CIP Group Pty Ltd v So (No 12) [2026] FCA 60

This case arose out of a property development business conducted through a group of companies. The Court said Marc Clancy and Terence So had been in the business of subdividing land since 2015 through entities known as the Golden Gate Property Group. Mr Clancy was said to be responsible for development and Mr So for financing. One of the key projects was the Carver’s Reach residential subdivision at Park Ridge in Queensland.

The Court summarised the pleaded case that financing came from external lenders, mainly Makro Finance Pty Ltd, and also from Ultimate Investment Portfolio Pty Ltd, a company controlled by the So side. Ultimate allegedly advanced money to GGPG, the principal development entity, through a series of unsecured and undocumented loans. By October 2019, the advances were said to total millions of dollars, but the amount actually owing was disputed.

The applicants alleged that by late 2019 the project entities were dependent on continued funding and could not quickly repay the amount Ultimate claimed was due. They said that in this context Mr So sought to have the project entities enter into a formal written loan and security package in favour of Ultimate. On 29 November 2019, the relevant entities executed a loan deed, guarantees and indemnities, a general security deed and mortgages over the development land.

The pleaded allegations were that the recorded initial amount owing of $7,011,718 was wrong or significantly overstated, that the terms were adverse to the project entities, and that Mr So was acting in conflict because he was both a director of the borrower-side entities and connected to the lender-side company. The applicants also alleged that in December 2021 Mr So caused immediate repayment demands to be issued for more than $10.8 million and then, three business days later, caused a receiver and manager to be appointed under the security documents. The project land was later sold during the receivership.

The immediate problem was evidentiary. The Court recorded that Marc Clancy was the person responsible for giving instructions for the applicants and was expected to be the primary witness of fact. He was no longer willing to give evidence because he had been charged with fraud offences that overlapped with allegations pleaded by the So parties in defence. He wished to maintain his privilege against self-incrimination.

That development had major consequences. The applicants’ case had originally been much broader. The judgment records that they sought to abandon many allegations, including much of the misleading or deceptive conduct case, a separate claim concerning a loan from Ms Yinga Yang to Axis North, relief under ss 232 and 233 of the Corporations Act, the s 180 case, and the lost opportunity damages claim that had been put in the order of $50 to $60 million.

What the applicants wanted to keep was a narrower case focused mainly on an alleged double duty conflict by Mr So in relation to the 2019 Ultimate loan deed and related securities, together with consequential relief. In practical terms, they were trying to salvage a trial from a much larger dispute after losing the witness they expected to rely on most heavily.

The Court had to decide two main groups of issues, plus some corrective procedural matters.

First, should the applicants be allowed to make substantial amendments one business day before trial? The catchwords show the Court considered the usual AON case management factors, including the adequacy of the explanation for the late changes, delay, prejudice to other parties, whether the proposed pleading stated all material facts or was embarrassing, and whether allowing the changes would undermine confidence in the efficient administration of justice if a long trial had to be adjourned. The Court also noted difficult conceptual issues concerning the scope of the fiduciary double engagement rule and whether fully informed consent could be exculpatory.

Second, should earlier grants of derivative leave under ss 236 and 237 of the Corporations Act be revoked? That raised questions about whether continuation of derivative leave remained in the best interests of the corporations concerned, whether there were conflicts affecting the instructing director, whether the applicants were acting in bad faith, and what powers the Court had where some companies had gone into liquidation after leave had been granted.

The reasons also dealt with confusion in earlier orders and party descriptions. The Court noted that Part 2F.1A does not apply to companies in liquidation, that one company had already been wound up when derivative leave was first granted, and that later orders referred to the wrong respondent. The judge explained that it was important to distinguish between derivative leave, powers under s 241, the Court’s case management powers, and any incidental power relevant to companies in liquidation.

McElwaine J allowed the amendment application in part. The formal orders granted leave to amend substantially in accordance with the draft Fourth Amended Originating Application and the draft Third Further Amended Statement of Claim, but with specified exclusions. In particular, leave was not granted for the amendment to the claim for relief at paragraph 18 of the draft originating application, and certain proposed amendments in the draft statement of claim were excluded. The amended originating application and statement of claim had to be filed by 4 pm on 10 February 2026, both in marked-up and clean form.

The Court also dismissed the interlocutory applications filed by the So parties and the TM parties seeking revocation of derivative leave and dismissal of the proceeding. The synopsis states that this was not a case to revoke derivative leave. So the respondents failed in their attempt to end the proceeding on that basis.

In addition, the Court corrected an earlier order made by Derrington J on 28 November 2024 under the slip rule so that a mistaken reference to the eighth respondent was replaced with the ninth respondent. The Court also ordered that the names of several respondents be amended to reflect that they were in liquidation as well as under receivership and management.

Finally, the parties were directed to file consent orders, or failing agreement competing proposed orders with short submissions, dealing with consequential matters including costs and a procedural timetable designed to bring the proceeding to trial commencing on 11 May 2026.

The commercial warning in this case is about related-party finance and governance discipline. The pleaded allegations centred on advances made through an entity associated with one of the directors, later formalised through a loan deed, guarantees and security documents. When a director is effectively on both sides of a transaction, the legal risk is not limited to whether the documents were signed. The dispute can quickly become about whether the amount owing was clear, whether the company had genuine independent decision-making, whether the director used their position for an improper purpose, and whether the company’s interests were subordinated to the insider lender’s interests.

The case also shows how vulnerable litigation becomes when one person holds the factual history, gives instructions and is expected to be the main witness. Many SMEs operate that way in practice. But if that person later cannot give evidence, the company may be forced to abandon major claims, narrow its case, or fight expensive procedural battles shortly before trial.

Another practical point is that insolvency events can complicate litigation strategy. The judgment records confusion about companies that had gone into liquidation after derivative leave had been granted. If your business is litigating through or on behalf of a company that later enters liquidation or receivership, the legal basis for continuing the proceeding may need urgent review.

The judgment shows how ordinary commercial documents can become the centre of a major court fight. The key documents were the 29 November 2019 loan deed, guarantees and indemnities, general security deed and mortgages. The pleaded case also referred to spreadsheets, emails, voice notes and accounting material said to bear on the amount actually owed and what Mr So knew about that amount.

For business owners, that is a reminder that disputes about related-party finance are often won or lost on records. If the lender’s own spreadsheets show inconsistent balances, or if the commercial basis for a figure cannot be explained clearly, that can become a major issue. Equally, if the company says the debt was overstated, it needs records and witnesses capable of proving that case.

The conduct that mattered was not just the signing of documents. The pleaded allegations also focused on the surrounding circumstances: the project’s dependence on continued funding, the pressure created by refinancing needs, the issue of immediate repayment demands in December 2021, and the appointment of a receiver only three business days later. Those are the kinds of facts that often shape whether a court sees a transaction as ordinary commercial enforcement or as conduct infected by conflict and misuse of position. In this judgment, those issues remained to be tried.

The judgment was delivered on 6 February 2026 after hearings between 10 and 12 December 2025. It sits within a sequence of earlier decisions in the same litigation, including earlier rulings on derivative leave and case management. The reasons expressly assume familiarity with the broader background set out in an earlier 2025 decision.

The status point is important. This was an interlocutory ruling. It decided what claims could proceed toward trial and rejected attempts to revoke derivative leave, but it did not finally determine liability, loss or relief in the underlying commercial dispute. The Court directed the parties to propose consequential orders and a timetable aimed at a trial commencing on 11 May 2026.