Litigation Fund WCX Pty Ltd v Aversa

1. [1]

   By Amended Statement of Claim, filed 31 March 2023, Litigation Fund WCX Pty Ltd (“the plaintiff”) brings an action against husband and wife, Mr Rosario and Mrs Antonia Aversa (“the defendants”), in relation to litigation funding agreements. The agreements were purportedly made to fund proceedings undertaken by the defendants concerning the construction of the WestConnex motorway in the inner west of Sydney (“the Aversa proceedings”).

2. [2]

   Mr Robert Coshott is the sole director and shareholder of the plaintiff, a litigation funder. By leave, Mr Coshott appeared for the plaintiff. Leave was required because Mr Coshott no longer holds a practising certificate as a solicitor (see r 7.1(2)(a) of the Uniform Civil Procedure Rules 2005 (NSW)). In relation to this question, an affidavit, sworn 22 November 2024, was read, annexing minutes of a company meeting held on 18 November 2024 authorising Mr Coshott to represent the company in the hearing of this matter.

3. [3]

   There were three purported litigation funding agreements (in relation to three separate properties) signed by the defendants on 18 September 2019 (with two signed by both defendants and one signed only by Mr Aversa (which reflected the ownership of each of the properties)). They were in relevantly identical terms. For convenience, I will sometimes refer to each of these purported litigation funding agreements as “the agreement”.

4. [4]

   In essence, the plaintiff claims that the defendants breached the agreement in two respects: first, by failing to gain approval from the plaintiff for changing solicitors conducting the Aversa proceedings (from Murphy Lyons Lawyers to Stacks Collins Thompson), and second, by failing to keep the plaintiff informed of the progress and status of the Aversa proceedings.

5. [5]

   The defendants filed a defence first raising a threshold issue, disputing that they are each legally bound by the agreement. They otherwise deny the plaintiff’s claims of breach of the agreement.

6. [6]

   The defendants also filed a Cross-claim first seeking declarations that there is no written agreement or any other agreement between the defendants (the first and second cross-claimants) and the plaintiff (the cross-defendant) pursuant to the inherent jurisdiction of the Court and/or s 75 of the Supreme Court Act 1970 (NSW); or second, that the agreement is void ab initio pursuant to the inherent jurisdiction of the Court or s 243 of the Australian Consumer Law due to misleading and deceptive conduct on part of the plaintiff; or third, that the agreement be set aside pursuant to the inherent jurisdiction of the Court or s 7 of the Contracts Review Act 1980 (NSW) on the basis that they are unjust.

7. [7]

   The defendants submitted at the hearing that the Cross-claim would only require determination if the Court found, in considering the plaintiff’s case, that the agreement was in force.

8. [8]

   For the reasons set out below, I have found that the plaintiff’s claims fail at the threshold level. Further, although it is not necessary to do so, I have nevertheless considered (on the hypothesis that the agreement is binding) whether the plaintiff has proved the defendants breached the purported agreement. For reasons also set out below, I have found that the plaintiff has failed to establish the claimed breaches.

9. [9]

   In relation to the Cross-claim, given my threshold finding, and the stated position of the defendants, the relief claimed by the Cross-claim is no longer sought and I have not dealt with those matters further.

10. [10]

    Because of the unusual way in which this matter was conducted, I have found it necessary to set out the evidence in some granular detail.

The evidence

1. [11]

   The proceedings were conducted by the plaintiff in an unorthodox fashion. Although Mr Coshott had filed an affidavit, he did not read it at the hearing. Rather, the only evidence relied upon by Mr Coshott, and admitted into evidence, after argument, was an affidavit of Rosario Cappello, sworn on 29 April 2024. This affidavit relevantly read as follows:

2. [12]

   Although Mr Cappello did not include any indication in the affidavit of what instructions he received or whether he was authorised to make the affidavit, I admitted the affidavit with its annexures, over objection. Pursuant to ss 183 and 69 of the Evidence Act 1995 (NSW), I was satisfied that the documents appeared to be business records, and that pursuant to s 135 of the Evidence Act, the probative value was not substantially outweighed by the danger that the evidence might be unfairly prejudicial but there was a live issue as to what I might ultimately make of the plaintiff’s documents.

3. [13]

   As can be seen, though, from a systematic setting out of the emails from the plaintiff, when compared to the emails produced by the defendants’ witnesses, in my view, it is clear that there has been a selective production of emails on the part of the plaintiff, with many critical emails omitted from the plaintiff’s tender.

The plaintiff’s evidence

1. [14]

   I set out in chronological order the email evidence produced by Mr Cappello in the plaintiff’s case. I have assigned pseudonyms to the names of barristers referred to in the emails.

2. [15]

   The Notice of Breach of Funding Agreement dated 9 February 2021, which was annexed, reads as follows:

3. [16]

   The notice was signed, apparently by Mr Coshott, with the signature block reading “Director, Litigation Fund WCX Pty Ltd”.

4. [17]

   The following email correspondence then occurred between Mr Coshott, Mr Shumsky and Mr Morris:

5. [18]

   The letter addressed to Robert Coshott, WCX Pty Limited, dated 23 February 2021 from Christopher Morris, Solicitor, reads:

6. [19]

   The next day, the following email was sent:

7. [20]

   Annexed to the above email was a document containing the following:

8. [21]

   The notice was signed, apparently by Mr Coshott, with the signature block reading “Director, Litigation Fund WCX Pty Ltd”.

9. [22]

   The final email was sent in reply as follows:

10. [23]

    Also annexed to Mr Capello’s affidavit was what appears to be a bank statement from the Commonwealth Bank for dates between 3 and 22 September 2020 inclusive, albeit with no usual statement details other than the initials “CDIA” and what appears to be a BSB and account number. It shows two entries on 3 September 2020 for payments out of the account of $4,950.00 and $27,270.00 with descriptions “Aversa fees RR” and “Aversa fee XX” respectively.

11. [24]

    Also produced are tax invoices or receipts from:

    1. (1)

       XX headed “Aversa v RMS” dated: 13 March 2020 for $9,817.50; 1 April 2020 for $13,777.50; 21 August 2020 for $27,270.83; 18 September 2020 for $12,155.00.

    2. (2)

       RR in relation to “Rosario Aversa v Roads and Maritime Services” dated as issued on: 17 March 2020 for $3,458.13; 11 June 2020 for $5,458.76; 24 July 2020 for $13,846.28 and $6,716.88; 28 August 2020 for $4,950.00; 21 September 2020 for $1,540.00.

    3. (3)

       Two more banking related documents the import of which is unclear.

12. [25]

    As noted, there were three purported agreements (in relation to three separate properties): two signed by both of the defendants and one signed only by Mr Aversa (which reflected the ownership of each of the properties). As further noted, they were in relevantly identical terms and are sometimes referred to in this judgment, for convenience, as “the agreement”. The agreement included the following relevant provisions.

13. [26]

    Recitals A and B are in the following terms:

14. [27]

    Clause 1.1 defines “Firm” to mean:

15. [28]

    Clause 1.1 defines “Proceedings” to mean:

16. [29]

    Under the heading, Warranties and Representations, cl 3(f) reads:

17. [30]

    Under the heading, Representatives and Conduct of Proceedings:

18. [31]

    Item 4 of the Schedule stated “(‘Firm’ Solicitors)” followed by the name of the previous solicitor in the Aversa Proceedings.

19. [32]

    Under the heading, Termination of Funding Transaction:

20. [33]

    Under the heading, Clients’ Other Obligations:

21. [34]

    Under the heading, Dispute Resolution:

22. [35]

    Under the heading, Notices:

23. [36]

    Under the heading, Address for service, it was provided that notices and communications may be delivered by hand or sent by post or email in a manner specified in the agreement.

The defendants’ evidence

1. [37]

   The defendant relied on the following evidence: an affidavit of Mark Shumsky affirmed 15 March 2024 with annexures; an affidavit of Mrs Antonia Aversa affirmed 14 March 2024, with annexures; an affidavit of Mr Rosario Aversa affirmed 14 March 2024, with annexures; and an affidavit of Christopher John Morris affirmed on 8 February 2023. All but Mr Morris were cross-examined.

2. [38]

   Mark Shumsky was called first. He relied upon his affidavit, affirmed on 15 March 2024, in which the following was set out.

3. [39]

   Mr Shumsky (“MS”) received a telephone call from Mr Coshott (“RC”) on or about 13 September 2020 and they had a conversation to the following effect:

4. [40]

   The two men met as arranged on 14 September 2020 and there was a “lengthy conference” which included a conversation with the words to the following effect:

5. [41]

   Mr Shumsky then produced a series of emails many of which, notably, had not been tendered in the plaintiff’s case.

6. [42]

   On 14 September 2020, at 1:16pm, Mr Shumsky received an email request from Mr Coshott requesting that he prepare a retainer agreement for Mr and Mrs Aversa which reads:

7. [43]

   On 15 September 2020 at 9:26am, Mr Shumsky received an email from Mr Coshott at 9:26am which reads:

8. [44]

   On 16 September 2020 at 4:37pm, Mr Shumsky wrote to Mr Coshott attaching a draft costs agreement, and stating, “It will obviously need tweaking and details added as to fee estimates. I will be guided by you in that respect. It should also address barristers fees, is there a set amount, do I need to ask XX about that?”

9. [45]

   On 17 September 2020 at 8:36am, Mr Shumsky received an email from Mr Coshott thanking him for the draft costs agreement and stating, “As discussed, your commencement date will be first week of October”.

10. [46]

    On 17 September 2020 at 10:49am, Mr Shumsky received an email from Mr Coshott stating:

11. [47]

    On 17 September 2020 at 11:53am, Mr Shumsky received a further email from Mr Coshott stating:

12. [48]

    On 18 September 2020 at 7:53am (elsewhere recorded as 7:52am), Mr Shumsky sent an email to Mr Coshott confirming the date and time of their next meeting, reporting that the matter had been stood over for two weeks, and that he had spoken with XX the previous afternoon. He also stated:

13. [49]

    On 18 September 2020 at 8:16am, Mr Coshott sent an email to Mr Shumsky stating:

14. [50]

    Attached to the email was a Notice of Change of Solicitor.

15. [51]

    Mr Shumsky and Mr Coshott met on 21 September 2020 as arranged during which they had a lengthy conversation which included words to the following effect:

16. [52]

    On or about Monday 21 September 2020, Mr Shumsky received a costs agreement signed by Rosario and Antonia Aversa. It was marked as signed on 18 September 2020.

17. [53]

    On 21 September 2020 at 3:22pm, Mr Shumsky received by email from Mr Coshott a copy of the Aversa signed funding agreement, which was described as the template for all the funding agreements.

18. [54]

    On 21 September 2020 at 4:53pm, Mr Shumsky sent an email to Mr Coshott, including the following:

19. [55]

    Mr Coshott provided these details by email on 22 September 2020 at 8:22 am.

20. [56]

    Mr Shumsky had a telephone conversation with Mr Aversa (“RA”) on or about 22 September 2020 to the following effect:

21. [57]

    On 23 September 2020, Mr Shumsky emailed Mr Coshott confirming he had spoken with Mr Aversa, and to the barristers, and that he would call Mr Coshott the following day to discuss the proposed directions, to confirm the e-court filing and also “other related matters in more detail”.

22. [58]

    Between 18 September 2020 and 5 February 2021, Mr Shumsky corresponded with Mr Coshott via regular emails to provide updates regarding the progress of the Aversa proceedings. In 2020, these included the following:

    1. (1)

       21 October 2020 at 7:46pm (MS to RC):

    2. (2)

       21 October 2020 at 8:04am (RC to MS):

    3. (3)

       28 October 2020 at 1:28pm (RC to MS):

    4. (4)

       28 October 2020 at 5:05pm (MS to RC):

23. [59]

    As set out above at [58(2)], on 21 October 2020, Mr Shumsky emailed Mr Coshott requesting that $50,000 be provided for the Aversa Proceedings, and Mr Coshott replied asking about the purpose for which the funds were required. On 22 October 2020 at 4:28pm, Mr Shumsky replied:

24. [60]

    On 28 October 2020 at 5:25pm, Mr Coshott emailed Mr Shumsky stating, “thanks for the update. will advise when funds transferred”.

25. [61]

    On 4 November 2020 at 12:36pm, Mr Shumsky emailed Mr Coshott stating, “Have funds transfer been arranged yet? Please let me know. I need to let the clients know asap.” Later that day Mr Coshott replied to Mr Shumsky stating that he was awaiting Foreign Investment Review Board approval of a much larger amount “which includes the $50K for [him]” and that it “[s]hould be in bank by early next week”.

26. [62]

    On 9 November 2020 at 9:31 am, Mr Shumsky received an email from Mr Coshott requesting a letter addressed to the Foreign Investment Review Board. This was provided to Mr Coshott later that day.

27. [63]

    Between 15 December 2020 and 17 December 2020, Mr Shumsky’s firm received amounts in its trust account that totalled an amount of $50,000 in three transfers.

28. [64]

    Mr Shumsky also set out email exchanges between Mr Shumsky and Mr Coshott (which were also included in the evidence tendered by the plaintiff, set out above) on 2 February 2021 at 9:23am [1] , 2 February 2021 at 1:33pm; 3 February 2021 at 9:05am; 3 February 2021 at 10:22am; 4 February 2021 at 7:58pm; 5 February 2021 at 12:36pm; and 5 February 2021 at 1:44pm.

29. [65]

    Mr Shumsky set out in his affidavit that on 29 January 2021 he attended an in-person meeting with Mr and Mrs Aversa and Mr Coshott at the Aversa’s home in Haberfield. He said the three other attendees were present throughout the entirety of the meeting which began at 4.30pm and concluded at 6.45pm. Mr Shumsky said that he did not recall the precise words spoken at the meeting, but in broad terms the following matters were discussed:

30. [66]

    Mr Shumsky went on to say that the meeting concluded at 6:45pm. He created a file note of the meeting recording what was discussed. Mr Shumsky produced that typed file note.

31. [67]

    He said it was his usual practice to contemporaneously record all his activities relating to a given matter on practice management software maintained by his employer and that “time record” is automatically added to invoices issued to the clients for a particular matter. He recorded his work in relation to the Aversa proceedings in accordance with his usual practice.

32. [68]

    The relevant invoice records that he spent 22 units (one unit equalling six minutes) which indicates he spent 2 hours and 12 minutes attending the meeting.

33. [69]

    On Saturday 30 January 2021, Mr Shumsky received an email from Mr Coshott, copied to Mr Aversa. It stated:

34. [70]

    I note in passing that the references by Mr Coshott to “the funder” in the third person, and that he has purportedly “reported” the outcomes of the meeting to the funder is a most curious use of language given that Mr Coshott is the sole director and shareholder of the funder (the plaintiff in this case). The above example is not the only example of this curious language.

35. [71]

    On 2 February 2021 at 9:23 am, Mr Coshott emailed Mr Shumsky asking, “What is the position with Counsel?”. That day, Mr Shumsky replied as set out above in the emails produced by the plaintiff that YY had a conflict of interest. Further emails about counsel (concerning their advice and seeking alternative counsel) were exchanged on 3, 4 and 5 February 2021, again as set out above in the emails produced by the plaintiff.

36. [72]

    Mr Shumsky set out the emails exchanged between him and Mr Coshott on 5 February 2021 at 4.40pm, 7:54pm and 7:56pm; and 9 February 2021 at 12:08pm and 4:16pm as set out by the plaintiff in his evidence above.

37. [73]

    Mr Shumsky then set out and/or attached additional emails, not referred to by Mr Coshott.

38. [74]

    On 14 February 2021 at 12:34, Mr Coshott sent an email to Mr Shumsky and another solicitor from Mr Shumsky’s firm, Mr David Thompson, stating:

39. [75]

    On 15 February 2021 at 7:29pm, Mr Coshott sent Mr Thompson the following email:

40. [76]

    On 16 February 2021 at 5:23pm, David Thompson sent the following email to Mr Coshott (copying in Mr Shumsky and Mr Christopher Morris (a colleague of Mr Shumsky at his firm)):

41. [77]

    On 23 February 2021 at 5:02pm, Mr Morris sent an email to Mr Coshott that attached a letter. The letter was in the following terms:

42. [78]

    Mr Coshott responded to Mr Morris at about 2:00pm on 24 February 2021 (as set out in the plaintiff’s evidence above at [22] [recorded as having been sent at 1:59pm]) that the Funding Agreement had been terminated.

43. [79]

    Mr Coshott cross-examined Mr Shumsky. In my assessment, Mr Shumsky was an entirely credible witness who did his best to answer the questions put to him honestly and accurately, and his evidence in chief remained unshaken.

44. [80]

    As to the meeting on 29 January 2021, he confirmed the accuracy of his file note of that meeting. He said after the meeting he would have gone to his office, taken his computer and typed up the file note. He would have probably typed it up at home. He disagreed that the meeting ran for 30 to 40 minutes, but rather that the length of the meeting was as recorded in the file note, i.e., 2 hours and 15 minutes.

45. [81]

    Mr Shumsky said he was not aware of a copy of the file note being provided in response to the Notice of Breach in order to show that there had been no failure to disclose information. Mr Shumsky believed, rather, that instructions were being sought and advice was being sought.

46. [82]

    Much of the cross-examination was misconceived. It is inutile to summarise much of the cross-examination, but some modest examples will suffice. For example, some of the questions put to Mr Shumsky were based on a misunderstanding of the billing system of Mr Shumsky’s firm, and who was responsible for various entries. Other questions were directed to alleged breaches which were not included in the pleadings.

47. [83]

    The next witness called was the second defendant, Mrs Antonia Aversa. She confirmed the accuracy of her affidavit, affirmed on 14 March 2024.

48. [84]

    Mrs Aversa stated that on or about 18 September 2019, she had a conversation with Mr Aversa where he stated words to the following effect:

49. [85]

    She signed a document styled “Master Funding Agreement” on 18 September 2019 and saw Mr Aversa sign the same document. They signed the document in order to enter into a litigation funding agreement with Litigation Fund WCX Pty Ltd (“the Litigation Funding Agreement”). She signed two more agreements, as did Mr Aversa. She exhibited a copy of each of the three agreements.

50. [86]

    I note that Mrs Aversa was mistaken about signing three agreements, and in fact only signed two (as she only co-owned two of the properties), but I do not find this inaccuracy undermined the cogency of her account.

51. [87]

    Mrs Aversa stated:

52. [88]

    Mrs Aversa stated she did not have any legal, financial or accounting advice prior to signing the litigation funding agreements. She said she did not have any further involvement in the Aversa Proceedings and let Mr Aversa handle everything related to it.

53. [89]

    Mrs Aversa stated that she now knows that Jim Lyons acted as her solicitor in the Aversa proceedings. She has never spoken with him and nor did she receive a costs agreement from him. She had no involvement in the selection of the previous solicitor in the Aversa Proceedings.

54. [90]

    Mrs Aversa first saw the summons in the Aversa Proceedings on 20 February 2024 when she received it from her solicitors. She does not recall having seen any other documents filed in the Aversa Proceedings.

55. [91]

    Mrs Aversa stated that she signed a costs agreement on or about 18 September 2020, appointing Stacks Collins Thompson (“Stacks”) as her solicitors in the Aversa Proceedings. She stated:

56. [92]

    Mrs Aversa said that “[o]n or about January 2021” a meeting took place at her house. Mr Aversa, Mr Coshott and Mr Shumsky attended.

57. [93]

    She said that she was not present for much of the meeting because she frequently left the room to take care of her children. She does not recall anything that was spoken at the meeting. She stated she remembered that “the meeting lasted roughly half an hour to 40 minutes”.

58. [94]

    Mrs Aversa was very briefly cross-examined by Mr Coshott and only in relation to her efforts and her opportunity to obtain advice.

59. [95]

    I accept Mrs Aversa as an honest witness who did her best to tell the truth to the best of her recollection.

60. [96]

    In his affidavit, after annexing a number of documents including an ASIC search relating to the plaintiff, Mr Aversa set out (relevantly) the following account:

61. [97]

    Mr Aversa then set out details of other proceedings involving Mr Coshott not presently relevant.

62. [98]

    Mr Aversa was cross-examined by Mr Coshott. Mr Aversa agreed that he could have received the Jim Lyons’ email address from Jim Lyons; he chose not to seek legal advice; and that he negotiated a reduction in the percentage amount requested from 50% to 40%.

63. [99]

    Mr Aversa was taken to [25] of his affidavit, and an email was shown to him from Mr Coshott dated 15 March 2020 at 9:38am annexing a letter from Jim Lyons to Mr and Mrs Aversa dated 14 March 2020. This letter reported on the progress of the proceedings, including that the RMS motion for summary dismissal was dismissed. Mr Aversa said that he could not remember receiving the documents but that he could have received them.

64. [100]

    Mr Aversa was then shown a number of different emails (marked Exhibit D) between himself and Mr Coshott dated 14 April 2020, 25–26 June 2020, 30 June 2020, 10 September 2020 (also annexed to Mr Aversa’s affidavit), 4 September 2020, 11 September 2020, 15 September 2020 and 16 September 2020. In part, they concerned settlement discussions and property values. Mr Aversa did not remember some but remembered others. In relation to the emails he did not remember, he did not dispute that they were sent.

65. [101]

    The email exchange on 4 September 2020 involved Mr Coshott asking for Mr Aversa’s phone number so he could call him (at 10:49am), and Mr Aversa replying (at 3:25pm) with his mobile phone number.

66. [102]

    The email dated Tuesday, 15 September 2020 from Mr Coshott to Mr Aversa stated:

67. [103]

    Mr Aversa stated that he signed the retainer agreement from Stacks after he spoke to Mr Coshott. He also confirmed that the meeting on 29 January 2021 was roughly 30 to 40 minutes.

68. [104]

    In re-examination, Mr Aversa stated that his wife was not involved in the negotiation of the reduction of the percentage from 50% to 40%.

69. [105]

    I accept Mr Aversa as an honest witness. He made concessions as appropriate and did his best to tell the truth to the best of his recollection.

70. [106]

    Mr Morris set out in his affidavit that he was an employed solicitor for Mr and Mrs Aversa and had day to day carriage of this matter.

71. [107]

    He set out and annexed the results of property and company searches he had performed in relation to the plaintiff on 16 January 2023 which indicated that the plaintiff owned no real property in Australia and that the plaintiff has issued shares in the total amount of $1.00. He also annexed a letter written to the plaintiff’s then solicitors on 1 February 2023 stating his clients’ concerns about the plaintiff’s ability to meet any adverse costs orders and requesting certain financial information. He also annexed a further copy of the agreement.

72. [108]

    Mr Morris also annexed some emails from his firm as examples of communication between Mr Shumsky and Mr Coshott, as follows.

73. [109]

    On 24 September 2020 at 12:36pm, Mr Coshott emailed Mr Shumsky:

74. [110]

    On 24 September 2020 at 5:40pm, Mr Shumsky emailed Mr Coshott:

75. [111]

    On 24 September 2020 at 6:12pm, Mr Coshott replied to Mr Shumsky:

76. [112]

    He also annexed emails from between Mr Coshott and Mr Shumsky on 4 February at 7:58pm and 5 February 2021 at 1:44pm, which were also produced as evidence by the plaintiff.

77. [113]

    Finally, he produced an estimate of costs as at the date of his affidavit.

Consideration

1. [114]

   In oral submissions, Mr Coshott contended that the defendants had admitted that the agreements had been entered into. That submission, however, does not withstand scrutiny. The defendants made no such admissions.

2. [115]

   In the Defence filed on behalf of each of the defendants (which are relevantly identical, except in one respect which is not immediately relevant), the defendants clearly did not admit that Michael Coshott entered into the agreements for and on behalf of the company, on or around 22 September 2019, which was to be incorporated as Litigation Fund WCX Pty Ltd ([3] and [5] of the Amended Statement of Claim). The defendants thus deny the purported agreements are binding on either of the defendants.

3. [116]

   The company search produced in evidence shows Litigation Fund WCX Pty Ltd was registered on 19 September 2019. The copies of each of the three agreements produced in evidence by Mr Cappello show a signature above the signature line “Director / secretary” purportedly executing the agreements on behalf of Litigation Fund WCX Pty Limited “in accordance with s 127 of the Corporations Act 2001 (Cth).

4. [117]

   The problem for the plaintiff is that there is no evidence that it was Mr Coshott, as sole director and secretary, who executed each of the agreements, nor when that signature was placed on the document. Further, there is no evidence of the company ratifying the agreement. Thus, there is there is no proven compliance with s 127 of the Corporations Act, nor, if required (which is not known on the evidence) whether there was any compliance with s 131 of the Corporations Act.

5. [118]

   Even if the signature on the agreements (which are all slightly different) are compared to the signature on the Notice of Breach of Funding Agreement, which was attached to an email from Mr Coshott and the surname “Coshott” is discernible in the signature, I was unable to draw the inference (pursuant to s 183 of the Evidence Act) that the agreements were signed by the same person who signed the Notice of Breach of Funding Agreement. I am thus unable to find that Mr Coshott was the signatory. However, even if I could, there is no evidence as to the date of the signing, and no evidence of ratification of the agreement.

6. [119]

   Accordingly, I cannot be satisfied on the balance of probabilities that the agreements were lawfully executed on behalf of the plaintiff. As such, the plaintiff’s case fails at this threshold stage as the plaintiff has failed to prove there is a binding agreement between the plaintiff and each of the defendants.

7. [120]

   As noted above, although it is not necessary to do so, I will nevertheless consider (on the hypothesis that the agreements are binding) whether the plaintiff has proved the defendants breached the purported agreements.

8. [121]

   As noted above, there were two breaches of contract pleaded by the plaintiff. I will deal with each one in turn. Before doing that, it is convenient to set out the relevant legal principles.

9. [122]

   The principles underpinning the interpretation and construction of an agreement reduced to writing are clear. The principles were conveniently summarised in Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104; [2015] HCA 37 at [46]–[51]:

10. [123]

    The pleadings read relevantly:

11. [124]

    The Plaintiff in essence claims that the solicitors were changed from Murphy Lyons to Stacks Collins Thompson without his approval.

12. [125]

    The defendants point to the evidence adduced by them (including a number of emails which, it was contended, had deliberately not been adduced by the plaintiff) which clearly show that the plaintiff not only provided prior approval, but indeed, through Mr Coshott, facilitated the change of solicitors.

13. [126]

    In my view, for the reasons which follow, the evidence before the Court is squarely at odds with the plaintiff’s claim. The combined effect of the evidence of Mr Shumsky and the Aversas, including emails produced by them, makes it abundantly clear that Mr Coshott engineered the change of solicitors from Murphy Lyons to Stacks Collins Thompson, and I so find. To claim that his permission was not sought is plainly unsustainable.

14. [127]

    It can again be noted that the emails adduced by Mr Coshott via Mr Capello omitted many of the emails produced by Mr Aversa and Mr Shumsky (the provenance of which was not contested) and which show indisputably that Mr Shumsky’s account should be accepted. That is, that Mr Coshott contacted Mr Shumsky and asked him to take over carriage of the litigation, and that the defendants were informed about the change of solicitor by Mr Coshott.

15. [128]

    The emails set out above from [42] to [50] show, without any doubt, that it was Mr Coshott who initiated the change of solicitor including Mr Coshott telling Mr Shumsky:

16. [129]

    The evidence, including emails, produced by Mr Aversa which have been set out in detail at [96] (especially the contents of [33]–[43] of his affidavit) entirely support Mr Shumsky’s account at [39] that Mr Coshott approached Mr Shumsky. There is no evidence to the contrary.

17. [130]

    Mr Coshott pointed to an apparent difference in the evidence as between Mr Shumsky and Mr Aversa in relation to the retainer agreement from Stacks Collins Thompson. However, when the each of the men’s answers are examined, they are not in conflict – rather, Mr Shumsky’s answers go to his understanding of how Mr Aversa received the draft agreement, and Mr Aversa’s answers went to the circumstances of Mr Aversa signing it.

18. [131]

    As to the failure of Mr Coshott to rely on his own affidavit I note the following passage in the judgment of Kirk JA in Ling v Pang [2023] NSWCA 112 (Leeming and Mitchelmore JJA agreeing) at [21], [23]–[24]:

19. [132]

    In this case, I am satisfied that given Mr Coshott was such a critical party in the interactions in question, it was expected and natural for him to rely upon his own affidavit. His evidence would clearly have elucidated his case and the fact that he was present in court and chose not to rely on his affidavit is plainly “unexplained”, other than for his submission that he was not obliged to rely upon it. I infer that his evidence would not have assisted his case.

20. [133]

    In any event, in this case, the accounts provided by Mr Shumsky and Mr Aversa, together with the clear terms of the email evidence, are entirely in favour of the defendants. The email evidence and the accounts provided by Mr Shumsky and Mr Aversa are consistent and compelling. To the extent that it was suggested to Mr Shumsky in cross-examination that the wording of his account in his affidavit set out at [40] above indicated that Mr Shumsky was somehow informing Mr Coshott that he had been asked by others to take over the matter, that suggestion is rejected. Not only do I accept as entirely reasonable Mr Shumsky’s explanation that he was confirming what he was told by Mr Coshott, Mr Shumsky’s account accords with all the objective documentary evidence, as well as the evidence of the Aversas. And as I already observed, there is no evidence to the contrary.

21. [134]

    I find that the plaintiff has failed to establish the first alleged breach of contract.

22. [135]

    The pleadings read, relevantly:

23. [136]

    First, it can be observed that the documents referred to in particulars (i), (iii) and (iv) under [24] of the Amended Statement of Claim are not in evidence. That means that the only evidence particularised by the Plaintiff to prove the contended breaches are three emails (set out again here for convenience):

24. [137]

    The plaintiff’s contention is thus a failure by the defendants to:

25. [138]

    The clause of the contract relied upon by the plaintiff to ground the breach is cl 8.2 of the agreement which I also set out again for convenience. It reads:

26. [139]

    The plaintiff submits that the failure of either Mr Shumsky or Mr Aversa to provide answers to the three emails proves the breach.

27. [140]

    The defendants submit that if the whole of the evidence is taken into account, it can be seen that the defendants did consult with and consider the views of the plaintiff and provided regular updates to Mr Coshott which amply satisfied the terms of the agreement.

28. [141]

    Whether or not any breach of cl 8.2 has been made out must be viewed in light of the whole agreement, the purpose of the transaction, and the objects which it was intended to secure. The meaning of the terms in cl 8.2 must be understood in terms of what a reasonable businessperson would have understood those terms to mean in that context.

29. [142]

    The purpose of the agreement as a whole was for the plaintiff to provide funding to the defendants for their proceedings. The proceedings were those of the defendants. It was for the defendants to instruct the solicitors, and to direct, conduct and conclude the proceedings, or any appeal, by way of settlement. Whilst the defendants were obliged to keep the plaintiff advised of the progress and status of the proceedings, as well as consult with and consider the views of the plaintiff, the agreement did not contemplate the plaintiff directing, conducting or concluding the proceedings.

30. [143]

    Further, whilst the agreement obliged the defendants (and for them to instruct their solicitors) to provide information to the plaintiff, that was stipulated as “from time to time” and “as may be reasonably required”. This requirement imports an objective component. In my view, it is reasonable, in the context of the agreement as a whole, to read this obligation as meaning that the defendants were to provide sufficient information at sufficiently regular intervals for the plaintiff to be able to provide its views in a meaningful way in relation to the proceedings.

31. [144]

    On the evidence set out above, when looked at as a whole, the defendants, together with their solicitor, provided information in relation to the proceedings on a very regular basis. It is clear that the information provided to the plaintiff meant that it was well aware of the course the proceedings were taking. It is also clear that the information provided to the plaintiff meant that it had sufficient opportunity to provide its views as to the course of the proceedings.

32. [145]

    Not only were there email exchanges at regular intervals, there was a lengthy meeting on 29 January 2021 at the defendants’ home attended by Mr Coshott.

33. [146]

    In relation to that meeting, I accept the evidence of Mr Shumsky that he typed a file note as to the discussion at the meeting within a short time after the meeting, and that it provided a substantively accurate account of what was said. That Mr and Mrs Aversa were of the view that the meeting went for a shorter time than that recorded by Mr Shumsky does not indicate to me that the essential accuracy of Mr Shumsky’s file note is not to be accepted. Mr Shumsky is a solicitor whose practice it is to type up file notes of meetings. Mr and Mrs Aversa made no file note and had no reason to recall the length of that meeting until well after it occurred. I accept that impressions of length of time can be inaccurate, especially in these types of circumstances.

34. [147]

    Further, as to the difference in the account of Mr Shumsky compared to that of the Aversas as to whether Mrs Aversa was present for the whole of the meeting, I note the following. It is clear from the evidence that of Mr and Mrs Aversa, Mr Aversa was the active party in relation to this litigation and Mr Aversa spoke on behalf of them both. This is clear not only from Mr Shumsky’s file note but also from Mr and Mrs Aversa’s evidence and the email evidence. Mrs Aversa stated in terms (see [88] above) that after signing the agreement she did not have any further involvement in the litigation and let Mr Aversa handle everything related to it. There is no evidence to suggest Mrs Aversa took any active part in the meeting at all. Accordingly, that she was recorded as present for the whole time when she may not have been, does not, in my view, undermine the accuracy of the substance of the file note.

35. [148]

    I also infer that Mr Coshott’s evidence in relation to his account of the meeting at which he was present, which was not put before the Court, would not have assisted his case.

36. [149]

    In all the circumstances, I accept the substance of the content of Mr Shumsky’s file note as a correct account.

37. [150]

    As a consequence, I am of the view that the meeting on 29 January 2021, along with the emails set out above from Mr Shumsky to Mr Coshott, amounted to sufficient provision of information in accordance with the agreement.

38. [151]

    The plaintiff has failed to satisfy me on the balance of probabilities that the defendants breached the agreement as contended.

39. [152]

    As the defendants did not breach the agreements, they therefore did not fail to rectify any purported breaches stated in the Notice of Breach.

40. [153]

    I find that the plaintiff has failed to establish the second alleged breach of contract.

Conclusion

1. [154]

   I have concluded that the plaintiff has failed to make good its claims and that the Amended Statement of Claim should be dismissed with costs.

2. [155]

   Given my primary finding that the plaintiff has failed to prove that any agreements were in existence and the indication by the defendants at the hearing, the relief claimed by the Cross-claim is no longer sought and the Cross-claim is dismissed.

Orders

1. [156]

   I make the following orders:

   1. (1)

      The Amended Statement of Claim is dismissed.

   2. (2)

      The Cross-claim is dismissed.

   3. (3)

      The plaintiff is to pay the costs of the defendants.