Federal Court of Australia

Kasaragh Investments Pty Ltd as trustee for the Kasaragh Investment Trust v Enablo Pty Limited (No 2) [2026] FCA 1528

ORDERS

THE COURT ORDERS THAT:

1.    Paragraphs 1 and 2 of the originating process filed on 28 February 2025 be dismissed.

2.    The plaintiff pay the first defendant’s costs of and incidental to paragraphs 1 and 2 of the originating process, as agreed or taxed, forthwith.

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

REASONS FOR JUDGMENT

GOODMAN J:

A.    Introduction

1    These reasons for judgment address questions of the relief necessary to give effect to Kasaragh Investments Pty Ltd as trustee for the Kasaragh Investment Trust v Enablo Pty Limited [2026] FCA 1009 (Kasaragh (No 1) or J), and costs. Some familiarity with Kasaragh (No 1) is assumed and the definitions used therein have been adopted.

2    As explained at J[42] the principal orders sought by Kasaragh in its originating process are:

1.    Pursuant to section 237 of the Corporations Act, an order that [Kasaragh] be authorised, or alternatively granted leave, to institute proceedings in the name and on behalf of [Enablo].

2.    Pursuant to section 247A(1) and (3) of the Corporations Act, an order authorising [Kasaragh] to inspect the books of [Enablo] and/or its agents to inspect the books of [Enablo] on [Kasaragh’s] behalf.

3.    Pursuant to section 1322(4)(b) of the Corporations Act, an order that ASIC be directed to rectify its registers to record that [Kasaragh] holds 15,000 fully paid ordinary shares in [Enablo].

4.    A declaration that the affairs of [Enablo] are being conducted, further or alternatively that the acts or omissions on behalf of [Enablo], are oppressive to, or unfairly prejudicial to, or unfairly discriminatory against [Kasaragh] pursuant to section 232 of the Corporations Act.

5.    Such further orders as the Court considers appropriate in order to address such oppression as is found in respect of [Enablo] under prayer 4 above.

6.     Further or in the alternative, a declaration that on or around 15 February 2025, [Mr Hackett, Ms Hackett, Sonix Investments, Jaxma, Mr Gil and Mr Cohn] breached the Shareholders Agreement dated 14 October 2022.

3    In Kasaragh (No 1), I noted that prayers 1 and 2 had been listed for hearing but only prayer 2 was pursued at the hearing (J[43] to [44]). I also concluded that prayer 2 should be dismissed (J[112]).

4    It is common ground that prayer 2 should be dismissed, with costs. The parties are at issue as to whether prayers 1 and 3 should be dismissed; and as to the nature of the costs order or orders to be made.

5    For the reasons developed below, prayers 1 and 2 should be dismissed, with the costs of and incidental to those prayers payable forthwith on a party and party basis.

B.    prayer 1

6    The parties are at issue as to whether prayer 1 should be dismissed. In order to determine this issue, it is necessary to set out aspects of the procedural history concerning that prayer.

7    On 21 March 2025, Justice Stewart made orders for the filing and service of evidence concerning prayers 1 and 2.

8    On 19 May 2025, I made orders by consent for the filing and service of written submissions, the preparation of a joint court book and for the allocation of a hearing date, all with respect to prayers 1 and 2.

9    On 30 May 2025, further orders were made by consent, extending the timetable set by the 19 May 2025 orders. Again, the orders contemplated that prayers 1 and 2 would be prepared and heard together.

10    On 4 June 2025, Kasaragh filed its written submissions in chief, which addressed only prayer 2.

11    Enablo, in its written submissions filed on 18 June 2025, took issue with the failure of Kasaragh to advance any submissions with respect to prayer 1 in circumstances where prayers 1 and 2 had been set down for hearing together and were, it was contended, inextricably linked. Kasaragh, in its written submissions in reply, reiterated the position taken in its submissions in chief, namely that it was moving only on prayer 2, but included detailed submissions (of 26 paragraphs) setting out a fallback position that s 237 of the Act was satisfied in the event that the Court were to decide to determine prayer 1.

12    At the hearing, the following exchanges occurred with respect to prayer 1.

13    During opening:

(1)    counsel for Kasaragh indicated that she was moving on prayer 2; and

(2)    counsel for Enablo stated:

Both prayers 1 and 2 are set down for hearing today. So it seems to be – it seems to – what flows from what my learned friend has said that there’s – paragraph 1 or prayer 1 is no longer pressed, or they may be hidden in – all that your Honour has heard – an application to stand that application over. If that be the true intention, then that should be made clear - - -

14    The following exchange then occurred:

MS BUNCLE: It has been made clear.

MR HASTIE: - - - it will be opposed. If I could just take your Honour to some of the brief procedural history.

HIS HONOUR: I’m familiar with the orders that Stewart J made.

MR HASTIE: Yes, and your Honour made, as well. And indeed, the most recent of the orders your Honour made was extending some dates on 30 May, which included a requirement that my learned friends put their submissions on in support of both applications by 4 June. So just four days after your Honour’s order was made. And of course, the submissions which were ultimately received, in chief, from my friends don’t address the application, at all.

HIS HONOUR: Yes.

MR HASTIE: So I hear – sort of ..... that it has been made clear. Well, that’s respectfully not correct. There has been - - -

HIS HONOUR: I think what has been made – well, relatively clear to me, is that the prayer 1 is not pursued today. What is not clear is what its ultimate status is. Whether it’s abandoned. Whether it’s to be put over to another day. Or whether it’s to be the subject of some further application. I’m just not clear on that.

MR HASTIE: Nor am I, with respect, your Honour. If it be that it’s abandoned, well, that’s fairly straightforward. If it be that it – there’s an application to stand it over for another day, then I wish to be heard on that.

HIS HONOUR: Yes.

MR HASTIE: Whilst I – I will let my learned friend address that in a moment …

15    In submissions in chief, counsel for Kasaragh submitted:

MS BUNCLE: ... Today, the application is, as your Honour knows, under 247A. And for the purposes of that application, there is a question as to whether or not we are eligible to seek leave under 237. That is the application as before your Honour today. My friend wants to put on 237 today because, currently, my client doesn’t have enough information to file a statement of claim. And it’s asking us to satisfy the matters in 237(2) in the absence of that information. Now, as I’ve said in my reply submissions, your Honour, asking us to do that today is asking us to fight with one hand tied behind our back.

HIS HONOUR: Yes. I – from my perspective, it’s a matter for you.

MS BUNCLE: Well, correct, your Honour. It is a matter for – exactly.

HIS HONOUR: The question is the consequences.

MS BUNCLE: Correct, your Honour. Now, I’ve taken your Honour through these submissions to identify that my friend has been on notice since we put our arguments on this application that we were seeking leave under 247A. He wants to push us on today for 237 for the reasons that your Honour is aware of because, strategically, it makes sense for him to do that. But the reality is that’s not the application that I’m moving today, and it’s not a relevant consideration for your Honour.

I accept if it’s coming to the question of costs, but there should be no issue of costs because my friend has been on notice of the fact this was the only application that was being pressed today, and so there’s no cost thrown away by having them prepare for 237 when there was no need to prepare for such an application in that way. Now, I can take your Honour through the legislation now, but there is no basis for us to be arguing the matters in 237 subsection (2) on the issues that would usually arise in a leave application. I accept that there’s overlap. But that application will come later once we have access or if we get access to these documents.

16    In his submissions in chief, counsel for Enablo submitted:

(1)    at T45.35 to 46.7:

I will return at the end to the mystery that still surrounds the application under section 237. I think it emerged, although my learned friend didn’t directly answer your Honour’s question, that what they intend to do is to apply to stand over that application. But of course, no application has been made, whether orally or otherwise, for that to occur, and I will address what I say the consequences of that should be at the end. The short point being this, is that my learned friend seeks to reinvent history to a large extent, to ignore the fact that orders were made by consent by Stewart J that the two applications would be heard and determined together. Orders were made by consent by your Honour that the two applications would be set down together. Orders were then made by consent extending the dates for the submissions on both applications to be delivered, and within a few days, the plaintiff delivers its submissions which say nothing about the section 237 application. What is it that they’re not telling the first defendant? What is it that they’re not telling the court about their mental processes here and the forensic choices that have been made? Because the one thing my learned friend couldn’t take your Honour to was any suggestion, formally or otherwise, that there was going to be an application to stand over this application or that the plaintiff had rethought the position which was previously by consent that the two applications would travel together. So I will return to all of that and what I respectfully say it means in the end. ; and

(2)    at T72.41 to 73.2:

Finally, then, that leaves us with the section 237 application which was set down for hearing today. There has been no application, even now, for that application to be stood over. There’s no reason why the court – I have come ready to deal with it. The directions require the parties to come ready to deal with it and in all those circumstances should be dismissed with costs. Now, if there’s an application brought at a later stage for a further grant of leave under section 237, well, there can be an argument about that at the time, but there’s no reason why the court shouldn’t deal with that application.

17    In reply, counsel for Kasaragh stated:

(1)    at T73.20 to 36:

MS BUNCLE: Your Honour, a large part of my learned friend’s submissions over the course of this afternoon were in relation to section 237 of the Corporations Act. We accept that those matters are relevant under that application, as in we accept that at the time that we bring the application under section 237 that your Honour would have to be satisfied of the matters under subsection (2) in order to grant my client leave to bring any derivative proceedings. But it would be premature to determine those matters on this application under section 247A in the absence of my client having had the benefit of the documents that we are seeking under this application to properly assess the draft statement of claim and the matters that it wishes to bring.

As I said at the outset of my submissions this morning, my client requires those documents in order to properly assess the derivative claims that it wishes to bring. What we have to do is to make out a case for investigation. And I will come to what my learned friend addressed your Honour on a moment ago. It is – earlier this morning, as your Honour knows, I took your Honour to each of the categories in the summary of categories and evidence, which are the categories of documents that my client seeks. ;

(2)    at T74.7 to 20:

... A large part of my friend’s submissions also centred upon the alleged lack of strength of the claims in the draft statement of claim. But the way that that was framed, once again, was within an application under section 237, which is not the application that’s before your Honour. The statement of claim is in draft. And we have acknowledged, as I’ve said from the outset, that we require further information before filing that draft statement of claim.

To require the plaintiff – the applicant – to ask – to argue section 237 before the section 247A application is determined would be to shut my client out from filing its draft statement of claim and the matters that it’s alleging, because it needs these documents to form a proper assessment of the derivative claims. It has pleaded as best it can to demonstrate the good faith and proper purpose for which the plaintiff is seeking to bring these proceedings. But as is in many cases often sought, there is an application first under section 247A, and a 237 application will follow. … ; and

(3)    at T78.31 to 42:

In relation to the indemnity, it would be premature and unfair to require the applicant today to have to assess the scope of an indemnity prior to being provided access to the books that will support any claim as outlined in the draft statement of claim. If my client was required to even consider providing an indemnity at this juncture, it would prevent him from being able to properly assess the risks of the derivative claim and becoming liable under any kind of indemnity. And so we would say that the proper assessment of that indemnity would occur once the draft statement of claim is finalised and filed, at which point, the section 237 application would be made, and my client would, on the authorities, have to consider an indemnity and the scope of it and its form. …

18    I am satisfied that prayer 1 should also be dismissed, for the following reasons.

19    First, as noted above, prayer 1 was set down for hearing together with prayer 2. Kasaragh was required by s 37N of the Federal Court of Australia Act 1976 (Cth) (FCA Act) to conduct the proceeding in a manner consistent with the over-arching purpose described in s 37M of the FCA Act of facilitating the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.

20    In the present context, the over-arching purpose required Kasaragh to act in accordance with the orders that had been made by consent, and subsequently re-affirmed by consent, for the hearing of prayer 1 to occur together with the hearing of prayer 2; and if a different course was proposed, then to bring such a proposal to the attention of the Court and Enablo at the earliest opportunity.

21    Kasaragh did not do so, and instead filed submissions which addressed only prayer 2. When Enablo, in its written submissions, took issue with the failure of Kasaragh to advance submissions in support of prayer 1, Kasaragh indicated in its reply submissions it was moving only on prayer 2, but added a detailed fallback position in case the Court were to decide to determine prayer 1. After the Court indicated that the decision whether to move on prayer 1 was a matter for Kasaragh and not the Court, Kasaragh did not move on prayer 1.

22    Secondly, Kasaragh did not seek an adjournment of the hearing of prayer 1. Necessarily, there was no hearing of any application for an adjournment.

23    Thirdly, I do not accept Kasaragh’s submission that prayer 1 should be heard and determined only when it formally seeks a hearing date to move on that prayer and that it would be prejudiced by the dismissal of prayer 1 in circumstances where it has not had the opportunity to move on that prayer with the benefit of a finalised statement of claim directed to the criteria set out in s 237(2) of the Act. That submission ignores the procedural steps outlined above and in particular that a hearing date for prayer 1 was provided (and confirmed by subsequent consent orders adjusting the timetable for that hearing).

24    In circumstances where Kasaragh chose not to use the time that the Court had allocated for the hearing of its application with respect to prayer 1 and did not seek an adjournment of that hearing, it should be taken to have abandoned that prayer.

25    Kasaragh should pay Enablo’s costs relating to prayer 1. In this regard, I do not accept Kasaragh’s submission that Enablo was on notice from Kasaragh’s written submissions in chief that Kasaragh would not move on prayer 1 at the hearing and that any costs that Enablo incurred with respect to prayer 1 after receiving those submissions were incurred at its own election and in circumstances where it knew Kasaragh’s position. That submission does not fit with the events recounted above, including the purported reservation by Kasaragh of prayer 1 in the event the Court wished to deal with it and the detailed submissions concerning prayer 1 in its reply submissions.

26    Enablo seeks such costs on an indemnity basis. This is dealt with at E. below.

C.    prayer 2

27    As noted above, it is common ground that prayer 2 should be dismissed.

28    Kasaragh accepts that it is liable to pay Enablo’s costs in relation to prayer 2 on a party and party basis. Enablo seeks costs on an indemnity basis. This is also dealt with at E. below.

D.    Prayer 3

29    Enablo submitted that prayer 3 should be dismissed as inutile. I disagree. Conceivably, relief in that form may be available if the oppression action described in prayer 4 were to succeed. Further, prayer 3 was not set down for hearing and no argument was addressed to that prayer.

E.    SHOULD costs BE payable on the indemnity basis?

30    Enablo seeks its costs of prayers 1 and 2 on the indemnity basis.

31    In support of its application for costs on the indemnity basis with respect to prayer 1, Enablo submitted that:

(1)    the Court listed prayer 1 to be heard together with prayer 2, because they were inextricably linked;

(2)    the prayer 2 application relied upon the veracity of the prayer 1 application to establish that a relevant cause of action existed;

(3)    having abandoned prayer 1 before the hearing, Kasaragh conceded that the application had poor prospects of success;

(4)    had Kasaragh pressed on with the prayer 1 application then both applications would have failed;

(5)    the inference to be drawn from the refusal to move on the prayer 1 application is that such a refusal was strategic. Faced with the conundrum that the draft statement of claim contained nothing to support the prayer 1 application, the decision not to move on prayer 1 was in effect an attempt to draw attention away from that glaring deficiency and to seek to rely on the existence of that application to engage the power in s 247A of the Act. That is, Kasaragh was seeking to avoid a decision being made on the prayer 1 application which it knew, based on the draft statement of claim, would fail; and

(6)    as Kasaragh knew that its application under prayer 1 would fail, that application was futile and costs should be paid on the indemnity basis.

32    In support of its application for costs on the indemnity basis with respect to prayer 2, Enablo submitted that:

(1)    on 21 March 2025, the Court made orders for Kasaragh to deliver a draft statement of claim detailing the derivative action for which it sought leave under s 237 of the Act;

(2)    on 17 April 2025, Kasaragh delivered that statement of claim. It was obvious on the face of that document that the causes of action pleaded were causes of action available to Kasaragh qua shareholder and were clearly not causes of action available to or for the benefit of Enablo;

(3)    in order to succeed on its prayer 2 application, Kasaragh had to show that that application had been brought in good faith and connected to an application for leave under s 237 of the Corporations Act. There was nothing in Kasaragh’s draft statement of claim or its submissions which substantiated why proceedings relating to a breach of the shareholders agreement or the decision to sell the Kasaragh shares would benefit Enablo and attract leave;

(4)    the Court came to the same conclusion;

(5)    properly advised, Kasaragh ought to have known that the application under prayer 2 was doomed to fail. The respondent spelt out that position in its solicitors’ emails dated 28 February 2025, 21 March 2025 and 18 April 2025; and

(6)    as a result, costs should be payable on the indemnity basis.

33    I am not persuaded that an award of costs on the indemnity basis is justified with respect to either prayer 1 or prayer 2. I accept that Kasaragh’s position with respect to both prayers 1 and 2 was weak, but I am not satisfied that those positions were so untenable or doomed to fail that Enablo’s costs should be payable on the indemnity basis.

F.    Should costs be payable forthwith?

34    Enablo also seeks an order that its costs be paid forthwith.

35    Rule 40.13 of the Federal Court Rules 2011 (Cth) provides that if an order for costs is made on an interlocutory application, the party in whose favour the order is made must not tax those costs until the proceeding in which the order is made is finished. The Court has a discretion to make an order dispensing with r 40.13: see rr 1.34 and 1.35. In Watson v Kriticos (Costs Payable Forthwith) [2022] FCA 4, Perram J explained at [6]:

The principles governing the exercise of the discretion are similarly well-established. As a general proposition, the discretion should be exercised in favour of a party who establishes that the demands of justice require a departure from the ordinary rule embodied in r 40.13: FKP v Spirits at [7]; Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297 at 312 per Olney J. Always to be borne in mind, however, are the twin policy considerations underpinning r 40.13: first, that it is generally undesirable that the parties should be exposed to multiple taxation processes during the life of one proceeding; and second and relatedly, that during the balance of the litigation, costs orders may be made in the opposite direction which will normally be capable of being set-off against earlier costs orders.

(italic emphasis in original)

36    At [7], his Honour provided a series of examples of circumstances which may justify a departure from the usual position. Similar groupings of such examples may be found in, e.g., Fiduciary Ltd v Morningstar Research Pty Ltd [2002] NSWSC 432; (2002) 55 NSWLR 1 at 4 to 5 ([11] to [13]) (Barrett J, as his Honour then was); Pavlovic v Universal Music Australia Pty Ltd (No 2) [2016] NSWCA 31 at [15] (Bathurst CJ, Beazley P and Meagher JA) Stone v Melrose Cranes & Rigging Pty Ltd, in the matter of Cardinal Project Services Pty Ltd (in liq) [2016] FCA 1113 at [55] (Markovic J); and Richmond v Ora Gold Limited [2020] FCA 70 at [33] (Colvin J).

37    As the Court of Appeal of the Supreme Court of New South Wales explained in Pavlovic at [16] to [18] with respect to an analogous rule, the discretion is broad, albeit it must be exercised judicially.

38    In the present case, I am persuaded that the demands of justice require a departure from the ordinary rule embodied in r 40.13, such that Enablo’s costs should be payable forthwith, for the following reasons.

39    First, the orders to be made with respect to prayers 1 and 2 represent the determination of discrete aspects of the proceeding (cf. Fiduciary at 4 [11]).

40    Secondly, for the reasons set out at [19] to [22] above, Kasaragh has engaged in some conduct that may be seen as unreasonable (cf. Fiduciary at 5 [12]).

41    Thirdly, the proceeding is still in its infancy and thus a final determination may be some time away (cf. Fiduciary at 5 [13]).

42    Finally, I have taken into account the policy considerations underpinning r 40.13 but consider that the above factors require that the discretion be exercised in the present case so that the costs are payable forthwith.

G.    conclusion

43    For the foregoing reasons, prayers 1 and 2 should be dismissed, with the costs of and incidental to those prayers payable forthwith on a party and party basis. I will make orders accordingly.

Associate:

Dated:    15 October 2026

SCHEDULE OF PARTIES