSWCA 296

- Hexion Speciality Chemicals Inc v Huntsman Corp (2008) 965 A.2d 715

- Ipsos S.A. v Dentsu Aegis Network Ltd (formerly Aegis Group Plc) [2015] EWHC 1726

- Ireland v WG Riverview Pty Ltd (2019) 101 NSWLR 658; [2019] NSWCA 307

- Jubilee Mines NL v Riley (2009) 40 WAR 299; [2009] WASCA 62

- Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622; [1984] HCA 55

- Lang v R (2023) 278 CLR 323; [2023] HCA 29

- Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305

- McFarlane as Trustee for the S McFarlane Superannuation Fund v Insignia Financial Ltd [2023] FCA 1628

- Mansfield v R (2012) 293 ALR 1; [2012] HCA 49

- Minumbra Lancewood Pty Ltd v AM Lancewood Investment Nominees Pty Ltd [2013] NSWSC 1929

- Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; (2015) 325 ALR 188; [2015] HCA 37

- Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; [1992] HCA 66

- NorthWest Healthcare Australia RE Limited v Australian Unity Funds Management Ltd [2023] NSWSC 86

- Parkin v Boral Limited (Materiality Evidence Ruling) [2025] FCA 70

- Pittmore Pty Ltd v Chan; Chan v Tan (2020) 104 NSWLR 62; [2020] NSWCA 344

- Price (as executor of the estate of Price (dec’d)) v Spoor (as trustee) (2021) 391 ALR 532; [2021] HCA 20

- R v Fysh [2012] NSWSC 1266

- R v Paulson [1921] 1 AC 271

- R&B Investments Pty Ltd (Trustee) v Blue Sky Alternative Investments Limited (in liq) (Separation of Issues) [2025] FCA 1097

- Re Atlas Advisors Australia Pty Ltd (2022) 162 ACSR 509; [2022] NSWSC 705

- Re 1derful Pty Ltd [2024] NSWSC 1414

- Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789

- Re Computer Room Solutions Pty Ltd (2021) 154 ACSR 672; [2021] NSWSC 845

- Re Mayne Pharma Group Ltd [2025] NSWSC 513

- Sangha v Baxter [2009] NSWCA 78

- Sargent v ASL Developments Ltd (1974) 131 CLR 634; [1970] HCA 40

- ShellharbourCityCouncil v Minister for Planning [2011] NSWCA 195

- SIF Holdings Pty Ltd v CRC Gosford Pty Ltd (2021) 391 ALR 697; [2021] NSWCA 174

- Tele2 International Card Company SA v Post Office Ltd [2009] EWCA Civ 9

- Thera Agri Capital No 2 Pty Ltd v BCC Trade Credit Pty Ltd t/as The Bond & Credit Co [2022] NSWSC 669

- Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; (2004) 211 ALR 342; [2004] HCA 52

- Varma v Varma [2010] NSWSC 786

- Watson v Foxman (1995) 49 NSWLR 315

- Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd (2005) 30 WAR 290; [2005] WASCA 106

- Yowie Group Ltd v Keybridge Capital Ltd

[2025] NSWCA 142

- Zonia Holdings Pty Ltd v Commonwealth Bank of Australia Ltd [2025] FCAFC 63

Texts Cited:

AJ Black & P Hanrahan, Securities and Financial Services Law, 9th ed, 2021, [8.58].

Category:

Principal judgment

Parties:

Mayne Pharma Group Ltd (Plaintiff / Cross-Defendant)
Cosette Pharmaceuticals, Inc. (First Defendant / Cross-Claimant)
Cosette Australia Bidco Pty Ltd (Second Defendant)

Representation:

Counsel:
N Hutley SC / T O’Brien / D Farinha / B Lambourne / S Gerber / J Bailey (Plaintiff / Cross-Defendant)
E Collins SC / M Hodge KC / M Ellicott / B Hancock / S Spiers / E O’Connor Jardine / C Beshara / G Zhu / R Haidary (Defendants / Cross-Claimant)

Solicitors:
Gilbert + Tobin (Plaintiff / Cross-Defendant)
Corrs Chambers Westgarth (Defendants / Cross-Claimant)

File Number(s):

2025/214319

JUDGMENT

1. The Plaintiff, Mayne Pharma Group Limited (“MPG”) is an Australian public company listed on the Australian Securities Exchange (“ASX”). Its business is focused on pharmaceuticals and it has a significant business presence in the United States and Australia. Its headquarters is in North Carolina in the United States of America. The First Defendant, Cosette Pharmaceuticals, Inc. (“Cosette”) and the Second Defendant, Cosette Australia Bidco Pty Ltd (“Cosette Sub”) (together, “Cosette Parties”) are each wholly-owned subsidiaries of Cosette Pharmaceuticals Holdings, Inc (“Cosette Holdings”) which is jointly owned and controlled by Avista Capital Holdings LP (“Avista”) and Hamilton Lane Advisors LLC (“Hamilton Lane”).

2. By a Scheme Implementation Deed (“SID”) dated 20 February 2025, Cosette and MPG agreed the terms and mechanism of a proposed scheme of arrangement which provided for the acquisition of all of MPG’s ordinary shares by Cosette Sub. Under the proposed scheme, MPG shareholders would be paid A$7.40 per share they own and the maximum scheme consideration payable would be A$614,933,421.40. I made orders under ss 411 and 1319 of the Corporations Act 2001 (Cth) (“Act”) relating to that proposed scheme of arrangement and associated orders on 15 May 2025 for the reasons set out in my judgment in Re Mayne Pharma Group Ltd [2025] NSWSC 513.

3. On 17 May 2025, Cosette issued its first notice of a material adverse change under cll 3.5(c) and 3.7(a) of the SID to MPG (“First MAC Notice”) and, on 4 June 2025, Cosette sent a notice of termination of the SID (“First Termination Notice”) to MPG. By Originating Process filed in these proceedings on 4 June 2025, MPG seeks declarations that the First MAC Notice was not validly issued and that Cosette did not validly terminate the SID by its First Termination Notice. The basis of that claim is in turn set out in MPG’s Concise Statement filed on 4 June 2025 (“CS”) and the Cosette Parties filed their Response to that Concise Statement on 13 June 2025 (“RCS”).

4. By its Cross-Summons filed on 13 June 2025, Cosette in turn seeks a declaration that it validly terminated the SID and seeks an order that MPG pay it a break fee pursuant to the SID and further relief, and it relies on its Cross-Claimant’s Amended Concise Statement (“CCS”) filed 23 September 2025 in that regard. MPG relies on a Response to the Cross-Claimant’s Amended Concise Statement (“CCSR”) also filed on 23 September 2025 and Cosette relies on a Further Amended Reply to the CCSR filed late in the hearing on 8 October 2025 (“CCS Reply”). The parties agreed that the larger part of these proceedings concerned Cosette’s Cross-Claim and Cosette first led evidence and made submissions at the hearing. I will generally refer to Cosette when dealing with the Cross-Claim and to the “Cosette Parties” in dealing with MPG’s claim to which both are defendants and with the proceedings generally.

5. The Cosette Parties have declined to extend the End Date (as defined) under the SID, namely 20 November 2025, and a delay in resolving these proceedings would potentially have the consequence that that date would be reached, the scheme would lapse and MPG and its shareholders would be deprived of the commercial benefit of any success in the proceedings. That result would be the antithesis of the just determination of the proceedings. These proceedings have therefore been conducted and determined in circumstances of extreme commercial urgency, and judgment has been given within several days of the conclusion of the hearing. That should allow sufficient time for either or both parties to bring any appeal from my judgment and, preferably, have any appeal determined before the End Date before the scheme expires: Yowie Group Ltd v Keybridge Capital Ltd [2025] NSWCA 142 at [5]. I have reviewed all evidence and submissions as the hearing progressed and after I reserved judgment but I have necessarily focussed in this judgment on key issues and the matters that it is necessary to decide in order to deliver judgment within the necessary time frame.

6. I should also note that there was a debate between the parties, in opening, as to which party had the onus of proof. Ms Collins, for the Cosette Parties, recognised that, ordinarily, the party who seeks relief has the burden of satisfying the Court of facts which justify the grant of that relief. Plainly, Cosette here seeks extensive relief in its Amended Cross-Claim and would ordinarily have that onus in respect of the maters for which it contends. Ms Collins submitted that, here, MPG had assumed that onus by seeking declarations that the First MAC Notice was invalidly issued and that the SID was not validly terminated. I am inclined to think that proposition is not correct, for the reasons put by Mr Hutley in MPG’s opening submissions. However, nothing turns on this matter, where this case will be decided by reference to the evidence as it emerged at the hearing and there is no issue where a party would succeed or fail by reference to any question of which party had the onus of establishing a particular matter.

Affidavit evidence

7. I now turn to the affidavit evidence and cross-examination. In addressing that evidence, I recognise that this hearing took place not long after the events in issue but I also have regard to the fallibility of human memory which increases with the passage of time, particularly where disputes or litigation intervene: Watson v Foxman (1995) 49 NSWLR 315 at 318–319; Varma v Varma [2010] NSWSC 786 at [424]–[425]. I also have regard to the fact that objective evidence, where available, is likely to be the most reliable basis for determining matters of credit that arise as to the affidavit evidence: Armagas Ltd v Mundogas SA [1985] 1 Ll R 1 at 57; Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789 at [10] (“Colorado”). I also bear in mind the observations of Bell P (as the Chief Justice then was, with whom Bathurst CJ agreed) in ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24 at [27]–[28]:

“Whilst the quality and accuracy of oral recollection of actual conversations should be treated with care and caution given the fallibility of human memory (of which there has been a growing appreciation within the judiciary in recent decades), oral testimony may still be of value and importance, as was recognised in the nuanced observations of Leggatt J (as his Lordship then was) in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC (Comm) 3560 at [22] (Gestmin):

“the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.” [emphasis added]

Documents and events have to be understood in their context, and evidence of context will often be furnished by witnesses in their oral evidence. Documents, moreover, will not always present a complete picture of events. Indeed it would be rare that they do. Nor do contemporaneous documents necessarily or invariably convey or record the background or context in which events took place. That background or context will be familiar to the actors at the time of those events but may not always emerge from documents.”

8. I have here drawn on my summary of the applicable principles in, inter alia, Re 1derful Pty Ltd [2024] NSWSC 1414 at [7]ff. I have also borne in mind the cautionary observations of Basten JA (Handley JA agreeing) in Sangha v Baxter [2009] NSWCA 78 at [155], applied by Nixon J in Firmtech Aluminium Pty Ltd v Xie; Zhang v Xu; Xie v Auschn Conveyancing & Associates Pty Ltd [2024] NSWSC 1293 at [42], that:

“Because a witness has not told the truth with respect to a particular matter does not mean that other parts of his or her evidence are untruthful. Where possible, an assessment should be made of the reasons for the untruthfulness in order to see if other aspects of the evidence are likely to be infected by the same concern. Further, evidence may be rejected because it is apparently unreliable, possibly mistaken or deliberately untruthful or capable of being categorised in a variety of ways which are unlikely to be capable of clear delineation in some cases.

Further, findings of credibility are not usually findings with respect to factual issues in the case, but are rather subsidiary findings on the way to determination of issues. Like many aspects of the evidence in a trial, the evidence of a witness who is believed to have lied in a particular respect, will nevertheless be able to bear some weight and should be placed into a balance, with other material evidence, before a conclusion is reached in relation to a critical fact. The rejection of a witness in total, absent corroboration is likely to mean that, even where corroborated, little attention will be paid to the evidence of the witness and less to the possible consequences which might flow from the fact that particular evidence is shown to be truthful: see generally, R v Collins [2007] NSWCA 122 at [44].”

9. I also bear in mind that the allegations of breach of the continuous disclosure requirements made by Cosette against MPG have potential civil penalty consequences, and I should apply the standards set out in Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 and its equivalent under s 140 of the Evidence Act 1995 (NSW) (“Evidence Act”) in this regard. Where a party advances allegations of impropriety, the Court must take account of the gravity of the matters alleged in deciding whether the inference should be drawn and, although the standard of proof remains proof on the balance of probabilities, the strength of the evidence necessary to establish a given fact to the civil standard may vary according to the nature of what it is sought to be proved: Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 at 449 –450; [1992] HCA 66. Section 140 of the Evidence Act similarly provides that, in a civil proceeding, the Court must find the case of a party proved if it is so satisfied on the balance of probabilities and that, without limiting the matters that the Court may take into account in deciding whether it is so satisfied, it is to take into account the nature of the cause of action or defence, the nature of the subject matter of the proceeding and the gravity of the matters alleged. I approach the evidence in Cosette’s claim for breach of MPG’s continuous disclosure obligations on that basis.

10. The Cosette Parties read three affidavits dated 22 July 2025, 7 September 2025 and 21 September 2025 of Mr Apurva Saraf, who is the President and Chief Executive Officer of Cosette, a director of Cosette and a director of Cosette Holdings. In his first affidavit, Mr Saraf set out the background to the Cosette Group, his experience, and provided a detailed chronological account of dealings with MPG, and I refer to aspects of his evidence in setting out the chronology of events below. Mr Saraf did not there, or in subsequent affidavits, address the modelling undertaken by Cosette or its advisers in any detail. Ultimately, little turns on that in these proceedings, where Cosette has not established any representational case as to which reliance would become significant.

11. Mr Saraf was cross-examined. He was an intelligent and careful witness who slowly read each document he was shown before he answered any question concerning it. I was left with the strong impression that his affidavit was in significant part a reconstruction of events from documents that he had been shown. In cross-examination, Mr Saraf was reluctant to address and generally would not concede matters which were potentially adverse to Cosette’s claims or his evidence. A striking example of his approach was his prolonged reluctance to acknowledge an obvious and significant error in the treatment in his affidavit of a valuation of MPG that had been prepared by Santander Bank, S. A. (“Santander”), an investment bank retained by Cosette. It is plain that, when preparing his affidavit, he had misunderstood that valuation as made in AUD rather than USD, and that had led him wrongly to claim that Cosette had substantially increased the price that it (or, strictly, Cosette Sub) would pay for MPG shares in the course of the transaction. Mr Saraf was plainly reluctant to acknowledge the impact of that misunderstanding in cross-examination, although that impact must have been immediately apparent to him given his obvious intelligence and expertise (Saraf XX, T146–150, 199–206). When this difficulty emerged, he gave evidence that he did not remember whether Cosette had substantially increased its valuation for MPG in this way, although his affidavit had plainly represented that that had occurred. It seemed to me that Mr Saraf’s as to this matter was, at best, guarded and, possibly, evasive.

12. By a second affidavit dated 7 September 2025, Mr Saraf responded to aspects of the affidavit evidence of Mr O’Brien, MPG’s Chief Executive Officer, which I address below. Mr Saraf and Mr O’Brien have different recollections as to some matters, but it is largely not necessary to resolve those differences in order to determine these proceedings. In his third affidavit dated 21 September 2025, Mr Saraf “corrected”, or sought to reshape, aspects of his first affidavit. He sought to make a significant change to his explanation of his email dated 9 September 2024, which I address below; gave evidence (Saraf 21.9.25 [9]) that his references to the basis of financial modelling referred to his understanding of those matters; and retreated (Saraf 21.9.25 [10]) from the position that Cosette’s modelling was “based on” information provided by MPG to the proposition that it was “informed by” that information. That was a particularly significant change where it reflected, without frankly acknowledging, the substantial documentary evidence that indicated that Cosette and its advisers (sensibly enough) had largely not used information provided by MPG to model MPG’s likely financial performance.

13. In closing submissions, the Cosette Parties submitted that the Court should find that Mr Saraf was a truthful witness whose evidence was corroborated by contemporaneous documents. I am not able to accept that submission without significant qualification. While Mr Saraf’s evidence in respect of the chronology of events largely followed the documentary evidence, I approach his evidence as to contested matters with caution for the reasons noted above.

14. The Cosette Parties also read the affidavit dated 21 July 2025 of Mr David Burgstahler, who is a director of Cosette Holdings and the Managing Partner and Chief Executive Officer of Avista, a major shareholder in Cosette Holdings. Mr Burgstahler outlines his experience and the relationship between Avista and the Cosette Group. He refers (Burgstahler 20.7.25 [20]) to his first having become aware of an opportunity to acquire MPG in early 2024 and to having exchanged emails with Mr Saraf about the acquisition in September 2024. Mr Burgstahler’s evidence (Burgstahler 20.7.25 [21]) is that he received information and updates as to due diligence that was conducted into the proposed acquisition of MPG, that he discussed that with Cosette management, and that the information he received included financial modelling. Like Mr Saraf, Mr Burgstahler did not address the content of that modelling in any detail. Ultimately, little turns on that in these proceedings, where Cosette has not established any representational case as to which reliance would become significant.

15. Mr Burgstahler also refers (Burgstahler 20.7.25 [22]) to his dealings with MPG representatives during the due diligence, including a discussion with the Chair of MPG after the proposed acquisition had “stalled” in December 2024. I will address his evidence as to the 17 February 2025 virtual meeting and the directors’ meeting of Cosette and Cosette Holdings on 18 February 2025 in dealing with the chronology of events below. Mr Burgstahler did not there refer to any events between the entry into the SID on 20 February 2025 and his receipt, on 26 March 2025, of an email from Mr Casten containing MPG’s February CFO report, which he characterises (in evidence admitted with a limiting order under s 136 of the Evidence Act as his understanding) as reflecting “significant misses by [MPG], including a shortfall in underlying [earnings before accounting for interest, taxes, depreciation and amortisation (“EBITDA”)] for February 2025 of A$11,287,000.” I also address Mr Burgstahler’s response to Cosette’s receipt of MPG’s 9+3 forecast for the financial year ended 30 June 2025 (“FY25”) (“FY25 9+3 Forecast”) in the chronology below. For the reasons that I explain below in dealing with Mr Burgstahler’s evidence of the 17 February meeting, I am unable to give any real weight to Mr Burgstahler’s evidence, other than where it is corroborated by contemporaneous documents.

16. The Cosette Parties also read the affidavits dated 22 July 2025 and 8 September 2025 of Mr Richard Casten, who is a Senior Vice President and Chief Financial Officer of Cosette and a director of Cosette Sub. In his first affidavit dated 22 July 2025, Mr Casten there refers to his academic qualifications and experience and to the nature of the Cosette Group. I address other aspects of his evidence in the chronology of events below. In his second affidavit dated 8 September 2025, Mr Casten responds to the affidavit evidence of Mr Gray, who is MPG’s Chief Financial Officer, which I address below, including Mr Gray’s reference to the key risks and opportunities sections in MPG’s forecasts. Mr Casten’s evidence is that he does not recall (but does not deny) a discussion with Mr Gray as to how key risks and opportunities were identified and assessed by MPG and does not recall Mr Gray referring to the potential meaningful impact of such risks and opportunities on MPG’s EBITDA. Assuming, without deciding, the correctness of that proposition, those risks and opportunities were nonetheless prominently disclosed in those forecasts and Mr Casten, rightly, does not suggest that he did not read or understand them, without the need for further discussion with Mr Gray. Mr Casten also there gave evidence (Casten 8.9.25 [13]) that he did not recall Mr Gray having advised, in meetings in the due diligence process, that MPG had experienced significant volatility in its forecasts; its forecasts had improved and were still improving; and that there were deviations that modelling would not pick up, In cross-examination, Mr Casten partly accepted and partly did not recall, but did not deny, that those matters had been disclosed to him. As I note below, I accept Mr Gray’s evidence that those matters were disclosed to Mr Casten.

17. In closing submissions, Cosette submits that Mr Casten gave truthful evidence and that his evidence should be accepted. Mr Casten is plainly well qualified and highly experienced and, in significant parts of his evidence, was honest as to the limits of his recollection. It was plain, from contemporaneous correspondence, that Mr Casten had a healthy scepticism as to the nature of forecasts and was conscious of the possibility that MPG may have been too optimistic as to its future sales and in anticipating growth in its earnings. Mr Casten was reluctant in cross-examination to acknowledge the extent of his scepticism, likely because he recognised that his sensible approach to the uncertainties of forecasting and the risks of over-optimism in forecasts would have undermined his superiors’ evidence and Cosette’s claims. I approach Mr Casten’s evidence with caution in respect of issues of reliance on information provided by MPG, where it seems to me that he preferred acquiescence in Cosette’s claims to frankly acknowledging his more sceptical approach.

18. The Cosette Parties also read the affidavit dated 22 July 2025 of Mr Alain Dury, who is a director, Business Development and Scientific Affairs at Cosette and reports to Dr Serge IIin-Schneider (Cosette’s Senior Vice President, Corporate Development and General Counsel) who, notably, did not give evidence. Mr Dury is involved in the evaluation of products for acquisition or licensing and the medical review of promotional materials for Cosette’s products. He was involved in assisting Cosette in due diligence on MPG’s products and he refers to his review of the website relating to Nextstellis, an oral contraceptive distributed by MPG. I will adopt the term “Nextstellis” to refer to that product, but maintain the inconsistent usages adopted by the parties to refer to it in quotations.

19. Mr Dury also refers to his request for access to advice obtained by MPG from the Office of Prescription Drug Promotion (“OPDP”) within the U.S. Food and Drug Administration (“FDA”) as to promotional material for Nextstellis and for communications between OPDP and MPG in 2022 which were then produced by MPG in due diligence. Mr Dury’s evidence is that he recognised, at that point, that the OPDP had previously expressed concerns in 2022 about one claim made by MPG in respect of Nextstellis and that a similar claim was still being made in its website at the time of due diligence. He also refers to the positive view formed by another employee of Cosette as to MPG’s marketing material, which he does not appear to have shared. By his second affidavit dated 7 September 2025 in reply, Mr Dury responded to evidence of Ms Nataline, but her evidence was not read as a result of a narrowing of the issues between the parties in respect of an “untitled letter” issued on 28 April 2025 by OPDP to MPG which raised concerns about MPG’s promotion of Nextstellis (“FDA Letter”), which I address below. By a third affidavit dated 23 September 2025, Mr Dury made several amendments to his first affidavit. I refer to other aspects of his evidence in the chronology below. Mr Dury was cross-examined and I have regard to that cross-examination although it will have no material impact on the outcome of the proceedings. In closing submissions, Cosette submits Mr Dury was a truthful witness and made concessions where appropriate and that I should accept his evidence. I generally accept that submission.

20. The Cosette Parties tendered expert evidence of Mr Hosier, which I address in dealing with the FDA Letter below.

21. The Cosette Parties also tendered the report dated 1 August 2025 of Mr Pete Meyers (Ex C6), who has experience in finance roles relating to the pharmaceutical industry, as a Chief Financial Officer and investment banker and has experience of overseeing preparation of a company’s financial statements and financial forecasts. Mr Meyers had been asked to give evidence as to whether MPG’s approach to recognising earnings is consistent with the usual process adopted by pharmaceutical companies operating in the United States and as to whether MPG had reasonable grounds for its forecast of underlying EBITDA based on six months actual and six months forecast results (FY25 6+6 Forecast”) as at 17 and 20 February 2025. MPG obtained but did not seek to tender the report dated 1 September 2025 of Mr Bahl in response. The Cosette Parties then tendered a report dated 7 September 2025 of Mr Meyers in reply (Ex C6A), much of which was not properly in reply in the first place and other parts of which were no longer relevant when Mr Bahl’s report was not tendered.

22. I should here say something further as the process by which expert evidence was led in the proceedings, which reflected the pressure of preparation of the proceedings for hearing within a relatively short time. Orders for expert evidence were originally made by consent on 11 June 2025 without express reference to r 31.19 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) which prevents expert evidence being led at trial unless directions are sought under that rule, unless the Court otherwise orders. On 8 August 2025 orders were made pursuant to UCPR r 31.28 extending the time for Cosette to serve its expert evidence until 4 August 2025.

23. If the approach which Mr Meyers proposed to adopted had been disclosed in an application that expressly sought directions under UCPR r 31.19, I would likely have declined leave to rely on his report, adopting the principles in Botany Bay City Council v Minister for Planning and Infrastructure [2014] NSWCA 141, Shellharbour City Council v Minister for Planning [2011] NSWCA 195 at [35] and NorthWest Healthcare Australia RE Limited v Australian Unity Funds Management Ltd [2023] NSWSC 86 at [16]ff (“NorthWest Healthcare”). I would have taken that course because, as I observed in NorthWest Healthcare at [28]:

“… it is not an expert’s role, in applying his expertise to assumed facts, to engage in a process of fact finding. Second, and practically, there is a real risk of wasted time and costs involved in that approach, where significant time may be spent in an expert reaching findings based on his or her perception of the facts, where that perception of the facts does not coincide with the case that is put by any party, or with the findings that are ultimately reached by the Court, and that is not transparent, because it is not identified in any assumptions which the expert has been asked to make.”

I also there noted the difficulty with the process by which an expert is invited to engage in the assessment of a matter by reference to what he would “expect” to be taken into account and noted that will likely result in “idiosyncratic opinions, based on the expert’s subjective assessment of what a [party] or its officers should do.”

24. My concerns as to these matters reflects the nature of expert evidence, which I should emphasise given the importance of this issue in this case. Section 76 of the Evidence Act provides that evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion is expressed. Section 79 of the Evidence Act states an exception to the opinion rule, as follows:

"If a person has specialised knowledge based on the person's training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge."

25. In well-known observations in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305 (“Makita”), Heydon JA noted (at [85]) that what will ordinarily be necessary in order to lead admissible evidence includes an explanation that shows that the opinion is substantially based on the witness's expertise as applied to facts assumed or observed to produce the relevant opinion. I bear in mind that, as subsequent case law has recognised, the observations of Heydon JA in that case may be something of a counsel of perfection, and the Court does not apply those observations with a view to finding a way to exclude the expert report, rather than assessing its admissibility in a more pragmatic way. In Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588; [2011] HCA 21 (“Dasreef”), the plurality pointed to the fact that, for expert evidence to be admissible, the witness must have relevant specialised knowledge based on his or her training, study or experience; the opinion must be wholly or substantially based on that knowledge; and the report should be presented in a form which makes it possible to determine whether the opinion is wholly or substantially based on that knowledge. In Lang v R (2023) 278 CLR 323; [2023] HCA 29, the High Court referred to Makita and Dasreef as identifying the applicable principles in respect of the admissibility of the opinion of an expert under the uniform evidence legislation, and Kiefel CJ and Gageler J observed (at [11]) that:

“Those principles require that, in order to satisfy the condition of admissibility that the opinion of an expert be demonstrated to be based on specialised knowledge or experience, the inference drawn by the expert which constitutes the opinion be supported by reasoning on the part of the expert sufficient to demonstrate that the opinion is the product of the application of the specialised knowledge of the expert to facts which the expert has observed or assumed."

26. Here, Mr Meyers has no personal knowledge of what MPG did or did not do. He refers in his report to eleven letters of instruction. The first of those letters dated 28 June 2025 (Ex C6, 240) identified the questions which he was asked to address and provided limited factual background, which he has presumably assumed, and some documents. He was then provided further documents, without identification of any facts that he was asked to assume by reference to them, by letters dated 5 July 2025 (Ex C6, 247), 9 July 2025 (Ex C6, 251), 11 July 2025 (Ex C6, 253), 14 July 2025 (Ex C6, 257), 24 July 2025 (Ex C6, 259) and 25 July 2025 (Ex C6, 261). By letter dated 27 July 2025 (Ex C6, 265), he was provided with further questions and asked to identify his assumptions in the body of his report (Ex C6, 265), which he has generally not done; he was provided with further documents, again without identification of any facts that he was asked to assume by reference to them, by letters dated 29 July 2025 (Ex C6, 268) and 30 July 2025 (Ex C6, 271); and he was provided with two assumptions and the expert witness code of conduct by letter dated 31 July 2025 (Ex C6, 273).

26. As I have pointed out, the instructions given to Mr Meyers did not define the factual assumptions which could properly be made by reference to the documents that were provided to him and he has plainly undertaken an extended exercise in fact finding by reference to those documents, without reference to any other part of the evidence that is now available, including from Mr Gray’s lengthy cross-examination. Parts of his evidence were objected to and rejected on that basis. Where he generally made no attempt to identify what assumptions he has made in his report, it was literally impossible to know what information that he perceived (and I use that term advisedly) MPG had at any relevant time or what he perceived that it did or did not do with that information. Here, as in NorthWest Healthcare, there would be little utility and a real risk of error in drawing conclusions from an expert report where the expert’s perception of the facts did not or may not:

“… coincide with the case that is put by any party, or with the findings that are ultimately reached by the Court, and that is not transparent, because it is not identified in any assumptions which the expert has been asked to make.”

28. On balance, and with real hesitation, I granted leave to the Cosette Parties to rely on Mr Meyers’ reports, where the orders as to expert evidence had not squarely addressed that matter; Mr Meyers had already travelled from the United States for cross-examination and MPG was ready to cross-examine him; and there was a possibility that these matters might be cured by his oral evidence. They were not and his evidence is of little utility for the reasons noted above. I will nonetheless now address his report in greater detail.

29. Mr Meyers addresses (Ex C6, 173ff) the typical roles of a chief financial officer and finance team in the US pharmaceutical industry, (Ex C6, 174ff) the revenue recognition practices in the US pharmaceutical industry and (Ex C6, 167, 178ff) the relationship between revenue and EBITDA in the US pharmaceutical industry, including the significance of “gross to net” calculations in revenue recognition. He then refers (Ex C6, 180ff) to supply chain finance and channel inventory monitoring practices; (Ex C6, 182ff) the implications of channel inventory for expected EBITDA; and (Ex C6, 183ff) identifies several “Key Mayne Products” for the purposes of his report.

30. Mr Meyers then outlines the background to MPG’s performance in the third quarter of the financial year ended 30 June 2025 (“Q3 FY25”) by reference to a review of documents and events which should be treated as matters of assumption. He then expresses the opinion (Ex C6, 168), largely without reference to identified assumptions of facts and partly in reliance on parts of his report that were not admissible and were not admitted, that, as at 17 or 20 February 2025, MPG did not have reasonable grounds for its forecast of underlying EBITDA for the remainder of FY25 reflected in the FY25 6+6 Forecast. He refers, in his review of MPG’s FY25 6+6 Forecast, to customary practice in the United States for companies to have access to and monitor certain kinds of data. He there identifies at least some assumptions that he has made by reference to his eleventh letter of instruction, from which he concludes that MPG at least had access to daily “ex-factory” shipment data. He also refers to other information which he “would expect” MPG to have received, although it is not apparent whether he has assumed that MPG in fact received what he expected it to receive, or has assumed that it did not and is critical of that matter. Mr Meyers also undertakes an analysis relating to the “pace” of MPG’s “ex-factory” shipments (Ex C6, 170), on the premise that that calculation provides meaningful information. These matters underpin Mr Meyers’ opinion that there was no reasonable basis for MPG’s FY25 6+6 Forecast given its projected increases in ex-factory shipments and, consequently, EBITDA for the Key Mayne Products (as defined in his report) in February and March 2025.

31. The difficulties with that analysis are, first, that it is undermined by Mr Gray’s evidence in cross-examination, which I address below and accept, as to the lack of utility in shipment information for such an analysis; and second, it is not possible to know how it takes into account the other information available to MPG to support a forecast where, as I have noted above, Mr Meyers does not identify the assumptions (or findings that he has made) which underpin his view to allow then to be tested. Mr Meyers implicitly assumes that all that was known to MPG and those preparing the FY25 6+6 Forecast is what emerges from the particular documents which were provided to him, which were a fraction of the evidence led in the proceedings, whatever (unidentified) factual inferences he has drawn from them and the information that the FY25 6+6 Forecast discloses on its face. It is impossible to test his conclusions formed on that incomplete basis against the evidence in this case, including the matters addressed in the extended cross examination of Mr Gray, where Mr Meyers does not disclose what assumptions of fact he has made. Where the body of knowledge which Mr Meyers thinks was known to MPG, at the time it prepared the FY 6+6 Forecast, cannot be identified, then his evidence as to whether that unidentified body of information provides a reasonable basis for MPG’s view does not assist.

32. Mr Meyers also addresses (Ex C6, 171, 208ff) the risks and opportunities disclosed in MPG’s 6+6 Forecast and asserts that scenarios where all risks and no opportunities, or vice versa, occur at the same time are “by definition” considered unlikely to occur and are therefore not useful as a management and planning tool. That proposition may be true in the limited sense that any unlikely event is unlikely until it occurs, when it is then certain. I readily accept that management would have greater regard to likely than unlikely events. Nonetheless, it seems to me that the identification of risks and opportunities in a forecast document will often expose, and here did expose in the FY25 6+6 Forecast, the possibility that those risks and opportunities may come home in part or, perhaps less likely, in whole.

33. The Cosette Parties also tendered a further expert report of Mr Meyers dated 7 September 2025, purportedly in reply. A significant part of the report was not properly evidence in reply and was rejected for that reason, and other parts of which were no longer relevant when Mr Bahl’s report was not tendered. Mr Meyers there expresses the view that nothing in Mr Bahl’s report, Mr Gray’s affidavit (24.8.25) or Mr O’Brien’s affidavit (24.8.25) caused him to revise the expert opinions set out in his first report. Others parts of that evidence in reply addressed his disagreement with aspects of the evidence of fact given in Mr Gray’s affidavit; Mr Meyers in turn suggests that aspects of MPG’s forecast process were “atypical” based on his experience in leading the forecasting process for commercialised pharmaceutical companies; and other aspects of that evidence were factual assertions and argumentative statements, particularly as to the adjustment made by MPG as to projected sales from February 2025. Mr Meyers there appears to treat it as self-evident that the shortfall in sales in January 2025 was quantitively material (although, as I have accepted below and Mr Meyers may also accept, it reflected a small proportion of annual sales) and did not reflect seasonal or temporary factors that could reverse, where that is a matter to determined with regard to the evidence led in the proceedings. Further parts of that evidence were not admitted over objection. Mr Meyers’ evidence in reply provided little assistance in determining the proceedings.

34. The Cosette Parties also led accounting evidence of Ms Friend which I address below in determining Cosette’s claim that an MMAC resulted from the Q3 FY25 Sales Performance Matters (as defined in Cosette’s CCS). Cosette also read a further affidavit dated 21 September 2025 of its solicitor, Mr Argyris, which proved, as a formal matter, changes in MPG’s share price on 17 September 2025. I address this below in dealing with Cosette’s continuous disclosure claim in respect of the FDA Letter.

35. It is important here to note not only the evidence led by Cosette Parties, but also the substantial evidence that they did not lead. In particular, the Cosette Parties led no evidence from the employees of Cosette’s advisers and the employees of Avista who accessed (Ex M3, Tab E) MPG’s “Cash flow by month F25” (Ex M4) in the virtual data room (“VDR”) in the course of the due diligence, which disclosed MPG’s EBITDA decline in January 2025. The Cosette Parties instead led evidence of senior executives who, it appears, did not personally access that information and were not informed of its existence by their deal teams and, in their affidavit evidence, wrongly assumed that that information had not been provided to Cosette, its advisers and Avista. Notwithstanding that Cosette’s advisers undertook detailed financial modelling of MPG, and one of those advisers, McKinsey & Company (“McKinsey”), adopted a more conservative view than either Cosette or MPG as to MPG’s forecast product sales, the Cosette Parties led no evidence from any of those advisers as to the analysis that they had undertaken. I am conscious that the proceedings were prepared for hearing under time pressure, by reason of the Cosette Parties’ refusal to extend the End Date for the scheme which, if it passed, would leave MPG without remedy. It is not necessary to draw any inference that the evidence not called by the Cosette Parties would not have assisted them, and it is sufficient to note that the Cosette Parties’ not leading such evidence likely left the Court with a partial account of events.

36. Turning now to MPG’s affidavit evidence, MPG read the affidavit dated 24 August 2025 of Mr Shawn O’Brien, its Chief Executive Officer and Managing Director. Mr O’Brien there addressed his background and experience in the pharmaceutical industry and MPG’s business operations including several areas of business and its key products. Mr O’Brien’s evidence as to MPG’s business operations (O’Brien 24.8.25 [31]ff) demonstrated their complexity, involving distribution of multiple branded products across several distribution and sales channels, including wholesale distribution in the United States and distribution to many pharmacies and special pharmacies and through a mail order pharmacy owned by MPG and located in the United States. He also addressed the history of Nextstellis, the development of the proposed transaction between MPG and Cosette, the steps taken by the parties after the entry into the SID and matters relating to the FDA Letter. Mr O’Brien also addressed (O’Brien 24.8.25 [114]) the process adopted by MPG to prepare quarterly forecasts, including its 3+9 forecast dated 31 October 2024 for FY25, based on three months of actual results and nine months of forecast results for FY25 (“FY25 3+9 Forecast”), its FY25 6+6 Forecast and its FY25 9+3 Forecast. His evidence is that:

“I am involved in finalising and approving the forecasts, together with [Mr Gray]. As part of that process [Mr Gray] and I evaluate the output of the mathematical model prepared by the finance team against the input and assumptions that have been provided by the commercial business leaders and incorporated into the forecast to test the v[e]racity of the projections. In addition, I am also considering market factors which may impact on [MPG’s] business including for example any new competitor products introduced into the market, changes in reimbursements policies for product coverage and any changes in our commercial investments which may impact product performance.”

37. I refer to other aspects of Mr O’Brien’s evidence in the chronology set out below. Mr O’Brien was cross-examined at some length as to the extent of his involvement in MPG’s forecasts (O’Brien XX, T295ff); the manner in which MPG’s FY25 6+6 Forecast was prepared (O’Brien XX, T299); the information available to MPG, including Mr O’Brien (O’Brien XX, T312ff); the history and significance of Nextstellis (O’Brien XX, T323ff); the significance of revenue from MPG’s women’s health business to its forecast EBITDA (O’Brien XX, T327); the circumstances of the subsequent decline in sales reflected in MPG’s later forecasts and financial performance (O’Brien XX, T393ff); and other events which I address in the chronology set out below.

38. In closing submissions, the Cosette Parties submit that Mr O’Brien’s evidence should not be accepted in significant aspects and where that evidence was not reflective of contemporaneous documents. I do not accept that there was any significant inconsistency between Mr O’Brien’s evidence and the contemporaneous documents. It seems to me that Mr O’Brien was a cautious and careful witness, who typically wished to review his affidavit and contemporaneous correspondence before responding to questions. I was nonetheless satisfied that he was giving evidence to the best of his recollection and, had it been necessary to resolve matters as to which Mr Saraf and Mr O’Brien had different recollections, I would largely have preferred Mr O’Brien’s evidence to Mr Saraf’s evidence as to those matters.

39. MPG also read the affidavit dated 24 August 2025 of Mr Aaron Gray, who is MPG’s Chief Financial Officer and is based in the United States. Mr Gray addressed his education and experience, including in forecasting, as to which he has significant expertise, and in senior finance roles. Mr Gray has a postgraduate qualification which included quantitative analysis courses. He has worked in financing roles at an industrial company in which he had responsibility for forecasting the relevant business; in a global medical technology business where he also had responsibility for forecasting orders, revenue and profit and managed that company’s large data analytics team; and he then had responsibility for forecasting equipment revenue for all of the diagnostic imaging business for North America at that company. He joined MPG as its Chief Financial Officer in August 2022 and, as the evidence demonstrated, has since introduced more sophisticated forecasting approaches at MPG, particularly from late 2024.

40. Mr Gray addressed aspects of MPG’s business relevant to his role and explained the way in which quarterly forecasts were prepared in MPG’s business. Mr Gray outlined MPG’s women’s health, dermatology and international business and its dealings with speciality pharmacies, large wholesalers and its mail order pharmacy, to which I referred above in addressing Mr O’Brien’s evidence. He also addressed the complexities of the application of US health insurance plans to MPG’s products and “co-pay” assistance programs which MPG offers in the United States. He explained, at length, the manner in which MPG calculates EBITDA, the data sources used in that calculation and the timing of its access to those data sources. He also explained the steps that he has taken, since he joined MPG, to introduce a single forecast as a management tool, combining previously separate financial and supply chain forecasts, and updating that forecast on a quarterly basis. He also explained (Gray 24.8.25 [106]ff) the use of statistical modelling as the first step in preparation of MPG’s forecast, commencing with the 3+9 Forecast that was prepared by MPG early in the period in issue in these proceedings. He also referred (Gray 24.8.25 [109]) to matters that are not readily captured by statistical modelling and to the steps taken by MPG to address those matters, including by review meetings undertaken by his team to obtain information from the business that is then included in forecasting. He outlined the steps taken in that forecasting (Gray 24.8.25 [123]ff) and explained the basis on which he considered those steps gave rise to a robust forecasting process. Mr Gray specifically addressed the preparation of the FY25 6+6 Forecast, which I address below, and also addressed subsequent developments. Mr Gray also addressed (Gray 24.8.25 [205]ff) his dealings with Cosette in respect of the proposed acquisition of MPG, and I will address that evidence in the chronology set out below. By a second affidavit dated 23 September 2025, Mr Gray corrected aspects of his first affidavit, which are not material to the determination of these proceedings.

41. Mr Gray was cross-examined at substantial length and as to matters of considerable detail. I will largely deal with the cross-examination of Mr Gray here, since that allows a clearer presentation of the density and detail of that cross-examination, although I also address some aspects of that cross-examination in the chronology below. Mr Gray was cross-examined (Gray XX, T419–420) as to MPG’s timing of access to information, including prescription data, co-pay data and information as to daily gross sales. He was cross-examined (Gray XX, T422) as to MPG’s knowledge, as at 17 February 2025, that MPG’s underlying EBITDA for the month of January 2025 was negative approximately $5.1 million and, after referring to his affidavit, he accepted that proposition. As emerged from the evidence and (much) later in his cross-examination, that negative EBITDA figure involved an adverse change of A$800,000 in MPG’s budgeted EBITDA for January 2025. As I will find below, that information had also been made available to Cosette, its advisers and Avista by the “Cash flow by month F25” (Ex M4) which MPG placed in the VDR on 19 February 2025, albeit only shortly before the SID was executed. Mr Gray was also cross-examined (Gray XX, T423) as to the commencement of his work in preparing the FY25 6+6 Forecast and (Gray XX, T424) as the process adopted by MPG, as disclosed in his affidavit evidence, to monitor the performance of its sales representatives and the use of that information for forecasting purposes.

42. Mr Gray was also cross-examined (Gray XX, T426) about, and explained, why there was little utility in reviewing the number of units shipped, where that was secondary information to information as to the level of demand that emerged from the prescriptions issued for relevant products. He pointed to demand as the primary data and noted that there was one set of demand data, which was then visualised or aggregated by MPG in different ways for review. He was also cross-examined (Gray XX, T427ff) in some detail, as to the percentage of MPG’s products, within different areas of its business, which are distributed through different distribution mechanisms. Significant parts of this and other aspects of Mr Gray’s cross-examination presented as having an investigative character, as the cross-examiner explored the accuracy of Mr Gray’s detailed affidavit evidence, rather than advancing any suggestion that Mr Gray’s evidence was not correct, and that investigation largely supported the accuracy of Mr Gray’s explanation of MPG’s financial and forecasting processes in his evidence in chief.

43. The questions that Mr Gray was asked were often complex and addressed matters of detail. He accepted in cross-examination (Gray XX, T433–434) that MPG’s top products drive the majority of units shipped across all products, reflecting the fact that they are the top products in the business. He was then asked to recall (Gray XX, T433) what proportion of total units shipped were represented by MPG’s four products in women’s health and two in dermatology; it was not clear whether that question was directed to each product or the six products collectively, and Mr Gray, unsurprisingly, was not able to answer a question of that detail from recollection. A later question (T434) was directed to a variation to that proposition, namely the proportion of total units shipped that were represented by the top six products but, unsurprisingly, Mr Gray also did not remember that number.

37. Mr Gray was cross-examined as to the history of MPG’s adopting statistical modelling. His evidence in cross-examination (Gray XX, T435), consistent with his affidavit evidence, was that MPG introduced more advanced statistical modelling in advance of the FY25 3+9 Forecast prepared in the early part of the time period in issue in these proceedings. He was also cross-examined (Gray XX, T436) as to his review of MPG’s forecasts and pointed out that he reviewed outputs of the forecasts which were created in different versions. He was cross-examined (Gray XX, T439) as to whether he had reviewed an earlier output of the statistical modelling for the FY25 6+6 Forecast; his evidence was that he had done so and he was then criticised, somewhat unfairly given the length and detail of his affidavit evidence, for not having referred to that matter in his affidavit. Mr Gray was also cross-examined (Gray XX, T440–441) as to meetings of the heads of business to identify matters relevant to MPG’s forecasts, although his team rather than he attended those meetings; his evidence was that no changes were made to the statistical forecast by reason of those matters, but additional views generated by those meetings were compared to the statistical forecast. He was also cross-examined as to the review of units and gross margins that took place as part of the quarterly process to generate a forecast in the business; he did not participate in work done by his team prior to that review but he and Mr O’Brien both participated in the gross margin review itself. Mr Gray was also cross-examined (Gray XX, T459) as to the circumstances in which forecasts of the number of units for Nextstellis for the second half of FY25 were reduced; it was suggested to him that he was mistaken in that recollection as to this matter, and his evidence was that he specifically recalled a conversation about that matter and I accept that evidence.

38. Mr Gray was then further cross-examined (Gray XX, T461ff) as to the FY25 3+9 Forecast and as to the methodology adopted in that forecast and the key risks and opportunities noted in respect of that forecast. Mr Gray rightly pointed out (Gray XX, T462–463) that there were occasions on which the mathematical model did not return a reasonable value and a divergence between the model and the final forecast was not then a risk or opportunity and on other occasions a risk or opportunity could result in a departure from the mathematical model. Mr Gray was also cross-examined, at considerable length, as to the detail of individual spreadsheets which were prepared in the forecasting process (Gray XX, T464ff–466ff), including as to individual numbers and line items contained in those forecasts, although the significance of those matters for Cosette’s case was not clear where the Cosette Parties brought no challenge to the detail of that process.

39. Mr Gray was also cross-examined as to the “run rate” which reflects the daily volume of units sold within the business against a goal or other number (Gray XX, T481). It appears from a spreadsheet shown to Mr Gray in his cross-examination that Ms Mateer of MPG had run rate information as at 15 January 2025, by the time of the meeting on 27 January 2025, although Mr Gray’s evidence (Gray XX, T483), which I accept, is that that information was not and would not ordinarily be provided to him at that meeting. He also pointed out and I accept that:

“The run rate in January more than nearly any other month would not be indicative of the trend because of the holidays that happen early in the month.”

47. Mr Gray accepted in cross-examination (Gray XX, T491) that, on comparing the forecasts for January 2025 for MPG’s US business between 28 January and 13 February 2025, it appeared that forecast result for that month had fallen by more than $6 million, and that would be a significant change between a forecast result and an actual result (T491); that was a good example of Mr Gray’s willingness to make proper concessions against MPG’s apparent interest and supports his credit. I address the significance of that matter to Cosette’s cross-claim below.

48. Mr Gray also fairly accepted in cross-examination (Gray XX, T492) that MPG had, for January 2025, fallen short of its forecast EBITDA result in the FY25 3+9 Forecast, which he noted was the relevant version to be compared with actual results in January 2025. Mr Gray also accepted (Gray XX, T495) that the adjustments made, implicitly between the FY25 3+9 Forecast and the FY25 6+6 Forecast, involve shifting projected unit sales to later months, so that it would be necessary for those months to perform better (in the cross-examiner’s words) in order to achieve the forecast. However, he also pointed out (Gray XX, T495) and, I accept, that that shift was not significant:

“[b]ecause the unit miss for the month of January [2025] was something about two and a half percent of the units forecasted for the second half.”

49. The cross-examiner then rightly anticipated (Gray XX, T496) Mr Gray’s expectation that MPG could have recovered that modest shortfall in actual sales within the next several months and Mr Gray broadly accepted that proposition.

50. Mr Gray was cross-examined as to the forecasting methodology recorded in the FY25 6+6 Forecast (Ex J1, 10A/7809; Gray XX T507ff). Mr Gray accepted (Gray XX, T509–510) that the “miss” disclosed in his CFO report to MPG’s board for January 2025 was about A$800,000 to forecast and he rejected the proposition that the likelihood of a “miss” in subsequent months would be increased by increasing the number of units forecast for subsequent months, on the basis that “the demand meaning prescriptions dispensed, continued” and that:

“The continuation of demand would signal that if anything one would expect an increase, looking forward.”

I accept that that reasoning process was reasonably founded, although, as I will observe below, that result did not come to pass.

51. Mr Gray’s evidence (Gray XX, T511) was, and I also accept, that a “miss” in the run rate for shipped units as at mid-February 2025 did not indicate a significant likelihood that MPG would not be able to achieve the forecast EBITDA for February 2025 because:

“Our shipping patterns don’t follow a run rate. They’re very volatile. Lower shipments earlier in the month in the face of continued demand or prescriptions dispensed, meaning demand, would indicate that there would be a most likely an acceleration of shipments needed to fill the demand.”

52. Mr Gray nonetheless fairly acknowledged (Gray XX, T512) that, as events developed, there was a “significant miss” to forecast EBITDA for February 2025, which became apparent when he received MPG’s February results in March 2025. Mr Gray’s evidence (Gray XX, T519) was that further analysis undertaken by MPG had been able to exclude particular causes for the decline in demand in February 2025, and the only remaining hypothesis that could not be excluded was an impact of steps then being taken by MPG to change its sales team and that this hypothesis was very difficult mathematically to prove or disprove. Mr Gray also rightly then pointed out (Gray XX, T519–520) that it was a fact that there was specific demand softness in the third quarter of FY25, commencing in January 2025, in that the “demand was lower than what we had forecasted and what we expected”; the demand in that period did not reflect what MPG believed to be the trend of the demand and was a change from what had been the case in the first half of the financial year; and that the uncertainty was as to the cause of that matter, where the only remaining explanation related to the change in the sales team. He nonetheless confirmed (Gray XX, T521) that, as at 14 February 2025, he believed that prescription data until early February 2025, which was the data then available, and co-pay data supported the then forecast.

53. Mr Gray was also cross-examined (Gray XX, T556ff) as to a spreadsheet which he had prepared to compare demand and wholesaler inventory (Gray 24.8.25 [92]) that used both prescription data and information as to units dispensed; Mr Gray fairly accepted (Gray XX, T560) that that document did not support the forecast made as a February 2025 for unit sales for Nextstellis, where at least two years data would be needed for a trend line in forecasting. He confirmed in cross-examination (Gray XX, T561) that his review of three years’ data in relation to prescriptions which he undertook on an ongoing and monthly basis had supported the forecast number of units for Nextstellis for February to June 2025 in the FY25 6+6 Forecast. He again pointed out (Gray XX, T562):

“The point is one month doesn’t make a trend and so in mathematical modelling, spikes way up or way down would be treated as an outlier”.

54. His evidence (Gray XX, T561) was also that, as a February 2025, the “slope of the [demand] line supported by the history would show that there was going to be a rebound”. Mr Gray also noted, in cross-examination (Gray XX, T588) the complexities introduced by a change in foreign exchange rate in the second half of FY25, which were not fully explored in his cross-examination or in the proceedings. Mr Gray’s evidence (Gray XX, T597–599) was that he did not realise until after the end of February 2025 that there would be a shortfall in gross sales, although he fairly acknowledged that units shipped as at mid-February 2025 did not support meeting forecast gross sales for that month, while also noting that gross sales might be made up in the second half of February, pointing to the continuance of demand over that period.

55. In closing submissions, the Cosette Parties submit that there are material gaps in Mr Gray’s affidavit as to the process that MPG followed in preparation of the FY25 6+6 Forecast and that:

“Some parts of Mr Gray’s evidence were unsatisfactory as, in cross-examination, he gave evidence that was not contained in his affidavit or which was inconsistent with his earlier attempts to describe the forecasting methodology and the basis on which he approved the [FY25] 6+6 Forecast.”

56. I do not accept this submission. I recognise that Mr Gray’s affidavit, although long and detailed, did not contain the degree of detail that emerged from his cross-examination over a day and a half, but that was likely inevitable given the practical constraints in preparation of affidavit evidence, particularly in a case prepared under an accelerated timetable. It was hardly surprising that, given the length of Mr Gray’s cross-examination, additional matters emerged from that cross-examination which largely elaborated on and were consistent with his affidavit evidence and, in other cases, involved appropriate concessions and qualifications to that evidence. That matter seems to me to support Mr Gray’s credit rather than the reverse.

57. In closing submissions, the Cosette Parties also advance lengthy submissions to the effect that Mr Gray’s evidence as to MPG’s statistical model changed in the course of cross-examination. I do not accept that submission, beyond the unsurprising proposition that, where Mr Gray was cross-examined at length as to that statistical model, his evidence about it grew steadily more detailed, as additional aspects of it were disclosed and exhaustively examined by that cross-examination. I also note that the suggested “changes” in that model, to the extent that they exist, often reflected an ongoing failure in the cross-examination to draw the distinction between the underlying statistical model and its outputs in various forms, although Mr Gray was generally precise in distinguishing the two in his cross-examination.

58. It seems to me that Mr Gray responded to very detailed questions, covering a very large body of information, over a relatively long cross-examination, in a direct and constructive way. He plainly had a strong understanding of MPG’s financial reporting, he was responsive in dealing with questions and frequently made concessions in respect of particular matters which were potentially adverse to MPG’s case and he was otherwise clear and direct in indicating where he disagreed with other matters put to him by the cross-examiner and, when asked, why he did so. I have no hesitation in accepting his evidence across the range of matters as to which he gave evidence, and preferring his evidence to Mr Saraf’s and Mr Casten’s evidence in those areas where there was a conflict between their evidence.

59. MPG also reads MPG reads the affidavit dated 25 August 2025 of Mr Turner, its Vice President of Marketing, also based in the United States, which addressed issues relating to the marketing of Nextstellis, before and after the receipt of the FDA Letter. I will address that affidavit and his cross-examination in dealing with the FDA Letter below. The Cosette Parties advance criticisms of Mr Turner’s evidence in cross-examination in closing submissions. I accept that Mr Turner had little experience to allow him to express views as to whether an “untitled letter” issued by the FDA was a serious matter, at least from a regulatory rather than a marketing perspective. I do not accept that there was any inconsistency between that evidence and his evidence that allegations from a regulatory agency like the FDA were “absolutely taken very seriously”, where that proposition is plainly sensible, irrespective of whether a regulator’s concerns are well-founded in the particular case. I also do not accept there is any basis for criticism of Mr Turner, so far as he referred in cross-examination to the steps which were already being taken by MPG to change its marketing approach. That evidence was properly given where, to give accurate evidence, Mr Turner had properly to distinguish between the steps which he plainly already wished to take to alter MPG’s marketing approach to Nextstellis, and the effect of the FDA Letter which provided him an opportunity to accelerate those steps.

60. MPG also read the affidavit dated 25 August 2025 of Mr Button, the Head of Supply Chain at Mayne Pharma International Pty Ltd, a wholly owned subsidiary of MPG, who is a member of that company’s senior leadership team and reports to MPG’s executive leadership team. Mr Button works at MPG’s South Australian facility and addressed an inspection of that facility by the Therapeutic Goods Administration (“TGA”) on 11 and 13 March 2025, a letter dated 4 April 2025 from the TGA to MPG (“TGA Letter”) and steps which have since been taken by MPG in response to that letter. He there identified the matters raised in the TGA Letter, MPG’s first and second responses to that letter and noted that TGA has accepted MPG’s second response to the TGA letter. He set out the estimated costs associated with steps taken or required to be taken by MPG in respect of the matters identified in the TGA letter. Mr Button was cross-examined, although more briefly than most of MPG’s witnesses, and presented as a credible witness with close knowledge of the operational matters which were addressed by his evidence. It is not necessary to address his evidence further, where Cosette subsequently abandoned its claims arising from the TGA Letter in its cross-claim.

61. MPG also led expert evidence of Ms Selman, which I address in dealing with the FDA Letter below, and accounting evidence of Ms Wright, which I address below in determining Cosette’s claim that an MMAC resulted from MPG’s Q3 FY25 Sales Performance Matters. MPG also read an affidavit dated 25 August 2025 of its solicitor, Mr Jagarajah, who led evidence as to the operation of the VDR maintained under the SID, the index to that VDR and the disclosure letter provided by MPG in respect of the transaction.

62. MPG did not lead evidence of any representative of Jefferies Group LLC (“Jefferies”), its financial advisers in respect of the transaction, although it is not apparent that Jefferies would have been able to provide significant assistance in the determination of the proceedings, by contrast with the advisers not called by the Cosette Parties to whom I referred above.

Chronology and background facts

63. There is a degree of common ground as to the background facts which emerge from the pleadings. There are differences between Australian time and US time in respect of communications to which I refer in the chronology below but no issue generally arises here as to the precise timing of any communication. I have adopted the date shown on the relevant document, rather than seeking to convert between Australian and US times in that chronology.

64. From about mid-July 2024, Cosette undertook (Saraf 22.7.25 [24]ff) initial preparatory work done in relation to a potential acquisition of MPG and identified an indicative price for such an acquisition, by reference to estimated EBITDA figures. Mr Saraf’s evidence (Saraf 22.7.25 [34]) that Santander identified an indicative fair value for MPG shares of A$4.74–$6.04. I think it likely, by reference to the derivation of that figure, that it was a reference to US$4.74–$6.04. Mr Saraf was reluctant to accept that matter in cross-examination, although he conceded the correctness of the calculation that led to that result. When he prepared his affidavit, Mr Saraf misunderstood that those figures were in AUD rather than USD, and that misunderstanding contributed to a significant error in another aspect of his evidence, which I address below.

65. Mr Casten’s evidence (Casten 22.7.25 [22]) is that was that he was first told about a proposed transaction to acquire MPG in or around mid-August 2024 when Mr Saraf told him that Mr Saraf was meeting Mr O’Brien in person to receive an overview of MPG’s business and operations.

66. On 23 August 2024, MPG released its FY24 Annual Report, Mr O’Brien and Mr Gray delivered its FY24 results presentation and MPG released an ASX announcement as to its results on the same day.   

67. On 26 August 2024, Santander prepared discussion materials (Ex J1, 6/4651) for Cosette in preparation for Mr Saraf’s first meeting with Mr O’Brien. That document valued MPG at US$2.62 per share, with no premium for control, but also pointed to higher valuations, including an analyst high valuation of US$4.71. It identified an implied enterprise value for MPG between US$390 and US$518 million, on a multiple of FY25 estimated EBITDA between 10.3 and 13.6; an equity value of between US$466 million and US$594 million; a value per share of between US$4.74 and US$6.04; and a “Wall Street Median Price Target” of US$4.57.

68. Mr Saraf first met with Mr O’Brien on 29 August 2024 (Saraf 22.7.25 [35]). Mr Saraf’s evidence is that Mr O'Brien indicated, in substance, that any offer to acquire MPG’s shares would need to be at least A$6 per share and would have to include a significant premium. Mr O’Brien also addressed (O’Brien 24.8.25 [63]ff; see also O’Brien XX, T329ff) the circumstances in which he was introduced to Mr Saraf, by an investment banker at Santander and met with Mr Saraf on 29 August 2024. Mr O’Brien denied Mr Saraf’s evidence that he had indicated a price that would be needed for any offer to acquire MPG, although he agreed that he said “the Board would be resistant to any takeover that does not reflect the value they see in the Company in the future”. It is not necessary to determine the disagreement as to whether price was discussed in order to determine the proceedings.

69. As of 6 September 2024, MPG and Cosette entered a Confidentiality Agreement (“Confidentiality Agreement”) (CCSR [18]) which provided, in cl 20.6, that it formed part of the SID. Clause 8 of the Confidentiality Agreement provided that neither the Disclosing Party nor any of its Representatives (as those terms are defined) make any representation or warranty, express or implied as to the accuracy or completeness of Confidential Information disclosed to the Recipient hereunder; and unless otherwise set forth in a separate agreement related to the Purpose, neither the Disclosing Party nor any of its Representatives shall be liable to the Recipient or any of its Representatives relating to or resulting from the Recipient’s use of any of the Confidential Information or any errors therein or omissions therefrom. The Confidentiality Agreement defined “Confidential Information” in cl 1 so as to include, inter alia, forecasts, sales and other financial results, subject to exclusions in cl 2 for certain information generally available to the public or otherwise received by the Recipient; and the “Purpose” to be a potential further business consensual collaboration between the parties. MPG relies (CCSR [18]) on the effect of that disclaimer; Cosette responds (CCS Reply [3]) by pointing to cl 20.6 of the SID and the need to read the Confidentiality Agreement and the SID together.

With knowledge of these circumstances and its potential right to terminate, Cosette agreed to amend the SID on 1 April 2025, agreeing that the SID (as amended) remained in full force and effect. In doing so, Cosette lost any rights it had to terminate the SID based upon the 6+6 Forecast.”

475. In response, Ms Collins submits that:

“… a party to a contract is not taken to have affirmed the contract only because it recognised the existence of the contract, exercised rights under the contract, or otherwise acted on the basis that the contract remains on foot. There is no overriding principle that an act done under the contract will always communicate the decision to affirm; that would be contrary to the true nature of election; it may simply be the taking of action consistent with the contract while the position is explored.”

476. I accept that submission, as a matter of principle and authority, but it plainly does not exclude the prospect that a waiver or election can take place by a choice to take one rather than another course, although a party would prefer to leave its options open, since the contrary view would denude principles of election of operative effect.

477. Ms Collins then submits that:

“The Deed of Amend[ment] altered details of the corporate structure of the acquiring entities under the SID, together with consequential amendments. This was not done in the exercise of a right by Cosette. There was no inconsistency between entry into the Deed of Amendment and the reservation by Cosette of a right to terminate the SID.”

478. I do not accept the latter part of this submission. The entry into a new agreement which confirmed the continuing effect of the SID, as amended, into the future, while an alleged right of termination was pending, was of its nature a choice between two inconsistent alternatives, whether to terminate the SID for the alleged subsisting breach of it or to commit to its continuation in an amended form. The course then taken by Cosette had real significance, where it had the result that MPG’s shareholders were not then alerted to any undisclosed right to terminate the SID and were deprived (without any fault on MPG’s part) of the opportunity to make decisions in respect of their shares in MPG and the scheme with knowledge of that matter.

Cosette seeks to avoid an election by reliance on cl 3.4(b) of the SID. That clause does not seem to me to assist the Cosette Parties here, because it is directed to “waiver” and not to an election between inconsistent rights. In Canberra Advance Bank Ltd v Benny (1992) 38 FCR 427; (1992) 115 ALR 207 at 200; (1992) 9 ACSR 179, the Full Court of the Federal Court in turn observed that:

“There are occasions when, notwithstanding the presence of a provision to the effect that a waiver must be in writing, the courts have found that waiver has occurred despite the absence of writing. R v Paulson [1921] 1 AC 271 is one such example. The headnote adequately summarises the relevant passage from the judgment of their Lordships appearing at 282-3. It is in these terms:

The principle of law that a lessor who accepts rent knowing that there has been a breach of a covenant in the lease thereby irrevocably elects to treat the lease as subsisting, and is precluded from claiming a forfeiture, is applicable although the lease provides that no waiver by the lessor shall take effect unless it is in writing.

[The trial judge] also referred to [Sargent] v and Legione v Hateley (1983) 152 CLR 406 ; 46 ALR 1. In the first of those cases, the vendors of land lost their right to rescind, notwithstanding the purchaser's breach, because of their activities in taking money from the purchaser and joining with the purchaser in converting the land from the “Old System” to Torrens Title. Thus, as in Paulson's case, there was a specific act by a party with knowledge of a breach which act was inconsistent with that party's subsequent attempt to rely on that breach. It is, of course, true that a term in a contract which states that any waiver must be in writing can be the subject of evidence which would justify a finding that the conduct of a party was such that the requirement for writing had been waived by that party.”

479. In Tele2 International Card Company SA v Post Office Ltd [2009] EWCA Civ 9 (“Tele2”), Aiken LJ (with whom Richards and Ward LJJ agreed) considered the application of an “anti-waiver” clause in a case of election and observed (at [55]–[56]) that the clause did not have the effect of overcoming election as a doctrine of law and likely could not do so, as follows:

“Therefore, it seems to me, clause 16 of the Agreement is of no particular help to POL, except perhaps in terms of emphasising the requirement that an election to abandon a right will only be shown if there was a clear and unequivocal communication of an election to abandon the right to terminate and to continue the Agreement. As a matter of fact, either POL elected to abandon its right to terminate the Agreement for Tele2's breach of clause 3.10.2 or it did not. If POL did elect to abandon its right to terminate for breach, then the whole contract, including clause 16, would continue in existence. (Of course, the continuation of the Agreement would not stop POL from claiming damages against Tele2 for breach of clause 3.10.2, but that is not in issue here).

In short, clause 16 cannot prevent the fact of an election to abandon the right to terminate from existing: either it does or it does not. This conclusion is reinforced, I think, by the terms of clause 16 itself. Although it stipulates that “in no event shall any delay, neglect or forbearance” on the part of any party in enforcing a provision of the Agreement “…be or be deemed to be a waiver” of the provision or “….shall in any way prejudice any right of that party under this Agreement”, it does not deal at all with the issue of election of whether or not to exercise a contractual right. The general law demands that a party which has a contractual right to terminate a contract must elect whether or not to do so. This clause does not attempt to say that the doctrine of election shall not apply – even assuming that any contractual provision could exclude the operation of the doctrine.”

480. It also seems to me that, consistent with the approach taken in R v Paulson [1921] 1 AC 271 and Sargent, Cosette’s entry into the Amending Deed was a specific act by a party with knowledge of many of the matters on which it now relies as a breach of the SID, which act was inconsistent with its subsequent attempt to rely on that breach. The inconsistency between terminating the SID for breach and continuing it in amended form and reaffirming its effect is so stark that Cosette waived the requirement for writing at the same time that it waived the asserted breaches of the SID arising from the facts then know to it. Second, consistent with the approach taken in Tele2, cl 3.4(b) of the SID does not, and likely could not, exclude an election arising from Cosette’s choice to take one course, namely to amend and confirm the SID, rather than another inconsistent course, to terminate it.

481. The Cosette Parties also rely on cl 20.11 of the SID, which also does not assist them, for the reason explained by the Court of Appeal in dealing with a corresponding clause in Pittmore Pty Ltd v Chan; Chan v Tan (2020) 104 NSWLR 62; [2020] NSWCA 344 at [130] as follows:

“[Counsel] maintained that cl 13 had no operation in relation to election or affirmation. He also adopted a construction to the effect that the clause applied to inaction by way of failure, delay or omission, but not to positive acts amounting to affirmation. That, with respect, is a natural way to read the clause. It is expressed to preclude inactivity by a party from amounting to a waiver of rights arising under the contract. It is not expressed to apply to positive acts of the party which are sufficient to affirm the contract. It is not necessary to express a concluded opinion on the operation of cl 13 ,,, but I favour the view that cl 13 would not prevent [the party’s] positive acts constituting an election or affirmation.”

482. I am reinforced in taking this view in the context of a scheme of arrangement, where an acquirer’s choices has significant public impacts, not only upon a target company and its shareholders, but also upon its employees and the communities in which it conducts business. Cosette’s choice, with admitted knowledge of relevant matters, to amend the SID and affirm its continued operation was necessarily inconsistent with a choice to terminate and amounted, at least, to an election not to terminate the SID by reason of the matters then known to it.

483. Turning now to the second aspect of MPG’s election defence, MPG then pleads (CCSR [144G]–[144J], substantially admitted CCS Reply [9]), in respect of the entry into the Deed Poll that:

“On 9 May 2025, [the Cosette Parties] made a Deed Poll in favour of each Scheme Shareholder as defined in the SID (Deed Poll).

By the Deed Poll, Cosette covenanted in favour of the Scheme Shareholders that it would perform all obligations contemplated of it under the Scheme, including providing the Scheme Consideration in accordance with the terms of the Scheme.

On or about 9 May 2025, Cosette provided the executed Deed Poll to [MPG].”

484. MPG then pleads (CCSR [144K], denied CCS Reply [9]), in respect of the entry into the Deed Poll that:

“By making the Deed Poll and providing it to [MPG], Cosette affirmed the SID, thereby losing the right to elect to terminate on the grounds it now advances to terminate the SID:

(a)   as a result of the alleged Q3 FY25 Sales Performance being a material adverse change (as pleaded in sections F and G.4 of the [CCS]);

(b)   as a result of the allegation that [MPG] breached its Due Diligence Material Representation concerning the FY25 6+6 Forecast (as pleaded in section H of the [CCS]);

(c)   as a result of the FDA Letter being a material adverse change (as pleaded in sections G.1 and G.4 of the [CCS]);

(d) as a result of the alleged failure to disclose the FDA Letter being a breach of the ASX listing rules or Corporations Act (as pleaded in section H1 of the [CCS]) …”

485. It also seems to me plain enough, from the chronology set out above, that the Cosette Parties had knowledge of the material facts necessary to give rise to an election, in respect of these matters at the time of entry into the Deed Poll.

486. Mr Hutley here submits that:

“The [D]eed [P]oll was expressly provided pursuant to Cosette’s obligations under the SID (recital C). Clause 4.1 provided that Cosette covenanted in favour of each Scheme Shareholder that it will observe and perform all obligations contemplated of Cosette under the Scheme, including the relevant obligations relating to the provisions of the Scheme Consideration in accordance with the terms of the Scheme. By clause 5 of the Deed Poll, Cosette represented that it has power, and had appropriate corporate authorisation, to enter into and perform the obligations under the Deed Poll. The Deed Poll was included in Mr Ilin-Schneider’s affidavit dated 12 May 2025, which was served on Mayne and read at the First Court Hearing on 15 May 2025.

The execution of the Deed Poll and its provision to Mayne Pharma was wholly inconsistent with any intention to terminate.”

487. Ms Collins responds that:

“Cosette made a Deed Poll in favour of Scheme Members on 9 May 2025. Again, this was not done in the exercise of a right by Cosette. Rather, this was the performance by Cosette of its obligations under cl 4.2 of the SID. This was conduct consistent with the reservation by Cosette of a right to terminate the SID. Cosette was not required to act contrary to its obligations under the SID in order to preserve an ability to exercise a right to terminate.

488. Ms Collins also submits that:

“The terms of the Deed Poll are consistent with the reservation of a right to terminate. The obligations under the Deed Poll were subject to the Scheme becoming Effective. If the SID was terminated before the Effective Date, the obligations of Cosette under the Deed Poll were to automatically terminate.”

489. I have reservations as to these submissions. The Deed Poll could only take effect if the SID was not terminated before the Effective Date; and, at the point of entry into the Deed Poll, Cosette did not reserve, or disclose to third parties who would rely on their execution of that document (including MPG’s shareholders, the Australian Securities & Investments Commission (“ASIC”) and the Court) any substantial undisclosed risk of termination of the SID that would defeat the operation of the Deed Poll. The position here is very different from one where any risk of termination would only arise in the future from events between the first and second Court hearings for the scheme. However, it is ultimately not necessary to decide whether the Cosette Parties’ entry into the Deed Poll also amounted to an election to continue the arrangements contemplated by the SID (as by then amended) rather than terminate them, where I find below that a further election plainly arose from Costete’s conduct at the first Court hearing for the scheme.

490. Finally, MPG pleads (CCSR [145]–[155]) and the Cosette Parties admit (CCS Reply [9]) the steps taken by the parties in respect of the scheme booklet and the first Court hearing in respect of the scheme. MPG then pleads (CCSR 156, denied CCS Reply [9]) that:

“In the circumstances pleaded above at 144D to 155, Cosette affirmed the SID, thereby losing the right to elect to terminate on the grounds it now advances to terminate the SID:

(a)   as a result of the alleged Q3 FY25 Sales Performance constituting a material adverse change (as pleaded in sections F and G.4 of the [CCS]);

(b)   as a result of the allegation that [MPG] breached its Due Diligence Material Representation concerning the FY25 6+6 Forecast (as pleaded in section H of the [CCS]);

(c)   as a result of the FDA Letter being a material adverse change (as pleaded in sections G.1 and G.4 of the [CCS]);

(d) as a result of the alleged failure to disclose the FDA Letter being a breach of the ASX listing rules or Corporations Act (as pleaded in section H1 of the [CCS]) …”

491. As I noted above, Dr Ilin-Schneider (who is the Senior Vice President, Corporate Development and General Counsel of Cosette) affirmed an affidavit dated 12 May 2025 (Ex J1, 14/10494.2) in the application to convene the scheme meeting brought in this Court, which was then read at the first Court hearing on 15 May 2025. Cosette’s Counsel and solicitors, who represented Cosette at that hearing, did not then disavow that affidavit or seek to qualify its contents. Dr Ilin-Schneider there recorded that:

“I am authorised to make this affidavit on behalf of Cosette and Cosette [Sub] in support of the application by [MPG] for orders under section 411 of the [Act] in relation to a scheme of arrangement (Scheme) proposed to be made between [MPG] and those [MPG] shareholders who are “scheme shareholders” (as defined in the [SID]). …”

492. This observation is important, because the authority conferred on Dr Ilin-Schneider to make that affidavit on behalf of the Cosette Parties in that application extends, in my view, to making any consequential election that arises from permitting reliance on that affidavit at the first Court hearing. Ms Collins was at pains to emphasise, in closing submissions, that Cosette’s board did not make a decision to terminate the SID until shortly after the first Court hearing; but that is not to the point, where the Cosette Parties had conferred authority on Mr Ilin-Schneider, if the steps taken within that authority amounted to an election not to terminate the SID.

493. Mr Ilin-Schneider went on to outline the process by which MPG and Cosette entered into the SID on 20 February 2025 and to describe the Cosette Group and its ownership by Avista and Hamilton Lane and outlined the position in respect of Cosette Sub. He referred to the entry by the Cosette Parties into the Deed Poll dated 9 May 2025, with no suggestion that the Cosette Parties’ obligations under the Deed Poll would not, in practice, be performed if, immediately after the first Court hearing, the SID was terminated. Mr Ilin-Schneider then outlined how the scheme consideration would be funded by the Cosette Parties, through an existing cash advance available to the Cosette Group, being approximately US$52.5 million as at 9 May 2025, equity financing and debt financing. He observed without further qualification that:

“The Maximum Scheme Consideration and other additional funding will be provided by the Cosette Group to Cosette [Sub] by way of a mix of capital contributions, inter-company loans and equity subscriptions, which have been documented via inter-company arrangements between the relevant entities.”

494. Dr Ilin-Schneider there referred to section 8.2 of the scheme booklet which provided a summary of the sources of funding, including equity funding by a legally binding equity commitment letter with Avista and Hamilton Lane; debt financing under a credit agreement with Santander and Hayfin. He observed that “the provision of the Debt Financing is subject to certain customary conditions precedent, as set out in section 8.2 of the scheme booklet” and noted that that section was verified in accordance with the verification process to which he deposed. Notably, he did not disclose any further risk to debt funding which would arise from termination of the SID immediately after the first Court hearing.

495. Dr Ilin-Schneider then outlined the process for the verification of the “Cosette Information” in the scheme booklet, which had importantly stated (Ex J1, 14/10740) that:

“As at the date of the scheme booklet, Cosette and [Cosette] Parent are not aware of any reason why the conditions to the Debt Financing would not be satisfied to enable the facilities to be drawn for the purpose of funding the Scheme Consideration.”

496. The Cosette Information contained in the scheme booklet also referred to the ASX announcement made by MPG in respect of the FDA Letter but not to other material information which would plainly have included the risk of termination of the SID on other grounds as follows:

“No other material information

The Cosette Group refers to the announcements made by [MPG] to ASX on 14 May 2025 as referred to in section 7.10. The matters described in these announcements remain under consideration by the Cosette Group as at the date of the scheme booklet, including in relation to the impact of these matters on [MPG] and its business and operations.

Other than as disclosed in this section 8 (information on Cosette and Cosette Group), there is no information as to the Cosette Group or its intentions regarding [MPG], that is material to the making of a decision by a [MPG] Shareholder on whether or not to vote in favour of the Scheme that is within the knowledge of any director of Cosette or Cosette Sub as at the date of this Scheme Booklet that has not been previously disclosed to [MPG] Shareholders.”

497. Dr Ilin-Schneider there observed that he was personally involved in that verification process and that:

“On 12 May 2025, the Board Statements were approved by the Cosette Board. The Board resolved that the Board Statements are accurate and, if applicable, held by the directors and that there is a reasonable basis for the Board Statements.”

The term “Board Statements” is defined in his affidavit as statements of intention, opinion, future matters or Cosette’s belief which were assigned for verification to management or directors on the Cosette Board.

498. Dr Ilin-Schneider then stated, in paragraph 32 of his affidavit, that by reason of the matters set out above in respect of the verification process:

“I am able to state that, to the best of my knowledge, information and belief, the Cosette Information, in the context in which it appears in the scheme booklet, is accurate and complete, not misleading or deceptive or likely to mislead or deceive in any material respect, and does not omit any material information.”

499. I have not neglected the fact that further adverse developments had occurred after 12 May 2025, the date that Dr Ilin-Schneider’s affidavit was affirmed, at least including the fall in MPG’s share price on 14 May 2025, and I have referred above to the evidence that Cosette knew of or was made aware of these developments as they occurred. However, it is not to the point that Dr Ilin-Schneider’s affidavit was affirmed before these developments when he and the Cosette Parties permitted it to be read in Court on 15 May 2025, without update or qualification, and necessarily as expressing Cosette’s then position as at the date of that hearing.

500. In my view, the Cosette Parties’ actions (by themselves and by Dr Ilin-Schneider) in permitting that affidavit to be read without update or qualification at that hearing excluded the possibility of termination of the SID by reference to the several matters known to the Cosette Parties at that date and not disclosed in that affidavit, other than the FDA Letter which was disclosed at the first Court hearing. That result arises because Cosette’s reserving such a right of termination would render the Cosette Information contained in the scheme booklet incomplete, misleading and deceptive and likely to mislead and deceive in critical respects, contrary to the confirmation which was then given to the Court by the Cosette Parties and Dr Ilin-Schneider as their authorised officer by permitting his affidavit to be read. The Court was then entitled to take the Cosette Parties at their word when they indicated, by what Dr Ilin-Schnider said and did not say, that such a right of termination did not then exist.

501. It is also broadly common ground (CS [26]–[27], RCS [26]–[27]) that, during that hearing, counsel for the Cosette Parties advised the Court that Cosette supported MPG’s application for orders convening the scheme meeting; drew attention (Ex J1, 14/10940.8–10940.9) to the fact that Cosette was considering the FDA Letter and its impact; and did not otherwise indicate that Cosette was considering any of the other matters later outlined in the First MAC Notice and subsequent notices.

502. I also recorded what the Court was told about the Cosette Parties’ position, as at 15 May 2025 when the first Court hearing took place, in my judgment in Re Mayne Pharma Group Ltd [2025] NSWSC 513 as follows:

“The proposed scheme provides for the acquisition of all of MPG’s ordinary shares by [Cosette Sub], which is ultimately owned by Cosette Pharmaceuticals Holdings, Inc. (“Cosette Holdings”). Cosette Holdings is in turn jointly owned and controlled by [Avista] and [Hamilton Lane]. Under the proposed scheme, MPG shareholders will be paid AU$7.40 per share they own and the maximum scheme consideration payable by Cosette Sub will be AU$614,933,421.40. …

By an affidavit dated 12 May 2025, of Dr Serge Ilin-Schneider, who is the Senior Vice President, Corporate Development and General Counsel of Cosette Pharmaceuticals, Inc. (“Cosette”), addresses, inter alia, the Deed Poll made by Cosette and Cosette Sub, funding arrangements for the scheme consideration and verification of the Cosette Information (as defined) in the scheme booklet. …
[Counsel for MPG] addresses the questions of performance risk and funding. He recognises that Cosette Sub is a special purpose entity created for the purpose of acquiring the ordinary shares in MPG, and points to evidence led by MPG, in Dr Ilin-Schneider’s affidavit, concerning Cosette Sub’s ability to fund the cash components of the scheme consideration, and also notes that the information as to that matter in section 8.2 of the scheme booklet which has been verified. That evidence addresses the issue noted in paragraph 28(b) of Practice Note SC Eq 4, which recognises that:

“Where a special purpose vehicle with minimal assets is to acquire securities of substantial value under a scheme, a risk of a scheme not completing is likely to be material to securityholders, irrespective of the fact that their securities are not transferred to that special purpose vehicle until the consideration is paid. Disclosure of such a risk is also important to maintaining a fully informed market. Evidence should be led at the first Court hearing of the availability of the funding or other financial support on which the special purpose vehicle will rely to complete the scheme.”

[Counsel for MPG] points out that it is anticipated that the maximum cash consideration payable by Cosette Sub will be AU$614,933,421.40, being approximately US$394 million (based on an AUD to USD exchange rate of $0.64), which will be funded by the Cosette Group from existing cash reserves, amounting to approximately US$52.5 million; from equity financing, relying on legally binding equity commitment letters with funds managed by Avista and Hamilton Lane under which they have irrevocably committed to providing to Cosette (or Cosette Sub as applicable) US$75 million in total at or before one business day prior to when the scheme consideration is payable; and from debt, where relevant debt commitments are subject to customary conditions precedent including no material adverse change, the scheme becoming effective and the completion of the equity financing. I am satisfied that the evidence led by MPG as to Cosette Sub’s funding arrangements sufficiently addresses the concerns which would otherwise arise where Cosette Sub is a special purpose company that could not pay the scheme consideration from its own resources. [I interpolate, Counsel who then appeared for the Cosette Parties and the solicitors who then appeared and still appear for Cosette did not intervene to qualify any aspect of this submission, a matter which is only consistent with an election that avoided the need to do so.]

[Counsel for MPG] also notes that cl 5 of the scheme adopts the conventional mechanism of making the transfer of MPG shares to Cosette Sub conditional on the payment of the total consideration into a trust account with an Australian bank, and that Cosette Sub and Cosette have given a Deed Poll in favour of MPG shareholders. I accept that these are well-established means of properly managing performance risk in these circumstances: ELMO at [27]-[28]. [I again interpolate, Counsel who then appeared for the Cosette Parties and the solicitors who then appeared and still appear for Cosette did not intervene to qualify any aspect of this submission, including to disclose that the Deed Poll would not protect MPG shareholders against a termination of the scheme arising from existing matters. That matter is again only consistent with an election that avoided the need to do so.] …

[Counsel for MPG] also addresses the issue arising from correspondence that MPG received from the FDA on 28 April 2025, to which I referred above. The explanatory booklet for the scheme has been amended, in a relatively minimalist way, to address that issue, primarily by cross reference to MPG’s response to the ASX price query and to MPG’s ASX announcement in response to the "speculation" as to the FDA's letter. I recognise that, on one view, that information is now in the public domain, and will likely have been absorbed by, at least, sophisticated shareholders who are trading in MPG shares and is likely incorporated in the price at which MPG shares are traded. However, the limited details of this matter provided in the scheme booklet has the consequence that the reader of the explanatory booklet, who is not already aware of these matters by having accessed the information released to ASX, and does not now make any further inquiry to access that information on ASX, will not know what is the content of the FDA letter, the ASX price query or MPG’s response to it. I also recognise that the explanatory booklet notes that the Cosette Group is considering these matters, including in relation to their impact on MPG and its business and operations. That disclosure will also be less meaningful to a reader of the explanatory booklet who does not already know these matters, who will not know what the Cosette Group is considering.

I have borne these matters in mind, and I am conscious that it is MPG’s, not the Court's, role to draft the explanatory booklet. Plainly, an alternative drafting approach would have been available, which would have described at least the objective subject matter of the FDA letter and the steps which MPG was taking in response to that letter, which are already addressed in MPG’s announcement to ASX. However, it is apparent from MPG’s response to the ASX price query that it takes the position that this matter is not material to the price of its shares, and the evidence in this application does not allow an assessment of the correctness or otherwise of that position, and the independent expert has confirmed this matter does not affect his opinion as to the scheme. On balance, I am not persuaded that I should decline to convene the scheme meeting by reason of the limited disclosure of this matter, on the premise that MPG’s contention that it is not material is correct. No doubt, as events develop, it may become clearer whether any supplementary disclosure is required in respect of this matter.”

503. Mr Hutley submits in opening that:

“by the time of the First Court Hearing on 15 May 2025, Cosette knew all of the circumstances it alleges gave it the rights to terminate. It knew all the detail of the “Q3 Performance Matters”. … It knew of the FDA Untitled Letter, and Mayne’s proposed response. It had been provided with a draft of the 14 May 2025 announcement for comment, which it now alleges was misleading. It also knew that … [MPG] had not announced the receipt of the letter prior to it being posted on the FDA’s website.”

504. It again seems to me plain that the Cosette Parties had full knowledge of the material facts necessary to give rise to an election, in respect of these matters at the time of the first Court hearing.

505. Ms Collins here responds that:

“Cosette provided input to the Scheme Booklet. Again, this was not the exercise of a right, but rather the performance of an obligation. Similarly, Cosette’s appearance at the First Court Hearing was not the exercise of a right under the SID. There was no inconsistency between Cosette providing assistance in the preparation of the Scheme Booklet, and appearing at the First Court Hearing, and the reservation of a right to terminate.”

506. I also do not accept this submission. First, contrary to this submission, the Cosette Parties were not party to the scheme proceedings and had no “right” to appear at the first Court hearing. They instead chose to seek, and obtained, leave to appear under r 2.13 of the Supreme Court (Corporations) Rules 1999 (NSW), which they may well not have obtained had they or their legal representatives then disclosed any reservation of a right to terminate the SID, at least by reason of any matter other than the FDA Letter, which had only just been received. That matter was not disclosed to the Court. Second, there would be a real inconsistency between appearing at the first Court hearing, apparently to support a scheme, and reserving an undisclosed right to terminate the SID. The Cosette Parties and their legal representatives taking the former position, without any further disclosure other than as to the FDA Letter, implied to the Court and to MPG’s shareholders that they were not taking the latter position. That inconsistency can only be resolved by treating that conduct as an election to affirm the SID

507. I am satisfied that the Cosette Parties’ position taken at the first Court hearing (other than in respect of the FDA Letter, where they reserved their position) amounted to an election to continue the arrangements contemplated by the SID (as by then amended) rather than terminate them. The Cosette Parties again cannot avoid a waiver (or election) by reliance on cll 3.4(b) or 20.11 of the SID for the reasons noted above, and I am again reinforced in that view by the public impacts of the Cosette Parties’ choice to support the scheme at the first Court hearing rather than terminate the SID at that point.

508. MPG also pleads, and makes submissions as to, a further defence relying on the proposition that the Cosette Parties cannot take advantage of their own wrong, in respect of matters that have arisen in the period since the scheme would likely have been implemented, immediately following the second Court date that was originally scheduled for 20 June 2025, but for the Cosette Parties purported termination of the SID. It is not necessary to address this defence given the conclusions that I have reached above and having regard to the urgency of the matter.

Orders

509. First, Cosette claims (Cross-Summons [1], CCS [143(a)]) a declaration that it has validly terminated the SID pursuant to one or both of cll 15.1(a)(i) and 15.1(a)(ii) of the SID. This declaration cannot be made, first, because I have found that, although Cosette has established that aspects of MPG’s Q3 FY25 Sales Performance constituted an adverse change, the impact of that change of MPG’s Maintainable EBITDA fell short of the impact required to give rise to an MMAC. That declaration also cannot be made, second, because I have found that the Cosette Parties are bound by an election not to terminate the SID, made by their entry into the amended SID and the Deed Poll and their conduct at the first Court hearing.

510. Second, Cosette claims (Cross-Summons [2], CSS [143(b)]) an order that MPG pay the “Mayne Break Fee” (as defined in cl 1.1 of the SID) by reason of Cosette’s termination of the SID for MPG’s alleged breach of the Mayne Representation and Warranty contained in cl 15 of Sch 2 to the SID (Due Diligence Material Representation), pursuant to cl 13.2(c) of the SID. Third and alternatively, Cosette claims (Cross-Summons [3], CSS [143(c)]) a declaration that MPG must indemnify it against, and must pay it on demand the amount of, any losses, liabilities, damages, costs, charges or expenses suffered or incurred by Cosette as a result of, or in connection with, MPG’s alleged breach of the Due Diligence Material Representation, up to the amount of the Mayne Break Fee, pursuant to cl 9.2(c) of the SID. These orders should not be made where they are consequential on the claim that Cosette has validly terminated the SID. Fourth, and further or alternatively, Cosette claims (Cross-Summons [4], CSS [143(d)]) a declaration that MPG engaged in misleading or deceptive conduct in contravention of s 18 of the ACL, s 1041H(1) of the Act and/or s 12DA(1) of the ASIC Act). A declaration could not be made in that form, where it makes no attempt to identify the conduct to which it refers, and should not be made on the merits since Cosette’s misleading and deceptive conduct claim has not been established

511. In the further alternative, Cosette claims (Cross-Summons [5], CSS [143(e)]) an order under ss 237 and 243 of the ACL, s 1325(1), (2) and (5)(a) of the Act and/or section 12GM(1) and (7)(a) of the ASIC Act declaring the SID to be void ab initio or from the date of the order or from such other date as the Court deems fit and claims (Cross-Summons [6], CSS [143(f)]) an order for damages under s 236 of the ACL, s 1041I of the Act and/or s 12GF of the ASIC Act. In closing submissions, Mr Hutley submits that it is a statutory pre-condition to the grant of relief under ss 236 and 237 of the ACL that the party seeking relief has suffered loss or damage or, in the case of ACL s 237, is likely to suffer loss or damage because of contravening conduct. I will assume, without deciding, by reference to the case law to which Cosette refers, that such loss can include the entry into a contract, resulting from misleading or deceptive conduct, without establishing economic disadvantage from that contract: Demagogue Pty Ltd v Ramnesky (1992) 39 FCR 31 at [32]–[33], [44]; Harvard Nominees Pty Ltd v Tiller (2020) 282 FCR 530; [2020] FCAFC 229 at [77]. The proposition does not assist the Cosette Parties here, where the relevant breach has not been established. These orders should not be made since Cosette has not established their basis on the merits.

512. For these reasons, Cosette’s Amended Cross-Claim should be dismissed in its entirety.

513. As I noted above, MPG in turn seeks declarations that the First MAC Notice was not validly issued and that Cosette did not validly terminate the SID by the First Termination Notice. Consequential on the findings that I have reached above, those declarations should be made and the position as to the further MAC notices and termination notices issued by the Cosette Parties has been determined in respect of their Cross-Claim.

514. MPG has been successful in the proceedings and the Cosette Parties have failed to establish their claims. Costs should follow the event in the ordinary way and, unless any application is made for costs on a special basis, by reason of any earlier offers exchanged between the parties, the Cosette Parties must pay MPG’s costs of the proceedings as agreed or as assessed. I direct the parties to bring in agreed short minutes to give effect to this judgment by 4pm on 16 October 2025.

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Endnotes

Amendments

17 October 2025 - Para 146 first line - change "MPG's" to "Cosette's".

Decision last updated: 17 October 2025