Federal Court of Australia

Corry v NHB Enterprises Pty Ltd, in the matter of Corry [2026] FCA 768

ORDERS

THE COURT ORDERS THAT:

1.    The interim application lodged for filing on 5 March 2026 be dismissed.

2.    The applicant pay the respondents’ costs of the interim application.

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

REASONS FOR JUDGMENT

(delivered ex tempore; revised from transcript)

STEWART J:

Introduction

1    The applicant, Alexander Stephen Corry, applied before a registrar of the Court to set aside a bankruptcy notice issued against him in favour of the respondents, NHB Enterprises Pty Ltd (NHB) and Finn Pharmaceuticals Pty Ltd (Finn). The bankruptcy notice, BN273521, was issued on 26 September 2024 for a total debt of $143,852.12 on a judgment of the District Court of NSW dated 9 September 2024.

2    The registrar dismissed Mr Corry’s application and later ordered that Mr Corry pay the respondents’ costs of the application.

3    Mr Corry now applies to review the registrar’s orders under s 35A(5) and (6) of the Federal Court of Australia Act 1976 (Cth).

4    It is uncontroversial that on such a review “the matter is considered afresh on the evidence and on the law at the time of the review, that is at the time of the hearing de novo” as if the Court were considering the claim for the first time: Bechara v Bates [2021] FCAFC 34; 286 FCR 166 at [17] and [20] per Allsop CJ, Markovic and Colvin JJ. “That is to say, there must be a complete rehearing of the facts and the law as they exist when the judge reviews the order made by the registrar”: Totev v Sfar [2008] FCAFC 35; 167 FCR 193 at [10] per Emmett J, adopted in Bechara v Bates at [21]. The judge reviewing the registrar’s order “begins afresh and exercises for himself or herself any discretion exercised by the registrar”; the parties in effect “commence the proceeding again”: Totev v Sfar at [13] adopted in Bechara v Bates at [21].

5    The applicant relies on s 40(1)(g) of the Bankruptcy Act 1966 (Cth), that is that he can “satisfy the Court that he … has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt … being a counter-claim, set-off or cross demand that he … could not have set up in the action or proceeding in which the judgment or order was obtained”.

6    “[I]n order to ‘satisfy’ the court for the purposes of s 40(1)(g), the debtor is not required to prove, as on a final hearing, the asserted entitlement to recover from the creditor. Accordingly, evidence tendered on an application to set aside is to be tested for admissibility, not as if the proceeding were one in which the debtor’s claim was being finally determined, but by reference to the question whether the court should be satisfied that the debtor has a claim deserving to be finally determined.” See Glew v Harrowell, in the matter of Glew [2003] FCA 373; 198 ALR 331 at [11] per Lindgren J, adopted in Fitzgerald v Fitzgerald [2021] FCAFC 225 at [8]-[9] per Logan J, Rangiah and Downes JJ agreeing.

Background

7    NHB operated a veterinary compounding chemist. It stored confidential formulations in a software database. Mr Corry was employed by NHB from February 2008 to April 2017, and for a period of time was the leading pharmacist and Chief Operations Officer of NHB.

8    In January 2016, Mr Corry became a director and shareholder of Medicina Pty Ltd, which traded in competition with the respondents.

9    On 14 June 2017, the respondents commenced a proceeding in the Supreme Court of NSW against Mr Corry and Medicina, among others, for various breaches of statutory, contractual, fiduciary and equitable obligations in respect of the circumstances in which Medicina came to operate and to compete against the respondents. That proceeding was settled at a mediation as later expressed in consent orders providing, relevantly, that Mr Corry deliver up to the respondents any documents forming any part of the software database belonging to the respondents. Mr Corry, through his then solicitor, confirmed that he did not have any documents to deliver up.

10    It later came to the attention of the respondents that Mr Corry continued to have access to their confidential information. A further proceeding was commenced by the present respondents in 2019, namely proceeding 2019/54125 in the Equity Division of the Supreme Court of NSW. The defendants in that proceeding were, in order:

(1)    Mr Corry;

(2)    Medicina;

(3)    Nishnil Singh;

(4)    Dharmit Kaushik Goradia; and

(5)    Rimon Ghaly.

11    Messrs Corry, Singh and Goradia were shareholders and directors of Medicina and Mr Ghaly was involved in its management, financial administration and affairs.

12    The statement of claim in that proceeding sought, amongst other relief, a declaration that the defendants were in breach of the terms of the Deed of Settlement and Release executed by them on 12 April 2018 following the mediation in the previous proceeding, various injunctions with regard to delivering up or destroying confidential information, an account of profits, equitable compensation and damages and common law damages and exemplary damages.

13    Interim search orders were obtained in that proceeding. Various computer and electronic devices were recovered from Mr Corry, which upon examination, revealed significant volumes of confidential information belonging to the respondents and which ought to have been delivered up in 2017.

14    As appears from the Heads of Agreement referred to more fully below, a first cross-claim was filed on 30 May 2019 by Medicina against Mr Corry and two companies associated with him, Corry Corporation Pty Ltd and Slava Enterprises Pty Ltd. The second cross-claim was filed on the same day by Messrs Singh, Goradia and Ghaly against Mr Corry.

15    There was a mediation on 2, 4 or 5 June 2019 (the evidence differs on the date) at which a settlement was reached between the plaintiffs to that proceeding (ie the present respondents) and the second, third, fourth and fifth defendants. There was no settlement between the plaintiffs and Mr Corry. The settlement was reduced to writing in a document headed “Terms of Settlement” and dated 5 June 2019. As I will come to, Mr Corry’s cross-claim arises out of what is said to have occurred at the mediation which led to the settlement.

16    Importantly, the Terms of Settlement between the plaintiffs and the second to fifth defendants included that:

(1)    the second to fifth defendants would pay, in full and final settlement of the plaintiffs’ claims against them, the amount of $1 million, for which they would be jointly and severally liable, in instalments commencing with $300,000 within 28 days of the date of the settlement (ie by the first week in July 2019), $100,000 per month by the tenth of each month from August 2019 and that the final instalment would be reduced by any stock owned by Medicina purchased by the plaintiffs at their discretion at a price to be agreed between the settling parties;

(2)    the second to fifth defendants would immediately cease conducting any business of Medicina which involved the compounding of veterinary medications; and

(3)    the second to fifth defendants would immediately take all reasonable steps and permanently prohibit any access by Mr Corry to the premises of Medicina.

17    On 14 August 2019, by notice of motion in the Supreme Court proceeding, the respondents brought charges of contempt against Mr Corry, his wife, Boriana Corry, and Mr Ghaly for breach of the 2018 delivery-up orders and the 2019 search orders.

18    On 23 August 2019, Mr Corry filed a cross-claim in the proceeding, ie a statement of third cross-claim. That statement of cross-claim asserted claims against Medicina, Mr Goradia, Mr Singh and Mr Ghaly, but not against NHB or Finn.

19    On 30 August 2019, the proceeding was stayed until further order of the Court with the exception of the contempt proceeding which continued.

20    On 24 June 2021, the Supreme Court declared that certain of the charges of contempt brought against Mr Corry had been proven beyond a reasonable doubt: NHB Enterprises Pty Ltd v Corry (No 7) [2021] NSWSC 741. President Bell (sitting at first instance) considered that the conduct “amounted to a serious contempt that warrants nothing less than a custodial sentence” and rejected Mr Corry’s “purported explanations of his conduct”, which his Honour considered to be “not at all convincing”: NHB Enterprises Pty Ltd v Corry (No 8) [2022] NSWSC 97 at [70]-[71]. Mr Corry was sentenced to imprisonment for three months.

21    Mr Corry’s appeal against the contempt orders and penalty was unanimously dismissed with costs by the NSW Court of Appeal on 23 July 2023: Corry v NHB Enterprises Pty Ltd [2023] NSWCA 162.

22    A certificate of determination of costs assessment was subsequently issued in which the costs assessor determined the amount of costs payable to be $143,852.12.

23    The costs certificate was registered and, on 9 September 2024, the respondents obtained a judgment against Mr Corry in the District Court of NSW in the amount of $143,852.12.

24    As mentioned, on 26 September 2024, the bankruptcy notice was issued against Mr Corry. Mr Corry accepts that the bankruptcy notice was properly served on him on 27 August 2025.

25    On 13 March 2026, the stay of the Supreme Court proceeding was lifted on the application of Mr Corry.

26    On 17 March 2026, Mr Corry filed a “Third Further Amended Statement of Cross-claim”.

27    On 15 May 2025, Hammerschlag CJ in Eq struck out Mr Corry’s “Third Further Amended Statement of Cross-claim” and gave Mr Corry an opportunity to serve another version of his cross-claim.

Mr Corry’s counter-claim, set-off or cross demand

28    Mr Corry served another version of his statement of cross-claim in the Supreme Court on 10 June 2026. It is with reference to that version that Mr Corry asserts that he has a counter-claim against the respondents such as to justify the setting aside of their bankruptcy notice.

29    One matter can be dealt with at the outset. Mr Corry places some store in remarks made by Hammerschlag CJ in Eq, where, in giving him a further opportunity to plead a cross-claim, his Honour stated: “I understand what his case is. He just hasn’t pleaded it.” That his Honour saw the possibility of the claim being pleaded is neither here nor there for present purposes because his Honour was concerned only with whether the postulated claim was capable of being pleaded. I am concerned also with whether it is capable of being proved.

30    The cross-claim is asserted against the following cross-defendants in order:

(1)    Medicina;

(2)    Mr Goradia;

(3)    Mr Singh;

(4)    Mr Ghaly;

(5)    Nicholas Bova;

(6)    NHB; and

(7)    Finn.

31    The first to fifth cross-defendants are referred to as the Medicina Parties. Mr Corry is pleaded as having been a director of Medicina and having held 40 shares being 30% of Medicina’s issued shares. He is pleaded to have been the beneficiary of an indemnity from Medicina protecting its directors against liabilities, costs or expenses, including legal expenses, incurred by reason of, or in connection with, their office or the performance of their duties.

32    The fifth cross-defendant, Mr Bova, is pleaded to have been the managing director of NHB and Finn.

33    Relevantly, the relief that is sought is a declaration that all the cross-defendants engaged in misleading or deceptive conduct contrary to s 18 of the Australian Consumer Law (sch 2 of the Competition and Consumer Act 2010 (Cth)) by certain express representations and misleading non-disclosure. Off the back of that declaration, damages are claimed under s 236 of the ACL.

34    Mr Corry pleads that Medicina is indebted to him for services rendered by him (in the sum of approximately $161,634.94), monies advanced by him (in the sum of $261,992.69) and legal fees incurred by him in the 2017 proceeding (in the sum of $110,000). As will be seen, it is these debts that he later forgave which is said to now give him a claim that exceeds the amount of the debt underlying the bankruptcy notice.

35    Mr Corry pleads that at the mediation on or around 5 June 2019, the Medicina Parties settled the claims of NHB and Finn on the “Terms of Settlement” document referred to above. He also pleads that he executed a “Heads of Agreement” on or about the same date. I will return to its terms.

36    He pleads that before he executed the Heads of Agreement, the Medicina Parties (ie not Mr Bova) made various representations to his then solicitor who passed on the representations to him. The representations were that:

(1)    NHB and Finn’s claims in the proceeding would be settled by the “settling defendants” (ie the Medicina Parties) paying $1 million;

(2)    Mr Corry was required (presumably by the Medicina Parties) to contribute approximately one third of that sum by resigning as Medicina’s managing director, transferring his shares for nil consideration and forgiving the debts owed to him by Medicina; and

(3)    that contribution was, as a matter of fact, equal in value to his proportionate one third share of the $1 million settlement and would be recognised as Mr Corry’s proportionate contribution to the settlement.

37    Mr Corry then pleads that the Medicina Parties and Mr Bova were under a reasonable expectation that the other would disclose to Mr Corry, before Mr Corry acted on the representations, any matter that contradicted, qualified or rendered materially incomplete the representations. It may be that Mr Corry intends to plead that he, Mr Corry, was under such an expectation, rather than that Mr Bova was under that expectation. In any event, he pleads that the expectation arose because, amongst other things:

(1)    Mr Bova knew that Mr Corry was being asked to resign, transfer his shares for no consideration and forgive debts on the footing that his contribution was a fair and proportionate one third share of the $1 million settlement;

(2)    The “Undisclosed Matters” (to which I will come) were known only to Mr Bova and the Medicina Parties and not to Mr Corry;

(3)    Mr Corry was not a party to the Terms of Settlement and was not provided with them before acting on the representations; and

(4)    Without disclosure of the Undisclosed Matters, the impression created by the representations was false or materially incomplete.

38    Mr Corry pleads that the knowledge of Mr Bova can be attributed to NHB and Finn because of his position as having negotiated and entered into the Terms of Settlement on their behalf.

39    Mr Corry pleads that the matters that were not disclosed to him, which should have been disclosed in accordance with the reasonable expectation referred to above (ie the Undisclosed Matters), were the following:

(1)    The Terms of Settlement contained, and were implemented or treated as implemented in accordance with, material terms, releases, benefits and consequences not disclosed to Mr Corry, being the remaining Undisclosed Matters.

(2)    The amount actually paid or contributed by Medicina under the settlement was approximately $100,000, alternatively materially less than $1 million.

(3)    The $1 million payment obligation was imposed on the Medicina Parties jointly and severally and Mr Corry’s asserted contribution by debt forgiveness and share transfer was not identified.

(4)    The Terms of Settlement conferred personal releases or release benefits on the Medicina Parties, including releases extending to related bodies corporate, associated entities, officers, agents, employees and assigns.

(5)    The Terms of Settlement conferred on NHB and Finn commercial benefits and advantages, including the cessation by the settling defendants of veterinary compounding, the referral of customers and enquiries to NHB and the removal of competing services.

(6)    The Terms of Settlement provided for the permanent prohibition of Mr Corry’s access to Medicina’s premises, and for the delivery up, deletion or destruction of documents and devices belonging to him on terms not disclosed to him before he acted on the representations.

40    Mr Corry pleads that he agreed to, and did, resign as managing director of Medicina, transfer his shares for nil consideration and forgive the debts owed to him by Medicina in reliance on the false impression that he had as a consequence of the representations that were made to him and the nondisclosure of the Undisclosed Matters.

41    Mysteriously, the first time that the Heads of Agreement is mentioned in the voluminous papers relied on before me (by way of example, Mr Corry relies on six affidavits with exhibits) is in the 10 June 2026 version of his cross-claim. Also, the Heads of Agreement is not included in those papers. However, on the hearing of Mr Corry’s application following questions from me, Mr Corry tendered the Heads of Agreement with no objection by Mr Tao of counsel who appeared for the respondents.

42    The Heads of Agreement records that it was executed on 5 June 2019, ie the same date as the Terms of Settlement. It also records that it is binding between the parties to it. It was signed by a solicitor on behalf of Mr Corry and his two companies. It is also signed by a solicitor on behalf of the Medicina Parties. It relevantly records that the Medicina Parties, Mr Corry and Mr Corry’s companies had agreed to settle the first cross-claim and the second cross-claim on the basis that:

(1)    Mr Corry would resign as a director of Medicina;

(2)    Mr Corry would not attend the premises of Medicina without the consent of Messrs Singh, Goradia or Ghaly;

(3)    Mr Corry would effect a transfer of his shares in Medicina so as to transfer 13 shares to Mr Singh, 13 shares to Mr Goradia and 14 shares to Mr Ghaly; and

(4)    Mr Corry and his companies thereby released and forever discharged the Medicina Parties “from any and all claims (in the broadest possible term) they may have against any of them whether known or unknown, directly or indirectly in connection in any way with Medicina or the Proceedings”.

43    By the Heads of Agreement, the Medicina Parties released and discharged Mr Corry and his companies from any claims against them “directly or indirectly in connection, in any way, with the Proceedings and/or Corry’s role as director of Medicina”.

A claim deserving to be finally determined?

44    There are difficulties with Mr Corry’s cross-claim against NHB and Finn.

45    The most obvious difficulty is that it depends on him having concluded the settlement with the Medicina Parties on 5 June 2019 (as reflected in the Heads of Agreement) on an understanding that the Medicina Parties were obliged to pay $1 million to settle the Supreme Court proceeding whereas in fact they paid, or were obliged to pay, a much lesser amount. The Terms of Settlement demonstrate that they were obliged to pay $1 million. There was consequently no misleading or deceptive representation or nondisclosure with regard to that issue.

46    Mr Corry says (from the Bar table) that he was still misled because he has obtained bank statements from Medicina under subpoena in the Supreme Court proceeding which reveal that Medicina paid only about $100,000. Not only is there no evidence of that, but it in any event proves nothing. The Terms of Settlement made the Medicina Parties jointly and severally liable for the payment of $1 million. That is consistent with the representation that Mr Corry pleads, ie that the “settling defendants” would have to pay that sum. It may be that only $100,000 was paid by Medicina itself and that the balance was paid by the other Medicina Parties. Indeed, it does not really matter who paid, or if any amount was paid. The claim cannot succeed on the basis that the Terms of Settlement were not fulfilled, only that they were misrepresented. They were not misrepresented.

47    In any event, NHB and Finn have tendered an extract from Finn’s general ledger which shows that $1 million was paid to it pursuant to the settlement. The sum of $300,000 was paid on 2 July 2019 and $100,000 was paid early in each of the following seven months. Those payments closely accord with the Medicina Parties’ obligations to pay under the Terms of Settlement. There is accordingly no basis to conclude that the settlement was not performed in that respect.

48    Another difficulty with Mr Corry’s claim is to sheet it home to NHB and Finn. It is not pleaded that Mr Bova made the relevant representations to Mr Corry. Rather, it is pleaded that the Medicina Parties made the representations and that Mr Bova’s liability arises from his failure to disclose the Undisclosed Matters to Mr Corry before he concluded the Heads of Agreement. Mr Corry has not pleaded, or adduced any evidence, to form a foundation from which it might be concluded that Mr Bova had any obligation to inform Mr Corry of the matters that Mr Corry says he should have been informed of.

49    In that regard, two settlements were reached at or immediately following the mediation, one between Mr Bova’s interests and the Medicina Parties and the other between the Medicina Parties and Mr Corry’s interests. From Mr Corry’s evidence it is apparent that the negotiations were undertaken and the settlements were concluded independently. In those circumstances it is hard to imagine how Mr Bova may have been under an obligation to disclose certain matters to Mr Corry in the negotiations that Mr Corry undertook with the Medicina Parties which led to the Heads of Agreement. It is not pleaded, let alone proved, how it might be that Mr Bova was aware, or ought to have been aware, that misrepresentations (by commission or omission) were being made to Mr Corry or that Mr Corry was about to conclude a settlement on the basis of a false or mistaken impression or understanding.

50    Another difficulty is that the key matter on which Mr Corry now relies, being that Medicina contributed only $100,000 in satisfaction of the Terms of Settlement, did not arise until after the conclusion of the Heads of Agreement. Mr Bova could not have known about something which occurred only after the Heads of Agreement were concluded before they were concluded. I am also not satisfied that had Mr Corry been informed of the remaining Undisclosed Matters, that could reasonably have led him to take a different stance in settling the claims against him.

51    There is also difficulty with being able to conclude that Mr Corry suffered any loss, or that he suffered a loss that exceeds the judgment debt underlying the bankruptcy notice. First, he pleads a counterfactual on a “no transaction” basis. He says that had the Undisclosed Matters been disclosed to him before he signed the Heads of Agreement and performed his obligations under it, he would not have executed the Heads of Agreement or have performed those obligations. But that would have left him in a situation where he still faced the cross-claims that were settled in the Heads of Agreement. That may have left him far worse off than he was having concluded the settlement. He has not sought to prove that he was worse off, or by how much, by taking into account the value to him of the cross-claims against him having been settled.

52    Mr Corry also pleads a counterfactual on a “different transaction” basis. He says that but for the nondisclosures he would have concluded a settlement on materially different terms preserving his shareholding, the debts owed to him, his management role and his access to Medicina’s business, or on the basis that required him to contribute no more than his proportionate share of the approximately $100,000 borne by Medicina. The principal difficulty with that, aside from the speculation as to whether the Medicina Parties would have agreed to such a settlement, is that it is built on the false premise as to the $100,000; Medicina’s settlement obligation was $1 million. Given his conduct in breach of the delivery-up orders and the search orders and his contempt of court, Mr Corry was always in a weak position in negotiating a settlement. There is no basis on which it might reasonably be found at trial that his “different transaction” might have eventuated.

53    It is to be observed that Mr Corry has set out on affidavit on several occasions what he says occurred at the mediation and what he did as a consequence thereof. He has also sought to plead those matters on several occasions. There are factual differences and inconsistencies between those various versions, perhaps most significantly the failure to mention the Heads of Agreement until the latest iteration of the cross-claim. Even in the hearing, Mr Corry initially told me that only he had executed the Heads of Agreement but later he tendered the document which shows that it was also executed by the Medicina Parties, that it was signed for him by his solicitor and that in it he acknowledges that he entered into it with the benefit of legal advice. He also sought to bring NHB and Finn into the cross-claim only after he had been served with the bankruptcy notice – indeed, only after the registrar had dismissed his application to set aside the bankruptcy notice. The point I make is that all of that is indicative of someone in a corner searching around for a claim, rather than of a claim anxious to be discovered.

Disposition

54    In the circumstances, I am satisfied that Mr Corry does not have a bona fide or genuine claim. It is at best highly speculative and has poor prospects. It is not a claim that is deserving of being finally determined. There is no reason to exercise the discretion other than to dismiss the challenge to the bankruptcy notice. His application to review and set aside the orders of the registrar must accordingly be dismissed.

55    Mr Corry seeks, in the alternative, that the time for compliance with the bankruptcy notice be extended to 21 days after the determination of his cross-claim in the Supreme Court. That relief must be dismissed for the same reasons.

56    There is no reason why Mr Corry should not be ordered to pay the costs of his interim application. He rightly offered no submission against that course.

Associate:

Dated:    18 June 2026