Supreme Court New South Wales Medium Neutral Citation: In the matter of Treadtel International Pty Ltd (No 2) [2016] NSWSC 791 Hearing dates: 4 December 2015 and 4 March 2016 Decision date: 20 June 2016 Jurisdiction: Equity Before: Robb J Decision: The parties are directed to bring in short minutes of order to give effect to the reasons for judgment. Catchwords: PROCEDURAL – Application for leave to amend statement of claim to seek relief under s 233 of the Corporations Act 2001 (Cth) – principles applicable – plaintiff claims second defendant holds share in first defendant on trust for plaintiff – whether plaintiff lacks standing because he is not recorded as a member of the first defendant in the register of members – different grounds for standing relied upon by plaintiff – arguable that plaintiff has standing to sue as beneficiary of trust in respect of share held by second defendant – exceptional circumstances – second defendant with conflict of interest and unwilling to sue – other alleged bases for standing permitted – leave to amend granted – application not too late – original pleading not a result of a tactical decision – application for leave to amend in part a result of defence pleaded LEAVE – conditions on which leave to amend granted – costs occasioned by the amendment, including costs thrown away payable by plaintiff – plaintiff not ordered to pay additional security for costs – plaintiff required to discontinue related proceedings in Italy on a permanent basis – plaintiff required to pay defendant's costs of Italian proceedings Legislation Cited: Corporations Act 2001 (Cth) Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485 Dymocks Book Arcade Pty Ltd v Capral Ltd (formerly Alcan Australia Ltd) [2011] NSWSC 1423 General Steel Industries v Commissioner for Railways (1964) 112 CLR 125 In the matter of Treadtel International Pty Ltd [2014] NSWSC 1406; 104 ACSR 1Niord Pty Ltd v Adelaide Lidden v Composite Buyers Ltd (1996) 67 FCR 560 Mercedes Holdings Pty Ltd v Waters (No 3) [2011] FCA 236 Petroleum NL (1990) 54 SASR 87; (1990) 2 ACSR 347 Ramage v Waclaw (1988) 12 NSWLR 84 Re Independent Quarries Pty Ltd (1993) 12 ACSR 188 Saad v State of New South Wales (No 4) [2014] NSWSC 353 TAL Life Ltd v Shuetrim [2016] NSWCA 68 Telecom Vanuatu Ltd v Optus Networks Pty Ltd [2005] NSWSC 951 Titlow v Intercapital Group (Australia) Pty Ltd (1996) 65 FCR 449; (1996) 144 ALR 203; (1996) 20 ACSR 201 Texts Cited: Ford, Austin and Ramsay's Principles of Corporations Law (16th ed, 2014) Category: Procedural and other rulings Parties: Pierro Cocco (plaintiff) Treadtel International P/L (first defendant) Richard Crosher (second defendant) Representation: Counsel: D Sulan/G P Gee (plaintiff) J Thomson (first defendant) D Robertson (second defendant) Solicitors: Rolland Ross Lawyers (plaintiff) Smith Lawyers (first defendant) Thompson Eslick (second defendant) File Number(s): 2014/205607 Publication restriction: None Judgment Introduction 1. The issue presently before the court is whether the court should grant leave to the plaintiff, Mr Pierro Cocco, to file an amended statement of claim in the form annexed to an amended interlocutory process filed in court on 4 March 2016. 2. The first defendant, Treadtel International Pty Ltd (Treadtel), and the second defendant, Mr Richard Crosser, both oppose leave to amend being granted. 3. If leave to amend is granted to Mr Cocco, there is a dispute between Mr Cocco and Mr Crosher as to the conditions upon which the leave to amend should be given. 4. In brief terms, Mr Cocco wishes to allege that he and Mr Crosher agreed, commencing in about January 2000, to establish a business of selling tyres to customers throughout the world. Mr Cocco will allege that he and Mr Crosher substantially conducted the business through their shareholding in Treadtel. At all times Mr Crosher has held on his own account one of the shares in Treadtel. Mr Cocco says that, between May 2007 and 10 February 2013, the other share in Treadtel (the trust share) was held by Mr Crosher's wife on trust for Mr Cocco. Thereafter, following Mr Crosher's divorce from his wife, the trust share has been registered in the name of Mr Crosher. Mr Cocco wishes to allege that Mr Crosher has failed to comply with requests that he transfer the share held on behalf of Mr Cocco, so that Mr Cocco could become registered as a member of Treadtel. He also wishes to allege that he has been shut out of the business of Treadtel for a considerable time. Ultimately, the primary claim that Mr Cocco wishes to make by his amended statement of claim is for relief under ss 232, 233, 461 and 462 of the Corporations Act 2001 (Cth). 5. The primary ground relied upon by Treadtel and Mr Crosher for refusal by the court of Mr Cocco's application for leave to amend his statement of claim is that Mr Cocco does not have standing to bring what is still commonly called an oppression suit, because he is not at present registered as a member of Treadtel, although they have other grounds. 6. Treadtel and Mr Crosher have been separately represented in these proceedings. That is so even though, at present, the register of members of the company records Mr Crosher as the only shareholder. It appears to be clear that Mr Crosher has complete control over the activities of Treadtel. Mr Cocco submits that Treadtel and Mr Crosher have identical interests. Alternatively, Mr Cocco submits that Treadtel should abstain from supporting Mr Crosher's defence as the ultimate issue is whether each of Mr Cocco and Mr Crosher are entitled to be members of Treadtel in respect of one share each. In either event, Mr Cocco submits that, in respect of any costs order that may be made against him, he should only be required to pay one amount of costs. History of proceedings 1. Mr Cocco commenced these proceedings by originating process filed on 11 July 2014. He sought an order pursuant to s 175 of the Corporations Act that the share register of Treadtel be rectified so as to record that from 9 July 2014, one ordinary share in the company was held by Mr Cocco. 2. Mr Crosher moved the court for orders for security for costs; a stay of the proceedings pending determination of a claim that Mr Cocco has on foot against Mr Crosher in the Court of Milan in Italy; the removal of the proceedings from the Corporations List; and that the matter proceed by way of pleadings. 3. Mr Crosher's application was dealt with by Brereton J on 14 October 2014: see In the matter of Treadtel International Pty Ltd [2014] NSWSC 1406; 104 ACSR 1. 4. It will be convenient to set out the paragraphs in his Honour's judgment that explain why he rejected the application by Mr Crosher for a temporary stay of the present proceedings until Mr Cocco discontinues or otherwise terminates the Italian proceedings, having regard to the differences in the issues raised by the two proceedings: [24] In the present case, there is no identity of issue between the Italian proceedings and the New South Wales proceedings. In the Italian proceedings, the essential issue is whether Mr Crosher agreed to assume personal liability for the obligations of Treadtel International — and perhaps the content of those obligations and the extent to which they remain unperformed. In the New South Wales proceedings, the essential issue appears to be whether Mr Cocco agreed to relinquish his interest in Treadtel International, and (if not) whether he is entitled to have the trust share legally transferred to him and registered in his name. Admittedly there is a common factual context, in the negotiations and agreements struck between the parties during the period 2011–2012, culminating in the Milan meetings on 12 February 2012. But that does not amount to a common substratum of fact, even if that be the relevant test — the existence (or not) of a personal guarantee by Mr Crosher is not a material fact in either Mr Cocco's cause of action or Mr Crosher's defence in the New South Wales proceedings; and the existence (or not) of an agreement by Mr Cocco to relinquish his interest in Treadtel International is not a material fact in either Mr Cocco's cause of action or Mr Crosher's defence in the New South Wales proceedings… [25] Moreover, in the New South Wales proceedings, Mr Cocco's claim in substance — though not yet fully pleaded — is that the trust share was and is held upon trust for him, and that he is entitled to have it transferred into his name and thereupon to be recorded in the register as the holder. It is a claim to enforce a trust of property situated in New South Wales, against a person resident in New South Wales, in respect of an interest in a New South Wales registered company, and includes a claim for relief under a Commonwealth statute, jurisdiction under which is neither conferred on nor exercisable by the Italian court… [26] Thus each proceeding has a different subject matter, and it is not vexatious for a plaintiff to sue the same defendant in different jurisdictions in respect of different subject matter… 1. Brereton J made an order that the proceedings should continue on pleadings. 2. His Honour also made an order that Mr Cocco provide security of $50,000 for Mr Crosher's costs. That order was made on the basis that Mr Cocco is a resident in Italy: see Uniform Civil Procedure Rules 2005 (NSW), r 42.21(1)(a). Mr Cocco did not contest that an order for security for costs should be made against him, or that $50,000 was an appropriate sum. He contended that $50,000 was an appropriate amount to cover the whole of the proceedings. Brereton J specifically said at [44] that he did not determine one way or the other, whether $50,000 should be sufficient to cover the entire proceedings. Further, he said that he did not intend to foreclose Mr Crosher from making a further application. The quantum of security could be revisited, if necessary, at a later stage, when the scope and the costs of the proceedings become clearer. I will mention the circumstances in which Mr Cocco provided a further $100,000 of security for costs below. 3. Brereton J dismissed the application for the proceedings to be removed from the Corporations List. 4. Mr Cocco filed a statement of claim on 3 November 2014. He added claims for a declaration that Mr Crosher held one ordinary share in Treadtel on trust for Mr Cocco; an order that Mr Crosher transfer that share to Mr Cocco; an order that Treadtel and Mr Crosher record Mr Cocco as the shareholder of the share in the register of members; and an order that Mr Crosher account to Treadtel (which I take to be an error for Mr Cocco) for any dividends or other distributions paid in respect of the share held on trust for Mr Cocco in the period when Mr Crosher was the registered owner of that share. These claims were in addition to the original claim under s 175 of the Corporations Act that the register of Treadtel be rectified. In essence, by his original statement of claim, Mr Cocco pleaded substantially the same allegations as are now found in the draft amended statement of claim limited to the claim that Mrs Crosher initially held one share in Treadtel on trust for Mr Cocco; the share register of Treadtel recorded Mrs Crosher as being the holder but not the beneficial owner of the trust share; the trust share was transferred to Mr Crosher as part of the divorce settlement; Mr Crosher was recorded as the holder and beneficial owner of the trust share in the share register; and Mr Crosher has refused to transfer the trust share to Mr Cocco, notwithstanding that his refusal is a breach of trust. 5. Mr Cocco filed an amended originating process on 29 December 2014 to cause the claims for relief in his originating process to conform to the claims in the statement of claim. 6. Defences were then filed by Treadtel and Mr Crosher. It is only necessary to describe the effect of the defences in outline. They effectively admitted the substance of Mr Cocco's allegations that the trust share was originally held on trust for Mr Cocco by Mrs Crosher; Mrs Crosher was recorded in the share register as the holder but not the beneficial owner; the trust share was transferred to Mr Crosher as part of the divorce settlement; the trust share was recorded in the share register as being held by Mr Crosher beneficially; and Mr Crosher has declined to comply with requests to transfer the trust share to Mr Cocco. 7. However, both defences allege, in par 12, that on or about 12 February 2012, Mr Cocco, by an agreement with Mr Crosher entered into in Milan, Italy, agreed to relinquish his interest in Treadtel on certain specified terms, which would involve a division between the two of businesses operated by Treadtel or its subsidiaries on the basis of certain payments. The detail of the alleged agreement is not material to the present application. 8. Mr Cocco filed replies to the defences in which he denied the agreement alleged by the defendants, and pleaded in the alternative that, if an agreement had been made, it was liable to be set aside because Mr Crosher was the trustee of the trust share for Mr Cocco, and he had breached his duties as trustee by failing to make proper disclosure to Mr Cocco, and failing to provide proper value for the benefits he received. 9. Treadtel filed a cross claim, which it amended on 23 February 2015, and Mr Cocco filed a defence to that cross claim. It is sufficient for present purposes to note that Treadtel's cross claim claimed orders to enforce promises alleged in the defences to have been made by Mr Cocco for the benefit of Treadtel in the alleged Milan agreement. 10. Relevantly for present purposes, the effect of these pleadings was that Mr Cocco's claim in respect of his beneficial ownership of the trust share, and his entitlement to have the register rectified, was confessed, subject to the plea in avoidance that Mr Cocco had entered into the Milan agreement, whereby he had relinquished his beneficial interest in the trust share in favour of Mr Crosher. 11. Consequently, the factual substratum of the dispute moved from the limited field of the beneficial ownership of the trust share, and what was required to be recorded on the share register of Treadtel, to the determination of the businesses operated by Treadtel and through its subsidiaries around the world, as a basis for determining whether the parties entered into the Milan agreement, and if so, what the terms and effect of that agreement were. Mr Cocco's first application for leave to amend 1. On 9 October 2015, Mr Cocco filed an interlocutory process in which he sought leave to file an amended statement of claim in the form annexed to the interlocutory process. 2. I do not speculate about the reasons why Mr Cocco sought to amend his statement of claim, but it seems likely that his application to amend was at least in part prompted by the change in the factual basis of the dispute brought about by the defences filed by the defendants, which, as I have noted above, shifted the focus of the dispute to the businesses established by Mr Cocco and Mr Crosher through Treadtel in various parts of the world, and the making of the alleged Milan agreement. 3. Significantly, the basic structure of the initial draft statement of claim was to allege that Mr Cocco and Mr Crosher established a partnership or joint venture, through which they established Treadtel, and thereafter various other businesses in a number of countries, through subsidiaries of Treadtel, or joint ventures in which Treadtel participated. Mr Cocco alleged a breakdown in the partnership or joint venture from about March 2011 (par 63); and that, in 2011 and 2012, Mr Cocco and Mr Crosher discussed ways to bring the partnership or joint venture to an end (pars 63 to 68); but those discussions did not reach fruition, so that Mr Cocco remains the beneficial owner of the trust share. 4. Mr Cocco wished to allege that, since at least 8 February 2012, Mr Crosher has wrongly treated Mr Cocco as though he was no longer a shareholder in Treadtel, and has conducted the business for his own benefit, as though he was the sole beneficial shareholder; and that this constituted oppression that entitled Mr Cocco to relief under s 233(1)(e) of the Corporations Act, or an order for winding up Treadtel under s 233(1)(a) or s 461(e), (f), (g) or (k) of the Corporations Act: see pars 69 to 72. 5. Mr Cocco also wished to make an alternative claim that any agreement to transfer the trust share is unenforceable; or, if it is enforceable, Mr Cocco is entitled to be paid a sum of money for the transfer. Mr Cocco maintained the rectification claim pleaded in the original statement of claim. 6. By the time the initial draft amended statement of claim was prepared, Mr Cocco had served his primary affidavit evidence in the proceedings. A significant number of the particulars to the allegations in the draft pleading were provided by making specific references to paragraphs in the affidavit. 7. It is not possible for me, without undertaking a substantial analysis of the affidavit evidence that has been filed, to make a valid judgment about the extent to which the claim that Mr Cocco sought to make by his initial draft statement of claim was founded on the evidence that had already been filed by the parties, and Mr Cocco in particular. I note that the particulars to 19 paragraphs of the draft statement of claim, which represents a substantial majority of the particulars given, refer either solely or substantially to identified paragraphs of Mr Cocco's 3 August 2015 affidavit. 8. It appears from the file that the latest substantive affidavit sworn by Mr Crosher is dated 8 May 2015, which predates the 3 August 2015 affidavit of Mr Cocco, upon which most of the particulars to the initial draft statement of claim were based. It is possible that the order of affidavits is explained by the fact that the effect of the defences was to shift the forensic ground to the issues raised in the defences, so that even though Mr Cocco is the plaintiff, his later affidavit is effectively a response to Mr Crosher's affidavit in support of the defences. 9. In the defendants' solicitors' letter dated 6 October 2015 to Mr Cocco's solicitors, in which they responded to service of the initial draft amended statement of claim, they assert in pars 12 and 13 that the draft pleading was not based upon Mr Cocco's evidence in chief, but his evidence in reply, and Mr Cocco had not sought leave to serve any further evidence in chief. That appears to confirm my inference that the initial draft amended statement of claim sprang out of Mr Cocco's affidavit in reply to Mr Crosher's affidavit, which although the affidavit of a defendant, was an affidavit in support of the primary issues in the proceedings, which were introduced by the defences filed by the defendants. 10. Mr Crosher's solicitor, Mr Peter Thompson said in his affidavit sworn 26 October 2015, in opposition to Mr Cocco's application, that if the leave to amend sought by Mr Cocco was given, it would be necessary for Mr Crosher's legal advisers to review any evidence that Mr Cocco now seeks to lead in chief on the amended claim, and take instructions on that evidence: see par 16(e). In the following subparagraphs of par 16, Mr Thompson explained all of the subsequent steps that would be necessary to prepare Mr Crosher's case. 11. Mr Thompson said in par 13, that Mr Crosher's professional costs and disbursements were $440,815 to date, and in par 16(j), that he estimated that the amended claim would cause Mr Crosher to incur additional costs estimated to be in the region of $200,000. Mr Thomson said in par 20, that he was of the opinion that a large part of the work that had been done would need to be redone or would be superfluous, and in par 21(g), Mr Thompson estimated that somewhere in the vicinity of 30-50% of the costs incurred by Mr Crosher to date will have been wasted if the leave to amend was granted. 12. Although Mr Thomson expressed these opinions, he did not attempt to substantiate them by reference to any specific aspects of the evidence. 13. Mr Thompson's affidavit was accompanied by a substantial exhibit (totalling 205 pages). On an application to amend a pleading such as the present, I will not take into account any part of the exhibit that was not referred to in submissions. 14. Mr Crosher read parts of the affidavit of Mr Thompson sworn 27 March 2015 (pars 9, 10, and 12 to 21). He revised his estimate of Mr Crosher's legal costs going forward to $232,000. He gave a more detailed explanation of the preparatory work that would be necessary. He said that Mr Crosher may need expert evidence concerning the translation of documents from Italian, evidence of Italian law, and evidence concerning the accounting position of Treadtel, as at 2011 and 2012. Mr Thompson did not elaborate on what the nature of that evidence would be. 15. Mr Crosher read pars 2 to 14 of Mr Thompson's affidavit sworn 26 June 2015. In substance, Mr Thomson revised his estimate of Mr Crosher's future costs upwards from $232,456 to $313,647. 16. Mr Crosher also relied upon limited parts of Mr Thompson's 14 August 2015 affidavit. 17. I infer that Mr Thompson's estimates of the future legal costs that Mr Crosher would incur, if the leave to amend sought by Mr Cocco was granted, were tailored to the issues raised by the initial draft amended statement of claim. 18. I admitted into evidence on a limited basis a copy of a letter from Mr Thompson to Mr Cocco's solicitor, dated 3 December 2015. The letter was in response to an offer made by Mr Cocco in support of his application for leave to amend his statement of claim that, if the leave was given, he would withdraw his Italian proceedings against Mr Crosher. The letter annexed extracts from a commentary on the Italian Code of Civil Procedure. I admitted the evidence on the interlocutory application, on the basis that it would be indicative of the relevant procedural rules of the Italian court, concerning Mr Cocco's offer to withdraw or discontinue the Italian proceedings. I did so on the basis that the material would assist the Court to understand the issues that would be involved in implementing Mr Cocco's offer. I said I would proceed on the basis that, if I ruled in favour of Mr Cocco's application for leave, and if it seemed appropriate that the Italian proceedings be withdrawn or discontinued as a condition of that leave, then the mechanics of how that was to be done would be deferred for further consideration. 19. For present purposes, it will be sufficient to set out the following extract from Mr Thompson's letter concerning the effect of the relevant Italian law: It is our understanding that, under Italian law, a party may withdraw judicial proceedings in two different ways: First, if there is an agreement between the parties for the proceedings to be withdraw then the proceedings will be extinguished by the Court if the parties agree to not appear at two consecutive hearings before the Court. If that occurs the judge will proclaim the proceedings to be extinguished in accordance with Article 309 (read in conjunction with Article 181) of the Italian Civil Procedure Code. As you will appreciate, that is not envisaged to occur here, as it would require our client's consent. In any event, we are instructed that there is not any further hearing listed in the Italian Court prior to the final hearing date which we understand is listed in June 2017. Secondly, if the claimant is to unilaterally withdraw proceedings, then he would need to follow the procedures of Article 306 of the Italian Civil Procedure Code by serving a deed on the defendant renouncing the claims raised against the defendant and that renouncement is to be accepted by the defendant. If the defendant does not accept that renouncement, it seems the Court will then need to cause the proceedings to be extinguished by making a judgment. 1. Mr Cocco did not tender evidence in response to Mr Thompson's evidence, or cross-examine Mr Thompson. 2. The most material feature of the initial draft statement of claim was that it sought to allege that all of the business activities of the parties took the form of a partnership or joint venture between Mr Cocco and Mr Crosher, which in substance operated through their shareholding in Treadtel, albeit that Mr Cocco's trust share was initially held on trust for him by Mrs Crosher. 3. Thus, Mr Cocco did not simply allege that he and Mr Crosher established Treadtel to operate it as a company, which had the nature and attributes of a partnership or joint venture. He alleged that there was a real partnership or joint venture that operated through the shareholding of Mr Cocco and Mr Crosher in Treadtel. 4. The initial draft statement of claim did not attend specifically to Mr Cocco's standing to make the oppression claim pleaded in pars 69 to 72. It effectively assumed the existence of that standing. 5. That application came on for hearing before me on 4 December 2015. After the reading of the evidence and some discussion, Mr Cocco withdrew his application for leave in relation to the draft amended statement of claim that was annexed to his interlocutory process, and indicated that he would renew his application in relation to a revised version of the draft amended statement of claim. Directions for the service of any revised amended draft statement of claim were made, and the application was adjourned to 4 March 2016. Mr Cocco's revised application to amend 1. In the intervening period, Mr Cocco served a revised form of the amended statement of claim. Mr Crosher opposed all of the proposed amendments. Mr Cocco made further amendments, and served an interlocutory process on the defendants on 26 February 2016, to which he attached the revised document. That was the interlocutory process that was filed by leave in court on 4 March 2016. 2. In pars 12 to 15 of the claim for relief in the final version of the draft amended statement of claim, Mr Cocco sought relief based upon the premise that he and Mr Crosher had carried on a partnership, or alternatively a joint venture, in the period after January 2000. The basis for that relief was pleaded in pars 109 to 113 of the draft pleading. 3. At the inception of the hearing on 4 March 2016, Mr Cocco's counsel informed the court that Mr Cocco no longer pursued his application that leave should be granted to him to file the draft amended statement of claim insofar as it sought relief on the premise that there was a partnership or joint venture, or contained the allegations to support that claim. I will therefore proceed upon the basis that the relevant parts of the draft amended statement of claim have notionally been deleted. 4. As I understand it, Treadtel and Mr Crosher only became aware that Mr Cocco would abandon his partnership or joint venture claim at or very shortly before the commencement of the hearing. 5. On the second hearing, Mr Crosher read the affidavit of Mr Thompson sworn 2 March 2016. Mr Thompson gave evidence that he had been informed by Mr Crosher's Italian lawyers that to cause the Italian proceedings to be terminated, without leaving Mr Cocco with the ability to commence fresh proceedings for the same claims, there will need to be a deed of waiver or settlement executed between Mr Cocco and Mr Crosher, which is subject to Italian law, which records terms which prevent that occurring. 6. Mr Thompson also said that he had been informed by the Italian lawyers that Mr Crosher had incurred legal costs relating to the defence of the Italian proceedings amounting to approximately €20,000 not including taxes to date. He said that he had also been informed that the Italian court would not order Mr Cocco to pay Mr Crosher's costs on an indemnity basis. He would be ordered to pay costs in accordance with ministerial guidelines, and not by reference to the actual costs properly incurred. The maximum amount that would be ordered at present is €10,080, plus general reimbursement of expenses (15%), Social Security Contribution (4%) and of VAT (22%). 7. Mr Thompson also gave evidence concerning the security for costs that Mr Cocco has been ordered to pay. An amount of $50,000 was paid into court pursuant to Brereton J's 14 October 2014 order. On 10 September 2015, Mr Cocco paid an additional $100,000 into court pursuant to a consent order made by Brereton J on 19 August 2015. The order noted "the agreement between the parties that subject to compliance with the…orders, [Mr Crosher] will not seek any further security for costs of the proceedings". 8. The agreement by Mr Cocco to pay into court an additional $100,000, as security for Mr Crosher's costs, was therefore made after Mr Cocco's 3 August 2015 affidavit in reply was served, but before Mr Cocco filed his interlocutory process on 9 October 2015, in which he sought leave to file his initial draft amended statement of claim. 9. Mr Thompson also gave evidence that his total revised estimate for Mr Crosher's legal costs to complete the proceedings, assuming the leave to amend the statement of claim is granted to Mr Cocco, is $753,815. That amount is constituted by the costs of $440,815 incurred to 26 October 2015; and assumed waste of $130,000 caused by the amendment; $153,000 as the estimate of preparation and costs of the hearing (assuming a four day hearing); plus an additional amount of $30,000 (assuming the hearing will take an additional four days). 10. I infer that Mr Thompson's estimate of Mr Crosher's costs to complete the proceedings was made on the basis that all of the issues that would flow out of Mr Cocco's claim that there was an overarching partnership or joint venture would need to be determined if Mr Cocco was given the leave to amend that he sought. 11. Mr Thompson said that he had requested that Mr Cocco agree to pay an additional $200,000 into court as security for costs, but that request was refused. 12. Mr Cocco did not tender any evidence in response to Mr Thompson's evidence. Mr Cocco's revised draft amended statement of claim 1. It will be necessary to consider the terms of the draft amended statement of claim. It will be sufficient to describe the general effect of some parts of the draft pleading, but other parts are of sufficient importance that they should be set out in full. My summary has been drawn from the relevant parts of Mr Cocco's outline submissions on the application. 2. Paragraphs 1 to 4 deal with the parties to the proceedings. 3. Paragraphs 5 to 6 deal with the initial discussions by which the business relationship was formed. 4. Paragraphs 7 to 58 deal with the business dealings between the parties and the various interests that were acquired or became part of the business relationship during the relevant period. 5. Paragraphs 59 to 69 deal with Mr Cocco's case concerning the relevant meetings in 2011 and 2012, whereby Mr Crosher says a concluded and final agreement was reached concerning Mr Cocco's beneficial shareholding in Treadtel. 6. Mr Cocco alleges in par 70 that from the time of incorporation of Treadtel to 30 May 2007, Mr Crosher's former wife held one of the two ordinary shares in Treadtel on trust for Mr Cocco, pursuant to the terms of an undated trust deed. Mr Cocco further alleges in pars 72 to 75 that, as a term of the settlement of their divorce proceedings, the former Mrs Crosher transferred the trust share to Mr Crosher on about 30 May 2007, and on that date, Mr Crosher was registered as the beneficial and legal owner of that share in the share register of Treadtel. Mr Cocco did not consent to the transfer of the beneficial ownership in the trust share to Mr Crosher, and he alleges in par 77 that from 30 May 2007, Mr Crosher held the trust share on trust for Mr Cocco. 7. Mr Cocco alleges in par 78 that Mr Crosher holds the trust share on trust for Mr Cocco, who is entitled to compel Mr Crosher to transfer the trust share to him, in accordance with clause 3 of the trust deed. He further alleges that Mr Crosher is required to account to Mr Cocco for any dividends or other distributions and benefits which accrued in respect of the trust share. Mr Cocco alleges that Mr Crosher has been erroneously recorded in the register and by notification to ASIC, as being the beneficial owner of both shares in Treadtel: see pars 79 and 80. 8. Mr Cocco requested by email on 22 May 2014 that Mr Crosher cause the register of Treadtel to be rectified to record Mr Cocco's beneficial ownership in the trust share: see par 81. He alleges in par 83 that, on 4 June 2014, Mr Cocco's solicitors asked Mr Crosher to correct the register to reflect Mr Cocco's beneficial ownership in the trust share (the First Request). He then alleges in par 87 that, on 29 October 2014, his solicitors directed Mr Crosher to execute an instrument of transfer of the trust share in favour of Mr Cocco, as was required by clause 3 of the trust deed (the Second Request). Mr Cocco says that Mr Crosher has not complied with any of the requests, and that, as he alleges in par 90, Mr Crosher has accordingly acted in breach of trust, by failing to comply with his obligation under clause 3 of the trust deed. 9. Mr Cocco then alleges four grounds for his standing to bring an oppression claim, and a winding up application, in respect of Treadtel. The first ground is pleaded as follows: (i) Standing as a member or contributory 91 Cocco has by the First Request, further or alternatively by the Second Request, done everything he can do to be recorded as shareholder on the register of Treadtel. 92 Crosher: (a) has refused to comply with the First request and further or alternatively the Second Request; (b) controls the share register of Treadtel; (c) is a rival faction of Cocco; (d) controls whether to: (i) execute an instrument of transfer in respect of the Trust Share; (ii) issue a share certificate to Cocco; and (iii) rectified the contents of the register of Treadtel. 93 By reason of the matters in paragraph 91 to 92, Cocco is a member for the purpose of section 231 of the [Corporations] Act. 1. I will consider the relevant legal principles below. For the present, it may be noted that s 231 of the Corporations Act relevantly provides: A person is a member of a company if they: (a) are a member of the company on its registration; or (b) agree to become a member of the company after its registration and their name is entered on the register of members… 1. The definition of "member" is somewhat circular, as s 231 defines the term by reference to itself, in the sense that each sub-paragraph includes the word "member". Furthermore, the definition of "member" of a company in s 9 of the Corporations Act is: "a person who is a member under section 231". 2. The draft statement of claim acknowledges that Mr Cocco is not a member by reason of his being registered as such in the register of Treadtel. Mr Cocco nonetheless wishes to argue that he is a member, in circumstances where the trust share is held on a bare trust for him; he has an express right in the trust deed to require Mr Crosher to transfer the trust share to him; he has exercised that right; Mr Crosher controls the register; and it is a breach of trust for Mr Crosher not to have complied with the First Request or the Second Request. 3. The second ground is pleaded as follows: (ii) Standing to bring the claim as a member or contributory derivatively 94 Further or in the alternative to paragraphs 91 to 93, Cocco is the beneficiary of the trust in respect of the Trust Share and Crosher is trustee. 95 Crosher in his capacity as trustee of the Trust Share will not take steps as a member of Treadtel to protect the beneficial interest of Cocco in the Trust Share. 96 Crosher is conflicted or disabled in his capacity as trustee of the Trust Share in taking any steps as a member of Treadtel to protect the beneficial interest of Cocco in the Trust Share. Particulars Any suit by Crosher as trustee of the Trust Share as member of Treadtel is not able to be brought because it would involve Crosher in his capacity as trustee of the Trust Share bringing suit against Crosher in his capacity as director and shareholder of Treadtel. 97 In the premises, special circumstances exist such that Cocco: (a) as the beneficiary of the Trust Share; has the right (b) to bring proceedings in his own name alternatively bring proceedings in his own name on behalf of Crosher as trustee of the Trust Share; (c) to pursue the rights which Crosher as trustee of the Trust Share could pursue as member (if he were not conflicted or disabled) under s 231-232 of the [Corporations] Act; (d) to seek such relief as would be available to Crosher as trustee of the Trust Share (if he were not conflicted or disabled) under s 233 of the Act. 1. This basis for standing starts from the proposition that Mr Crosher is a bare trustee of the trust share for Mr Cocco. As Mr Crosher is recorded on the share register of Treadtel as being a member, he clearly has standing to bring oppression proceedings against Treadtel and Mr Crosher, insofar as their conduct may have satisfied any of the grounds in s 232 of the Corporations Act in respect of Mr Crosher's ownership of the trust share on trust for Mr Cocco. However, Mr Crosher cannot be expected to pursue a claim for relief under s 233 of the Corporations Act in respect of that conduct, because he has a conflict of interest. Furthermore, Mr Crosher is practically disabled from commencing the proceedings because he would effectively be suing himself. 2. Mr Cocco relied upon the decision of Powell J (as his Honour then was) in Ramage v Waclaw (1988) 12 NSWLR 84, where his honour said at 91-93: The true position appears to be accurately stated in Jacobs' Law of Trusts in Australia, 4th ed (1977) where the following passages appear (ibid at 531): The beneficiaries, or any one of them, may institute proceedings to compel the trustee to perform his duty or to protect their beneficial interest in the trust property even although that interest is only contingent. A failure by the trustee to carry out any particular duty will, of course, be a breach of trust, giving rise to a right of action against him by a beneficiary, and, if sufficiently serious, will afford grounds for his removal as trustee and the appointment of a new trustee in his place. Normally this remedy will provide adequate protection to a beneficiary. But where a trustee refuses to institute proceedings against a debtor or to recover trust property, the beneficiary may wish to institute proceedings himself, either in his own name or in the name of the trustee. The rule here is that a beneficiary may sue in his own name only where the relief sought is in the equitable jurisdiction of the court and even then only where the circumstances are exceptional. If they are not exceptional, or if the proposed action is to be commenced in the common law jurisdiction, the beneficiary's remedy is to sue the trustee for the execution of the trust and then to apply for the appointment of a receiver and for leave to sue in the name of the trustee or of the receiver… Where there are special circumstances and the relief sought is in the equitable jurisdiction of the court a beneficiary may take proceedings in his own name, the trustee and other beneficiaries being added as defendants. Although it would appear that, in the early stages, the only circumstance which might be regarded as "exceptional", or "special", were collusion between the trustee and debtor, or insolvency of the trustee, a consideration of the authorities will, I believe, demonstrate, that "exceptional", or "special", circumstances are not now to be regarded as limited to such categories of case. 1. The distinction between applications for relief in the equitable jurisdiction and at common law referred to by Powell J in the extract from Jacobs' Law of Trusts in Australia is no longer supported in the authorities. 2. In TAL Life Ltd v Shuetrim [2016] NSWCA 68, Leeming JA, with whom Beazley P and Emmett AJA agreed, said [54] Originally, the view appears to have been taken that that was possible only in cases where the trustee's claim was equitable: see for example Ramage v Waclaw (1988) 12 NSWLR 84 at 91. I am of the view that it includes proceedings at law (such as suing under a policy of insurance), a view which has been upheld repeatedly at first instance: see Lidden v Composite Buyers Ltd (1995) 67 FCR 560 (Finn J); Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432 at 436–437 (Cohen J) and Chahwan v Euphoric Pty Ltd [2009] NSWSC 805; 73 ACSR 252 at [18] (Brereton J). The restriction to proceedings in equity was originally a consequence of the jurisdictional limits of chancery, and it was well established that a beneficiary could in appropriate circumstances advance a claim at law in the name of the trustee. Sir John Romilly MR reviewed the numerous authorities that existed in 1854 where such an equity had been "occasionally although cautiously enforced by this Court" in Stainton v The Carron Company (1854) 18 Beav 146 at 156; 52 ER 58 at 62. That accords with what was said in Hayim v Citibank NA [1987] AC 730 at 748: These authorities demonstrate that a beneficiary has no cause of action against a third party save in special circumstances which embrace a failure, excusable or inexcusable, by the trustees in the performance of the duty owed by the trustees to the beneficiary to protect the trust estate or to protect the interests of the beneficiary in the trust estate. 1. In Mercedes Holdings Pty Ltd v Waters (No 3) [2011] FCA 236, Perram J said at [39]: "There is no reason to think that Finn J's reasoning from the Judicature Act 1873 (UK) system does not apply to statutory counts too". His Honour was referring to the judgment of Finn J in Lidden v Composite Buyers Ltd (1996) 67 FCR 560 at 563, 564, where Finn J laid down the basis for removing the distinction between claims in the equitable jurisdiction and at common law, in relation to the circumstances in which a beneficiary may pursue an action to which the trustee is entitled, in the stead of the trustee. 2. In these circumstances, sufficient grounds have been established, at this stage of the proceedings, when the issue is whether Mr Cocco should be given leave to amend his statement of claim, for the exceptional case where equity will permit the beneficiary to commence proceedings to enforce the claim to which the trustee is entitled. Mr Cocco is in effect saying that he, as a beneficiary of the trust, has standing to pursue relief in respect of the trust share for oppression by Treadtel and Mr Crosher in respect of his own share, because Mr Cocco is permitted by equity to act upon Mr Crosher's own standing as the registered holder of the trust share. If there remain questions as to whether there are any special circumstances that deny Mr Cocco standing where the nature of the claim is a statutory proceeding under ss 232 and 233 of the Corporations Act, those questioned should be resolved at the hearing, and not at the present interlocutory stage. 3. The third basis of standing is: (iii) Standing by reason of nunc pro tunc rectification of the register 98A Further or in the alternative, Crosher has acted in breach of trust by failing to transfer the Trust Share and recognise Cocco as a member of Treadtel. Particulars The matters in paragraphs 78 to 90 are repeated. 98B Any order of the Court to the effect rectifying the register of Treadtel, ought to be made nunc pro tunc. 98C Once an order is made nunc pro tunc, Cocco is taken to have been a member since the date of the First Request, or alternatively the Second Request or such other date as the Court sees fit. 98D In the circumstances of 98B to 98C, equity recognises that which ought to have been done as having been done and equity would permit the claims to oppression to proceed in the present proceedings. 1. This basis appears to recognise the fact that s 234 of the Corporations Act relevantly provides that an application for an order under s 233 in relation to a company may be made by "(a) a member of the company…". Mr Cocco is not currently a member of Treadtel in respect of the trust share, as he is not recorded as a shareholder in the company's share register. If an order is made by the court rectifying the register nunc pro tunc, to the date of either of the two requests, or any other date before leave is granted to file the amended statement of claim, then Mr Cocco will retrospectively have become a member of Treadtel for the purposes of s 234 of the Corporations Act. 2. It should be noted that Mr Cocco is not relying upon a right to become a member on completion of an agreement for the transfer of the trust share to him, where the agreement has not yet been completed. He is claiming that the court, in its equitable jurisdiction, has power to make an order that the share register be rectified nunc pro tunc to cure a continuing breach of trust by Mr Crosher. 3. The final basis for standing asserted by Mr Cocco is: (iv) Standing as contributory or creditor 98E Further or in the alternative, Cocco has standing under section 462 of the (Corporations) Act as a contributory or as a person that is alleged to be a contributory of Treadtel on the grounds pleaded in paragraphs 78 to 98D above. 98 Further or in the alternative, Cocco has standing under section 462 of the (Corporations) Act as a contingent or prospective creditor of Treadtel, on the grounds pleaded in paragraphs 116 to 119 below. 1. Section 462 of the Corporations Act, referred to in these paragraphs of the draft statement of claim, authorises a person who is a creditor of a company (including a contingent or prospective creditor) to make an application for an order to wind up the company, under the grounds set out in s 461 of the Corporations Act. As appears from par 108 of the draft statement of claim, Mr Cocco wishes to rely upon the grounds for winding up contained in s 461 (e), (f), (g) and (k). 2. The effect of par 98E is to claim that Mr Cocco is a contributory of Treadtel by reason of all of the facts alleged in the nominated paragraphs concerning Mr Cocco's right, as beneficiary of the trust, to be registered as a shareholder of the trust share, and Mr Crosher's failure to cause that to happen, in breach of the trust. 3. The reference to pars 116 to 119 in par 98 raises a contingent claim made by Mr Cocco. In pars 43 to 58, Mr Cocco wishes to plead a number of events that led up to discussions between Mr Cocco and Mr Crosher for the purpose of reaching an agreement for Mr Crosher to buy out Mr Cocco's interests in Treadtel. The proposed buyout terms are pleaded in par 59, but Mr Cocco wishes to allege that the terms of the proposed buyout never became binding, and, in any event, they have not been performed. Mr Cocco wishes to go further, in that he wishes to allege in pars 62 to 69 that, if any agreement was reached, it was void and unenforceable, because it was entered into by Mr Crosher in circumstances that involved a breach of his obligations as trustee of the trust share. 4. Mr Cocco wishes to allege in par 114, in the alternative, that if (which is denied) an enforceable agreement was reached for Mr Cocco's exit from Treadtel, then Mr Cocco is entitled to payment of the amounts agreed to be paid to him. Part of the agreement involved Treadtel reimbursing Mr Cocco for the costs be incurred in winding up one of the businesses established as an Italian subsidiary of Treadtel. Mr Cocco wishes to allege that that reimbursement has not occurred. The other part of the agreement, whereby Mr Cocco says that Mr Crosher agreed to pay him €375,000 for the transfer of the beneficial ownership of the trust share, is irrelevant for present purposes, because the failure by Mr Crosher to pay that amount to Mr Cocco would make him a creditor of Mr Crosher, and not the company, Treadtel. 5. Thus, the fourth basis relied upon for standing by Mr Cocco, is in respect of the standing to apply for an order that Treadtel be wound up on one of the grounds listed in s 461 of the Corporations Act. However, that claim is contingent on Mr Crosher succeeding in establishing that there was a binding buyout agreement. If there was such an agreement, then Mr Cocco would be a creditor of Treadtel for the reimbursement sum, and accordingly, Mr Cocco wishes to allege he is now a contingent creditor of Treadtel. 6. Mr Cocco's oppression claim is contained in pars 99 to 108 of the draft amended statement of claim. In summary, Mr Cocco wishes to allege that, since 16 March 2011, or various alternative later times, Mr Crosher has controlled Treadtel on the basis that he is the sole shareholder, and that Mr Cocco has no beneficial interest in the trust share (pars 99 and 100). Mr Cocco identifies the alleged oppressive conduct by Mr Crosher in par 102, which includes excluding Mr Cocco from management; excluding him from operational decisions; and failing to provide him with financial information in relation to the various Treadtel businesses. Since 29 October 2014, Mr Crosher has failed to hold any annual general meeting in respect of Treadtel to which Mr Cocco has been invited: see par 103. Mr Crosher has, since 29 October 2014, denied Mr Cocco's request to rectify the register of Treadtel (part 104); and failed to hold any shareholder or other meeting to which Mr Cocco has been invited (par 105). 7. I have already referred to the contingent claim made by Mr Cocco in pars 114 to 117, to be entitled to payments of money sums if there was a binding buyout agreement. Principles governing leave to amend 1. The principles governing applications to amend pleadings were helpfully gathered by Ward J (as per Honour then was) in Dymocks Book Arcade Pty Ltd v Capral Ltd (formerly Alcan Australia Ltd) [2011] NSWSC 1423 (noting that her Honour was concerned with a case where the relevant limitation period had expired, which is not the case here) as follows: [5] Sections 64 and 65 of the Civil Procedure Act 2005 (NSW) relevantly provide as follows: 64 (1) At any stage of proceedings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to s 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. … [6] In Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27 ; (2009) 258 ALR 14, the High Court said (from [14]): There is a distinction between the discretion of a court to allow a party to amend its pleading on that party's motion and the requirement to make all such amendments as may be necessary to determine the real questions in controversy. That requirement engages with the authority conferred on the court to make amendments of its own motion. The point was made in 1887 by the Full Court of the Supreme Court of Victoria in Dwyer v O'Mullen in relation to O XXVIII r 1 of the 1875 Rules. Higinbotham CJ said of the last clause of the rule that it: makes an amendment mandatory. The judge is under the obligation of making an amendment, but only for a certain purpose and in certain cases — for the purpose of determining the real question in controversy between the parties — that being expressed in many cases to be the question which the parties had agitated between themselves, and had come to trial upon. … An important aspect of the approach taken by the plurality in J L Holdings was that it proceeded upon an assumption that a party should be permitted to amend to raise an arguable issue subject to the payment of costs occasioned by the amendment. So stated it suggests that a party has something approaching a right to an amendment. That is not the case. The "right" spoken of in Cropper v Smith needs to be understood in the context of that case and the Rule, which required amendment to permit the determination of a matter already in issue. It is more accurate to say that parties have the right to invoke the jurisdiction and the powers of the court in order to seek a resolution of their dispute. Subject to any rights to amend without leave given to the parties by the rules of court, the question of further amendment of a party's claim is dependent upon the exercise of the court's discretionary power. [7] The exercise of the discretion to grant or refuse leave must not only be in accordance with s 64(2) of the Civil Procedure Act (Greenwood v Papademetri [2007] NSWCA 221 (at [35])), it must also adhere to the "dictates of justice" (ss 56, 57 and 58 of the Civil Procedure Act). Those matters will generally require consideration of the nature and degree of any prejudice that may be suffered by the grant or refusal of the application (Itek Graphix Pty Ltd v Elliott [2002] NSWCA 104; (2002) 54 NSWLR 207). Where the proposed amendment to the pleading satisfies the express criteria in s 65(2) of the Act, it is suggested that it will be unlikely that a person opposing the grant of leave will be able to demonstrate material prejudice (Ritchie's Uniform Civil Procedure at [65.45]). [8] The exercise of discretion necessarily involves a balancing exercise (Cement Australia Pty Ltd v Australian Competition and Consumer Commission [2010] FCAFC 101; (2010) 187 FCR 261 at [51] and [66]) having regard to the circumstances of the particular case. [9] In Cement Australia, their Honours (Keane CJ, Gilmour and Logan JJ), said at [45]: Before turning to the particular grounds of complaint agitated in this Court by the Cement Australia parties, we should observe that insofar as the trial judge gave significant weight to the consideration that the achievement of justice in the particular case before him favoured allowing the amendment, that was not contrary to the decision in Aon Risk or anything in s 37M or s 37N of the Federal Court Act. Nothing in Aon Risk or the Federal Court Act suggests that this consideration is not relevant to the exercise of the discretion to permit or refuse an amendment. Rather, the point made in Aon Risk is that this consideration must not be allowed to trump other relevant considerations, including considerations of the kind reflected in ss 37M and 37N of the Federal Court Act. and at [51]: Aon Risk is not a one size fits all case. Whilst various factors are identified in the judgment as relevant to the exercise of discretion, the weight to be given to these factors, individually and in combination, and the outcome of that balancing process, may vary depending on the facts in the individual case. As the plurality in Aon Risk observed at [75], statements made in cases concerning amendment of pleadings are best understood by reference to the circumstances of those cases, even if they are stated in terms of general application. [10] In Aon at [102], the factors to be weighed in the exercise of this discretion were said to include the nature and importance of the amendments to the plaintiff; the effect of the proposed amendments on the defendant; the delay in making the amendments; and, where there is delay in applying for amendment, whether an adequate explanation for the delay has been given. There, Gummow, Hayne, Crennan, Kiefel and Bell JJ said (at [98]) that the requirements for speed and efficiency "should not detract from a proper opportunity being given to the parties to plead their case" and at [102] that "The objectives stated in [the relevant rule there under consideration] do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will". One of the factors to be weighed in the balance is the point the litigation had reached, relative to a trial, when the application to amend is made. 1. In the present case, the defendants do not only oppose leave being given to Mr Cocco because of the timing and circumstances in which he has made his application; they do so on the ground that leave should not be given because, if Mr Cocco had pleaded the amended claim from the beginning, the parts of his claim constituted by the amendments would have been liable to be struck out, on the ground that they did not allege a reasonably arguable cause of action. In such a case, the question before the court is whether the claim made by Mr Cocco has sufficient prospects of success that it would survive a strikeout application, if it were allowed to be pleaded, applying the test in General Steel Industries v Commissioner for Railways (1964) 112 CLR 125: see Ainsworth v Burden [2005] NSWCA 174 at [51], [52]; Harvey v John Fairfax Publications Pty Ltd [2005] NSWCA 255 at [67], [68]; and Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2007] NSWSC 1306 at [3]. That test is, as Barwick CJ said at 128-129: The plaintiff rightly points out that the jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion…It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action — if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal—is clearly demonstrated. The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense". 1. In the present case, there is a question as to whether Mr Cocco should be permitted to plead a number of novel claims, particularly concerning the issue of whether he has standing to seek remedies against the defendants based upon whether the affairs of Treadtel have been conducted in a manner that falls within s 232 of the Corporations Act. In my view, the appropriate course is to adopt the approach set out by White J in Telecom Vanuatu Ltd v Optus Networks Pty Ltd [2005] NSWSC 951, in cases where a party seeks to add novel claims to a pleading which alleges a reasonable cause of action, and the same facts will have to be investigated whether or not the novel claims are not permitted. His Honour said: [21] In Wickstead v Browne (1992) 30 NSWLR 1, Kirby P, when considering whether a cause of action in negligence by a beneficiary of a trust against the trustee should be allowed to go to trial said (at 5): But as the trial must now proceed, there is merit (as it seems to me) in permitting the appellant to present his case in various ways. The marginal utility to the respondent of preventing the appellant from proceeding upon the alternative cause of action in negligence is minimal. But the marginal cost of doing so would be very great if, subsequently, the trial was concluded, limited by the orders proposed, and it was then held, either by this Court or by the High Court of Australia, that the appellant's cause of action in negligence was viable; 2. Common experience teaches that it is usually more efficient and just to consider the viability of a cause of action when the facts said to support it are adduced and the suggested action can be judged with a full understanding of all relevant evidence. Testimony gives colour and content to the application and development of legal principle. (Emphasis added) [22] His Honour's was a dissenting judgment, but was upheld in the High Court: ((1993) 10 Leg Rep SL2). [23] Two things follow from the passage from Wickstead v Browne quoted in para [21]. First, there is a threshold question as to whether there is a practical advantage which outweighs the potential disadvantage in deciding whether the question is reasonably arguable. Thus, in Williams & Humbert v W & H Trade Marks (Jersey) Ltd [1986] AC 368, Lord Templeman said (at 435–436), that if an application to strike out involves a prolonged and serious argument, the judge should, as a general rule, decline to proceed with the argument unless the judge not only harbours doubts about the soundness of the pleading, but is satisfied that the striking out will obviate the necessity for a trial, or will substantially reduce the burden of preparing for trial, or the burden of the trial itself. [24] Secondly, in assessing whether there is sufficient utility in deciding whether the cause of action is reasonably arguable, the question is not whether the trial judge, but whether the Court of Appeal or the High Court, might consider that the cause of action is viable. Entitlement of Mr Cocco to leave to amend 1. The opposition to the court granting leave to Mr Cocco to file the revised draft amended statement of claim was primarily conducted by Mr Crosher, with the support of Treadtel. 2. The written submissions made on behalf of Mr Crosher concerning defects in the pleading of the partnership or joint venture claim fell away when Mr Cocco abandoned those claims. 3. Counsel for Mr Crosher acknowledged in relation to the pleading issues that "the position is much improved", but he submitted that there remained pleading defects. 4. Those defects were set out in Mr Crosher's written submissions delivered before the renewed hearing. They were directed at the pleading of the oppression claim. As I understand it, Mr Crosher also relied upon the submissions that were made on his behalf on 4 December 2015, to the extent that they remained relevant, following the revision of the draft pleading. 5. The primary argument put by Mr Crosher at the first hearing was that, if Mr Cocco alleges that Mr Crosher was at relevant times a trustee of the trust share in favour of Mr Cocco, then Mr Cocco's proper remedy is for breach of trust, not for orders under ss 233 or 461 of the Corporations Act, based on the claim that Mr Crosher had conducted the affairs of Treadtel in a way that was oppressive (using that term as a shorthand for the conduct described in s 232 and the relevant parts of s 462 of the Corporations Act) to himself in his capacity as trustee of the trust share. Mr Crosher submitted in effect that, if Mr Crosher held each of two shares in Treadtel, and controlled the conduct of the company, he could not in principle oppress himself in one capacity in favour of himself in a personal capacity. 6. The question before the court is not whether that submission is correct or not, but whether the claim made by Mr Cocco has sufficient prospects of success that it would survive a strikeout application, if it were allowed to be pleaded, applying the test in General Steel Industries that has been set out above. 7. In my view, the factual circumstances that have been alleged in the present case are relatively exceptional in that, even though Mr Cocco no longer alleges that there was a formal partnership or joint venture recognised by the law, under which the activities of Treadtel were conducted, it is clear that the allegation is that, even though the parties operated through their shareholding in Treadtel, the business conducted was in the nature of a partnership between two equal partners. Initially, Mr Cocco participated in the management of Treadtel on an equal basis with Mr Crosher, and the fact that Mrs Crosher was the holder of the trust share, and Mr Cocco was only a beneficial owner, was treated by the parties as a mere formality. The circumstances in which Mr Crosher became registered as the holder of the trust shares were not within the control of Mr Cocco, and were not by his consent. A transaction occurred, as part of the divorce proceedings, which led to Mr Crosher being registered as the holder of the trust share, on the basis that he was the beneficial owner. Mr Crosher then managed the affairs of Treadtel as if he was the only beneficial shareholder in the company (at least from about the date of the alleged Milan agreement). If that agreement is established, it may be shown that Mr Crosher was entitled to act in the manner in which he did. If the agreement is not established, then it will follow from the admissions made by Mr Crosher in his defence that he has conducted the affairs of Treadtel in breach of his duty as trustee of the trust share. 8. As a general proposition, there may be considerable force in the argument that is necessary to distinguish carefully between Mr Cocco's entitlements as a beneficiary of a trust over the trust share, and the rights that he might have on the basis that Mr Crosher was obliged to allow Mr Cocco a continuing involvement in the management of Treadtel, where the consequence of Mr Crosher ignoring those rights may justify the court in granting oppression relief to Mr Cocco. The need to make that distinction may well be decisive in cases where the membership of the relevant company is not limited to the trustee and the beneficiary. Perhaps even there were one additional independent shareholder of Treadtel, Mr Cocco's attempt to obtain relief for oppression on the basis that Mr Crosher was obliged to conduct the affairs of Treadtel in a way that afforded Mr Cocco a positive involvement in the management of the company, even though he was only the beneficial owner of a share, might break down. 9. However, given the circumstance that Treadtel was always a two man company; that Mr Cocco was only a beneficial shareholder was in practical terms a formality; and that Mr Crosher acquired the trust share without Mr Cocco's consent, so that he has acted unilaterally to exclude Mr Cocco from the management of the company; I could not find at this stage of the proceedings that Mr Cocco's claim has no reasonable prospects of success, particularly as there is no third-party shareholder interested in Treadtel in a manner that might require the court to impose a more strict delineation between Mr Crosher's obligation as trustee of the trust share in favour of Mr Cocco, and the manner in which he was required to manage the affairs of the company in the interests of all of the shareholders. 10. I would not decline Mr Cocco's application for leave to amend his statement of claim on the basis that he does not have a sufficiently arguable claim that Mr Crosher's conduct constituted actionable oppression. 11. Mr Crosher criticised the way in which the oppression claim is pleaded, by saying that the allegations are made at the generalised level that Mr Crosher has controlled, managed and operated Treadtel on the basis that he is the sole shareholder in the company, and that Mr Cocco has no beneficial interest (pars 99 and 100); that Mr Crosher has denied that Mr Cocco has any interest in the trust share (par 101); and that Mr Crosher has excluded Mr Cocco from management, operational decisions, and receiving financial information (par 103). Further, Mr Cocco alleges that Mr Crosher has failed to hold any annual general meeting to which Mr Cocco has been invited since at least 29 October 2014, and failed to report any material business decisions to Mr Cocco (par 103). Mr Crosher has denied Mr Cocco's request to rectify the register (par 104) and has failed to hold any shareholder or other meeting to which Mr Cocco has been invited (par 105). 12. Mr Crosher submitted that the draft pleading is defective because it does not make any positive allegation that Mr Crosher has wrongly paid dividends to himself alone or otherwise gained benefits from the company without ensuring that Mr Cocco received his share of the same benefits. 13. It is not necessary on an application such as the present to examine in detail the question of whether or not, and if so in what circumstances, exclusion from participation in management, and denial of information, may constitute oppressive conduct. It will be sufficient to note the following edited extracts from Ford, Austin and Ramsay's Principles of Corporations Law (16th ed, 2014): [10.460.15] Improper exclusion from participation in management Exclusion of a member from management will attract relief where it is not in accordance with the company's constitution. Even where the constitution is observed an exclusion from management may call for a remedy where it is inconsistent with a common understanding between members outside the company's constitution which gave rise to a member's legitimate expectation of participating in management: Quinlan v Essex Hinge Co Ltd [1996] 2 BCLC 417; see [10.400]. … A company may be formed on the basis that there is an expectation of participation in management by the shareholders. But where irreconcilable differences develop such that this participation is no longer possible, there is no exclusion from management which constitutes oppression: Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343; [2009] NSWSC 342. [10.460.18] Denial of access to information Denial of access to books and records may be held to constitute prejudicial conduct: Re Back 2 Bay 6 Pty Ltd (1994) 12 ACSR 614; 12 ACLC 253. Alternative remedies such as s 247A may be utilised to compel access to books and records; however, to the extent that the denial is oppressive, unfairly prejudicial or unfairly discriminatory, an action may also lie under Pt 2F.1… 1. It is neither necessary nor appropriate at this stage of the proceedings to consider the merits of Mr Cocco's claim, or how the principles outlined in the extract immediately above might apply to his case. I note that in his existing statement of claim, Mr Cocco already seeks an order that Mr Crosher account for any dividends or other distributions paid by Treadtel in respect of the share held on trust for Mr Cocco. Mr Cocco has not yet pleaded details of any such dividends or distributions, which may be explained by the fact that he has not been provided with any information concerning the affairs of Treadtel. 2. The defendants' primary response to Mr Cocco's application for leave to file an amended statement of claim is that leave should be refused because it would be futile, as the principal relief sought by Mr Cocco is that made available by s 233 of the Corporations Act, in respect of the conduct identified in s 232 (which, for the sake of brevity, has been termed oppression), and it is established by authority that this court should follow that Mr Cocco does not have standing to seek that relief, because he is not currently recorded as a member of Treadtel in its share register, and will not be so recorded at the time he files the draft amended statement of claim in accordance with any leave given by the court. 3. The defendants rely upon the decision in Niord Pty Ltd v Adelaide Petroleum NL (1990) 54 SASR 87; (1990) 2 ACSR 347 where White J, with whom Mohr and Millhouse JJ agreed, said at 363 to 364 (in relation to a precursor to ss 232 and 233 of the Corporations Act): Niord had no standing whatsoever under s 320(1) of the Companies Code to apply to the court for an order for the relief therein envisaged because such an application can only made under s 320(1)(a) "by a member who believes" that oppressive, prejudicial or unfairly discriminatory action has been taken by the company. The only other person or body who can bring this kind of action is the Commission: 320(1)(b). Niord could not rely for standing or right to sue upon an equitable interest. Niord was nothing but an intermeddler, an outsider desperately seeking to throw itself into the way of being oppressed within the meaning of s 320… It is not necessary on this appeal to go into Niord's relationship with Poseidon nor into its reasons or motives. The plain fact is that Niord was not a "member" and had no right to complain of oppressive or other conduct towards members and no other standing to apply under s 320(1). It was crucial to Niord's standing under s 320(1) that it be registered, at the time of issuing the summons, on the Adelaide Register. The Register evidences the fact of membership of a company. Only a person or a company on the Register can bring an action complaining inter alia of oppressive conduct. It is not possible for Niord now or in the future to convert non-membership into membership by making some further amendment to its already amended statement of claim. Neither the first nor the second statement of claim in this action alleges any fraud by Adelaide in deliberately holding up the registration of the transfers lodged on 12 April 1989 for more than 10 days. It may well be that Adelaide was too busy with the imminent meeting to get around to registering late share transfers. Indeed, the registration of 82,000 shares on one day and of 18,000 shares some weeks later indicates that lodgement of share transfers might have been on different days or that "busy-ness" might be the explanation for lateness of registration. Whatever the explanation, lack of the status of membership is fatal to Niord's claim under s 320. Niord was, until registration on the Register no more than the equitable owner of the shares. The vendors, as the registered members, remained the members of Adelaide. 1. The defendants submit that the court should follow this decision of the Full Court of the Supreme Court of South Australia on the principle in Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485. 2. I accept that the decision in Niord is authority for the proposition that a transferee under a contract for the sale of shares in a company should not generally be treated as a member before the contract is completed and the transferee's name is recorded in the share register of the company as the holder of the shares. However, I do not accept that the decision establishes that a person may never be treated as a member of a company, for the purposes of s 233 of the Corporations Act, unless the person is recorded in the share register as the holder of shares in the company. In my view, White J's observation that: "Neither the first nor the second statement of claim in this action alleges any fraud by Adelaide in deliberately holding up the registration of the transfers lodged on 12 April 1989 for more than 10 days", at least implicitly leaves open that there may be situations where the court should treat a person as a member of a company for the purposes of s 233 of the Corporations Act where that person is not yet recorded as a member in the register of members. 3. In Re Independent Quarries Pty Ltd (1993) 12 ACSR 188, Williams J said at 191-192: Neither my diligent researches nor the submissions of counsel have revealed the existence of any decided case on the factual situation which now confronts me. There are many cases involving a person who was the equitable holder of shares: eg Maas v McIntosh (1928) 28 SR (NSW) 441 and Hooker Investments Pty Ltd v Email Ltd (1986) 10 ACLR 443. In those cases the equitable owner of the shares did not appear on the register and was not the holder of a share certificate in his name. It followed that such a person could not exercise the rights of a member. Similarly, the plaintiffs in Fulloon v Radley [1992] 2 Qd R 290 were the transferees pursuant to certain unregistered share transfers, and as they had not agreed to become members and did not appear on the register it was held that they were not members of the company. It was a somewhat similar factual situation which confronted the court in Musselwhite v C H Musselwhite and Son Ltd [1962] Ch 964. In that case there was an agreement to transfer shares for the payment of a sum of money by way of instalments over a period of time. The agreement provided the transfers of the shares should be executed and that the executed transfers and relevant share certificates should be deposited with the company solicitors until payment had been made in full. The transferor remained on the company's register of members as the holder of the shares. The question arose as to the rights of the transferor to vote at the annual general meeting prior to the final payment with respect to the shares. It was held that a partly paid vendor of shares remaining on the register of members after the execution of the contract for sale retained the voting rights. The statement of Fry LJ in Nicol's case (1885) 29 Ch D 421 at 447 is often quoted in text books: "Section 23 of the Companies Act 1862 makes the placing of the name of a shareholder on the register a condition precedent to membership. Although the court has power to dispense with this under certain circumstances, that does not make it any the less a condition precedent''. But it is important to note the facts of that case. There had been an application for shares but the allotment money had not been paid, share certificates had not been issued, and names were never entered on the register. I have not been able to find any case where a court has had to consider whether the holder of a share certificate issued in his name, and stating that he is the registered holder of the shares referred to therein, was not a member because his name did not appear in the register. It seems to me that there is here a clash between the provisions of ss 1087 and 184. In considering that clash it must not be overlooked that pursuant to s 209(9) the register of members is only prima facie evidence of matters contained therein. Reference need only be made in that regard to the decision of the House of Lords in The Directors of the Reese River Silver Mining Co Ltd v Smith (1869) LR 4 HL 64. There are numerous passages in the judgments delivered therein highlighting the fact that the register is not conclusive; one of the illustrations given, which is of relevance for present purposes, is where the name of a person is, without sufficient cause, omitted from the register. When one considers ss 1085, 1091, 1092, 1093, 1094, and 1095 of the Corporations Law it seems that the law contemplates that the entry of details of the transferee in the share register and the issuing of the fresh share certificate would be contemporaneous steps. It appears not to have been within the contemplation of the draftsman that for some reason or other the directors or a company would issue a share certificate in the name of the transferee but not register details in the register of members. … Bearing in mind that there is now an extended definition of ``member'' for purposes of s 260 I have come to the conclusion that the holder of share certificates in his name, duly sealed with the seal of the company, and which have been issued consequent upon a valid transfer form lodged, and where the consideration for the transfer has been fully paid, is a member of the company for purposes of s 260. The share certificate itself is prima facie evidence that such a person is a registered shareholder in, and therefore a member of, the company. The mere fact that in such circumstances his name is omitted from the register is not conclusive evidence that he is not a member notwithstanding the provisions of s 184… 1. Williams J, in the particular circumstances, where the party held a valid share certificate certifying that he was a member, but was not entered in the register of members as the holder of the shares, held that the party was a member. Because the facts of the present case are different, his Honour's decision is not directly relevant. It does, however, provide support for the proposition that there may be some cases in which a party may apply for relief under s 233 of the Corporations Act, which fall short of the party being recorded as the holder of shares in the register of members of the relevant company. 2. In Titlow v Intercapital Group (Australia) Pty Ltd (1996) 65 FCR 449; (1996) 144 ALR 203; (1996) 20 ACSR 201, Lehane J said, at 202 to 204, in an ex tempore judgment: The question thus resolves itself to this: can somebody whose name does not appear in the register of members of a company be regarded as a member of that company for the purposes of s 260 of the Law? It is clear, I believe, that one cannot become a member until one's name is entered in the register. That follows from s 184 of the Law which provides that a person who agrees to become a member of a company, and whose name is entered in the company's register of members, becomes a member of the company. Thus, the person does not become a member until each of those conditions is fulfilled. … I was referred also to Niord Pty Ltd v Adelaide Petroleum NL (1990) 8 ACLC 684. That was a decision of the Full Court of the Supreme Court of South Australia in which the judgment of the court was delivered by White J. That case differed from this in that proceedings were commenced before the plaintiff became registered as a member rather than, as here, at a time after removal of the applicant's name from the register. On the facts, therefore, it may be said that the case is distinguishable because s 184 in terms applies in the case of someone whose name has never been entered in the register, not in the case of someone whose name was entered in the register but has subsequently been removed. However, White J referred to the consequences of being or not being on the register of members for the purposes of an application under s 260 in strong and general terms. The relevant passage may be found at 697 and 698. In particular his Honour said this: The register evidences the fact of membership of a company. Only a person or company on the register can bring an action complaining inter alia of oppressive conduct. It is not possible for Niord (i.e. the plaintiff) now or in the future to convert non-membership into membership by making some further amendment to its already amended statement of claim. Those last words are perhaps not directly applicable given the form of the application in this case. But there is clear and unqualified authority, albeit to some extent obiter, of the Full Court to the effect that only a person actually on the register can bring an application under s 260. The other authorities to which I was referred are not, I think, inconsistent with that proposition. That is certainly so of the decision of Branson J in this court in Leaney v Olmstead Pty Ltd (1994) 51 FCR 240. Nor is it inconsistent with the judgment of Williams J in the Supreme Court of Queensland in Re Independent Quarries Pty Ltd (1994) 12 ACLC 159. It is certainly true that in the particular circumstances of that case Williams J held that where the plaintiff held share certificates properly sealed in his name, but his name was not entered in the register because the register was controlled by what was described as a rival faction, rectification of the register need not be effected before the person named in the share certificate as the registered holder could lawfully claim to be a member. I do not think, however, that that decision on extremely unusual facts, and where rectification was in fact sought and granted, is one which should cause me not to apply the very general observations both of Young J and of the Full Court of the Supreme Court of South Australia. 1. Although Lehane J accepted and applied the principle that registration in a company's register of members is a necessary condition of a party being a member of the company, his Honour's reference to "but his name was not entered in the register because the register was controlled by what was described as a rival faction", in his analysis of the judgment of Williams J, appears to leave open the possibility that a party may be a member of a company for the purposes of s 233 of the Corporations Act, where the party is entitled to be entered on the share register as the holder of shares, but where registration is precluded by a "rival faction" which has control of the register. 2. It is neither necessary nor appropriate for the court, on an application by Mr Cocco for leave to amend his statement of claim, to attempt to determine whether, as a matter of law, Mr Cocco is entitled to be treated as a member of Treadtel for the purposes of s 233 of the Corporations Act. 3. I am satisfied that the second ground that Mr Cocco wishes to plead as the basis for his standing to seek relief under s 233 of the Corporations Act is sufficiently arguable in the circumstances to justify the court in permitting Mr Cocco to make that allegation, and to take that claim to trial. It appears to me that the second ground falls within what may be described as the exception to the general rule contemplated (and I use that word advisedly) in the three authorities that I have discussed above. It is an open question whether or not a party should be treated as a member of a company where that party is entitled to be recorded as the holder of shares in the register of members of the company, and the party cannot achieve registration because the register is under the control of a rival party, particularly where the refusal of registration may be a breach of duty to the first party – in the present case, a breach of trust. 4. I am also satisfied that, once the second ground is accepted as being reasonably open, Mr Cocco should be permitted to plead the first and third rounds, on the principle discussed by Kirby P (as his Honour then was) in Wickstead v Browne, as considered by White J in the Telecom Vanuatu case. 5. I am also satisfied that Mr Cocco should be permitted to plead the fourth ground of standing, which relates to his claim to be a contingent or prospective creditor for the purposes of s 462 of the Corporations Act. Against the possibility that Mr Crosher succeeds in establishing what I have called the Milan agreement, Mr Cocco wishes to plead that he is entitled to be paid debts in performance of that agreement, which remain outstanding. He therefore has an arguable case that he is a contingent or prospective creditor of Treadtel. Now is not the occasion to investigate the merits of that claim, or any difficulties for Mr Cocco's case that may flow out of the inconsistent alternative positions that he wishes to plead. 6. Finally, it is necessary to deal with the grounds of opposition to the grant of leave to Mr Cocco to amend his statement of claim that arise out of the principles discussed by the High Court in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175. 7. As I understand it, Mr Crosher's argument was that Mr Cocco should not be given leave to amend his statement of claim, because the court should infer that the existing statement of claim was pleaded in the narrow way, in which the case was formulated based upon a tactical decision consciously made by Mr Cocco, in circumstances where no explanation has been proffered to the court as to why Mr Cocco wishes to change his course, or why it has taken him so long to do so. 8. I have previously alluded to the fact that this is a somewhat unusual case. The existing statement of claim pleads a relatively straightforward case that Mr Crosher holds the trust share on trust for Mr Cocco, so that Mr Cocco is entitled to be registered as the holder of that share, and Mr Crosher is obliged as trustee of the trust share to pay to Mr Cocco any dividends or other distributions that he has received from Treadtel in his capacity as the holder of the trust share. 9. Mr Crosher's argument that Mr Cocco made a tactical decision to plead his case in this relatively narrow way appears to imply that Mr Cocco was well aware that Mr Crosher's position was that the Milan agreement had been entered into, and under that agreement, Mr Crosher had become entitled beneficially to the trust share. Mr Crosher implies that Mr Cocco could have pleaded the case he now wants to make from the outset, but he chose not to do so. That argument depends for its validity on the proposition that Mr Cocco knew that Mr Crosher would respond by pleading reliance on the Milan agreement. 10. I am not satisfied that this dispute should be approached on the basis that Mr Cocco knew, or even ought to have known, that Mr Crosher would respond to the statement of claim by effectively admitting the allegations made in it, and pleading a defence based upon the Milan agreement. 11. I am satisfied that Mr Cocco's application for leave to amend his statement of claim is a reasonable response to Mr Crosher's bringing the Milan agreement into the proceedings by means of his defence. The defence introduces into the proceedings issues concerning the nature of the business of Treadtel and its subsidiaries, and the making and terms of the Milan agreement. More significantly, however, if Mr Crosher fails to establish that the Milan agreement was made, or that it has been performed by Mr Crosher, the admissions contained in Mr Crosher's defence will have the effect that Mr Crosher has acted in breach of trust in causing the trust share to be registered in his name as beneficial owner, without the consent of Mr Cocco, and in managing the affairs of Treadtel on the basis that Mr Cocco had no interest in the company. 12. The defendants have not demonstrated, or even attempted to demonstrate in any objective way, how the amendment of Mr Cocco's statement of claim to introduce his new claim will have a substantial prejudicial effect on their conduct of the defence of the proceedings. 13. I will therefore grant leave to Mr Cocco to amend his statement of claim by filing the revised draft amended statement of claim. Conditions for grant of leave to amend 1. All parties agreed that, if the court decides to grant leave to Mr Cocco to file his revised draft amended statement of claim, the leave should be granted on conditions. The parties were at odds about what those conditions should be. 2. Mr Cocco offered to accept the conditions contained in the following orders, which he submitted should be made by the court. The Court orders: 1. The plaintiff be granted leave to file the proposed Amended Statement of Claim. 2. The plaintiff is to pay the costs of and occasioned by the Amended Statement of Claim. 3. The plaintiff is to pay the costs of the Interlocutory Process filed 8 October 2015. 4. The Court notes: (a) To the extent that the first or second defendant agreed not to bring a further application for security for costs, such agreement no longer stands such that the first or second defendant if so advised may bring a further application for security for costs; (b) The plaintiff is to renounce his claim in Italy under Article 306 of the Italian Code of Civil Procedure, which is to be accepted by the second defendant and lodged with the Court in Italy, with the plaintiff to pay the second defendant's costs of the Italian proceedings as agreed or ordered by the Italian Court without prejudice to the plaintiff's right to pursue the claims contained in the Amended Statement of Claim in these proceedings… 1. Mr Cocco clarified his position at the hearing concerning the costs that he should be ordered to pay to the defendants. He submitted that both defendants have precisely the same interest, because Mr Crosher completely controls Treadtel, and the court should only make an order for one set of costs as between the two defendants. 2. I accept Mr Cocco's submission that he should only be ordered to pay one set of costs of his application to amend the statement of claim. Not only were the two defendants in an identical interest, but I am satisfied that Mr Crosher entirely controls Treadtel. While counsel for Treadtel acted conservatively and properly in putting his submissions, it is clear that he only echoed or reinforced the submissions put on behalf of Mr Crosher. 3. Mr Crosher, supported by Treadtel, submitted that any leave to amend should be granted on the following conditions: The Court grants leave to file the Amended Statement of Claim on the following conditions: (a) The Plaintiff to pay the Defendants' costs occasioned by the amendment of the Statement of Claim and, for the avoidance of doubt, will include the costs thrown away as a result of the amendment, such costs to be assessed at the conclusion of the proceedings, or as otherwise agreed. (b) The plaintiff to pay the Defendants' costs of, and incidental to, the Plaintiff's Interlocutory Process filed 9 October 2015, including the Amended Interlocutory Process filed 4 March 2016, such costs to be assessed at the conclusion of the proceedings, or as otherwise agreed. (c) The Second Defendant [this is an error and should read Plaintiff] to pay into Court further security for the Second Defendant's costs of the proceedings in the sum of $200,000 by [date to be determined by the Court] ("the Further Security"), such Further Security to be provided by deposit with the Registrar of the Court and the Plaintiff to notify the Second Defendant when the Further Security has been provided. (d) The Plaintiff and the Second Defendant to cause there to be a termination of the proceedings currently pending before Judge Borelli in the Court of Milan (Case No. 83789/2013] ("the Italian Proceedings"), on terms satisfactory to their respective Italian lawyers, which have the effect that those proceedings are withdrawn and the Plaintiff is precluded, either in his personal capacity or in his capacity as liquidator of TD srl, from re-commencing proceedings in Italy or anywhere else in the world other than in these proceedings in respect of the claims the subject of the Italian Proceedings. (e) The Plaintiff to pay the Second Defendant an amount equivalent to the legal costs that the Second Defendant incurred in the defence of the Italian Proceedings to the date of their termination in an amount to be agreed, or, in the absence of agreement, to be an amount of €20,000. 1. The parties are therefore at issue about: (a) the costs order that should be made against Mr Cocco; (b) whether Mr Cocco should be ordered to provide an additional amount of security for Mr Crosher's costs, and if so what amount; (c) what should be done in relation to the termination of the Italian court proceedings by Mr Cocco; and (d) whether Mr Cocco should be ordered to pay Mr Crosher's costs of the Italian proceedings, and if so in what amount. 2. On the issue of costs, the difference between the parties appears to be one of drafting, as Mr Cocco accepts that he should be ordered to pay the costs of the interlocutory process filed on 8 October 2015, which he effectively abandoned on 4 December 2015. He also accepts that he should be ordered to pay the costs of and occasioned by the amended statement of claim. 3. In my view, as well as being ordered to pay the costs of the first interlocutory process up to its abandonment on 4 December 2015, Mr Cocco should also pay the costs of the first iteration of his revised draft amended statement of claim, up to the time when he served on the defendants the version of the draft amended statement of claim that is the subject of the present application. 4. I will therefore make order (b) suggested by Mr Crosher, concerning the costs of the 9 October 2015 interlocutory process. 5. So far as the costs of the amendment to the statement of claim are concerned, order 2 proffered by Mr Cocco uses the time honoured phrase "costs of and occasioned by", although he refers to the amended statement of claim, rather than the amendment of the statement of claim. 6. There are too many cases to mention in which the expression "occasioned by", in many different contexts, has clearly been used as a synonym for "caused by". The question is whether the expression, when used in a costs order following the grant of leave to amend a pleading, includes costs thrown away as a result of the amendment. In my view, it is uniformly accepted that the expression does include costs thrown away. As a recent example, Garling J said, in a related context, in Saad v State of New South Wales (No 4) [2014] NSWSC 353 at [1]: "On 5 February 2014, the court ordered that the final hearing of these proceedings be adjourned and the dates vacated. On that day, the court ordered that the plaintiffs pay the defendant's costs of and occasioned by the adjournment, namely, the costs thrown away by the late application". 7. That said, the expression "occasioned by" is at best a quaint way of saying "caused by or thrown away by". Apart from commonly understood practice, it is not necessarily clear that "occasioned by", or "caused by", includes thrown away by. 8. While I make no finding on the validity of Mr Thompson's evidence concerning the quantum of the costs incurred by Mr Crosher that will be thrown away by the amendment, the evidence justifies the conclusion that the amount may be substantial. As Mr Crosher has requested that the words "and, for the avoidance of doubt, will include the costs thrown away as a result of the amendment", I hold that in this case it is appropriate to use that form of words in the costs order. 9. Accordingly, the costs order concerning the consequences of the leave to file the amended statement of claim should be in the terms of order (a) suggested by Mr Crosher. 10. The parties have not yet made submissions concerning the costs order that should be made in respect of the amended interlocutory process filed in court on 4 March 2016. I will make arrangements to hear the parties on that issue, when I publish these reasons for judgment. 11. The next issue for consideration is whether Mr Cocco should be ordered to provide any additional security for costs, as a condition to his being granted leave to file an amended statement of claim. 12. In my view, it is premature for the court to deal with the question of whether Mr Cocco should be ordered to provide additional security for costs. 13. There is no formal application for additional security for costs before the court, and Mr Cocco has not contested the issue by evidence, cross examination or submissions. It was reasonable for Mr Cocco to take this course, because if the court had not granted him leave to amend his statement of claim, all of the effort and cost involved in contesting the additional security for cost issue would have been futile. Mr Crosher did not point to any authority that supports the submission that, where a plaintiff applies for leave to amend his statement of claim in a case where security for costs has already been ordered, it is an appropriate condition for the leave being granted that additional security for costs be provided. 14. As Mr Crosher already has the benefit of security for costs in the sum of $150,000, it will be preferable for any application for security for costs to be dealt with after a formal application by Mr Crosher, where defences have been filed; after it becomes clearer as to the nature of the additional evidence that will be required; and when the court is better able to decide how the issues in the case should be determined, especially in relation to whether any questions should be determined before others (for example, whether the oppression claim should be determined before any remedy for oppression is considered). 15. This course should not be wasteful for Mr Crosher, because he should be able to use much of the evidence that he has already assembled on the question of further security for costs. 16. I am satisfied that, at this time, it will be sufficient for the court to grant Mr Cocco leave to amend his statement of claim on the basis of the term in par 4(a) of the draft orders suggested by Mr Cocco. 17. By par 4(b) of the draft orders suggested by Mr Cocco, he suggests that the court should note that he "is to renounce his claim in Italy under Article 306 of the Italian Code of Civil Procedure, which is to be accepted by [Mr Crosher] and lodged with the Court in Italy". 18. As I understand Mr Cocco's position, he offers this course voluntarily, without accepting that he would not be permitted to make the amendment to his statement of claim that he seeks to make, if he intended to continue with his Italian proceedings. In the decision of Brereton J that I have mentioned above, his Honour rejected Mr Crosher's application for a stay of the proceedings in this court pending the determination of the Italian proceedings, partly on the ground that the issues raised by both proceedings did not sufficiently overlap. Mr Cocco offers par 4(b) of his draft orders to obviate the need for the court to deal with this question anew. 19. Mr Crosher's position is that the court, on the present application, should determine as a matter of Italian law what is necessary to effect a termination of the Italian proceedings, in a manner that will prevent Mr Cocco reviving that claim, whatever may be the fate of the present proceedings. 20. Mr Cocco has not fully contested the claims made by Mr Crosher, as to what is necessary to effect termination of the Italian proceedings in a manner that bars a future similar claim. I am not confident about being able to decide what the requirements of Italian law are, on the basis of assertions by Mr Thompson in his letter, and an extract from an English language text on Italian procedural law. 21. I propose to deal with this issue in the following way. First, I am not satisfied that it will be sufficient for the court to note some intended action by Mr Cocco, as is contemplated in par 4 of his suggested draft orders. Realistically, the court has some control over Mr Cocco, while the present proceedings are on foot; however, as Mr Cocco is an Italian resident, when these proceedings have been completed, there will be little realistic prospect of either this court, or Mr Crosher, being able to oblige Mr Cocco to do anything in relation to the Italian proceedings, if it has not already been done while these proceedings are on foot. Any grant of leave to amend Mr Cocco's statement of claim should be made on condition that he brings about a termination of the Italian proceedings within a stipulated time, on a basis which precludes him from reviving that claim, or any similar claim. It is not an attractive proposition that this court should have to decide for itself, on evidence, as to what the appropriate procedure of the Italian court is, or what needs to be done to effectively preclude Mr Cocco from reviving his claim. Mr Cocco should be ordered, within a given time, to proffer to Mr Crosher an effective means to finally achieve the termination of the Italian proceedings, without possibility of revival. The court should only have to resolve this dispute if Mr Cocco's proposal is, for good reason, not acceptable to Mr Crosher. Mr Cocco might be well advised to offer to do what Mr Crosher has sought the court on this application to order that he do. I will hear the parties concerning what precise order should be made to deal with this issue. 22. Finally, it is necessary to deal with Mr Crosher's application for an order that Mr Cocco pay Mr Crosher's costs of the Italian proceedings "in an amount to be agreed, or, in the absence of agreement, to be an amount of €20,000". 23. Mr Cocco should pay the amount of costs that would be payable to Mr Crosher, if Mr Cocco voluntarily discontinued the Italian proceedings. Mr Crosher has not made out a case that either under Italian law, or the law of this State, Mr Cocco should be ordered to pay his costs of the Italian proceedings on an indemnity, or near indemnity basis. 24. Furthermore, the evidence given by Mr Thompson concerning Mr Crosher's solicitor and client costs of the Italian proceedings is only an approximation, and is not supported by anything like a bill of costs. 25. I am satisfied that it is appropriate, as a condition to granting Mr Cocco leave to amend his statement of claim, that this court put in place an arrangement to ensure that, as soon as is reasonably possible, and in any event before the completion of these proceedings, Mr Crosher is paid a close approximation of what he would have been entitled to be paid under Italian law upon discontinuance of the Italian proceedings by Mr Cocco. 26. It would not be satisfactory for Mr Crosher to be left in the position where he had to pursue some application in an Italian court for a relatively small amount of costs, where that application would have to be made entirely independently of the present proceedings. 27. I have not been given evidence to establish what the Australian currency equivalent of €10,084, plus general reimbursement of expenses (15%), and Social Security Contribution (4%), and the VAT (22%) is. I have also not received evidence from Mr Cocco on the subject of whether the Italian court will in fact order costs on that basis, or some other basis. 28. I invite the parties to submit a draft order to deal with this issue. I have in mind that, by some convenient procedure, if the parties cannot agree on an appropriate amount, the court will be provided with evidence in some concise form that will enable it to make a relatively summary determination of the amount that should be paid by Mr Cocco. I have in mind that it will be appropriate for an order to be made that Mr Cocco pay that sum shortly after it can be agreed, or determined. 29. The parties should provide to my associate draft short minutes of order to implement these reasons for judgment within 14 days of the delivery of those reasons. If necessary, appropriate arrangements can be made to deal with any disagreements as to the appropriate form for the orders to be made. 30. Directions should be made for the determination of the costs order in respect of Mr Cocco's amended interlocutory application filed on 4 March 2016. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 June 2016