De Lorenzo v CXI Software Pty Ltd [2024] NSWDC 371

District Court New South Wales

Medium Neutral Citation: De Lorenzo v CXI Software Pty Ltd [2024] NSWDC 371 Hearing dates: 21 August 2024 Date of orders: 23 August 2024 Decision date: 23 August 2024 Jurisdiction: Civil Before: Newlinds SC DCJ Decision: (1) Judgment for the Plaintiff in the sum of $151,795.39, inclusive of interest up to 23 August 2024. (2) The Defendant pay the Plaintiff's costs. Catchwords: CIVIL – Contract – Banking and finance – Instruments – Convertible notes – Proper construction of convertible note stipulation deed – "Liquidity event" – "Shareholders' approval" – In the circumstances the debt has not been converted to equity – Plaintiff entitled to judgment for unpaid debt Legislation Cited: Corporations Act 2001 (Cth) Cases Cited: Basis Capital Funds Management Ltd v BT Portfolio Services Ltd [2008] NSWSC 766 Category: Principal judgment Parties: John De Lorenzo (Plaintiff) CXI Software Pty Ltd (Defendant) Representation: Counsel: A Osborn Brodie (Plaintiff) S O Concheanainn (Defendant, as sole Director, with leave)

Solicitors: Strategic Legal (Plaintiff) File Number(s): 2023/363149 Publication restriction: Nil

JUDGMENT

Introduction 1. By amended Statement of Claim filed 21 November 2023, the Plaintiff ("Mr De Lorenzo") claims against the Defendant ("CXI") judgment for an alleged debt of $126,219.18, together with interest. The obligation is said to arise under a convertible note subscription deed ("the Deed") entered into by CXI and Malzo Pty Ltd ("Malzo") on 27 April 2018. 2. Mr De Lorenzo claims, and CXI accepts, that on 8 February 2023, there was a transfer from Malzo of its rights and obligations under the Deed to Mr De Lorenzo, who at the time was a director of Malzo. 3. That transfer was consented to by CXI upon the basis that the terms of the Deed would apply as between the Mr De Lorenzo and CXI. CXI issued a fresh loan note certificate, pursuant to the Deed, to Mr De Lorenzo on 8 February 2023. It is accepted by Mr O Concheanainn, who has, with leave, represented CXI as its director at the hearing, that CXI is bound by the terms of the Deed and that Malzo's rights and obligations have passed to Mr De Lorenzo.