MC Coronam Pty Ltd v Crown

1. [1]

   The trial of this matter was fixed to commence this morning. By an application filed on the business day before the hearing was to commence, the defendants have applied to have the hearing vacated and seek leave to file an amended commercial list response and cross-claim.

The substantive proceedings

1. [2]

   The plaintiff is a special purpose vehicle established by Merricks Capital Proprietary Limited, a private capital firm, to operate as trustee for what is described as the MC Coronam fund. The MC Coronam fund is a fixed unit trust established for the purposes of the dealings which are the subject of these proceedings.

2. [3]

   On 3 May 2022, the plaintiff and several borrower entities entered into a land facility agreement in connection with the purchase of land in the Southern Highlands. Both defendants were listed as guarantors under that agreement. An amended version of the land finance agreement – which incorporated and restated the terms of that agreement – was entered into on 29 November 2022.

3. [4]

   A range of other agreements between the parties and other parties relating to the transactions which underpin these proceedings have been entered into.

4. [5]

   Through those agreements, the plaintiffs advanced in excess of $80 million to the borrower entities. The repayment of that advance was, as I have noted, guaranteed by the defendants.

5. [6]

   Since November 2023, the borrower entities have been in default under those agreements. Receivers have been appointed to the secured assets by the plaintiff. The plaintiff now seeks to enforce against the defendants the guarantees they have given.

The procedural context

1. [7]

   The proceedings were commenced in May 2025. Shortly thereafter, orders were made by Stevenson J, which required the defendant to file and serve their commercial list response by 18 June 2025. Those orders were not complied with by the defendants.

2. [8]

   On 20 June 2025, further orders were made by Peden J, directing that the defendants file and serve a commercial list response by 2 July 2025. Once again, those directions were not complied with by the defendants.

3. [9]

   On 4 July 2025, the proceedings again came before Peden J. On that occasion, her Honour directed that the defendants file their commercial list response by 25 July 2025. On that date, a commercial list response was filed by the defendants.

4. [10]

   After the defendants’ commercial list response was filed, directions were made for the service of evidence by the plaintiff; including orders made on 18 September 2025 by Peden J, which required the plaintiff to file and serve its evidence in chief by 17 October 2025. That order was not complied with by the plaintiff. It is apparent from the Court file that the plaintiff’s evidence in chief was filed on 31 October 2025.

5. [11]

   In October 2025, the defendants also terminated the retainer of the solicitors that had, to that point, been retained to act for them in the proceedings. Until very recently, the first defendant has been representing himself and, by doing so, representing the interests of the second defendant.

6. [12]

   On 5 December 2025, the matter again came before Peden J. The defendants did not appear on that occasion. Her Honour fixed the matter for hearing today – with an estimate of two days – and extended the time for the defendants to serve their evidence to 30 January 2026. Her Honour also made clear that the defendants would not be permitted to rely on evidence served after that date without leave of the Court.

7. [13]

   No evidence has been served by the defendants in the substantive proceedings.

8. [14]

   Shortly after 5 December 2025, the defendants foreshadowed to the plaintiffs their intention to seek a vacation of the hearing date. Unsurprisingly, the plaintiff did not consent to this course. The defendants approached the chambers of Peden J, who re-listed the matter for further directions on 13 February 2026. On that occasion, there was discussion between the first defendant and her Honour about a proposed vacation of the hearing date.

9. [15]

   No formal application to vacate the hearing was made at that time nor was any evidence served in support of such an application. Her Honour made no orders and noted that any application for a vacation of the hearing would need to be made formally.

10. [16]

    The defendants’ formal application to vacate the hearing was not made until the last business day before the proceedings were fixed to commence.

The basis on which the vacation of the hearing is sought

1. [17]

   The first defendant has prepared an affidavit in which he describes significant mental health challenges that he says he and the second defendant have faced.

2. [18]

   Those mental health challenges have not prevented the first defendant from instructing solicitors in related proceedings, or in various ways conducting those related proceedings on his own behalf. However, I accept that these proceedings and the multitude of related proceedings in which he is involved have been the source of significant stress in his life. This has no doubt been exacerbated by the fact that, since October 2025, the defendants have been representing themselves in these proceedings.

3. [19]

   I approach with some caution the fact that the defendants have, until recently, been representing themselves in the current proceedings. It is plain from the evidence that the first defendant was able to retain – and has been instructing – his current solicitors in connection with related proceedings in the Court of Appeal since late last year. Those solicitors have only been formally retained in connection with these proceedings very recently.

4. [20]

   However, the first defendant readily accepts that he should have been more proactive in his defence of these proceedings. He takes full responsibility for his failure to do so. He now says that there are potential defences to the claim made by the plaintiff against the defendants, which they would be prevented from properly exploring and running if the proceedings were to proceed to hearing today and tomorrow. These potential defences were elaborated upon in submissions made by the defendants’ counsel.

5. [21]

   In exercising my discretion to vacate the hearing, I must determine where the interests of justice lie, having regard to the potential prejudice to the parties and the broader concern for the administration of justice, as was emphasised in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175.

6. [22]

   The principles which are to be applied on an application to vacate a hearing were not in dispute before me and were helpfully summarised by Bennett J in Rovers v Ribes [2025] NSWSC 1616 at [21] and [22] as follows:

7. [23]

   The defendants have also drawn to my attention a range of factors identified by the Court of Appeal in Kelly v Mina [2014] NSWCA 9 at [47], which I accept are relevant to the exercise of my discretion.

8. [24]

   The first is the delay caused by the vacation of the hearing and associated application to amend. The proceedings have been on foot for some 10 months. While vacating a hearing and allowing a party to amend their pleadings will inevitably result in some delay, the nature of the defences now sought to be raised are such that I think any such delay can be confined to a relatively short period.

9. [25]

   The second is the extent of any wasted costs that will be incurred if the hearing is vacated. Once again, vacating a hearing date and permitting a late amendment to pleadings will inevitably result in wasted costs. Whilst this is an important consideration, the scale of these proceedings and the issues sought to be ventilated in any amended pleadings mean that those wasted costs will also be relatively confined and are capable of being addressed through costs orders made in favour of the plaintiff.

10. [26]

    Finally, and perhaps most importantly, is any irreparable element of unfair prejudice which might be caused by the vacation and subsequent amendment.

11. [27]

    The defendants say that they will suffer significant prejudice if they are deprived of an ability to advance – in a properly considered manner – certain defences to the plaintiff’s claim that they now wish to avail themselves of. I have heard argument from the parties on what are said to be the strengths and weaknesses of those defences. I accept that some of the defences identified by the defendants are at least arguable. Beyond that, it is not appropriate in the context of an interlocutory application such as this for me to express any considered view on the merits of those proposed defences.

12. [28]

    However, I do accept that the plaintiff’s characterisation of a number of those defences – namely, that they are speculative – is accurate. I do not say that because I have reached a view in relation to the substantive merits of those defences but, rather, because they have been proffered by the defendants and their counsel as defences which they “may” have, but have not yet been able to properly explore.

13. [29]

    Were all the potential defences identified by the defendants in this speculative category, I may have been less inclined to vacate the hearing date. However, there are several which have been slightly better articulated. The ultimate merits of others will turn on an assessment of underlying facts which, for the reasons given by the first defendant, have not yet been adequately explored. I accept that depriving the defendants of an opportunity to explore those defences in a more considered way – albeit within a very tight time frame – would potentially result in them suffering significant prejudice.

14. [30]

    I also accept that prejudice will be suffered by the plaintiff by reason of the vacation of the hearing. I have already addressed the costs that will have been wasted. Whilst this prejudice is largely able to be cured through the making of appropriate costs orders, it is nevertheless real, particularly when regard is had to the possibility that any costs orders made in favour of the plaintiff may ultimately not be able to be met by the defendants.

15. [31]

    The plaintiff will also suffer potential prejudice by reason of the delay in bringing the proceedings to finality. It points to interest and fees which will continue to accrue while the moneys advanced to the borrower entities remain unpaid. The quantum of this ongoing interest is significant. However, the plaintiff does hold security in respect of the borrower entities’ liability in addition to the guarantees given by the defendants.

16. [32]

    Whilst there was some dispute between the parties about the adequacy of that security to meet the existing level of indebtedness, there is a prospect that such further interest as might accrue during the short delay between now and when the matter is finally brought on for hearing, will be captured by existing security.

17. [33]

    More importantly, it was not suggested that a delay in the hearing of these proceedings would operate to diminish, in any significant way, the benefits available to the plaintiff under the guarantee, nor that the entry of any judgment in these proceedings at an earlier time would result in moneys being recovered by the plaintiff sooner. Rather, it would expand the pool of sources from which the plaintiff might seek to recover the very substantial outstanding debt.

18. [34]

    Balancing these considerations, I am satisfied that it is in the interests of justice for me to vacate the hearing and direct that the defendants promptly take all necessary steps to articulate their defences and serve any evidence on which they wish to rely so that the matter can be quickly brought to a final hearing.

19. [35]

    I make the following orders:

    1. (1)

       Pursuant to Rule 2.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and s 61 of the Civil Procedure Act 2005 (NSW) (CPA) the Defendants have leave to file and serve an Amended Commercial List Response on or before 30 March 2026.

    2. (2)

       Pursuant to Rule 2.1 of the UCPR and s 61 of the CPA the Defendants have leave to file and serve a cross claim on or before 30 March 2026.

    3. (3)

       The time for the Defendants to serve the evidence on which they rely in defence of the proceedings and in support of any cross claim they might file is extended to 9 April 2026.

    4. (4)

       The Plaintiff is to file and serve any defence to any cross claim by 9 April 2026.

    5. (5)

       The hearing of this matter fixed for 16-17 March 2026 is vacated.

    6. (6)

       The proceeding are listed on 10 April 2026 for further case management.

    7. (7)

       The Defendants pay the Plaintiff’s costs thrown away by reason of the vacation of the hearing and by reason of any amendment made to the Commercial List Response.

    8. (8)

       The Defendants pay the Plaintiff’s costs of this application.