Federal Court of Australia

EV20 Consulting Group Pty Ltd v Paperless Warehousing Pty Ltd (No 3) [2025] FCA 1348

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application filed by Paperless Warehousing Pty Ltd ACN 000 800 617 on 31 July 2025 seeking costs orders against Gillis Delaney Lawyers ABN 98 691 183 536, be dismissed.

2.    Paperless is to pay Gillis Delaney’s costs of the application, as agreed or taxed.

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

REASONS FOR JUDGMENT

BURLEY J:

1.    INTRODUCTION

1    In the present interlocutory application, filed on 31 July 2025, Paperless Warehousing Pty Ltd seeks an order that the solicitors representing EV20 Consulting Group Pty Ltd, Gillis Delaney Lawyers, pay the costs of a claim brought by EV20 against Paperless and the costs of a cross-claim brought by Paperless against EV20. The application is based on the contention that Gillis Delaney was never authorised by EV20 to act on its behalf. It is also based on a contention that Gillis Delaney behaved unreasonably in the discharge of its functions in the conduct of the proceedings. For the reasons set out below, I reject those contentions, dismiss the interlocutory application and order that Paperless pay the costs incurred by Gillis Delaney on the application.

1.1    Background

2    In EV20 Consulting Group Pty Ltd v Paperless Warehousing Pty Ltd [2025] FCA 328 (EV20 No 1), as varied in EV20 Consulting Group Pty Ltd v Paperless Warehousing Pty Ltd (No 2) [2025] FCA 476 (EV20 No 2), I determined an interlocutory application for orders pursuant to r 5.23(2) of the Federal Court Rules in favour of Paperless Warehousing Pty Ltd, with the consequence that the claim brought by EV20 Consulting Group Pty Ltd on 2 March 2021 was dismissed and a cross-claim brought by Paperless against EV20 and other cross-respondents was allowed. I ordered that EV20 pay Paperless’ costs of the claim and the cross-claim. This judgment assumes familiarity with EV20 No 1 and EV20 No 2 and adopts the abbreviations used in those judgments.

3    In the present application, Paperless seeks orders pursuant to s 43 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) that Gillis Delaney Lawyers, the solicitors who have represented EV20 from the outset of the proceedings, jointly and severally pay Paperless’ costs of the EV20’s claim and Paperless’ cross-claim, on and from at least 13 October 2022.

4    In support of its application, Paperless relies on affidavits affirmed by its solicitor, Katrina May Crooks, dated 31 July 2025 and 14 October 2025 and various admissions made in affidavits and pleadings filed on behalf of EV20 in the proceedings. The second affidavit of Ms Crooks makes reference to documents produced on subpoena by Gillis Delaney.

5    Gillis Delaney relies on an affidavit affirmed by Michael Joseph Gillis affirmed 30 September 2025, a partner of Gillis Delaney who is authorised to make the affidavit on its behalf.

6    No witness was cross-examined.

7    Paperless contends that Gillis Delaney ought to pay the costs incurred by it in respect of the proceedings on three alternative bases:

(a)    That Gillis Delaney did not have authority to act for EV20 from 13 October 2022 when Roderick Andrew Peters asserted authority over EV20 in an email to the effect that he had “just taken over the helm at EV20”;

(b)    That Gillis Delaney did not have authority to act for EV20 from 7 February 2024, being the date when it contends that the then sole director of EV20, Zoran Markovic provided an ineffective instruction to Gillis Delaney to the effect that Mr Peters and Len Anderson had authority to provide instructions; or

(c)    That Gillis Delaney behaved in an unreasonable manner such as would warrant personal costs orders against it from 28 June 2024, which was the “latest date” on which Paperless contends that Gillis Delaney became aware of four matters identified in [55] of its written submissions.

8    Gillis Delaney disputes that Paperless has established a lack of authority within (a) or (b) and in the alternative contends that the Court ought not to exercise its discretion in favour of making a costs order against it.

9    Gillis Delaney also disputes that it behaved in an unreasonable manner and further contends that the argument in (c) ought not, as a matter of procedural fairness, be allowed.

2.    WAS GILLIS DELANEY AUTHORISED TO ACT?

2.1    Relevant law

10    In MultitecFBM (Asia Pacific) Pty Ltd v Han [2008] NSWSC 1339; 69 ACSR 106 at [28]–[29] Sackville AJ said:

28    If one party alleges that the solicitors for another party have not been retained by a person with authority to act on behalf of the other party, the first party may challenge the validity of the retainer: Harry S Bagg’s Liquidation Warehouse Pty Ltd v Whittaker (1982) 44 NSWLR 421, 429-430 per Powell J. The legal onus is on the party seeking to establish that there is no valid retainer in existence, although the evidentiary burden may shift on particular factual issues: Hawkesford v Hawkesford [2005] NSWSC 463 at [55] per Campbell J. If the challenge to the retainer succeeds, the appropriate order may be to dismiss the proceedings: Harry S Bagg’s at 430-431 per Powell J. If an order dismissing the proceedings is made, the solicitor who has acted without a proper retainer may (but not necessarily will) be held liable to pay the successful party’s costs: Hillig v Darkinjung Pty Ltd (No 2) [2008] NSWCA 147 at [47]-[52] per McColl JA (with whom Beazley and Giles JJA agreed).

29    It is well established that, although an action commenced by a solicitor without authority can properly be described as a “nullity”, it is nonetheless open at any time to the purported plaintiff to ratify the unauthorised act of the solicitor and to adopt the proceedings: Danish Mercantile Co Ltd v Beaumont [1951] Ch 680 at 684- 685 per Jenkins LJ (with whom Hodson LJ agreed). The ordinary doctrine of ratification applies, so that ratification of the unauthorised act is deemed to be equivalent to antecedent authority: Danish Mercantile v Beaumont at 686; Harry S Bagg’s at 430 per Powell J.

11    Actual authority may be express or implied. In Colin R Price and Associates Pty Ltd v Four Oaks Pty Ltd [2017] FCAFC 75; 251 FCR 404 at [150]–[151] Rares, Murphy and Davies JJ explained:

In relation to implied authority, the Court’s inquiry concerns the intention of the principal in conferring authority on the agent. Ordinarily, where a company has more than one director, a single director does not have implied authority to bind the company. A director’s normal power is to bind the company only by joining with other directors in a resolution of the board of directors: Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 (Northside) at 198, 205 (Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ); Junker at [42].

An implied grant of authority can result from acquiescence in a course of behaviour by persons who have actual authority to delegate. For example, if directors stand by while a single director enters into transactions outside his or her authority the board may be taken to have impliedly granted actual authority to do so: Junker at [43]. However, to confer implied authority there must usually be not only the acquiescence of the individual directors but evidence of a communication by word or conduct of their respective consents to one another and to the agent: Austin A, Ford H and Ramsay I, Company Directors: Principles of Law and Corporate Governance (LexisNexis Butterworths, 2005) at [3.41], citing Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480; Junker at [43].

12    In Ford, Austin & Ramsay’s Principles of Corporations Law (LexisNexis, subscription service, last updated August 2025) at [13.070] Professor Ian Ramsay wrote that, “where the company’s chief executive is not a member of the board, the fact that he or she is appointed to manage the company in everyday matters probably means that the chief executive has the same usual authority as a managing director”.

13    In Entwells Pty Ltd v National and General Insurance Co Ltd (1991) 5 ACSR 424 at 427, Ipp J observed that the task of a managing director is to deal with everyday matters, to supervise the daily running of the company and the other managers, “indeed generally be in charge of the business of the company”, citing Ford, Principles of Company Law, 5th ed., at [1425]. His Honour added, that “it is a characteristic of the power of a managing director that he is given powers of day to day management which are exercisable without reference to the board: Pennington’s Company Law, 5th ed., 657”. That includes engaging others to provide services for the company: Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 (CA).

14    In Nece Pty Ltd v Ritek Inc [1997] FCA 504; 15 ACLC 813 at 818 Lehane J said:

It is, I should think, highly unlikely that a managing director entrusted with the day to day management of a company would not have implied authority to instruct solicitors to take proceedings to recover debts or to resist claims against the company where the transactions concerned occurred in the daily operation of the company’s business. It would not follow, however, that the managing director should be regarded as having implied authority, if the evidence went no further, to instruct solicitors to oppose a winding up application of any apparent substance. Rather, it might be expected that that would be a matter with which the board would be directly and immediately concerned.

15    This line of authorities was recently followed by Katzmann J in Mount v Dover Castle Metals Pty Ltd [2025] FCA 101; 173 ACSR 123 at [600], [609]–[611].

16    It is important to recognise that whilst implied actual authority may be sufficient, ostensible authority alone is not: Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd [1975] HCA 49; 133 CLR 72 at 80 (Gibbs, Mason and Jacobs JJ). See also Hawksford v Hawksford [2005] NSWSC 463; 191 FLR 173 at [56] (Campbell J):

I accept that for the purpose of deciding whether a solicitor has been validly retained to act for a company in litigation, it is the actual authority of the person who has purported to act on behalf of the company which is of importance, not the ostensible authority of that person: Harry S Bagg’s Liquidation Warehouse Pty Ltd v Whittaker; AW & LM Forrest Pty Ltd v Beamish at 458.

2.2    Gillis Delaney was authorised to act

17    The proceedings were commenced by EV20 on 2 March 2021, with Paperless advancing its cross-claim on 20 July 2021.

18    Paperless submits that the Court should order that Gillis Delaney pay its costs of the litigation from 13 October 2022 on the basis that Gillis Delaney was not properly authorised to act on behalf of EV20. It makes its submissions on the basis of the instructions provided to Gillis Delaney over three periods of time:

(a)    from the commencement of the proceedings until 13 October 2022;

(b)    from 13 October 2022 until 7 February 2024; and

(c)    from 7 February 2024 onwards.

19    To elaborate, Paperless first contends that Gillis Delaney was not properly instructed to act at the outset of the proceedings because there was no evidence that the sole director and shareholder of the company, Peter Donald McKerrell, had confirmed that any of the individuals providing instructions to Gillis Delaney (at that time Scott William Symons, Grant Earnest Smith and Christopher Stephen Pearce) were authorised to do so. Paperless secondly submits that on 13 October 2022, when Mr Peters took over the responsibility for instructing Gillis Delaney, that Mr Peters did not have authority to do so and that accordingly Gillis Delaney had no authority to act on behalf of the company. It contends that after October 2022, Gillis Delaney took instructions from Mr Peters, Mr Anderson, Mr Pearce and Kevin Mannion, none of whom appeared to be in direct communication with Mr McKerrell and that the Court should infer that none of these persons had actual authority to give instructions. Thirdly, Paperless notes that on 2 February 2024, Gillis Delaney learnt from a fresh ASIC search performed for EV20 that Mr McKerrell was no longer a director of EV20 and that as of 9 December 2023, Mr Markovic was the sole director and secretary of the company. It submits that an email received by Gillis Delaney on 7 February 2024, wherein Mr Markovic purported to ratify that Mr Peters and Mr Anderson were able to give instructions in the litigation on behalf of EV20 is insufficient, with the consequence that Gillis Delaney were not given proper instructions to act by reason of that ratification.

20    For the following reasons, I reject these submissions.

21    When the proceedings were commenced, the sole director, secretary and shareholder of EV20 was Mr McKerrell. He remained in that position until 29 October 2023. Gillis Delaney was aware that he was the director from 21 January 2021, when it obtained a search of the ASIC records.

22    The affidavit of Mr Gillis records that he received initial instructions on 11 January 2021 from Mr Symons, who communicated with him under correspondence indicating that he had the role of “Executive General Manager” of EV20. He received further instructions from Mr Smith, who in correspondence held the role of “Sales Lead Consultant”. On 14 January 2021, Mr Gillis had a conversation with Mr Symons and Mr Pearce. He gives evidence that Mr Smith and Mr Symons described Mr Pearce as “the boss”. Mr Pearce in his correspondence indicated that he held the title of “Executive Chairman” of EV20. In an affidavit affirmed 13 September 2021, relied upon by Paperless in this application, Mr Pearce gave evidence that he had overall responsibility for guiding the operations of EV20 and had a team of management executives who reported to him regarding the operations of the company. This description suggests that the role of Mr Pearce equated to that of a managing director. Gillis Delaney received instructions from that point until later in October 2022 from each of Messrs Symons, Smith and Pearce.

23    On 8 February 2021, Gillis Delaney issued a formal costs agreement to EV20 which was duly executed by Mr Pearce on behalf of EV20, together with confirmation that funds had been deposited into the account of Gillis Delaney. Shortly after, Gillis Delaney received an email from Mr Mannion, who signed his communications with the title “Software Design Consultant” at EV20. Thereafter, Mr Mannion provided also instructions in relation to technical issues relating to the software relevant to the proceedings.

24    From May 2021, emails received by Gillis Delaney originating from EV20 began also to be copied to an email address len@jorsontechnologies.com.au. The recipient, Mr Gillis was then informed, was Mr Anderson. Mr Pearce informed Mr Gillis that Mr Anderson was an investor in EV20.

25    As I have noted, on 20 July 2021, Paperless filed a cross-claim in the proceedings and the sole director and shareholder of EV20, Mr McKerrell, was joined as the fifth cross-respondent. Thereafter, Gillis Delaney acted for most of the cross-respondents, including Mr Symons, Mr Mannion, Mr Smith, Mr McKerrell, Mr Pearce and EV20.

26    In August 2021, EV20 was represented at a court-held mediation at which Mr Pearce and Mr Anderson attended.

27    At this point in the chronology, it may be noted that Gillis Delaney was receiving instructions from persons styled as the Executive General Manager and the Executive Chairman of EV20. The sole director, secretary and shareholder in EV20 was joined as a party to the cross-claim and was represented personally by Gillis Delaney. Mr Pearce and Mr Anderson attended a mediation of the litigation on behalf of EV20 and the individual cross-respondents. In those circumstances, there is an air of unreality about the first submission put by Paperless to the effect that at no point in time, including at the commencement by EV20 of its claim, was Gillis Delaney provided with authority to act on behalf of the company. That fact can readily be inferred from the matters to which I have referred; Colin R Price at [151]; Nece at 818. I infer that Mr McKerrell was well aware that Gillis Delaney was acting on behalf of EV20 and that Mr Pearce and Mr Anderson attended the mediation to give instructions on behalf of EV20 with Mr McKerrell’s approval.

28    Paperless, who bears the onus of establishing an absence of authority; Hawksford at [54]–[55], did not seek to tender the constitution of EV20. It is entirely likely that decisions regarding the conduct of proceedings, including the conduct of the present litigation, were delegated by Mr McKerrell to Mr Pearce and his subordinates, a point that is supported not only by the availability of that course pursuant to s 198D of the Corporations Act 2001 (Cth), but by the fact that Mr McKerrell, whom I infer was plainly aware of the arrangements, apparently approved of them. In my view, no other sensible inference is available, having regard to the fact that Mr McKerrell was a party to the litigation and was also represented by Gillis Delaney. The first submission advanced by Paperless must be rejected.

29    Paperless’ second submission is that on 13 October 2022, Mr Peters took over instructing Gillis Delaney and that he did not have actual authority to do so with the consequence that Gillis Delaney also had no authority to act on behalf of the company. Paperless refers in its submissions to evidence drawn from affidavits and pleadings in the proceedings to the effect that each of Mr Smith, Mr Symons and Mr Pearce left their roles at EV20 during the course of 2021.

30    For present purposes, it is the role of Mr Pearce which is most relevant. The evidence does not disclose that Mr Pearce ceased to have any involvement in EV20 after December 2021. To the contrary, it discloses that he continued to be involved in EV20 until October 2023, as is apparent from Mr Pearce’s email of 14 October 2022, to which I refer below, and the detailed recitals to the invoices issued by Gillis Delaney to EV20, for work done in 2022 and 2023, which indicate that Mr Pearce continued to confer with Gillis Delaney throughout 2022 and into 2023. Invoices are addressed to “Mr Chris Pearce, EV20 Consulting Group Pty Ltd” until 16 May 2024. Whilst the evidence does disclose that Mr Pearce ceased to work physically at the Sydney offices of EV20, and ceased to manage the operations of EV20, it is apparent that he was still involved in providing instructions on behalf of EV20.

31    On 13 October 2022, Mr Peters send Mr Gillis the following email, which was copied in to Mr Pearce and Mr Anderson:

Hi Michael,

Thanks for your emails. Unfortunately Chris Pearce has taken extended leave from EV20 and Len Anderson is unwell and only working periodically. I will be meeting with Len tomorrow and should be in a position to update you on your account situation. I have just taken over the helm at EV20 and working through a backlog of matters.

I understand that you have been extremely patient with regards to this issue and should have a substantial payment to you within the following week.

Should you wish to discuss the matter further please do not hesitate to phone me on [redacted].

Regards,

Rod Peters

(emphasis added)

This email was sent from an @ozemail address and contains no indication as to the role or title of Mr Peters.

32    On 14 October 2022, Mr Pearce wrote to Mr Gillis, from his @EV20 email address, saying:

Hi Michael

Out of respect for yourself I just wanted to make sure you are across this. I have been working on, and paying for EV20 for over 2 years with no earnings for myself. My involvement was always to be an advisor to the team but as we know, when Scott started to make some poor calls, my involvement had to increase.

Now that the business is set up, I have to earn some income, so I have had to start looking for roles.

I have absolute faith in your and David’s leadership of this case and also understand your frustration with payments, Len and Rod are working on this today.

Thanks Michael, I will still advise in the business from time to time and are still in contact with Len and Rod. …

33    Mr Gillis gives evidence that after receiving the email from Mr Peters on 13 October 2022, he spoke with Mr Pearce and Mr Anderson about it, and that they confirmed that Mr Peters was “taking over the helm at EV20”.

34    My finding that Mr Pearce and Mr Anderson were authorised by the company to provide instructions to Gillis Delaney is sufficient basis for me to conclude that they were also authorised to confirm that Mr Peters was able to take over the role of being “at the helm” insofar as Gillis Delaney was concerned. By this stage, Gillis Delaney had been acting in the litigation for some 18 months.

35    There is no reasonable basis upon which it may be supposed that Mr Pearce and Mr Anderson did not have the implied authority from Mr McKerrell to authorise Mr Peters, to provide instructions on behalf of the company. Mr Gillis was not cross-examined about his evidence concerning his conversation regarding the handover, to which I have referred above, and it may be accepted that he received confirmation from those two people, whom I have accepted had authority to provide instructions to Gillis Delaney, to the effect that Mr Peters was now able to do so and that Mr Anderson continued to do so. It may be noted that at this point in time that Mr McKerrell remained a client of Gillis Delaney in his personal capacity as a cross-respondent and remained the sole director and shareholder of EV20. The conduct of the proceedings on behalf of EV20 continued, with Gillis Delaney rendering and being paid its invoices. The circumstances do not warrant the conclusion that the proceedings, properly commenced in 2021, and prosecuted since then on behalf of EV20 by Gillis Delaney, did not continue to be prosecuted with instructions from Mr Pearce, and after him, Mr Peters with the authority of Mr McKerrell.

36    Accordingly, I reject the second submission advance by Paperless.

37    The third submission advanced by Paperless is that on 2 February 2024, Gillis Delaney learnt from a fresh ASIC search for EV20 that Mr McKerrell was no longer a director of EV20 and that as of 9 December 2023, Mr Markovic was the sole director and secretary of the company. It submits that an email received by Gillis Delaney on 7 February 2024 wherein Mr Markovic purported to ratify that Mr Peters and Mr Anderson were able to give instructions in the litigation on behalf of EV20 is insufficient, with the consequence that Gillis Delaney were not given proper instructions to act.

38    The background to these events is described by Mr Gillis in his affidavit. On 3 August 2023, he sent an email to Mr Anderson, Mr Pearce and Mr Peters, indicating that Gillis Delaney had not received payment for certain invoices and that it was critical for the claim and the cross-claim for steps to be taken and that urgent payment was required. Mr Gillis gives evidence that he received assurances from Mr Anderson and Mr Peters that payment would be made and that subsequently he received payment. Issues also arose with third parties to the litigation who had sought indemnity from EV20 if they were to continue to take advantage of EV20’s services in the face of the litigation brought by Paperless. As a consequence, Mr Gillis gives evidence that he thought it prudent to confirm that the instructions he was receiving from Mr Peters and Mr Anderson were sanctioned by the sole director and he asked Mr Peters to provide that confirmation.

39    On 7 February 2024 he received an email from Mr Peters which said “Directors [sic] authority to act as requested” and was followed by an email as follows:

From: NXST Group

Date: Tue, 6 Feb 2024, 9:11 am

Subject: EV20 Consulting

To:

I Zoran Markovic agree for Rod Peters & Len Anderson to instruct Gilles [sic] Delaney Lawyers on all legal matters.

--

Best Regards

Zoran Markovic

40    EV20 submits that, insofar as there is any doubt about the authority of Messrs Peters and Anderson to give instructions on behalf of the company, this email provides adequate ratification. For the reasons indicated above, I consider that Mr Anderson and Mr Peters did have the authority of EV20 to provide instructions and no ratification was necessary. However, if I am incorrect in relation to that, for the reasons below I consider that this ratification is sufficient.

41    Although an action commenced by a solicitor without authority may be described as a “nullity”, it is nonetheless open at any time to the purported party to ratify the unauthorized act of the solicitor and to adopt the proceedings; MultitecFBM at [29]. A principal can ratify the making of a contract entered into by a purported agent when the agent did not in truth have authority to make the contract. The ratification has retrospective effect and the agent is treated as having had the requisite authority; Leybourne v Permanent Custodians Ltd [2010] NSWCA 78 at [131] (Giles JA, Tobias JA and Sackville AJA).

42    In Leybourne the NSW Court of Appeal (Giles JA, Tobias JA and Sackville AJA) said:

132.    Whether the conduct of the principal amounts to ratification is a question of fact, but there should be “clear adoptive acts” (Eastern Construction Co Ltd v National Trust Co Ltd (1914) AC 197 at 213 per Lord Atkinson); the conduct must be unequivocal (for example, Petersen v Moloney (1951) 84 CLR 91 at 101). It is well expressed in Dal Pont, Law of Agency, 2nd ed at 5.28 -

“The positive acts of the alleged principal may, aside from any express words, constitute sufficient evidence of ratification. This may be so where the fair inference to be drawn from a person’s conduct, on an objective basis, is that the person consents to a transaction to which he or she might properly have objected. Put another way, ratification ‘is implied from or involved in acts when you cannot logically analyse the act without imputing such approval to the party whether his mind in fact approved or disapproved or wholly disregarded the question’.” (citations omitted)

133.    Acceptance of the benefit of the unauthorised act of the agent with knowledge that the benefit flows from that act will ordinarily suffice (Australian Blue Metal Ltd v Hughes (1961) 79 WN (NSW) 498 at 515; Brockway v Pando [2000] WASCA 192 at [120]). Suing on a transaction brought about by an agent acting beyond authority will also ordinarily mean ratification of the unauthorised transaction: the reason is obvious, see Dal Pont, op cit, at para 5.29 and cases cited.

134.    There must be full knowledge of all the material circumstances in which the act was done, unless the principal intends to ratify and take the risk whatever the circumstances (for example, Bremner v Sinclair NSWCA, 3 November 1998; (2001) ANZ Conv R 29 at [32] per Campbell J. The extent of knowledge necessary depends on the particular facts. It should be enough knowledge to decide whether or not to adopt the unauthorised act (Bremner v Sinclair at [32]).

43    On its face, the email is from Mr Markovic, the sole director and shareholder of EV20. As a director of the company, it is open to me to infer, and I do so infer, that Mr Markovic had familiarised himself with the affairs of the company and was aware of the legal matters of EV20 to which he referred. Contrary to the submission advanced by Paperless, I would not infer that Mr Markovic did not have full knowledge of the circumstances pertaining to the “legal matters” of EV20 to which he referred. This conclusion is supported by the fact that in his email Mr Markovic correctly identified the individuals (Mr Peters and Mr Anderson) giving instructions and the name of the solicitors involved.

44    Paperless submitted that the email should be given no weight because it was supplied by Mr Peters to Mr Gillis and there is no direct evidence from Mr Markovic or confirmation of the provenance of the email. When pressed on the point, however, counsel for Paperless did not submit that the email was fraudulent. I would not infer that it is a document that does not come from Mr Markovic. Nor do I reject it as having no weight.

45    Following receipt of this email, Mr Peters and Mr Anderson continued to provide instructions to Gillis Delaney, the firm continued to provide legal services, those services were invoiced. Mr Gillis exhibits these invoices to his affidavit.

46    As a high level summary, in May 2022 Gillis Delaney issued an invoice to EV20 for work from 25 November 2021 until 29 April 2022 addressed to Mr Pearce. The commentary indicates that detailed instructions were sought and received, inter alia, from Mr Pearce and Mr Mannion and that Mr Pearce, Mr Mannion and Mr Anderson attended conferences together. On 15 March 2023, an invoice was issued to EV20 for work from 1 November 2022 until 28 February 2023. This includes considerable time spent for conversations, advice given and discussions with Mr Anderson, Mr Pearce, Mr Mannion and Mr Peters, often in concert with each other. On 15 May 2023, a further invoice was rendered by Gillis Delaney to EV20 for period 14 March 2023 until 9 May 2023 which involves similar narratives.

47    These narratives provide a picture of a company that is operating in the preparation of significant litigation in which at least one person who is unchallenged in his role as an employee (Mr Mannion) and another who had a senior executive position until December 2021 (Mr Pearce) and otherwise continued to work within the company, collaborating with Mr Peters and Mr Anderson in the conduct of the proceedings. This does not paint a picture that any of these people is not authorised to provide instructions to the solicitors.

48    Further invoices are attached for the periods between 9 May 2023 and 6 November 2024. Conferences continue to occur with Messrs Anderson, Pearce and Peters in this period, with no evidence of further conferences with Mr Pearce (from the invoices alone) after 9 October 2023. Evidence is provided of telephone conversations with Mr Peters up to 15 August 2024 and with Mr Anderson up to 18 September 2024.

49    Furthermore, there is no suggestion that EV20 raised any concern that Mr Peters and Mr Anderson were improperly instructed.

50    Gillis Delaney continued to act for EV20 until 9 October 2024.

51    These matters lead me to conclude that Paperless has not discharged the onus that lies upon it to establish that Gillis Delaney was not properly authorised to act on behalf of EV20 throughout the litigation.

52    If I am wrong about that conclusion, I would nonetheless not order that Gillis Delaney pay the costs of Paperless. There is an air of unreality about the present application that cannot be ignored. EV20 advances no complaint that Gillis Delaney was not properly instructed or that Gillis Delaney acted without proper instruction. No director has come forward to complain about the conduct of Gillis Delaney. To the contrary, the evidence indicates that EV20 relied upon Gillis Delaney for advice and paid the invoices rendered by Gillis Delaney without demur.

53    The award of costs in circumstances where a solicitor has acted on instructions that were not authorised by a client is discretionary; Hillig v Darkinjung Pty Ltd (No 2) [2008] NSWCA 147 at [51] (McColl JA, Beazley and Giles JJA agreeing). The transition within EV20 of personnel from Mr Pearce to Mr Peters has been described above, as has the ratification by Mr Markovic, on behalf of EV20, of the authority of Mr Peters and Mr Anderson to provide instructions. Prior to the resignation of Mr McKerrell as a director, EV20 plainly authorised Mr Pearce to give instructions. There was no reason for Gillis Delaney to suppose that those instructions would change or to suppose that Mr Pearce was not able to hand the baton to Mr Peters, especially given that each of Mr Pearce and Mr Anderson continued to assist in the litigation. In those circumstances, leaving aside the question of actual authority, this is not a case where it would appear that the solicitors should be required to pay Paperless’ costs of the proceedings.

3.    THE UNREASONABLE CONDUCT ALLEGATION

54    In its submissions in support of the interlocutory application, filed five days before the hearing, Paperless advanced the submission that Gillis Delaney engaged in unreasonable conduct in the exercise of its functions as solicitor such that the Court ought to require the firm to pay the costs incurred by Paperless from 28 June 2024.

55    Gillis Delaney objects to this argument being advanced on the basis that it had no notice prior to the written submissions that it would be raised and, had it been raised earlier, it could have adduced evidence in answer. It also submits that the argument has no merit on the basis of the evidence now available.

56    I consider that there is merit in the first of Gillis Delaney’s arguments. No notice was provided before the written submissions of the argument being advanced. Paperless relied on two affidavits affirmed by Ms Crooks. In the first, of 31 July 2025, she indicated that the basis for the application being brought is that Gillis Delaney “acted on behalf of EV20 without proper authority because they took instructions from Mr Peters”. Most readers would not thereafter assume that the content of the affidavit included material in support of a quite different and completely unforeshadowed allegation, namely that Gillis Delaney had acted unreasonably and in dereliction of its duties to the Court pursuant to ss 37M and s 37N of the FCA Act. Nor do the parts of that affidavit, to which attention was drawn in oral submissions, provide notice of that fact. The consequence is that Mr Gillis was not given an opportunity to answer the serious allegation that he had failed to act in accordance with his obligations to the court. I was assured by senior counsel for Gillis Delaney, and accept, that had the allegation been notified, then instructions would have been taken in this regard and evidence adduced.

57    For completeness, I also accept that the evidence relied upon by Paperless does not provide sufficient information to support the contention that Gillis Delaney did fail in its duty, as alleged. Given my conclusion in relation to the first point, it is not necessary for me to address this in detail. Suffice it to say that a key aspect of the argument advanced by Paperless is that a document entitled “Deed of Assignment” dated 23 February 2023, which Paperless submits is evidence that from that date EV20 had ceased operations, arguably simply provides a security interest over the assets of EV20. Had Mr Gillis been informed of the allegation that it represented a transfer of assets, with the consequence that a later pleading to the effect that EV20 continued to provide services in respect of its intellectual property, then he could have explained his understanding of the Deed and also his instructions in preparing the pleading. Accordingly, I reject the unreasonable conduct allegation.

4.    DISPOSITION

58    For the reasons above, the interlocutory application must be dismissed with costs.

Associate:

Dated:    3 November 2025

SCHEDULE OF PARTIES