Supreme Court New South Wales Medium Neutral Citation: In the matter of Felan's Fisheries Pty Limited [2016] NSWSC 1901 Hearing dates: 13 December 2016 (last submissions 16 December 2016) Decision date: 23 December 2016 Jurisdiction: Equity - Corporations List Before: Black J Decision: The Court directs that the parties send agreed short minutes to give effect to this judgment, including as to costs, to the Associate to Black J by 4pm on 27 January 2016, or, if there is no agreement between them, their respective short minutes of order with short submissions as to any differences between them. Catchwords: Practice and procedure — Amendment application — where applicant sought leave under r 6.21 of the Uniform Civil Procedure Rules 2005 (NSW) to join additional persons as defendants – where applicant sought leave under s 64 of the Civil Procedure Act 2005 (NSW) to file and serve an Amended Originating Process and Further Amended Statement of Claim – where several defendants directly affected by the proposed amendments did not oppose the amendments – whether pleading in Further Amended Statement of Claim has tendency to cause embarrassment or cause prejudice – whether the Court should exercise discretion to allow amendments. Practice and procedure — Costs — where the Court previously dismissed the first defendant's application for security for costs – where the plaintiff unreasonably put the first defendant to proof of the plaintiff's impecuniosity in the application for security for costs – where parties were in dispute as to the costs order sought by the plaintiff – whether issues in proceedings clearly dominant or separable – whether cost orders sought should be made. Legislation Cited: - Civil Procedure Act 2005 (NSW), ss 56, 57, 58, 64 - Companies (Vic) Code, s 574 - Corporations Act 2001 (Cth), ss 181, 233, 1324 - Uniform Civil Procedure Rules 2005 (NSW), rr 6.21, 14.28 Cases Cited: - AON Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 - Australian Securities and Investments Commission v Mapstone [2006] NSWSC 993; (2006) 59 ACSR 214 - Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 - Break Fast Investments Pty Ltd v Giannopoulos [2011] NSWSC 1117 - Broken Hill Proprietary Co Ltd v Bell Resources Ltd (1994) 8 ACLR 609 - Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd [2009] FCAFC 147; (2009) 180 FCR 11 - Choo v Zhang (No 2) [2016] NSWCA 301 - Commonwealth Bank of Australia v ZYX Learning Centres Ltd [2014] NSWSC 1676; (2014) 103 ACSR 476 - Cooper v Myrtace Consulting Pty Ltd [2014] FCA 480 - Doppstadt Australia Pty Ltd v Lovick & Son Development Pty Ltd (No 2) [2014] NSWCA 219 - Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 - Kadam v MiiResorts Group 1 Pty Ltd (No 2) [2016] FCA 1343 - Korda v Australian Executor Trustees (SA) Ltd [2015] HCA 6; (2015) 255 CLR 62 - Levin v Clark [1962] NSWR 686; (1960) 80 WN (NSW) 485 - McCracken v Phoenix Constructions (Qld) Pty Ltd [2012] QCA 129; [2013] 2 Qd R 27 - McGuirk v University of New South Wales [2009] NSWSC 1424 - Oates v Hawkins [2010] NSWSC 491 - Re Broadcasting Station 2GB Pty Ltd [1964-65] NSWR 1648 - Re Felan's Fisheries Pty Limited [2016] NSWSC 1351 - Re Felan's Fisheries Pty Limited [2016] NSWSC 581 - Re Fishinthenet Investments Pty Ltd [2014] NSWSC 260 - Shelton v National Roads & Motorists Association Ltd [2004] FCA 1393; (2004) 51 ACSR 278 - Simmons v Henwood [2003] NSWCA 184 - Simmons v Protective Commissioner (NSW) [2002] NSWSC 455 - Treadtel International Pty Ltd v Cocco [2016] NSWCA 360 - Trident General Insurance Co Ltd v McNiece Bros Pty Ltd [1988] HCA 44; (1988) 165 CLR 107 Texts Cited: - Professor R Baxt, "Will Section 574 of the Companies Code Please Stand Up! (And Will Section 1323 of the Corporations Act Follow Suit)" (1989) 7 C&SLJ 388 - "The versatility of s 1324 of the Corporations Act" (2012) 8(2) Baxt Report Category: Procedural and other rulings Parties: Felan's Fisheries Pty Limited (Plaintiff) Sydney Fish Market Pty Limited (First Defendant) SFM Tenants and Merchants Pty Limited (Second Defendant) Bruce James Standen (Third Defendant) Grahame Richard Turk (Fourth Defendant) John Samuel Symonds (Fifth Defendant) William John Gallagher (Sixth Defendant) Sandra Margaret Hook (Seventh Defendant) Terry Con Poulos (Eighth Defendant) Harry Kouros (Ninth Defendant) Gregory George Imisides (Tenth Defendant) Nicholas Peter Manettas (Eleventh Defendant) Representation: Counsel: R Carey (Plaintiff) J C Hewitt (First Defendant) K Kumar (Solicitor – Third to Ninth Defendants) Solicitors: Fraser Clancy Lawyers (Plaintiff) K&L Gates (First Defendant) HWL Ebsworth (Third to Ninth Defendants) File Number(s): 2015/369226 Judgment Background to the proceedings 1. I have set out the background to these proceedings in earlier judgments, including my judgment in respect of an earlier and unsuccessful application to extend a caveat and for an interlocutory injunction under s 1324 of the Corporations Act 2001 (Cth) made by the Plaintiff, Felan's Fisheries Pty Ltd ("Felan's") ([2016] NSWSC 581) ("Caveat judgment"). I have drawn on that judgment for the brief summary of the background to the proceedings that follows. The First Defendant, Sydney Fish Markets Ltd ("SFM") operates the Sydney Fish Market under a lease granted in 1994 by the Crown in respect of New South Wales. The shareholders in SFM are the Second Defendant in the proceedings, SFM Tenants and Merchants Pty Ltd ("Buyers"), and a proposed additional defendant to the proceedings, NSW Fishermen's Holding Co Pty Ltd ("Catchers") which each hold half of the shares in SFM. The relationship of those entities is governed by a Shareholders Agreement dated 27 September 1994 between them ("Shareholders Agreement"), to which SFM is not a party, and some of the provisions of that Shareholders Agreement are in turn reflected in SFM's Constitution. Felan's owns 1.875m ordinary shares in Buyers, constituting 25% of its ordinary shares. 2. Felan's took a sublease of premises situated in the Sydney Fish Market from the predecessor to SFM, the Fish Marketing Authority in 1989 and remained in possession after the expiry of that lease as a tenant holding over on a monthly basis, and also subsequently took a licence of an additional space. At least since July 2014, there has been a proposal for the redevelopment of the area surrounding the Sydney Fish Market, including the premises on which the Sydney Fish Market is located, which appears to have given rise to some controversy, at least between competing commercial interests that hope to benefit from it, including Felan's and interests associated with it. In April 2015, SFM issued a notice to quit to Felan's; an extended time for Felan's to vacate the premises was then negotiated; and, in July 2015, SFM re-entered and took possession of the premises. SFM then advised Buyers of its re-entry into the premises, which had the consequence that Buyers may be entitled, or obliged, to take steps to require Felan's to dispose of its shares in Buyers in accordance with reg 52 of its Constitution, which linked eligibility to hold a shareholding in Buyers with a tenancy in the Sydney Fish Market. 3. In December 2015, after the events to which I have referred occurred, and presumably with knowledge of them, Mr Robert Deans acquired control of Felan's. These proceedings were commenced on 16 December 2015. Felan's subsequently lodged a caveat over the premises of the Sydney Fish Markets, and unsuccessfully resisted the lapsing of that caveat. SFM and the Third–Ninth Defendants subsequently sought, and the Third–Ninth Defendants obtained, security for costs for the proceedings. Amendment application and applicable principles 1. By Notice of Motion filed on 4 November 2016, Felan's now seeks an order granting leave under r 6.21 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") to join several additional parties to the proceedings, Messrs Apostolakis, Jeffreson, Fidden and Catchers. Messrs Apostolakis and Jeffreson have been directors of SFM since 19 April 2016 and directors of Buyers since 29 March 2016 and 28 January 2015 respectively. Mr Fidden has been a director of SFM since 17 May 2016. An order was also sought by Felan's, but not pressed at this point, granting leave to Felan's to file a notice of discontinuance in respect of two existing defendants, although it appears that such a discontinuance is still intended. 2. Felan's also sought an order granting leave under s 64 of the Civil Procedure Act to file and serve an Amended Originating Process and a Further Amended Statement of Claim ("FASC") in the form exhibited to an affidavit of its solicitor, Mr Fraser, sworn on 4 November 2016. The proposed FASC seeks to make numerous changes to the Amended Statement of Claim, including abandoning earlier claims and introducing several new claims. The Third–Ninth Defendants did not oppose the amendments, and a significant number of those amendments were not opposed by SFM. SFM initially opposed leave to amend in respect of paragraphs 58A–58C, 59, 60A and 60B of the proposed FASC, although it somewhat narrowed its opposition to those paragraphs in oral submissions; also opposed leave for paragraphs 124N–124AD, 124AE–124AH and 124AI–124AK of the proposed FASC. Felan's also seeks to make amendments to the Originating Process, and several of those amendments were opposed by SFM, so far as they depended on amendments made in the proposed FASC that were opposed. 3. Felan's amendment application is supported by an affidavit of Felan's solicitor, Mr Fraser, dated 4 November 2016, with an exhibit comprising two lever arch folders of documents (Ex A1). Mr Fraser sets out the history of the proceedings at some length, including Felan's service of an affidavit sworn 15 December 2015, exhibiting four lever arch files of documents, at the time the proceedings commenced in December 2015; Felan's unsuccessful application to extend the caveat which it had lodged over the premises of the Sydney Fish Market, which was determined on 3 May 2016 by the Caveat judgment; the filing of an unsuccessful security for costs application by SFM and a successful application for security for costs by the Third–Ninth Defendants; and the service of Mr Deans' affidavit dated 26 August 2016, exhibiting a further four lever arch folders of documents, on 29 August 2016. Mr Fraser also refers to the circumstances in which SFM issued a notice terminating Felan's lease and licence over its premises in the Sydney Fish Market in 2015, to which I referred above, and to the issue by SFM of two further notices to quit in relation to Felan's premises on 13 October 2016, about three weeks after delivery of judgment in respect of the security for costs application. Mr Fraser also outlines the several amendments sought to be made by Felan's and I will refer to his evidence as to those amendments below. 4. On 28 October 2016, I directed that Felan's serve, including upon any proposed additional defendants, any Interlocutory Process seeking leave to file and serve the Amended Originating Process and the FASC. Felan's has read affidavit evidence to prove the service of those documents upon the proposed additional defendants. The one example of a letter serving the Interlocutory Process and supporting affidavit which is in evidence, addressed to Mr Fidden (Smith 14.11.16), indicates that Felan's solicitors did not provide a copy of the proposed Amended Originating Process or proposed FASC to Mr Fidden, although they indicated that they would deliver a hard copy of the exhibit which contained those documents to Mr Fidden's solicitors on request, and also did not advise Mr Fidden of the date on which this application was listed or note that he may be entitled to appear to oppose the application. Felan's did not tender other covering letters under which the relevant documents were served on the other proposed defendants and I infer that they were in similar form and that their tender would not have assisted Felan's in establishing that those parties were given notice of their opportunity to appear and to resist the amendments that were sought to join them to the proceedings. In those circumstances, I do not treat the failure of the affected parties to appear as indicating any lack of opposition to the amendments, because it seems to me that they have not been given adequate notice of their opportunity to appear and oppose the amendments. 5. I am required to exercise my discretion whether to allow the amendments having regard to the provisions of ss 56–58 and 64 of the Civil Procedure Act 2005 (NSW). Section 58 of the Civil Procedure Act requires the court to have regard to the dictates of justice when concerning an order for the amendment of a document and requires the court also to have regard to the provisions of ss 56 and 57. Section 56 of the Civil Procedure Act identifies the overriding purpose of the just, quick and cheap resolution of the real issues in dispute in the proceedings and s 57 of the Civil Procedure Act requires proceedings to be managed having regard, inter alia, to the just determination of the proceedings. These provisions point to, and I am conscious of, the requirement that a party have a fair opportunity to put the case it wishes to put; however, they also point to the need to take into account the wider public interest in the administration of justice, as to which delay is a significant matter. Section 64(2) of the Civil Procedure Act in turn provides that, subject to s 58, all necessary amendments should be made for the purpose of determining the real questions raised by the proceedings. 6. I should also have regard to the High Court's decision in AON Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 ("Aon"), where the High Court, in the context of an amendment application, emphasised the significance of delay for the opposing party and the fact that a costs order should not be treated as an automatic solution to problems created by failures to conform to the objectives of case management. The joint judgment there observed, in relation to rules of court that are similar to s 56 of the Civil Procedure Act that: "Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and costs are taken into account. The Rule's reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs." Mr Hewitt, who appears for SFM, particularly relies on the observations in the joint judgment (at [102]–[103]) emphasising the significance of delay, and of the absence of any explanation for that delay offered by a party that seeks the exercise of discretion in its favour and to the disadvantage of the other party. The principles identified by the Court in Aon above are, of course, to be applied having regard to the statutory context established by the Civil Procedure Act and particularly the emphasis on the dictates of justice and the need for the just, quick and cheap resolution of the real issues in dispute in the proceedings: see Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 at [36]. 1. Mr Hewitt also relies on the decision of Hammerschlag J in Simmons v Protective Commissioner (NSW) [2002] NSWSC 455 at [64] for the proposition that court resources should not be utilised in allowing a plaintiff to prosecute proceedings which do not have reasonable prospects of success, even if they are not certain to fail. However, that decision was overturned by the Court of Appeal in Simmons v Henwood [2003] NSWCA 184. Although the Court of Appeal there did not directly address his Honour's observations as to that matter, Hamill J subsequently expressed the view, in Commonwealth Bank of Australia v ZYX Learning Centres Ltd [2014] NSWSC 1676; (2014) 103 ACSR 476 at [55] that the test for summary dismissal, and by analogy the refusal of leave to amend, is more stringent than that adopted by Hammerschlag J in Simmons v Protective Commissioner (NSW) above. In Treadtel International Pty Ltd v Cocco [2016] NSWCA 360 at [30], Barrett AJA summarised the proper approach in determining whether to allow leave for an amendment as follows: "… his Honour's task, upon an application for leave to amend, was not to arrive at any concluded view as to the ultimate merits of the pleaded allegations. The central inquiry is that indicated by Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] HCA 1 at 91, General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125; [1964] HCA 69 at 130 and, more recently, Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 where Gaudron, McHugh, Gummow and Hayne JJ said at [57]: 'Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.' [Citations omitted.]" 1. It is also necessary to refer to one other applicable principle, which is significant for the findings that I reach below in respect of pleadings of claims against Buyers and Catchers. A pleading may be struck out under UCPR r 14.28, or an amendment not permitted, if the pleading has a tendency to cause prejudice, embarrassment or delay in the proceedings or is otherwise an abuse of the process of the court. In Shelton v National Roads & Motorists Association Ltd [2004] FCA 1393; (2004) 51 ACSR 278 at [18], Tamberlin J observed that: "'Embarrassment' in this context refers to a pleading that is susceptible to various meanings, or contains inconsistent allegations, or in which alternatives are confusingly intermixed, or in which irrelevant allegations are made that tend to increase expense. This is not an exhaustive list of situations in which a pleading may be embarrassing … ." That observation was approved in McGuirk v University of New South Wales [2009] NSWSC 1424 at [30], [33], where Johnson J noted that a pleading is embarrassing when it is unintelligible, ambiguous, vague or too general, so as to embarrass the opposite party who does not know what is alleged against him, or if the allegations are made at such a level of generality that the defendant does not know in advance the case he or she has to meet. Some matters of general application 1. I should first refer to several matters of general application to which SFM refers, before turning to its opposition to particular amendments which I will address below. First, SFM points out that the Court held, in SFM's security for costs application, that Felan's is impecunious, and that it appears likely that Felan's would be unable to meet either an order for costs thrown away by the relevant amendments, or an order for additional costs incurred in the conduct of the proceedings, as a result of the amendments. SFM submits that it is not just for an impecunious corporate plaintiff such as Felan's to join additional parties to the proceedings, Buyers and Catchers, without establishing that it will be in a position to meet a costs order if the claims against them fail. It should be noted that Felan's does not seek to join Buyers, since it is already party to the proceedings, but seeks to expand the case against it. It is otherwise not necessary to address this submission, in respect of the expansion of the case against Buyers and the joinder of Catchers, since I will find below that neither should be permitted on other grounds. 2. SFM also submits that it will not be protected against any prejudice by an order for costs, given the likelihood that Felan's will be unable to meet a costs order made against it if ordered to do so. There is force in that submission. However, the limited scope of the amendments that I will permit below are unlikely to have the consequence of increasing the cost of the proceedings to any material extent. SFM also submits that the proposed amendments are likely to result in a substantial delay in the resolution of the proceedings. It seems to me unlikely that the limited amendments that I will permit below will have any significant impact by way of delay in the resolution of the proceedings. 3. SFM also criticises, with significant force, the structure of the pleading, so far as it repeats nearly identical claims with minor variations, and refers to a strong criticism of an elaborate pleading by Edelman J in Kadam v MiiResorts Group 1 Pty Ltd (No 2) [2016] FCA 1343 at [34]–[40]. There is a significant degree of internal repetition within the paragraphs introduced by the proposed amendments. There is also a substantial degree of repetition across paragraphs 101–124AD of the proposed FASC, which take some 40 pages to plead a series of allegations of breach of the duty of good faith and the duty to exercise powers for a proper purpose, in substantially common form, relating to different acts and different groups of directors involved in those acts. The pleading is constructed by largely copying and pasting the same paragraphs, several times, changing only the description of the relevant act and the names of the directors involved. It seems to me likely that this pleading could have been achieved much more simply, by pleading the logical structure of the allegations once, and identifying, in sub-paragraphs, the different acts and different groups of directors as to which the allegations were made. However, it may be that the repetition will cause no particular practical difficulty to the Defendants or a trial judge, once it is recognised that the same two substantive allegations are made several times in respect of several acts and several groups of persons. It does not seem to me that this matter provides sufficient basis to decline leave to permit the proposed amendments. 4. I note, for completeness, that I raised, in the course of submissions, whether it was open to SFM to object to an amendment, on the basis of the prejudice that would be caused to it, where the parties directly affected by that amendment (and, in the case of the parties to be joined, those parties) had not (at least to date) objected to the amendment. In supplementary written submissions addressing that question, Mr Hewitt rightly noted that, in Break Fast Investments Pty Ltd v Giannopoulos [2011] NSWSC 1117 at [4]–[7], the Court had declined leave to a plaintiff to join an additional, third, defendant on the objection of the first and second defendants, by reason of the plaintiff's failure to provide an explanation for the delay in doing so and the prejudice to the first and second defendants which would result from that joinder. In the event, I have declined leave for the joinder of Catchers, and for the amendment as against Buyers, on other grounds which do not depend on prejudice to SFM from those steps. Pleading of background facts 1. The first area of controversy in respect of the amendments is paragraphs 58A–58B and 60A of the proposed FASC. Mr Hewitt accepted that the introduction of paragraph 58C and 60B, which form part of the same proposed amendment, did not cause difficulty. The paragraphs which are controversial read as follows: "58A From about 2003 Deans, including through Fishbank, developed a proposal for the redevelopment of land in the vicinity of Bank Street and Bridge Road in Pyrmont, including the Sydney Fish Market Site (the Fishbank Proposal). 58B Between 2003 and the end of 2013, Deans discussed the Fishbank proposal with Turk and other directors of SFM, as well as with the representatives of the owners and tenants of land adjacent to the Sydney Fish Market Site, including representatives of the New South Wales Government, in order to seek their support for the Fishbank Proposal. … "60A By the end of 2013 at the latest, Turk and the management of SFM, including Skepper, had come to the view that SFM should not proceed to consider or support the Fishbank proposal." 1. Mr Hewitt indicated, in the course of oral submissions, that SFM may admit or largely admit paragraphs 58A–58B of the proposed FASC, which are pleaded in somewhat general terms. However, a controversy arises because each of those paragraphs is particularised by reference to the facts and matters referred to in paragraphs 76–211 of Mr Deans' affidavit sworn 29 August 2016, to which several volumes of documents are exhibited. SFM expresses understandable concern that the just, quick and cheap determination of these proceedings is likely to be prejudiced if the parties were required to examine ten years of Mr Deans' dealings in respect of his proposal for the development of the area surrounding the Sydney Fish Market, as background to determining the matters in issue in the proceedings, which relate to events in 2015 and 2016. It seems to me that that development would have a significant adverse impact upon SFM, particularly if it were then required to lead evidence of past directors and executives relating to Mr Deans' account of developments over that lengthy period. 2. It seems to me that that issue raised by paragraphs 58A–58B of the proposed FASC is readily resolved in a practical way. Mr Carey, who appears for Felan's, confirmed that, if SFM and the other Defendants admitted paragraphs 58A–58B of the proposed FASC, then the relevant paragraphs of Mr Deans' affidavit and the relevant part of the corresponding exhibit would not and could not be read in order to prove uncontested facts, and could only be read to the extent that they were relevant to any other pleaded fact or issue in the proceedings. It seems to me that that concession had to be made. If Mr Deans' affidavit was intended to be read to prove other unpleaded facts, of greater specificity than those pleaded in proposed paragraphs 58A–58B of the proposed FASC, then I would not have allowed the amendment on the basis that those paragraphs did not properly identify the case that Felan's seeks to put. It seems to me that any dispute as to paragraphs 58A–58B of the proposed FASC will be identified by a proper pleading by SFM and the other Defendants as to those paragraphs, which will likely admit those paragraphs subject to any necessary qualifications, rather deny them and place those matters generally in issue. To the extent that any qualifications pleaded by the Defences are in issue, then Mr Deans' affidavit evidence and any other relevant evidence can be admitted in respect of them. It also seems to me that any question of management of the preparation of the hearing, or the hearing itself, in respect of these paragraphs may readily be addressed by case management by the Corporations Judge or the trial judge, such that the parties are not put to unreasonable expense or wasted time in dealing with matters that are collateral to the real issues in the proceedings. For these reasons, I will allow the amendment to introduce paragraphs 58A–58B of the proposed FASC. 3. The allegation in proposed paragraph 60A of the FASC is particularised by reference to paragraphs 212–262 of Mr Deans' affidavit. It seems to me that that paragraph pleads a material fact that has potential relevance to the allegations of improper purpose that are brought against the Third–Ninth Defendants and this paragraph relates to a matter that is proximate in time to the events in issue in the proceedings. I will allow the amendment to include that paragraph, on the basis that any issues as to the scope of evidence allowed in respect of it, and any discovery to be permitted in respect of that issue, are matters that can be managed by the Corporations Judge. Relief sought in respect of further notices to quit under s 1324 of the Corporations Act 1. SFM also resists Felan's proposed amendment to introduce paragraphs 124N–124AD of the proposed FASC which relate to a challenge to notices to quit issued to Felan's on behalf of SFM in October 2016 and the resolutions of SFM's board authorising the issue of those notices. Mr Fraser's affidavit evidence is that the claims in those paragraphs have substantially the same structure as Felan's claims in relation to the April 2015 resolutions of the directors of SFM pleaded in paragraphs 101–112 of the Amended Statement of Claim; its claims in relation to the directors' alleged failure to cause SFM to offer Felan's a new lease and licence between May 2015 and April 2016 in proposed paragraphs 112E–112R of the FASC, to which SFM takes no objection; its claims in relation to the directors' alleged continuing failure to offer a new lease and licence in April and May 2016 in proposed paragraphs 120C–120O of the FASC, to which SFM takes no objection; and its claims in relation to the directors' alleged failure to cause SFM to offer Felan's a new lease and licence since May 2016 in proposed paragraphs 124A–124M of the FASC, to which SFM also takes no objection. 2. These paragraphs of the proposed FASC seek to bring a further claim against several current directors of SFM, Messrs Standen, Turk, Simons, Hook, Apostolakis, Jeffreson and Fidden in respect of the issue of further notices to quit to Felan's in 2016. As I noted above, Messrs Apostolakis, Jeffreson and Fidden are sought to be joined to the proceedings in respect of this claim, as well as other claims in respect of recent events to which no objection is taken by SFM. Paragraph 124N pleads that SFM's directors passed resolutions in October 2016 authorising and directing Messrs Turk and Skepper to issue further notices to quit to Felan's on behalf of SFM in relation to its leased and licensed premises. Paragraphs 124O–124Q plead the execution and service of those notices to quit. Paragraph 124R pleads that the directors did not intend to cause SFM to issue a new lease or licence to Felan's in respect of the leased or licenced premises. 3. Proposed paragraphs 124S and 124T of the FASC plead that the relevant conduct, in respect of the lease and licence respectively, was inconsistent with and not directed to achieving the Tenancy Objective (as pleaded in FASC paragraphs 38(d) and 95ff) in the Shareholders Agreement and was contrary to the Shareholders Voting Provision in the Shareholders Agreement and the SFM Voting Provision (as defined) in SFM's Constitution. The reference here to the "Tenancy Objective" is to cl 3.1(c)(viii) of the Objectives set out in the Shareholders Agreement, which identifies an objective of providing to a tenant who is a shareholder of Buyers and whose lease expires, a first right of refusal in relation to the new lease to be offered in respect of that tenancy and, if the tenant refuses that first right of refusal, then to offer that lease to other tenants who are members of Buyers on a specified basis, prior to offering that lease to any other person. Felan's contends that that provision extends beyond a right of first refusal, if such a lease is offered, to require that such a lease be offered. The reference to the "SFM Voting Provision" is to cl 57 of SFM's Constitution which requires that voting and other decisions of SFM's directors must be consistent with and directed to achieving SFM's objectives as set out in the Shareholders Agreement. Paragraphs 95–96 of the Amended Statement of Claim and proposed FASC plead, broadly, that the Tenancy Objective in the Shareholders Agreement, when read together with other objectives, required SFM to offer Felan's a new lease over the leased premises and a new licence of the licensed premises. 4. Paragraph 124U in turn pleads that, by reason of these matters, the relevant directors failed to discharge their duties in good faith and in the best interests of SFM and contravened s 181(1)(a) of the Corporations Act. Paragraph 124V pleads that Felan's is likely to suffer loss and damage in respect of the relevant conduct and paragraph 124W pleads that Felan's is a person whose interests have been and continue to be affected by that conduct. These paragraphs appear to be directed to establishing Felan's standing to seek orders under s 1324 of the Corporations Act. Paragraph 124X in turn pleads that the relevant directors took that conduct having particular beliefs and for specified purposes including, broadly, to reduce support among members of Buyers for the Fishbank proposal and to "punish" Felan's for its perceived association with Fishbank and the Fishbank proposal and "to destroy Felan's business". 5. Proposed paragraph 124AA pleads that the pleaded purposes were collateral to and extraneous to and not directed to achieving any of the Objectives (as defined) referred to in the Shareholders Agreement. Paragraph 124AB alleges a breach of s 181(1)(b) of the Corporations Act which requires the director or officer of a corporation to exercise his or her powers and discharge his or her duties for a proper purpose, and paragraphs 124AC–124AD repeat the allegations directed to establishing Felan's standing under s 1324 of the Corporations Act. 6. The relief sought in relation to this pleading, in the proposed Amended Originating Process, is an injunction under s 1324(1) of the Corporations Act, inter alia, requiring the Third–Ninth Defendants to cause SFM to offer a new lease to Felan's in relation to the premises or suitable alternative premises. Section 1324(1) of the Corporations Act provides that, where a person has engaged in or is engaging in conduct that contravenes the Corporations Act, or was knowingly concerned in or party to the contravention, the Court may, on the application of a person whose interests are affected by the conduct, grant an injunction restraining the first mentioned person (i.e. the person acting in contravention of the Corporations Act or knowingly concerned in it) from engaging in that conduct or requiring that person (i.e. the person in contravention or knowingly concerned in the contravention) to do any act or thing. 7. Felan's relies on the wide test of standing formulated by Hampel J in Broken Hill Proprietary Co Ltd v Bell Resources Ltd (1994) 8 ACLR 609 at 613, in respect of the predecessor section in s 574 of the Companies (Vic) Code and refers to several subsequent decisions that have considered the scope of s 1324 of the Corporations Act, including the decision of the Court of Appeal of the Supreme Court of Queensland in McCracken v Phoenix Constructions (Qld) Pty Ltd [2012] QCA 129; [2013] 2 Qd R 27. The scope of standing under s 1324 of the Corporations Act was in turn reviewed by the Full Court of the Federal Court in Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd [2009] FCAFC 147; (2009) 180 FCR 11 at [109]ff. Mr Carey also submits, and I accept, that the balance of authority supports the view that an order may be made under s 1324 of the Corporations Act on the application of a person with standing under that section, and not only on the application of the Australian Securities and Investments Commission, in relation to a contravention of s 181(1) of the Corporations Act. 8. Mr Hewitt indicated, in oral submissions, that SFM is prepared to proceed for the purposes of this application on the basis that Felan's has standing to bring an application until s 1324 of the Corporations Act, although SFM contends that the section could not be applied to grant the relief sought by Felan's in the relevant circumstances. Mr Hewitt draws attention to the uncontroversial observation of White J in Australian Securities and Investments Commission v Mapstone [2006] NSWSC 993; (2006) 59 ACSR 214 at [30] that the conduct which may be restrained under s 1324 of the Corporations Act is conduct by which the relevant person has contravened or, or is contravening, or would contravene the Corporations Act. Mr Carey in turn refers to Oates v Hawkins [2010] NSWSC 491 at [69], where Bergin CJ in Eq treated claims brought by a plaintiff under s 1324 of the Corporations Act as personal claims, rather than as claims brought on behalf of a company, although they sought an order that certain funds be restored to that company. 9. Mr Hewitt submits that leave to amend should be refused in relation to the claims made in proposed paragraphs 124N–124AD of the FASC, and the corresponding relief sought in paragraphs 6 and 11 of the Amended Originating Process, on the basis that that claim does not enjoy reasonable prospects of success. SFM submits that there is no pleaded claim in the FASC that SFM has contravened the Corporations Act so as to found relief against it under s 1324 of the Corporations Act and that there is no prospect of an injunction being granted against SFM at a final hearing. SFM submits that the injunction sought by Felan's against its directors amounts, in substance, to an injunction against SFM, because its directors are its "agents". It seems to me that, irrespective of whether directors of a company can properly be characterised as "agents" of the company, at least for some purposes, the injunction sought by Felan's is not an injunction against SFM, but an injunction against its directors on the basis that they (rather than SFM) are alleged to have contravened s 181 of the Corporations Act. 10. Mr Hewitt also relies on my refusal, in the Caveat judgment, to grant an interlocutory injunction under s 1324(4) of the Corporations Act against SFM, on the basis that there was no final relief pleaded against it on that basis, and that there was no statutory jurisdiction to make an order under s 1324 of the Corporations Act against SFM on a final basis, because it was not alleged to have contravened the Corporations Act, or to fall within any other category of person against whom an order could be made under s 1324(1) of the Corporations Act. It seems to me that those observations do not assist SFM, where Felan's now seeks relief against the directors of SFM, who are alleged to have contravened s 181 of the Corporations Act and who are persons against whom orders may be made under s 1324 of the Corporations Act. Although Mr Hewitt submits that that claim represents a means of Felan's seeking relief, in substance, against SFM, it does not follow that an order which is properly made against the directors of SFM could not be made, simply because it would have the same practical effect as an order that could not be made against SFM directly. 11. It seems to me that the amendment to introduce these paragraphs should be permitted for several reasons. First, it should first be recognised that the Third–Ninth Defendants, who are the direct target of the allegations pleaded by these paragraphs, do not resist the proposed amendment. Second, the structure of these paragraphs is broadly the same as the structure of several other paragraphs relating to other pleaded acts of directors of SFM, to which no objection is taken by SFM, and that suggests that they will cause little additional difficulty for the conduct of the hearing. Third, so far as SFM contends that the claim that is brought under s 1324 of the Corporations Act is not properly available on the pleaded facts, as a matter of law, that proposition is not sufficiently clear to support a refusal of leave to make the relevant amendments, particularly where they are in the same form as allegations that are already made to which no objection is taken. Even if the proposed amendments represents an extension of s 1324 of the Corporations Act, the question of the scope of that section has excited considerable academic interest, with some commentators urging the courts to take a less restrictive view than has historically been taken: see, for example, Professor R Baxt, "Will Section 574 of the Companies Code Please Stand Up! (And Will Section 1323 of the Corporations Act Follow Suit)" (1989) 7 C&SLJ 388; "The versatility of s 1324 of the Corporations Act" (2012) 8(2) Baxt Report. The power to decline leave for amendments should not be exercised in a way that will prevent the proper development of the law, including by a trial judge or an appellate court taking the view that the section should be allowed a somewhat wider application than the existing case law has permitted. For these reasons, the proposed amendment to introduce paragraphs 124N–124AD of the FASC should be permitted. Claim against Buyers and Catchers based on trust of a promise 1. SFM resists a third proposed amendment to introduce paragraphs 124AE–124AH in the FASC which seek to introduce a claim against an existing defendant, Buyers, and a proposed additional defendant, Catchers, alleging that the benefit of a provision in the Shareholders Agreement between Buyers and Catchers was held by Buyers on trust for its members in relation to their respective tenancies, including for Felan's in respect to its tenancy under its existing lease and licence. Mr Fraser summarises this amendment (Fraser 4.11.16 [142]–[144]) as directed to a cause of action based on a "trust of a promise" and observes that: "Felan's says that the benefit of the Tenancy Objective in the Shareholders Agreement is held by Buyers on trust for its members, including Felan's. Felan's says that on its proper construction, that clause requires Buyers and Catchers to procure the Buyers Nominee Directors and the Catchers Nominee Directors respectively (who together constitute a majority of SFM's board) to cause SFM to offer a new lease and licence to Felan's." 1. The relief sought in respect of this allegation is found in paragraphs 14A–14B of the Amended Originating Process and includes a declaration as to the existence of the relevant trust and an order requiring Buyers and Catchers to procure their respective nominee directors on the board of SFM to cause SFM to offer a new lease and licence to Felan's in respect of the premises or suitable alternative premises. 2. Paragraph 124AE pleads that the benefit of the Tenancy Objective in the Shareholders Agreement was held by Buyers on trust for its members in relation to their respective tenancies, including from 26 August 2014 for Felan's in relation to its tenancy under its lease and licence. That pleading relies on the principle in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd [1988] HCA 44; (1988) 165 CLR 107 and SFM points to the matters which would be required to establish a trust of a promise, under that principle, and also points to my observation in the Caveat judgment (at [25]) that: "[I]t seems to me that there is no structural or textual basis to suggest that such a trust exists, and there is no evidentiary basis to which [Counsel for Felan's] has drawn attention, for the existence of such a trust. It is also difficult to see, at least in respect of provisions dealing with the internal workings of SFM, how the shareholders of SFM, Buyers and Catchers, could hold their rights on trust for individual shareholders in those companies, not least where it might be anticipated that those individual shareholders might well take different views among themselves as to relevant matters of internal governance." 1. SFM submits that a trust is not to be inferred simply because the court considers it is an appropriate means of protecting a relevant interest, and that whether the necessary intention to create a trust should be found is a question of construction of the relevant text, to be determined objectively, and that the court would not be astute to discover indications of an intention to create a trust, unless they emerge clearly from the language used in the circumstances of the case: Korda v Australian Executor Trustees (SA) Ltd [2015] HCA 6; (2015) 255 CLR 62 at [11], [108]. SFM also submits that the matters particularised to proposed paragraph 124AE of the proposed FASC are not sufficient to establish a requisite intention to create a trust and do not take matters further than my observation in the Caveat judgment doubting whether there was a structural or textual basis for such a trust. SFM also submits that paragraphs 124AF and 124AG of the proposed FASC are unarguable, because the Shareholders Agreement is an agreement between Buyers and Catchers, SFM is not party to it, and that agreement cannot give rise to rights enforceable against SFM even if such rights are held on trust by Buyers. However, as I understand Felan's pleading, it does not seek to establish rights enforceable against SFM, but instead rights enforceable against Buyers and Catchers, so as to require their nominee directors on the board of SFM to take certain steps. 2. It does not seem to me that it would be a proper exercise of the Court's discretion, at the amendment stage, to exclude this amendment on the basis that the existence of a trust of the promise may not be established at a final hearing, particularly where that raises questions of construction which were not likely to cause any practical difficulties in the conduct of the hearing. However, it seems to me that the amendment to introduce paragraphs 124AE–124AH in the proposed FASC, and the corresponding relief in paragraphs 14A–14B of the proposed Amended Originating Process, should not be permitted. Paragraph 124AE of the proposed FASC would not establish any cause of action against Buyers or Catchers without the inclusion of paragraphs 124AF–124AH of the proposed FASC. Proposed paragraphs 124AF–124AG relevantly provide that "on their proper construction, in the circumstances described in paragraphs 72A–124AD above, the Tenancy Objective and the Shareholders Voting Provision in the Shareholders Agreement required Buyers and Catchers to procure the Buyers Nominees Directors and the Catchers Nominee Directors respectively" to cause SFM to take certain steps. Paragraph 124AH in turn alleges that, in the circumstances referred to in paragraph 72A–124AD above, Buyers and Catchers have failed to take the pleaded steps. 3. That pleading does not identify which of the circumstances described in paragraph 72A–124AD of the FASC, which are largely if not entirely directed to allegations against the directors of SFM and which extend over nearly 50 pages, are relied upon as relevant to the allegations against Buyers and Catchers. In responding to the FASC, Buyers and Catchers would be required to seek to guess which of those paragraphs were relevant to the claim against them, and then deny, admit or not admit the matters described in the previous 50 pages of the pleading, or not plead to them, depending on their assessment of the relevance of those paragraphs. It seems to me that a pleading in this form is embarrassing (in the sense noted in paragraph 11 above) and likely to cause significant prejudice to Buyers, as an existing party to the proceedings which has filed a submitting appearance in respect of the narrow existing case against it, and Catchers as a party sought to be joined to the proceedings, in their defence of the proceedings. That is sufficient to require that the amendment to introduce paragraphs 124AE–124AH not be permitted and that the application to join Catchers as party to the proceedings also not be allowed. 4. In those circumstances, it is not necessary to address other possible difficulties with the pleading, which has the premise that Buyers and Catchers as the appointors of nominee directors to the board of SFM would be entitled to require those directors to take particular steps, apparently regardless of whether those directors considered those steps were consistent with the interests of SFM and their duties as directors of SFM. First, it is not entirely clear how Buyers holding the benefit of a promise made by Catchers in the Shareholders Agreement on trust for its members would require Buyers to deal in a particular way with the promise it had made to Catchers, so as to require Buyers' nominee directors to act in a particular fashion. Second, it is well established that, at least in the ordinary course, a nominee director is entitled to take into account the interests of his or her appointor, but is nonetheless obliged to act in the interests of the company to which he or she is appointed: Levin v Clark [1962] NSWR 686 at 700; (1960) 80 WN (NSW) 485; Re Broadcasting Station 2GB Pty Ltd [1964-65] NSWR 1648. I appreciate that, as Mr Carey points out, several provisions in the Shareholders Agreement contemplate that Buyers and Catchers will procure their nominee directors of SFM to take particular steps. There may be an open question whether those provisions would be read as subject to an implied limitation that that would only occur where those steps would be consistent with their directors' duties as directors of SFM. Even if that implied limitation were not read into those provisions, there may be a real question whether a court could grant a mandatory order requiring the appointor of a nominee director to "procure" a nominee director to take a specified step. The most obvious difficulty with such an order would be that the appointor may well be unable to comply with it, since a nominee director who considered that step was inconsistent with his or her duties to the company of which he or she was director could properly then take the view that he or she ought to resign as a director, rather than be left in the position where he or she was required, by his or her appointor, to take a step that was in potential breach of his or her duty to the company. It seems to me to be preferable that I do not express any substantive view as to these questions, where they were not addressed by full submissions before me and I am comfortably satisfied that the amendment should not be permitted on other grounds. Derivative action and claim in oppression 1. Proposed paragraphs 124AI–124AJ of the FASC pleads that, in the circumstances referred to in paragraphs 124AF–124AH above, Buyers has refused to take specified action. Paragraph 124AJ pleads that, in the circumstances referred to in paragraph 124AI, the conduct of Buyers' affairs has been contrary to the interests of members of Buyers as a whole or oppressive to, unfairly prejudicial to and unfairly discriminatory against Felan's. Paragraph 124AK seeks orders under s 233 of the Corporations Act authorising Felan's to institute proceedings in the name of Buyers against SFM and Catchers to enforce the Tenancy Objective (as defined) and the Shareholders Voting Provision in the Shareholders Agreement and the SFM Voting Provision in SFM's Constitution. 2. I am comfortably satisfied that an amendment in this form should also not be permitted. First, this pleading depends on paragraphs 124AF–124AH which have not been allowed. Second, the pleading of the paragraphs is itself embarrassing, in the sense referred to in paragraph 11 above, so far as the reference to paragraphs 124AF–124AH in paragraph 124AI brings in the reference to the "circumstances described in paragraphs 72A–124AD above" made in paragraphs 124AF–124AH; paragraph 124AJ refers to the circumstances referred to in paragraph 124AI; and paragraph 124AK refers to the circumstances referred to in paragraph 124AJ. These cross-references have the difficulties to which I referred in respect of those paragraphs. Second, on any view, it seems to me that it would not promote the just, quick and cheap resolution of the real issues in dispute to introduce an oppression case that exists only between Buyers and Felan's in these proceedings, so as to expose SFM and the Third–Ninth Directors to the costs of being present for its determination, when that matter could readily be determined in separate proceedings between Buyers and SFM. 3. Third, the amendment should not be permitted where it seeks to achieve the result that, after these proceedings have determined the relevant issues in dispute between Felan's and SFM, Felan's would then be permitted to bring further proceedings in the name of Buyers against SFM, agitating the same issues as those which are to be determined in these proceedings. It seems to me that the just, quick and cheap resolution of the real issues in dispute in these proceedings, and in Felan's proposed oppression proceedings against Buyers, would be promoted by leaving Felan's to commence any oppression proceedings against Buyers as separate proceedings, which could be commenced and determined promptly, so that any claim that Felan's may be authorised to bring in the name of Buyers against SFM may be brought and determined at the same time as any claim that Felan's brings in its own name against SFM, relating to the same matters, in these proceedings. 4. In the result, Buyers will remain in the proceedings only for the purpose of Felan's seeking leave to bring a derivative action in its name. It may be that Felan's will face some difficulties in obtaining that leave, given the nature and legal risks of the claim which it seeks to bring on Buyers' behalf, and the fact that it is (as I have held in the security for costs application) impecunious and may well be unable to provide an adequate indemnity to protect Buyers' interests in respect of the conduct of the proceedings: Re Fishinthenet Investments Pty Ltd [2014] NSWSC 260; Cooper v Myrtace Consulting Pty Ltd [2014] FCA 480 at [29]. Mr Carey recognised the latter issue in the course of submissions. My preliminary view is that the application for that leave should be determined as a separate and preliminary issue, prior to the determination of any other issues in the proceedings. Depending upon the outcome of that application, it may be that Buyers will have no future role to play in the proceedings. Costs of security for costs application 1. By Interlocutory Process filed on 11 April 2016 and 2 May 2016 respectively, SFM and the Third–Ninth Defendants sought security for costs of the proceedings against Felan's. By my judgment delivered on 23 September 2016 ([2016] NSWSC 1351), I held that no order for security for costs should be made in favour of SFM, but that an order for security for costs should be made in favour of the Third–Ninth Defendants. Orders have previously been made to give effect to that judgment in respect of the Third–Ninth Defendants. It remains to determine a dispute as to the costs of that application as between Felan's and SFM. 2. Felan's seeks an order that SFM pay 65% of its costs of the unsuccessful security for costs application against it, excluding those costs which were the subject of a specific costs order made on 17 June 2016, as agreed or as assessed on the ordinary basis. Felan's relies on the fact that it was ultimately successful in opposing SFM's security for costs application, although I note that that success reflected success on a particular issue, namely that the proceedings it had brought against SFM were, in substance, defensive in character. On the other hand, SFM submits that no order as to costs should be made in respect of the security for costs application. 3. Felan's accepts that any order for costs in its favour should be discounted to reflect that it put SFM to proof of its impecuniosity, and I had held that there was reason to believe that it would be unable to meet an order for costs if it was not successful in the proceedings. In my judgment as to security for costs, I had observed (at [54]) that: "My preliminary view is that any order for costs of this application in favour of Felan's and against SFM should be substantially discounted to take account of the fact that Felan's required SFM to prove that there was reason to believe that Felan's would be unable to pay its costs if it was ordered to do so, where there seems to me not to have been a reasonable basis for a contention to the contrary." 1. SFM submits, and I accept, that a successful party may not only be deprived of costs but also ordered to pay the other party's costs in respect of an issue that was clearly dominant or separable: Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38]: Doppstadt Australia Pty Ltd v Lovick & Son Development Pty Ltd (No 2) [2014] NSWCA 219 at [17]; Choo v Zhang (No 2) [2016] NSWCA 301 at [26]. SFM submits that it was successful in establishing that there was reason to believe that Felan's would be unable to meet a costs order against it and that the jurisdiction to order security for costs was established, and I accept that that is a matter which should be reflected in dealing with the costs of the security for costs application, given the significance of that issue. 2. SFM also points out, and I accept, that it was required to incur substantial costs in establishing that the threshold for an order for security for costs was made out, given the extent of expert evidence that was required as to that issue, and in circumstances that there was little basis for dispute as to that issue. It seems to me that the threshold issue of Felan's financial position was both a substantial and severable issue, and that it would not have needed to be determined had Felan's made a proper concession in that respect. SFM also points out, and I accept, that questions which I had raised in the course of the hearing had squarely placed Felan's on notice of the risk of costs, if a proper concession was not made as to that issue (2.9.16 T 91, T106). SFM submits, and I also accept, that there is greater reason for an order for costs in its favour in that respect, so far as Felan's had initially relied on the Acumen report dated 10 February 2016, and put SFM to the costs of obtaining expert evidence in response, before abandoning reliance on that report in the course of the hearing and relying on a second report, having also put SFM to the costs of replying to that second report. SFM also submitted that there is reason to make a costs order in its favour in this respect, because an order for security for costs has been made in favour of the directors, and the directors had relied on the evidence led by SFM in respect of that issue. I do not need to determine that question, where I hold below that an order for costs should be made in favour of SFM in respect of this issue on other grounds. 3. SFM also submits that an order for security for costs was otherwise not made in its favour, only by reason that I found that Felan's claim was essentially defensive in character and that a significant amount of security would have been ordered, but for that finding. While I accept those submissions, so far as they go, it seems to me that they do not support the result that there should be no order as to costs, where SFM was ultimately unsuccessful in its security for costs application. 4. In the alternative to its submission that there should be no order as to costs, SFM submits that Felan's should pay SFM's costs in relation to the question whether there was reason to believe that Felan's would be unable to pay SFM's costs of the proceedings if ordered to do so including, without limitation, the costs of its obtaining expert reports as to that issue. It seems to me that an allowance should be made for the costs to which Felan's put SFM in respect of the proof of impecuniosity, and those costs are likely to be substantial where that issue was the subject of two sets of expert reports made by each party, as well as submissions and oral argument. I am unable to be satisfied that the 35% discount proposed by Felan's to a costs order in its favour would adequately adjust for those costs, where neither party has led evidence of the extent of costs attributable to that issue. It seems to me that the only alternative to a discount of the kind which Felan's proposes, but is not established, will be to order that Felan's pay SFM's cost of and incidental to the question whether there was reason to believe that it would be unable to meet an order for costs, if it was not successful in the proceedings, and that SFM otherwise pay Felan's costs of and incidental to the security for costs application. I appreciate that that course will have a practical disadvantage, since each party will need to proceed to assessment of the costs it seeks to recover, and potentially separate costs referable to the particular issues for the purposes of such an assessment. That disadvantage may, however, be avoided if the parties can agree an appropriate discounting factor between themselves, although they have not done so to date. 5. SFM also submits, in the alternative, that it should only be required to pay 50% of Felan's costs in relation to the discretionary factors considered by the Court. I do not accept that submission, where it seems to me that Felan's would ordinarily be entitled to those costs, so far as it was successful in resisting the security for costs application. SFM also submits that there should be no order as to the costs incurred by the parties on the question of the quantum of security, and relies on the fact that I indicated that I would have ordered security for a significant part of the costs claim, had I ordered security for costs in favour of SFM. It does not seem to me that that submission assists SFM, where it was ultimately not successful in the security for costs application, and these costs were incurred by Felan's as a result of SFM's ultimately unsuccessful pursuit of the security for costs application. 6. An issue also arose as to whether the proposed amendments in the FASC, for which Felan's sought leave after the determination of the security for costs application, should impact on the costs of that application. SFM relies on the proposed amendments to the Originating Process and Amended Statement of Claim in submitting that there should be no order for costs in respect of the security for costs application. SFM submits that the amendments which were sought to be made by Felan's would potentially have affected the characterisation of its claims as defensive, or at least required that characterisation to be undertaken on a different basis. In the event, I cannot accept that submission, since several significant amendments sought to be made by Felan's have not been permitted, and those which have been permitted are responsive to further notices to quit issued by SFM, are similarly pleaded to the existing case against the directors of SFM in respect of other matters and primarily affect the Third–Ninth Defendants rather than SFM, and would not have altered the characterisation of whether Felan's case against SFM was defensive in character. As Mr Carey also points out, the amendments in respect of the notices to quit issued by SFM in late 2016 could not have been raised prior to the security for costs application, since that further notice to quit was only issued after I had delivered my judgment in the security for costs application. In these circumstances, it does not seem to me that those amendments have any impact upon the result in the security for costs application. 7. In the result, unless the parties can reach agreement between themselves, I will order that Felan's pay SFM's costs of and incidental to the question whether there was reason to believe that it would be unable to meet an order for costs, if it was not successful in the proceedings, and that SFM otherwise pay Felan's costs of and incidental to the security for costs application, other than those costs that have been the subject of previous costs orders. Summary and orders 1. In the result, I will grant leave to Felan's to join Messrs Apostolakis, Jeffreson and Fidden to the proceedings, while reserving to them an opportunity to set aside that joinder where it appears they were not given adequate notice of their opportunity to oppose this application. I will not grant leave for the joinder of Catchers. I will grant leave to Felan's to file its proposed FASC, excluding proposed paragraphs 124AE–124AK, and its proposed Amended Originating Process excluding the corresponding relief, on the usual basis that Felan's pay the costs thrown away by reason of the amendments. I will not at this point grant leave for the discontinuance of the proceedings against Messrs Imisides and Manettas, since that issue was deferred. 2. I direct that the parties send agreed short minutes to give effect to this judgment, including as to costs to the Associate to Black J by 4pm on 27 January 2017, or, if there is no agreement between them, their respective short minutes of order with short submissions as to any differences between them. I will deal with any differences between the parties in that respect, including as to costs, when the matter is next listed for directions in the Corporations List on 30 January 2017, or otherwise allocate a hearing for that matter, if time is not available to determine it on that date. I will make the orders in respect of the costs of the security for costs application to which I have referred above, unless the parties can reach any consensus so as to avoid the costs of reciprocal applications for assessment of those costs. ********** 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: 23 December 2016