The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd; Morrow v Cordell Jigsaw Productions Pty Ltd (No 14)

1. [1]

   I delivered my principal judgment in these proceedings on 13 April 2022. [1]

2. [2]

   These reasons assume familiarity with that judgment and the various persons there referred to. I shall use the same abbreviations here.

3. [3]

   I have now heard submissions as to the orders that I should make to give effect to the principal judgment and as to costs.

Orders (other than costs) in the Commercial Proceedings

1. [4]

   By their Amended Summons the Joint Venture Company, Giant Dwarf and Mr Morrow sought:

2. [5]

   Notwithstanding my findings that Mr Morrow and Giant Dwarf suffered no loss by reason of the injurious falsehoods and breach of the Mediation Agreement, Mr O’Neill for Mr Morrow and Giant Dwarf submitted that I should make orders that Mr Murray and Cordell Jigsaw be permanently restrained from further publishing the falsehoods and make a declaration as to the breach of the Mediation Agreement.

3. [6]

   I see no utility in doing either of these things.

4. [7]

   In relation to the injurious falsehoods, as damage is an element of the cause of action, [9] the result of my findings is that the Joint Venture Company, Giant Dwarf and Mr Morrow have not established that the tort was committed. As I record below, Mr Murray has undertaken to the Court that he and Cordell Jigsaw will not repeat the allegation that Mr Morrow engaged in fraud against Cordell Jigsaw.

5. [8]

   As to the Mediation Agreement, I see no utility in making a declaration that has “no foreseeable consequences for the parties”. [10]

6. [9]

   The Amended Summons should be dismissed. I will deal with the question of costs below.

7. [10]

   By its Amended Cross-Summons, Cordell Jigsaw sought:

8. [11]

   I upheld each of Cordell Jigsaw’s contentions that:

9. [12]

   In those circumstances, Mr Katekar SC who appeared with Ms Gaussen for Mr Murray and Cordell Jigsaw, sought an order that the Amended Cross-Summons “is upheld”.

10. [13]

    Although I will make orders giving effect to my findings, I see no utility in making an order that the Cross-Claim be “upheld”.

11. [14]

    Mr O’Neill accepted that it followed from my reasons that I should order, pursuant to s 237 of the Australian Consumer Law, that the Share Sale Agreement entered into on 8 April 2019 be rescinded.

12. [15]

    Mr Katekar submitted that I should also order that:

13. [16]

    I think the preferable course is to order that the Joint Venture Company, Mr Morrow and Giant Dwarf do all such things and execute all such documents so as to cause the relevant shares to be transferred from Giant Dwarf to Cordell Jigsaw, with effect from 8 April 2019, and to cause Mr Murray to be reappointed as a director of the Joint Venture Company with effect from the date of my orders.

14. [17]

    Mr Katekar submitted that, in addition, I should:

15. [18]

    The current position in relation to the PDV Offsets is as follows:

16. [19]

    In its Amended Cross-Summons, Cordell Jigsaw sought relief in respect of the PDV Offsets as an alternative to rescission of the Share Sale Agreement. However, as I have set out above, Cordell Jigsaw also sought “any further or other order the Court considers appropriate”.

17. [20]

    As I propose to order that the Share Sale Agreement be rescinded, it is necessary to make such orders as will restore Mr Murray and Cordell Jigsaw to the position they would have been in had the Share Sale Agreement not been executed. [17] Mr Katekar submitted that it was also necessary to make such orders that would place Cordell Jigsaw in the same position it would have been in but for Mr Morrow’s and Giant Dwarf’s misleading or deceptive conduct that had led me to order rescission of the Share Sale Agreement.

18. [21]

    Mr Morrow’s and Giant Dwarf’s misleading or deceptive conduct caused Cordell Jigsaw to sell to Giant Dwarf its shares in the Joint Venture Company.

19. [22]

    That conduct also had the result of placing Mr Morrow in a position where he could make unilateral decisions as to how the Joint Venture Company dealt with the PDV Offsets.

20. [23]

    Mr Murray’s apprehension is that Mr Morrow has, by decisions he has caused the Joint Venture Company to make, jeopardised Cordell Jigsaw’s ability to recover its share of the PDV Offsets, once it is reinstated as a 50% shareholder of the Joint Venture Company.

21. [24]

    In oral submissions on 16 June 2022, Mr O’Neill said that “at the moment” Mr Morrow did not dispute Cordell Jigsaw’s “entitlement” to 40% of the PDV Offset received by the Joint Venture Company for series two, three and four, nor its entitlement to 40% or 50% (whichever figure is correct) of the PDV Offset which the Joint Venture Company expects to receive for series one; [18] but that “he doesn’t know what he doesn’t know”. Thus, Mr Morrow has not given an unqualified assurance that he and Giant Dwarf do not dispute Cordell Jigsaw’s entitlement.

22. [25]

    Mr Katekar drew my attention to the observations of Barwick CJ and Jacobs J in Neeta (Epping) Pty Ltd v Phillips [19] that:

23. [26]

    As there is no unequivocal agreement by Mr Morrow as to the consequences, so far as they concern the PDV Offset, of rescission of the Share Sale Agreement, I am persuaded that I should make the orders referred to at [17(a)] above; namely, that the Joint Venture Company pay Cordell Jigsaw entitlements for the PDV Offset received in respect of series two, three and four of The Checkout, together with interest.

24. [27]

    Mr Murray is concerned that the Joint Venture Company will not have sufficient funds to pay Cordell Jigsaw its proper entitlements and thus seeks an order to the effect set out at [17(b)] above.

25. [28]

    I do not propose to make any such order at the moment, as it is not yet known whether the Joint Venture Company will be able to pay Cordell Jigsaw the amount due. However, I will grant Cordell Jigsaw liberty to apply for orders to this effect if any controversy arises once the PDV Offset for series one is to hand.

26. [29]

    In the meantime, Cordell Jigsaw is protected by the undertaking given to Henry J in September 2020, [21] as now amended, and to which I referred in my judgment refusing to grant a freezing order against the Joint Venture Company pending delivery of the principal judgment. [22]

27. [30]

    I will also deal in these reasons with the question of Cordell Jigsaw’s percentage entitlement to the PDV Offset for series one of The Checkout.

28. [31]

    At [72] of my principal judgment, I referred to a “1 pager” sent by Ms Shortland from Cordell Jigsaw, to Mr Morrow [23] on 24 January 2014 attaching a draft shareholders agreement.

29. [32]

    Ms Shortland’s “1 pager” was expressed to “cover off the 20% corridor for series two and beyond of the Check Out” and provided that the parties acknowledged that:

30. [33]

    Mr Morrow ultimately agreed to these arrangements. [24]

31. [34]

    It was thus agreed that “for second and subsequent series” of The Checkout Giant Dwarf would be paid a 20% “creator’s royalty” with the remaining 80% of net receipts “then be[ing] split according to the shareholding as outlined in the Shareholders Agreement”; that is, equally between Giant Dwarf and Cordell Jigsaw.

32. [35]

    This was the provenance of the agreement between Giant Dwarf and Cordell Jigsaw that, for series two to series six of The Checkout, profits would be shared between Giant Dwarf and Cordell Jigsaw on a 60/40 basis rather than on a 50/50 basis. [25]

33. [36]

    This agreement was prospective and applied only to net receipts for series two and following of The Checkout. It was not intended to apply to series one, which had by then concluded.

34. [37]

    It must follow, now that the Share Sale Agreement is to be rescinded, that Cordell Jigsaw’s share of such “net receipts” as comprise the PDV Offset for series one is 50% rather than the 40% to which it is entitled for the later five series.

35. [38]

    It is true that in the Cross-Claim, Cordell Jigsaw sought, in the alternative to rescission of the Share Sale Agreement, a declaration that it:

36. [39]

    However, in his affidavit of 17 May 2021, Mr Simon Fraser, in the course of calculating Cordell Jigsaw’s loss from having sold its shares in the Joint Venture Company to Giant Dwarf, said:

37. [40]

    It thus appears that Cordell Jigsaw understood that the “60/40” split for the PDV Offset was only in respect of the series following series one, and that for series one the split was to be “50/50”.

38. [41]

    In those circumstances I propose to make a declaration to the effect set out at [17(c)] above.

39. [42]

    I will deal with the costs of these proceedings below.

Orders (other than costs) in the Defamation Proceedings

1. [43]

   To reflect my findings at [979] of the principal judgment, it is agreed that I should order that Mr Murray and Cordell Jigsaw pay Mr Morrow general damages of $30,000 and aggravated damages of $5,000.

2. [44]

   It is also agreed that Mr Murray and Cordell Jigsaw pay interest on those sums from the date of publication.

3. [45]

   Mr Katekar and Mr O’Neill agreed that the appropriate rate was in the order of 3.5%. [26]

4. [46]

   Interest should run from 5 July 2019, the date of Mr Murray’s email to Ms Carnabuci, being approximately the temporal mid-point of Mr Murray’s allegedly defamatory emails and the first in which he alleged fraud.

5. [47]

   Mr Morrow also seeks a permanent injunction restraining Mr Murray or Cordell Jigsaw from publishing any imputation to the effect that Mr Morrow “engaged in fraud”.

6. [48]

   I have found that Mr Murray’s email to Ms Carnabuci of 5 July 2019 and to Ms Gilchrist of 12 August 2019 would convey to a reasonable reader that Mr Morrow had engaged in knowingly dishonest conduct and fraud and that Mr Murray and Cordell Jigsaw had failed to justify those statements. [27]

7. [49]

   During argument on 16 June 2022 Mr Katekar informed me that Mr Murray had instructed him to offer an undertaking to the Court, on his own behalf, and on behalf of Cordell Jigsaw, that he would not publish any statement to the effect “that Julian Morrow engaged in fraud against Cordell Jigsaw Productions Pty Ltd”.

8. [50]

   In light of that undertaking, I do not see any reason to grant the injunction sought by Mr Morrow.

A stay?

1. [51]

   During argument on 16 June 2022, I was informed that both parties have, notwithstanding the fact that no orders have yet been made in the proceedings, filed Notices of Intention to Appeal. [28] Evidently, no decisions have yet been made to pursue an appeal, although appeals seem probable, bearing in mind the complexity of the matter and the implications of my findings, particularly for Mr Morrow.

2. [52]

   Mr O’Neill submitted that, once an order is made rescinding the Share Sale Agreement, and orders made causing Mr Murray to be reinstated as a director of the Joint Venture Company, that company, as a party that may wish to appeal from aspects of my decision, will likely be deadlocked, and unable to get advice about an appeal or decide whether to appeal.

3. [53]

   On the other hand, Mr Katekar submitted that Mr Morrow and Giant Dwarf could decide whether to appeal and could join the Joint Venture Company as a respondent to the appeal. That is no doubt true. However, it is not clear to me what the implications would be, so far as concerns the Joint Venture Company, for it to be joined as a respondent, rather than itself being an active appellant, in any appeal that may ensue.

4. [54]

   I am persuaded that I should stay the orders I propose to make in the Commercial Proceedings for 35 days, subject to two matters.

5. [55]

   The first is that I will not stay the orders I propose to make that the Joint Venture Company pay Cordell Jigsaw its share of the PDV Offsets for series two, three and four of The Checkout. Mr O’Neill accepted, properly in my view, that a condition of a stay could be that the Joint Venture Company pay Cordell Jigsaw’s share of the PDV Offsets into Court, or into Cordell Jigsaw’s solicitor’s account or even (Mr O’Neill was less enthusiastic about this prospect) to Cordell Jigsaw itself. In those circumstances, I do not propose to stay those orders.

6. [56]

   The second is that the stay will be subject to receiving, within seven days, an undertaking from Mr Morrow that he will forthwith execute all such documents and do all such things so as to cause the Joint Venture Company to pay to Cordell Jigsaw 50% of any PDV Offset received by the Joint Venture Company for series one of The Checkout during the pendency of the stay. If I do not receive that undertaking within seven days, the stay will lapse.

7. [57]

   Mr Katekar submitted that it should be a condition of a stay that Mr Morrow and Giant Dwarf indemnify the Joint Venture Company for any costs it incurs if an appeal is not brought or in relation to any costs liability it incurs if an appeal is brought and is unsuccessful. As I only propose to order a stay for 35 days, I do not see it necessary to impose any such condition.

Costs in the Commercial Proceedings

1. [58]

   In the final paragraph of the principal judgment, I suggested that it may be appropriate that there be no order as to the costs of either the Commercial or the Defamation Proceedings with the intent that each party pay his or its own costs.

2. [59]

   Although Mr Morrow and Giant Dwarf were prepared to agree to orders to that effect, having considered the parties’ submissions in relation to costs, I am persuaded that I should not make such an order but, rather, should make separate orders in each of the Commercial and Defamation Proceedings.

3. [60]

   As I have set out above, the Joint Venture Company, Giant Dwarf and Mr Morrow were largely unsuccessful in the claims made by their Amended Summons in the Commercial Proceedings.

4. [61]

   It follows that they should pay Cordell Jigsaw’s and Mr Murray’s costs of that aspect of the Commercial Proceedings.

5. [62]

   Mr Katekar submitted that those costs should be paid on an indemnity basis because the claim that Giant Dwarf was entitled to terminate the Share Sale Agreement was “hopelessly flawed”.

6. [63]

   Mr Katekar drew attention to the letter that Mr Murray’s solicitor, Mr Fraser, wrote to Mr Morrow’s solicitor, Mr Kay, on 19 June 2019. [29]

7. [64]

   In that letter, under the heading “Scope of Quit Claim Deed”, Mr Fraser contended that the terms of the Share Sale Agreement did not compel Cordell Jigsaw to execute the Quit Claim. As Mr Katekar pointed out, the conclusions I came to [30] were to the same effect as Mr Fraser’s contentions.

8. [65]

   Mr Katekar submitted:

9. [66]

   I do not accept that submission.

10. [67]

    Although I did not accept Mr Morrow’s contentions as to whether Cordell Jigsaw was obliged by the terms of the Share Sale Agreement to execute the Quit Claim, I am not able to conclude that those contentions were “hopeless”.

11. [68]

    I am certainly not prepared to conclude that Mr Morrow’s pursuit of that claim bespoke him having the ulterior motive asserted by Mr Katekar. Mr Katekar did not put this proposition to Mr Morrow in cross-examination and withdrew it during the costs argument.

12. [69]

    I am not prepared to order indemnity costs in the Commercial Proceedings.

13. [70]

    As I have set out above, Cordell Jigsaw was successful in relation to its Cross-Claim, save for its claim for damages for breach of the Joint Venture Agreement. [31]

14. [71]

    It should therefore have its costs of the Cross-Claim.

15. [72]

    Mr Katekar submitted Cordell Jigsaw should have its costs of the Cross-Claim on an indemnity basis by reason of three Calderbank offers.

16. [73]

    The first offer was made on 19 June 2019, some five months before Mr Morrow commenced the Commercial Proceedings.

17. [74]

    This offer was to the effect that:

18. [75]

    Mr Morrow rejected this offer the following day, 20 June 2019.

19. [76]

    By this point, Mr Murray had made clear that he believed that Mr Morrow may have misled him in the circumstances leading to the execution of the Share Sale Agreement and may have acted in breach of his duties as director of the Joint Venture Company. [32]

20. [77]

    However, at this stage, no proceedings were on foot, and Cordell Jigsaw was thus yet to propound its Cross-Claim and its contention, central to many of my findings, that it was an implied term of the Joint Venture Agreement that each joint venturer would inform the other of any opportunity to produce a further series of The Checkout or any equivalent or similar consumer affairs program for the ABC.

21. [78]

    As Mr Katekar submitted, this offer “proceeded on the premise that Mr Morrow had misled Mr Murray into authorising [Cordell Jigsaw] to enter into the Share Sale Agreement” and “effectively asked Mr Morrow to accept that he had done so”.

22. [79]

    Mr Katekar submitted that, acting reasonably, Mr Morrow should have accepted that he had misled Mr Murray into causing Cordell Jigsaw to enter into the Share Sale Agreement and that:

23. [80]

    Although I have found that Mr Morrow did behave substantially as Mr Murray was in June 2019 contending, I am unable to conclude that it was unreasonable of Mr Morrow not to accept this offer which, as Mr Katekar accepted, invited him to accept his wrongdoing and to capitulate at this early stage.

24. [81]

    In any event, Mr Murray made further offers, prior to and on the day that the Commercial Proceedings were commenced, to which I will now turn.

25. [82]

    The second offer was made on 18 October 2019, immediately after the mediation.

26. [83]

    Cordell Jigsaw offered to “settle the matter” on the basis that:

27. [84]

    As Mr Katekar submitted, this offer “represented a capitulation by [Cordell Jigsaw] on misleading and deceptive conduct but involved Giant Dwarf accepting that its purported termination of the [Share Sale Agreement] was invalid.”

28. [85]

    Cordell Jigsaw withdrew that offer three days later on 21 October 2019.

29. [86]

    As this offer was only open for three days, and as Cordell Jigsaw made an equivalent offer on 1 November 2019, which was rejected, I will consider Cordell Jigsaw’s application for indemnity costs in the light of that later offer.

30. [87]

    The third offer was made on 1 November 2019, the day on which Mr Morrow commenced the Commercial Proceedings.

31. [88]

    This was to the same effect as the 18 October 2019 offer but proposed a 2% fee against cash budget, rather than a flat fee of $59,000 for each of series seven and eight of The Checkout.

32. [89]

    The offer was stated to be “in full and complete resolution of the dispute between us”. The correspondence, to which I have referred at fn 32, should have made clear to Mr Morrow and those advising him that “the dispute between us” included whether Mr Morrow had misled Mr Murray into agreeing to cause Cordell Jigsaw to sell its shares in the Joint Venture Company to Giant Dwarf and whether Mr Morrow had acted in breach of his fiduciary duties to the Joint Venture Company.

33. [90]

    The offer was expressed to be open until 5 November 2019. Mr Morrow’s solicitor rejected this offer on 4 November 2019 on the basis that it “fails to remedy the damage our clients have suffered”.

34. [91]

    Mr Katekar submitted:

35. [92]

    The offer was made at a time when Mr Morrow’s position then was that Giant Dwarf had terminated the Share Sale Agreement. It is not clear what Mr Morrow (or Mr Murray for that matter) understood the implications of this to be so far as concerns Cordell Jigsaw’s shareholding in the Joint Venture Company nor as to Cordell Jigsaw’s entitlement to cause Mr Murray to be reappointed as a director of the Joint Venture Company.

36. [93]

    By now, the ABC had made clear it was not going to commission a further series of The Checkout for FY2020 [33] although it had stated it was “willing to consider a pitch for a new consumer affairs TV show”. [34] Further, the dispute between Mr Morrow and the ABC concerning the terms on which the ABC might commission The Help Desk was coming to a head. [35]

37. [94]

    However, the offer was made, literally, at the outset of the proceedings and long before the parties’ positions were finally articulated. As I have set out, Mr Murray had by then made known the substance of his complaints, but Cordell Jigsaw’s contentions as to the implied term of the Joint Venture Agreement had not then been articulated.

38. [95]

    In all these circumstances, although by this offer Cordell Jigsaw proposed an outcome for Mr Morrow and Giant Dwarf that was considerably better than Mr Morrow and Giant Dwarf have achieved, and significantly less favourable than Cordell Jigsaw has achieved, I am not able to conclude that it was unreasonable for Mr Morrow and Giant Dwarf not to have accepted the offer.

39. [96]

    Mr O’Neill developed detailed submissions to the effect that Mr Murray and Cordell Jigsaw had engaged in “disentitling conduct” so as to warrant the conclusion that there should be no order for costs in their favour in the Commercial Proceedings.

40. [97]

    The particulars of such “disentitling conduct” related almost entirely to the Defamation Proceedings (for example, pressing the defence of justification in relation to the allegation of fraud, failure to apologise and maintenance of the allegation that Mr Morrow had a bad reputation).

41. [98]

    I do not see these matters as being relevant to the costs order I should make in the Commercial Proceedings.

42. [99]

    Mr Murray and Cordell Jigsaw do not seek any costs order against the Joint Venture Company. Accordingly, the costs orders will be directed only to Mr Morrow and Giant Dwarf.

Costs in the Defamation Proceedings

1. [100]

   Mr Morrow was successful in the Defamation Proceedings and, on the face of it, is entitled to his costs of those proceedings.

2. [101]

   Mr Katekar submitted that, nonetheless, there should be no order as to costs because, first, Mr Morrow only succeeded in recovering a “paltry” or “derisory” amount of damages; and second, because Mr Murray had, shortly after the Defamation Proceedings were commenced, sent Mr Morrow’s solicitors letters which Mr Katekar submitted showed that his claim for economic loss was bound to fail.

3. [102]

   I do not see how the relatively modest amount of damages that I have awarded Mr Morrow is, of itself, a reason not to award him costs, at least on the ordinary basis.

4. [103]

   However, questions arise by reason of s 40 of the Defamation Act 2005 (NSW), to which I will now turn.

5. [104]

   Section 40 of the Defamation Act is in the following terms:

6. [105]

   In Davis v Nationwide News Pty Ltd McClellan CJ at CL said:

7. [106]

   As Mr O’Neill submitted:

8. [107]

   The questions that arise under s 40(2)(a) are whether:

9. [108]

   Mr Murray contends he made one reasonable settlement offer. Mr Morrow contends he made three reasonable settlement offers. None of these offers was accepted.

10. [109]

    Mr Morrow commenced the Defamation Proceedings on 11 September 2020.

11. [110]

    On 24 September 2020, Mr Murray wrote to Mr Morrow’s solicitor, Mr Kay:

12. [111]

    Mr Murray continued:

13. [112]

    On 28 September 2020, Mr Kay replied, rejecting Mr Murray’s offer and stating:

14. [113]

    On 30 September 2020, Mr Murray replied to Mr Kay, enclosing two documents.

15. [114]

    The first document was an email sent by an ABC employee, Mr Simon Melkman to Mr Michael Carrington on 1 April 2019, which recorded that Mr Morrow “wants us to proceed with negotiations and commissioning decisions without informing [Cordell Jigsaw], which would be both contentious and detrimental to [Cordell Jigsaw].”

16. [115]

    The second document was a document called “the Help Desk Briefing Document” which was circulated by Mr Peter Munro to Mr Carrington and other ABC staff on 28 November 2019 which contained the recommendation that:

17. [116]

    Mr Murray concluded:

18. [117]

    This was in effect a “walk away” offer by Mr Murray. It was not accompanied by an apology. But it pointed to the difficulty that Mr Morrow was likely to have, and which I found he did have, [37] in proving any connection between Mr Murray’s allegedly defamatory communications with the ABC, and Mr Morrow’s estrangement from the ABC and thus his claim to have suffered economic loss by reason of Mr Murray’s communications.

19. [118]

    Ultimately, I have made a relatively modest award of damages in Mr Morrow’s favour; far less than was advocated for on his behalf.

20. [119]

    In those circumstances, my conclusion is that Mr Murray’s offer to “walk away” was reasonable, and thus that he did not fail to make a reasonable offer to settle the proceedings.

21. [120]

    However, contrary to Mr Katekar’s submission set out at [101] above, I do not see Mr Murray’s September 2020 offers as being a reason to make an order as to costs. Mr Morrow has succeeded in the Defamation Proceedings and should have his costs.

22. [121]

    In his email of 28 September 2020, Mr Kay proposed:

23. [122]

    In substance, Mr Morrow’s proposal was that the Defamation Proceedings be stayed until the outcome of the Commercial Proceedings.

24. [123]

    This was not an offer to “settle the proceedings” for the purposes of s 40(3).

25. [124]

    In any event, as Mr Katekar submitted:

26. [125]

    On 22 December 2020, Mr Morrow made an Offer of Compromise under Uniform Civil Procedure Rules 2005 (NSW) r 20.26 to accept $49,999 in the Defamation Proceedings.

27. [126]

    On the same day, Giant Dwarf and Mr Morrow served an Offer of Compromise in the Commercial Proceedings for $999,999.

28. [127]

    Neither offer was accepted.

29. [128]

    The two Offers of Compromise were not stated to be interdependent. But they were linked in that there were common underlying facts between the two proceedings. The communications said to constitute defamatory publications in the Defamation Proceedings were also said to constitute injurious falsehoods for the purpose of the Commercial Proceedings.

30. [129]

    Thus, had Mr Murray accepted the offer in the Defamation Proceedings, unless he caused Cordell Jigsaw also to accept the offer made in the Commercial Proceedings, he and Cordell Jigsaw would have remained exposed in the Commercial Proceedings to the injurious falsehood allegations, arising from the same material.

31. [130]

    In those circumstances, it was not unreasonable of Mr Murray not to accept Mr Morrow’s 22 December 2020 offer.

32. [131]

    In any event, Mr Morrow ultimately recovered less than that offer.

33. [132]

    Finally, on 23 March 2021, Mr Kay wrote to Mr Fraser inviting Mr Murray to withdraw his plea of justification to the allegation of fraud.

34. [133]

    That was not an offer “to settle proceedings”.

35. [134]

    My conclusion is that s 40 is not enlivened.

36. [135]

    Mr O’Neill submitted that Mr Murray’s and Cordell Jigsaw’s “unreasonable maintenance” of a defence of justification to the allegation of fraud was a reason to award Mr Morrow indemnity costs in the Defamation Proceedings.

37. [136]

    As I recorded in the principal judgment, Cordell Jigsaw did not in its Cross-Claim in the Commercial Proceedings allege that Mr Morrow had behaved fraudulently. [38]

38. [137]

    I also found that the matter was compounded by Mr Katekar’s closing submission that “we do say that he fraudulently made a representation to us”. [39]

39. [138]

    But I took this matter, as well as the other matters referred to at [935] to [953] into account when assessing my award of aggravated damages.

40. [139]

    I do not see how this matter can also be relevant to, or found, an order for indemnity costs.

Conclusion

1. [140]

   I make the following orders in the Commercial Proceedings being proceedings 2019/343896:

   1. (1)

      The Amended Summons is dismissed.

   2. (2)

      Order pursuant to s 237 of the Australian Consumer Law that the Share Sale Agreement dated 8 April 2019 and made between the first and second plaintiffs and the first defendant be rescinded.

   3. (3)

      Order that the plaintiffs do all such things and execute all such documents as are necessary so as to cause the second plaintiff to transfer to the first defendant with effect from 8 April 2019 the shares in the first plaintiff that the first defendant transferred to the second plaintiff pursuant to the Share Sale Agreement and to cause the second defendant to be reinstated, with effect from the date of these orders, as a director of the first plaintiff.

   4. (4)

      Order that within 14 days of the making of these orders the first plaintiff pay to the first defendant:

   5. (5)

      Declare that the first plaintiff is liable to pay the first defendant 50% of the PDV Offset refund, net of costs, and receipts from the ATO for series one of The Checkout.

   6. (6)

      Order that the Amended Cross-Summons otherwise be dismissed.

   7. (7)

      Order that the second and third plaintiffs pay the defendants’ costs of the Amended Summons.

   8. (8)

      Order that the first and second cross-defendants pay the cross-claimants’ costs of the Amended Cross-Summons.

   9. (9)

      Stay orders 2, 3, 7 and 8 (but not order 4) for 35 days from the date of these orders, subject to receipt by the Court within seven days of the making of these orders of an undertaking from the third plaintiff that he will execute all such documents and do all such things so as to cause the first plaintiff to pay to the first defendant 50% of any PDV Offset refund, net of costs, that the first plaintiff receives during the period these orders are stayed from the ATO for series one of The Checkout

   10. (10)

       Grant the first defendant liberty to apply on short notice for orders against the second and third plaintiffs in the event that the first plaintiff fails to comply with order 4 above.

   11. (11)

       Grant the parties liberty to apply on 24 hours’ notice in relation to the form of these orders, such liberty to be exercised by 5 pm on 1 July 2022.

2. [141]

   I make the following orders in the Defamation Proceedings, being proceedings 2020/264993:

   1. (1)

      Order that the defendants pay the plaintiff:

   2. (2)

      Order that the defendants pay the plaintiff interest, including interest on costs from 5 July 2019, at the rate of 3.5%.

   3. (3)

      Note the undertaking given to the Court by the second defendant, on his own behalf, and on behalf of the first defendant that he will not publish any statement to the effect that the plaintiff engaged in fraud against the first defendant.

   4. (4)

      Order that the defendants pay the plaintiff’s costs of the proceedings.

   5. (5)

      Grant the parties liberty to apply on 24 hours’ notice in relation to the form of these orders, such liberty to be exercised by 5 pm on 1 July 2022.