FEDERAL COURT OF AUSTRALIA Karis v Digital CC Management Pty Ltd (No 3) [2024] FCA 738 File number: WAD 60 of 2022 Judgment of: BANKS-SMITH J Date of judgment: 9 July 2024 Catchwords: PRACTICE AND PROCEDURE - application for summary judgment, to strike out pleadings and for security for costs - where a number of factual and legal issues require determination - where claim based on a series of representations said to be conduct within s 18 of the Australian Consumer Law - where evidence relating to two alleged representations is interconnected - whether appropriate that limitation period issue be resolved summarily - whether appropriate that conduct said to be relevant to equitable relief be determined summarily - whether appropriate that contested issues of corporate authorisation and knowledge be determined summarily - whether agreement executed as a deed - application of principles as to summary judgment - summary dismissal of applicant's claims not appropriate and respondents' onus not met - leave granted to applicant to re-plead parts of claim - claims not struck out - applicant resides overseas - security for costs ordered - quantum and timing of order Legislation: Competition and Consumer Act 2010 (Cth) Schedule 2 (Australian Consumer Law) ss 4, 18, 31, 236, 237, 243 Corporations Act 2001 (Cth) s 711 Federal Court of Australia Act 1976 (Cth) ss 31A, 56 Federal Court Rules 2011 (Cth) rr 16.21, 19.01, 26.01 Cases cited: 400 George Street (Qld) Pty Ltd v BG International Ltd [2010] QCA 245; [2012] 2 Qd R 302 Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256 Bell Wholesale Co Ltd v Gates Export Corporation (No 2) (1984) 2 FCR 1 Bendigo and Adelaide Bank Limited v Russo [2019] NSWSC 661 Bullabidgee Pty Ltd v McCleary [2011] NSWCA 259 C v Commonwealth of Australia [2015] FCAFC 113; (2015) 234 FCR 81 Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 Cargill Consulting Ltd v BTAC Coal Pty Ltd [2019] FCA 2070 Chandrasekaran v Commonwealth of Australia (No 3) [2020] FCA 1629 Coles Supermarkets Australia Pty Ltd v FKP Ltd [2008] FCA 1915 Commissioner of Taxation v Vasiliades [2016] FCAFC 170 Commonwealth of Australia v BIS Cleanaway Ltd [2007] NSWSC 1075 Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955 Davies v Minister for Urban Development and Planning [2011] SASC 87; (2011) 109 SASR 518 Etnyre v Australian Broadcasting Corporation [2021] FCA 610 Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) 8 ACSR 405 Global Advanced Metals Pty Ltd v Metallurg Inc [2017] WASCA 188 Hausman v Abigroup Contractors Pty Ltd [2009] VSCA 288; (2009) 29 VR 213 Henjo Investments Pty Ltd v Collins Marrickville (1988) 39 FCR 546 Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 Jefferson Ford Pty Ltd v Ford Motor Company of Australia Limited [2008] FCAFC 60; (2008) 167 FCR 372 Karis v Digital CC Management Pty Ltd [2022] FCA 685 Karis v Digital CC Management Pty Ltd (No 2) [2022] FCA 859 Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281 Knight v Beyond Properties Pty Ltd [2005] FCA 764 Lamshed v Lamshed (1963) 109 CLR 440 Logue v Hansen Technologies Ltd [2003] FCA 81; (2003) 125 FCR 590 Mabrouk Minerals Pty Ltd v Mabrouk Holdings Ltd [2008] WASC 132 Meyidi Pty Ltd v Touloumdjian [2013] SASC 146 National Biofuels Group Pty Ltd v Elbow River Marketing [2009] FCA 613 Norcast S.ár.L v Bradken Ltd [2012] FCA 765 Prajapati v Narshima Tradings Pty Ltd (t/a Ziggy's Cafe) [2017] FCA 1563 PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321 Rana v Google Australia Pty Ltd [2013] FCA 60 RCR Energy Pty Ltd v WTE Co-Generation Pty Ltd [2017] VSCA 50 Ricochet Pty Ltd v Equity Trustees Executor & Agency Co Ltd (1993) 41 FCR 229 Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 Staff Development & Training Centre Pty Ltd v Commonwealth of Australia [2005] FCA 1643 Stapleton v Fairfax Media Publications Pty Ltd [2019] FCA 1418 Stav Investments Pty Ltd v Taylor; LK Group Investments Pty Ltd v Taylor [2022] NSWSC 208 Taylor v Stav Investments Pty Ltd as trustee for the Stav Investments Family Trust; Taylor v LK Group Investments Pty Ltd [2023] NSWCA 204 Tenji v Henneberry & Associates Pty Ltd [2000] FCA 550; (2000) 98 FCR 324 Tropical Reef Shipyard Pty Ltd v QBE Insurance (Australia) Ltd [2011] FCAFC 145 Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 Wikeley v Kea Investments Ltd [2024] FCA 631 Windsor v Sydney Medical Service Co-operative Ltd (No 2) [2009] FCA 704 Division: General Division Registry: Western Australia National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 165 Date of hearing: 16 March 2023 Counsel for the Applicant: Mr MNC Harvey KC and Ms S Kearney Solicitor for the Applicant: Monaco Lawyers Counsel for the First and Second Respondents: Mr PJ Ward Solicitor for the First and Second Respondents: Williams & Hughes Counsel for the Third Respondent: The third respondent did not appear Counsel for the Cross-Claimant: Mr PJ Ward Solicitor for the Cross-Claimant: Williams & Hughes Counsel for the Cross-Respondent: Mr MNC Harvey KC and Ms S Kearney Solicitor for the Cross-Respondent: Monaco Lawyers ORDERS WAD 60 of 2022 BETWEEN: ALEXANDER KARIS Applicant AND: DIGITAL CC MANAGEMENT PTY LTD (ACN 168 145 300) First Respondent DIGITAL CC HOLDINGS PTY LTD (ACN 167 754 725) Second Respondent EUGENI YURIEVICH TSVETNENKO Third Respondent AND BETWEEN: DIGITAL CC MANAGEMENT PTY LTD (ACN 168 145 300) Cross-Claimant AND: ALEXANDER KARIS Cross-Respondent order made by: BANKS-SMITH J DATE OF ORDER: 9 july 2024 THE COURT NOTES THAT: A. Proposed orders 1 and 2 of the first and second respondents' interlocutory application dated 28 September 2022 were addressed by consent. THE COURT ORDERS THAT: 1. The applicant provide security for the first and second respondents' costs of the proceeding for the period until the completion of discovery and court-directed mediation in the amount of $150,000 by payment into Court or in a form satisfactory to the Registrar within 28 days of the date of this order. 2. The proceeding (but not the cross-claim) be otherwise stayed pending payment of security. 3. The applicant have leave to amend his pleading in order to specify the respondents alleged to have made each of the Bonus Representation and the Trading Account Representation, and to set out the facts relied upon by him in that regard. 4. The first and second respondents' interlocutory application is otherwise dismissed. 5. Costs of the application reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT BANKS-SMITH J: 1 The applicant, Alexander Karis, commenced this proceeding on 8 April 2022 against Digital CC Management Pty Ltd and Digital CC Holdings Pty Ltd, the first and second respondents respectively, and against Eugeni Tsvetnenko, the third respondent. The proceeding is the subject of previous decisions, referred to below. 2 By this application, Digital CC Management and Digital CC Holdings seek summary dismissal in relation to parts of the claim, or orders that part of the claim be struck out. Digital CC Management also seeks summary judgment against Mr Karis on its cross-claim. In addition, security for costs is sought from Mr Karis in relation to the parts of his claim that remain after determination of these applications. INTRODUCTORY MATTERS 3 The proceeding arises out of a dispute between cryptocurrency traders as to the manner in which certain companies were established and their intended roles and individual entitlements. 4 Mr Tsvetnenko has not entered an appearance. Digital CC Management and Digital CC Holdings are represented by the same lawyers in this proceeding and are the only active respondents. For convenience, for the purpose of this application I generally refer to Digital CC Management and Digital CC Holdings together as the respondents. 5 I have previously determined an ex parte anti-suit injunction application in relation to proceedings commenced in the United States of America: Karis v Digital CC Management Pty Ltd [2022] FCA 685. The US proceeding has since been discontinued. I have also determined an interlocutory application regarding the manner by which units of bitcoin are to be held on trust pending the resolution of this proceeding: Karis v Digital CC Management Pty Ltd (No 2) [2022] FCA 859 (Karis (No 2)). The following summary of the pleaded cases adopts in part some of the earlier reasons. 6 By way of background, Mr Karis deposed to setting up a digital marketing business in around 2001, known as Karis Marketing Group (KMG). He came to know Mr Tsvetnenko through KMG's work in digital marketing. 7 Mr Karis had discussions with Mr Tsvetnenko and others in around November 2013 about setting up a business which would buy hardware to mine bitcoin and engage in arbitrage by trading between different bitcoin exchanges. Mr Karis prepared business plans for the proposed business. In January 2014 and February 2014, Mr Tsvetnenko engaged Australian lawyers, HHG Legal Group, to incorporate the entities Digital CC Management (incorporated 19 February 2014) and Digital CC Holdings (incorporated 28 January 2014). Mr Tsvetnenko also facilitated the acquisition in May 2014 of a listed Australian company (Macro Energy Ltd) for the purpose of capital raising. Upon its acquisition, Macro Energy became known as DigitalX Ltd. 8 Digital CC Management, Digital CC Holdings and DigitalX were used for the purpose of conducting the business. They are referred to together in these reasons from time to time as the Digital CC Group. 9 Separately, in around January 2014, Mr Karis set up seven bitcoin trading accounts for his personal use through which he purchased and sold bitcoin (Karis Trading Accounts). For current purposes, consistent with the approach of the parties, I proceed on the basis that bitcoin accounts and the amounts recorded in them are considered property. The pleaded case 10 Mr Karis contends that during February 2014 and March 2014 a number of representations were made to him by some or all of the respondents. 11 In particular, Mr Karis pleads that between around January 2014 to March 2014, the respondents represented to him that: (a) if he assisted in raising capital for the proposed business, Mr Karis would receive equity in DigitalX (Equity Representation) (para 9 statement of claim); (b) if he agreed to accept Digital CC Holdings' offer of employment as its chief executive officer, Mr Karis would receive regular and substantial bonuses comprising further equity in DigitalX in the form of newly issued shares or stock warrants for the acquisition of such shares (Bonus Representation) (para 10); and (c) Digital CC Management would shortly pay Mr Karis for the transfer to it of the rights in the Karis Trading Accounts and the bitcoin credited to those accounts (Trading Account Representation) (para 11). 12 The particulars provide that each representation was made partly in writing by emails between Mr Karis and one or more of the respondents, and partly orally by conversations between him and Mr Tsvetnenko. 13 Mr Karis pleads that he relied upon the Equity Representation and the Bonus Representation in a number of ways (para 13). He agreed to become a director of Digital CC Holdings and Digital CC Management. He executed an agreement to be employed as the chief executive officer of Digital CC Holdings (Executive Employment Agreement). In March 2014 he flew to Australia to assist Mr Tsvetnenko in raising capital for the proposed business, meeting with potential investors in Sydney and Perth. He resigned from his employment with Karis Marketing Group. In around May 2014 he commenced employment under the Executive Employment Agreement and continued in that role until December 2016. On 5 June 2014 he became a director of DigitalX and continued in that role until December 2016. 14 Mr Karis pleads that he relied on the Trading Account Representation by signing a document (Trading Accounts Agreement) that purported to be an agreement with Digital CC Management, and which stated that he held the Karis Trading Accounts and the bitcoin credited to them on trust for the benefit of Digital CC Management (para 14). (I note that the Trading Accounts Agreement also states that Digital CC Mining Pty Ltd (which became Digital CC Management) provided moneys to Mr Karis for the acquisition of the Karis Trading Accounts). 15 Mr Karis claims that the representations were misleading or deceptive (para 15) in that: (a) contrary to the Equity Representation, Digital CC Management now alleges that the provision of shares in DigitalX to his personal company, Digital Man LLC, was in exchange for transferring ownership of the Karis Trading Accounts to Digital CC Management; (b) contrary to the Bonus Representation, Mr Karis did not receive regular and substantial bonuses by way of further equity in DigitalX as part of his employment, nor upon termination of his employment; and (c) contrary to the Trading Account Representation, Mr Karis did not receive any consideration from Digital CC Management for the Karis Trading Accounts and the bitcoin credited to them. 16 Mr Karis claims that the respondents in making the representations engaged in conduct that contravened s 18 of the Australian Consumer Law (ACL) (Schedule 2 to the Competition and Consumer Act 2010 (Cth)); that further or alternatively, the respondents in making the Bonus Representation engaged in conduct that contravened s 31 of the ACL; and insofar as the Representations were made with respect to future matters, the respondents had no reasonable grounds for making them and so they were misleading within the meaning of s 4 of the ACL (paras 16-18). 17 Mr Karis claims that as a consequence of the respondents' contraventions, he has suffered loss and damage; that he is entitled to recover the amount of his loss pursuant to s 236 of the ACL; and that he is entitled, pursuant to s 237 of the ACL (para 19) or, in the alternative, in equity (referred to in his originating process), to orders declaring that the Trading Accounts Agreement is void. 18 Mr Karis also alleges the Trading Accounts Agreement is not supported by consideration and so is not binding at law (para 20) (despite the agreement expressly providing that it is executed as a deed). 19 Mr Karis claims that Digital CC Holdings repudiated the Executive Employment Agreement when his employment was terminated with immediate effect on 16 December 2016 and that he accepted the repudiation (paras 22-24). 20 Mr Karis also claims (paras 25-34) that Digital CC Holdings breached the Executive Employment Agreement in that: (a) it failed to provide one month's written notice of termination to Mr Karis, or alternatively, one month's remuneration in lieu of such notice and so is indebted to Mr Karis in the sum of $31,250, or is liable to pay that sum by way of loss and damage; and (b) it failed to pay Mr Karis any accrued but untaken annual leave upon the termination of his employment and so is indebted to Mr Karis in the sum of $12,692, or is liable to pay that sum by way of loss and damage; and it failed to pay Mr Karis a lump sum termination payment to which he was entitled in the sum of $1,125,000, and so is indebted to Mr Karis in that sum or that sum is payable by way of loss and damage. The cross-claim 21 Digital CC Management relevantly seeks a declaration by its cross-claim that the Trading Accounts Agreement is valid and binding, and declaratory relief to the effect that Mr Karis has no legal or beneficial interest in the Mt Gox bitcoin account (subsequently assigned to and under the control of a trustee, as explained in Karis (No 2), pending resolution of this proceeding). As to Mr Karis's 'absence of consideration' argument in relation to the Trading Accounts Agreement, Digital CC Management contends that it is enforceable regardless, as it was executed as a deed. The context of the falling out 22 Some context for the cause of the dispute between the parties is provided by the affidavit evidence. Mr Karis explained that in around mid-2016, Mr Tsvetnenko was charged by New York authorities with various offences for matters unrelated to the Digital CC Group. Mr Karis and other DigitalX directors made efforts to distance Mr Tsvetnenko from the Digital CC Group. Issues arose between Mr Karis and the other directors as to whether certain roles, including that of Mr Karis, should be undertaken by people residing in Australia. There was a deterioration of their various relationships. Discussions began as to how Mr Karis might exit the group. On 16 December 2016, Mr Karis's employment pursuant to the Executive Employment Agreement was terminated by Digital CC Holdings. This interlocutory application 23 By this application as clarified by the submissions, the respondents seek: (a) summary dismissal pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth), or in the alternative r 26.01 of the Federal Court Rules 2011 (Cth), of Mr Karis's claims under s 237 of the ACL and in equity for declarations that the Trading Accounts Agreement is void; (b) similarly, orders striking out the paragraphs of the statement of claim that relate to the Trading Account Representation (heading to para 10 of the respondents' submissions, and which appear to be paras 11, 14, 15, 16, 18, 19 and 20 of the statement of claim); (c) orders (sought by the first respondent) striking out paras 12, 16, 18 and 19 of the statement of claim insofar as they relate to the Bonus Representation (respondents' submissions para 57); (d) orders (sought by the first respondent) striking out para 9 of the statement of claim insofar as it relates to the Equity Representation having been made by the first respondent (respondents' submissions para 57); (e) summary judgment in favour of Digital CC Management with respect to its cross-claim seeking enforcement of the Trading Accounts Agreement; and (f) security for costs. 24 The effect of the applications referred to in the preceding paragraph is that even if successful, the part of Mr Karis's claim that relates to the Executive Employment Agreement would remain on foot. Presumably it is partly because of this that the first and second respondents seek security for their costs of the proceeding. The evidence 25 For the purpose of this application, the respondents rely on affidavits of Mr Matthew Keating, a solicitor acting for the respondents, and Mr Jonathon Carley, the chief operating and financial officer of the DigitalX Group and director of both the first and second respondents. 26 Mr Karis relies on his own affidavits provided earlier in the proceeding. Principles - summary judgment 27 Section 31A of the Federal Court of Australia Act includes the following: 31A Summary judgment (1) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is prosecuting the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding. (2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. (3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; for it to have no reasonable prospect of success. (4) This section does not limit any powers that the Court has apart from this section. 28 It is s 31A(2), rather than s 31A(1), which is of relevance to the respondents' application referred to at [23(a)] above. Section 31A(1) is relevant to Digital CC Management's application by cross-claim referred to at [23(c)]. 29 Rule 26.01 of the Federal Court Rules also sets out circumstances in which a party may apply to the Court for an order for summary judgment: (1) A party may apply to the Court for an order that judgment be given against another party because: (a) the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or (b) the proceeding is frivolous or vexatious; or (c) no reasonable cause of action is disclosed; or (d) the proceeding is an abuse of the process of the Court; or (e) the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding. … (4) If an order is made under subrule (1) dismissing part of the proceeding, the proceeding may be continued for that part of the proceeding not disposed of by the order. 30 The principles relating to these powers are well settled. The principles are set out in cases such as Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118; Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955; Rana v Google Australia Pty Ltd [2013] FCA 60; and C v Commonwealth of Australia [2015] FCAFC 113; (2015) 234 FCR 81. 31 In Jefferson Ford Pty Ltd v Ford Motor Company of Australia Limited [2008] FCAFC 60; (2008) 167 FCR 372 at [124], Gordon J noted that s 31A was introduced in order to extend 'the power of the court to deal with unmeritorious matters by broadening the grounds on which federal courts can summarily dispose of unsustainable cases' (citing the Minister's Second Reading Speech of the relevant bill). Even so, the power to give summary judgment for one party against another is not to be exercised lightly: Spencer at [24] (French CJ and Gummow J), [60] (Hayne, Crennan, Kiefel and Bell JJ); and Tropical Reef Shipyard Pty Ltd v QBE Insurance (Australia) Ltd [2011] FCAFC 145 at [31] (Edmonds, Jessup and Robertson JJ). 32 As French CJ and Gummow J continued in Spencer: [25] Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a 'fanciful' prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. 33 The moving party on an application for summary dismissal bears the onus of persuading the Court of the criterion under s 31A. So, the critical question for the respondents in this case is whether Mr Karis has 'reasonable' prospects of successfully prosecuting this proceeding: Windsor v Sydney Medical Service Co-operative Ltd (No 2) [2009] FCA 704 at [38] (Edmonds J); and Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256 at [46]-[48] (Reeves J). That determination 'does not require a mini-trial based upon incomplete evidence to decide whether the proceedings are likely to succeed or fail at trial. Instead, it requires a critical examination of the available materials to determine whether there is a real question of law or fact that should be decided at trial': Cassimatis at [46]. Principles - strike out 34 Rule 16.21 of the Federal Court Rules sets out the circumstances where all or part of a pleading may be struck out. It provides: Application to strike out pleadings (1) A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading: (a) contains scandalous material; or (b) contains frivolous or vexatious material; or (c) is evasive or ambiguous; or (d) is likely to cause prejudice, embarrassment or delay in the proceeding; or (e) fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or (f) is otherwise an abuse of the process of the Court. (2) A party may apply for an order that the pleading be removed from the Court file if the pleading contains material of a kind mentioned in paragraph (1)(a), (b) or (c) or is otherwise an abuse of the process of the Court. 35 I infer from their submissions that the respondents rely upon r 16.21(1)(c), (d) or (e) for their application. 36 Although there is some overlap in the principles applying to summary dismissal and striking out of pleadings, there is also a central difference between the two concepts. As Wigney J said in Chandrasekaran v Commonwealth of Australia (No 3) [2020] FCA 1629: [96] … Where the evidence shows that a person may have a reasonable cause of action or reasonable prospects of success, but the person's pleading does not disclose that to be the case, the Court may be empowered to strike out the pleading under r 16.21, but is not empowered to summarily dismiss the proceeding under s 31A of the FCA Act: see White Industries Australia Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298 at [47], referred to in Spencer at [23]. That said, a 'failure after ample opportunity to plead a reasonable cause of action may suggest that none exists and therefore that the applicant has no reasonable prospects of success': White Industries at [47]. Principles - security for costs 37 Section 56 of the Federal Court of Australia Act allows the Court to make orders requiring an applicant to give security for costs. Rule 19.01 of the Federal Court Rules specifies the manner in which a respondent may apply for such an order. 38 The Court's jurisdiction with respect to security for costs is unfettered and dependant on the circumstances of each case: Bell Wholesale Co Ltd v Gates Export Corporation (No 2) (1984) 2 FCR 1 at 4. The Court's discretion is to be exercised having regard to whether the interests of justice are best served by making or refusing an order: Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) 8 ACSR 405 at 411. 39 Against that background, the authorities have established a number of matters that guide the exercise of the discretion. They are usefully summarised by Abraham J in Etnyre v Australian Broadcasting Corporation [2021] FCA 610 at [8]-[17] and I respectfully adopt without repeating her Honour's summary. 40 Of particular relevance in this case are the facts that Mr Karis is a natural person and not a corporation, and that he resides overseas. 41 It has been recognised that although courts are disinclined to order security against natural persons, as Lindgren J observed in Knight v Beyond Properties Pty Ltd [2005] FCA 764 at [32]-[33], being a natural person is no bar to an order for security for costs, particularly when coupled with other factors. Those factors include the impecuniosity of the applicant and whether impecuniosity would stifle the litigation, and the complexity and bona fides of the matter, acknowledging (adopting the comments of Spender J in Staff Development & Training Centre Pty Ltd v Commonwealth of Australia [2005] FCA 1643 at [13]), that a security application is not the time for detailed argument as to the merits of the case. 42 That an applicant is resident outside of Australia is ordinarily regarded to be highly relevant, although not determinative. In PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321, McHugh J stated (at 323): To make or refuse to make an order for security for costs involves the exercise of a discretionary judgment. That means that the court exercising the discretion must weigh all the circumstances of the case. The weight to be given to any circumstance depends not only upon its own intrinsic persuasiveness but upon the impact of the other circumstances which have to be weighed. A circumstance which may have very great weight when only two or three circumstances have to be weighed may be of minor significance when many circumstances have to be weighed. However, for over 200 years the fact that a party, bringing proceedings, is resident out of the jurisdiction and has no assets within the jurisdiction has been seen as a circumstance of great weight in determining whether an order for security for costs should be made. Indeed, for many years the practice has been to order such a party to provide security for costs unless that party can point to other circumstances which overcome the weight of the circumstance that that person is resident out of and has no assets within the jurisdiction. 43 In Logue v Hansen Technologies Ltd [2003] FCA 81; (2003) 125 FCR 590 at [18], Weinberg J explained that the clear rationale of this principle is: … to create a fund within this country against which a successful respondent may enforce a judgment for costs thereby enabling the avoiding of the risks, uncertainties and delays of attempting to enforce such a judgment in the applicant's claimed country of residence … 44 There are a number of more recent examples in this Court where security was ordered on the basis that the relevant person was a non-resident with minimal assets in the jurisdiction: Wikeley v Kea Investments Ltd [2024] FCA 631 (Dowling J); Stapleton v Fairfax Media Publications Pty Ltd [2019] FCA 1418 (Flick J); and Etnyre v Australian Broadcasting Corporation. THE TRADING ACCOUNT REPRESENTATION - SUMMARY JUDGMENT 45 Counsel for the respondents addressed the difficulties with the pleaded case as to the Trading Account Representation first, and I will follow the same course. In short, this part of the claim involves the alleged conduct of the respondents in making the representation and a challenge by Mr Karis to the enforceability of the Trading Accounts Agreement. He seeks relief including by way of a declaration that the Trading Accounts Agreement is void pursuant to s 237 of the ACL or in equity. The respondents seek summary judgment against Mr Karis by way of dismissal of this part of the proceeding. 46 This part is attacked on a number of different bases, which distil to seven arguments: (a) there is an absence of probative evidence about the making of the Trading Account Representation; (b) the Trading Accounts Agreement is a deed and does not require consideration; (c) the claim should lie at best in breach of contract and is not a misleading or deceptive conduct claim; (d) the representation was allegedly made by a company of which Mr Karis is one of only two directors, so he either 'made the representation to himself' or the representation was not properly authorised by the company; (e) there was no reliance because Mr Karis would have transferred the accounts in order to reap the benefits of the new business, regardless of payment for the accounts; (f) the claim is statute barred; and (g) as a matter of discretion, relief would not be granted to Mr Karis due to conduct of Mr Karis that amounts to unclean hands, his public affirmation of the Trading Accounts Agreement, his delay in bringing the proceeding and the inability to unwind the Trading Accounts Agreement. First argument - evidence The Trading Accounts Agreement 47 The Trading Accounts Agreement was executed on 6 March 2014 between Mr Karis as 'Account Holder' and Digital CC Mining as 'Beneficiary' (immediately thereafter Digital CC Mining became Digital CC Management). The agreement was drafted by HHG Legal. 48 Relevantly, the Trading Accounts Agreement includes the following terms: (a) Recital A states that the Account Holder is or will be registered as the holder of the Accounts (being specifically the seven identified accounts constituting the Karis Trading Accounts, and defined to include all deposits, assets, moneys, profits and benefits with respect to them); (b) Recital C states that the Accounts were acquired by the Account Holder with moneys provided for such purpose by the Beneficiary; (c) by cl 2, the Account Holder confirms that he has no beneficial interest in the Accounts and has, at all times since the Accounts were opened and for as long as he remains the registered holder, held and holds the Accounts and all interests in respect to them on trust for the Beneficiary, and will deal with the Accounts in accordance with the directions of the Beneficiary; (d) by cl 3 the Beneficiary is appointed the Account Holder's attorney for all purposes related to dealing with the Accounts; (e) by cl 4 the Account Holder agrees to transfer title to the Accounts when and as requested by the Beneficiary; (f) by cl 5 the Beneficiary may remove the Account Holder and appoint a substitute; (g) by cl 9 the Beneficiary is obliged to provide the Account Holder with all moneys which may be required to enable the Account Holder to hold and continue to hold and maintain the Accounts on trust for the Beneficiary; (h) by cl 10 the Beneficiary indemnifies the Account holder from costs and liabilities associated with holding the Accounts on trust for the Beneficiary; and (i) by schedule 1 indicates account balances for the seven Karis Trading Accounts as at 17 February 2014. The Trading Account Representation 49 It is to be recalled that Mr Karis does not contend that the Trading Account Representation was made by the Trading Accounts Agreement. He pleads that it was made separately, by written email exchanges and orally in conversations. 50 Mr Karis pleads (at para 11) that in around January to March 2014, and after the respondents were incorporated, the respondents represented to him that Digital CC Management would 'shortly pay Mr Karis for the transfer to it of rights in the Karis Trading Accounts and the bitcoin held therein'. On the face of the pleading there are apparently two components in play - the Karis Trading Accounts set up by Mr Karis and the balance credited to those accounts. 51 It is said that the Trading Account Representation was made in around January to early March 2014 by all respondents, was partly written (by way of emails that have not been located) and partly oral. As to the oral component, Mr Karis relies on phone calls between him and Mr Tsvetnenko. 52 Mr Karis stated in his affidavit evidence that Mr Tsvetnenko asked him in early 2014 to allow the new business to use the Karis Trading Accounts. He said Mr Tsvetnenko said it would take too long to establish accounts in the name of the new companies. Mr Tsvetnenko said words to the effect that in exchange for the Karis Trading Accounts Mr Karis would be paid by the business for the costs he had incurred in purchasing those accounts. His affidavit evidence included the following statements: [21] In or around January 2014, for my own personal use and to satisfy myself of the viability of the Proposed Business, I set up the following bitcoin trading accounts in the name of KGM through which I purchased and sold bitcoin. Given the passage of time, I have not been able to locate any records of the transactions, however I recall using KMG's money to purchase these accounts. … [22] In early 2014, Mr Tsvetnenko told me words to the effect that he had tried exploring the process for establishing bitcoin accounts in the name of new companies for the Proposed Business, but that he thought the process would take too long and was too tedious. He asked me to agree to allow the Proposed Business to trade using the Karis Trading Accounts and to hand over ownership of those accounts to the Proposed Business. He said to me words to the effect that, in exchange, I would be paid by the Proposed Business for the costs I had incurred in purchasing the Karis Trading Accounts. [23] Mr Tsvetnenko said words to the effect that he could use the Karis Trading Accounts and roll them up into a publicly listed company and the share price would rise exponentially, so the value of the new company would be many times the value of the Karis Trading Accounts. In circumstances where I was going to hold equity in the company which owned the Proposed Business and would be the CEO running the day-to-day operations, I was excited by this and was persuaded that this should be how the Proposed Business went forward. … [29] On or around 6 March 2014, I agreed to Mr Tsvetnenko's request in relation to using the Karis Trading Accounts in the Proposed Business and transferring ownership by executing the Purported Agreement which was prepared by HHG Legal Group at Mr Tsvetnenko's direction. [30] In recital C of the recitals to the Purported Agreement, it states that the Karis Trading Accounts were acquired by me with money provided for such purpose by Digital CC Management. This is not correct. As I set out above, given the passage of time, I have not been able to locate any records of the transactions, however I recall using KMG's money to purchase the Karis Trading Accounts. In various conversations between the start of 2014 to entry into the Purported Agreement, Mr Tsvetnenko had said words to the effect that, if I agreed to transfer ownership, I would be paid for the costs I had incurred in purchasing the Karis Trading Accounts and I believed that that would occur and agreed to the Purported Agreement on that basis. However, I do not recall, and have not located any documents recording, any payment of money by Digital CC Management for the Karis Trading Accounts prior to, at the time of, or after the entry into the Purported Agreement. 53 As that evidence indicates, it appears that Mr Karis contends that the purchase costs relating to the Karis Trading Accounts were met by KMG, and not Digital CC Management, despite what is said in Recital C of the Trading Accounts Agreement. Mr Karis's evidence does not expressly engage with that part of the representation that refers to the 'bitcoin credited held therein'. Be that as it may, there is apparently no contemporaneous documentary evidence available to Mr Karis as to the costs or payment by KMG that might assist in this regard. Similarly, Mr Karis has no record of being paid by Digital CC Management for the costs or accounts. Mr Karis pleads that Digital CC Management now alleges that the shares in DigitalX that were provided to Mr Karis's personal company (Digital Man LLC) were issued in exchange for transferring ownership of the Karis Trading Accounts. The Shareholder Loan Agreement and Deed of Variation 54 Mr Karis also refers to a 'Shareholders' and Directors' Loan Agreement' purportedly executed on or about 7 March 2014 (Shareholder Loan Agreement) made between a number of shareholders or directors of Digital CC Holdings as lenders for the purpose of providing Digital CC Holdings as borrower with funds to commence business, pending the acquisition of DigitalX. Digital Man LLC is one of the lenders, and its contribution is described as $44,447.71 by way of 'cash in bitfinex' and $21,207.63 by way of 'contribution of 25.009 coins into bitfinex' (a total of USD$65,655.34). The repayment date under the agreement was said to be the earlier of either six months from the date of the agreement or the date that Macro Energy completed the proposed capital raising. I note that although 'bitfinex' is one of the accounts referred to in schedule 1 of the Trading Accounts Agreement, the quantities of bitfinex bitcoin referred to in the Shareholder Loan Agreement and schedule 1 do not align and appear to be unrelated. 55 Mr Karis also refers to a 'Deed of Variation of Shareholders' and Directors' Loan Agreement', dated 11 March 2014, which amended the Shareholder Loan Agreement by increasing the amounts to be paid by the shareholders/directors. Relevantly, Digital Man LLC is not named as a party, but instead Karis Holdings LLC is named - nothing is said to rest on this - and the amount is increased by an additional sum of USD$84,344.66 to USD$150,000. The repayment mechanism was varied by cl 3.1, which provided as follows: The Lenders and Borrower agree that if the Proposed Capital Raising is completed, the Subject Loans will be repaid to each of the Lenders by way of the Borrower procuring that Macro Energy Limited issue to the Lenders equity in Macro Energy Limited on a pre-Proposed Capital Raising (i.e pre-listing) value basis to the total value of the Lenders respective Subject Loan. For example, on completion of the Proposed Capital Raising, the Borrower shall procure that Macro Energy Limited issue to Karis Holdings equity in Macro Energy Limited to the value of $150,000 based on a Macro Energy Limited share price calculated pre-Proposed Capital Raising. 56 As discussed further below, it appears that the conversion of the loan into shares was given effect. Mr Karis relies on these agreements as explaining the basis upon which he received equity, distinguishing it from any consideration relating to the Karis Trading Accounts. It would appear accordingly that some of these factual matters overlap with the content and facts in issue relevant to the Equity Representation. Documentary evidence relied upon by the respondents 57 The respondents refer to a number of other documents that they say are consistent with a conclusion that the Karis Trading Accounts and the subject bitcoin were transferred by Mr Karis, with his knowledge, to Digital CC Mining, and then to another company, Digital CC Trading Pty Ltd. They also contend that the documents are consistent with a conclusion that Mr Karis and his related entities received consideration for the Karis Trading Accounts by way of conversion of loans to shares. Risk Master Sheet 58 Mr Carley annexed to his affidavit a 'risk master sheet' said to record the running balance of the second respondent's (Digital CC Holdings) cryptocurrency accounts and those of its subsidiaries from the date of its incorporation (28 January 2014). In fact, the document records trades from 8 January 2014. The document indicates that the account balances of what are apparently the Karis Trading Accounts as at 17 February 2014 are consistent with those described in the schedule of the Trading Accounts Agreement, save for an unexplained apparent discrepancy in relation to bitfinex (BTC column). Further, according to Mr Carley, the risk master sheet indicates that Digital CC Holdings traded those accounts both before and after execution of the Trading Accounts Agreement on 6 March 2014, consistent with the purported acknowledgement in the Trading Accounts Agreement that Mr Karis already held the accounts on trust for Digital CC Mining as beneficiary as at the date of the Trading Accounts Agreement. 59 I note that although Mr Carley states that the risk master sheet (a spreadsheet) is a record of the trading of Digital CC Holdings including through its subsidiaries, what inferences might be drawn from the document cannot be readily resolved. The risk master sheet, accepting Mr Carley's evidence that it is a Digital CC Holdings document and taken with his evidence as a whole, does no more than indicate the manner in which from an unknown date Digital CC Holdings has chosen to record certain trades that date from 8 January 2014. What weight a court might give to the document without further explanation is unclear. 60 Nothing on the face of the document differentiates between trades presumably made by Mr Karis from 8 January 2014, prior to the incorporation of at least Digital CC Holdings (on 28 January 2014) and potentially Digital CC Management (on 19 February 2014), and trades made presumably by those entities after Mr Karis is alleged to have lost control of the accounts. Further, nothing differentiates between any trades prior to or after the execution of the Trading Accounts Agreement. These matters suggest the risk master sheet may have been prepared in part retrospectively. Nor, without more, does it evidence legal or beneficial ownership of the bitcoin or relevant accounts. Senior counsel for Mr Karis pointed to some of these questions about the risk master sheet in his submissions, and I accept his submission that the provenance and intent of the spreadsheet requires further explanation. Trading Accounts Transfer Agreement 61 On 7 March 2014 (the day after the date of the Trading Accounts Agreement) a further agreement was executed, including by Mr Karis. Again, the agreement was prepared by HHG Legal. It provided for the transfer of the legal title to certain accounts including the Karis Trading Accounts (excluding the account balances) from Digital CC Mining to Digital CC Trading, for the sum of USD$1. It also provided for the account balances by way of monies and crypto currencies to be transferred to Digital CC Trading, but to be held on trust for the sole benefit of Digital CC Mining. It appears from this agreement that the legal right and title to the accounts was considered separate to interests in the account balances. 62 According to the respondents and as indicated by the document, Mr Karis in his capacity as director of both Digital CC Mining and Digital CC Trading signed the Trading Accounts Transfer Agreement. Disclosure documents relating to listing of DigitalX 63 The respondents refer to Mr Karis's involvement in the preparation for the reverse takeover of Macro Energy by acquisition of shares in Digital CC Holdings. They refer in particular to two documents. 64 First, they refer to a due diligence questionnaire signed by Mr Karis on 4 May 2014 that confirmed that all material contracts (which included the Trading Accounts Agreement) had been correctly disclosed in the draft prospectus, with no relevant matters excluded. Mr Karis disclosed that he held a loan to Digital CC Holdings. He refers to benefits received by way of company travel, graphic design and other expenses he has invoiced back to the company, but, according to the respondents, he does not disclose that he is owed monies by Digital CC Mining/Digital CC Management pursuant to the Trading Account Representation as now alleged. 65 Second, the respondents refer to the prospectus, which was approved by resolution and lodged with ASIC on 12 May 2014. The prospectus, issued by Macro Energy ('to be renamed Digital CC Limited') for the purpose of the reverse takeover, made a number of disclosures about Digital CC Holdings. Importantly, the respondents observed, the prospectus disclosed the key effect of both the Trading Accounts Agreement and the Trading Accounts Transfer Agreement, without any reference or caveat as to any amounts that might be due to be paid to Mr Karis or KMG. The prospectus also disclosed the Shareholder Loan Agreement and the Deed of Variation, including disclosure of the increase in funds to be provided by the lenders (Digital Man LLC is identified for an amount of $150,000). The prospectus notes that the funds loaned up to the capped amounts are proposed to be repaid by way of converting the amounts due into shares at a deemed issue price. Finally, the prospectus also refers to the potential risk of the loss of bitcoin held on the Mt Gox exchange (see Karis (No 2)) without any suggestion that those bitcoin were owned other than by the DigitalX group of companies. Notice of Initial Substantial Holder 66 The notice is dated 10 June 2014 and indicates that Mr Karis was a substantial holder of shares in Digital CC Limited as at 5 June 2014, in that he or Digital Man LLC held some 20,514,200 fully paid shares. As to those shares, it indicates that 750,000 shares were provided by way of consideration of 'conversion of loan into shares'. Annual Report 67 Mr Karis signed off on the end of the financial year 30 June 2014 annual report for Digital CC Limited, which included the following paragraph: On 28 February 2014, Mt Gox, the online Bitcoin trading exchange filed for bankruptcy protection in Japan. At the time Mt Gox filed for bankruptcy, Digital CC Trading Pty Ltd (wholly owned subsidiary of the Group) held approximately $233,435 of bitcoins with Mt Gox. It is uncertain as to whether Digital CC Trading Pty Ltd will recover those bitcoins in the future and therefore the inventory has been written down in full. 68 The respondents rely on this as evidencing the fact that the bitcoin the subject of the Karis Trading Accounts were registered to Digital CC Trading, and not Mr Karis, consistent with the operation of the Trading Accounts Agreement and the Trading Accounts Transfer Agreement. What do the various documents disclose - or fail to disclose? 69 I have already pointed to questions that arise in relation to the risk master sheet. 70 In addition, the Trading Accounts Agreement, the Trading Accounts Transfer Agreement, the Share Sale Agreement, the Shareholder Loan Agreement and other relevant evidence referred to by the respondents do not provide a consistent or complete picture. They give rise to a number of questions. For example: (a) Why does Recital C of the Trading Accounts Agreement refer to Mr Karis acquiring the Karis Trading Accounts with money provided for that purpose by Digital CC Mining, when neither Mr Karis nor the respondents give evidence to that effect about payment? Why is there no evidence from the respondents that addresses Recital C, and particularly in circumstances where the respondents contended that the consideration for the bitcoin accounts was the equity in DigitalX which was valued 'at substantially more than the value of the accounts [Mr Karis] tipped in'? (b) How is the construction of Recital C to be resolved? Acknowledging it is only a recital, what was the objective intention of the parties when it was drafted and how is that to be resolved when the parties purported to understand it differently, sometimes contending the recital refers only to costs (disbursements) incurred by Mr Karis, and sometimes contending that it refers to the value of bitcoin credited to the accounts? (c) What is meant by the consideration described in the Shareholder Loan Agreement of '$44,447.71 by way of 'cash in bitfinex' and $21,207.63 by way of 'contribution of 25.009 coins into bitfinex'? If the advance to Digital CC Holdings by Mr Karis and his related entities was by way of the transfer of the Karis Trading Accounts for its benefit, then why is only one of the seven accounts (bitfinex) referred to? How do the amounts correlate? (d) Why is there otherwise no apparent link between the Karis Trading Accounts and the amount of the loans made by Mr Karis or his companies to Digital CC Holdings under the Shareholder Loan Agreement as varied? (e) Is there any reason why the transactions cannot properly be understood as separate transactions - that is, the transfer of the Karis Trading Accounts was one transaction, but the loan and debt to equity conversion was separate? The documents are at times equivocal in this regard, just as they are equivocal at times as to whether they are referring to transfers of trading accounts or transfers of interests in bitcoin. (f) Why, having regard to the respondents' case, does the Trading Accounts Agreement not refer to the grant of any equity to Mr Karis? (g) To the extent the respondents contended, particularly in challenging the reliance plea, that Mr Karis did not seek to get paid but rather sought to enjoy the potential exponential growth in value of DigitalX shares, then (again) why was Recital C included in the Trading Accounts Agreement? (h) The fact that Digital CC Holdings (incorporated in January 2014) chose to neither acquire bitcoin in its own name nor through a subsidiary but instead chose to accept a transfer of accounts from Mr Karis is consistent with an outcome whereby Mr Karis was entitled to the Karis Trading Accounts at the time, and was to receive consideration for the transfer of such accounts. Mr Karis's contention that he was entitled to payment is not fanciful in that context. 71 There is no doubt that there are gaps and inconsistencies in the evidence insofar as Mr Karis's case is concerned. He may have some difficulty in establishing where legal and beneficial ownership of the Karis Trading Accounts was said to lie, particularly after the date of the Trading Accounts Transfer Agreement. There may well be an explanation as to why certain public company documents were signed by him apparently without qualification, and, having regard to the range of other issues, I would not determine this application in the respondents' favour solely because of their execution. I accept, however, that their execution provides some support for the respondents' case. 72 Even taking into account the documents referred to by the respondents, questions remain. They include the factual issues that I have referred to that require further elucidation. Added to this is Mr Karis's evidence by affidavit that Mr Tsvetnenko told him that he would be 'paid' for the costs relating to purchasing the Karis Trading Accounts. Consistent with Mr Karis's argument, use of the word 'paid' is arguably inconsistent with a promise of satisfaction of indebtedness by equity. Mr Karis's obligation to provide evidence 73 There was disagreement generally as to the extent of Mr Karis's obligation to provide evidence for the purpose of the application for summary dismissal. The respondents submitted it was open to Mr Karis to provide additional evidence in response to the application, and his failure to at least describe evidence he might adduce at trial means the Court should consider only the evidence presently adduced, and not speculate about what evidence may be provided at trial. They relied on reasoning in Prajapati v Narshima Tradings Pty Ltd (t/a Ziggy's Cafe) [2017] FCA 1563 at [43]-[44] to the effect that where a party has had ample opportunity to provide evidence prior to the hearing of an application for summary judgment, it was open to the Court to assess the prospects of the case based on the evidence put forward at the time. They also cite Hausman v Abigroup Contractors Pty Ltd [2009] VSCA 288; (2009) 29 VR 213 at [48]-[50] in support of the proposition that it is 'significant' a party chose not to lead further evidence when it had an opportunity to and where the applicant has 'pointed to gaps and inconsistences' in the evidence. It was submitted that some care is to be taken with a rigid application of Hausman in circumstances where the Court was concerned with a particular requirement of summary dismissal as applied in that case, being that the application was heard first by a master and then could be heard on appeal de novo by a single judge. 74 Mr Karis submitted correctly that the respondents have the onus of demonstrating he has no reasonable prospect of successfully prosecuting the proceeding. He emphasised that a summary judgment application is not a 'mini trial' based on incomplete evidence to decide the proceeding as being likely to succeed or fail at trial, referring to Cassimatis. 75 I accept that the capacity for a respondent to a summary dismissal application to adduce additional evidence prior to the application being heard is one of many matters to be taken into account. However, to suggest that an adverse inference as to prospects should generally be drawn from the respondent's failure to adduce additional evidence or a roadmap of expected evidence for the purpose of the summary dismissal application hearing overstates the position. 76 In the circumstances of this case, it is appropriate to take into account that Mr Karis has deposed to his inability to locate further emails (a matter consistent with his pleading) and he has deposed to the nature of the conversations he said he had with Mr Tsvetnenko. One would expect that Mr Karis will be closely cross examined as to all of the conversations he purports to rely upon should the matter proceed to trial, and there may be issues of both reliance and credibility to determine in that regard. But it is not the case that Mr Karis has not attempted or taken the opportunity to give evidence of those matters. 77 Discovery has not yet been undertaken in this proceeding and neither party has sought the issue of subpoenas to produce documents. I infer that Mr Karis was not likely to persuade Mr Tsvetnenko to provide affidavit evidence for use in an interlocutory proceeding in Australia, and the other respondents did not suggest otherwise. The documents themselves give rise to questions, as I have observed, and it seems to me that cross examination of witnesses, together with discovery, are the likely steps by which further relevant evidence falls to be adduced from all parties in this case. In those circumstances, I do not consider that the absence of further evidence from Mr Karis prior to the interlocutory hearing directs a conclusion that I must determine the merits of Mr Karis's claims, within the Spencer principles, as if no further probative evidence would be forthcoming at trial. Conclusion on first argument 78 The first argument reveals a number of conflicts in the facts deposed to, with the result that 'it is apparent that there are real factual issues in dispute which are required to be tested at trial': Cargill Consulting Ltd v BTAC Coal Pty Ltd [2019] FCA 2070 at [21] (Anderson J). 79 For the purpose of this assessment I have considered whether the documentary evidence upon which the respondents seek to rely is of such probative force that it might properly be said that Mr Karis has no reasonable prospect of successfully prosecuting the proceeding, but I am not persuaded that is the case, for the reasons I have given. Second argument - deed 80 The respondents submit that the Trading Accounts Agreement was executed as a deed, so Mr Karis's contention that the agreement is void for lack of consideration should be dismissed. They rely on the Court of Appeal decision in 400 George Street (Qld) Pty Ltd v BG International Ltd [2010] QCA 245; [2012] 2 Qd R 302. Relevantly, Muir JA (Fraser JA and Mullins J agreeing) said the following: [30] The Instrument is a commercial document. The meaning of a commercial document is to be determined objectively by what reasonable persons in the position of the parties would have understood the document to mean: That requires consideration not only of the text of the documents, but also the surrounding circumstances known to [the parties] and the purpose and object of the transaction. [31] Referring to a bilateral contract, it was said in the judgment of the Court in Toll (FGCT) Pty Limited v Alphapharm Pty Ltd: This Court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction. (footnotes omitted) [32] These statements of principle were directed to the meaning of contractual terms but, in my view, they have application to the question of whether the Instrument was intended to take effect as a deed. The numerous authorities to which this Court was referred, as one might suspect, support the conclusion that this question is to be decided principally by reference to the contents of the instrument under consideration. I put aside, for the moment, the question of whether delivery was effected. (footnotes omitted, emphasis added) 81 Mr Karis's response to this argument had three limbs. 82 First, as a matter of construction, he relied on the fact that the words 'the parties agree', used at the commencement of the Trading Accounts Agreement, is consistent with a finding that the document is not a deed. However, it is well recognised that the words 'the parties agree' will satisfy the formal requirements of a deed so long as it is otherwise clear that the document is a deed: see generally Seddon N, Seddon on Deeds (Federation Press, 2nd ed, [1.5]). It must also be noted that the parties expressly executed the Trading Accounts Agreement 'as a deed' (immediately preceding the relevant signatures). So, of itself, I do not consider this argument to be particularly strong. 83 Second, Mr Karis referred to an observation in Seddon on Deeds which is contained in the Second Edition at [2.5]. Seddon includes an extract from Butt P, Land Law (6th ed 2010) relating to execution of an instrument, which states: For this purpose, extrinsic evidence is admissible in determining the parties' intention when executing the instrument. The parties' subjective intention is relevant - the court is not restricted to deducing their intention solely from the instrument itself. … 84 Seddon then observes: The reference to subjective intention may be controversial. In 400 George Street, in which the above passage was cited, an objective test was nevertheless put forward. It is submitted that the question of intention here is about intention to create a deed and not about the interpretation of the document, where the conventional approach is an objective one. In contract law, a subjective approach is sometimes used to ascertain whether the parties intended to create contractual relations. 85 Third, Mr Karis referred to Bendigo and Adelaide Bank Limited v Russo [2019] NSWSC 661 in which McCallum J referred to the relevance of subjective evidence in ascertaining whether a document has been executed as a deed as an 'unresolved legal question', but found it unnecessary to consider the issue further. 86 400 George St is persuasive appellate court authority, although the doubts expressed by McCallum J are acknowledged. Regardless, I consider that the determination of the contractual status of the Trading Accounts Agreement in isolation is an artificial exercise. It must be recalled that Mr Karis seeks to have the agreement set aside under the broad statutory powers in s 237 of the ACL on the basis that he entered into it because of the misleading or deceptive conduct of the respondents by the Trading Account Representation. Whether the document is described as or found to be an agreement or deed does not of itself determine that question. 87 Therefore, I do not consider it appropriate to deal with the issue of the status of the document in a final manner by summary judgment, when findings and evidence relating to its execution are linked to the misleading or deceptive conduct pleading. Issues relating to the circumstances of entry into the Trading Accounts Agreement (and the allegedly related Equity Representation) will need to be addressed as part of the s 18 ACL case at trial regardless, having regard to my reasons above in relation to the first argument. 88 Whether Mr Karis succeeds in adducing evidence of his subjective intention prior to and when executing the Trading Accounts Agreement and how it is assessed in considering the status of the agreement remains to be seen. 89 Another argument relied on by the respondents (in relation to the pleading at para 15(c) of the statement of claim) is that there is no basis for Mr Karis to plead that he received no consideration under the Trading Accounts Agreement. 90 They submitted that: (a) Mr Karis deposed to the fact that he cannot recall and can find no record of receiving monetary payment; (b) in using those words, Mr Karis does not deny receiving money, so his evidence is a 'half-truth'; (c) it was always intended that Mr Karis in fact receive payment in equity for the transfer of the accounts which amounts to consideration; and (d) he in fact received consideration worth far more than the value of the Karis Trading Accounts by way of equity in DigitalX. 91 Mr Karis's evidence that he 'cannot recall and can find no record of receiving monetary payment' is relevant to whether an inference can be drawn to the effect that he did not receive consideration under the Trading Accounts Agreement. Whether or not such an inference will ultimately be drawn will depend upon the evidence as a whole. As the respondents correctly note, an issue of credibility arises. Furthermore, in light of the issues I have referred to above about the transfer of equity in DigitalX, I am not at this point sufficiently persuaded for the purpose of summary dismissal that the transfer of equity was connected to the Trading Accounts Agreement so as to amount to consideration for it. Similarly, I am not sufficiently persuaded that Mr Karis's conduct indicated some mutual intention or concession that despite the terms of the Trading Accounts Agreement he would not be paid money but instead would receive equity in DigitalX. The fact that the value of the equity transferred to Mr Karis is said by the respondents to be of a value 'many times that of the value of the Karis Trading Accounts' does not necessarily assist the respondents, in circumstance where there is some evidence of a different basis upon which Mr Karis may have received that equity. Again, the evidence as a whole, including any oral evidence about these matters, will need to be tested and considered. Third argument - contract or misleading or deceptive conduct 92 Mr Karis has not brought a claim in contract for breach of the Trading Accounts Agreement, although he claims he received no consideration for the Karis Trading Accounts or the bitcoin credit held in them. As discussed above, he seeks to have the Trading Accounts Agreement set aside. 93 Rather, the claim is based on the Trading Account Representation and is brought under s 18 of the ACL. 94 The respondents submitted that the Trading Account Representation is no more than an alleged contractual promise to pay which cannot constitute an actionable representation for the purposes of the ACL, and cannot give rise to a right to the relief sought by Mr Karis. 95 The authorities in this area are nuanced and careful attention is to be paid to whether the alleged representation is relied upon separately to any subsequent contract; whether it is contained in a contractual document; whether it preceded the execution of the contract and was then superseded by it; or otherwise. 96 For example, the authorities recognise that a false statement in a contract may fall within the scope of the misleading or deceptive conduct statutory provisions. As French CJ said in Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 at [35]: …There is no reason in principle why the fact that a false statement is contained in a contractual document thereby takes the use of that statement in the document out of the scope of 'misleading or deceptive conduct'. Whether the proffering of a contractual document containing a false statement amounts to a misrepresentation or to misleading or deceptive conduct, is a matter of fact to be determined by reference to all the circumstances. The circumstance that such a representation is the subject of a contractual warranty does not, as a matter of law, exclude the making of it from the purview of the statutory prohibition. 97 As explained in RCR Energy Pty Ltd v WTE Co-Generation Pty Ltd [2017] VSCA 50 at [64]-[65], where a representation is said to appear in a contract, it will be necessary to examine all the terms to see if the representation is made good, or whether it is nothing more than the undertaking of a contractual obligation. As the majority continued (at [67]): Whether a contractual promise involves conduct that is capable of being misleading is something that will depend on all the circumstances of the case. Analysis of a contractual promise, abstracted from all the circumstances that surrounded its making, may involve an inappropriately narrow inquiry. 98 As to the importance of an examination of the surrounding circumstances in this context, see also Stav Investments Pty Ltd v Taylor; LK Group Investments Pty Ltd v Taylor [2022] NSWSC 208, where Ward CJ in Equity said at [532]: … While I accept that the mere provision of a draft term sheet would be unlikely of itself to give rise to a representation that the content of the matters set out in the draft was true (not least because draft documents may well be the subject of amendment and clarification in due course), I consider that the combination of the representations made in the oral conversations and the email communications together with the final warranties in the term sheets as executed did amount to representations which have been shown to be misleading or deceptive for the reasons set out when considering the contractual warranties. (Not disturbed in Taylor v Stav Investments Pty Ltd as trustee for the Stav Investments Family Trust; Taylor v LK Group Investments Pty Ltd [2023] NSWCA 204.) 99 The respondents rely on Coles Supermarkets Australia Pty Ltd v FKP Ltd [2008] FCA 1915. The case involved an agreement by way of an offer letter between Coles and the prospective lessor (respondent), in circumstances where ultimately the respondent did not enter into a lease with Coles. Having found breaches of contract on the part of the respondent, Gordon J considered Coles' misrepresentation claims that relied upon the offer letter and other matters (brought under s 52 of the Trade Practices Act 1974 (Cth)). Having acknowledged that 'the interaction between the TPA and the laws of contract is interesting', her Honour said: [68] In Futuretronics at 239, Ormiston J 'expressed [his] doubts whether a contractual promise of itself carries with it any representation as to fact or conduct' actionable by reason of s 51A. His Honour explained the issue (at 238-39) in the following terms: It is hard to believe that normally any promisee with ordinary contractual rights would … describe himself as having been deceived or misled [based on the mere acceptance of a promise]. It is only when it becomes apparent that the promise cannot be enforced, because, for example, it is either unenforceable or the promisee's rights are valueless or diminished, that one may return to the original promise to inquire whether that promise was of so little substance that it can be concluded that the promisee was indeed misled or deceived in the first place, at the time of his acceptance of the promise. Thus it may then be seen that the promisor originally had no intention to perform his promise or that he originally had no capacity or ability to perform it. … It would seem on the authorities that, at the least, a contractual promise would amount to an implied representation that the promisor then had an intention to carry out that promise. If it can be shown that he had no such intention, he would be guilty of misleading or deceptive conduct. Likewise it would seem that such a representation connotes a present ability to fulfil that promise which, if shown to be untrue at the time of making, would likewise characterise the implied representation as misleading or deceptive. [69] As this passage reveals, an express contractual promise or representation will constitute an actionable implied representation under s 52 of the TPA only if the party making the promise or representation had no intention or capability of carrying it out at the time it was made (ie the promisor had no reasonable grounds for making the promise). The questions which then arise are (1) what is the contractual promise in this case and (2) did the respondents have the intention and ability to carry it out at the time it was made? 100 In summary, her Honour found that the evidence established that the respondents had reasonable grounds for making representations and promises of the kind contained in the offer letter and thus those representations and promises were not misleading or deceptive within the meaning of s 51A and s 52 of the Trade Practices Act (at [70]) (being in effect s 4 and s 18 of the ACL). This followed 'extensive cross-examination of witnesses' as to the facts and intentions of the parties, and the respondent had admitted they made the implied representation that they would perform the obligations under the offer letter (at [70]). 101 This collection of cases indicates that a number of factors must be considered in deciding whether conduct by way of a contractual obligation might amount to conduct for the purpose of s 18 of the ACL. 102 Whilst I do not doubt that Coles may provide some assistance to the respondents, there are distinguishing features, particularly when considering its application in the context of a summary dismissal application. 103 In Coles, the representation was set out in a document and was admitted. Coles sought only damages (to which it was already entitled as it had established breach of contract). There was no cause to consider whether the applicant entered into a second contractual arrangement with the respondent as a result. In this case there will be cause to consider the pleaded representation as a purported contract (on the respondents' case) which was followed by another purported contract (the Trading Accounts Agreement), such that the first was in a sense also allegedly made in a pre-contractual phase. Mr Karis asserts that he relied on the representation that he would be paid in agreeing to enter into the Trading Accounts Agreement. This alleged conduct preceded entry into the Trading Accounts Agreement, and gives rise to questions as to how the alleged representation and the Trading Accounts Agreement are to be understood viewed together. 104 There are a number of other difficulties with the manner in which the respondents seek to portray the Trading Account Representation as no more than a contractual obligation, at least for the purposes of a summary judgment application. 105 In particular, there is a tension between Recital C of the Trading Accounts Agreement and the respondents' plea in its defence that the Trading Account Representation was 'fulfilled' by Mr Karis's 'receiving equity in Digital X valued substantially in excess of the value of the trading Accounts' (para 5 of the defence). A question arises as to the respective intentions of Mr Karis and the respondents at the time and whether, assuming the Trading Account Representation to be no more than a contractual obligation, there was in fact agreement between the parties as to the consideration to be paid. This issue goes to the heart of whether the representation could be viewed as a contractual obligation. 106 I do not find the respondents' submission compelling for the purposes of summary dismissal in circumstances where the interplay between the Trading Accounts Agreement and the matters alleged to have been said or emailed to Mr Karis will require some examination. If the documentary evidence were unequivocal, the position might be different - but for the reasons expressed above, it is not. Fourth argument - authorisation 107 The respondents submitted that to the extent any representations were made to Mr Karis by the first respondent, then he was a director of that company and so he implicitly or expressly authorised Mr Tsvetnenko to make any such representations on behalf of the company. Alternatively, if Mr Karis did not authorise Mr Tsvetnenko to make the representations, then it was not reasonable for Mr Karis to rely on those representations because he must have known they were not authorised. They assert the representation would not have been made at all by the first respondent if it were not co-authorised by both Mr Tsvetnenko and Mr Karis. 108 Mr Karis submitted that he would not have authorised the representation because Mr Tsvetnenko was the driving force in the business of Digital CC Management, as addressed in his affidavit evidence. Accepting this as true, this issue essentially narrows to whether Mr Tsvetnenko alone had authority to make representations on behalf of Digital CC Management. 109 This 'authority' argument involves a level of speculation. It does not accommodate the fact that the law may operate to permit a company to act whilst excluding a particular director from the decision-making process. For example, where there is a potential conflict of the duties of a director of a company and their personal interests, a director would ordinarily (at minimum) abstain from voting. That does not deny the capacity of the company to act or enter into agreements. Furthermore, the constitution of a company might permit agreements to be entered into by the authority of a single director. Indeed, counsel for Mr Karis raised the possibility that the constitution of Digital CC Management may permit Mr Tsvetnenko to make representations on behalf of the corporation without Mr Karis's authorisation. 110 I note that Mr Karis also pleads in his reply and defence to cross-claim that Mr Tsvetnenko exercised control over the first and second respondents to the exclusion of all others. 111 In short, there are legal and factual issues in relation to this issue that have not been properly ventilated and that are not appropriate for determination on a summary basis. Mr Karis presently has a reasonable prospect of successfully addressing this argument at trial, and I would not deny that prospect by summary dismissal. Fifth argument - reliance 112 The respondents submitted that Mr Karis does not in his own evidence demonstrate reliance on the Trading Account Representation in entering into the Trading Accounts Agreement. Rather, they say Mr Karis's evidence is that he entered the Trading Accounts Agreement because he was enticed by the potential value of equity in DigitalX he would gain under the agreement. 113 The respondents rely on paras 23 and 29 of Mr Karis's affidavit, extracted at [52] above, together with the risk master sheet. They emphasised in particular para 23 in which Mr Karis deposed he was excited by Mr Tsvetnenko's suggestion that Mr Tsvetnenko could roll the trading accounts into a public company, causing the share price to rise exponentially. According to the respondents, this evidence contradicts Mr Karis's pleading that he executed the Trading Accounts Agreement in reliance on the Trading Account Representation. 114 To my mind this argument highlights that there are factual issues to be resolved as to the circumstances of the alleged Trading Account Representation, the Equity Representation, and the circumstances of the grant to Mr Karis of equity in DigitalX. I have already pointed to difficulties with the present probative value of the risk master sheet. However, Mr Karis has also pointed to evidence contrary to the respondents' submissions and consistent with Mr Karis's pleading, including paras 22 and 30 of Mr Karis's affidavit (extracted above). I agree with Mr Karis's submissions that the respondents' submissions as to reliance fail to show he has no reasonable prospect of success. In the face of a conflict between Mr Karis's evidence and the assumptions drawn by the respondents, it is apparent that there are real issues as to reliance that should be tested at trial. 115 I also note that Mr Karis need not establish that he relied solely on the impugned representation in entering into the Trading Accounts Agreement. Proof that a representation made some non-trivial contribution or materially contributed to the decision of an applicant to act in a particular way will be sufficient, notwithstanding that other matters were also influential in making the decision: Ricochet Pty Ltd v Equity Trustees Executor & Agency Co Ltd (1993) 41 FCR 229 at 234-235; and Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 at [14] (Gleeson CJ), [60]-[61] (Gaudron J). Sixth argument - limitation period 116 The respondents submit that Mr Karis's claim falls outside the applicable limitation period, said to be six years, because Mr Karis commenced his claim in 2022 and the relevant loss and damage he suffered occurred in 2014. They say Mr Karis's loss as pleaded, whether the loss of opportunity to use the Karis Trading Accounts or when the alleged promise to pay was not made good shortly after transfer of the accounts, must have occurred before 8 April 2016, and on that basis there is no evidence Mr Karis could lead to show his claim is not statute barred. 117 Mr Karis relies on a passage from Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514, in which (at 533) Mason CJ, Dawson, Gaudron and McHugh JJ stated: We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question. 118 Mr Karis asserts in his submissions that his loss only crystallised on 3 March 2022, when the first respondent commenced the US proceedings seeking to enforce the Trading Accounts Agreement. Whilst that is his primary submission, he also referred to the potential that the relevant date is December 2016 when his employment was terminated (although this is not pleaded). He pleads in his reply and defence to counterclaim that his loss and damage crystallised upon the receipt of a letter of demand dated 11 September 2019 from lawyers for Digital CC Management in relation to his assertion of ownership of bitcoin then held by the rehabilitation trustee; his receipt of a letter of demand from the United States Lawyers for Digital CC Management; or the commencement of the US proceedings. In his submission, there is a dispute about limitation periods, intertwined with the commencement of the US proceedings, and the question of any limitation period clearly falls within the scope of Wardley as an issue which should be determined at trial. 119 In response to Mr Karis's submission, the respondents argue that Mr Karis knew in 2014 he gave up the trading accounts and that the Digital CC Group was trading using them, because he signed off on the annual reports as a director. On that basis, they say there can be no doubt that his loss accrued before the alleged limitation date of 8 April 2016. They submit this case falls within the 'clearest cases' that may be summarily dismissed, as described in Wardley. 120 Whilst I have some sympathy for the respondent's submission, I do not accept the circumstances are so clear as to justify summary dismissal. Whilst there were clearly events that occurred prior to 8 April 2016, it is not unequivocal that Mr Karis's loss or damage because of the Trading Account Representation accrued at the time he entered into the Trading Accounts Agreement or accrued otherwise before 8 April 2016. I do not agree with the respondents' submission that there can be no doubt that Mr Karis must have suffered loss when the alleged promise of payment was not fulfilled, shortly after execution of the Trading Accounts Agreement. 121 Mr Karis's alleged loss would crystallise, in the words of Brennan J in Wardley (at 536), when the adverse balance of the overall transaction between Mr Karis and the Digital CC Group was struck. 122 It seems to me at least arguable that this could be when Mr Karis's employment was terminated, being a point where Mr Karis should have realised he was not in fact going to be paid at all for the Karis Trading Accounts (on his case), or some other date when it became apparent that, despite other events after the alleged representation and the execution of the Trading Accounts Agreement, Digital CC Management did not intend to make any separate payment to Mr Karis as represented. Whether it could be the date the proceedings were instituted in the US must be considered having regard to the intervening events between the parties. Having regard to the factual issues and gaps in the evidence already highlighted, and the interrelationship between the evidence relevant to the representations, I do not consider this is the type of 'clearest case' that directs a finding on a summary basis that the limitation period expired before these proceedings were instituted. This is a case where it would be undesirable to decide the limitation point at this point, having regard to the observations in Warley. Seventh argument - disentitlement to award of discretionary relief 123 The respondents submit that even if Mr Karis were successful in proving the substance of his claim, there would be no reasonable prospect of this Court setting aside the Trading Accounts Agreement. They claim this on the basis that in equity, Mr Karis's conduct disentitles him to relief: Global Advanced Metals Pty Ltd v Metallurg Inc [2017] WASCA 188 at [107]. They submit the same equitable principles inform relief pursuant to s 237 of the ACL, relying on Tenji v Henneberry & Associates Pty Ltd [2000] FCA 550; (2000) 98 FCR 324; and Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281 at 298. 124 The respondents add that although discretionary factors relevant to the grant of relief are ordinarily assessed at trial, where a court is satisfied that 'no reasonable judge could or would exercise discretion to grant such relief', those factors may support an application for summary dismissal, relying on Commonwealth of Australia v BIS Cleanaway Ltd [2007] NSWSC 1075 at [5]-[6] and Davies v Minister for Urban Development and Planning [2011] SASC 87; (2011) 109 SASR 518 at [93]. Accordingly, they submit no reasonable judge would grant Mr Karis a declaration pursuant to s 237 of the ACL or in equity that the Trading Accounts Agreement is void and that the claim for such relief should be summarily dismissed. 125 The respondents point to four specific grounds which they claim would disentitle Mr Karis to relief. Mr Karis did not specifically address all of these points. He submits generally that because these are matters that go to a court's exercise of discretion, they are not fit for summary determination, and that he should be given the opportunity to lead evidence at trial. 126 First, the respondents contend that Mr Karis's conduct is classified as a breach of s 711(2) of the Corporations Act 2001 (Cth), by his failure to disclose his alleged right to be paid for the Karis Trading Accounts in the prospectus for the reverse takeover of DigitalX. As it is relevant to the grant of relief, the respondents describe this is an 'archetypal unclean hands situation'. 127 I am unconvinced that this alleged contravention of itself reveals a persuasive case as to Mr Karis's 'unclean hands'. It was DigitalX's responsibility, not Mr Karis's personally, to comply with s 711 of the Corporations Act. Some examination of the circumstances of the preparation of the prospectus would be required before an 'unclean hands' finding might be made. There may well be a spectrum of conduct or involvement by Mr Karis - from oversight, error, delegation, misunderstanding through to deliberate non-disclosure - and all may influence whether any such finding might be made. 128 Second, the respondents rely upon Mr Karis's alleged 'public affirmation' of the Trading Accounts Agreement. The respondents say that for several years after the prospectus was issued and the takeover took place, Mr Karis was a director and CEO of DigitalX while it was trading on the relevant bitcoin accounts. According to the respondents, he reported to shareholders and the stock market on the profits of such trading through Digital CC Management's annual reports in such a way as to reinforce the belief that the Karis Trading Accounts were the property of Digital CC Management. They also rely upon his execution of the Trading Accounts Agreement and the Trading Accounts Transfer Agreement. They say Mr Karis also benefitted substantially from the newly floated DigitalX group both as a shareholder and as the group CEO, in the form of appreciating shares, his salary and intangible benefits. The respondents cite Tenji at [22] in which French J said the positive affirmation of a contract coupled with a demand for compensation 'might well weigh heavily' against the granting of relief, 'if only because the other party in such a case could be led to adopt a position or not alter its position on the assumption that there would be no claim for avoidance of the contract'. 129 Absent further explanation from Mr Karis, assuming the respondents' characterisation of Mr Karis's conduct is correct and is linked to the performance of the Trading Accounts Agreement, and depending upon the level of his involvement and decision-making in the publication of company information, I accept that his conduct is likely relevant to the discretionary exercise of the power to grant relief. These matters may well be a serious issue for him in the end. However, again, Mr Karis's involvement in the alleged conduct must be tested, established and viewed in the context of other conduct by the parties. I am not satisfied that the evidence as to affirmation currently before me rises to the level necessary to justify summary dismissal. 130 The third is that the respondents claim it would be impossible to unwind the Trading Account Representation. They cite Henjo Investments Pty Ltd v Collins Marrickville (1988) 39 FCR 546 at 564 for the proposition that courts will be slow to grant relief where 'restitutio in integrum is not substantially possible'. 131 The respondents claim that given eight years (at the time) had passed, during which Mr Karis accrued the benefits discussed above, and in the context of significant fluctuations in the value of cryptocurrencies, restitutio in integrum would be impossible. To this I add that Digital CC Trading, which has an interest in the relevant accounts by way of the Trading Accounts Transfer Agreement, described above, is not a party to this proceeding. 132 For both equitable rescission and a declaration that an agreement is void pursuant to s 237, the extent to which an agreement can be unwound is important to the award of the remedy: Bullabidgee Pty Ltd v McCleary [2011] NSWCA 259 at [60]. While there is substantial overlap between this analysis at general law and under the ACL, each framework is not identical. Relief under the ACL may be available where relief under general law is not: Meyidi Pty Ltd v Touloumdjian [2013] SASC 146 at [99]-[104]. The Court has wide powers to make orders by way of relief: see the non-exhaustive list in s 243 of the ACL. 133 I accept that there would be complications in unwinding the conduct that has post-dated the Trading Accounts Agreement. However, I am not persuaded that they are so insurmountable that they warrant a grant of summary dismissal. In equity and under the ACL, relief of the kind the applicant seeks can operate flexibly to do justice between the parties. This flexibility may be greater under the ACL, since the agreement may be declared void from a particular date. The appropriate relief must be viewed when the factual matters that underlie the conduct of Mr Karis and the respondents is clearer. These are difficult issues, not amenable to resolution by a piecemeal approach to aspects of the case. 134 The fourth matter relied upon was raised in various different contexts across the respondents written and oral submissions, but falls within the ambit of discretion to grant relief. The respondents claim that Mr Karis cannot elect to wait and see how the market moves before making a claim when the value of the relevant cryptocurrency was at its highest, citing Lamshed v Lamshed (1963) 109 CLR 440. They say that Mr Karis commenced this dispute when he directed the Mt Gox rehabilitation trustee to disburse the bitcoin to him in September 2018. Before then, the respondents claim they were assured of the beneficial interest in the Karis Trading Accounts pursuant to the Trading Accounts Agreement which they believed not to be disputed, and hence had no reason to commence proceedings. 135 Mr Karis submits that any delay is the responsibility of the first respondent, since although Mr Karis did make a claim with the Mt Gox rehabilitation trustee in 2018, it was 2019 when the respondents sent Mr Karis a first letter of demand, 2021 when they sent a second, and 2022 when proceedings commenced. 136 I am not satisfied on the evidence before me that Mr Karis has delayed this proceeding as the respondents claim. Mr Karis's making of the claim with the Mt Gox rehabilitation trustee is not consistent with a desire to wait and see how the market moves. He made that claim when the opportunity to do so became available. The respondents did not appear to be in any hurry to respond. The question of delay and any impact upon relief should be appropriately left to trial. 137 Considering each of these factors separately and cumulatively, I am not satisfied that 'no reasonable judge' would grant Mr Karis discretionary relief. Summary dismissal - conclusion 138 Based on the evidence as it stands, there is no doubt that Mr Karis's case is not an easy one. There are many matters to be established on which he will bear the onus at trial. There are a number of factual and legal issues that must be resolved, particularly insofar as the Trading Account Representation is to be understood in the context of the Trading Accounts Agreement. Just because a matter is difficult does not deny the power to grant summary judgment or dismissal. I have accordingly considered carefully whether part of the claim might properly be dismissed at this point. However, in the end the number of factual and legal issues, including the interconnectedness of much of the evidence, the fact that Mr Karis asserts a number of oral representations, the potential disconnect between the consideration by payment or equity, the number of matters raised in relation to equitable relief and the relevance of a range of conduct on the part of Mr Karis and others, has led me to conclude that I am not satisfied that Mr Karis's prospects of success on his claims is no more than 'fanciful' or that there is 'no reasonable prospect' of success. I do not consider this is a suitable matter for summary dismissal. The power to give summary judgment for one party against another is not to be exercised lightly and this principle too has informed my decision. To the extent the respondents also sought to have the paragraphs of the pleadings relating to the Trading Account Representation struck out, their application fails for the same reasons set out above. THE BONUS REPRESENTATION AND THE EQUITY REPRESENTATION 139 It is fair to say that the respondents focused in their submissions relating to summary judgment on the Trading Account Representation. Having regard to the interlocutory application, it appears the principal argument in relation to the Equity Representation and the Bonus Representation is that the pleaded claims should be struck out (paras 57 and 58 of the written outline, para 4 of the reply submissions). 140 The respondents' arguments are therefore addressed below in relation to the strike out application. 141 I note, however, that during the hearing a submission was made by counsel for the respondents that appeared to suggest that there should be summary judgment on the Equity Representation, because it cannot be found to be wrong - that is, the respondents rely on the fact that Mr Karis (or Digital Man LLC) did in fact receive equity in DigitalX. If the respondents by this submission intended to seek summary dismissal of this part of the claim, then I am not persuaded that the respondents have established that this is an appropriate case for summary dismissal of the discrete part of the proceeding that deals with the Equity Representation. As already noted, there are real issues to be determined as to the basis upon which equity was granted to Mr Karis and these issues overlap with the factual and legal issues relating to the Trading Account Representation. I note this overlap again in relation to the strike out application below. SUMMARY JUDGMENT ON CROSS-CLAIM 142 The respondents accepted that their arguments in support of summary judgment on their cross-claim rest on their same arguments in support of summary dismissal of Mr Karis's claims about the Trading Accounts Agreement. It follows that I consider that as a matter of practical judgment, and in accordance with the observations in Spencer and the other authorities cited above, I would not grant summary judgment on the cross-claim. I also note that in the circumstances of this case, a declaratory order as to the validity of the Trading Accounts Agreement would limit the potential range of relief that might otherwise be available should Mr Karis ultimately succeed in the relevant part of his claim. STRIKE OUT - BONUS REPRESENTATION AND EQUITY REPRESENTATION Bonus Representation 143 The respondents submit that paras 12, 16, 18 and 19 of the statement of claim should be struck out because they indicate the Bonus Representation was made by the first respondent, whereas para 10 indicates the Bonus Representation was only made by the second and third respondents, and on that basis it is embarrassing. 144 Mr Karis submits that confusion in the pleading was a consequence of an attempt to wrap up all the representations and avoid prolixity. They say it is plain from the originating application that the relief sought is limited to the second and third respondents, and that any doubt could have been settled between the parties. Senior counsel for Mr Karis accepted that the pleading should be clarified. 145 I will grant leave to Mr Karis to amend paras 12, 16, 18 and 19 of the statement of claim in order to make it clear who he alleges made the Bonus Representation, so that the parties proceed with a clear understanding of the claims to be met. Equity Representation 146 The respondents also seek to strike out para 9 of the statement of claim insofar as it alleges that the first respondent, Digital CC Management, made the Equity Representation, on the basis that allegation has no reasonable prospect of success. They rely on the same argument addressed above as to representations by the first respondent lacking authority if they were not co-authorised by Mr Karis. They say that it would be nonsensical for Digital CC Management to make or Mr Karis to rely on such a representation, because it was a subsidiary of Digital CC Holdings with no power to give effect to the representation. 147 As Mr Karis submitted, this argument gives rise to similar authority issues that have been discussed already in relation to the Trading Account Representation: see [107]-[111] above. Further, there is overlap in the factual inquiries that are relevant to the Equity Representation and the Trading Account Representation in that the grant of equity in DigitalX is said to be relevant to both, as also discussed above. On the materials before me I am not satisfied that the threshold for striking out the pleading, having regard to the principles set out above, has been reached. 148 Accordingly, I will not strike out the pleading relating to the Equity Representation, but I will require Mr Karis to amend the pleading in order to clearly plead the matters upon which he relies in asserting that Digital CC Management made each of the Trading Account Representation and the Equity Representation. Again, it is important that the respondent proceed with the case against them clearly exposed. SECURITY FOR COSTS 149 Mr Karis is not a resident of Australia and, according to the respondents, has no assets within the jurisdiction. The respondents submit that it is proper that Mr Karis be ordered to provide security for costs, relying on PS Chellaram & Co at 323, extracted above. They seek an order that he provide security by payment into court of $150,000. 150 In terms of the quantum of the security that is to be provided, the respondents rely on the affidavit of Mr Keating, in which Mr Keating has estimated the total recoverable cost of the work required to be undertaken by the respondents' solicitors up to and including discovery and mediation to be relevantly $212,950 (on the assumption there is no summary dismissal). Those costs are broken down by categories that cover the injunction application the subject of Karis (No 2), this application for summary dismissal, strike out and security for costs, drafting of the defence, preparation for discovery, inspection of discovered documents, preparation and attendances at direction hearings, preparation for and attendance at mediation, correspondence with Mr Karis's lawyers, the rehabilitation trustee and Boutique Capital, and taking instructions and giving legal advice. By 'recoverable costs' I infer that Mr Keating is referring to costs that Mr Karis might be ordered to pay to the respondents on the standard party and party basis. Although they seek costs for the period that precedes the application for security, such an approach is permissible: Norcast S.ár.L v Bradken Ltd [2012] FCA 765 (Gordon J). I add that by letter dated 25 May 2022 to Mr Karis's solicitors, the respondents' solicitors foreshadowed that they would be seeking security for costs. They made inquiries at that time and inferred that no assets were available. Mr Karis's solicitors did not provide any information that dispelled the respondents' concerns in that regard. 151 Mr Karis says the circumstances of the case militate against the making of an order. He says he has assets in the jurisdiction in the form of approximately 9 million shares in DigitalX, valued at USD$190,000 as at 21 October 2022. 152 Mr Karis also submits that at least in relation to the dispute about the Trading Accounts Agreement, Digital CC Management is the true moving party, and his position is in substance defensive. He contends that the commencement of this proceeding was a reaction to the US proceeding commenced by Digital CC Management. On that basis he submitted he should not be required to provide security for costs, relying on National Biofuels Group Pty Ltd v Elbow River Marketing [2009] FCA 613. In that case, Rares J ordered a defendant foreign corporation to pay security for costs, on the basis that although the applicant commenced proceedings and were seeking damages, the defendant was the true moving party because it was positively denying that terms contained within a letter of credit formed part of the contract between the parties, and was itself seeking a large sum of damages. Accordingly, the applicant's position was in substance defensive: at [22]-[23], [25]. 153 Otherwise, Mr Karis submitted the claims relating to his employment are sufficiently linked to the Trading Accounts Agreement dispute such that it is unlikely the respondents will incur substantial additional costs because of those claims. He noted that the Equity Representation case will involve determination of the Trading Accounts Agreement dispute in that it will require assessing his shareholding in DigitalX and the basis upon which he was granted those shares, an overlap to which I have also referred above. 154 In response, the respondents argue that the shares referred to by Mr Karis are owned by Digital Man LLC, not Mr Karis, and in any event the shares may be readily disposed of. They also say Mr Karis has not deposed to his beneficial ownership of these shares, relying on an unsworn annexure to his submissions. The respondents say this Court should follow the approach in Mabrouk Minerals Pty Ltd v Mabrouk Holdings Ltd [2008] WASC 132 and reject Mr Karis's submissions as to his locally held shares. In that case, Newnes J was not satisfied that shares in local entities held by a plaintiff foreign corporation constituted assets within the jurisdiction. His Honour was not confident that those shares would remain unencumbered and available to satisfy a costs order, and not, for example, subject to a third-party security interest: at [70]-[71]. 155 I have taken into account all of these matters, but on balance am persuaded that it is appropriate that Mr Karis provide security. Whilst I accept that there may be some defensive elements to his litigation, he is the plaintiff in these proceedings in Australia, has resisted attempts for the proceedings to be pursued in the US, and must deal with the consequences of his chosen course (a course which was properly open to him, I should add), one of which is that he risks an order of this Court that he provide security for costs. The matters to which he has pointed in opposition to the order do not overcome the weight of the circumstance that he is resident out of the jurisdiction and apparently has no assets in his own name, and no assets being offered by way of security, within the jurisdiction. 156 Further, Mr Karis's attempt to characterise the proceedings as defensive oversimplifies the position. He seeks to pursue a range of complaints about conduct under the ACL, and not limited to the Trading Account Agreement. Both parties to some extent have sought to compartmentalise the claims where it might assist their arguments, but viewed objectively, and regardless of the trigger that led to these proceedings being instituted in Australia, Mr Karis is the party in the position of (and in fact) the plaintiff in this proceeding. Having regard to the range of complaints encompassed by his pleadings, I consider the facts of Mr Karis's case sufficiently distinguishable from National Biofuels. In any event, there is no rule that a court will not order security for costs against a party bringing a proceeding if that person is in substance a defendant: Commissioner of Taxation v Vasiliades [2016] FCAFC 170 at [84]. That is merely one of the circumstances to be taken into account, and the discretion to order security for costs remains unfettered and unconfined by rules or restricted by its exercise in other cases: Vasiliades at [88]-[89]. 157 I accept the respondents' submission that no comfort can be taken from the fact that companies related to Mr Karis might hold shares. No offer has been made to make those shares available or to otherwise secure them so that they might be made available to the respondents. Mabrouk Minerals is apposite in this regard. 158 Nor do I accept that the level of overlap between the employment dispute within the pleading and all of the other claims made by Mr Karis is so great as to justify refusing or significantly limiting an award of security. There is indeed a level of overlap, as I have touched on above and as the arguments about the crystallisation of loss and the Bonus Representation reveal, but it is artificial to dissect the different claims and allocate a percentage of the requested security amount to each of them and then seek to assess whether the costs of some cancel out the costs of others. It would be rare that security could fairly and efficiently be assessed in such a manner, and an exercise of that nature is not justified in this case. However, I do take into account the prospect of some overlap in work required across the different claims as a matter relevant to my decision to fix the amount of security at a level less than that calculated by Mr Keating: see [163] below. 159 The real driver for the security for costs application in this case is not the assessment of merits and the prospect of success on the part of the respondents. Rather, it is the fact that Mr Karis resides overseas and has no assets available within the jurisdiction to meet a costs order. 160 I add that Mr Karis did not contest the nature of the evidence gathered and deposed to by Mr Keating. 161 However, in oral submissions, senior counsel for Mr Karis suggested that if security were to be granted, the figure claimed was broadly put, and that it should be reduced by about a third. 162 As noted, Mr Keating's calculation came to a total of $212,950. However, by way of security the respondents seek $150,000. That is, they have already discounted the figure they seek. 163 I accept that the information provided, and the quantum sought, are expressed broadly, but having regard to the matters raised so far in this action and the disputes already heard, I am of the view that the estimate of $212,950 is generous, but not extravagant, and has a reasonable basis. However, consistent with the actual amount sought by the respondents in their application, I consider a fair amount by way of security, having regard to the current stage of this litigation, is $150,000, to be paid into Court within 28 days. There is no suggestion that such sum will prevent Mr Karis continuing with his claims or otherwise stifle the litigation. 164 There will be an order to that effect. The action brought by Mr Karis against the first and second respondents will be stayed pending payment of security. If Mr Karis pays the security and the matter proceeds, there is no bar to the respondents seeking further security. ORDERS 165 There will be orders accordingly. I certify that the preceding one hundred and sixty-five (165) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Banks-Smith. Associate: Dated: 9 July 2024