Costa Nicodemou in his capacity as Receiver & Manager of Coronam Holdings Pty Ltd in its own capacity and as trustee for Coronam Property Trust v Crown

On 26 March 2025, the plaintiff, Mr Costa Nicodemou, was appointed receiver and manager of a group of companies controlled by the first defendant, Mr Thomas Peter Crown (together, the Crown Group), by MC Coronam Pty Ltd (referred to as Merricks) following default by companies in the Crown Group in repaying money lent to them by Merricks under the terms of a land facility agreement dated 3 May 2022 (subsequently amended on 29 November 2022) (the Facility Agreement). Merricks claims to be owed $122,398,363.24 as at 28 August 2025.

The borrowers’ obligations under the Facility Agreement were secured by a General Security Deed dated 3 May 2022 (the GSD). Under that Deed, members of the Crown Group granted security over the assets they held both in their own right and as trustees of various trusts controlled by Mr Crown. Mr Nicodemou was appointed by Merricks exercising rights granted to it under that Deed.

From about July 2025, Mr Crown made a series of representations to specific individuals that certain companies in the Crown Group had been removed as trustees of the relevant trusts with the consequence that Mr Nicodemou had no legal authority to deal with the assets of those trusts or to receive income generated by them.

On 8 August 2025, Mr Nicodemou in his capacity of receiver commenced these proceedings initially seeking interim relief restraining Mr Crown from continuing to make those representations. That relief was granted by Peden J on 14 August 2025 and the matter was fixed for a final hearing on 3 October 2025.

Originally, the proceedings raised a substantial number of issues concerning the assets that fell within the scope of the receivership, whether by making the representations he did, Mr Crown had engaged in misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law (ACL) and, if so, whether Mr Nicodemou was entitled to claim damages in respect of that conduct. By the commencement of the hearing, many of those issues had fallen away.

Subject to one qualification to which I will come, Mr Crown concedes that the relevant companies had not been removed as trustees of the relevant trusts and that, as a consequence, Mr Nicodemou’s receivership extends to the assets of those trusts. Mr Crown also concedes that he engaged in misleading and deceptive conduct when he made the representations that he did and that in those circumstances, and again subject to one qualification, he consents to the permanent injunctions sought by Mr Nicodemou restraining him from continuing to engage in that conduct.

Three issues remain to be determined.

First, there is a question whether the Court should make the declarations sought by Mr Nicodemou with or without the qualifications sought by Mr Crown. Second, there is a question whether Mr Nicodemou is entitled to recover damages in respect of Mr Crown’s contravention of s 18 of the ACL. Third, and most significantly, there is a question whether Mr Nicodemou is entitled to seek relief in respect of an asset held by Resilient Investment Holdings Pty Ltd (RIH) as trustee of the Resilient Investment Trust consisting of shares in Ailo Holdings Pty Ltd. If he is not, Mr Crown submits that the injunctions and any declarations made by the Court should reflect that qualification.

It is convenient to deal with the second and third questions before dealing with the issue whether the declarations concerning misleading and deceptive conduct should be made and, if so, in what form.

Originally, Mr Nicodemou sought to recover damages in the nature of rent or agistment fees that had been withheld by the persons liable to pay those amounts on the basis that those persons were uncertain about who was entitled to receive them. It is plain that as a consequence of the concessions made by Mr Crown, that Mr Nicodemou is entitled to receive them and it is to be expected that when the Court makes its orders the relevant amounts will be paid to him. In those circumstances, Mr Nicodemou does not press his claim for damages in respect of those amounts.

The only other damages now claimed by Mr Nicodemou are additional costs he claims he incurred as a consequence of Mr Crown’s representations. In an affidavit sworn on 2 October 2025, Mr Nicodemou says that his firm (Newpoint Advisory) “has incurred fees and costs in the amount of $21,752.90 … in addressing the representations made by Mr Crown which are the subject of these proceedings, and the consequences of those representations”. He then gives this evidence:

Details of those amounts are given in a “WIP Report” exhibited to Mr Nicodemou’s affidavit. However, without additional information, it is not possible for the Court to reach a proper conclusion on whether there is a sufficient connection between the work done and the representations to be able to say that the fees charged for that work are damages resulting from the misleading and deceptive conduct. Accordingly, this part of the claim must fail.

By an amended summons, Mr Nicodemou seeks the following declarations:

Mr Crown contends that Mr Nicodemou does not have standing to seek those declarations because the shares in Ailo Holdings are not part of the secured property of RIH. He does not take issue with the form of the declarations themselves, although it is still necessary for the Court to be satisfied that it is appropriate to make them.

The way the issue has been presented to the Court is somewhat curious. Mr Nicodemou does not seek a declaration that the shares in Ailo Holdings form part of the secured property. Nor does Mr Crown seek a cross-declaration that the shares are not part of the secured property. Instead, both parties skirt around that issue. Mr Nicodemou does so by confining the declarations he seeks to the rights of RIH. He submitted that he had standing to seek those declarations whether or not the shares in Ailo Holdings formed part of the secured property, although he did advance an argument that the shares in Ailo Holdings did form part of the secured property. Mr Crown contested Mr Nicodemou’s standing to seek those declarations. Although his position is not entirely clear, the way Mr Crown appears to put his argument is that in order for Mr Nicodemou to seek the declarations he does, he must establish that the Ailo Holdings shares are part of the secured property and Mr Nicodemou has failed to do that.

Notwithstanding the position of the parties, it seems sensible to start with the question whether the shares in Ailo Holdings formed part of the secured property, since it is common ground that if they did, Mr Nicodemou has standing to seek the declarations he does. The only question, then, would be whether the Court should in the exercise of its discretion make those declarations.

Before addressing the question whether the shares in Ailo Holdings formed part of the secured property, it is necessary to give some further background.

By cl 1 of a Deed of Accession dated 23 January 2020 (the Accession Deed), RIH agreed to be bound by an Amended and Restated Shareholders Agreement dated 30 November 2017 between the then shareholders of Ailo Holdings (the SHA). By cl 2 of an Accession Deed, RIH:

According to the register of Ailo Holdings, as at 30 April 2025, RIH held 10,432,816 shares in Ailo Holdings. It is unclear when RIH acquired the additional shares.

On 13 June 2025, Mr Crown sent an email to Mr Ben White at Ailo Holdings purporting to attach a letter dated 26 September 2024 addressed to the Company Secretary of Ailo Holdings attaching a share transfer form dated 26 September 2024 and signed by Mr Crown which shows a transfer of the shares in Ailo Holdings from RIH as trustee for the Resilient Investment Trust to Coronam Family Office Custodian Pty Ltd (CFOC), the second defendant.

On 19 June 2025, Mr White replied to Mr Crown’s letter saying:

Mr Crown continued to assert in correspondence with Ailo Holdings (and with Mr Nicodemou) that the shares had been transferred to CFOC. That claim was resisted by Ailo Holdings which maintained that the September 2024 documents were not received by Ailo Holdings and that (to quote from a letter dated 5 September 2025 sent by Ms Alexandra Coleman on behalf of Ailo Holdings) “In fact, an email dated 13 June 2025 enclosing copies of documents (the metadata for which indicate they were created on 30 May 2025) was the first time Ailo was provided these documents”.

Mr Nicodemou disputes the authenticity of the letter and transfer. In doing so, he points to an email chain starting with an email dated 8 February 2025 from an unknown sender to Mr Crown concerning an investment in Ailo Holdings. One email in that chain dated 20 March 2025 from Mr Crown says:

Apparently attached to that email were two share transfer forms both dated 18 February 2025, and both signed by Mr Crown. One shows the transfer of 194,993 shares in Ailo Holdings from RIH as trustee for the Resilient Investment Trust to a transferee, whose name has apparently been redacted, for a consideration of $300,000. The other shows the transfer of 649,979 shares in Ailo Holdings from RIH as trustee for the Resilient Investment Trust to an unnamed transferee for $1 million. Mr Nicodemou submits that it is to be inferred from that email and those share transfers that RIH continued to own the shares in Ailo Holdings and that the purported transfer to CFOC is a sham.

Clause 2 of the GSD relevantly provides:

Clause 16.1(a) of the GSD relevantly provides:

“Grantor” includes RIH in its own capacity and as trustee. “Collateral” is defined broadly. In relation to RIH, it plainly includes any shares it holds in Ailo Holdings either for itself or as trustee. The issue is whether those shares are excluded under cl 2.2(a)(ii) because Ailo Holdings is not a wholly owned Subsidiary (a term defined by reference to the Corporations Act 2001 (Cth)) of RIH.

Clause 2.2(a)(ii) only applies “where under the relevant … constituent document with a Counterparty … the consent of the relevant Counterparty is required before the relevant Grantor may … grant a Security Interest in such Collateral … unless the relevant Counterparty has consented to the granting of the Security Interest over such Collateral under this document”. “Counterparty” is defined to mean “a third party who is not an Obligor or a related entity of an Obligor”.

Although the clause is somewhat clumsily expressed, it seems clear that what the clause is saying is that the limitation only applies to “equity” in a company where the company’s “constituent document” contains a prohibition on the granting of a Security Interest in its equity without the company’s consent and that consent has not been given “under this document”. If the company’s constituent document does contain such a prohibition and the consent has not been given, then under cl 2.2(d)(i) each Grantor must “comply with any requirement in any Finance Document … to seek consent to the grant of a security interest over any Relevant Collateral”.

Clause 2.2(d)(i) itself does not appear to contain an obligation to seek consent. Rather, it simply states that each Grantor must comply with any obligation to seek consent that is to be found elsewhere (in any Finance Document). The only apparent obligation under a Finance Document (which is defined to include the Facility Agreement and the GSD) to seek consent is cl 16.1(a) of the GSD, which imposes an obligation on each Grantor to “perform all acts and execute and deliver all further documents as the Secured Party, acting reasonably, requires” to perfect the Security Interest. Under cl 2.2(c), it appears that once consent is given, the equity becomes the subject of a security interest under the GSD. Moreover, if the Collateral is sold, the proceeds of sale become part of the secured property under cl 2.2(b).

Clause 2 recognises that the constitutions of some proprietary companies contain restrictions on dealing with the company’s shares without the consent of the company. It excludes shares in companies of that type from the security taken under the GSD unless and until the relevant consent is obtained. The clause uses the broader (and undefined) term “equity” rather than “shares”, recognising that some equity interests may be in other forms, such as units in a unit trust. Similarly, the clause uses the broader (and undefined) term “constituent document”, which would, for example, include a trust deed. However, those points do not change the essential effect of the provision.

The constitution of Ailo Holdings contains no restrictions on the transfer of the shares in it. Clause 19.1 provides:

There is no other provision of the constitution that limits the operation of that clause. However, cl 20.1 provides:

Clauses 10 and 16 of the SHA relevantly provide:

“Dispose” is defined broadly to mean “sell, transfer, Encumber or otherwise dispose of a legal or beneficial interest in a Share”. It plainly includes the creation of a charge.

It follows from what has been said the effect of the GSD is to create a charge over the secured property where the GSD cannot operate as a transfer of the “Collateral”. That is the position in relation to the shares in Ailo Holdings, since any transfer would require the consent of the directors of Ailo Holdings under cl 20.1 of its constitution; and it is plain from the share register of Ailo Holdings, which still shows RIH as the shareholder, that no such consent has been given.

The SHA requires the consent of ordinary shareholders to the creation of that charge, but neither the constitution nor the SHA requires the consent of the company itself to the creation of the charge. Consequently, even if it could be said that the SHA forms part of the constituent documents of Ailo Holdings, it cannot be said that the condition for the operation of the limitation contained in cl 2.2(a)(ii) of the GSD (that is, “where under the relevant … constituent document … the consent of the relevant Counterparty [ie Ailo Holdings] is required before the relevant Grantor [ie RIH] may … grant a Security Interest in such Collateral”) has been satisfied. The ordinary shareholders of Ailo Holdings may have a claim against RIH for breach of the SHA because their consent to the creation of the charge was neither sought not given, but that does not affect application of cl 2.2(a). That exception does not apply because Ailo Holdings’ consent was not required to the creation of the charge.

In view of that conclusion, it is unnecessary to consider the question whether Mr Nicodemou would have had standing to seek the declarations he seeks even if Merricks had not obtained a valid charge over the Ailo Holdings shares held by RIH.

It is not clear why all the declarations sought by Mr Nicodemou are necessary or appropriate.

The starting point is that RIH as trustee of the Resilient Investment Trust is shown as the holder of 10,432,816 shares in Ailo Holdings in Ailo Holdings’ Register of Members. In the absence of evidence to the contrary, that is evidence that RIH in that capacity is the legal and beneficial owner of the shares: see Corporations Act 2001 (Cth), s 176. CFOC does not seek to displace that evidentiary presumption. Moreover, in order to displace the presumption, CFOC would need to establish that the requirements of Ailo Holdings’ constitution and of the SHA had been satisfied. However, it is plain that the constitution has not been satisfied because the purported transfer to CFOC has not been registered. Moreover, the directors have a discretion to refuse registration without giving a reason for their refusal. It appears that they have exercised that discretion against registration.

In addition, under cl 16.1 of the SHA “No party may transfer … any interest in …Shares to a person not already a Shareholder unless that person has executed and delivered to each Shareholder and the Company a Deed of Accession”. There is no evidence that CFOC has executed a Deed of Accession. It must follow that RIH as trustee of the Resilient Investment Trust remains the legal and beneficial owner of the shares in Ailo Holdings and those shares continue to form part of the secured property under the GSD.

In view of what I have said, it is neither necessary nor appropriate to make all the declarations sought by Mr Nicodemou on this aspect of the case. In the light of what has happened, there may be questions as between Ailo Holdings and CFOC concerning whether CFOC was entitled to be registered as the owner of the shares held by RIH, although given the broad discretion conferred on the directors of Ailo Holdings by cl 20.1 of the constitution it is not apparent that CFOC could succeed in that claim. Moreover, such a claim would raise a question of priority as between Merricks and CFOC. Those various issues could only be determined in properly constituted proceedings to which Ailo Holdings was a party. It is not appropriate to resolve the factual issues relevant to those issues by declarations made in these proceedings. However, given what has happened, it is appropriate to make a declaration that recognises that the shares in Ailo Holdings continue to be held by RIH in its capacity as trustee of the Resilient Investment Trust to resolve any question of who is entitled to deal with them. That is best done by making a declaration in the form of para 10E of the Amended Summons, which reflects the position as shown in the Ailo Holdings share register.

Two issues arise in relation to the declarations concerning misleading and deceptive conduct. One is whether they should be made. The second is their form.

In my opinion, it is appropriate to make declarations that Mr Crown has engaged in misleading and deceptive conduct as well as granting injunctive relief. Generally, a court will not make declarations unless there is some utility in doing so and the declarations are not merely prefatory to other relief: Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286; [1974] HCA 18; Attorney-General (NSW) (Ex rel Corporate Affairs Commission) v Australian Softwood Forests Pty Ltd [1979] 2 NSWLR 73 at 76. The declarations will have utility in this case because they will make it clear to persons who have acted on the misleading and deceptive conduct by withholding money from Mr Nicodemou what the true position is.

The question remains what form those declarations should take. There needs to be no qualification on the declarations and permanent injunctions in relation to the shares in Ailo Holdings held by RIH, since those shares form part of the secured property.

Mr Nicodemou seeks declarations that mirror the form of the permanent injunctions that Mr Crown accepts should be granted. Mr Crown, on the other hand, proposes more limited declarations which are tied precisely to the conduct he engaged it. So, for example, he proposes a declaration that by sending a specific email he engaged in misleading and deceptive conduct by making the specific representations made in that email in relation to the specific companies in the Crown Group that are referred to in that email.

I prefer the approach proposed by Mr Nicodemou. The form of declarations proposed by Mr Crown are apt to lead to confusion because, by focusing on specific representations in relation to specific companies, they may give the wrong impression that the position is different in relation to other companies in the Crown Group that are not the subject of the declarations. However, by making the specific statements, Mr Crown gave the broader impression that the position applied to all companies in the Crown Group and it is because of that that the permanent injunctions are expressed more broadly. It is appropriate in those circumstances that the declarations mirror the injunctions.

Mr Nicodemou has been substantially successful. Although he failed in his claim for damages, that claim was such a minor part of the case that no special costs order should be made to reflect that failure. And although Mr Nicodemou has not been successful in obtaining all the declarations he sought in the amended summons, he has been successful on the question of standing, which was the main issue between the parties. Mr Nicodemou has also been successful in establishing that Mr Crown had engaged in misleading and deceptive conduct and in obtaining the primary relief he sought. In those circumstances, the defendants should pay his costs.

Accordingly, the orders of the Court are: