In the matter of SkyCity Adelaide Pty Ltd

1. [1]

   By Originating Process filed on 27 June 2025, the Plaintiff, Mr Stephen Wright, seeks leave under section 237 of the Corporations Act 2001 (Cth) (the Act) to bring a proceeding on behalf of the First Defendant, SkyCity Adelaide Pty Ltd (SCA), against certain former directors and officers of SCA (the Proposed Proceeding). The Plaintiff also seeks an order, pursuant to s 247A of the Act, authorising himself or his solicitors to inspect certain records of SCA and the Second Defendant, SkyCity Entertainment Group Limited (SCEG).

2. [2]

   The Plaintiff’s application is opposed by the Defendants.

3. [3]

   SCEG, which is listed on both the Australian Stock Exchange and the New Zealand Stock Exchange, operates a number of casinos, hotels, restaurants and bars in Australia and New Zealand.

4. [4]

   SCA, which is a wholly owned subsidiary of SCEG, operates a casino in Adelaide, South Australia, under the name “SkyCity Adelaide” (the Casino).

5. [5]

   SCA was at all relevant times a “reporting entity” for the purposes of the Anti-Money Laundering and Counter-Terrorism Financing Act 2007 (Cth) (AML/CTF Act) and the Anti-Money Laundering and Counter-Terrorism Financing Rules 2007 (Cth) (Rules), and was regulated by the Australian Transaction Reports and Analysis Centre (AUSTRAC).

6. [6]

   On 7 December 2022, the Chief Executive Officer of AUSTRAC commenced a proceeding against SCA in the Federal Court of Australia, seeking declarations that SCA had contravened the AML/CTF Act and seeking a civil penalty in respect of those contraventions (the AUSTRAC Proceeding).

7. [7]

   On 17 May 2024, the parties to the AUSTRAC Proceeding filed a Statement of Agreed Facts and Admissions, whereby SCA admitted for the purposes of that proceeding that, in the course of operating the Casino, it had committed various contraventions of the AML/CTF Act during the period from 7 December 2016 to 14 December 2022 (the Relevant Period). In particular, SCA admitted that, during the Relevant Period:

   1. (1)

      it contravened s 36(1) of the AML/CTF Act, by failing to appropriately monitor 56 “Higher Risk Customers” ([411]-[412]) and 65 “SCEG Channel Customers” (at [442]) in relation to the provision of designated services; and

   2. (2)

      it contravened s 81(1) of the AML/CTF Act, by providing designated services to customers in circumstances where its AML/CTF programs did not comply with the requirements of the AML/CTF Act and the Rules (at [443]). These contraventions were admitted to be “too numerous to quantify” (at [443]).

8. [8]

   On 7 June 2024, Lee J delivered judgment in the AUSTRAC Proceeding: CEO of AUSTRAC v SkyCity Adelaide Pty Ltd [2024] FCA 664. His Honour made declarations that SCA had contravened:

   1. (1)

      s 36(1) of the AML/CTF Act on 121 occasions during the Relevant Period, by failing to appropriately monitor 121 customers in relation to the provision of designated services; and

   2. (2)

      s 81(1) of the AML/CTF Act on each occasion that it commenced to provide a designated service to a customer during the Relevant Period.

9. [9]

   His Honour ordered that SCA pay a pecuniary penalty in the amount of $67m, together with the applicant’s costs fixed in the amount of $3m.

10. [10]

    The Statement of Claim which has been prepared in respect of the Proposed Proceeding (Proposed SOC) alleges that, during the Relevant Period, eight of SCA’s former directors and officers (Proposed Defendants) breached their duties to SCA under the Act, at common law and in equity, by failing to take steps or make enquiries which would have revealed that SCA was in breach of its obligations under the AML/CTF Act and that, had such steps been taken, SCA would not have been exposed to a pecuniary penalty. None of the Proposed Defendants was a party to the AUSTRAC Proceeding.

11. [11]

    By way of overview, the Proposed SOC includes allegations that:

    1. (1)

       the Casino operated by SCA involved various identified forms of money laundering and terrorism financing (ML/TF) risk (at [11]-[40]) and, by reason of those matters, the ML/TF risk of the business as a whole was both well-known and high (at [41]-[46], [64]);

    2. (2)

       SCA was a reporting entity within the meaning of the AML/CTF Act at all times during the Relevant Period and had various obligations arising under that Act, including:

    3. (3)

       SCA contravened ss 36(1) and 81(1) during the Relevant Period in the manner admitted in the AUSTRAC proceedings, and those contraventions had no significant benefits to SCA and were outcomes that no reasonable director or board of directors would consider to be in the best interests of SCA (at [70]-[79]);

    4. (4)

       each of the Proposed Defendants owed to SCA, and breached, duties of care and skill under the Act, at common law and in equity (at [103]-[119], [122]-[138], [141]-[156], [159]-[175], [178]-[194], [197]-[213], [216]-[232], [235]-[251]);

    5. (5)

       but for those breaches, SCA would not have contravened the AML/CTF Act and so would not have incurred the penalty and costs in the AUSTRAC Proceeding (at [120]-[121], [139]-[140], [157]-[158], [176]-[177], [195]-[196], [214]-[215], [233]-[234], [252]-[259]); and

    6. (6)

       as a result of the breaches, SCA has suffered damage in the amount of at least $70 million, being the amount of the pecuniary penalty and costs that SCA was ordered to pay in the AUSTRAC Proceeding (at [261]).

12. [12]

    The Plaintiff holds shares in SCEG, and as such, has standing to bring an application under s 237 of the Act for leave to bring the Proposed Proceeding in SCA’s name: see ss 236(1)(a)(i) (read with s 50(a)) and 237(1)(a).

13. [13]

    On 24 April 2025, the Plaintiff entered into a litigation funding agreement with LCM Funding Pty Ltd in respect of both this proceeding and the Proposed Proceeding (the Funding Agreement). As outlined below, the Funding Agreement provides that the Plaintiff is entitled to certain payments in respect of his role in both this proceeding and the Proposed Proceeding.

14. [14]

    Pursuant to proposed order 2 in the Originating Process, if the Proposed Proceeding results in a judgment or settlement in favour of SCA, LCM will be entitled to receive from any such “Resolution Sum”:

    1. (1)

       the costs paid or payable by LCM in relation to the Proposed Proceeding, including reasonable “ancillary costs” (including the costs associated with the provision of any security for costs, or with taxation of costs, or the costs of and incidental to this application for leave insofar as they are paid by LCM);

    2. (2)

       a commission in an amount being the greater of:

    3. (3)

       if the Resolution Sum is received four years after the Funding Agreement was signed (that is, after 24 April 2029), interest on costs calculated at a rate of 12% per annum, compounding monthly.

15. [15]

    On 30 April 2025, the Plaintiff’s solicitors gave notice to SCA of his intention to make an application under s 237 of the Act for leave to bring the Proposed Proceeding.

16. [16]

    On 26 May 2025, SCA’s solicitors responded to this notice, stating that SCA had not yet formed a view as to whether it would be in SCA’s best interests to commence an action of the kind outlined by the Plaintiff’s solicitors, that it was prepared to give further consideration to this issue, and that it would require a period of at least four months to enable that consideration to take place and to make a determination. As the Plaintiff submitted, it appears, from the terms of this response, that SCA had not, prior to receiving notification of the Plaintiff’s intention to bring this application, given any serious consideration to pursuing action against the Proposed Defendants with a view to recovering the amount of $70m that was paid by SCA in the AUSTRAC Proceeding.

17. [17]

    On 27 June 2025, the Plaintiff commenced this proceeding.

18. [18]

    In early September 2025, the directors of SCA (Mr Glenn Davis, Mr Julian Cook and Ms Avril Baynes) resolved not to bring a proceeding against the Proposed Defendants of the kind proposed by the Plaintiff’s s 237 application.

19. [19]

    On 12 September 2025, Black J granted leave to the Plaintiff to file, on an interim basis, the Proposed SOC pursuant to the power contained in s 241 of the Act, subject to the final determination of the Plaintiff’s application for derivative leave: Re Skycity Adelaide Pty Ltd [2025] NSWSC 1108. This leave was granted upon the Plaintiff undertaking that he would not serve the Proposed SOC or otherwise continue the Proposed Proceeding without further leave of the Court.

20. [20]

    The principal issues that arise for determination on the Plaintiff’s application for leave to bring the Proposed Proceeding are whether the Plaintiff has established that:

    1. (1)

       he is acting in good faith;

    2. (2)

       it is in the best interests of SCA that leave be granted to the Plaintiff; and

    3. (3)

       there is a serious question to be tried in the Proposed Proceeding.

Evidence

1. [21]

   The Plaintiff filed an affidavit in support of his application for leave, and was cross-examined. The Defendants did not make any challenge to the Plaintiff’s credit.

2. [22]

   In addition, the Plaintiff relied on affidavits from his solicitor and from officers of LCM (none of whom was required for cross-examination).

3. [23]

   SCA filed an affidavit of its Managing Director, Ms Avril Baynes, who was also not required for cross-examination. SCA did not lead any evidence from the other two members of SCA’s board, namely, Mr Glenn Davis and Mr Julian Cook. The Plaintiff contended that, by reason of those witnesses not being called, the Court should draw inferences adverse to SCA.

4. [24]

   I will address the main issues arising from the affidavit evidence (including any inferences from the lack of such evidence) when dealing with each of the three issues identified above.

5. [25]

   Objection was taken to a number of the documents tendered by each party. In particular:

   1. (1)

      the Defendants objected to the tender of the Statement of Agreed Facts and Admissions that was filed in the AUSTRAC Proceeding; and

   2. (2)

      the Plaintiff objected to the tender of certain materials relating to the decision by SCA’s board not to bring the Proposed Proceeding.

6. [26]

   The parties submitted that such material should be rejected, or alternatively should be subject to limitations on the use to be made of such material, pursuant to s 136 of the Evidence Act 1995 (NSW).

7. [27]

   In circumstances where, following a brief cross-examination of the Plaintiff, the parties were proceeding directly to closing submissions, I formed the view that the most efficient course was to defer arguments about the admissibility and use of this material to closing addresses, and to rule on those objections in these reasons for judgment. The parties indicated that they were content with this course. Accordingly, I deal with the objections to this material below, when addressing the particular issues to which those documents relate.

8. [28]

   Each of the parties put forward, on the hearing of this application, material that was confidential and commercially sensitive. For example, the Plaintiff tendered an unredacted form of the Funding Agreement and documents relating to an ATE insurance policy which LCM has entered in respect of the Proposed Proceeding; and the Defendant tendered board papers which contained confidential information regarding SCA’s business, including various challenges which the business was said to be facing. The parties sought, by consent, orders pursuant to ss 7(b) and 8(1)(a) of the Court Suppression and Non-publication Orders Act 2010 (NSW) that such material be kept confidential until further order, and that access to such material is to be restricted to the parties and their legal advisers on the ground that such order is necessary to prevent prejudice to the proper administration of justice. I am satisfied that the orders sought by the parties should be made. It would cause prejudice to the proper administration of justice if the parties, by putting this confidential and commercially sensitive material before the Court, on the basis that it is relevant to the issues arising on the application, were to lose confidentiality in the material.

9. [29]

   I have endeavoured to limit reference to this material in these reasons for judgment, except to the extent necessary to explain the decision I have reached.

Section 237 – Matters in Issue

1. [30]

   Section 237 of the Act provides that the Court “must grant” leave to bring a derivative suit if it is satisfied of the matters specified in s 237(2)(a)-(e), namely:

2. [31]

   It is well established that if all of these criteria are made out, the Court is required to grant leave and conversely, if any one is not made out, the Court should refuse leave: Huang v Wang [2016] NSWCA 164 at [57] per Bathurst CJ (McColl JA agreeing) and the cases there cited.

3. [32]

   The applicant for leave bears the onus of proving that all of the criteria in s 237(2) have been met: Gillespie v Gillespie [2025] NSWCA 24 at [28] (Gleeson, Mitchelmore and Ball JJA).

4. [33]

   It was common ground that the requirements in s 237(2)(a) and (e) are satisfied, namely, it is probable that SCA will not itself bring the Proposed Proceeding, and the Plaintiff has given the required notice of his application for derivative leave. However, SCA disputes that each of s 237(2)(b)-(d) is satisfied.

Section 237(2)(b): Applicant is acting in good faith

1. [34]

   In Swansson v RA Pratt Properties Pty Ltd [2002] NSWSC 583 at [35]-[36], Palmer J made the following observations in relation to the “good faith” requirement:

2. [35]

   It is plain from the terms of the quotation set out above that his Honour was not attempting to provide an exhaustive statement of the considerations to which the Court will have regard in determining whether “the applicant is acting in good faith”, but was instead identifying “at least two” interrelated factors which will always be considered: namely, whether the applicant has a honest belief that there is a good cause of action and reasonable prospects of success; and whether the applicant is seeking to bring the proposed action “for such a collateral purpose as would amount to an abuse of process”.

3. [36]

   In Chahwan v Euphoric Pty Ltd trading as Clay & Michel [2008] NSWCA 52 at [81], Tobias JA (with whom Beazley and Bell JJA agreed) observed that the expression “acting in good faith” need not be confined, as the appellant had suggested, to the two matters identified by Palmer J in Swansson. His Honour added:

4. [37]

   His Honour continued as follows (at [83], emphasis added):

5. [38]

   Paragraphs 6.36 and 6.37 of the Explanatory Memorandum to the Corporate Law Economic Reform Program Bill 1998 (the Explanatory Memorandum), to which Tobias JA referred in the passage quoted above, are in the following terms (emphasis added):

6. [39]

   In Gillespie, the Court of Appeal referred to the decisions in Swansson and Chahwan, and to the terms of the Explanatory Memorandum. The Court observed that it is necessary to bear in mind the following matters ([27]-[31]):

   1. (1)

      the requirement that “the applicant is acting in good faith” applies both to the application for leave and to the desire to bring the underlying action (since both involve the applicant “acting” in relation to the application for leave);

   2. (2)

      the term “good faith” is not defined in the Act, and it is not a term of art. What amounts to good faith is context and fact dependent. Nonetheless, it is generally the case that:

7. [40]

   The Court observed (at [31]) that it follows that “the question whether the applicant is acting in good faith in making the application raises the question whether the application has been made for a purpose for which the right was granted”. Importantly, the Court made the following observations in relation to this question (emphasis added):

8. [41]

   The Court added (at [32]) that whether an application is made for the purpose for which the right was granted, or some other purpose, is a matter that can be inferred from the circumstances of the case.

9. [42]

   It has been observed that it will be relatively easy for an applicant to demonstrate good faith to the Court's satisfaction where the application is made by a current shareholder of a company who has more than a token shareholding and the derivative action seeks recovery of property so that the value of the applicant's shares would be increased: Swansson at [38].

10. [43]

    The Plaintiff has been a shareholder of SCEG continuously since 17 March 2021.

11. [44]

    As at the commencement of this proceeding, the Plaintiff held 1,562 shares in SCEG which were, at that time, worth around $1,300.

12. [45]

    In his affidavit in support of the application, the Plaintiff erroneously stated that his shareholding represented approximately 0.59% of the issued capital of SCEG. In his oral evidence in chief, he acknowledged this mistake, and indicated that he should have stated that his shareholding in SCEG comprises approximately 0.59% of his own portfolio.

13. [46]

    As at 30 June 2025, SCEG had 760,205,209 shares on issue.

14. [47]

    As at 11 September 2025, following the issue of further shares pursuant to an offer announced to New Zealand’s Exchange on 21 August 2025, SCEG had a total of 1,103,055,047 shares on issue. (The Plaintiff did not participate in this share issue.)

15. [48]

    Accordingly, the Plaintiff’s holding of 1,562 shares represents around 0.00014% of SCEG’s current share capital.

16. [49]

    The Plaintiff does not depose to having had any interest in pursuing claims against the Proposed Defendants prior to having received, on 17 December 2024, an online notice regarding potential claims against directors and officers of SCA. On 18 December 2024, he completed, in response to this notice, an online form with his details. On the same day, he received an email from Mr Justin Ward, who is the Portfolio Manager of LCM with responsibility for the day-to-day carriage of this matter on behalf of LCM. Mr Ward thanked the Plaintiff for “registering [his] interest in the SkyCity Adelaide Pty Limited statutory derivative action”, and stated that LCM was “looking for a representative shareholder(s)”, who needed to be a current shareholder of SCEG. Following a telephone discussion with Mr Ward, the Plaintiff was introduced to Ms Moore of King & Wood Mallesons, who is the Plaintiff’s solicitor in this proceeding. The Plaintiff subsequently entered into the Funding Agreement.

17. [50]

    The Proposed Proceeding advances a claim for loss and damage in the amount of $70m (representing the sum of the pecuniary penalty and costs ordered against SCA in the AUSTRAC Proceeding).

18. [51]

    The Plaintiff accepted that, by reason of the terms of the Funding Agreement (and leaving aside interest), the most that SCA could receive, if successful in the Proposed Proceeding, would be 70% of $70m, or $49m. The Plaintiff also accepted that 0.00014% of $49m is around $70.00.

19. [52]

    Pursuant to the terms of the Funding Agreement, the Plaintiff has an entitlement to the following amounts:

    1. (1)

       first, an amount of [redacted] per hour (described as “shareholder consultancy fees”) for any services which he provides in respect of both this application and the Proposed Proceeding, including reviewing documents, giving instructions, preparing evidence, and attending Court to give evidence; and

    2. (2)

       secondly, [redacted] of LCM’s interest from the litigation plus any reasonable expenses.

20. [53]

    The Plaintiff is entitled to issue invoices for his shareholder consultancy fees on a monthly basis, with LCM being obliged to pay such invoices within 30 days. The Plaintiff’s entitlement to such fees does not in any way depend upon the outcome either of this application or of the Proposed Proceeding.

21. [54]

    The Plaintiff has not yet issued any such invoice for shareholder consultancy fees, but acknowledged that he has already worked “a number of hours” on the derivative leave application, and has a present entitlement to issue invoices for the services which he has provided to date.

22. [55]

    The Plaintiff further accepted that:

    1. (1)

       LCM’s interest is at least 30% of any judgment in favour of SCA in the Proposed Proceeding;

    2. (2)

       if the Proposed Proceeding succeeds, SCA may be awarded damages of up to $70m; and

    3. (3)

       30% of $70m equals $21m, and [redacted] of that amount would be [redacted].

23. [56]

    Having been taken through those calculations, the Plaintiff agreed that, if the Proposed Proceeding succeeds, he could receive, in addition to his shareholder consultancy fees, an amount of [redacted] or more (although he added that he may, obviously, receive less than that amount), plus he would recover his reasonable expenses. The Plaintiff also agreed that he was aware of these entitlements at the time that he signed the Funding Agreement.

24. [57]

    Further, the Plaintiff agreed that, even if the litigation had some other benefits to SCA besides the potential recovery of around $49m, there is “no way” that the amount which he stood to receive as a shareholder of SCEG would correspond to, “or come close to”, the amount which he is already entitled to charge for shareholder consultancy fees to date.

25. [58]

    In particular, the Plaintiff conceded that:

    1. (1)

       he is already entitled to multiples of [redacted] for the work he has done to date, even if the litigation fails; and

    2. (2)

       he stands “to gain nothing of that kind as a shareholder in SCEG, even if the litigation succeeds”.

26. [59]

    This led, critically, to the following evidence:

27. [60]

    In his affidavit, the Plaintiff deposed that he is “of the view that SCA has claims against the Proposed Defendants as set out in the draft Statement of Claim” in the Proposed Proceeding.

28. [61]

    In cross-examination, the Plaintiff agreed that the “sole basis” on which he has formed the view that SCA has claims against the Proposed Defendants is the following material:

    1. (1)

       the Originating Application and Statement of Agreed Facts and Admissions filed in the AUSTRAC Proceeding;

    2. (2)

       the orders made in the AUSTRAC Proceeding and Lee J’s reasons for those orders; and

    3. (3)

       the Proposed SOC.

29. [62]

    As noted above, the Proposed SOC alleges that the Proposed Defendants breached their duties to SCA by failing to make inquiries to determine whether SCA was complying with its obligations pursuant to the AML/CTF Act. The Plaintiff conceded, in cross-examination, that he does not know what inquiries were made by the Proposed Defendants, or what responses were received, including whether the Proposed Defendants made such inquiries as were necessary, but received inaccurate or misleading responses to those inquiries.

30. [63]

    After conceding those matters, the Plaintiff gave the following evidence:

31. [64]

    The Plaintiff’s evidence as to the following matters was unchallenged:

    1. (1)

       he is of the view that SCA has claims against the Proposed Defendants, as set out in the Proposed SOC; and

    2. (2)

       he wants to repair the damage which was caused by the Proposed Defendants and believes the burden of that damage should not be borne by the shareholders of SCEG, but should be borne by the Proposed Defendants.

32. [65]

    I accept the Plaintiff’s evidence as to those matters.

33. [66]

    It does not follow, however, that the “good faith” requirement in s 237(2)(a) of the Act is satisfied in the circumstances of this case.

34. [67]

    First, while I accept that the Plaintiff honestly believes that SCA has the claims against the Proposed Defendants which are set out in the Proposed SOC, the Plaintiff frankly acknowledged that he does not personally have “any belief one way or the other as to whether or not they are good claims”, or “as to whether they have reasonable prospects of success” (see paragraph [63] above).

35. [68]

    Senior Counsel for the Plaintiff submitted, in closing address, that the Plaintiff, who is not a lawyer, was, by these answers, acknowledging that he “personally” had not performed his own assessment of prospects, but he “obviously believed in the cause [of action] on the basis of what he had been told by [his] lawyers”.

36. [69]

    I do not accept this submission. There is no reference in the Plaintiff’s affidavit to having received any advice in relation to the basis for, or prospects of, the claims in the Proposed SOC, let alone to having relied on any such advice. Further, the Plaintiff confirmed in cross-examination that he has formed his views “solely” on the basis of the documents identified in paragraph [61] above (which did not include any such advice).

37. [70]

    Senior Counsel for the Plaintiff further submitted that, having regard to the Statement of Agreed Facts and Admissions (upon which the Plaintiff relied in forming the view that there was a cause of action), “it would be extraordinary if there wasn’t a reasonable cause of action”, because “the agreed facts showed a complete and almost egregious failure of senior management and the board to take steps to comply with their relevant obligations”.

38. [71]

    In order to satisfy the requirement in s 237(2)(a), it must be established that the applicant is acting is good faith, both in bringing the application for leave and in seeking to pursue the proposed action. In assessing whether this requirement is satisfied, one matter which the Court will always consider is whether the applicant “honestly believes that a good cause of action exists and has a reasonable prospect of success” (Swansson at [36]). Even if it were assumed that the Plaintiff’s solicitor (or LCM) has, on the basis of the contents of the Statement of Agreed Facts and Admissions, an honest belief that there is a good cause of action with reasonable prospects, this could not establish that the Plaintiff himself has such a belief, particularly where the Plaintiff has conceded that he does not personally hold any such belief.

39. [72]

    Secondly, the Plaintiff gave evidence that he has brought this application for two purposes – namely, for the purpose of vindicating his rights as a shareholder of SCEG and for the purpose of profiting from his private arrangements with LCM – and that the “principal element … of [his] purpose in bringing this proceeding is to profit from [his] private arrangements with the funder” (see paragraph [59] above).

40. [73]

    Senior Counsel for the Plaintiff submitted that:

    1. (1)

       in Swansson at [36], Palmer J observed that the Court will, in assessing the good faith requirement, consider “whether the applicant is seeking to bring the derivative suit for such a collateral purpose as would amount to an abuse of process”;

    2. (2)

       this passage from Palmer J’s judgment had been quoted, with approval, by the Court of Appeal in each of Chahwan and Gillespie;

    3. (3)

       in order to establish that an action is brought “for such a collateral purpose as would amount to an abuse of process”, it is necessary to establish that “a litigant is pursuing an ulterior purpose unrelated to the subject matter of the litigation and that, but for his ulterior purpose, he would not have commenced proceedings at all” (quoting Goldsmith v Sperrings Ltd [1977] 1 WLR 478 at 503);

    4. (4)

       there is no overarching rule of public policy barring the prosecution of an action where any agreement has been made to provide money to a party to institute or prosecute the litigation in return for a share of the proceeds of the litigation: Campbell's Cash and Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386; [2006] HCA 41 at [89]-[91] per Gummow, Hayne and Crennan JJ; and

    5. (5)

       in the present case, the Plaintiff is bringing the proceeding for a proper purpose (namely, to recoup damages for SCA), and it follows that there is no abuse of process, and the “mere fact that he is receiving a collateral benefit which potentially is of some size, but compared to the benefit to the company, modest, is .. neither here nor there”.

41. [74]

    The position was summarised as follows:

42. [75]

    The Defendants did not advance any allegation of abuse of process.

43. [76]

    However, as Senior Counsel for the Defendants submitted, the authorities do not say that, in order for the Court to find that an applicant is not acting in good faith, it is necessary to establish an abuse of process.

44. [77]

    Each of the Court of Appeal decisions upon which the Plaintiff relied – namely, Chahwan and Gillespie – repeated Palmer J’s observation in Swansson (at [36]) that, in considering good faith, the Court will always consider “whether the applicant is seeking to bring the derivative suit for such a collateral purpose as would amount to an abuse of process”. However, in Chahwan, Tobias JA expressly stated that the assessment of “good faith” is not confined to the considerations identified in Swansson at [36] and, in particular, “extends beyond conduct that would constitute an abuse of process” (at [81]; see paragraph [36] above). Those observations were quoted, with approval, by the Court of Appeal in Gillespie (at [20]).

45. [78]

    Specifically, the Court of Appeal held, in Chahwan at [83], that if an applicant “is in reality seeking to further his or her own personal interests other than as a current or former shareholder of the company, rather than the interests of the company as a whole”, then the requirement of good faith will not be satisfied, even if “the conduct in question would not support a finding of abuse of process”. Similarly, in Gillespie at [31], the Court of Appeal held that if the application is brought for some purpose other than to seek to vindicate a right of the company which those in control of the company are not prepared to pursue, and such other purpose is “the sole or principal purpose of the application”, then the applicant will not be acting in good faith.

46. [79]

    In the present case, the Plaintiff frankly acknowledged that he has brought this application, and seeks to bring the Proposed Proceeding, for a purpose other than to seek to vindicate SCA’s claims against the Proposed Defendants – namely, for the purpose of profiting from his private arrangements with LCM – and that the latter is “the principal element” of his purpose in bringing the application. His evidence was clear on this point, and I accept it.

47. [80]

    It is unsurprising that the Plaintiff acknowledged this to be the case, given that, as he conceded, the benefit that he stands to receive in respect of his 0.00014% shareholding in SCEG, in the event that the claim in the Proposed Proceeding is successful, is around $70 (which, as the Defendants submitted, is a “trifling” amount), whereas – irrespective of the outcome of either this application or the Proposed Proceeding – the Plaintiff has already, simply by bringing this application, earned the right to be paid a vastly greater sum under the terms of the Funding Agreement, and has the prospect of being paid, in the event that the Proposed Proceeding is successful, an amount which may exceed [redacted].

48. [81]

    The Plaintiff relied on Huang at [59], as authority for the proposition that the fact that an applicant may derive some collateral benefit from the bringing of the proceeding is “irrelevant”. However, in the cited paragraph, Bathurst CJ was not addressing the “good faith” requirement, but the “best interests” requirement. His Honour observed that the best interests of the company will, at least where the company is solvent, predominantly reflect the interests of its shareholders and, in that context, observed that the fact that two of those shareholders would derive some collateral benefit was irrelevant. His Honour did not suggest that the existence of such a collateral benefit was irrelevant to the determination of the “good faith” requirement, particularly where it is established that the applicant’s sole or principal purpose is, in reality, to further his own personal interests other than as a shareholder, rather than to vindicate a right of the company.

49. [82]

    I acknowledge that the Proposed Proceeding seeks to recover damages of $70m, and that the courts have frequently, in determining s 237 applications, repeated Palmer J’s observation in Swansson at [38] that it will be relatively easy for an applicant to demonstrate good faith where the application is made by a current shareholder of a company who has “more than a token shareholding” and the derivative action seeks recovery of property so that the value of the applicant's shares would be increased. Recent examples include In the matter of Wil Brown Management Pty Ltd and Wil Brown Pty Ltd — Brownlee Enterprises Pty Ltd v Wilmen Pty Ltd [2022] NSWSC 207 at [69] (Williams J); Ao Qing Investment Pty Ltd v 52 Lord St East Perth Pty Ltd [2022] FCA 743 at [53] (Jackson J); and Singh v Aulakh [2025] FCA 1207 at [58] (Bennett J)

50. [83]

    Senior Counsel for the Plaintiff submitted that his client has “a small shareholding but it is not merely a token shareholding”.

51. [84]

    There is not, in the cases cited above (nor in any other case to which I was referred in submissions), any discussion of what would, in the context of a s 237 application, amount to a “token” shareholding. Of course, for most people, a shareholding worth around $1,300 would be far from a “token” matter. However, a shareholding worth that amount might well be regarded as a “token shareholding” by a person who, like the Plaintiff, holds an investment portfolio worth in excess of $220,000 (noting that his SCEG shareholding represents 0.59% of his entire portfolio). Further, a shareholding of 1,562 shares might objectively be regarded as “a token shareholding” in circumstances where the company in question has in excess of 1.1 billion shares on issue.

52. [85]

    It is unnecessary, and undesirable, to seek to define the limits of a “token” shareholding, given that s 237 does not contain any such term (and I have not determined this application based on any assessment of whether or not the Plaintiff has a “token” shareholding). Palmer J’s observations in Swansson at [38] did not amount to the statement of any test to be applied, but rather were offered as illustrations of circumstances in which the “good faith” requirement may be readily satisfied. In particular, his Honour’s observations directed attention to the economic interest of the applicant in the company, the extent to which the value of the applicant’s shares would be increased in the event that the proposed action is successful, and the purpose for which the applicant brings the derivative leave application and seeks to bring the proposed action. I have had regard to those matters.

53. [86]

    For the reasons given above, I find that the Plaintiff’s principal purpose in bringing this application for leave, and in seeking to bring the Proposed Proceeding, is to profit from his entitlements under the Funding Agreement. The Plaintiff is thus, by this application, principally seeking to further his own personal interests other than as a shareholder, rather than the interests of SCA as a whole. Further, I find that, as the Plaintiff conceded, he does not have a belief, one way or the other, as to whether a good cause of action exists, which has reasonable prospects of success.

54. [87]

    It follows that the requirement of good faith is not established.

55. [88]

    It also follows that the Plaintiff’s application for leave to bring the Proposed Proceeding must be rejected, irrespective of whether the remaining elements of s 237(2) are satisfied: Huang at [57].

56. [89]

    Nonetheless, given that there was extensive evidence filed, and submissions made in respect of those other elements, and in case I have erred in reaching my findings in respect of the “good faith” requirement, I have considered those other elements below.

Section 237(2)(c): Best interests of the company

1. [90]

   The “best interests” criterion requires an applicant to establish, on the balance of probabilities, that the proposed derivative action is in fact in the best interests of the company. In Swansson at [55]-[56], Palmer J observed as follows (citations omitted, emphasis in original):

2. [91]

   The approach outlined by Palmer J in Swansson has been consistently followed: Huang at [57]. While Swansson was decided at a time when it was considered that a proceeding under s 237 is final in nature, the fact that this view was subsequently held to be incorrect does not alter the requirement that an applicant satisfy the Court, on the balance of probabilities, that the proceeding is in the best interests of the company: Huang at [58]. This is consistent with the words of s 237(2)(c) and recognises the serious nature of an order requiring a company to bring a proceeding which it is unwilling to take itself: ibid.

3. [92]

   The term “the best interests of the company” means best interests in the sense of its separate and independent welfare; and best interests will, at least where the company is solvent, predominantly reflect the interests of the shareholders in that capacity: Huang at [59].

4. [93]

   It is, generally, reasonable to expect that the pursuit of an action by or on behalf of a company against an officer for the recovery of compensation for an alleged breach of duty to the company is in the company's best interests: Hislop v Paltar Petroleum Ltd (No 3) [2017] FCA 1253 at [20] (Gleeson J) and the cases there cited.

5. [94]

   In Swansson at [24], Palmer J observed that leave must not be given lightly. One of the reasons why leave “will not be granted lightly” is that “such an action may impose a substantial burden on a corporation”: MG Corrosion Consultants Pty Ltd v Vinciguerra [2011] FCAFC 31 at [67] (North, McKerracher and Jagot JJ). In determining if it is in the best interests of the company that leave be granted, it is “necessary to consider the resources the company will be required to devote to the action and the resources it has available, together with the effect that the action may have on other aspects of its business”: In the matter of Gladstone Pacific Nickel Limited [2011] NSWSC 1235 at [57] per Ball J (citing the observations of Brereton J in Maher v Honeysett & Maher Electrical Contractors Pty Ltd [2005] NSWSC 859 at [44]).

6. [95]

   The Explanatory Memorandum stated (at [6.38]) that the “best interests” criterion recognises that “a company might have sound business reasons for not pursuing a cause of action open to it and that its management might legitimately have decided that the best interests of the company would not be served by taking action”.

7. [96]

   A relevant factor is whether the substance of the redress which the applicant seeks to achieve is available by means that do not require the company to be brought into litigation against its will: Swansson at [59].

8. [97]

   Other relevant matters to consider include the likely recovery if the action is successful, the likely costs, and the nature of any indemnity the applicant has offered to the company if the action is brought and the likelihood that the company will recover under that indemnity: Gladstone Pacific Nickel at [57].

9. [98]

   The case law emphasises the importance of an adequate indemnity in respect of adverse costs (and any amount that the company may be ordered to pay by way of security for costs) as a means of addressing the risk of prejudice to the company from the commencement of the proceedings, should they ultimately prove to be unsuccessful, and the risk of exposure to costs and expenses of litigation, including costs orders: In the matter of Fishinthenet Investments Pty Ltd and Coastal Waters Seafood Pty Ltd [2014] NSWSC 260 at [31] (Black J).

10. [99]

    Section 237(3) of the Act provides as follows:

11. [100]

    The Explanatory Memorandum stated as follows in respect of this rebuttable presumption (at [6.41]):

12. [101]

    The rebuttable presumption in s 237(3) reflects a general precept that the management of the affairs of a company in the best interests of the company as a whole is a matter for the directors, and it is for the directors to make the business judgments required for the conduct of the activities of the company: Atalanta Investments Pty Ltd v Kalgoorlie Projects Pty Ltd [2025] FCA 607 at [16] (Colvin J).

13. [102]

    Section 237(3) of the Act, in establishing a rebuttable presumption that granting leave is not in a company’s best interests in specified circumstances, including where a company (implicitly by its board) has decided not to bring proceedings, overlaps with the business judgment rule: In the matter of Wonga Pastoral Development Co Pty Ltd [2023] NSWSC 133 at [49] (Black J).

14. [103]

    In Pacific Current Group Limited v Fitzpatrick [2024] FCA 1480 at [283]-[285], Beach J made the following comments about the elements of the business judgment rule (which are, by reason of the similarity between the terms of ss 180(2) and 237(3), also applicable to the corresponding elements of the rebuttable presumption):

    1. (1)

       with respect to the requirement that all of the directors inform themselves about the subject matter of the decision to the extent they reasonably believe to be appropriate, the reasonableness of any such belief on a director’s part should be assessed by reference to:

    2. (2)

       with respect to the requirement that all of the directors rationally believed that the decision was in the best interests of the company, a director’s belief will be rational if it is based on reason or reasoning, whether or not the reasoning was convincing and therefore reasonable in an objective sense, but it would not be a rational belief if there was no arguable reasoning process to support it.

15. [104]

    The onus of establishing each of the elements of the business judgment rule is on the party relying on that rule: see Australian Securities and Investments Commission v Rich [2009] NSWSC 1229 at [7258]-[7270] (Austin J); Australian Securities and Investments Commission v Mitchell (No 2) [2020] FCA 1098 at [1435] (Beach J); Pacific Current Group at [274]. The Plaintiff submitted, and the Defendants did not dispute, that the onus of establishing the elements of the rebuttable presumption in s 237(3)(a)-(c) is similarly on the party seeking to rely on that presumption. I accept that is so.

16. [105]

    The Defendants read an affidavit of the Managing Director of SCA, Ms Avril Baynes. The material exhibited to Ms Baynes’ affidavit included the following documents:

    1. (1)

       an undated draft memorandum headed “Board Paper – SkyCity Adelaide Derivative Action”, which was addressed from Ms Baynes to the board of SCA (Draft Board Paper);

    2. (2)

       a document headed “Derivative Action against Former Directors and Officers”, which appears to have been prepared by Mr David Fox, who is a member of SCA management, and which attached the Draft Memorandum (Cover Paper);

    3. (3)

       the minutes of a meeting of the board of SCA on 29 August 2025 (the August SCA Minutes);

    4. (4)

       the minutes of a meeting of the board of SCEG on 29 August 2025 (August SCEG Minutes);

    5. (5)

       the final version of the memorandum headed “Board Paper – SkyCity Adelaide Proposed Derivative Action” which was also addressed from Ms Baynes to the board of SCA and was provided to the members of the board on 5 September 2025 (the Final Board Paper); and

    6. (6)

       a Circulating Resolution which was signed by each member of the SCA board (namely, by Ms Baynes on 6 September 2025, Mr Cook on 7 September 2025 and Mr Davis on 8 September 2025), and which attached the Final Board Paper (the Circulating Resolution).

17. [106]

    The Plaintiff objected to the tender of each of these documents, on the basis that they contained inadmissible hearsay (Evidence Act 1995 (NSW), s 59) and inadmissible opinion evidence (Evidence Act, s 76).

18. [107]

    The Defendants contended that each of the documents was relevant for a non-hearsay purpose (Evidence Act, s 60); and that the opinion rule did not apply because the documents were relevant for a purpose other than proof of the existence of a fact about the existence of which the opinion was expressed (Evidence Act, s 77).

19. [108]

    For the reasons set out below, I accept the Defendants’ submission.

20. [109]

    Ms Baynes deposed that:

    1. (1)

       she caused the Draft Board Paper to be prepared by SCEG’s in-house lawyers;

    2. (2)

       for the purposes of preparing the Draft Board Paper, SCEG’s in-house lawyers and Gilbert + Tobin conducted various meetings with members of SCA management, including two meetings which Ms Baynes attended;

    3. (3)

       the Cover Paper and the Draft Board Paper were provided to the boards of SCA and SCEG in August 2025;

    4. (4)

       on 29 August 2025, Ms Baynes attended a meeting of the boards of SCA and SCEG (as this was a joint meeting, the August SCA Minutes and August SCEG Minutes are relevantly identical);

    5. (5)

       at this meeting, the Draft Board Paper was discussed, and Ms Baynes expressed the view that, for the reasons outlined in the Draft Board Paper, the potential benefits to SCA of the Proposed Proceeding were, on balance, outweighed by the potential risks and commercial harm to SCA that could flow from the Proposed Proceeding;

    6. (6)

       on 5 September 2025, the directors of SCA (including Ms Baynes) were provided with a link to the Final Board Paper and the Circulating Resolution, and were asked to provide their response to the Circulating Resolution by 7 September 2025;

    7. (7)

       she reviewed the Final Board Paper before it was provided to the board of SCA;

    8. (8)

       on 6 September 2025, she again reviewed the Final Board Paper before providing her response to the Circulating Resolution, confirming that she believed that the Proposed Proceeding was not in the best interests of SCA; and

    9. (9)

       her belief that the Proposed Proceeding is not in the best interests of SCA is based on her own assessment of the consequences of the Proposed Proceeding for SCA, as set out in the Final Board Paper.

21. [110]

    In addition, Ms Baynes gave the following evidence:

22. [111]

    The Draft Board Paper, Cover Paper, August SCA Minutes, August SCEG Minutes and Final Board Paper are relevant to proving the information that was provided to the directors of SCA before they made the decision, as recorded in the Circulating Resolution, not to bring the Proposed Proceeding, and are therefore relevant to the issue as to whether the Defendants have established the requirements for the rebuttable presumption pursuant to s 237(3) of the Act.

23. [112]

    This material is also relevant to establishing the views which Ms Baynes holds regarding the Proposed Proceeding, and the basis on which she has reached the view that it is not in the best interests of SCA to bring the Proposed Proceeding.

24. [113]

    It follows that the Draft Board Paper, Cover Paper, August SCA Minutes, August SCEG Minutes and Final Board Paper are admissible pursuant to ss 60 and 77 of the Evidence Act, despite the fact that they contain previous representations and opinions of various other persons.

25. [114]

    The issue then arises whether there should be some limitation on the use to be made of these documents pursuant to s 136 of the Evidence Act.

26. [115]

    In circumstances where Ms Baynes was not required for cross-examination, and where the parties agreed that questions regarding the admissibility of the disputed documents could be addressed in final submissions (and determined in these reasons for judgment), it would be artificial to craft, at the time of delivering judgment, limitations on the use that may be made of such evidence. Instead, I have had regard to the parties’ respective submissions concerning whether there should be any limitation on the use of these documents, including any submissions regarding the probative value of representations contained in these documents and regarding any prejudice arising from the lack of identification (or lack of availability) of the person(s) responsible for such representations, when determining the weight that should be placed on such material, and the findings that should (or should not) be made based on such material.

27. [116]

    The Defendants indicated, in opening, that there were 49 documents (described as “Part C documents”) which they tendered on a “contingent” basis, that is, those documents were tendered “only if the [Final Board Paper], to which the plaintiff objects, is not admitted into evidence without limitation”.

28. [117]

    Since I have admitted the Final Board Paper without imposing any s 136 limitation on the use of that document, the relevant “contingency” against which the Part C documents were “contingently” tendered has not arisen, and therefore it is unnecessary to consider the detailed objections to those documents.

29. [118]

    The Defendants did not suggest that the Part C documents were also tendered against the “contingency” that I admitted the Final Board Paper without any s 136 limitation, and treated the parties’ submissions regarding the use of this document as matters going to weight, with such submissions being taken into account in determining whether to make the findings for which the Defendants contended on the basis of the Final Board Paper.

30. [119]

    If the Defendants did, in fact, intend that the “contingency” against which the Part C documents were tendered extended to that situation, I would have refused leave to rely on the Part C documents, having regard to the following matters:

    1. (1)

       the Defendants were ordered to file any evidence on which they relied by 8 September 2025, with “no evidence to be relied on if not filed and served by that date without leave”;

    2. (2)

       it was readily foreseeable by well-resourced and well-advised commercial litigants such as the Defendants that there would be submissions made by the Plaintiff regarding the use that could be made of, or the weight that could be attached to, the views expressed in the Final Board Paper;

    3. (3)

       despite those matters, and despite the Defendants’ solicitors having been (according to Ms Baynes) closely involved in the preparation of the Final Board Paper, the Defendants did not file any evidence (other than that of Ms Baynes) seeking to establish any of the matters stated in the Final Board Paper;

    4. (4)

       the Defendants were notified of the Plaintiff’s objections to their evidence on 24 September 2025;

    5. (5)

       the Defendants did not notify an intention to tender the 49 Part C documents on the “contingent” basis described above, until after business hours on 29 October 2025 (being two days after the Court Book was finalised, and four business days before the hearing);

    6. (6)

       there was no explanation by the Defendants for this delay;

    7. (7)

       only 7 of the 49 Part C documents had been provided to the Plaintiff prior to 29 October 2025, with the other 42 documents running to some 600 pages in length;

    8. (8)

       the Defendants did not address any of the “Part C” material in their written submissions filed on 29 October 2025; and

    9. (9)

       the Defendants did not provide to the Plaintiff any submissions regarding the significance of the “Part C” documents, or the findings that should be made or inferences that should be drawn on the basis of those documents, until after the Plaintiff had completed closing oral submissions in reply, when the Defendant handed up an “aide memoire” addressing the Part C documents;

31. [120]

    Given the late stage at which the “aide memoire” was produced by the Defendants, I granted leave to the Plaintiff to provide, by 19 November 2025, supplementary written submissions regarding any objection to the tender of the Part C documents and regarding the contents of the aide memoire.

32. [121]

    The Plaintiff submitted, and I accept, that he would be prejudiced if the Defendants were given leave, at this stage of the proceeding, to rely on the Part C documents. In particular, I accept the Plaintiff’s submission that he has been denied, by the late notice of the Part C documents and the late notice of the Defendants’ submissions regarding the factual matters said to be established by those documents, the opportunity to take steps such as:

    1. (1)

       investigating those matters by notices to produce, or

    2. (2)

       considering whether to call expert evidence in relation to those matters.

33. [122]

    In short, it would be inconsistent with the just, quick and cheap resolution of the real issues in the proceeding, and cause prejudice to the Plaintiff, to permit the Defendants to tender, well after the deadline for the filing of evidence (and in circumstances where the delay was wholly unexplained), a large number of documents against the contingency that the Court determined, in light of the Plaintiffs’ submissions, not to afford weight to the evidence that was filed by the Defendants in accordance with the Court’s orders. That is particularly so, in circumstances where the factual propositions said to be established by the additional material were identified by the Defendants only after the Plaintiff had concluded its submissions regarding the Defendants’ evidence.

34. [123]

    Accordingly, I have not admitted the Part C documents into evidence and have not had regard to the submissions in the “aide memoire” regarding the factual matters said to be established by those documents. I have instead had regard to the Final Board Paper (and Ms Baynes’ evidence about that document), and to the parties’ respective submissions on the findings that the Court should, or not make, on the basis of that material.

35. [124]

    It also follows that I have not made any orders under the Court Suppression and Non-publication Orders Act in respect of the Part C documents. (The Defendants noted that such orders were only proposed in the event that the Court granted leave to the Defendants to tender those documents.)

36. [125]

    A rebuttable presumption that granting leave is not in the best interests of SCA arises if each of s 237(3)(a)-(c) of the Act is established (see paragraph [99] above).

37. [126]

    There is no dispute that each of s 237(3)(a) and (b) is established. In particular:

    1. (1)

       the Proposed Proceeding is a proceeding by SCA against a third party within the meaning of s 237(3)(a)(i) (being a proceeding against former directors and officers of SCA); and

    2. (2)

       SCA has decided not to bring the Proposed Proceeding: s 237(3)(b)(i).

38. [127]

    The critical issue is whether the Defendants have established that s 237(3)(c) is established. This paragraph requires that, for all of the directors who participated in the Circulating Resolution (namely, Ms Baynes, Mr Cook and Mr Davis), each of the requirements of subparagraphs (i)-(iv) is satisfied.

39. [128]

    The Plaintiff did not dispute that each of those subparagraphs was established in respect of Ms Baynes. This is unsurprising, given that the Plaintiff did not challenge any aspect of her affidavit evidence that was directed to dealing with these requirements. In particular, Ms Baynes identified the information to which she had regard in reaching the decision that it was not in the best interests of SCA to bring the Proposed Proceeding, and the basis on which she reached the decision.

40. [129]

    However, the Plaintiff did dispute that any of the requirements of s 237(3)(c) had been established in respect of the other two directors, Mr Cook and Mr Davis.

41. [130]

    The Plaintiff suggested, in oral address, that each of Mr Cook and Mr Davis may have a material personal interest in the decision not to bring the Proposed Proceeding, since each of them was a director of SCA for at least part of the “Relevant Period” during which there was non-compliance with the AML/CTF Act (namely, from 7 December 2016 to 14 December 2022). In particular, Mr Davis was appointed as a director of SCA on 8 September 2022 and Mr Cook on 11 October 2022 (with Mr Cook, in addition, being a director of SCEG from 8 June 2021 onwards).

42. [131]

    The Plaintiff submitted that, in those circumstances, there was “a prospect that either of them could be the subject of allegations supporting an apportionment defence or potentially a cross-claim” by the Proposed Defendants. Further, the Plaintiff submitted that each of Mr Cook and Mr Davis:

43. [132]

    The Plaintiff noted that there was no evidence that SCA had obtained any “advice as to whether those directors might come to be embarrassed in potential scenarios in this litigation”, and there was no indication in the Defendants’ documentation that any consideration had been given to whether Mr Cook and Mr Davis had a material personal interest in the decision concerning the Proposed Proceeding. The Plaintiff submitted that, in the absence of evidence from Mr Cook and Mr Davis, the Court should draw an inference, pursuant to the principles in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8, that neither of them could have assisted SCA in relation to that issue; and that, in the absence of evidence of Ms Baynes regarding this matter, there was an inference available as regards her, pursuant to the principles in Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389, that “she could have said nothing relevant to that topic which would have assisted the company”.

44. [133]

    I do not consider that the material before the Court is sufficient to support any finding that either Mr Cook or Mr Davis does, in fact, have a material personal interest in the decision whether or not to bring the Proposed Proceeding. It would be relevant to any such determination to have regard to the prospects of any claim being advanced against either of them, given the limited period between their appointment and the end of the Relevant Period, which would also require some assessment of their responsibilities during that period. The Court was not directed to any evidence regarding those matters or provided with any submissions regarding those matters.

45. [134]

    Nor would I draw an inference, from the absence of evidence from Mr Cook and Mr Davis, that either of them does, in fact, have a material personal interest in the decision. That is particularly so in circumstances where the Plaintiff did not squarely raise any such allegation regarding Mr Cook or Mr Davis in any material filed before the hearing (including the Plaintiff’s written submissions).

46. [135]

    I do, however, accept the Plaintiff’s contention that the Court is unable to be satisfied, in the absence of evidence from Mr Cook and Mr Davis, that the requirements of each of subparagraphs 237(3)(c)(i)-(iv) have been established.

47. [136]

    In contending that those matters were established, the Defendants relied on the material provided to Mr Cook and Mr Davis (including the Draft Board Paper and the Final Board Paper), and the terms of the Circulating Resolution, which were as follows (emphasis added):

48. [137]

    By signing the Circulating Resolution, Mr Cook and Mr Davis confirmed each of the bullet points which is italicised above. Those bullet points closely mirror the terms of s 237(3)(c)(i)-(iv) of the Act.

49. [138]

    The fact that this confirmation was given by each of them does not establish that the requirements of s 237(3)(c)(i)-(iv) have in fact been met.

50. [139]

    Senior Counsel for the Defendants submitted that the fact that these confirmations were given “is some evidence that [Mr Cook and Mr Davis] turned their minds to that matter and believed they were acting in that fashion”, adding: “I don’t suggest that it goes further than that”.

51. [140]

    Even if the Court were to draw such an inference, the existence of such a belief would be of limited significance in circumstances where there was no evidence from Mr Cook or Mr Davis regarding the basis on which any such belief was formed. For example, so far as concerns the absence of a material personal interest, it is unknown whether each of Mr Cook and Mr Davis believed that he had no personal interest in the Proposed Proceeding (and, if so, on what basis), or whether either of them formed the view that he did, in fact, have a personal interest in the proceeding, but believed that interest not to be a “material” one (and, if so, on what basis). In those circumstances, the mere existence of any such belief would not take matters very far.

52. [141]

    In any case, a subjective belief on the part of a director that he or she was acting in good faith, or did not have a material personal interest in the decision, does not establish that the requirements of s 237(c)(i) and (ii) are satisfied. These are matters that must be objectively determined.

53. [142]

    Turning to s 237(3)(c)(iii) and (iv), each of those paragraphs has both a subjective and an objective element.

    1. (1)

       paragraph (c)(iii) requires that the directors have informed themselves about the subject matter of the decision to the extent they “believed” appropriate, and that such belief be “reasonable”; and

    2. (2)

       paragraph (c)(iv) requires that the directors “believed” that the decision was in the best interests of the company, and that such a belief be “a rational one” in the sense described in the final paragraph of s 237(3).

54. [143]

    In order to satisfy those requirements, it is necessary for there to be not only evidence that the directors formed the requisite beliefs, but also evidence of the basis for those beliefs, in order to determine whether such beliefs were, respectively, reasonable and rational. The mere assertion of a belief, phrased in terms of s 237(c)(iii)-(iv), does not allow such a determination.

55. [144]

    The Defendants submitted that the Court would be satisfied that Mr Cook and Mr Davis:

    1. (1)

       had informed themselves about the subject matter of the decision to the extent they reasonably believed appropriate, having regard to the Draft Board Paper, the Final Board Paper and August SCA Minutes (being the information provided to those directors for the purposes of reaching their decision); and

    2. (2)

       rationally believed that the decision was in the best interests of SCA, given that the Circulating Resolution records that this belief was reached “having regard to” the Draft Board Paper, the Final Board Paper and the discussions recorded in the August SCA Minutes.

56. [145]

    I do not accept this submission. The fact that information was provided to Mr Cook and Mr Davis does not establish that they “informed themselves” about the decision not to pursue the Proposed Proceeding “to the extent they reasonably believed to be appropriate”, since there is no evidence from Mr Cook or Mr Davis regarding the extent to which they read these materials, what views they formed on the basis of these materials, whether they turned their mind to question whether any further enquiries should be made, or why they believed that the extent to which they had informed themselves about the decision was appropriate (and therefore no basis to test the reasonableness of any such belief).

57. [146]

    The assertion in the Circulating Resolution that each of Mr Cook and Mr Davis “read both the Draft Board Paper and the Final Board Paper”, and “had regard to” those documents, is of little weight. There are various ways in which a director might “read” or “have regard to” a board paper, including reading only the executive summary, skimming its contents, focussing on select parts, or studying its entire contents. The Defendants submitted that the Court should infer that Mr Cook and Mr Davis read those documents “thoroughly”. I do not draw any such inference in circumstances where neither of them gave evidence, and there was therefore no opportunity to test, in cross-examination, the extent to which they had regard to those documents, or what information in those documents they regarded as material or relevant to their decision, or what views they formed on the basis of any such information prior to signing the Circulating Resolution. Accordingly, the requirements of s 237(c)(iii) are not satisfied.

58. [147]

    Similarly, the Defendants submitted that the matters in the Final Board Paper “provide a basis on which a reasonable person could conclude that the decision was in the best interests of SCA, even if the decision is one about which reasonable minds might differ”, and therefore the Court could “be comfortably be satisfied that the decision of the directors in the Circulating Resolution was one they rationally believed was in the best interests of SCA”. However, the issue is not whether a reasonable person could, on the basis of the information available to the board, rationally believe that the decision was in the best interests of the company. The issue is whether Mr Cook and Mr Davis in fact believed that the decision was in the best interests of SCA, and whether the belief of each of them was a rational belief.

59. [148]

    In order to determine this issue, it is necessary to identify the basis on which each of Mr Cook and Mr Davis formed their belief, or their reasoning process, in order to identify whether the belief, formed on that basis, was one which no reasonable person in their position would hold. In the absence of any evidence from either of them as to the basis for any such belief, including the information which each regarded as material to his decision and his reasoning process, there is not a sufficient basis to determine that the requirements of s 237(c)(iv) are satisfied.

60. [149]

    Given that the evidence upon which the Defendants rely does not establish the requirements of each of s 237(c)(iii) and (iv) of the Act so far as Mr Cook and Mr Davis are concerned, no rebuttable presumption arises that granting leave is not in the best interests of SCA.

61. [150]

    The Plaintiff must establish that the grant of leave to bring the Proposed Proceeding is, on the balance of probabilities, in the best interests of SCA.

62. [151]

    In respect of this issue, the Plaintiff relied primarily on the following matters:

    1. (1)

       the best interests of a solvent company will predominantly reflect the interests of shareholders, and SCEG (being SCA’s sole shareholder) and its shareholders have “a strong interest in [SCA] recovering compensation for the loss of $70 million paid by way of penalty and costs due to admitted contraventions of federal law while the proposed defendants were directors and officers”;

    2. (2)

       the Proposed Defendants are insured; and

    3. (3)

       an indemnity has been offered to SCA in respect of the costs to which it would be exposed by the conduct of the Proposed Proceeding and in the event of its failure.

63. [152]

    The Defendants referred to several matters which were said to raise significant doubt about the prospects of SCA recovering any substantial sum from the Proposed Proceeding for the benefit of its sole shareholder, SCEG (and thereby for the benefit of SCEG’s shareholders, including the Plaintiff).

64. [153]

    First, the Defendants submitted that the Plaintiff had not established that his claims in the Proposed Proceeding gave rise to a serious question to be tried. I address this question separately below.

65. [154]

    Secondly, the Defendants submitted that there was “a substantial risk, if not likelihood” that the bringing of the Proposed Proceeding would result in cross-claims for contribution being brought against SCEG and that, to the extent that such a cross-claim were to succeed, the burden of the loss and damage would fall upon SCA’s sole shareholder, SCEG, and therefore on SCEG’s shareholders (which is the outcome that the Plaintiff seeks to avoid by seeking leave to bring the derivative claim).

66. [155]

    The gist of this potential cross-claim was said to be that, in light of the matters pleaded at paragraphs [90]-[102] of the Proposed SOC, SCEG was a de facto director, or shadow director of SCA; that it therefore owed duties to SCA pursuant to ss 180 and 181 of the Act; and that it “breached its duties in much the same way as the named defendants are said to have breached theirs”. In this regard, the Defendants referred to Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd [2010] NSWSC 233 at [231], where White J observed that it has been held more than once, and assumed on many occasions, that a company can be a shadow director.

67. [156]

    In support of their contention that SCEG might be exposed to such a cross-claim, the Defendants referred to the allegations in paragraphs [90]-[102] of the Proposed SOC, which include the following matters:

    1. (1)

       SCEG and SCA were parties to agreements dated, respectively, 2013 and 2018, pursuant to which SCEG provided SCA with management services, including assisting SCA with its regulatory compliance and corporate governance requirements;

    2. (2)

       throughout the Relevant Period, AML/CTF compliance was included among the main responsibilities of one of the committees established by the SCEG board, which is described in the Proposed SOC as the “Responsible Directors Committee”;

    3. (3)

       the duties and responsibilities of the Responsible Directors Committee included monitoring compliance with AML/CTF legislation in Australia and New Zealand;

    4. (4)

       each version of SCA’s AML/CTF program was authored and approved by the Group’s General Manager Regulatory Affairs and AML (who was a SCEG officer); and

    5. (5)

       Part A of each version of SCA’s AML/CTF program was approved by the Responsible Directors Committee and/or the SCEG board.

68. [157]

    It appears, from the balance of the Proposed SOC, that seven of the eight Proposed Defendants are persons who held various roles in SCEG, and who are alleged to have had responsibility for aspects of SCA’s AML/CTF compliance.

    1. (1)

       The first defendant, Ms Wong, is pleaded to have been:

    2. (2)

       The second defendant, Mr Carter, is pleaded to have been:

    3. (3)

       The third defendant, Mr Treacy, is pleaded to have been:

    4. (4)

       The fourth defendant, Ms Owen, is pleaded to have been:

    5. (5)

       The sixth defendant, Mr O’Connell, is alleged to have been:

    6. (6)

       The seventh defendant, Mr Stephens, is alleged to have been:

    7. (7)

       The eighth defendant, Mr Ahearne, is alleged to have been:

69. [158]

    The Plaintiffs referred to the allegations in the Proposed SOC regarding the roles and responsibilities of these defendants, and submitted that there is “no reason to suppose” that any of them would be able to successfully assert “that SCEG had equal culpability or reliability of the same nature and to the same extent as they do, applying the usual test of equitable contribution”. In this regard, the Plaintiff referred to Burke v LFOT Pty Ltd (2002) 209 CLR 282; [2002] HCA 17 at [16].

70. [159]

    Senior Counsel for the Defendants accepted that the Proposed Defendants would not have a basis for a claim for contribution against SCEG insofar as such a claim relied simply on the conduct of the Proposed Defendants themselves.

71. [160]

    The position may be different if there were some other officers of SCEG, who are not Proposed Defendants, and who were responsible for any failures in SCA’s AML/CTF Program. However, SCA and SCEG did not lead evidence that there was any such person, despite this being a matter peculiarly within their knowledge. In the absence of such evidence, I consider that the risk of such a cross-claim is theoretical.

72. [161]

    Thirdly, the Defendants submitted that there is “serious doubt” about whether the Proposed Proceeding, even if successful, would result in a substantial recovery for SCA.

73. [162]

    The Proposed Defendants are insured under a primary “Directors & Officers Liability” policy and series of excess policies for the period from 14 October 2020 to 31 October 2021, with an aggregate level of cover of [redacted] (being approximately [redacted] as at 14 October 2025) plus a further [redacted] for defence costs. By letter of 26 September 2025, the Defendants’ solicitors confirmed that the 2021 policy is the policy in respect of which notifications have been made.

74. [163]

    The Defendants submitted that there is reason to doubt whether the insurer under this policy would grant indemnity to the Proposed Defendants:

75. [164]

    In support of this submission, the Defendants referred to a letter dated 7 October 2025 from Vero Liability to SCEG, which stated as follows:

76. [165]

    This letter does not identify any particular alleged non-disclosure (despite the admissions in the AUSTRAC Proceeding having been publicly available for around 18 months). Nor does the letter identify any basis for any reduction in liability under s 28 of the Insurance Contracts Act 1984 (Cth), in circumstances where there is no suggestion of any fraudulent non-disclosure. The letter is, in essence, a reservation of rights.

77. [166]

    I accept that there is, in circumstances where such a reservation has been made, a risk that indemnity will not be granted. However, there is no basis to assess the chances of this risk being realised, or the merits of any grounds which may subsequently be asserted by Vero Liability for denying indemnity. In those circumstances, I do not consider that the mere existence of this risk provides a basis for concluding that there is “serious doubt” about whether the D&O Policy would cover any liability of the Proposed Defendants.

78. [167]

    Having regard to those matters, I accept that, if the Proposed Proceeding is successful, there is a prospect of a substantial financial return to SCA (and its shareholder, SCEG). I have determined this application on that basis.

79. [168]

    The Plaintiff submitted that, for a company in the “parlous financial position” of SCA, a “prospect of receiving $50 million” must be, prima facie, “in the best interests of the company”.

80. [169]

    The Defendants submitted that, even assuming that the claims in the Proposed SOC have reasonable prospects of success and that there is a reasonable prospect of a recovery from the Proposed Defendants, “there is a substantial risk that bringing the [Proposed Proceeding] will have significant, adverse, commercial consequences for SCA, which outweigh any potential upside of bringing the claims”. In this regard, the Defendants relied on Ms Baynes’ evidence, and the contents of the Final Board Paper which Ms Baynes caused to be prepared. The Defendants submitted that the Court “ought not second-guess management’s assessment of such risks”.

81. [170]

    In response, the Plaintiff described the potential consequences of the Proposed Proceeding identified by SCA as “speculative matters”. The Plaintiff submitted that no significant probative weight should be placed on the Final Board Paper, and that it would be unfairly prejudicial to the Plaintiff for the Final Board Paper to be used as evidence of the truth of the assertions made in that document, in circumstances where the Final Board Paper identifies that there were some eighteen separate “contributors” to the document (with Ms Baynes being the only one of those contributors who gave evidence), and the Final Board Paper does not disclose which persons contributed which information or opinions to the document or, in many cases, the source of such information or the basis of such opinions. (As noted above, I have treated those submissions as matters going to the weight that should be afforded to representations contained in the Final Board Paper, and the findings that should, or should not, be made on the basis of that material.)

82. [171]

    For example, the Final Board Paper contained a section headed “SCEG”, which stated that SCEG’s status as sole shareholder of SCA “means that its views in relation to significant decisions impacting [SCA] should be afforded substantial weight”. It continued as follows:

83. [172]

    The Final Board Paper then set out various matters in subparagraphs (a)-(g). I have not produced those paragraphs in this judgment, as those paragraphs were said to contain confidential information, and it is unnecessary to disclose the content of that information, given the views I have reached below. In broad terms, those subparagraphs outlined the views of “SCEG management” on the risks that would arise for SCA if the Proposed Proceeding were to be brought, and also risks for SCEG, including regulatory risks, reputational risks, operational and financing risks, and the risk (which has been addressed above) of a cross-claim being brought against SCEG by the Proposed Defendants. The Final Board Paper stated that, having regard to those matters, SCEG management were of the view that, even if the Proposed Proceeding were assumed to have “high prospects of success”, this “potential upside” would “not be outweighed by the magnitude of the potential risk the business would face as a result”.

84. [173]

    As set out in the quotation above, the matters identified by “SCEG management” were said to be “subject to Board consideration”. The Defendants relied on the August SCEG Minutes and the August SCA Minutes which stated, relevantly, that the board of SCEG “confirmed to the directors of [SCA] that they each agreed with the factors identified in paragraph 62 of the Board Paper” (this being the paragraph in the Draft Board Paper which corresponded to the paragraph discussed above regarding the views of SCEG management).

85. [174]

    The Defendants did not call any member of SCEG management or any member of the SCEG board to give evidence about these matters, including the basis on which any such person formed any view regarding the existence of the various risks, or the prospects of such risks being realised, or the potential consequences of those risks.

86. [175]

    In those circumstances, I consider that the representations attributed to “SCEG management” in the Final Board Paper referred to above (which were said to have been adopted by the SCEG board in the August SCEG minutes) have limited probative weight and, in particular, do not establish, as a matter of fact, the existence of the risks identified, or their magnitude, or that such risks outweigh the potential benefit.

87. [176]

    However, the relevant material does establish that SCEG has, by its management and board, communicated to the directors of SCA that it has the concerns described above. I accept that the fact of those communications is a relevant matter, since it is relevant, when considering the best interests of SCA, to take into account the views of its sole shareholder (SCEG), who has also provided the funding necessary to keep SCA operating.

88. [177]

    Those communications also form part of the material provided to Ms Baynes, to which she had regard in forming her views on the Proposed Proceeding, and is therefore relevant to assessing the basis for her views.

89. [178]

    As noted above, Ms Baynes gave unchallenged evidence that:

    1. (1)

       she caused the Draft Board Paper to be prepared, she participated in meetings for the purposes of its preparation, and she reviewed the Draft Board Paper;

    2. (2)

       she informed the boards of SCA and SCEG at the meeting on 29 August 2025 that she was of the view that, for the reasons outlined in the Draft Board Paper, the potential benefits to SCA of the Proposed Proceeding were, on balance, outweighed by the potential risks and commercial harm to SCA that could flow from the Proposed Proceeding;

    3. (3)

       she subsequently reviewed the Final Board Paper, and has confirmed that it accurately reflects her views on and understanding of the matters discussed in that document;

    4. (4)

       she holds those views based on her knowledge of the operations of SCA as Managing Director and her personal familiarity with various matters discussed in the Final Board Paper; and

    5. (5)

       she held, at the time that she signed the Circulating Resolution, the belief that the Proposed Proceeding was not in the best interests of SCA, based on her own assessment of the potential consequences of that Proceeding for SCA, “which assessment is as set out in the [Final] Board Paper”.

90. [179]

    The Final Board Paper sets out the following “Management Recommendation”:

91. [180]

    Having regard to Ms Baynes’ unchallenged evidence that the Final Board Paper accurately reflects her views on the subject matter of that document, I am satisfied that she holds the views set out in the quotation above. In short, the concerns held by Ms Baynes, as established by this evidence, include that:

    1. (1)

       the Proposed Proceeding would expose SCA to:

    2. (2)

       these risks, which represent “existential” risks for SCA’s ongoing profitability and viability, would militate against the Proposed Proceeding being in the best interests of SCA, even if the prospects of success were very strong, but the Proposed Defendants have a number of reasonable defences available to them and hence any recovery is uncertain and could take a number of years.

92. [181]

    The risks identified in the quotation at paragraph [178] above are the subject of further detailed commentary in the Final Board Paper. Given that the relevant parts of the Final Board Paper which expand upon those risks were the subject of confidentiality claims by the Defendant, I will not set out that further detail here, but I have had regard to the section of the Final Board Paper headed “Risks associated with potential proceedings”, and also find that Ms Baynes holds the views attributed to “management” in this section of the document.

93. [182]

    The Plaintiff placed some reliance on the decision in De Tocqueville v Pacific Current Group Ltd [2020] FCA 172. In that case, Moshinsky J ordered that an applicant be granted leave to bring a derivative action which was funded by IMF Bentham. His Honour observed (at [69]-[71]) that the claims in the draft statement of claim were clearly expressed and cogent; that the claims were covered by D&O insurance, with cover of up to $60m, such that there was a good prospect, in the event that the claims were established, of recovery up to an amount of $60m; and that there was at least a low prospect that the claims would be successful. As against this, the company had relied on a board paper, which expressed concerns regarding possible disruption to its business in the event that the claim was to proceed. His Honour described this evidence as “weak” (at [81]).

94. [183]

    However, it is important to note that the reason why Moshinsky J considered this evidence to be “weak” was because the relevant board paper was annexed to an affidavit of a director, who did not “himself give evidence in his affidavit as to this matter”: “Thus, there is no direct affidavit evidence to the effect that the Proposed Proceeding is likely to be disruptive to [the company’s] business” (at [81]). In contrast, Ms Baynes gave evidence that her own assessment of the potential consequences of the Proposed Proceeding is the same as the assessment set out in the Final Board Paper; and that, on the basis of this assessment, she holds the views regarding the Proposed Proceeding set out in the Final Board Paper and has formed the belief that it is not in the best interests of SCA to bring the Proposed Proceeding.

95. [184]

    There is no unfair prejudice to the Plaintiff in using the Final Board Paper to establish Ms Baynes’ assessment of the potential consequences of, and views regarding, the Proposed Proceeding, in circumstances where Ms Baynes gave this evidence regarding the contents of the Final Board Paper and was available for cross-examination.

96. [185]

    In closing address, Senior Counsel for the Plaintiff confirmed that he did not dispute that Ms Baynes had formed the belief that the Proposed Proceeding was not in the best interests of SCA, or that she had formed this belief on the basis identified in her affidavit (being on the basis of her own assessment of the potential consequences of the Proposed Proceeding, as set out in the Final Board Paper).

97. [186]

    The question then arises as to what weight should be given to Ms Baynes’ assessment of the potential consequences of the Proposed Proceeding when considering whether the Plaintiff has satisfied the “best interests” requirement.

98. [187]

    The Plaintiff sought to downplay the significance of Ms Baynes’ evidence, submitting that it was the board of SCA (rather than Ms Baynes as Managing Director) who was responsible for deciding, and had decided, not to bring the Proposed Proceeding, and that the view of Ms Baynes was “but one view”:

99. [188]

    Her view is, however, the view of the Managing Director of SCA. She is also the only executive director of SCA and, on the Plaintiff’s submission, is the only director who does not have any personal interest in the issues raised in the Proposed Proceeding (since she was not employed by SCA during the Relevant Period).

100. [189]

     In addition, Ms Baynes is a person with extensive experience within the industry in which SCA operates. She has held senior management positions in the casino industry for more than ten years. From March 2015 to April 2019, she was an executive manager at SkyCity Darwin, which was a wholly owned subsidiary of SCEG responsible for operating a casino in Darwin. After SCEG divested this entity in April 2019, Ms Baynes worked as a senior executive at Mindil Beach Casino Resort in Darwin until November 2023, including serving as General Manager from November 2020 onwards. She commenced work with SCA in November 2023 as General Manager of Hospitality, subsequently assuming the role of Interim Chief Operating Officer in April 2024 and the role of Managing Director in September 2024. Ms Baynes was also appointed as a director of SCA on 15 April 2024.

101. [190]

     In her affidavit, Ms Baynes explained that she has reached the views on the Proposed Proceeding which are set out in the Final Board Paper based on her involvement in SCA’s operations as Managing Director. In particular, she deposed that she is personally familiar with:

     1. (1)

        the matters regarding SCA’s financial position and performance that are set out in paragraphs 17-21 of the Final Board Paper, through her role as Managing Director;

     2. (2)

        the history of, and findings from, the review conducted by the South Australian Consumer and Business Services (CBS), as set out in paragraphs 22-33 of the Final Board Paper, as a result of her direct involvement in that review;

     3. (3)

        the B3 Remediation Program, and the work and challenges involved in delivering that Program, as discussed in paragraphs 31-54 of the Final Board Paper, through her direct involvement in that Program; and

     4. (4)

        SCA’s relationships with regulators, as discussed throughout the Final Board Paper, based on her direct involvement in dealing with those regulators on behalf of SCA.

102. [191]

     As regards SCA’s financial position and performance, Ms Baynes gave evidence, in the body of her affidavit, regarding SCA’s financial performance over the past five years, as set out below:

103. [192]

     Ms Baynes deposed that, as shown by this table, SCA has, over the past five years, made a net negative contribution to the Group’s performance in all years other than 2021.

104. [193]

     As regards dealings with regulators, Ms Baynes deposed that she has been responsible for managing the CBS review of SCA’s suitability to continue to hold a license to operate a casino in Adelaide. This review was conducted by the Hon Brian Martin AO KC, and was suspended during the AUSTRAC Proceeding. Ms Baynes deposed that the process of responding to Mr Martin’s review has involved the production of documents in response to over 26 separate information requests, the conducting of interviews with more than 20 of SCA’s employees and directors, and making submissions to Mr Martin and CBS in relation to that process. On 12 August 2025, the South Australian Liquor and Gambling Commissioner, Mr Brett Humphrey, released Mr Martin’s report to the public. The accompanying media release stated, relevantly, that:

105. [194]

     I accept Ms Baynes’ evidence that she has formed her views regarding the potential consequences of the Proposed Proceeding based on her personal familiarity with SCA’s financial position and performance, operations, and regulatory relationships.

106. [195]

     The Plaintiff submitted that there was an element to the Defendants’ position that “rehashing the past might hurt the company”, and that Ms Baynes’ affidavit, the Final Board Paper, and the other material relied upon by SCA had not given any consideration to the potential benefit to the company’s reputation from taking action against “the management who have brought the company to its knees”, which might “have indefinable consequences for the standing of that organisation in the world”.

107. [196]

     I accept that there could, depending on the circumstances, be benefits for a company’s standing in the community, where the company decides to take action against former directors and officers who are alleged to have engaged in misconduct (including where their conduct is said to have resulted in the company having breached its legal obligations over an extended period). However, I also accept that there could, again depending on the circumstances (including the extent to which there has already been an investigation of past conduct by regulators and a court proceeding), be damage to a company’s standing from the further examination of such events, which could potentially have operational and financial consequences. Those are business judgments, which persons who have a close familiarity with a company’s operations and regulatory environment, and who have duties to act in the company’s best interests, are best placed to make, absent there being some basis to conclude that those persons are not acting in good faith.

108. [197]

     In the present case, the Plaintiff did not dispute that Ms Baynes was acting in good faith and for a proper purpose in deciding that it was not in SCA’s best interests to bring the Proposed Proceeding, or that she had any personal interest (material or otherwise) in that decision. Further, the Plaintiff elected not to advance, through cross-examination of Ms Baynes:

     1. (1)

        any proposition that she had inadequate information to carry out an assessment of, or form any view about, the potential consequences of the Proposed Proceeding (as set out in the Board Paper); or

     2. (2)

        any proposition that the matters in the Final Board Paper regarding SCA’s financial performance, the CBS review, the B3 Remediation Program and SCA’s relationship with regulators, with which Ms Baynes is personally familiar, do not provide a proper or adequate basis for the conclusions that she has reached regarding the Proposed Proceeding.

109. [198]

     Nor did the Plaintiff, in written or oral submissions, engage with the assessment of the potential consequences of the Proposed Proceeding as set out in the Final Board Paper (which Ms Baynes identifies as corresponding with her own assessment of those matters) and, in particular, explain why the matters set out in those paragraphs of the Final Board Paper with which Ms Baynes has personal familiarity, do not support her own assessment of those consequences.

110. [199]

     Having regard to the matters outlined above, I have given significant weight to the assessment which the Managing Director of SCA has made of the potential consequences of the Proposed Proceeding, drawing on her own knowledge of the company’s financial position, operations and regulatory relationships, and to her view, based on that assessment, that the potential consequences of the Proposed Proceeding outweigh the potential benefits (even assuming that it has reasonable prospects of success).

111. [200]

     In light of Ms Baynes’ assessment, I am not satisfied that the Plaintiff has discharged his onus of establishing, on the balance of probabilities, that the Proposed Proceeding is, in fact, in the best interests of SCA.

112. [201]

     In addition, while I am not satisfied that SCA has established the requirements for the rebuttable presumption in s 237(3) to arise, it is nonetheless relevant, in determining whether the Plaintiff has established that the Proposed Proceeding is in fact in the best interests of the Company, to take into account the decision of the SCA board. As noted above, the non-executive directors on the SCA board (namely, Mr Cook and Mr Davis):

     1. (1)

        were provided with the Final Board Paper containing the recommendations of SCA management;

     2. (2)

        were informed by Ms Baynes, at the August board meeting of SCA, that she was of the view, for the reasons outlined in the Draft Board Paper, that the potential benefits to SCA of the Proposed Proceeding were, on balance, outweighed by the potential risks and commercial harm to SCA that could flow from proceeding; and

     3. (3)

        having been provided with that information, joined with Ms Baynes in the Circular Resolution.

113. [202]

     As Black J observed in Wonga at [47], the Court will exercise caution in overturning a business judgment of a company’s directors. His Honour there referred to:

     1. (1)

        Harlowe’s Nominees Pty Ltd v Woodwide (Lakes Entrance) Oil Co NL (1968) 121 CLR 483 at 493; [1968] HCA 37, where the High Court (Barwick CJ, McTiernan and Kitto JJ) observed that directors “in whom are vested the right and the duty of deciding where the company’s interests lie and how they are to be served may be concerned with a wide range of practical considerations, and their judgment, if exercised in good faith and not for irrelevant purposes, is not open to review in the courts”; and

     2. (2)

        Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821 at 832, where Lord Wilberforce (speaking for the Judicial Committee of the Privy Council) observed that:

114. [203]

     In Wonga, His Honour also referred (at [50]) to the following “well-established principles” governing the allocation of responsibility between a company’s board and its shareholders:

115. [204]

     As Black J acknowledged (at [51]), the statutory derivative action necessarily qualifies these principles to some extent, since it requires the Court to grant leave to bring a claim that a company’s directors have not authorised if the specified statutory requirements for leave have been established. However, his Honour added that Senior Counsel for the Plaintiff in Wonga could not point to any case in which a Court had authorised a derivative claim in circumstances where a decision not to bring that claim had been made by a company’s board or by a company’s independent director(s) and where there was no suggestion that the board or independent director(s) were not exercising decision-making powers vested in them in good faith, notwithstanding that a shareholder had a different view as to the merits of that decision. (Nor, in the present case, did the Plaintiff identify any such authority.)

116. [205]

     In Wonga, the rebuttable presumption in s 237(3) was not established, and therefore the application for derivative leave was not determined by reference to that presumption (at [49]). Nonetheless, the application was unsuccessful, as Black J was not satisfied, on the balance of probabilities, that the proposed claim was in the best interests of the company in the circumstances of that case (at [53]). His Honour acknowledged that the position may have been different if there had been a proper basis to challenge the propriety of the decision-making of the only independent director on the company’s board, but the plaintiff did not seek to identify any proper basis to do so or put such a challenge.

117. [206]

     In the present case there was, as noted above, no challenge to the propriety of the decision-making of Ms Baynes. However, Senior Counsel for the Plaintiff stated that, in circumstances where Mr Cook and Mr Davis were not called to give evidence, “[w]e don’t accept that the two individuals not called were acting in good faith and for proper purposes”.

118. [207]

     As I have previously explained, I am not satisfied, in the absence of evidence from Mr Cook and Mr Davis, that the requirements for the rebuttable presumption to arise have not been established. However, I do not, from their absence, draw any inference that either of them did not in fact exercise their powers in good faith or for a proper purpose.

119. [208]

     The position is therefore, as it was in Wonga, that the Plaintiff has not established a basis for finding that the decision of the board of SCA was not made in good faith.

120. [209]

     For the reasons set out above, I am not satisfied that the Plaintiff has discharged his burden of establishing the “best interests” requirement.

121. [210]

     It follows that it is unnecessary to address the remaining issues that were raised regarding the “best interests” requirement, which concerned the adequacy of the indemnity offered to SCA in respect of the costs of the Proposed Proceeding. However, given the procedural history, I will briefly address this matter below.

122. [211]

     As a means of limiting the risk of prejudice to the company from a derivative claim, leave is often granted on the condition that the applicant for leave undertake to indemnify the company for its costs of the proceeding and any adverse costs order against the company arising out of the proceeding: Power v Ekstein [2010] NSWSC 137 at [108] (Austin J).

123. [212]

     The Originating Process stated that, in support of the Plaintiff’s application, LCM proposes to undertake to the Court, by the Plaintiff’s counsel, that, subject to orders being made in terms of prayers 1 and 2 of the Originating Process, LCM will:

     1. (1)

        pay and indemnify SCA against all costs, charges and expenses incurred by the Plaintiff on behalf of SCA in bringing and maintaining the claim in this Court in substantially the same form as the Proposed SOC; and

     2. (2)

        pay and indemnify SCA against any orders for adverse costs, including any orders for security for costs, made against it in such proceeding.

124. [213]

     In an affidavit affirmed on 26 June 2025, Mr David Collins, who is the Chief Financial Officer of LCM, confirmed that LCM was willing to give undertakings in those terms.

125. [214]

     Prayer 1 of the Originating Process seeks an order under s 237 of the Act for leave to bring the Proposed Proceeding. Prayer 2 of the Originating Process seeks orders, pursuant to ss 241 and 242 of the Act, which are broadly to the effect that any money payable to SCA pursuant to a settlement or judgment in the Proposed Proceeding is to be paid into a controlled money account operated from the Plaintiff’s solicitors, from which certain amounts are to be paid to LCM (including the amount of the costs paid by LCM and the funder’s premium), and to the Plaintiff’s solicitors (in respect of any unpaid costs), with the balance then being paid to SCA. (The Defendants stated, in closing address, that they would address the form of the proposed orders and undertaking in the event that leave was granted.)

126. [215]

     In their written submissions filed on 15 October 2025, the Plaintiff noted that a grant of leave under s 237, on the basis of an undertaking by a third-party litigation funder and orders under ss 241 and 242 regarding the distribution of funds, was made in De Tocqueville. The Plaintiff further submitted that the financial strength of the entity giving the undertaking in the present case (namely, LCM) is demonstrated by the affidavit evidence of Mr Collins and of Mr Ward.

127. [216]

     In their submissions in response filed on 29 October 2025, the Defendants submitted that there is serious doubt about LCM’s ability to honour the proposed indemnity, given that its financial statements for the year ended 30 June 2025, which were published on 1 October 2025, include a going concern qualification. The material uncertainty in question relates to LCM’s ability to comply with its debt covenants in the event of certain adverse case outcomes. The Defendants acknowledged that LCM has arranged ATE insurance to protect itself against the risk of adverse costs orders, but expressed a number of concerns regarding this cover, including that:

     1. (1)

        the limit under the policy is [redacted], which “may prove grossly inadequate in proceedings involving eight different individuals, many of whom may be separately represented”; and

     2. (2)

        SCA is not a party to the policy. (The Defendants noted in supplementary submissions handed up at the hearing that it was open to LCM to take up the option, under cl 5 of the policy, of obtaining a deed of indemnity from the insurer in favour of SCA, but LCM has chosen not to do so.)

128. [217]

     After the Defendants raised these matters in their written submissions, the Plaintiff requested that the proceeding be re-listed, so that he could make an application to adjourn the hearing for several weeks, in order to allow time for further evidence. On 3 November 2025, I heard this application, which was opposed by the Defendants. In the course of that hearing, it emerged that the further evidence which the Plaintiff sought to file included an amended version of the ATE policy, and that the additional time was required in order to allow negotiations to occur with the insurer regarding changes to the policy.

129. [218]

     In the course of hearing this application, I asked Senior Counsel for the Defendants whether, assuming the hearing proceeded as scheduled on 5 November 2025, and assuming I was satisfied that all of the other requirements for a grant of leave were satisfied, but I was concerned that there was, for example, an issue regarding the adequacy of the level of cover under the existing ATE policy, it was open to the Court either:

     1. (1)

        to make the grant of leave conditional upon taking steps to address any such issue (by, for example, increasing the level of cover); or

     2. (2)

        to adjourn the application to allow the Plaintiff the opportunity to put on further evidence as to those matters.

130. [219]

     Senior Counsel for the Defendants acknowledged that this “would be a way of dealing with” the issue raised by the Plaintiff’s adjournment application, adding: “It’s difficult to see if dealt with in that way that there would be prejudice to the defendants”.

131. [220]

     Counsel for the Plaintiff also embraced this course, submitting that if the Court were otherwise satisfied that the criteria for granting leave were established, “so that the insurance question was effectively the only issue remaining on the table”, then “a grant of leave on terms would be entirely appropriate” and, on that basis, the Plaintiff “would be prepared to proceed” with the hearing as scheduled.

132. [221]

     Having regard to those matters, if I had determined that the Plaintiff had otherwise satisfied the requirements for a grant of leave under s 237, subject to an issue regarding the adequacy of the ATE insurance policy, I would have allowed the Plaintiff an opportunity to put on further evidence (including evidence as to any amended terms of such cover) in order to address the issues raised by the Defendants and would have sought further submissions, in the light of such evidence, as to the adequacy of the undertaking proffered by LCM.

133. [222]

     However, given the findings which I have made, those issues do not arise.

Section 237(2)(d): Serious question to be tried

1. [223]

   The test of whether there is a serious question to be tried is the same as the test that is applied by the court in determining whether to grant an interlocutory injunction: Swansson at [25] (Palmer J).

2. [224]

   Consequently, the same relatively low threshold is applicable, and it is generally not appropriate for the Court to attempt to resolve disputed questions of fact on such an application: Gladstone Pacific Nickel at [56] (Ball J).

3. [225]

   While the applicant is not required to prove the allegations in the proposed claim, there must be a sufficient evidentiary basis to establish a serious question to be tried: In the matter of A S P Aluminium Holdings Pty Ltd [2024] NSWSC 183 at [29] (Black J); and Mount Gilead Pty Ltd & Hobhouse v L Macarthur-Onslow [2021] NSWSC 948 at [78] (Black J) (upheld on appeal in [2023] NSWCA 37).

4. [226]

   The Defendants objected to the Plaintiff’s tender of the following documents from the AUSTRAC Proceeding:

   1. (1)

      the Statement of Claim filed on 7 December 2022;

   2. (2)

      the Statement of Agreed Facts and Admissions filed on 17 May 2024; and

   3. (3)

      the orders and reasons for judgment of Lee J on 7 June 2024 (CEO of AUSTRAC v SkyCity Adelaide Pty Ltd [2024] FCA 664).

5. [227]

   The Plaintiff accepted that the pleading could only establish the allegations made in the AUSTRAC Proceeding, and that Lee J’s judgment could only establish what findings were made and what orders were made (and not the existence of any facts in issue in that proceeding).

6. [228]

   As regards the Statement of Agreed Facts and Admissions, the Plaintiff submitted that this document was a formal record of admissions of fact by SCA, which was signed by its solicitor, and, as such, was admissible for a hearsay purpose, pursuant to s 81 of the Evidence Act.

7. [229]

   Many of the allegations in the Proposed SOC regarding SCA’s non-compliance with the requirements of the AML/CTF Act and Rules are drawn directly from, and particularised by reference to, the Statement of Agreed Facts and Admissions. For example, the Proposed SOC pleads the following matters by reference to the contents of the Statement of Agreed Facts and Admissions:

   1. (1)

      there were ML/TF risks associated with various aspects of the Casino business operated by SCA, including:

   2. (2)

      SCA provided services to the 56 customers referred to in Column A of Appendix A to the Statement of Agreed Facts and Admissions, in respect of whom “higher ML/TF risks arose” (Proposed SOC, [39]-[40], Appendix A; Statement of Agreed Facts and Admissions, [407], [409]);

   3. (3)

      the various ML/TF risks posed by SCA’s casino business were high and well-known (Proposed SOC, [41]-[46], [64]; Statement of Agreed Facts and Admissions, [444], [449], [453], [456]);

   4. (4)

      at all times during the Relevant Period, Part A of SCA’s AML/CTF Program (Proposed SOC [71], Statement of Agreed Facts and Admissions, Section F):

   5. (5)

      SCA did not conduct appropriate risk-based ongoing customer due diligence with respect of the 56 Customers referred to in paragraph (2) above during the Relevant Period (Proposed SOC, [75]; Statement of Agreed Facts and Admissions, Section G.3-G.4); and

   6. (6)

      SCA did not adequately monitor the further 65 customers referred to in Appendix B to the Statement of Agreed Facts and Admissions in relation to the provision of designated services (Proposed SOC, [76]-[77]; Statement of Agreed Facts and Admissions, Sections G.5-G.6).

8. [230]

   The Plaintiff acknowledged that the Statement of Agreed Facts and Admissions could not be used in the Proposed Proceeding to establish, as against the Proposed Defendants, any of the matters set out in that document, but submitted that it could be used on the present application, to which SCA is a defendant, to establish that there is a serious question to be tried regarding the allegations of non-compliance in the Proposed SOC.

9. [231]

   In response, the Defendants submitted that the Statement of Agreed Facts and Admissions was prepared pursuant to s 191 of the Evidence Act and, as such, amounts to no more than a representation by SCA that it would not dispute the asserted facts in the AUSTRAC Proceeding.

10. [232]

    In support of this submission, the Defendants relied on the decision of Ryan J in Australian Competition and Consumer Commission v Pratt (No 3) [2009] FCA 407. In that case, the defendant was alleged to have given false or misleading evidence during an examination conducted pursuant to the Trade Practices Act 1974 (Cth) regarding his involvement in a price-fixing cartel. The Australian Competition and Consumer Commission (ACCC) sought to rely on documents created in settlement of the cartel proceedings, in which the defendant admitted to being knowingly involved in a contravention. The relevant documents included an Agreed Statement of Facts, which was stated to have been made pursuant to s 191 of the Evidence Act. In respect of this document, Ryan J made the following observations (at [83], emphasis in original):

11. [233]

    The Defendants submitted that:

    1. (1)

       consistently with the reasoning in Pratt, the only representation made by SCA in the Statement of Agreed Facts and Admissions was that SCA would not dispute the matters set out in that document for the purposes of the AUSTRAC Proceeding;

    2. (2)

       SCA did not make, by that document, any representation that the statements contained in it were in fact true; and

    3. (3)

       therefore, that document could not be relied upon, for the purposes of determining whether there was a serious question to be tried, as evidence of any of the matters set out in that document.

12. [234]

    In response, the Plaintiff referred to the decision of Perram J in Capic v Ford Motor Company of Australia Pty Ltd [2021] FCA 715. In that case, the applicant in a representative proceeding sought to rely on admissions made by the respondent (Ford) in a Statement of Agreed Facts and Admissions that had been tendered in proceedings brought by the ACCC against Ford. In response, Ford submitted that “at best this document was evidence of what matters the [ACCC] and [Ford] had agreed did not need to be proved in that proceeding”.

13. [235]

    Perram J accepted that it was “certainly evidence of that”, but added as follows (at [815]):

14. [236]

    His Honour explained (at [816]) that this conclusion did not involve regarding the representations in the Statement of Agreed Facts and Admissions as “previous representations” for the purposes of Pt 3.2 of the Evidence Act (which, as Ryan J explained in Pratt, they are not). His Honour accepted that each representation in the document was “no more than a representation by each party to the proceeding that he, she or it will not dispute the asserted fact in that proceeding”, but said that it was nonetheless open to the Court “to infer from the parties’ decision so to eschew such disputation that the asserted fact is true”. His Honour added that this inference could be drawn with greater confidence having regard to the absence of contradictory evidence, which it was peculiarly within Ford’s power to lead.

15. [237]

    In the present proceeding, the issue is not whether the material facts pleaded in the Proposed SOC are true, but whether the Plaintiff has established, for the purposes of a s 237 application, that there is a serious question to be tried.

16. [238]

    I have determined that the Statement of Agreed Facts and Admissions should be admitted into evidence on this application. I have not done so on the basis that it contains admissions by SCA that the matters set out in that document are true. Instead, I have admitted that document into evidence on this application on the basis (consistently with both Pratt and Capic) that it contains representations by SCA that it would not dispute the facts contained in that document for the purposes of the AUSTRAC Proceeding. I infer, from such representations, that SCA either agreed to the matters set out in the Agreed Statement of Facts and Admissions because those matters were true or because it formed the view, from documents available to SCA (including its own internal records), that those matters were capable of being established in the AUSTRAC Proceeding. This inference may be more confidently drawn in circumstances where:

    1. (1)

       Ms Baynes, who was the only witness called by the Defendants, and who was a director of SCA and its Interim Chief Operating Officer at the time when the Statement of Agreed Facts and Admissions was filed, did not give any evidence to the effect that SCA had, for pragmatic or tactical reasons, agreed to the matters set out in that document in circumstances where it did not believe those matters to be true; and

    2. (2)

       the management of SCA did not, in the Draft Board Paper, the Final Board Paper or any of the other materials provided to the board regarding the risks of the Proposed Proceeding, express a view that any of the material facts which were pleaded in the Proposed SOC, by reference to the contents of the Statement of Agreed Facts and Admissions, were not true or were not capable of being established on the documents available to SCA.

17. [239]

    As I have noted at paragraph [225] above, it is not necessary, on a s 237 application, that the applicant adduce evidence that is sufficient to prove the allegations in the proposed claim. Instead, what is required is a sufficient evidentiary basis to establish a serious question to be tried. I am satisfied that the representations made by SCA in the Statement of Agreed Facts and Admissions – namely, representations that it would not dispute the asserted facts in a regulatory proceeding in which it received a civil penalty of $67m – provide a sufficient evidentiary basis to establish a serious question to be tried, so far as concerns the allegations made in the Proposed SOC regarding the failings in SCA’s AML/CTF compliance during the Relevant Period.

18. [240]

    The Defendants submitted that, even if there was a serious question to be tried as to whether SCA contravened the AML/CTF Act or Rules in the manner alleged during the Relevant Period, the Court would not be satisfied that there was a serious question to be tried as to whether the Proposed Defendants breached their duties to SCA, having regard to, in particular, the following matters:

    1. (1)

       many of the breaches pleaded by the Plaintiff concern steps that a reasonable person in the position of the Proposed Defendants would have taken if they had known of the relevant non-compliance, but the pleading appears to proceed on the basis that those matters were not in fact known to the Proposed Defendants (and that the Proposed Defendants ought to have become aware of those matters); and

    2. (2)

       insofar as the Plaintiff’s claim is that the Proposed Defendants failed to make enquiries by which they would have become aware of such non-compliance (which then would have led to them taking steps to address such non-compliance), the pleading does not disclose the nature of the enquiries that the Plaintiff alleges ought to have been made.

19. [241]

    Given that I have determined that the Plaintiff has not established the requirements in s 237(2)(b) and (c) of the Act, such that the Court must refuse leave to bring the Proposed Proceeding, it is unnecessary to undertake any detailed analysis of the Proposed SOC.

20. [242]

    It is sufficient to note that the Plaintiff does in fact plead that various matters were known to the Proposed Defendants and, in this regard, relied on the contents of the Statement of Agreed Facts. For example, it is pleaded that the First Defendant, Ms Wong, “knew, or ought reasonably to have known” that some of the 56 Customers referred to in Appendix A to the Statement of Agreed Facts and Admissions posed higher ML/TF risks (Proposed SOC, [115]). In this regard, the Plaintiff referred to Ms Wong’s role as General Counsel of SCEG and a director of SCA, and referred to various statements made throughout the Statement of Agreed Facts and Admissions to the effect that issues regarding those customers were reported to, or escalated to, “senior management”.

21. [243]

    I accept the Plaintiff’s submission that representations made in the Statement of Agreed Facts and Admissions regarding matters reported to “senior management” provide a sufficient evidentiary basis to conclude that there is a serious question to be tried as to whether senior management were aware of such matters. Further, I accept that evidence of a particular Proposed Defendant’s role and responsibilities within SCA and SCEG is capable of providing a sufficient evidentiary basis to conclude that there is a serious question to be tried as to whether that person, as a member of senior management, was aware of such matters.

22. [244]

    Finally, I accept that there is a serious question to be tried as to whether a Proposed Defendant, who was aware of such matters, ought to have taken steps to address the associated AML/CTF risks, given the potential regulatory consequences.

23. [245]

    However, given the other findings I have made (which dispose of this application), I do not consider it necessary or desirable to express any view on whether, in respect of each of the named Proposed Defendants, there is a serious question to be tried as to whether he or she breached duties owed to SCA during the Relevant Period.

24. [246]

    The Plaintiff has not established the requirements of s 237(2)(b) or s 237(2)(c) of the Act. It follows that leave to bring the Proposed Proceeding must be refused.

25. [247]

    Although the Plaintiff’s s 247A application was originally framed as an application to inspect certain books of SCA and SCEG for the purposes of pursuing his s 237 application, Senior Counsel for the Plaintiff indicated, at the hearing, that the s 247A application was pursued only in the event that leave was granted pursuant to s 237 of the Act, with inspection being sought for the purposes of the Proposed Proceeding.

26. [248]

    It follows that, with the rejection of the s 237 application, the basis for the Plaintiff’s s 247A application has fallen away and it, too, must be refused.

27. [249]

    For those reasons, the Originating Process will be dismissed, with costs.

28. [250]

    As noted at paragraph [28] and [124] above, I will make the orders which the parties sought pursuant to ss 7(b) and 8(1)(a) of the Court Suppression and Non-publication Orders Act, except insofar as concerns the Part C documents (since the contingency against which those documents were tendered has not arisen). I will provide the parties with a period of three business days to make any submissions as to whether any parts of these reasons for judgment should be redacted, by reason that such parts disclose the contents of material in respect of which I have made those orders. During this period, these reasons for judgment will be restricted to the parties and their legal advisers. In the event that no such submission is made, these reasons for judgment will be published without any such redaction.

29. [251]

    Finally, the Defendants submitted that, if the s 237 application was rejected, the Court should make orders dismissing the Statement of Claim which was filed by the Plaintiff pursuant to the orders made by Black J on 12 September 2025 (whereby leave was granted, on an interim basis, to file the Proposed SOC pending the determination of this application). I accept that this conclusion follows from my rejection of the s 237 application. However, the Plaintiff may seek to appeal my orders, and the dismissal of the Statement of Claim (which was filed, pending the determination of this application, because of a looming limitation period) would cause irremediable prejudice to the Plaintiff in the event that, on appeal, leave under s 237 was granted. For those reasons, such an order should only be made in the event that the Plaintiff does not bring any appeal within the period specified in the Uniform Civil Procedure Rules 2005 (NSW). Accordingly, I will not make such an order at this time. However, in the event that no appeal is filed by the requisite date, I will, upon being notified by the parties that this is the case, make such an order in chambers.

30. [252]

    Accordingly, I make the following orders:

    1. (1)

       The Originating Process filed 27 June 2025 be dismissed.

    2. (2)

       The Plaintiff pay the Defendants’ costs of the proceeding.

    3. (3)

       Pursuant to section 7(b) and 8(1)(a) of the Court Suppression and Non-publication Orders Act 2010 (NSW), or alternatively the inherent jurisdiction of the court, that the following material is to be kept confidential until further order, and access to that material is to be restricted to the parties and their legal advisers on the ground that such order is necessary to prevent prejudice to the proper administration of justice:

    4. (4)

       Order, pursuant to section 10 of the Court Suppression and Non-publication Orders Act 2010 (NSW), that these reasons for judgment not be published to any persons other than the parties and their legal advisers until 5:00pm on 3 December 2025.

    5. (5)

       Direct that the parties file and serve, and provide to the Associate to Nixon J, by 4.00pm on 3 December 2025 any submissions as to whether any parts of these reasons for judgment should be subject to a non-publication order pursuant to section 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW), identifying the specific paragraphs (or parts thereof) in respect of which such an order is sought, such application to be determined on the papers.

31. [253]

    On 3 December 2025, I received submissions from the parties pursuant to Order 5 above. The parties, between them, identified a limited number of parts of the reasons for judgment which they submitted ought to be subject to a non-publication order pursuant to sections 7 and 8(1)(a) of the Court Suppression and Non-publication Orders Act 2010 (NSW), on the basis that those parts of the judgment disclose the substance of material that is the subject of Order 3 above.

32. [254]

    Having reviewed those submissions, I determined that orders should be made in the form sought by the parties. The basis for those orders is the same as the basis for Order 3 above (see paragraph [28] above).

33. [255]

    Accordingly, on 4 December 2025, I made an order, pursuant to ss 7 and 8(1)(a) of the Court Suppression and Non-publication Orders Act, on the ground that such an order is necessary to prevent prejudice to the proper administration of justice, that the parts of the reasons for judgment which are marked as “[redacted]” above (which disclose the substance of materials captured by Order [3](b), [3](j) and [3](i) of the orders made on 28 November 2025) are not to be published or disclosed to any persons, other than the parties, their legal representatives or the Court until further order of the Court.