Re Norstar Recycling Pty Ltd
[2025] VSC 657
•20 October 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S ECI 2025 03250
| MARADOX PTY LTD (ACN 059 570 955) | Plaintiff |
| v | |
| RAYMOND SAILAH & ORS | Defendant |
| (according to the Schedule attached) |
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JUDGE: | Waller J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 6 October 2025 |
DATE OF RULING: | 20 October 2025 |
CASE MAY BE CITED AS: | Re Norstar Recycling Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2025] VSC 657 |
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INJUNCTIONS – Application for interlocutory injunction – Where plaintiff seeks to restrain first and second defendants from putting a resolution to a company board concerning payment of moneys – Principles relevant to granting interlocutory injunctions – No serious questions to be tried – Balance of convenience weighs against granting of interlocutory injunction – Damages likely an adequate remedy – Application dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr I W Upjohn KC with Mr J Mereine and Mr P Donovan | Roberts Gray Lawyers |
| For the First and Second Defendants | Mr D Batt KC with Mr G Kozminksy and Mr M Roberts | King & Collins |
| For the Third Defendant | No appearance | |
| For the Fourth Defendant | No appearance |
HIS HONOUR:
A. INTRODUCTION
The substantive dispute in this proceeding involves claims of oppression by the plaintiff, Maradox Pty Ltd (Maradox) against the first defendant, Raymond Sailah, and the second defendant, James Sailah, concerning the affairs of the fourth defendant, Norstar Recycling Pty Ltd (Norstar).
Norstar, together with other entities, conducts a business known as Norstar Steel Recyclers. The directors of Norstar are Paul Sailah, Raymond Sailah and James Sailah who are brothers. For convenience, and without intending any disrespect, I will refer to them by their first names.
By its originating process, Maradox seeks relief pursuant to s 233 or alternatively s 461(1)(k) of the Corporations Act 2001 (Cth) (Act). The orders it seeks include that:
(a) Raymond and James be restrained from causing any payment other than in the ordinary course of business to be made by Norstar without the consent of Maradox;
(b) certain persons be appointed as directors of Norstar; and
(c) Maradox purchase all of the shares in Norstar owned by the third defendant, Normet Industries Nominees Pty Ltd (NIN).
The present application concerns a resolution that Raymond and James seek to put to the board of Norstar (the Resolution). The Resolution would require Norstar to pay amounts totalling $25,517,399.60 to companies associated with them - R & J Sailah Pty Ltd, Raymond Sailah Pty Ltd and James Sailah Pty Ltd (the R & J companies).
By interlocutory process dated 11 June 2025, Maradox sought an interlocutory injunction restraining Raymond and James from putting the Resolution to Norstar’s board. The matter came before me as an urgent application on that day. At the hearing of the application, Maradox, by its counsel, gave the usual undertaking as to damages[1] and Raymond and James, by their solicitor, undertook not to put the Resolution to the board of Norstar until the hearing and determination of Maradox’s interlocutory process. I made orders fixing the hearing of Maradox’s interlocutory process for 25 June 2025.
[1]As to the form of the usual undertaking as to damages see Coles Supermarkets Australia v 461 Hampton Street Investments [2024] 73 VR 500, [117] (Waller J).
On 25 June 2025, Maradox sought leave to amend its interlocutory process, and the parties sought an adjournment by consent to enable further investigations to be undertaken in respect of Norstar’s financial accounts. I made orders granting leave and adjourning the matter to 6 October 2025. Both parties’ undertakings were also renewed and extended.
On 26 June 2025, Maradox filed an amended interlocutory process, fortifying the jurisdictional bases of the injunctive relief it seeks by including references to s 1324 of the Act, s 37 of the Supreme Court Act 1986 (Vic) and the Court’s equitable jurisdiction, in addition to the reference to s 233 of the Act originally included. The injunction seeks to restrain Raymond and James from putting the Resolution to the board of Norstar until the hearing and determination of this proceeding and a related proceeding, S ECI 2023 02770.
In support of its application, Maradox relies on the affidavits of:
(a) Bojana Balen affirmed on 11 June 2025; and
(b) Kathryn Koutoulas affirmed 22 September 2025.
Raymond and James oppose the grant of interlocutory relief and seek the dismissal of the application with costs. They rely on the affidavits of:
(a) Nancy Jacqueline Collins sworn 21 June 2025;
(b) Sophie Joy Chisholm sworn 22 September 2025;
(c) Gregory Aloysius Valles sworn 22 September 2025; and
(d) Nancy Jacqueline Collins sworn 23 September 2025.
The third and fourth defendants did not enter an appearance or otherwise participate in the proceeding. Noting this, and for convenience, I will occasionally refer to the first and second defendants as the defendants.
B. BACKGROUND
B.1 Norstar shareholding structure
As mentioned above, the directors of Norstar are Paul, Raymond and James.
Paul is the sole shareholder and director of Maradox. Maradox is the trustee of three trusts associated with him, being the Paul Sailah Family Trust, the Paul Sailah Superannuation Fund and the Sailah Assets Trust (SAT). In its capacity as trustee of the SAT, Maradox owns 24,205,660 class A shares in Norstar, which is an approximately 30.26% holding.
The only other shareholder of Norstar is NIN, which owns 55,794,340 class A shares and 12 ordinary shares, an approximately 69.74% holding. The two directors of NIN are Paul and Raymond. NIN holds the shares in Norstar in its capacity as trustee of the Sailah Family Trust (SFT).
The beneficiaries of the SFT include:
(a) Corry Holdings Pty Ltd as trustee for the Corry Trust (Corry Family Trust);
(b) Ramagela Pty Ltd as trustee for the Raymond Family Trust (Raymond Family Trust);
(c) El Chupacabra Pty Ltd as trustee for the James Family Trust (James Family Trust);
(d) Maradox Pty Ltd as trustee for the Paul Sailah Family Trust (Paul Sailah Family Trust or PSFT);
(together, the Family Trusts).
In turn, those trusts relevantly have the following corporate beneficiaries:
(a) R & J Sailah Pty Ltd is a beneficiary of the Corry Family Trust;
(b) Raymond Sailah Pty Ltd is a beneficiary of the Raymond Family Trust;
(c) James Sailah Pty Ltd is a beneficiary of the James Family Trust; and
(d) Davmas Pty Ltd (Davmas) is a beneficiary of the Paul Sailah Family Trust;
(together, the Corporate Beneficiaries).
Maradox’s holding in the SFT is approximately 28.31%. Thus, between Maradox’s shareholding in Norstar and its holding in the SFT, Paul’s entities’ effective share in Norstar is roughly 50% with the remaining 50% effectively shared between entities related to Raymond and James.
A diagram of the structure of the holdings is reproduced at Annexure A.
B.2 Chronology
On 26 June 2023, Maradox and Paul commenced proceeding S ECI 2023 02770 in this Court. That proceeding concerns aspects of a business restructure undertaken in 2007 regarding the affairs of the SFT (and NIN as the trustee). Raymond, James and their mother Corry Sailah are the second, third and fourth defendants respectively. Three companies associated with Raymond, James and Corry Sailah are the eleventh, twelfth and thirteenth defendants. The proceeding is currently listed for a nine-week trial commencing on 9 February 2026.
Maradox and Paul contend in that proceeding that since 30 June 2017, their joint direct and indirect interest in Norstar ought to have been 75% or, at the very least, 65%.
Part of the relief sought in proceeding S ECI 2023 02770 concerns distributions made by NIN to companies nominated by Raymond and James, which are alleged to be held on trust for Paul.
On 3 June 2025, Norstar held a board meeting attended by Paul, Raymond and James. Following the meeting, Paul considered that it was no longer tenable for him to be outnumbered on the board and that the board needed to be ‘balanced’. To that end, he intended to call a Norstar board meeting for 13 June 2025, at which he would propose that both his son, Bradley Sailah, and a separate professional independent director be appointed as additional directors of Norstar.
On 6 June 2025, James sent an email to Paul (copied to Raymond) informing him that there would be a board meeting on 12 June 2025 to consider a resolution to repay some of Norstar’s loan accounts.
On 8 June 2025, Raymond and James on behalf of the R & J companies sent Paul a letter giving notice of their demand on Norstar to make ‘loan repayments’ to the R & J companies totalling $25,517,399.60. It stated that they would take steps to make the ‘loan repayments’ unless Paul objected by 4:00pm on 10 June 2025, in which case they proposed to call a board meeting on 12 June 2025.
On 9 June 2025, Paul sent a reply letter to Raymond and James in which he objected to the payments demanded by Raymond and James. The letter also referred to a board meeting on 4 September 2024 at which Raymond and James voted for a resolution that Norstar pay $24,821,643 to their related entities. The letter noted that Raymond and James had not provided Paul with evidence of any signed written assignment of the debts which those related entities were alleged to be owed by Norstar nor any evidence of notice in writing given to Norstar of the assignment of those debts, but that Raymond and James nevertheless withdrew those funds to pay the money the subject of the resolution. The letter also stated that Paul considered that there ‘needs to be an urgent balancing of the Board of Directors of Norstar by the appointment of two additional directors’. An attachment to the letter gave notice of a board meeting of Norstar on 11 June 2025 for that purpose.
On 10 June 2025, James sent an email to Paul (copied to Raymond) which attached a letter and the proposed Resolution. The letter suggested that the proposed Resolution that Norstar pay $25,517,399.60 to their related entities be dealt with at the meeting on 12 June 2025 and that Paul’s resolution to appoint two additional directors be deferred to 17 July 2025. It further stated that if Paul wished to proceed with the meeting on 11 June 2025 for the purpose of putting his resolution to appoint two additional directors, then James and Raymond would put their proposed Resolution to a vote at that meeting. The proposed Resolution stated:
The directors of the Company will consider and, if thought fit, pass a resolution that the Company pay unpaid dividends presently owing by the Company to the following entities (R&J Entities) in the following amounts:
R & J Sailah Pty Ltd $16,128,929.69 Raymond Sailah Pty Ltd $4,684,302.31 James Sailah Pty Ltd $4,704,167.60 Total $25,517,399.60
On the same day, Paul, through his solicitors Roberts Gray Lawyers, sent an email to Raymond and James seeking an undertaking that they would not put the Resolution to a vote. The request was refused by reply email from Raymond and James’ solicitors.
On 11 June 2025, as noted above, Maradox commenced this proceeding and filed an interlocutory process seeking to restrain Raymond and James from putting the Resolution to the board. Its application was supported by written submissions and an affidavit of its solicitor Bojana Balen. On the same day, the appropriate undertakings were given by the parties and the hearing of the interlocutory process was fixed for 25 June 2025.
On 21 June 2025, Raymond and James filed an affidavit of their solicitor, Nancy Collins, and an outline of submissions. The financial statements of Norstar exhibited to the affidavit record unsecured loans to the R & J companies well in excess of those the subject of the proposed Resolution, though several of the statements appeared unsigned on the page declaring that they present fairly the company’s financial position in respect of that financial year. Reply submissions were filed by Maradox on 24 June 2025.
On 25 June 2025, at the hearing of the interlocutory process, I noted that the proposed Resolution referred to payment of ‘unpaid dividends’ and queried whether that expression was appropriate, given that:[2]
(a) the R & J companies are not shareholders of Norstar; and
(b) Raymond and James’ position was that ‘what was proposed was the repayment of loans’, rather than payment of dividends.
[2]Transcript of Proceedings, In the matter of Norstar Recycling Pty Ltd (Supreme Court of Victoria, S ECI 2025 03250, Waller J, 25 June 2025) 5.14–29 (25 June Transcript).
Senior counsel for Raymond and James acknowledged that the wording was ‘infelicitous’ and stated that consideration would be given to reformulating the proposed Resolution.[3]
[3]Ibid, T5.25–6.4.
The hearing was ultimately adjourned by consent to 6 October 2025 to enable the directors of Norstar to investigate aspects of its accounts in connection with the application.
On 2 July 2025, James sent a letter to Paul entitled ‘Norstar Recycling Pty Ltd — Investigation into dividend payments and loan liabilities’. The letter proposed the following steps for further investigation:
1.for the directors of Norstar to ask Lipins to set out each transaction relevant to the entries in the loan accounts in order to show how it is that Norstar’s financial statements have amounts owing to our companies, and your company, Davmas, rather than Norstar’s shareholders. Their explanation should include their accounting treatment and the journal entries and working papers giving effect to them;
2.while Lipins prepares that information, the directors of Norstar expand the retainer of Norstar’s external auditors, Grant Thornton, to include auditing the loan accounts and preparing a report for the Board; and
3. your accountant, Alan Kenworthy, meet with our accountant, Greg Valles, to agree on a format by which the information to be provided by Lipins and Grant Thornton to the Board is set out, so as to ensure that the final product addresses all of your concerns.
Lipins Partners (Lipins) were the accountants and advisers for Norstar, the SFT, the Family Trusts and the Corporate Beneficiaries until late 2023.
On 14 July 2025, solicitors acting for Maradox and Paul replied to the letter agreeing to the first of those steps, but not the latter two:
a.Our clients do not object to the proposal that the directors of Norstar ask Lipins to:
(i)set out each transaction relevant to the entries in the loan accounts to show how it is that Norstar’s financial statements have amounts owing to your clients’ companies, and to Davmas, rather than to Norstar’s shareholders; and
(ii)include in that work the accounting treatment, relevant journal entries and working papers which gave effect to those entries.
b.Our clients do not agree to expanding Grant Thornton’s retainer to include this work and they also do not agree to Mr Kenworthy being involved in the process as proposed by your clients. If your clients have in mind a particular format for the provision of the information by Lipins to the Board, please send it to us for consideration with our clients.
On 18 July 2025, solicitors acting for Raymond and James sent a letter to Maradox’s solicitors noting Paul’s limited agreement to the steps for investigation, and informing them that Gregory Valles, the accountant for Raymond and James, had investigated the loan accounts in 2024 and satisfied himself about their accuracy.
On 24 July 2025, Maradox’s solicitors replied, inviting Raymond and James to provide Mr Valles’ findings. The letter also suggested that Lipins be engaged to provide the information agreed to be sought from them.
On 30 July 2025, Lipins was engaged to investigate Norstar’s loan accounts.
On 18 August 2025, Sophie Chisholm of Lipins sent an email to James, Raymond and Paul attaching various documents (described as ‘workpapers’) in relation to the investigation into Norstar’s loan accounts.
On 10 September 2025, Raymond and James’ solicitors sent a letter to Maradox’s solicitors stating that the Resolution had been reformatted as follows:
The Company forthwith pay
unpaid dividendsthe following amounts presently owing by the Company to the following entitiesin the following amounts:
R & J Sailah Pty Ltd $16,128,929.69 Raymond Sailah Pty Ltd $4,684,302.31 James Sailah Pty Ltd $4,704,167.60 Total $25,517,399.60
On the same day, Paul’s son, Bradley Sailah sent an email to James Davenport, Norstar’s Administration Manager, directing him to transfer approximately $3 million to be ‘drawn from Paul Sailah’s drawings account for Norstar’ which appears to be a reference to Davmas’ loan account.
On 11 September 2025, a Norstar board meeting was held in which Raymond and James asked Paul to explain the difference between Paul taking money from Davmas’ loan account to buy Bradley Sailah a house and Raymond and James seeking (partial) repayment of their loan accounts. According to an audio recording of the meeting, Paul stated that there was ‘no difference’.
On 18 September 2025, James sent an email to Paul (copied to Raymond) regarding Lipins’ engagement. He stated that the material provided ‘did not take things very far’ and that he and Raymond did not think ‘Lipins and Sophie should be asked to do any further work for Norstar resulting from the material Sophie provided on 18 August’.
On 22 September, Paul replied by email in which he said ‘if you and Raymond don’t want Lipins to do any further work, then how are we supposed to be satisfied that Norstar owes the money to your companies?’
On the same day, Maradox filed an affidavit of its solicitor, Kathryn Koutoulas.[4] Raymond and James also filed affidavits with voluminous exhibits from Sophie Chisholm of Lipins and Gregory Valles of Valles Accountants.[5]
[4]Affidavit of Kathryn Koutoulas affirmed 22 September 2025.
[5]Affidavit of Sophie Joy Chisholm sworn 22 September 2025 (Chisholm Affidavit); Affidavit of Gregory Aloysius Valles sworn 22 September 2025 (Valles Affidavit).
For the financial years 2021 to 2024, Sophie Chisholm managed and/or supervised the accountancy and taxation affairs of various Sailah family entities including Norstar, NIN, Maradox, the Family Trusts and the Corporate Beneficiaries.[6]
[6]Chisholm Affidavit, [5].
Since November 2023, Valles Accountants have acted as financial advisors and accountants for Corry Sailah, Raymond, and James, and their various corporate entities including the R & J companies.[7]
[7]Valles Affidavit, [5].
On 23 September 2025, Raymond and James filed a subsequent affidavit and supporting exhibits of its solicitor, Nancy Collins. Ms Collins deposes that she has been informed by Raymond that Norstar’s cash at bank as at 19 September 2025 is $122,906,609.45.[8]
[8]Affidavit of Nancy Jacqueline Collins sworn 23 September 2025, [13] (Second Collins Affidavit).
The affidavit also annexes versions of the financial statements of Norstar[9] which are signed by Paul and Raymond for FY2008 to FY2013, FY2015 to FY2017, FY2020 and FY2022. James also signed the FY2022 statement. The financial statement for FY2023 are signed by Paul, Raymond and James. However, the signing page for the FY2023 statement appears to be in black and white in contrast to the rest of the financial statement and lacks the same footer and pagination. The financial statement for FY2024 is signed by Raymond and James only.
[9]Second Collins Affidavit, Exhibit C-NJC2, 139–319.
Following the receipt of updated written submissions, the hearing proceeded on 6 October 2025.
B.3 Accounting evidence
In their affidavits, Ms Chisholm and Mr Valles provide extensive explanations as to why the loans are owed to the R & J companies, supported by voluminous documentary evidence.
The evidence of Ms Chisholm and Mr Valles establishes the following. Between financial years 2009 and 2022, Norstar declared dividends in most years.[10] The two shareholders of Norstar – Maradox and NIN – received different treatment. Maradox was required to receive its share of the dividends in cash because it is the trustee of Paul’s superannuation fund (which held all the units in the SAT) and the Superannuation Industry (Supervision) Act 1993 (Cth) mandates cash payment to superannuation funds.[11] By contrast, NIN's dividend entitlements were recorded by book entry rather than paid in cash. Through various transactions described below, these book entries ultimately gave rise to loans owed by Norstar directly to the Corporate Beneficiaries (including the R & J companies). As a result, the loans owed by Norstar to entities associated with Raymond and James came to far exceed the loans owed to entities associated with Paul, despite their effective shareholding in Norstar being roughly equal at 50% each.
[10]The dividends and associated franking credits are listed in the Second Collins Affidavit, Exhibit C-NJC2, 63.
[11]Chisholm Affidavit, [15].
The exhibits annexed to Ms Collins’ second affidavit include extensive correspondence between accountants from Lipins and Paul referring to the imbalance between the loans to entities related to Paul and those related to Raymond and James.
The correspondence included an email of 23 June 2011 in which Stuart Hall of Lipins emailed Paul stating:
Hi Paul,
Confirming our discussions yesterday to take advantage of the refund of franking credits available to your Super Fund you will need to declare a net dividend of $7.5m as at 30 June 2011 from Norstar Recycling Pty Ltd. The Superfund’s share of this is 49.9% or $3,742,500.
Therefore an amount of $3,742,500 must be deposited in your Superfund’s bank account by 30 June 2011.
The other 50% dividend effectively belonging to Ray & James can be done on paper at this stage but will need to be accounted for and evened up in due course. We can discuss this further …[12]
[12]Second Collins Affidavit, Exhibit C-NJC2, 139–319.
The correspondence also included an email of 19 September 2022 from Mr Hall to Paul attaching a document titled ‘Loan Account Summary — Sailah Group 2007 to 2021.pdf’.[13] Mr Hall explained that the table was updated annually ‘to show the movements in loan accounts for the Paul Sailah Family Group vs the Corry Sailah Group controlled by Raymond and James’ and that ‘distributions were kept 50/50 between the two sides of the family’.[14] Mr Hall then explained the difference in loan account balances in the following terms:
However, because your Superfund dividend share gets paid out in cash your total loan accounts at present are lower to the tune of approximately $17m which I have highlighted in green. The Corry Trust/Raymond/James side of the family are funding the business an extra $17m as compared to you and your family. To correct this imbalance they should draw an additional $17m from the company or alternatively you could consider paying interest to them on the differential. This is something that I have raised before but hasn’t been addressed to date.[15]
[13]Ibid, 88.
[14]Ibid.
[15]Ibid.
The evidence of Ms Chisholm and Mr Valles sets out the steps by which the loans owed by Norstar to the Corporate Beneficiaries arise:[16]
[16]Chisholm Affidavit, [16]; Valles Affidavit, e.g. [25], [29], [43]–[47].
(a) Norstar would declare a dividend;
(b) NIN recorded its portion of that dividend as income and a receivable;
(c) NIN then distributed the net income of the SFT, including the Norstar dividend, to the trustees of the Family Trusts;
(d) the trustee of each Family Trust recorded its portion of the distributions as trust income and a receivable;
(e) each trustee then distributed the net income of the relevant Family Trust to (among others) the relevant Corporate Beneficiaries;
(f) then, over three financial years:
(i) in year 1, being the financial year in which distributions were made by the Family Trusts to the Corporate Beneficiaries, the Corporate Beneficiaries recorded their portion of the distributions as income and a receivable (an unpaid present entitlement);
(ii) in year 2, being the following financial year, the unpaid present entitlements were converted into unsecured loans owed by the trustees of the Family Trusts to the relevant Corporate Beneficiaries;
(iii) in year 3, and specifically on the first day of that third financial year, the unsecured loans owed by the trustees of the Family Trusts to the relevant Corporate Beneficiaries were converted into loans owed directly by Norstar to the Corporate Beneficiaries.
Ms Chisholm and Mr Valles’ evidence is that the three year process was implemented in order to address Part III, Division 7A of the Income Tax Assessment Act 1936 (Cth) and avoid adverse taxation treatment under that Division.[17]
[17]Valles Affidavit, [20]–[28]; Chisholm Affidavit, [16].
This position is also evinced in the email of Nicholas Bortolin of Lipins to Paul on 13 April 2023 in which he states:
This distribution to the corporate beneficiary creates an entitlement in the family trust. As we do not physically pay funds into the corporate beneficiary, this entitlement would create a Division 7A loan issue which would necessitate interest charges and repayments.
Each year to delay the Division 7A issue, we flow these loans between the respective family trusts and Corporate Beneficiaries back up to Norstar Recycling via Sailah Family Trust so that effectively the loan is between Norstar Recycling and the corporate beneficiary. The benefit to doing this is that company-to-company loans are not subject to Division 7A rules. We are able to continue this strategy for as long as Norstar Recycling Pty Ltd has a credit loan with Sailah Family Trust.[18]
[18]Second Collins Affidavit, Exhibit C-NJC2, 114.
C. RELEVANT PRINCIPLES
Since the amendment of Maradox’s interlocutory process (to include reliance on s 1324 of the Act and s 37 of the Supreme Court Act, and the Court’s equitable jurisdiction), there is no dispute as to the legal test that needs to be met in order for Maradox to succeed in its application.
Maradox must establish that:
(a) there is a serious question to be tried, also known as a prima facie case;[19] and
(b) the balance of convenience favours the grant of an injunction.[20]
[19]Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618, [4] (Kitto, Taylor, Menzies and Owen JJ).
[20]Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, [65] (Gummow and Hayne JJ). See also Bradto Pty Ltd v Victoria (2006) 15 VR 65, [35] (Maxwell P and Charles JA).
Incorporated within the balance of convenience, or sometimes considered as a separate matter, is the question whether damages would constitute an adequate remedy. An injunction is a means to prevent irreversible acts occurring; if damages can adequately compensate the injured or offended party, an injunction will not be necessary.[21]
[21]Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148, [11] (Mason ACJ); Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, [19] (Gleeson CJ and Crennan JJ); Uber Builders and Developers Pty Ltd v MIFA Pty Ltd [2020] VSC 596, [26(c)] (Nichols J).
The onus is squarely on the plaintiff to demonstrate that an injunction is justified in the context of the proceeding, and without effectively abridging or curtailing the final determination of the matter.
I set out the applicable principles in more detail in Birchip Holdings Pty Ltd v Arrowsmith Rd Pty Ltd:
Whether to grant interlocutory injunctive relief is a matter of discretion. In the exercise of that discretion, the Court needs to be satisfied:
(a)first, that there is a serious question to be tried. This involves consideration as to whether the Plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the proceeding the Plaintiff will be held entitled to relief; and
(b)secondly, that the balance of convenience favours granting the injunction. This involves consideration as to whether the inconvenience or injury which the Plaintiff would likely suffer if an injunction were refused would outweigh or is outweighed by the inconvenience or injury which the relevant Defendants would likely suffer if an injunction were granted. As an additional (or integral) requirement, the Plaintiff must usually demonstrate that damages will not be an adequate remedy for the loss they will suffer if an interlocutory injunction is not granted.
In determining whether there is a serious question to be tried, the need to make out a ‘prima facie case’ does not require the Plaintiff to show that it is more probable than not that it will succeed at trial. It is sufficient that the Plaintiff shows a ‘sufficient likelihood of success’ to justify in the circumstances the preservation of the status quo pending the trial.
There is a relationship between the first and second enquiries. How strong the balance of probability needs to be depends upon the nature of the right that the Plaintiff asserts and the practical consequences likely to flow from the relief sought. The Court will be more inclined to grant an interlocutory injunction that will have serious practical effects for the Defendants where the Plaintiff has demonstrated strong prospects of success. The Court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been ‘wrong’, in the sense of granting an injunction to a party which failed to establish its right at trial, or in failing to grant an injunction to a party who succeeded at trial.
Further, where relief at an interlocutory level would effectively entitle the Plaintiff to the final relief it seeks in the proceedings, a higher onus rests on the Plaintiff and the Plaintiff must show more than a serious issue to be tried. In such cases, the Court may embark on an assessment of the merits and strength of the Plaintiff’s case.[22]
[22][2023] VSC 681, [40]–[43] (citations omitted).
D. SUBMISSIONS
D.1 Maradox’s submissions
D.1.1 Serious question to be tried
Maradox submits that there is a ‘triable issue’ as to who the debt is owed to by Norstar. It concedes that Norstar has declared dividends which are owing to ‘someone’ and that the amounts owing by Norstar may be to the Corporate Beneficiaries in the amounts recorded in the loan accounts. However, it submits that it cannot be confident of that fact.[23]
[23]The only facts of which Maradox says it can be certain are that the dividends were declared to Norstar shareholders and are payable to Maradox (which has received them) and to NIN. See Transcript of Proceedings, In the matter of Norstar Recycling Pty Ltd (Supreme Court of Victoria, S ECI 2025 03250, Waller J, 6 October 2025) (6 Oct Transcript), 21.29–22.1.
Maradox submits that its lack of confidence arises in part from the fact that the position of Raymond and James has changed from proposing a resolution requiring the payment of ‘dividends’ to a resolution requiring the payment of ‘amounts owing’. Further, Maradox says it is justifiably concerned, given Raymond and James have never provided a satisfactory explanation, including supporting documents, in relation to the earlier withdrawal of more than $20 million from Norstar’s account back in September 2024. Similarly, it submits there has been no explanation for the urgency relating to the payment of the $25 million sought by the Resolution (and this was said to be also relevant to the balance of convenience, as discussed below).
Maradox submits that the directors of Norstar should not be causing the company to pay any such alleged debt without evidence that an assignment has in fact taken place, or if the debts are said to have arisen in some other way, evidence of the creation and quantum of those debts in that other way.
Maradox submits that the applicable law in relation to the assignment of debts involves the following principles:
(a) a debt may be assigned in law or in equity;
(b) in law, s 134 of the Property Law Act 1958 (Vic) provides that for an absolute legal assignment to be made, it must be in writing and signed by the assignor, with express notice given to the debtor; and
(c) in equity, an assignment is valid if there is a ‘sufficient manifestation of an intention to assign’, and the ‘language is immaterial if the intention is plain’.[24]
[24]Primary Yield Finance Ltd v Meyer [2012] VSC 595, [28] (Mukhtar AsJ), citing William Brandt’s Sons & Co v Dunlop Rubber Co [1905] AC 454, 462.
In light of these requirements, Maradox points to the correspondence of 9 June 2025 in which Paul stressed that Raymond and James had not provided evidence of the assignment of a debt.[25]
[25]6 Oct Transcript, 9.15–21.
The submission that an assignment was required was overtaken by the submission of Raymond and James, which was ultimately put on the basis that the debts existed in consequence of a novation.[26] In response to that submission, Maradox submits that Raymond and James failed to provide evidence from the persons whose conduct allegedly demonstrates a novation.[27]
[26]Ibid, 10.6–21.
[27]Ibid, 34.16–29.
Maradox contends that there is no evidence identifying who made the entries in the accounting records or why. It submits that the loan accounts appear to have significantly increased through adjusting entries, with unexplained increases in the 2023 and 2024 financial years. Maradox submits that there is plainly a serious question to be tried: the factual and legal basis for these accounting entries must be tested through the usual interlocutory processes and trial.
Maradox submits that the inference that a novation occurred has sought to be drawn by Raymond and James from the accounting evidence only, which ignores the broader context and the actual nature of the transactions. By way of example, Maradox cites the email from Mr Bortolin of Lipins on 13 April 2023, emphasising in particular that the treatment of the dividends as loans was an accounting strategy, and the statement of Mr Bortolin that ‘[e]ach year to delay the Division 7A issue, we flow these loans’. Maradox submits that Mr Bortolin’s explanation contains no mention of novation, nor do any of the other materials. Raymond and James’ ultimate explanations for how the amounts are owed has only appeared to be based on novation from their later submissions filed on 3 October 2025.[28]
[28]Ibid, 18.29–19.21, see also 8.14–19.
Maradox submits that the argument of Raymond and James that the amounts are owing based on novation is a ‘bootstraps argument’ insofar as it relies on accounting in the financial statements from which it infers that the directors of Norstar agreed to such a novation.[29] Maradox says that Raymond and James could have given evidence about the alleged agreement.[30] It submits that reliance on the financial statements must be limited because Paul only signed a declaration page to which nothing is attached, there are some years for which there is no signature from Paul, and the signature for FY2023 (which was attached to substantive accounts) is in a different colour and lacks the same footer and pagination as used in other years rendering its authenticity questionable in circumstances where these ‘discrepancies... are completely unexplained’.[31]
[29]Ibid, 23.26–24.1
[30]Ibid, 19.4–11.
[31]Ibid, 25.21–28.31.
Maradox submits that despite the language of the signed declarations (i.e. that ‘[t]he financial statements and note present fairly the company’s financial position’), the declarations are aimed at confirming solvency and not at confirming the accuracy of which moneys are owed to whom.[32] In this sense, it was put that Raymond and James’s sole reliance on the accounting records of Norstar was misplaced. Relying on various decisions of this Court, Maradox submits that accounting records merely record what has happened and have been found to be insufficient to establish the existence of a debt.[33] Nor, in the circumstances, do the ledgers manifest an intention to assign any debt and no evidence has been adduced of any oral loan agreement. Maradox contends that the evidence of Mr Valles, Ms Chisholm and Ms Collins does not assist Raymond and James in this regard.
[32]Ibid, 29.29–30.17.
[33]Citing Shot One Pty Ltd (in liq) v Day [2017] VSC 741 (Shot One); Re ACN 096 281 542 Limited (in liq) [2018] VSC 425; Michell v Onroad Offroad Pty Ltd [2018] VSC 648. Cf VL Finance Pty Ltd v Legundi [2003] VSC 57, [30] (Nettle J).
In particular, Maradox cites the case of Shot One Pty Ltd (in liq) v Day (Shot One),[34] in which Sloss J held that, whilst the ledgers, accounts or books of a company ‘are generally to be treated as prima facie evidence of the matters stated in them’, her Honour was:
not satisfied that the loan account entries recorded in the books of Shot One over the relevant period can be relied upon as ‘proving’ either the loan transaction(s) which the respective entries purport to record, or the quantum of the alleged indebtedness.[35]
[34]Shot One [2017] VSC 741.
[35]Ibid, [244].
Maradox says that in the present case the financial evidence is even more limited and lacking than in Shot One, where there was at least witness testimony as to specific instructions given to the company accountant by a director.[36] If Sloss J made such a finding with greater evidence available, there is even more reason to make a similar finding here. Maradox contends, on this basis, that ‘there must be something more than journal entries alone’ and that in this case there is not.[37]
[36]6 Oct Transcript, 33.3–23.
[37]Ibid, 39.2–5.
Maradox further points to the general inaccuracies of Norstar’s records and ledgers, citing by way of example the misuse of the term ‘dividends’ for entries that are plainly not dividends, as well as vague references to the ledger being an ‘adjusting journal’, with no mention of novation or Division 7A.[38]
[38]Ibid, 39.7–40.31.
In reply, Maradox emphasised that it can also rely on the evidence adduced by the defendants, and that that evidence does not prove that the moneys are owing to the R & J companies.[39] It submits that ‘[i]f there was going to be Division 7A loans, and if there was going to be a novation, why doesn’t the accountant explain it to the directors in those terms?’.[40] Maradox denies any suggestion that Paul assented to or otherwise knew that the payment conversion process was to be treated as a novation.[41]
[39]Ibid, 154.21–26.
[40]Ibid, 155.38–30.
[41]Ibid, 156.3–9.
Maradox challenges the defendant’s reliance on principles of novation as drawn from Chitty on Contracts (Chitty) and points to the following statement from Chitty: ‘acceptance [of a novation] may be inferred from actual conduct, but ordinarily it is not to be inferred from conduct without some distinct request’.[42] It says that there was plainly no request in the present case.
[42]Ibid, 157.4–13, citing HG Beale, Chitty on Contracts (Thomson Reuters, 35th ed, 2023), [23–089] (Chitty).
D.1.2 Balance of convenience
Maradox submits that there is a real cause for concern that, unless restrained, Raymond and James will cause Norstar to pay more than $25 million to their respective companies before the board can be balanced and in circumstances where there is real doubt that the moneys are payable to those companies.
Maradox submits that if the moneys are paid to the R & J companies, but are ultimately determined at trial not to be owing to them, those funds will not be recoverable — whereas, if they remain in Norstar’s accounts, then the position is preserved until the trial. Maradox’s position was that R & J companies are ‘$1 or $2 companies’ and ‘[i]f the money is taken out, they will want to do something with it’.[43] It was put that the funds were much safer with Norstar, a valuable operating company.[44] While Maradox ultimately accepted in reply that this submission incorrectly classified the R & J companies as trustees of discretionary trusts, it nevertheless submits that the financial statements of the R & J companies demonstrate that ‘they have one asset, namely these loans’.[45] Maradox replies to Raymond and James’ submission that there is no evidence of this fact by pointing to a document that purports to show that there is a single asset in James Sailah Pty Ltd, being a $17 million loan to Norstar.[46]
[43]Ibid, 21.24–29.
[44]Ibid, 41.13–21.
[45]Ibid, 160.20–161.29.
[46]Ibid, 167.25–9.
Maradox says that, whilst it concedes that there is some inconvenience caused to the R & J companies not being able to use the moneys, that could be met by a personal undertaking in damages by Maradox.[47] Moreover, Maradox contends that no evidence has been adduced or submission made by Raymond and James that their companies are in urgent need of funds.
[47]Ibid, 41.21–29.
Maradox submits that these proceedings can be resolved in the time allocated for the trial of proceeding S ECI 2023 02770, which is fixed to run from 9 February to 21 April 2026. Rolling together the two proceedings would, in Maradox’s submission, be a more efficient and sensible use of the Court’s time, and thus in the public interest.[48] Thus, the injunction would only have to be maintained and the status quo preserved until judgment after the trial in April 2026. In reply on this point, Maradox submits that there is sufficient time to put on valuation and other evidence and take all interlocutory steps to prepare for the matters to be heard one after another in the time currently allotted.[49]
[48]Ibid, 44.22–45.2.
[49]Ibid, 165.2–31.
In reply, Maradox disagrees with James and Raymond’s submission that the relief sought in proceeding S ECI 2023 02770 if it were obtained, is materially less than the loan balances that would remain owing if the payments the subject of this application were made.
Maradox ultimately says that, even if Norstar has the money to make the payment, debts which may not in fact be owing should not be paid without investigation.
Maradox further submits in reply that, if the amounts sought in the Resolution were paid out by Norstar, the two tranches, including the moneys paid out in 2024, would together total approximately $50 million which is not an insignificant amount and would in fact impact upon Norstar’s finances.[50]
[50]Ibid, 159.3–7.
D.2 Defendants’ submissions
D.2.1 Serious question to be tried
Raymond and James emphasise that the onus is on the plaintiff to demonstrate the necessity for an interlocutory injunction, in accordance with the established two-limb test and that it is a high bar which Maradox has not met. Raymond and James submit that Maradox (particularly in the correspondence between June and September 2025) has attempted to reverse the onus onto them to demonstrate that the evidence verifies that the moneys are owing. Nevertheless, they say that, whilst they do not bear this onus, they have demonstrated that the moneys are indeed owing.[51] Whilst Maradox now concedes that the question is not whether moneys are owing, but to whom, the evidence in any event decisively confirms that the money was owing to the R & J companies.[52]
[51]Ibid, 72.30, 78.22–31, and 127.31–128.13.
[52]Ibid, 78.26–31.
Raymond and James contend that Maradox has not made out a serious question to be tried. They emphasise that the serious question to be tried cannot relate to any conduct, and must be put on the basis of evidence specifically relating to the Resolution and the moneys sought therein. They submit that the amount cited in the Resolution is plainly owed upon the evidence. They submit that Maradox’s evidence on the issue is extremely limited and centres upon why dividends declared by Norstar in favour of NIN were paid to or treated as being payable to the R & J companies. They submit that Maradox has been unable to clarify its evidence or put forward any tangible denial as to the fact that the moneys are owing, and has been unable to show that a novation has not occurred.
Raymond and James submit that it could not be in issue that:
(a) the dividends declared by Norstar in favour of its shareholders were validly declared;
(b) loans agreed to be made by a company to family members can be created orally or by conduct and evidenced by book entry and it follows that the converse, loans by family members (in this case, by family members’ companies) to a company, can also be evidenced by book entry;
(c) the financial statements of Norstar as at 31 July 2025 record as current liabilities unsecured loans owed to the R & J companies (and Davmas Pty Ltd), in amounts well in excess of those the subject of the proposed Resolution, and the balances in the loan ledgers have not changed materially since 31 July 2025;[53]
(d) balance sheets recording debts and liabilities are an acknowledgment by the company of an existing indebtedness; and
(e) demand has been made for the payment of the amounts in question.
[53]The loan ledgers are shown in the Second Collins Affidavit, Exhibit C-NJC2, 259.
In such circumstances, Raymond and James contend that it is difficult to conceive how a proposed resolution for the payment of those debts can constitute a triable issue of oppressive or unfair conduct. This is particularly so where Norstar’s ledgers demonstrate that the R & J companies are owed an amount by Norstar that exceeds the amount sought by the Resolution.
Raymond and James stress that there is a ‘lack of any evidence from the plaintiff’s side’ and relying only on accounts is ‘fatal to the application’ where Maradox bears the onus of establishing a serious question to be tried in circumstances where the accounts do not assist them.[54] The books and records are prima facie evidence of indebtedness under ss 286 and 1305 of the Act, and admissible to prove the facts contained therein under the Evidence Act 2008 (Vic). Further, they submit Maradox’s reliance on the case of Shot One is misplaced, as that case can be factually distinguished from the present matter. In Shot One, there were multiple versions of financial statements for the same period and the director gave evidence that he had never seen any of the financial statements and that the purported directors’ meetings recording the statements had never occurred.[55] None of those issues exist in the present case and the records are reliable and supported by the contemporaneous working papers of the accountants.[56]
[54]Ibid, 132.1–11.
[55]Ibid, 133.27–134.9.
[56]Ibid, 134.10–30.
Raymond and James submit that, upon a proper understanding of the records and the interconnected corporate structure of the various Sailah entities, Norstar is indebted to the Corporate Beneficiaries (including the R & J companies) in the amounts stated in Norstar’s financial statements. They rely on the accounting evidence, particularly as outlined above at [51] and [53] to [55], the three year process of converting dividends declared by Norstar ([55](a)) to loans owed to the Corporate Beneficiaries ([55](a)(iii)), and the motivation of the parties to avoid adverse taxation consequences under Part III, Division 7A of the Income Tax Assessment Act 1936 (Cth). Counsel for Raymond and James summarises the process (picking up the language of Mr Bortolin) as follows:
[D]ividends are declared to the shareholders. They’re distributed by way of income and unpaid present entitlements down to a family trust and then those entitlements are converted to loans in satisfaction of the entitlements. Then ultimately they’re flowed back up through the corporate beneficiaries to Norstar.[57]
[57]6 Oct Transcript, 58.31–59.6.
Raymond and James emphasise the last step in the three year loan conversion process as being a novation, and that there is no other inference or meaning suggested by the phrase ‘flowed back up’. In support of this submission, they refer to certain legal principles regarding novation:
(a) the consideration for the novation of a debt is typically found as follows:
If B owes A money and both parties agree with C that C, not B, is to pay the money to A, A is providing consideration for C’s promise to pay him by agreeing to release B; while B is providing consideration for being released by A by providing A with the new debtor, C [who has provided consideration by promising to pay A].[58]
[58]Citing Chitty, [23–094].
(b) novation may be express or inferred from the conduct of the parties,[59] inferences can be drawn from conduct both prior and subsequent to the transfer of liability,[60] including the acceptance of liability,[61] and ‘no narrow or pedantic approach is warranted’.[62] They cite Chitty which states:
[59]Citing Vickery v Woods (1952) 85 CLR 336, 345 (Dixon J); Olsson v Dyson (1969) 120 CLR 365, 390 (Windeyer J); Fightvision Pty Ltd v Onisforou [1999] NSWCA 323 , [78] (Sheller, Stein and Giles JJA) (Fightvision); Fu Tian Fortune Pty Ltd v Park Cho Pty Ltd [2018] NSWCA 282, [32]–[34] (Barrett AJA; Macfarlan and Gleeson JJA agreeing) (Fu Tian). See also McMahon v National Foods Milk Ltd [2009] VSCA 153, [77] (Nettle JA; Neave and Dodds-Streeton JJA agreeing) (McMahon).
[60]Citing Fu Tian, [43] (Barrett AJA; Macfarlan and Gleeson JJA agreeing). See also Fightvision, [80] (Sheller, Stein and Giles JJA); Gangemi v Osborne [2009] VSCA 297, [24] (Nettle and Harper JJA; Mandie JA agreeing).
[61]Citing McMahon, [77] (Nettle JA; Neave and Dodds-Streeton JJA agreeing).
[62]Citing Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429, 437 (Barwick CJ), quoted in Fightvision, [86] (Sheller, Stein and Giles JJA).
Whether there has been consent is assessed objectively. It follows that the parties may not appreciate that their dealings would have had the effect of novation, but this doesn’t prevent the novation from being effective.[63]
(c) and, more broadly, financial accounts recording the existence of a debt are admissible, prima facie evidence of the debt, are adopted by the company upon a director’s signature, and there is nothing unusual about transactions being affected by book entries.[64]
[63]6 Oct Transcript, 133.17–21, citing Chitty, [23–090].
[64]Citing Australian Securities and Investments Commission v Rich (2009) 236 FLR 1, [394]–[400] (Austin J); Shot One, [237]–[250], [271] (Sloss J); White v Timbercorp FinancePty Ltd (in liq) [2017] VSCA 361, [119], [147], [155] (Ferguson CJ, Santamaria and McLeish JJA); De Vries v Timbercorp Finance Pty Ltd (in liq) [2021] VSCA 265, [23]–[24], [51] (Kyrou and McLeish JJA and Lyons AJA); Minerva Financial Group Pty Ltd v Federal Commission of Taxation (2024) 302 FCR 52, [72] (Besanko, Colvin and Hespe JJ).
Raymond and James submit that, in applying these principles, the Court would find that Norstar, the trustees of the Family Trusts and the Corporate Beneficiaries (by their conduct) agreed to novate the liability for the debts of the Family Trusts to Norstar. The books of the trustees and Corporate Beneficiaries were balanced with equivalent entries recorded each time Norstar recorded an amount owing to the Corporate Beneficiaries, and Maradox’s shareholdings were adjusted in response to the increase at the trust level.[65] They submit that the ‘only sensible explanation’ for these entries and changes is that there was a three-way agreement between Norstar, each trustee, and each relevant corporate beneficiary (including the R & J companies) that Norstar would take on the relevant loan.
[65]6 Oct Transcript, 62.5–63.12
In sum, Raymond and James contend that the novation was evidenced by:
(a) the contemporaneous working papers of the accountants, including Ms Chisholm and Mr Valles;
(b) the parties’ motivation to avoid adverse taxation consequences under Part III, Division 7A of the Income Tax Assessment Act 1936 (Cth);
(c) the repetition of the three year loan conversion process over several years and in relation to several debts;
(d) the loan ledgers recording the amounts as owing by Norstar to the Corporate Beneficiaries of the Family Trusts, the contrast of that process with the cash dividends paid to Paul via his superannuation fund, and various items of correspondence since 2011 (between Paul, Raymond, James and various accountants) comparing these as somewhat equivalent (but differently arrived at) entitlements;
(e) the absence of Paul disputing prior to the commencement of proceedings in this Court that Norstar was directly indebted to the Corporate Beneficiaries (including the R & J companies), and the fact he has signed many directors declarations in respect of the ledgers recording those debts;
(f) the fact that the other corporate beneficiary, Davmas, maintains a loan account which was subject to the same novation process, which Paul has (as recently as 10 September 2025) treated as payable to him in the same manner as Raymond and James now seek the funds stated in the Resolution on behalf of the R & J companies, by attempting to draw down Davmas’ loan account, which demonstrates that Paul has acted in a manner fundamentally incompatible with Maradox’s application,[66] and which is further reinforced by the fact that counsel for Maradox now accepts that ‘Davmas is in the same boat’ as the other Corporate Beneficiaries in this sense;[67] and
(g) the affidavit evidence and in particular, the sworn evidence of Ms Chisholm and Mr Valles that the balances in Norstar’s loan ledgers are owed by Norstar to the Corporate Beneficiaries, and that Maradox has refused to have an independent accountant audit the loan accounts or provide any other accountancy evidence as to the loan accounts.
[66]Ibid, 132.16–21.
[67]Ibid, 14.12–22 (Maradox’s acceptance), 59.22–24 (Raymond/James’ submission).
In response to Maradox’s concerns regarding the directors’ declaration of FY2023 being a separate document (and its other concerns regarding the declarations), Raymond and James submit that regardless of whether the declaration is directly annexed to the accounts, the directors have plainly ‘endorsed the correctness of the company accounts’ and there ‘is no relevant difference’ as between the declarations for the various financial years.[68] Further, they say that there is no evidence from Paul or his solicitors ‘that he didn’t sign the accounts or that he had doubt about them or that he now can’t recall that he signed them, or that by signing a separate document there was a problem’.[69] In fact, there is further evidence that Paul was content with the treatment of the FY2023 declaration. Raymond and James tender a document encompassing a company tax return, the directors’ declaration and minutes of a meeting of Norstar dated 12 December 2023. At that meeting, the chairperson tabled the directors’ declaration for FY2023 and resolved that it be approved and Paul endorsed this; the minutes of that meeting were then signed by Paul in February 2024.[70]
[68]Ibid, 128.27–129.23.
[69]Ibid, 129.27–130.1.
[70]Ibid, 130.16–131.12.
In such circumstances, Raymond and James submit that Maradox has failed to discharge the onus it bears, and there is extensive evidence which demonstrates that the amount sought in the Resolution is owed to the R & J companies.
D.2.2 Balance of convenience
Raymond and James submit, primarily, that as there is no serious question to be tried the Court need not consider the balance of convenience. They submit that in any event, if there was a ‘doubtful serious question to be tried’ then the balance of convenience has to markedly or significantly favour the grant of an injunction.[71]
[71]Citing New Stem Cell Australia Pty Ltd v Magellan Stem Cell Centre Pty Ltd [2025] VSC 546, [11] (Craig J) and the authorities referred therein.
Further and in any event, they submit that because a debtor owes a duty to pay the debt owing,[72] a demand for payment had been made and having regard to several other factors, the balance of convenience is strongly against the grant of the relief sought.
[72]Citing Eagle v Delta Haze Corporation [2000] VSC 513, [19]–[20] (Mandie J).
Raymond and James characterise Maradox’s submission that there is no evidence of Raymond, James, or the R & J companies being ‘in urgent need of money’ as not being determinative of the balance of convenience. They submit the point is instead a neutral factor because it says nothing about the injury that Maradox might suffer if the injunction is refused.[73]
[73]6 Oct Transcript, 137.27–138.21.
Raymond and James contend that Maradox would suffer no injury. Norstar has extremely large cash reserves of approximately $123 million as at 19 September 2025 and the payments in question would cause it no financial prejudice or problem. Further, even after receiving the payments in question, the R & J companies would continue to be owed approximately $20 million by Norstar, and the payment of any such loan would in fact even up the loan balances remaining owing to each of the R & J companies and Davmas.
Raymond and James further highlight what they say is unfair conduct on the part of Paul in respect of Davmas.[74] As discussed above, the result of the treatment of Norstar dividends and debts has meant that Paul has received cash dividends (via Maradox) and Raymond, James, and Corry Sailah have not received anything resulting in a significant disparity. The practical effect of this is that Raymond, James and Corry Sailah have been funding the business, without interest, while Paul has received some of his share of the profits of the business in cash for his personal benefit, whilst being entirely aware of the arrangements causing this imbalance, and ‘brazenly’ seeking to draw $3 million from Davmas’ loan account while this proceeding has been on foot. The payments in question would merely remove that disparity, whereas an injunction would preserve an unfair, inequitable status quo. The impact on third parties is a relevant consideration on the balance of convenience, and significant prejudice would not only be caused to Raymond and James, but also the R & J companies and Norstar itself.[75]
[74]Ibid, 145.1–12.
[75]Ibid, 143.3–14.
Raymond and James emphasise that Norstar’s financial statements acknowledge the debts in question as being owed, and submit that the order sought by Maradox would involve Norstar being prevented from giving effect to its legal obligations and persons entitled to the payment of debts being kept out of sums to which they are legally entitled.[76]
[76]Ibid, 144.14–145.1.
As to the submission of Maradox of the potential difficulty in recovering the moneys the subject of the Resolution if they are ultimately paid erroneously, Raymond and James say this is not an issue. If a different result is determined at the trial of the substantive proceeding, Norstar can take steps to recover the payments. Raymond and James contend that Maradox’s submissions in this regard (including calling their companies $1 or $2 companies) is based on a factual inaccuracy, as it presumes the Corporate Beneficiaries are trustees of discretionary trusts, when they are not trustees at all.[77] Further, Maradox has not led any evidence to support the conclusion that the funds would not be recoverable, and ‘an applicant for an interlocutory injunction has the onus to produce evidence if it’s going to assert prejudice’.[78]
[77]Ibid, 139.3–6.
[78]Ibid, 139.7–24, citing Harjai v Fraser [2016] NSWCA 2, [12] (Macfarlan JA).
Raymond and James contend that damages in this case would inherently be an adequate remedy. Maradox has filed no evidence, and made no submissions to the contrary and the onus is on it to do so.[79]
[79]Ibid, 141.23–24.
Further, Raymond and James submit that if the injunction was refused, Maradox would suffer no injury or prejudice as none of the payments sought by the R & J companies were ever going to or sought by Maradox. Maradox’s investment in Norstar would not be impacted, as the operations of the business would not be prejudiced. Maradox seeks only to deprive the R & J companies from using funds to which they are entitled and over which Maradox has no claim.
Raymond and James submit that, on the other hand, the grant of an injunction would sanction an unfair commercial outcome for the R & J companies, leaving the loans unbalanced in circumstances where Paul knew the loans exist, knew that Raymond and James were in effect funding the business, and was himself seeking to draw upon the Davmas loan account to purchase a house for his son.[80]
[80]Ibid 144.25–145.13.
Raymond and James submit that, even if Paul and Maradox are successful in proceeding S ECI 2023 02770, no order will be made against the R & J companies because they are not parties to that proceeding.[81] Further, even if this fact could be disregarded, the amount of the relief relevantly sought by Maradox and Paul in that proceeding, if it were obtained and in its full quantum, is materially less than the loan balances that would remain owing to those entities by Norstar after the payments the subject of this application had been made.
[81]Ibid, 145.23–29.
Raymond and James further submit that there is no possibility for the present proceeding to be heard alongside proceeding S ECI 2023 02770. That proceeding has been on foot for more than two years, requiring significant preparation, and is due to commence in February 2026 which would leave an unreasonably restricted amount of time for preparation of the present (substantive) matter.[82] There would also not be a decision in February 2026, and thus any prejudice arising from the (wrongfully) imposed injunction would continue unreasonably for a protracted period of time.[83]
[82]Ibid, 147.20–148.9.
[83]Ibid, 148.10–21.
E. CONSIDERATION
E.1 Serious question to be tried
The onus rests squarely on Maradox to establish that there is a serious question to be tried. While the threshold is not a high one, requiring only a sufficient likelihood of success to justify preserving the status quo pending trial, Maradox must nevertheless point to some real foundation for its claim that the defendants be restrained from putting the Resolution to the board of Norstar until the determination of this proceeding and proceeding S ECI 2023 02770.
The difficulty for Maradox is that its case, at its highest, amounts to little more than speculation about the validity of the loans recorded in Norstar’s financial statements. Maradox concedes that dividends were declared and are owing to ‘someone’. It accepts that the amounts recorded in the loan accounts may well be owed to the Corporate Beneficiaries. Its complaint is essentially that it ‘cannot be confident’ of these facts.
Such lack of confidence, without more, does not establish a serious question to be tried. The Court is not dealing with a case where there is positive evidence contradicting the existence or quantum of the debts. Rather, Maradox points to gaps in the evidence and invites the Court to infer from those gaps that there must be doubt about whether the loans exist.
E.1.1 The accounting evidence
The evidence before the Court is substantial and detailed. There is extensive sworn evidence from Ms Chisholm and Mr Valles, accountants with direct knowledge of the transactions and accounting treatment over many years. This evidence is supported by contemporaneous working papers detailing the treatment of dividends as loans through the three-year conversion process. The financial statements of Norstar, signed by directors including Paul in most years, consistently record the loans as current liabilities. There is correspondence between accountants and directors spanning the period from 2011 to 2025 discussing and acknowledging the loan imbalance.
The evidence establishes that the accounting treatment was designed to avoid adverse taxation consequences under Division 7A. This treatment followed a consistent pattern over multiple financial years. Moreover, there is evidence of conduct by Paul himself, including his attempted drawdown on the Davmas loan account in September 2025, that is fundamentally inconsistent with Maradox’s present position.
Against this body of evidence, Maradox’s case rests on more limited foundations. Maradox points to the absence of a formal written assignment document and to changes in the terminology used in the proposed Resolution. It raises concerns about the authenticity of the FY2023 directors’ declaration. Maradox also emphasizes that accountants’ correspondence refers to ‘flowing loans’ and avoiding Division 7A rather than explicitly using the term ‘novation’.
E.1.2 Assignment or novation
Maradox’s focus on the absence of a written assignment document misconceives the legal position. Raymond and James do not contend that there was an assignment in the technical sense. Rather, their case is that through the three-year conversion process, there was a novation of the debts — that is, Norstar, the trustees of the Family Trusts, and the Corporate Beneficiaries, by their conduct, agreed that Norstar would assume the debts owed by the trustees to the Corporate Beneficiaries.
The law regarding novation is clear: it may be express or inferred from conduct. Acceptance may be inferred from actual conduct, and no narrow or pedantic approach is warranted. The consideration for a novation is found in the mutual release of obligations and the substitution of a new debtor.
Maradox’s criticism that the accountants’ emails do not explicitly use the word ‘novation’ is misplaced. Parties may not appreciate that their dealings would have the effect of novation, but this does not prevent the novation from being effective. What matters is whether, objectively assessed, the parties’ conduct demonstrates agreement to the substitution of debts.
Here, there is substantial evidence of novation. The consistent accounting treatment over many years involved corresponding entries in the books of Norstar, the trustees and the Corporate Beneficiaries. The treatment served a clear commercial purpose in avoiding Division 7A consequences. The directors signed financial statements recording Norstar as owing the debts directly to the Corporate Beneficiaries. Paul’s own conduct in treating Davmas’ loan account as available for his use demonstrates his understanding of the arrangement. There is correspondence between accountants and directors acknowledging the loan imbalance and its source. Significantly, there was no contemporaneous challenge to this treatment prior to the commencement of this proceeding.
E.1.3 The reliability of the financial records
Maradox seeks to cast doubt on the reliability of Norstar’s financial records, but its criticisms do not withstand scrutiny.
First, Maradox’s reliance on Shot One is misplaced. That case involved multiple conflicting versions of financial statements for the same period, and evidence from a director that he had never seen any of the statements and that purported board meetings had never occurred. Those extreme circumstances are absent here. The financial statements in this case are consistent over time, supported by contemporaneous working papers, and Paul signed declarations in respect of most years.
Secondly, Maradox’s concerns about the FY2023 declaration being a separate document are answered by the evidence that Paul signed minutes of a board meeting in February 2024 approving that very declaration. Any suggestion that Paul was unaware of or did not approve the FY2023 declaration is therefore untenable.
Thirdly, the fact that Paul may have signed only a declaration page in some years (with accounts attached) rather than signing every page of the financial statements does not undermine the reliability of those statements. The declarations explicitly state that ‘the financial statements and notes present fairly the company’s financial position’. While Maradox contends these declarations are aimed at confirming solvency rather than the accuracy of individual entries, this reading is too narrow. Directors who sign such declarations are adopting the accuracy of the financial statements, including the liabilities recorded in them.
Fourthly, contrary to Maradox’s submission, the financial records are not ‘inaccurate’ because they refer to ‘dividends’ when describing amounts that originated as dividends but were subsequently novated into loans. The records accurately reflect the source and nature of the obligations.
E.1.4 The absence of evidence from Maradox
A striking feature of this application is the paucity of evidence from Maradox to support its concerns. Maradox has not called any accountancy evidence to challenge the treatment of the loans or to suggest an alternative explanation. There is no evidence from Paul explaining what he understood when he signed the various directors’ declarations. Maradox has not obtained an independent audit of the loan accounts, despite opportunities to do so. It has not identified any specific entry or transaction that is said to be incorrect. Nor has it articulated any clear alternative case as to who is owed the amounts in question, if not the Corporate Beneficiaries.
The contrast with the position of Raymond and James is stark. They have placed before the Court detailed accountancy evidence explaining the mechanics of the loan conversion process, supported by extensive documentation.
Maradox’s approach appears to be to sow doubt through rhetorical questions rather than to advance a positive case. This is insufficient to establish a serious question to be tried.
E.1.5 Conduct inconsistent with Maradox’s position
The evidence reveals conduct by Paul that is fundamentally at odds with Maradox’s present position. Paul signed directors’ declarations in most years recording the loans as owing by Norstar to the Corporate Beneficiaries. He received correspondence from accountants explaining the loan imbalance and its source, yet raised no objection. In September 2025, Paul attempted to draw down on the Davmas loan account, treating it as available funds — conduct that demonstrates he understood the Corporate Beneficiaries (including Davmas) had loans owing to them by Norstar. At a board meeting on 11 September 2025, Paul acknowledged there was ‘no difference’ between his withdrawal from the Davmas account and Raymond and James seeking repayment of their companies’ loan accounts. For many years prior to June 2025, Paul raised no issue with the accounting treatment or the existence of the loans.
This conduct is inconsistent with any genuine belief on Paul’s part that the loans recorded in Norstar’s books are questionable or lacking in foundation.
E.1.6 Conclusion on serious question
Having regard to all these matters, I am not satisfied that Maradox has established a serious question to be tried as to whether the amounts specified in the Resolution are owing by Norstar to the R & J companies. Put another way, if the evidence remains as it is I do not consider that there is a probability that at the trial of the proceeding Maradox would be entitled to an order restraining Raymond and James from putting the Resolution to the board of Norstar.
At best, Maradox has raised questions about matters of proof — whether formal assignment documents exist, whether certain accounting practices were explained in particular terms, and whether directors fully understood the legal characterisation of the transactions. But these matters, even if ultimately found to require further explanation at trial, do not give rise to a serious question about whether the debts exist.
The weight of the evidence points clearly to the conclusion that Norstar declared dividends to its shareholders, and that those dividends were distributed through the trust structures to the Corporate Beneficiaries (among others). Through the three-year conversion process, designed to avoid Division 7A consequences, the loans were novated such that Norstar became directly indebted to the Corporate Beneficiaries. This treatment was consistently applied over many years. Paul was aware of and acquiesced to this treatment, and the amounts recorded in the loan accounts accurately reflect the debts owing.
Maradox has not identified any specific error in the accounting or any positive evidence that contradicts the existence of the loans. Its case rests on speculation arising from gaps in the evidence — gaps that are readily explicable by the informal manner in which family company affairs are often conducted, and which in any event do not undermine the substantial body of evidence supporting the existence of the debts.
E.2 Balance of convenience
Since I do not consider that Maradox has established that there is a serious question to be tried, it is not strictly necessary for me to consider the balance of convenience. Nonetheless, even if I were satisfied that Maradox had established a serious question to be tried, the balance of convenience weighs heavily against the grant of an injunction.
E.2.1 The adequacy of damages
A threshold consideration is whether damages would be an adequate remedy. The onus is on Maradox to demonstrate that damages would be inadequate. Maradox has adduced no evidence on this issue and has made no substantive submissions addressing it.
On the contrary, the evidence indicates that damages would be an adequate remedy if required. Norstar is a substantial operating company with cash reserves of approximately $123 million as at September 2025. The payments sought under the Resolution total approximately $25.5 million — a significant but not crippling sum for a business of Norstar’s size. If the payments are made and subsequently found to have been made in error, Norstar would have clear rights of recovery against the R & J companies. There is no evidence that the R & J companies would be unable to repay any amounts improperly received. Moreover, Maradox itself is not a party to the loans and would suffer no direct loss from their payment.
Maradox’s suggestion that the R & J companies are ‘$1 or $2 companies’ that would dissipate the funds is not supported by evidence. While Maradox later accepted this characterisation was inaccurate (the R & J companies are not trustees of discretionary trusts), it did not withdraw its concern about recoverability. But again, there is no evidence to support this concern.
In these circumstances, Maradox has not demonstrated that damages would be an inadequate remedy if Norstar were ultimately found to have made payments that were not owing.
E.2.2 Prejudice to the parties
The grant of an injunction would cause significant prejudice to Raymond, James and the R & J companies. They would be kept out of funds to which they are (on the evidence) legitimately entitled. The loan imbalance that has existed for many years would be perpetuated. They would continue to fund Norstar’s operations without interest while Paul’s entities have received cash distributions. They would be denied the use of funds for an indeterminate period.
Maradox, on the other hand, would suffer no prejudice if the injunction were refused. The payments are not sought from Maradox and do not affect its shareholding in Norstar. Norstar’s financial position would not be materially impacted by the payments, given its substantial cash reserves. The payments would not affect Maradox’s rights in the related proceeding.
E.2.3 The conduct of the parties
The conduct of the parties is a relevant consideration. As noted above, Paul has himself drawn down on the Davmas loan account while simultaneously maintaining (through Maradox) that the R & J companies’ loan accounts lack foundation. This conduct suggests that the present application is strategic rather than genuinely concerned with the validity of the loans.
Indeed, during the hearing senior counsel for Maradox conceded that his client might not have sought an injunction if the defendants had sought repayment of ‘a relatively small amount for a particular family purpose’.[84] The basis of Maradox’s opposition is therefore the magnitude and circumstances of the repayment, not the validity of the underlying debt.
[84]Ibid, 158.23-159.6.
Moreover, Maradox’s failure to take up opportunities to audit the loan accounts or to adduce positive evidence challenging their validity suggests a lack of genuine belief that the loans are questionable.
E.2.4 The status quo
Maradox contends that the injunction is necessary to preserve the status quo pending trial. But what is the status quo? The loans have existed on Norstar’s books for many years. The R & J companies have legitimate claims to repayment. A demand for payment has been made. In these circumstances, the ‘status quo’ is not a situation where Norstar refuses to pay debts that it acknowledges (through its financial statements) as owing. Rather, the status quo is that Norstar owes debts to the R & J companies and is under a legal obligation to pay them upon demand. To grant an injunction would not preserve the status quo; it would alter it by preventing Norstar from meeting its legal obligations.
E.2.5 The relationship to proceeding S ECI 2023 02770
Maradox submits that the proceedings should be heard together, or at least that the Resolution should be stayed until the determination of proceeding S ECI 2023 02770. I do not accept this submission for several reasons.
First, the two proceedings involve different issues and different relief. Proceeding S ECI 2023 02770 concerns the restructure undertaken in 2007 and alleged breaches of trust. This proceeding concerns allegations of oppressive conduct.
Secondly, even if Maradox and Paul succeed in proceeding S ECI 2023 02770, there is no basis to conclude that this would affect the validity of the loans to the R & J companies. The R & J companies are not parties to that proceeding, and no orders are sought against them.
Thirdly, the relief claimed in proceeding S ECI 2023 02770, even if granted in full, is likely to amount to less than the loan balances that would remain owing after the payments sought in the Resolution are made. At the very least, Maradox has not demonstrated that repayment of the debts would prejudice its ability to enforce a judgment in S ECI 2023 02770 even if it were successful in all its claims.
Fourthly, I do not consider that there is sufficient time to prepare this proceeding for hearing alongside proceeding S ECI 2023 02770. That proceeding has been on foot for more than two years and has involved extensive preparation. It has been set down for trial commencing in early February 2026 for a period of nine weeks. I am also not satisfied that even if this proceeding were ready to be heard at that time that all of the issues arising in this proceeding (an oppression proceeding extending beyond the issues raised on this application) could be accommodated within that trial time frame. Senior counsel for Maradox conceded that if this proceeding could not be heard for 12 months then the balance of convenience tips against Maradox.
E.2.6 Mitigating factors
It is fair to acknowledge that certain matters may have contributed to Maradox’s concerns and its decision to pursue this application. The initial Resolution referred to payment of ‘unpaid dividends’ when the R & J companies are not shareholders of Norstar. This misdescription was acknowledged by senior counsel for the defendants at the hearing on 25 June 2025 as ‘infelicitous’. The use of this terminology may have given rise to some confusion on the part of Maradox as to the true nature of the amounts claimed and the basis on which they were said to be owing. However, this must be weighed against the fact that Paul had received correspondence from accountants over many years explaining the loan imbalance and its source, and had himself sought to draw down on the Davmas loan account in September 2025 in a manner that demonstrated his understanding that the Corporate Beneficiaries held loans against Norstar.
Further, Maradox may have been lulled to some degree by the email of 18 September 2025 from James regarding the Lipins investigation. That email stated that the material provided ‘did not take things very far’ and suggested that no further work should be undertaken by Lipins. This could reasonably have been understood by Maradox as indicating that Raymond and James had not found substantive support for their position. However, only four days later on 22 September 2025, Raymond and James filed detailed affidavits from Ms Chisholm and Mr Valles containing voluminous exhibits and comprehensive accountancy evidence. The timing of this material, coming so soon after the suggestion that the investigation had yielded little of value, may have contributed to Maradox’s sense that the evidentiary foundations for the Resolution required closer scrutiny. Nevertheless, this must also be understood in light of the fact that the underlying accounting treatment and loan structure had been consistently documented in financial statements over many years, and Paul had been a signatory to many of those statements.
These matters provide some context for Maradox’s pursuit of this application, though the weight to be given to them is limited by Paul’s longstanding awareness of the arrangements. In any event, they do not alter the fundamental assessment of where the balance of convenience lies. By the time of the hearing before me on 6 October 2025, Maradox had the benefit of the detailed accountancy evidence and had time to consider it. The Resolution had also been reformulated to remove the reference to ‘dividends’. In those circumstances, while some initial confusion may have been understandable, it cannot justify the continuation of the injunction application in the face of the substantial evidence now before the Court.
E.2.7 Conclusion on balance of convenience
For these reasons, the balance of convenience weighs strongly against the grant of an injunction.
E.3 Overall conclusion
For the reasons set out above, I am not satisfied that Maradox has established a serious question to be tried. The evidence before the Court supports the conclusion that the amounts sought in the Resolution are owing by Norstar to the R & J companies. Maradox’s concerns about the validity of the loans are not supported by any positive evidence and are contradicted by the conduct of Paul himself.
Even if there were a serious question to be tried (which I do not accept), the balance of convenience weighs heavily against the grant of an injunction. Maradox would suffer no prejudice from the refusal of injunctive relief, while Raymond, James and the R & J companies would suffer significant prejudice from its grant.
The application must therefore be refused.
F. ORDERS
I will make the following orders:
(a) The plaintiff’s application for an interlocutory injunction is refused.
(b) The plaintiff’s interlocutory process dated 11 June 2025 is dismissed.
(c) The proceeding is adjourned to a directions hearing on 31 October 2025.
The usual rule when a plaintiff fails on an application for interlocutory injunctive relief is that costs follow the event, but there may be circumstances of which I am unaware that would displace the usual rule. I will deal with the question of costs and what further directions should be made in the proceeding at the directions hearing on 31 October 2025.
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ANNEXURE A: Corporate Structure
SCHEDULE OF PARTIES
S ECI 2023 02770
BETWEEN:
| MARADOX PTY LTD (ACN 059 570 955) | Plaintiff |
| - and - | |
| RAYMOND SAILAH | First Defendant |
| JAMES SAILAH | Second Defendant |
| NORMET INDUSTRIES NOMINEES PTY LTD (ACN 005 440 246) | Third Defendant |
| RECYCLING PTY LTD (ACN 125 250 151) | Fourth Defendant |
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