Crown v Nicodemou in his capacity as Receiver and Manager of Coronam Holdings Pty Ltd

1. [1]

   WARD P: I agree with Adamson JA.

2. [2]

   ADAMSON JA: The appellants, Thomas Crown and Coronam Family Office Custodian Pty Ltd (Coronam Family Office) (together, Crown), appeal against orders made on 23 October 2025 by Ball JA (the primary judge), sitting in the Equity Division of the Supreme Court (the Court below). These orders included a declaration that Resilient Investment Holdings Pty Ltd in its personal capacity and as trustee for Resilient Investment Trust (RIH) is the legal and beneficial owner of 10,432,818 shares (the Ailo shares) in Ailo Holdings Pty Ltd (Ailo).

3. [3]

   The respondents to the appeal are Costa Nicodemou (the receiver) in his capacity as receiver and manager of Coronam Holdings Pty Ltd and other companies in its own capacity and as trustee for the Coronam Property Trust and other trusts.

4. [4]

   On appeal, Crown submitted, on various bases not put in the Court below, that the charge granted by RIH to the receiver’s appointor under the General Security Deed dated 3 May 2022 did not extend to the Ailo shares and that, accordingly, the receiver did not have standing to seek the relief claimed in the amended summons.

5. [5]

   Crown’s appeal ought not be entertained by this Court. To explain why the appeal must be dismissed on this basis it is necessary to set out in some detail the background facts and the ambit of the proceeding in the Court below, as revealed by the pleadings and the submissions made.

The background facts

1. [6]

   Pursuant to a Land Facility Agreement dated 3 May 2022 (as amended on 29 November 2022) (the Facility Agreement) (Blue 169), MC Coronam Pty Ltd (Merricks) advanced $87,493,606 to certain entities controlled by Mr Crown, including RIH.

2. [7]

   On 3 May 2022, RIH and others entered into a General Security Deed pursuant to which they, by cl 2.1, granted a security interest to Merricks over “Collateral” (Blue 70), which was defined to mean all present and after acquired property of a “Grantor” (Blue 74). “Grantor” is defined to mean “[e]ach person listed in Schedule 1” and includes RIH.

3. [8]

   Clause 2 of the General Security Deed relevantly provides:

4. [9]

   The General Security Deed defines “Counterparty” to mean “a third party who is not an Obligor or a related entity of an Obligor”. “Obligor” is defined to have the same meaning as in the Facility Agreement: namely “each Borrower and each Guarantor”.

5. [10]

   It was common ground that “Grantor” includes RIH; that “Collateral” includes any shares which RIH holds in Ailo either for itself or as trustee; and that Ailo is not a wholly owned subsidiary of RIH.

6. [11]

   In May and November 2022, Merricks advanced funds to RIH and others pursuant to the Facility Agreement.

7. [12]

   On 15 November 2023, Merricks issued a notice of default under the Facility Agreement (Blue 340-342). On 26 March 2025, by Deed of Appointment, Mr Nicodemou was appointed receiver and manager of certain property, including that of RIH (Blue 48-69).

8. [13]

   As at 30 April 2025, Ailo’s register of shares recorded that RIH was holder of the Ailo shares. On 23 January 2020 RIH had executed a Deed of Accession pursuant to which it agreed to be bound by an Amended and Restated Shareholders Agreement dated 30 November 2017 between the then shareholders of Ailo (the shareholders’ agreement).

9. [14]

   On 13 June 2025, Mr Crown wrote to the receiver and asserted that Coronam Family Office and not RIH owned the Ailo shares (Blue 1326). He sought to substantiate this allegation by enclosing a signed share transfer dated 26 September 2024, apparently recording a transfer of the Ailo shares from RIH to Coronam Family Office which Mr Crown asserted had been sent to Ailo at about that time (Blue 1326). The receiver responded by email on 19 June 2025, refuting the allegation and indicating that Ailo’s records did not include any record of the alleged share transfer having been received before 13 June 2025 (Blue 1336).

10. [15]

    In an email sent on 1 July 2025 (Blue 1335), Mr Crown reiterated his assertion as to ownership of the Ailo shares (Blue 1335). He sent a further email on 22 July 2025 to similar effect (Blue 1335). On 31 July 2025, Mr Crown sent an email with a letter of demand to the receiver in which he “reserve[d] all rights to pursue immediate action, including … [i]njunctive and declaratory relief … under the [shareholders’ agreement]” (Blue 1332).

11. [16]

    Mr Crown sent a further email to the receiver on 7 August 2025, complaining about the lack of response. He said, in part (Blue 1333):

12. [17]

    On 3 September 2025 (after the receiver had commenced proceedings against Mr Crown (see below)), Mr Crown wrote to the “Ailo Board and Company Secretaries”, alleging that Coronam Family Office was the legal and beneficial owner of the Ailo shares. He referred to the September 2024 transfer and alleged that they had become aware that “Ailo [through the receiver] is apparently engaging with a third party in relation to a draft Share Sale Agreement involving the same shares” (Blue 1242). The email concluded with a list of demands, including that Ailo cease any dealings with the Ailo shares; that the directors confirm that Ailo had not agreed to any dealing relating to those shares; and that they rectify Ailo’s share register to record Coronam Family Office as the legal and beneficial owner of the Ailo shares as a result of the September 2024 share transfer (Blue 1242-1243).

13. [18]

    Ailo’s directors responded, through their solicitor, by email on 5 September 2025 (after the receiver had commenced proceedings), asserting that no share transfer for the Ailo shares had been received prior to 13 June 2025. The letter concluded (Blue 1245):

The proceedings in the Court below

1. [19]

   On 8 August 2025, the receiver commenced proceedings against Mr Crown by summons filed in the Commercial List of the Supreme Court, claiming relief that included injunctions to restrain Mr Crown from representing that the receiver had no authority to sell the Ailo shares and a declaration that RIH was the owner of the Ailo shares. The summons was returnable for directions on 14 August 2025 (short service having been granted). On that day, Mr Crown gave undertakings to the Court that he would not make representations including that the receiver did not have authority to deal with trust assets. On 14 August 2025, the proceedings were listed for final hearing on 3 October 2025 with an estimate of one day.

2. [20]

   The hearing of the matter was expedited to minimise the disruption to the receiver’s negotiations to sell the Ailo shares which had already commenced when the receiver was notified of Mr Crown’s representations and assertions disputing that RIH owned them (Black 1, Blue 17).

3. [21]

   The receiver filed a Commercial List Statement on 1 September 2025 which, together with the summons, was amended on 12 September 2025 (including to add Coronam Family Office as a second defendant). The allegations and responses of present relevance are referred to below.

4. [22]

   In paras 53-72 of his Amended Commercial List Statement (the Amended Statement), the receiver set out the matters on which he relied in support of the allegation in para 73 that even if the September 2024 share transfer were authentic, it was not effective to transfer the Ailo shares from RIH to Coronam Family Office. The receiver alleged, in part, that Coronam Family Office, as putative transferee of the Ailo shares had not complied with the shareholders’ agreement in various respects, including by failing to give notice or to execute a Deed of Accession.

5. [23]

   The receiver alleged that:

   1. (1)

      Mr Crown produced the purported share transfer form dated 26 September 2024 after 26 March 2025, the date on which the receiver was appointed (para 55 of the Amended Statement);

   2. (2)

      the authenticity of the share transfer form was not admitted (para 56 of the Amended Statement);

   3. (3)

      no other documents had been produced to substantiate the transfer of the Ailo shares from RIH to Coronam Family Office (para 57 of the Amended Statement); and

   4. (4)

      cl 20.1 of Ailo’s constitution provides that the directors may refuse to register a transfer without giving any reason for the refusal (para 58 of the Amended Statement).

6. [24]

   The receiver also alleged that:

   1. (1)

      Coronam Family Office was not registered in the register of members of Ailo (para 63 of the Amended Statement);

   2. (2)

      even if the share transfer form dated 26 September 2024 were authentic, it was lodged after RIH’s property was controlled by the receiver and therefore was not an effective transfer of the Ailo shares by RIH (para 64 of the Amended Statement); and

   3. (3)

      RIH was a party to the shareholders’ agreement, which prohibited the transfer of shares in Ailo otherwise than in accordance with the agreement (paras 65 and 66 of the Amended Statement).

7. [25]

   Crown alleged in the Amended Commercial List Response filed on 3 October 2025 (Amended Response):

8. [26]

   The receiver’s opening written submissions dated 1 October 2025 set out the matters which were then in dispute, including whether the September 2024 share transfer was authentic and whether it had been provided to Ailo at about the date which it bore (Black 62).

9. [27]

   Crown’s written submissions, dated 2 October 2025 (the eve of the hearing) contained various concessions, including by Mr Crown that his emails contained representations which were misleading or deceptive or likely to mislead or deceive and consented to permanent injunctions restraining him from such conduct (Black 70). Of present relevance, Crown submitted:

10. [28]

    The proceeding was heard by the primary judge on Friday 3 October 2025. As Crown’s counsel neither cross-examined the receiver’s witnesses nor tendered any evidence in Crown’s case, Mr Dooley, who appeared on behalf of the receiver with Mr Sivanathan in the Court below and in this Court, commenced final submissions immediately after reading the receiver’s affidavit evidence and tendering relevant documents.

11. [29]

    At the outset of final submissions, the primary judge observed, in exchange with the receiver’s counsel, that what was left of the dispute seemed to be what was contained in paras 7-11 of Crown’s submissions (extracted above) (Black 18): namely, whether the receiver had standing to commence the proceedings (Black 20). The receiver submitted that he had standing to bring the proceedings for the relief claimed on the basis of s 420(2)(k) of the Corporations Act 2001 (Cth) (Black 20).

12. [30]

    Before the receiver’s counsel continued with his submissions, the primary judge asked Crown’s counsel whether Crown was advancing a contention based on standing or on the merits of the receiver’s claim. Crown’s counsel responded (Black 21-22):

13. [31]

    The receiver’s counsel resumed his submissions and took the primary judge through cl 2.2(a)(ii) of the General Security Deed. He put Crown (and the primary judge) squarely on notice of its position as to the effect of the way in which Crown had conducted the case, as follows (Black 24):

14. [32]

    Mr Wiggins, who appeared for Crown in the Court below but not in this Court, said, in closing submissions (Black 28):

15. [33]

    Mr Wiggins also made submissions about cl 2.2 of the General Security Deed but did not take the matter further than his written submissions. He said of cl 2.2:

16. [34]

    Mr Wiggins also said:

17. [35]

    At the conclusion of the hearing, the primary judge stood the matter over to enable the parties to agree on the form of declaration that ought be made as to misleading or deceptive conduct (which Mr Crown had conceded). His Honour otherwise reserved his decision.

18. [36]

    In order to determine the questions of standing and the ownership of the Ailo shares, the primary judge considered the interpretation of cl 2.2(a)(ii) of the General Security Deed as well as Ailo’s constitution and the shareholders’ agreement. The primary judge said of the forensic decisions taken by the parties:

19. [37]

    His Honour said further, when construing cl 2.2(a)(ii) of the General Security Deed:

20. [38]

    The primary judge identified the relevant provisions of Ailo’s constitution, as follows:

21. [39]

    The primary judge’s dispositive reasons as to the receiver’s standing and the ownership of the Ailo shares are as follows:

22. [40]

    As is evident from the grounds of appeal set out below, Crown submitted that the primary judge was in error in identifying Ailo rather than its shareholders as the relevant “Counterparty” for the purposes of cl 2.2(a)(ii) of the General Security Deed and in determining that, because the charge was valid on that basis, the receiver had standing to seek the declaratory relief sought in the amended summons.

23. [41]

    The primary judge made orders of which the following are relevant to the appeal:

The grounds of appeal

1. [42]

   Crown’s third amended notice of appeal filed in Court on 30 March 2026 alleges the following grounds (Orange 10):

2. [43]

   There is no challenge in the appeal to the substance of the declaration that RIH is the legal and beneficial owner of the Ailo shares. Rather, Crown sought to challenge the declaration on the basis that the receiver lacked standing to seek the declaration because the charge created by the General Security Deed did not extend to the Ailo shares. This is reflected in the substantive orders sought, as follows:

Notice of contention

1. [44]

   The receiver filed an amended notice of contention on 15 March 2026 which alleged the following grounds (Orange 51):

Consideration

1. [45]

   Crown submitted that “relevant Counterparty” in cl 2.2(a)(ii) is not a “fixed label” with a constant meaning of “the company whose shares are in question”, but rather is a “relational phrase” which has a distributive meaning to apply to any counterparty whose consent is required under the “Relevant Contract”. Crown submitted that the purpose of the carve-out in cl 2.2(a)(ii) is to prevent the General Security Deed security from attaching to equity interests where attachment would require third-party consent (or would result in breach or default) unless and until the third party consents.

2. [46]

   Crown submitted that the test for whether cl 2.2(a)(ii) applies involves the following steps:

   1. (1)

      identify the “Relevant Contract”, which may be a “contract” or a “constituent document with a Counterparty”;

   2. (2)

      ask whether, under the Relevant Contract, the consent of the “relevant Counterparty” is required before the Grantor may grant the Security Interest (or whether granting it would be a breach/default); and

   3. (3)

      ask whether that Counterparty has in fact consented.

3. [47]

   Crown argued that, applying the test above:

   1. (1)

      the shareholders agreement was the “Relevant Contract” (as it was both a constituent document with a Counterparty and a “contract”);

   2. (2)

      under the shareholders agreement, a shareholder must not “Dispose” (which includes “Encumber”) of shares except “with the written consent of all Ordinary Shareholders” who are, therefore, the relevant “Counterpart[ies]” (since the shareholders are neither an Obligor nor a related entity of an Obligor); and

   3. (3)

      as the receiver had not proved that Ailo’s shareholders had consented, the receiver had not discharged his onus of proving that the charge extended to the Ailo shares.

4. [48]

   On this basis, Crown submitted that:

   1. (1)

      the carve-out in cl 2.2(a)(ii) applies and the security granted under cl 2.1 does not extend to RIH’s shares in Ailo; and

   2. (2)

      accordingly, the receiver did not have standing to obtain the declaration since the charged property did not include the Ailo shares.

5. [49]

   Ultimately, Ms Jaffray only faintly pressed her submission that the receiver did not have standing. Although she did not abandon the submission, she relied exclusively on her written submissions which she did not develop orally (tr 11).

6. [50]

   The receiver’s primary submission was that it was not open to Crown to make these new arguments in this Court, having not made them in the Court below. The receiver further submitted that questions of onus were to be viewed by reference to matters which were actually in dispute between the parties and not simply by reference to factual propositions which might have been raised, but were not.

7. [51]

   Crown, for whom Ms Jaffray appeared with Mr Ivantsoff in this Court, accepted that:

   1. (1)

      Crown did not, in the Court below, make any of the submissions presently relied upon;

   2. (2)

      there had been no reference to the nature of the consent required by either Ailo’s constitution or the shareholders’ agreement for the purposes of cl 2.2(a)(ii) of the General Security Deed; and

   3. (3)

      Crown’s counsel had made no reference in the Court below to cl 2.2(a)(ii) beyond the words which provide that “[t]he security interest does not extend to … equity interests in any person other than a wholly owned Subsidiary”.

8. [52]

   However, Crown submitted that the arguments on which they relied in this Court were “open” on the pleaded case. In particular, Crown relied on their blanket denials in their Amended Response (set out above), which they contended permitted them to raise these submissions in this Court. Crown also submitted that the arguments they wished to raise in this Court did not require any further evidence to be tendered beyond that which had been adduced by the receiver in the Court below, which included Ailo’s constitution, the shareholders’ agreement, the Deed of Accession dated 23 January 2020 (executed by RIH) and Ailo’s share register (tr 5).

9. [53]

   Rule 14.14 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) provides:

10. [54]

    Although Commercial List statements and responses “differ from pleadings in substance, they nevertheless stand in the place of pleadings in proceedings commenced in the Commercial List and Technology and Construction List”: see the summary of authorities in Roberts v Goodwin Street Developments Pty Ltd (2023) 110 NSWLR 557; [2023] NSWCA 5 at [62] (Ward P).

11. [55]

    It is plain from the Amended Statement that the allegations concerning Ailo’s shareholders’ agreement were made in the context of the receiver’s case that the alleged transfer of the Ailo shares to Coronam Family Office in September 2024 (on which Crown relied and did not abandon) was ineffective. The question whether RIH or Coronam Family Office owned the Ailo shares remained a live issue in the Court below. If that question had been decided in favour of Crown (which contended that Coronam Family Office owned the Ailo shares), cl 2.2(a)(ii) would have had no operation since it was not suggested that the charge covered any property of Coronam Family Office. In these circumstances, the bare denials made by Crown in their Amended Response did not have the effect of putting in issue whether cl 2.2(a)(ii) applied to the charge granted by RIH over the Ailo shares and, if it did, what the consequences were for the ambit of the charge.

12. [56]

    Similarly, the receiver’s forensic purpose in tendering the Deed of Accession (dated 23 January 2020, which had been executed by RIH) and the shareholders’ agreement in the Court below was to enable the primary judge to be satisfied that RIH had complied with the requirements of that deed when it acquired the Ailo shares in January 2020. There was nothing in the pleadings, the evidence or the submissions to indicate to the primary judge, or to the receiver, that Crown would seek to impugn the ambit of the charge by contending that, for the purposes of cl 2.2(a)(ii), the shareholders’ agreement was a “Relevant Contract”; that the shareholders of Ailo were relevant “Counterpart[ies]”; or that, accordingly, the consent of the shareholders of Ailo was required before the charge could validly extend to the Ailo shares. Indeed, as the primary judge observed at J[15] (extracted above), “both parties skirt around the issue”.

13. [57]

    Crown, in this Court, seeks to use the blanket denials in its Amended Response as a means to make arguments not put below. For example, Crown denied the receiver’s allegation contained in para 64 of the Amended Statement that, after the receiver’s appointment, RIH’s property was “controlled by the receiver”. In the context of the live issues in the Court below, this denial ought be understood to be a denial that RIH still owned the Ailo shares (because they had been transferred to Coronam Family Office) and that, therefore the receiver had no control over them. The bare denial of para 64 cannot be retrofitted in this Court to accommodate a positive allegation that cl 2.2(a)(ii) excluded the Ailo shares from the charge on the basis that Ailo’s shareholders had not consented to the charge, particularly in circumstances where no issue about consent (whether legal or evidentiary) was raised in the Court below. Indeed, Crown’s counsel in the Court below positively eschewed any reference to the words in cl 2.2(a)(ii) which dealt with consent.

14. [58]

    Pleadings do not invariably operate as a constraint on the issues to be determined. An exception arises “where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial”: Dare v Pulham (1982) 148 CLR 658 at 664 (Murphy, Wilson, Brennan, Deane and Dawson JJ); [1982] HCA 70. However, in the present case, there was not a murmur from Crown in the Court below, whether in pleadings or submissions, that Crown sought to rely on the submissions now sought to be advanced. In the Court below, Crown relevantly submitted no more than that the Ailo shares were not covered by the charge because Ailo was not a wholly owned subsidiary of RIH. Crown made no submission in the Court below as to the meaning and application of the balance of cl 2.2(a)(ii).

15. [59]

    Although the primary judge’s reasons reveal that his Honour considered the whole of cl 2.2(a), it having been the subject of submissions by the receiver, his Honour did so expressly for the purposes of determining whether the receiver had standing to seek the declaratory relief. In the course of so doing, the primary judge made the incidental finding at J[38] that the charge over the Ailo shares (being property of RIH) was valid on the basis of his Honour’s construction of cl 2.2(a)(ii). There was no ground of appeal alleging that this finding involved any denial of procedural fairness to Crown.

16. [60]

    In substance, what Crown seeks do in this appeal is to run a point which was not taken below and which would have required evidence to be adduced had it been taken. Parties to an appeal are generally bound by the way in which they conducted themselves in the Court below. The passage in Bird v DP (A Pseudonym) [2024] HCA 41; (2024) 98 ALJR 1349 at [39] (Gageler CJ, Gordon, Edelman, Steward and Beech-Jones JJ) which is highlighted in the extract below is apposite to the present appeal:

17. [61]

    In accordance with this principle, this Court ought not proceed to decide the matters which Crown sought to raise for the first time in this Court.

18. [62]

    Although the question of onus need not be determined as it was raised for the first time in this Court, I propose to address it in general terms. Crown submitted that the receiver, as the applicant for the declaratory relief, bore the onus of proving that the charge over RIH’s property extended to the Ailo shares. It submitted that the receiver had failed to discharge that onus because it had not adduced evidence to establish that the requisite consent of the relevant Counterparty had been given under cl 2.2(a)(ii) of the General Security Deed.

19. [63]

    Crown was obliged, pursuant to s 56(3) of the Civil Procedure Act 2005 (NSW), to assist the Court to further “the overriding purpose” in s 56(1), being “to facilitate the just, quick and cheap resolution of the real issues in the proceedings”. Crown conducted the proceedings in the Court below (leaving aside the question of standing) on the basis that the reason the receiver could not deal with the Ailo shares was that they were not owned by RIH. As the question of consent to the charge was not put in issue by Crown, it was not necessary for the receiver to adduce evidence on this point.

20. [64]

    Thus, in circumstances where Crown, in the Court below, identified the real issues as being whether (on the limited basis discussed above) the receiver had standing and whether RIH owned the Ailo shares, it was not open to Crown to complain in this Court that the receiver had not discharged his onus of proving that the relevant Counterparty had consented to the charge under cl 2.2(a)(ii) of the General Security Deed. The course available to an accused in a criminal prosecution of putting the prosecutor to proof of all elements of a charge, without indicating what is in dispute, is not a course which is open to a party in civil proceedings.

21. [65]

    As the appeal must be dismissed, I do not propose to address the amended notice of contention, save in two respects.

22. [66]

    First, the receiver alleged in grounds 1c(i) and (ii) that the primary judge’s finding of fact at J[37] (extracted above) “that the consent of ordinary shareholders of Ailo to the creation of the Security Interest created by the General Security Deed was neither sought nor given was erroneous as there was no evidence to support the finding”.

23. [67]

    In the course of the hearing in this Court, McHugh JA put to the receiver’s counsel that it was open to read J[37] as if the word “because” meant “on the basis that” in the following sentence:

24. [68]

    The receiver accepted that such a reading was available and, if it were accepted to be the preferable reading, there would be no substance in the allegation of error in that aspect of the notice of contention. I consider that the primary judge’s reasons ought fairly be read as saying no more than, if the consent of Ailo’s shareholders has neither been sought nor given, they may have a claim against RIH for breach of the shareholders’ agreement. This reading is consistent with the absence of evidence, of which the primary judge was plainly aware, as to whether the consent of Ailo’s shareholders had either been sought or given.

25. [69]

    Second, had it been necessary to decide the question of standing, I would otherwise have considered that at least ground 1a in the amended notice of contention was made out: namely, that the power conferred on the receiver pursuant to s 420(2)(k) of the Corporations Act “to bring … proceedings” “for the purpose of attaining the objectives for which the receiver was appointed” extends to the determination of issues about the ownership or control of property secured by the charge pursuant to which the receiver was appointed. In light of the dispute which had arisen as to the Ailo shares, that was sufficient to confer standing on the receiver to bring the proceedings in the present case. The power conferred by s 420(2)(k) has been construed broadly to include proceedings concerning property to which a receiver may in future be entitled: see the discussion in Land Enviro Corp Pty Ltd (In Liq) v HTT Huntley Heritage Pty Ltd [2017] NSWCA 207 at [26]-[27] (Bathurst CJ, Meagher JA agreeing).

Proposed orders

1. [70]

   I propose the following orders:

   1. (1)

      Dismiss the appeal.

   2. (2)

      Order the appellants to pay the respondents’ costs of the appeal.

2. [71]

   McHUGH JA: I agree with Adamson JA.