Federal Court of Australia

Marlton Investments Pty Ltd v Villawood Management Pty Ltd [2026] FCA 1613

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to r 2.4 of the Federal Court (Corporations) Rules 2000 (Cth), the plaintiffs have leave to file and serve a statement of claim substantially in the form handed up at the hearing on 21 September 2026, save for paragraphs 45, 46, 51, 52(a)(i), and 54(k).

2.    The plaintiffs pay the costs of the application for leave to file a statement of claim filed on 1 July 2026.

3.    The further hearing of the interlocutory application filed on 1 July 2026 be adjourned to a date to be fixed.

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

REASONS FOR JUDGMENT

O’CALLAGHAN J:

1    This is an interlocutory application (application) filed on 1 July 2026 by the plaintiffs, Marlton Investments Pty Ltd as trustee for the Anthony Johnson Family Trust and Calibre Holdings Pty Ltd (collectively, the plaintiffs), seeking leave to:

(1)    file and serve an amended originating process pursuant to r 8.21(1) of the Federal Court Rules 2011 (Cth);

(2)    file and serve a statement of claim substantially in the form handed up at the hearing on 21 September 2026, pursuant to r 2.4 of the Federal Court (Corporations) Rules 2000 (Cth) (the draft SOC); and

(3)    join 17 additional defendants, pursuant to r 9.05 of the Rules.

2    There was no objection to (1), subject to the determination of (3), and the parties agreed that (3) should be deferred until after determination of (2), which is the subject of these reasons.

3    This is an oppression proceeding, commenced in December 2024, and seeks relief under s 233 of the Corporations Act 2001 (Cth).

4    The plaintiffs are shareholders of Villawood Management Pty Ltd (VM), the first defendant. The plaintiffs are owned and controlled by Mr Johnson.

5    VM is engaged in business as a manager and developer of residential property developments. It is principally owned by entities controlled by Messrs Costelloe, Johnson, Duster, Strano and Lockwood, whom the draft SOC calls “the Core Owners”.

6    Mr Costelloe controls the second and third defendants. Mr Strano controls the fourth and fifth defendants. Mr Lockwood controls the sixth and seventh defendants. Mr Duster controls the eighth defendant. The ninth defendant has a small percentage of shares in VM and is not owned by a Core Owner.

7    The proposed tenth defendant, Sandhurst Capital Pty Ltd, is what Mr Graham called the “finance arm”. It is also owned by entities controlled by those same gentlemen. The proposed eleventh defendant, Sandhurst Retail & Logistics Pty Ltd (SRL), was the manager of industrial property developments.

8    VM is governed by a constitution, and by a shareholder deed between it and its shareholders dated 16 January 2016. SRL is governed by a constitution, and by a shareholder deed between it and its shareholders dated 2 April 2022. Sandhurst is governed by the terms of its constitution.

9    The oppression proceeding arises out of what the draft SOC calls an irretrievable breakdown in the relationship between Mr Johnson and the other Core Owners.

10    The oppression proceeding is being case managed and heard together with six other related proceedings in my docket, being:

(a)    five proceedings issued by VM and entities related to it (VM Parties) against Johnson and entities related to him, including Marlton and Calibre (Johnson Parties), being: proceeding no. VID640 of 2024 (called the Marriott Waters Proceeding); proceeding no. VID653 of 2024 (called the Wallan Proceeding); proceeding no. VID929 of 2024 (called the Langwarrin Proceeding); proceeding no. VID1113 of 2024 (called the Baxter Proceeding); and proceeding no. VID794 of 2025 (called the Vearings Lane Proceeding) (together, the VM Proceedings); and

(b)    proceeding no. VID1196 of 2024 (called the Zimmermann Proceeding), issued by Zimmermann Vearings Pty Ltd, which is an entity controlled by Mr Johnson,

(together, the Proceedings).

11    The parties agree that it is desirable to have the oppression proceeding proceed by way of pleadings. The defendants oppose only particular paragraphs of the draft SOC.

12    At the outset of the hearing, senior counsel for the defendants said that paragraphs 45, 46, 51, 54(k), 54(l) and Annexure A of the draft SOC were objected to. Later in the hearing it transpired that paragraph 52(a)(i) was also opposed.

13    Paragraph 49 of the draft SOC, which is not objected to, was said to be a “roadmap” to the alleged oppressive conduct. It alleges:

[49]    Further, since at least March 2024, in the circumstances described further below in this statement of claim:

(a)    there has been a breakdown in the relationship between Johnson and the Majority Core Owners such that the relationship is now characterised by distrust and acrimony;

(b)    there have been disputes between Johnson, on the one hand, and the Majority Core Owners, on the other, in connection with VM, Sandhurst Capital and SRL and their related entities, including in respect of the matters referred to at sections E to K below;

(c)    in their dealings with Johnson and his related entities in relation to VM, Sandhurst Capital, SRL and their related entities, the Majority Core Owners have acted in concert and have voted as a bloc, both in their individual capacities and as shareholders through their related entities, including in respect of the matters referred to in subparagraph (e) below;

(d)    Johnson has ceased to be a director of VM, SRL and some related companies, and the Majority Core Owners have sought his removal as a director of Sandhurst Capital and other companies, as referred to in section D below;

(e)    the Majority Core Owners have exercised their power as a majority so as to:

(i)    issue default notices under the VM Shareholder Deed and pursue the forced acquisition of Johnson’s shareholdings in VM at a discount, as referred to in section E below;

(ii)    pursue a litigation strategy against Johnson and his related companies and parties, as referred to in section F below;

(iii)    facilitate Costelloe’s appropriation of valuable intellectual property of VM, in breach of Costelloe’s duties to VM, as referred to in section G below;

(iv)    appropriate for themselves the Jimboomba Opportunity (a valuable commercial opportunity of Sandhurst Capital, as described further below), in breach of their duties to Sandhurst Capital, as referred to in section H below;

(v)    use Sandhurst Capital funds for their own benefit so as to acquire the Wallan Property and pursue the acquisition of the Jimboomba Opportunity, in breach of their duties to Sandhurst Capital, as referred to in section I below;

(vi)    restrict or refuse Johnson’s access to information about the business and affairs of VM, Sandhurst Capital, SRL and their related companies, as referred to in section J below;

(vii)    make significant business and investment decisions without proper notice or recourse to Johnson and/or contrary to his wishes, as referred to in section K below; and

(f)    the Foundational Understanding has broken down, and the Legitimate Expectation is being denied by the Majority Core Owners, as referred to in section L below.

The “Foundational Understanding” and the “Legitimate Expectation”

14    Paragraphs 45 and 46 of the draft SOC must be read together.

15    Paragraph 45 states:

[45]    At all relevant times until the events described in section C to K below, the five Core Owners established and operated VM, Sandhurst Capital and SRL upon a common understanding that the Core Owners would:

(a)    cooperate and engage in business together in mutual trust and confidence; and

(b)    jointly participate in the management of the companies in accordance with the Legitimate Expectation pleaded in paragraph 46 below; and

(c)    not make or proceed to implement any significant business and investment decisions against the expressed wishes of any one of the Core Owners,

(the Foundational Understanding).

PARTICULARS

The Foundational Understanding arises and is to be inferred from:

(i)    the conduct of the Core Owners in attending and participating in meetings of the boards of VM, Sandhurst Capital and SRL since the times those companies were established and came to be owned (or principally owned) by the Core Owners; and

(ii)    the practice during those times (until the events described below) whereby the Core Owners made significant business and investment decisions by agreement reached between the Core Owners through discussions in the said meetings or in other communications, and they did not proceed with a significant business decision or investment proposal against the wishes or objection of any one of the Core Owners.

The significant business and investment decisions included, for example: establishing and reviewing the strategy for VM and Sandhurst Capital; the decision to establish SRL and establishing and reviewing the strategy for that company; a decision whether to acquire a property; a decision whether to sell a property; a decision whether to invite investors to participate in a project – and, if so, who and in what proportions; a decision whether to obtain external funding from lenders – and, if so, from whom and on what terms; a decision whether to refinance existing facilities; and a decision whether to appoint or remove key personnel.

16    Paragraph 46 states:

[46]    Further, at all relevant times:

(a)    each of the Core Owners has had a legitimate expectation that he will participate in the management of VM, Sandhurst Capital and SRL in that:

(i)    he would hold the position of, and exercise all rights, powers and obligations attaching to, the office of a “Director” of the company;

(ii)    alternatively to (i), he would be entitled to appoint any person of his choosing to hold the position of, and exercise all rights, powers and obligations attaching to, the office of a “Director” of the company;

(iii)    he and/or his nominee would be provided with reasonable notice of the nature and content of any decision to be made by the Directors of the company;

(iv)    he and/or his nominee would be provided with a reasonable amount of information to enable him properly to form a view, and to make a decision, in relation to any matter requiring a decision to be made by the Directors of the company;

(v)    he and/or his nominee would be provided with access to accurate information concerning the affairs, financial performance and activities of the company; and

(vi)    he and/or his nominee would be given notice and information concerning strategic decisions concerning the company, including when opportunities would be diverted from those entities or loans would be provided or obtained,

(the Legitimate Expectation); and

(b)    it would be unfair to Johnson and his shareholder entities if the Legitimate Expectation was denied.

PARTICULARS

The Legitimate Expectation arises from:

(a)    the conduct and practice referred to in the preceding paragraph (and the particulars thereto);

(b)    the practice whereby the Core Owners were either appointed as directors of VM, Sandhurst Capital and SRL or they could appoint a director to those entities should they wish;

(c)    Johnson’s appointment and roles as a director of VM, Sandhurst Capital, SRL and related entities trading under or employing the name “Villawood Properties”, including his role in identifying and bringing relevant property investment opportunities to VM, Sandhurst Capital and SRL (as referred to in paragraph 44 above);

(d)    Johnson’s subscription of capital (through Marlton Investments and Calibre) in each of VM, Sandhurst Capital and SRL.

17    Mr Graham summarised the effect of those two paragraphs in his oral submissions as follows:

[I]n a practical … sense we say, well, they wouldn’t make or proceed to implement any significant decisions against the expressed wishes … of any one of the [C]ore [O]wners. And that’s in a context where they all had a legitimate expectation that they could participate and be informed [Tr page 12].

18    The plaintiffs submitted that the “Foundational Understanding” and the “Legitimate Expectation” comprised a common understanding that had underpinned the operation of the companies from their inception, and reflected the “quasi-partnership” type of arrangement recognised in Ebrahimi v Westbourne Galleries Ltd [1973] AC 360 and Morara Pty Ltd v Kingslane Property Investments Pty Ltd [2024] WASCA 123.

19    The plaintiffs submitted that oppression may arise where a small group operates a company on the basis of mutual trust and confidence and joint decision-making; where there is a legitimate expectation of continued participation in management; and departure from that expectation may constitute oppression even where the majority acts consistently with the company’s formal governance arrangements.

20    Whether those propositions are correct or not is not the question. The question before me is whether paragraphs 45 and 46 articulate an arguable cause of action – that is, whether the claims made have sufficient prospects of success that they would survive a strike out application, if they were allowed to be pleaded. In considering that question, it is necessary to bear in mind that the Court is not conducting a mini-trial on the merits and further, that any exercise to grant leave in relation to pleadings must be in accordance with the overarching purpose in ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth).

21    A proposed pleading may properly be rejected where it is plainly untenable or would inevitably be struck out if filed: see General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 (Barwick CJ) at 129. However, care must be taken before reaching that conclusion on an interlocutory application: cf Spencer v Commonwealth (2010) 241 CLR 118 (French CJ and Gummow J) at [24]-[25].

22    The relevant inquiry is whether paragraphs 45 and 46 disclose an arguable foundation for the oppression claim advanced.

23    The first and most fundamental problem with the proposed allegations in paragraphs 45 and 46 is that they fly in the face of the express terms by which all the Core Owners agreed to conduct their property development activities, being the shareholder deeds and constitution in the case of VM and Sandhurst, and the constitution in the case of SRL.

24    Recitals to the VM shareholder deed provide, among other things, that “[t]he Shareholders wish to regulate the management of … the Company upon and subject to the provisions of this Deed”.

25    Clause 4.9 of the VM shareholder deed provides that “[a] resolution of the Directors may only be carried if it is passed by a majority of the votes cast by Directors entitled to vote on that resolution”.

26    Recitals to the Sandhurst shareholder deed provide:

A.    The Company carries on the Business.

B.     The Shareholders collectively hold 100% of the share capital of the Company.

C.    The parties have agreed that the Company is to be owned, controlled and financed on the terms and conditions of this agreement.

27    Clause 8.11 of the SRL shareholder deed provides:

A resolution of the Directors may only be carried:

(a)    in the case of a resolution approving an action which requires special majority approval under clause 8.12, if it is passed in accordance with clause 8.12; or

(b)    in the case a resolution dealing with any other matter, if it is passed by a majority of the votes cast by Directors entitled to vote on that resolution.

28    Clause 8.12 of the SRL shareholder deed provides:

The Company must not, and each Shareholder must procure that the Company does not undertake any of the actions listed in Part 1 of Schedule 1 unless and until:

(a)    a resolution approving the specific action is passed by the affirmative vote of 75% or more of the votes cast by Directors entitled to vote on that resolution; or

(b)     all Directors sign a document consenting in writing to the Company taking the specific action

29    Sandhurst’s constitution provides under the heading “Effect of this constitution” as follows:

This Constitution shall have effect as a contract:

(a)    between the Company and each member;

(b)    between the Company and each director and Company secretary; and

(c)    between a member and each other member,

pursuant to which each member agrees to observe and perform the Rules within the Constitution so far as they apply to that member.

30    Clause 23.11 of Sandhurst’s constitution provides: “[a]ny question arising at a director’s meeting or any committee of directors is determined by a simple majority of votes of the directors”.

31    Counsel for the plaintiffs was unable to explain or even hint at why these provisions, which are wholly at odds with proposed paragraphs 45 and 46, were not and are not intended to have effect according to their (unambiguous) terms. The plaintiffs submitted that such matters should be left to be pleaded out, but I do not agree.

32    Secondly, the contention (at [45(a)] of the draft SOC) that the Core Owners would “cooperate and engage in business together in mutual trust and confidence” and the “Legitimate Expectation” plea are bald and conclusory assertions, devoid of meaning in the absence of particulars or the provision of material facts.

33    Accordingly, I will not allow paragraphs 45 and 46 of the draft SOC.

The issuing of Default Notices under the VM Shareholder Deed pleading at paragraphs 51 and 52(a)(i)

34    Paragraphs 51 and 52(a)(i) of the draft SOC state:

[51]    Since about mid-2024, during the course of the Buy-Out Negotiations between Johnson and the Majority Core Owners referred to in paragraph 48 above, the Majority Core Owners have:

(a)    issued or caused to be issued on multiple occasions documents styled as “Default Notices” under the VM Shareholder Deed (together, Default Notices) to Marlton Investments and Calibre; and

(b)    in doing so, sought forcibly to acquire Johnson’s shareholdings in VM (via Marlton Investments and Calibre) at a discount, purportedly pursuant to the VM Shareholder Deed.

PARTICULARS

The Default Notices are in writing and were issued as follows:

(i)    Costelloe and Treasure purportedly acting on behalf of VM have issued three documents styled as “Default Notices” under the VM Shareholder Deed to Marlton Investments and Calibre, dated 27 June 2024 (First Default Notice), 24 June 2025 (Second Default Notice) and 23 February 2026 (Fifth Default Notice); and

(ii)    the VM Majority Shareholders have issued two documents styled as "Default Notices” under the VM Shareholder Deed to Marlton Investments and Calibre, dated 26 June 2025 (Third Default Notice) and 22 February 2026 (Fourth Default Notice).

Each of the Default Notices seeks to invoke clauses 12 and 17 of the VM Shareholder Deed which, if given effect, would circumvent the Buy-Out Negotiations and deliver to VM and the Majority Core Owners a forced sale of Marlton Investments and Calibre’s shares in VM at a substantial discount, and the suspension of all rights attaching to Marlton Investments and Calibre’s shares in the interim.

[52]    In Federal Court of Australia proceeding no. VID640 of 2024 (Marriott Waters Proceeding):

(a)    Marlton Investments and Calibre have filed a cross-claim in which they allege inter alia:

(i)    that each of the First, Second and Third Default Notices is invalid and of no effect and ought to be set aside on various grounds (paragraphs 19 and 28) including that, in breach of a term of the VM Shareholder Deed (designated as the “Reasonableness Constraint”) VM and the VM Majority Shareholders failed to exercise the power under clause 17.4 of the VM Shareholder Deed reasonably or in good faith and/or for the purpose for which it was conferred (paragraphs 15 and 24);

35    The defendants contended that those paragraphs are deficient for a number of reasons.

36    They say that the plaintiffs do not squarely plead the facts and circumstances by reference to which the Default Notices were issued are said to be incorrect, but instead incorporate by reference what is alleged in the Marriott Waters Proceeding, namely that “VM and the VM Majority Shareholders failed to exercise the power under clause 17.4 of the VM Shareholder Deed [ie to issue Default Notices] reasonably or in good faith and/or for the purpose for which it was conferred”.

37    The defendants say that:

(1)    The plaintiffs ought squarely to say if this allegation is made in the oppression proceeding, or withdraw it.

(2)    If such a claim is being advanced, the plaintiffs ought to explain why it is that the issuing of the Default Notices constituted conduct which was unreasonable or involved a lack of good faith or was foreign to the purpose for which the power was conferred.

(3)    As part of so doing, they should plead the legitimate scope of the power and the alleged purpose for which they say it was exercised.

38    The defendants further submitted that to the extent that the allegations of a lack of good faith or acting for a purpose foreign to a power are sought to be advanced, they should be clearly made, citing by way of example Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 3) (2010) 267 ALR 494 [68]-[69] (Flick J):

[68] A pleading which alleges a particularly serious matter needs to be pleaded specifically. The example frequently given is that of fraud. …

[69] The same approach in respect to the need for specificity in pleadings has been applied in the context of misfeasance: Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1. Pleading issues were there in issue when misfeasance had been alleged as against the Bank. Lord Hope of Craighead there expressed the principle generally as follows (at [51]):

[51] On the other hand it is clear that as a general rule, the more serious the allegation of misconduct, the greater is the need for particulars to be given which explain the basis for the allegation. This is especially so where the allegation that is being made is of bad faith or dishonesty. The point is well established by authority in the case of fraud.

39    In response, senior counsel for the plaintiffs said this:

So the criticism seems to be, your Honour, that we ought to say clearly whether the allegation is made in this proceeding that the notices are invalid, but we don’t think that’s unclear, your Honour. We are not making that allegation for the purposes of this proceeding and that’s clear, I think, from our friends’ submission. So at paragraph 22 of their submissions they observe correctly that it is not contended by the Johnson parties that facts and circumstances by reference to which the [D]efault [N]otice were issued are incorrect. So that’s true. In this proceeding we are not alleging that the [D]efault [N]otices were invalid. But we are saying, we are pleading, that it is a relevant circumstance here. That those [D]efault [N]otices have been issued and are in play in the way in which we’re pleaded and that will inform the overall assessment that the court is ultimately called upon to make as to where the conduct in the aggregate is of the unfair nature.

40    I am, with respect, not altogether sure what it means to say that it is not alleged that the Default Notices were invalid, but they “have been issued and are in play” and “will inform the overall assessment that the court is ultimately called upon to make as to where the conduct in the aggregate is of the unfair nature”. But in any event, proposed paragraph 52(a) says, in terms, “Marlton Investments and Calibre have filed a cross-claim in which they allege inter alia: that each of the First, Second and Third Default Notices is invalid and of no effect and ought to be set aside”. If that contention is not made in the oppression proceeding – that is, if it is conceded, as senior counsel indicated, that the Default Notices are not invalid, but that they have some other significance for the purposes of the oppression proceeding as part of some overall assessment of conduct – that should be made clear.

41    In short, the defendants’ points are well made, so I will not allow paragraphs 51 and 52(a)(i) of the draft SOC.

The “Litigation Strategy” pleadings at paragraphs 54(k) and 54(l)

42    Paragraphs 54(k) and 54(l) of the draft SOC state:

[54]    The Litigation Strategy has involved inter alia:

…

(k)    in the two years since commencing the Villawood Federal Court Proceedings, not seeking to advance or get ready for trial the claims for relief of VM, Sandhurst Capital, SRL and related companies in those proceedings;

PARTICULARS

The Villawood Federal Court Proceedings presently remain at the ‘pleadings stage’, and will remain so until at least later in 2026, with no discovery having been made, no witness or lay evidence having been filed for trial, and no other trial steps having been taken. That is so notwithstanding that those proceedings were commenced by the applicants in the period since July 2024 and the applicants have incurred very substantial legal fees as referred to in subparagraph (c) above.

The plaintiffs refer to the procedural chronology at Annexure A hereto.

(l)    selectively reporting to external parties including persons and entities involved in business with Johnson about the litigation against Johnson and his related entities, in particular in respect of allegations of impropriety against Johnson in connection with the interlocutory processes and applications referred to in subparagraph (j) above and the particulars thereto;

PARTICULARS

The plaintiffs refer to the following:

(i)    a statement by Costelloe at a meeting of the VM Board and management at 9am on 5 September 2025 to the effect that Costelloe had written to financiers and stakeholders regarding “Johnson’s breaches" and was considering a “DPP notification". Forbes requested a copy of that correspondence and Costelloe replied that Forbes could get it via “the grape vine”;

(ii)    an email dated 5 September 2025 at 10:29am, by which Forbes asked Costelloe for a copy of the correspondence sent and a list of recipients of the communication. Costelloe did not respond;

(iii)    an email dated 5 September 2025 from Pappas to Forbes in which Pappas set out the text of a message which he stated had been sent to “financiers, JV Partners and significant investors”, together with a copy of the decision of the Honourable Justice Anderson in Villawood Management Pty Ltd v Marlton Group Pty Ltd [2025] FCA 980 (August 2025 Decision) and a copy of a Lawyerly ConstructionPro media article titled “Mills Oakley solicitor used by client to mislead court judge finds” (First Lawyerly Article);

(iv)    an email dated 10 July 2026 from Pappas to undisclosed recipients with the subject, “VILLAWOOD UPDATE”, containing a message to “key stakeholder[s]”, referring to the criminal contempt proceedings issued against Johnson and Kara and attaching a copy of the August 2025 Decision, the First Lawyerly Article, a copy of a further Lawyerly ConstructionPro media article titled “Villawood exec’s daughter claims privilege over ‘double deletion’ of docs”’, a copy of the interlocutory application and statement of charge dated 7 April 2026 filed in the Wallan Proceeding (by which the criminal contempt charges referred to at subparagraph (g) above have been pursued);

(v)    the Majority Core Owners (and the company officers who act on their instructions) have not copied Johnson or Forbes into their communications with external parties and they have refused to provide copies of the communications, despite requests.

The communications described in subparagraphs (i) to (v) above are selective reports because they involve limited accounts of only some aspects of the litigation as chosen by the Majority Core Owners, which have been sent at times as chosen by the Majority Core Owners to recipients as chosen by the Majority Core Owners (the identity of whom has not been disclosed to the plaintiffs). In doing so, the Majority Core Owners have focused exclusively on allegations of misconduct against Mr Johnson, which they have communicated widely to people and entities involved in business with Mr Johnson and the Majority Core Owners.

For example, the communication in subparagraph (iv) purports to “update” the recipients “about the ongoing legal dispute between Villawood and ... Johnson”, but it only refers to the judgment of Honourable Justice Anderson (which was already the subject of the communication in subparagraph (iii)), it attaches two articles from ‘Lawyerly’ (one of which was already attached to the communication in subparagraph (iii)) and it refers to the contempt applications issues against Mr Johnson and Ms Sabo and attaches a copy of the interlocutory application and charge sheet. The purported update does not refer to any of the many other aspects of the pending litigation, which involves 9 proceedings in the Federal Court of Australia and the Supreme Court of Victoria. Further, whilst the purported update gives prominence to the contempt charges which the Majority Core Owners had caused to be filed some 3 months prior to the communication, it does not refer to the fact that lawyers acting for Mr Johnson and Ms Sabo have foreshadowed that they will seek to summarily dismiss or strike out the contempt applications (as was communicated in correspondence from those lawyers in May 2026 and referred to in an email dated 26 May 2026 at 8:08pm from Helen Joyce, Baker & McKenzie to the Associate to the Honourable Justice Anderson, which was copied to Clayton Utz) and it does not update the recipients as to the serious allegations of breach of duty involving the appropriation of corporate property and opportunity, which are raised against the Majority Core Owners in this proceeding (notice of which had been given to the Majority Core Owners in June 2026, well prior to the communication in subparagraph (iv)).

Further particulars will be provided following discovery by the parties.

43    Paragraph [55] proposes an “in the premises” plea as follows:

[55]    In the premises of paragraphs 53 and 54 above, the Majority Core Owners have pursued the Litigation Strategy substantially for the purpose of exerting pressure on Johnson and gaining an advantage over him including in the context of the Buy-Out Negotiations, and in furtherance of their personal interests as shareholders (via their respective shareholding entities) of VM, Sandhurst Capital and SRL.

44    Proposed paragraph 54(k) is linked to Annexure A. If the Annexure is deficient, paragraph 54(k) falls away.

45    The Annexure is a 6-page document titled “Annexure A Brief Procedural Chronology (as at June 2026)” and is referred to at paragraphs 54(c), 54(j), and 54(k) of the draft SOC.

46    It is not necessary to burden these reasons with it. It is a table setting out a host of things that have transpired in the proceeding since 27 June 2024, and are anticipated to happen in the future.

47    The plaintiffs submitted that the purpose of the Annexure was to illustrate the scale of the litigation and legal expenditure incurred in the Proceedings, and the causes of delay said to be occasioned by the actions of the defendants.

48    But that is not so.

49    Many of the entries in the Annexure relate to Mr Johnson’s conduct in relation to the 2012 DMA. They were not things initiated by the defendants, but by the plaintiffs.

50    In reply, the plaintiffs insisted that the Annexure demonstrates the characteristics of the litigation being pursued, namely: the “sheer volume and nature” of it, including the initiating and pursuing of extensive interlocutory processes, the defendants’ “singular focus” on the allegations of impropriety against Mr Johnson and his daughters in connection with the 2012 DMA, and the lack of progression of the Proceedings toward trial.

51    That may or may not be the case, but the Annexure, which is really no more than a chronology of the Proceedings to date, is of no assistance. So paragraph 54(k) will not be allowed.

52    As to 54(l), the defendants contended in their written submissions that the pleading does not state how it is said that the Majority Core Owners have engaged in “selectively” reporting matters, and that it is unclear as to what is meant by selective (for example, whether the conduct was selective as to content reported or selective as to the recipients of any reporting on the litigation). A further version of the sub-paragraph was produced (it is the underlined part set out above) which meets those criticisms.

53    Paragraph 54(l) will be allowed.

Disposition

54    For these reasons, the plaintiffs will have leave to file and serve a statement of claim substantially in the form handed up at the hearing on 21 September 2026, pursuant to r 2.4 of the Federal Court (Corporations) Rules 2000 (Cth), but excluding paragraphs 45, 46, 51, 52(a)(i) and 54(k).

55    The plaintiffs may, if they wish, attempt to refashion those excluded paragraphs of the draft SOC, in light of these reasons.

56    But they must pay costs of this application, because they have been unsuccessful with respect to all but one of the contested paragraphs.

Associate:

Dated:    29 October 2026

SCHEDULE OF PARTIES