Silva Fortune Pty Ltd v Nuvei Global Merchant Services Pty Ltd

[2025] NSWSC 699

Supreme Court

New South Wales

Medium Neutral Citation:

Silva Fortune Pty Ltd v Nuvei Global Merchant Services Pty Ltd [2025] NSWSC 699

Hearing dates:

25 June 2025

Date of orders:

02 July 2025

Decision date:

02 July 2025

Jurisdiction:

Equity

Before:

Peden J

Decision:

At [48]

Catchwords:

CIVIL PROCEDURE — Preliminary discovery — To identify potential cause of action — Whether plaintiffs unable to obtain sufficient information to make decision about whether to commence proceedings — Whether inspection of documents sought would assist plaintiff to make decision — Preliminary discovery ordered

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW) r 5.3(1)

Cases Cited:

B & J Hudghton Investments Pty Ltd v Lakeba Group Ltd [2022] NSWSC 830

Morton v Nylex [2007] NSWSC 562 at [33]

Murray v Wheeler [2013] NSWSC 137

O’Connor v O’Connor [2018] NSWCA 214

Pioneer Holdings v Seth [2014] NSWSC 492

Rinehart v Rinehart [2015] NSWSC 1201

Western Bulk Carriers (Australia) Pty Ltd v Cosco Bulk Carrier Co Ltd [2002] FCA 1520

Category:

Principal judgment

Parties:

Silva Fortune Pty Ltd (first plaintiff)
N G P Investments (No 2) Pty Ltd (second plaintiff)
Nuvei Global Merchant Services Pty Ltd (defendant)

Representation:

Counsel:
G Sirtes SC with N Condylis (plaintiffs)
M Hall with J Bailey (defendant)

Solicitors:
Madison Marcus (plaintiffs)
King & Wood Mallesons (defendant)

File Number(s):

2025/00129958

Publication restriction:

Nil

JUDGMENT

1. The plaintiffs, two corporations, seek preliminary discovery of nineteen categories of documents from Nuvei Global Merchant Services Pty Ltd (formerly Till Global Payments Pty Ltd) pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 5.3(1).

2. The plaintiffs say they reasonably require those documents in order to decide whether to bring a claim for relief against Till Global and its former director, Mr Haddad, for misleading or deceptive conduct pursuant to s 18 Australian Consumer Law (ACL), set out in Sch 2 of the Competition and Consumer Act 2010 (Cth) or s 12DA Australian Securities and Investments Commission Act 2001 (Cth).

Legal principles

3. The relevant principles are well known. Reference is often made to Simpson AJA’s five limb test in O’Connor v O’Connor [2018] NSWCA 214 (O’Connor) at [21] (with whom McColl and Macfarlan JJA agreed). Her Honour noted that for a Court to exercise the discretion to grant an order for preliminary discovery under UCPR r 5.3(1), it must be satisfied of the following:

1. the applicant may be entitled to make a claim for relief from the court against the prospective defendant;

2. the applicant has made reasonable enquiries to obtain sufficient information to decide whether or not to commence proceedings;

3. having made reasonable enquiries, the applicant is unable to obtain sufficient information to make the decision whether or not to commence proceedings;

4. the prospective defendant may have or have had possession of a document or thing that could assist in determining whether the applicant is entitled to make a claim for relief; and

5. inspection of such a document would assist the applicant to make the decision whether or not to commence proceedings.

See also the recent summary of principles in B & J Hudghton Investments Pty Ltd v Lakeba Group Ltd [2022] NSWSC 830 at [19] (Rees J).

Scope of dispute

4. I accept the parties’ agreement that the O’Connor limbs 1, 2 and 4 are made out here based on the evidence. What remains is a dispute between the parties concerning whether the third and fifth O’Connor limbs have been satisfied.

5. The defendant asserted that the plaintiffs had failed to objectively establish that they have insufficient information to decide whether to sue: Mortonv Nylex [2007] NSWSC 562 at [33] (White J); B & J Hudghton at [21].

6. Morton makes clear that the question the Court is tasked with answering is whether the applicant “has insufficient information to be able to decide whether to institute proceedings; not merely to establish a cause of action”: at [33]. As such, preliminary discovery may be ordered to allow a plaintiff to access documents relevant to “available defences, or the extent of apprehended breaches, or the likely quantum of damages, as well as of documents which may establish whether there is a cause of action”: at [33].

7. The defendant also submitted that the plaintiffs had not demonstrated that they were “lacking something reasonably necessary to make a decision whether to institute proceedings”: Morton at [33] (emphasis added). An applicant must adduce evidence demonstrating the particular respects in which the information they currently have is deficient: Morton at [33]; B & J Hudghton at [23]. Mere assertions by plaintiffs or their legal advisers that the information is deficient is not sufficient to meet this limb of the test: Western Bulk Carriers (Australia) Pty Ltd v Cosco Bulk Carrier Co Ltd [2002] FCA 1520 at [17] (Beaumont J); B & J Hudghton at [23].

8. In relation to the fifth limb, the defendant submitted that there was insufficient evidence to demonstrate that the documents sought would assist the plaintiffs in deciding whether to bring proceedings. It submitted that the plaintiffs were attempting to build up a case they had already decided to or could decide to bring: Murray v Wheeler [2013] NSWSC 137 at [46]-[48] (Bergin CJ in Eq).

Factual background

9. Till was incorporated on 20 December 2019, with Mr Haddad being its only director and secretary. He remained a director until 30 May 2023, and from its incorporation until that date, Mr Haddad was Till’s CEO.

10. Till describes itself as an “integrated payments solutions provider”.

11. From early 2020 until July 2023, Till raised about $230,000,000 through 4 separate instruments:

Capital raise	Instrument	Conclusion date	Sum raised (AUD)
A Raise	Convertible note	14 February 2020	$11,800,000
B Raise	Loan facility	28 April 2021	$18,170,000
C Raise	Convertible note	29 November 2021	$129,884,900
D Raise	Convertible note	July 2023	$70,000,000
Total			$229,854,900

12. The A Raise form of note was a redeemable loan which, if not redeemed by maturity, would convert to ordinary shares in the company. By contrast, the C and D Raise form of notes were non-redeemable, meaning that return on investment solely depended upon the value of Till's shares upon conversion.

13. The plaintiffs were among the investors who participated in the raises. Their investments were as follows:

A Raise	B Raise	C Raise	D Raise	Total (AUD)
Silva Fortune	$13,050,000	$46,049,075	$59,099,075
NGP Investments	$1,069,158	$542,989	$3,000,000	$14,000,000	$18,612,147

14. The C Raise commenced from about the middle of 2021 and concluded on 29 November 2021. Till promoted the C Raise by circulating an "Investor Presentation” on or around 10 June 2021, being the date of the document. Silva Fortune and NGP Investments relied upon the document when deciding whether to participate in the C Raise.

15. The Investor Presentation encouraged participation in the C Raise through a series of representations:

1. Technology representations: The Investor Presentation described Till as "Australia's first global technology based omni-channel merchant acquirer". It made other statements about Till being the “leader” and that it was above its competitors.

2. Partner representations: The Investor Presentation described inter alia Till’s “Major Partnerships” as “Near-term partnership opportunities worth >$260m AAR”.

3. Capital deployment representations: Till told investors that the $129 million being raised would be allocated in the following ways: a maximum of $91 million towards “ANZ Growth”, about $25 million towards “ANZ M&A Opportunities” and about $13 million towards “USA Market Readiness”.

4. Financial representations: Till made various claims in respect of its financials, telling investors “29% FY20’Q3 to FY21’Q3 Gross Revenue CQGR”, “127% FY20’Q3 to FY21’Q3 Processed Volume CQGR” and “251% YoY Growth 3Q’21” in respect of past performance, and “IRR 28%” in respect of past return on invested capital and “IRR 37%” on predicted return on capital for the C Raise.

16. Despite the large capital raising, in November 2023, the shares in Till were sold for about $47 million to a large Canadian company, Nuvei Global Merchant Services.

17. Till’s investors say they have suffered large losses. The plaintiffs together state that they have suffered losses of over $43 million by reason of their investment in Till’s capital raises.

18. The plaintiffs have considered Till’s annual accounts and discerned the following:

1. As at around 30 June 2021, Till had over $21 million in net cash outflow. However, at that time, Till and Mr Haddad continued to market the C Raise, enticing $130 million from investors.

2. Within a month of concluding the C Raise, on 29 December 2021, Till Payments LLC (a related company) acquired “the customer contracts of Ziosk Integrated Payment Solutions from Tabletop Media for $42.7m (USD $31.0m).” Despite paying $42.7 million in the Ziosk transaction, Till later recorded an impairment charge of $7.1 million for the acquisition.

3. It appears Till purchased not only the “customer contracts”, but also Ziosk’s technology offering, but then was valued as worthless by management (in the FY 22 accounts).

4. In January 2022, Till established a joint venture with Jonas Software AUS Pty Ltd, which Till described as a "$90mm+ Opportunity in Australia/NZ @ 25% Penetration". However, by 30 June 2022, Till had reduced the carrying value of that joint venture to nil.

5. Till’s net cash outflow had increased to $55,391,024 (from $21,343,536 in the financial year 21), and further, the company had invested $8,752,880 in a "new software platform" and paid $42.7 million in the Ziosk acquisition.

6. On 24 August 2022, Till borrowed $60 million from Longreach Credit Investors. Upon entering the facility, Till drew down $45 million.

7. Because it was lacking in resources, Till carried out the D capital raise between late 2022 and July 2023. On 10 January 2023, Investors were told by email that Till's dire financial predicament was due to "cash burn", which was being reduced “on the path to profitability”.

8. The D Raise generated $70 million for Till. This included $46.05 million and $14 million from Silva Fortune and NGP Investments, respectively.

19. On 9 November 2023, Till sold its shares to Nuvei for $47 million. Till entered the sale on behalf of all shareholders during a meeting between Mr Haddad and Nuvei's then CEO. Mr Haddad rejoined Till's board on 4 January 2024, the day the share sale completed. Till has openly defended the share sale, including denying the allegation that the sale was not on arm's length terms. Till thus takes the position the sale reflected fair value.

20. Not long after the share sale, the Australian Financial Review published an article on 6 March 2024 titled “Till was paying senior managers as ‘contractors’ before fire sale”. The article explained the dire financial position Till found itself in at the time of the sale, before alleging the payment of millions of dollars to Mr Haddad and his brother as “consulting fees”.

Are plaintiffs entitled to preliminary discovery?

21. I consider the plaintiffs are entitled to preliminary discovery for the following reasons.

Third limb – have plaintiffs demonstrated they have insufficient information?

22. The defendant submitted that the plaintiffs have failed to identify what information they already have, and therefore it is not possible to objectively assess whether they require further documentation in order to make a decision.

23. The “test” does not require a precise recitation of all the documents within the possession of the plaintiffs. I accept the plaintiffs’ submission that the particular facts in Morton led to White J refusing to exercise the discretion to grant preliminary discovery. In particular, the applicants there were shareholders who had obtained large quantities of documents, but failed to summarise their contents or explain what they had gleaned from them: see Morton at [34]. Further, there was no evidence from the legal representatives as to whether they considered the information sufficient to commence proceedings and the reasons for that: Morton at [35].

24. Where an applicant gives evidence as to “what they have learned over time and have identified the ways in which the information they have gleaned is insufficient to enable them to decide whether or not to commence proceedings”, then there are likely to be fewer concerns about the third limb: see RinehartvRinehart [2015] NSWSC 1201 at [94] (White J).

25. Here, the plaintiffs have identified “key documents” and the financial records they have considered and explained what information they still seek.

26. I do not accept that Mr Koundouris, the director of Silva Fortune, was required to give evidence in order for the plaintiffs to succeed. Mr Koundouris was not a director of Till during the C Raise round on 29 November 2021 and the signing of the FY21 accounts on 30 November 2021. Instead, Mr Koundouris was representing Silva Fortune and considering whether it ought to invest in Till.

27. He only became an independent director of Till from December 2022, and I accept it cannot be assumed he had access to earlier information held by the board in 2021.

28. Further, in circumstances where the unchallenged evidence of the plaintiffs’ solicitor is that he received instructions from Mr Koundouris about certain matters and facts and yet requires further information for the plaintiffs to make a decision whether to commence proceedings, it is not necessary that Mr Koundouris gives evidence of those instructions personally.

Fifth limb - will the documents “assist” making a decision to commence proceedings?

29. I do not accept the defendant’s submission that it can be inferred that the plaintiffs have already made a decision to commence proceedings and therefore the documentation sought is not reasonably necessary for them to do so. That submission is contrary to the following facts.

30. First, the solicitor on the record for the plaintiffs, Mr de la Hoyde, has given uncontested evidence that he does not have sufficient information to certify that particular proceedings have reasonable prospects of success. His affidavit also references what information is provided in the defendant’s financial reports, and the information being sought from the documentation that must underlie the financial reports.

31. The plaintiffs consider that the statements made by the defendant to potential investors may amount to misleading and deceptive conduct. Depending on the information received through this application, the plaintiffs may allege that these statements constitute intentional, and effectively fraudulent, statutory misleading or deceptive conduct. As McDougall J observed in Pioneer Holdings v Seth [2014] NSWSC 492, such allegations are very serious and the courts have emphasised the need for parties and practitioners to satisfy themselves that there is a proper basis for the making of such serious allegations: at [37].

32. While it may be, as the plaintiffs themselves have submitted, that there is an innocent explanation for the representations made to investors, the potential existence of this fact does not prevent the above consideration from being relevant. I adopt McDougall J’s observation in Pioneer at [38] that he “did not think that it can be said to be outside the purview of r 5.3(1) for plaintiffs who are contemplating making the serious allegation of fraud to wish to satisfy themselves, so far as an application for preliminary discovery might help them to do, that there is no innocent explanation.”

33. I accept that Mr de la Hoyde must satisfy himself that there are no available offences that may vanquish his client's ability to properly plead in a way that can be certified by a solicitor as required to establish a reasonable ground to make such an assertion.

34. Secondly, there are several letters from the plaintiffs’ solicitors to the defendant on 27 May 2024, 20 December 2024 and 18 February 2025 seeking information, and others asking the defendant to reconsider its refusal to provide information. The defendant remained opposed to providing any documentation. While I accept that the same correspondence included assertions that alleged breaches by the defendant were plain and apparent, such assertions in their context do not demonstrate that a decision had been made to commence proceedings and the exact nature of those proceedings. The letters indicated that further information was being sought because of what appeared to be discrepancies between the accounts and the representations made to investors. For example, in the 20 December 2024 letter, the plaintiffs’ solicitors wrote that “[w]e require the documentation requested in Schedule A in order for our clients to have sufficient information to decide whether or not to commence proceedings against Till and Mr Haddad (amongst others).” (emphasis added).

Conclusion

35. I consequently accept that the plaintiffs are seeking primarily further financial information from the defendant to enable them to assess whether there is a reasonable explanation for the statements that were made to potential investors. There is limited information available to the plaintiffs at the moment.

36. The issue is whether all the categories of documents ought to be discovered.

Categories of documents sought

37. The defendant did not submit that preliminary discovery would be oppressive.

38. Instead, if I was minded to make an order for preliminary discovery, then the defendant only disputed some of the categories proposed by the plaintiffs.

39. The parties agreed at hearing that category 2 should be amended to read:

Any document or documents recording Till’s ownership during the Relevant Period of Till’s software, trademarks, trade names, and other intangible assets owned.

40. After submissions, the only categories in dispute were the following.

41. Documents “relied upon” by Till or its management to make statements in the Investor Presentation and annual report: The defendant took issue with the words, “relied upon”, used in categories 4, 15, and 16 on the basis that the defendant would be saddled with the difficulty of making “an assessment of relevance when a pleading is not before it”. The plaintiffs did not “see a problem” with this language, but submitted that if the Court did, category 4 could be amended to say “all documents upon which Till based the statements contained thereafter”. I do not consider that “relied upon” requires any evaluative judgement on the defendant’s party which would be overly burdensome and so reject the plaintiffs’ submission.

42. Financial documents: The defendant submitted that if management accounts, annual reports, general ledgers and the like were disclosed, then it would be unnecessary to also require the defendant to discover “drafts or final investment memorandums or similar documents for the purpose of raising funds for Till in the Relevant Years” (category 12), and business plans or forecasts (category 13). This was said to be “a wish list descending down the various levels of formality in financial record keeping of a company”.

43. I reject that submission.

44. All the documents sought are relevant to the possible discrepancies between the financial statements the plaintiffs have seen and the representations.

45. Documents concerning expenditure on various services recorded in the annual reports: The defendant submitted that the request for documents in categories 17 and 19 amounted to “a Royal Commission …. to unearth all of any objectionable expenditure that may have occurred within previous financial years”, and that they were not “reasonably necessary” for the plaintiffs to make a decision to litigate.

46. I do not accept that submission. The categories are tied to what the defendant has recorded in annual reports. The plaintiffs are entitled to consider the material used to create those reports to understand the representations and whether they justify the commencement of proceedings.

Conclusion

47. I am satisfied that the plaintiffs do need the further information in the categories of documents, as amended, to have sufficient information to make a decision whether to commence proceedings.

48. I direct that:

1. On or before 4pm on 7 July 2025, the plaintiffs serve on the defendant short minutes of order intended to give effect to these reasons for judgment together with the orders they propose in relation to costs and any necessary explanation;

2. On or before 4pm on 9 July 2025, the defendant:

1. if it agrees with the plaintiffs’ short minutes of order, notify the plaintiffs and my Associate of their agreement, in which case the orders will be considered in chambers;

2. if it does not agree with the plaintiffs’ short minutes of order, serve on the plaintiffs a document (which may include alternative short minutes of order) setting out the matters on which they disagree and provide copies of the plaintiffs’ short minutes of order and their document to my Associate, in which case the matter will be listed, initially for directions, at 9:30 am on 11 July 2025, or such other date as is agreed with my Associate, to deal with all outstanding issues.

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Decision last updated: 02 July 2025