Federal Court of Australia

PlayUp Limited v Mintas (No 3) [2025] FCA 331

ORDERS

THE COURT ORDERS BY CONSENT THAT:

1.    The amended originating application and amended statement of claim both filed on 23 September 2023 be dismissed.

2.    Order 4 made on 1 December 2021 be discharged.

3.    The plaintiff is to pay the defendant’s costs of defending the claims put against her in this proceeding.

4.    The plaintiff is to pay the defendant’s costs of her interlocutory application accepted for filing on 9 August 2024 on an indemnity basis.

THE COURT ORDERS THAT:

5.    The oral application for a stay made by the plaintiff on 25 March 2025 is dismissed.

6.    The plaintiff is to pay the defendant’s costs of the application for a stay.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

(REVISED FROM TRANSCRIPT)

REASONS FOR JUDGMENT

MARKOVIC J:

1    This proceeding was commenced by the plaintiff, PlayUp Limited, on 1 December 2021. At that time, PlayUp filed an originating application seeking orders against the defendant, Dr Laila Mintas, on an interim and final basis, pursuant to s 1324 of the Corporations Act 2001 (Cth).

2    On the same day, on the ex parte application of PlayUp, the Court made interim orders pursuant to subs 1324(1)(a) and (4) of the Corporations Act restraining Dr Mintas in effect from publishing false or disparaging information about, or making false or disparaging statements to certain persons or entities in connection with, PlayUp until further order (Injunction Orders). Those Orders have remained in place.

3    On 3 February 2022, PlayUp filed an amended originating application and statement of claim seeking additional relief. On 18 December 2023, Dr Mintas filed a notice of cross-claim and statement of cross-claim in which she seeks damages, or alternatively equitable compensation from PlayUp. It is not necessary to say anything further about that cross-claim, because it has not been in issue in the application that has been before me today.

4    Defences were filed, both to the amended statement of claim and the statement of cross-claim, by the relevant parties.

5    On 16 October 2023, Dr Mintas filed an interlocutory application seeking, among other things, orders pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth), or alternatively s 1335 of the Corporations Act, for PlayUp to provide security for her costs.

6    On 10 April 2024, the security for costs application was listed for hearing before the Court. PlayUp was represented at the hearing, but it had not filed any evidence or submissions in response to the application and, at the hearing, counsel appearing for PlayUp informed the Court that PlayUp did not wish to be heard in opposition to the relief sought in the security application. He submitted only that his client would ask for a little bit more time to do what needed to be done to comply with whatever order the Court made at the time, and that a large amount had been sought by way of security.

7    At the conclusion of the hearing of the security application, I made orders for the provision of security by PlayUp in the amount of $390,000. The security was to be provided by 22 May 2024. Indeed, the security as ordered was not provided for many months thereafter.

8    By interlocutory application filed on 8 August 2024, Dr Mintas sought an order pursuant to s 22 of the Federal Court Act and/or r 19.01(1) of the Federal Court Rules 2011 (Cth) that PlayUp’s claims against her made in the amended statement of claim be dismissed, and further or in the alternative, that the Injunction Orders be discharged.

9    I subsequently made orders for the filing by the parties of submissions and evidence in relation to the application that had been filed by Dr Mintas on 8 August 2024, which I will hereinafter refer to as the Dismissal Application. Pursuant to those orders, Dr Mintas filed an affidavit affirmed by a solicitor in the employ of Clyde & Co lawyers, her solicitors in this proceeding, and submissions. PlayUp filed an affidavit affirmed by Daniel Simic, one of its directors, on 27 August 2024, but did not file any submissions.

10    The Dismissal Application was listed to be heard today 25 March 2025. This morning, shortly before the listing time, counsel for PlayUp emailed submissions to my Associate, copied to counsel appearing for PlayUp. In those submissions, I understand for the first time, the Court was informed that PlayUp consented to the orders sought in the Dismissal Application, that it appreciated that it had failed to pay the security in accordance with the Court’s orders, and that it provided its consent on the basis that it wished to make an immediate application for a stay of the dismissal orders and proposing a regime imposing orders for the stay that it sought, which would require PlayUp to pay the security sum in five instalments commencing today and ending on 29 August 2025.

11    At the commencement of the hearing this morning, I made orders by consent by which the amended originating application and the amended statement of claim were dismissed, the Injunction Orders were discharged, and PlayUp is to pay Dr Mintas’ costs of the claim it made against her and her costs of the Dismissal Application, with the latter to be paid on an indemnity basis (Dismissal Orders). Upon the making of the Dismissal Orders, PlayUp applied for a stay of them on the terms which I have already described. That application was made pursuant to r 41.03 of the Rules which provides that a party bound by a judgment or order may apply to the Court for an order that the judgment or order be stayed.

12    Counsel appearing for PlayUp referred me to my decision in Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar (No 3) [2023] FCA 1529. In Stolyar (No 3) (at [9]) I observed that the principles that apply in determining whether the Court should order a stay are well established, and that they are most often considered in the context of the grant of a stay pending the outcome of an appeal. I also observed that I could see no reason why the same principles would not apply in the circumstances in which a stay was sought in that case where the applicant for the stay did not seek a stay pending the outcome of appeal. The same could be said for the present circumstances where PlayUp seeks a stay pending payment of the amount it was ordered to pay by way of security.

13    In Stolyar (No 3) at [10] I set out the principles, by reference to the decision in Flight Centre Limited v Australian Competition and Consumer Commission [2014] FCA 658, which apply to a consideration of whether to grant a stay pending the outcome of an appeal. From the relevant principles, I identified that the following would apply to the application that was then before the Court. The same principles might equally apply here. They are:

(a)    There is an onus on the applicant to demonstrate a proper basis for a stay that will be fair to all parties.

(b)    There is a prima facie assumption that the judgment appealed from is correct.

(c)    There is a prima facie assumption that the Court should not deprive a litigant of the benefit of a judgment in its favour.

(d)    The Court has a broad discretion as to whether to grant a stay, and it is not necessary for an applicant for a stay to demonstrate special or exceptional circumstances. It is sufficient that the applicant demonstrates a reason or an appropriate case to warrant the exercise of discretion in its favour.

…

(f)    A stay will usually be granted if there is a real risk that the applicant will suffer prejudice or damage, if a stay is not granted, which will not be redressed by a successful appeal.

(g)    In the exercise of its discretion, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties before it.

14    It is clear that the applicant for the stay bears the onus on the application. That was not in dispute between the parties on this application. It is to be recalled that PlayUp made its application for a stay upon the making of the consent orders for dismissal of the proceeding as against Dr Mintas and after PlayUp had indicated to the Court that it did not oppose the application for dismissal that was otherwise to be made pursuant to s 56(4) of the Federal Court Act.

15    Counsel for Dr Mintas submits, and I accept, that the application for a stay should not be seen to subvert the application that would otherwise be made for dismissal of the proceeding on the basis of the power in s 56(4) of the Federal Court Act. In that regard she submits that at the very least the principles that would apply on such an application would also apply in considering all of the circumstances and exercising the discretion as to whether to grant a stay. Those principles have been summarised on a number of occasions and applied by this Court in considering applications for dismissal for failure to comply with orders made for the payment of security for costs. They are conveniently summarised in Austcorp Project No. 20 Pty Ltd v The Trust Co (PTL) (Limited), in the matter of Belpac Pty Limited (Receivers and Managers Appointed) (in liquidation) (No 4) [2015] FCA 850 commencing at [18]. Relevantly, at [21] Gleeson J referred to the five factors identified in Idoport Pty Limited v National Australia Bank [2002] NSWSC 18 at [24], which are factors relevant to the exercise of the discretion as to whether to dismiss a proceeding where there has been failure to comply with an order for security for costs. Counsel for Dr Mintas submitted, and again I accept, that those factors would be equally relevant to the Court’s exercise of a discretion as to whether to grant a stay.

16    They are:

(1)    the period that has elapsed since security was ordered;

(2)    the fact that the plaintiff has been on notice of the application for dismissal;

(3)    the seeming inability of the plaintiff to further fund the proceeding;

(4)    the prejudice to the defendants; and

(5)    the position of the court.

17    PlayUp submits that, having regard to all of the circumstances, I would order a stay on the conditions it has identified. It submits that those conditions are intended to ensure that there is no prejudice to Dr Mintas. It further submits that there can be no prejudice, and that Dr Mintas will only improve her position. As I understand it, that is because as time passes, and the nominated payments are made, there will be security available to Dr Mintas to meet any costs order should she be successful in the proceeding. PlayUp also submits that once the conditions are met, and it has paid all the security, the proceeding can be resolved on its merits. On the other hand, PlayUp contends that the consequence of a dismissal is significant, particularly where it has incurred over $900,000 in legal costs in pursuing the proceeding, and it has never had its day in court. In the meantime, that is, in the period during which the proceeding is stayed, and it is intended that PlayUp will meet the conditions by payment of the security amount in tranches, there will be no work for Dr Mintas to do vis-à-vis the proceeding.

18    Finally, PlayUp submits that the order discharging the Injunction Orders should also be stayed and that, in support of that, regard should be had to Mr Simic’s evidence given during the course of his cross-examination today that he was concerned that Dr Mintas will make disparaging comments about PlayUp and thus potentially affect its ongoing transactions.

19    I have a number of concerns about this application. Putting to one side those, which I discussed with counsel for PlayUp, about the effect of the Dismissal Orders made by consent and the mechanics, assuming compliance with the conditions to be imposed if a stay is ordered, as to how the proceeding would, in effect, spring back to life, I am concerned about the basis upon which the application is made.

20    In my view, the application order for a stay as sought by PlayUp ignores a number of factors.

21    First, it ignores the time that has passed during which it failed to comply with the orders of the Court requiring it to pay the security. PlayUp now comes to the Court, in effect, seeking an extension of time to comply with those orders. That is contrary to s 37M of the Federal Court Act and the efficient disposition of proceedings in this Court.

22    Secondly, it ignores the effect of litigation on parties to it. PlayUp’s submission that there is no prejudice to Dr Mintas should a stay be ordered cannot be accepted. Dr Mintas will remain subject to the litigation and will need to wait a further six months to know the outcome of the stay application and whether the proceeding will, assuming it can, “spring back into life”. That there may be some funds made available for security for her costs in the interim does not change that position.

23    Moreover, I am not satisfied that I would, in any event, exercise my discretion and grant a stay having regard to all of the circumstances of this case.

24    First, a considerable period has elapsed since I made the orders for payment of security. Those orders were made on 10 April 2024 and the security was to be paid by May 2024. The security remains unpaid.

25    Secondly, PlayUp was on notice of the Dismissal Application for want of payment of security for some time. The Dismissal Application was filed in August 2024 and orders were made in November 2024 setting it down for hearing today. Despite that, it was not until this morning that the Court and Dr Mintas were informed of PlayUp’s position. That is but one example of the way in which PlayUp has sought to prosecute this proceeding. There is evidence before me that it has on a number of occasions, as is evident from the orders that have been made by the Court, that it has failed to comply with orders of the Court and has required numerous extensions of timetables.

26    Thirdly, there is, based on the evidence before me and, in particular, given by Mr Simic today in cross-examination, a real risk that PlayUp will not be able to fund the proceeding, let alone the further instalments of security that are contemplated by the stay application. Among other things, PlayUp has not filed accounts with ASIC for the financial years ended 30 June 2022, 30 June 2023 or 30 June 2024. Further, despite evidence given by Mr Simic today about various transactions that PlayUp has entered into, including for funding by way of debt or equity, the documentary evidence before me showed that those arrangements were either indicative or only recorded in terms sheets, and subject to further negotiation and the entry into of enforceable arrangements.

27    There were other aspects of the evidence about PlayUp’s financial position which were unsatisfactory. It is not clear to what extent moneys might be owing to the FTX group of companies. Nor is there any fulsome financial information before the Court, which would permit me to comfortably conclude that there were sufficient funds for PlayUp to be able to meet the requirement to pay the security, let alone fund the ongoing litigation. Indeed, since August 2024, when Mr Simic affirmed his first affidavit in response to the Dismissal Application, and today, when Mr Simic affirmed a further affidavit, the amount that it seems is available to pay security, or a first tranche of it has only increased from $65,000 to $78,000.

28    The evidence also showed that PlayUp has a number of other commitments, including financial commitments, which it has to meet, which may also be a bar to it meeting its proposed commitment, either to pay security or to continue to fund and prosecute the proceeding.

29    Fourthly, the prejudice to Dr Mintas. I have already identified that the ongoing spectre of the proceeding is one form of prejudice that she would suffer, but, in my view, there is other prejudice, including the concern that the proceeding would spring back to life, while on the other hand, PlayUp would, in effect, obtain an extension of time to pay the security, without having established a proper basis to do so. It seems to me that PlayUp has had a chance, and a more than adequate chance, to pay the amount ordered by way of security in April 2024, and it ought not get any further time to do that.

30    Finally, there is the position of the Court. I have already referred to s 37M of the Federal Court Act. This proceeding was commenced in late 2021. Some three and a half years later, it has barely progressed. A litigant who comes to this Court should be prepared to prosecute its proceeding in a timely fashion, and in accordance with the requirements that proceedings be run in an efficient and cost-effective manner. That has not occurred in this case. This is a busy Court whose scarce resources need to be carefully used and applied for the benefit of all litigants.

31    In those circumstances, having regard to all of the circumstances, the evidence given both by PlayUp and by Dr Mintas, I am not satisfied that the stay sought by PlayUp of the Dismissal Orders should be made.

32    I refuse to make the orders sought by PlayUp for a stay.

Associate:

Dated:    8 April 2025