Cheng v Bullseye Mining Ltd [No 2] - [2024] WADC 21

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION:   PERTH
CITATION:   CHENG -v- BULLSEYE MINING LTD [No 2] [2024] WADC 21
CORAM:   REGISTRAR JEYAMOHAN
HEARD:   22 FEBRUARY 2024
DELIVERED          :   12 APRIL 2024
FILE NO/S:   CIV 1987 of 2020
BETWEEN:   SAM CHENG
Plaintiff (First defendant by counterclaim)
AND
BULLSEYE MINING LTD
Defendant (Plaintiff by counterclaim)
AND
BRETT CLARK
Fifth defendant by counterclaim
AND
DOONBEG CAPITAL PTY LTD
Sixth defendant by counterclaim

Catchwords:

Practice and procedure - Pleading - Application to strike out paragraphs in the counterclaim - Whether pleas of conspiracy to harm by either unlawful means or alternatively lawful means should be struck out - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 1 r 4B, O 20 r 19(1), O 20 r 19(3)
Supreme Court Act 1935 (WA)

Result:

Application granted - paragraphs struck out

Representation:

Counsel:

Plaintiff (First defendant by counterclaim)	:	Mr M C Goldblatt
Defendant (Plaintiff by counterclaim)	:	Mr M L Bennett
Fifth defendant by counterclaim	:	Mr C S Williams
Sixth defendant by counterclaim	:	Mr C S Williams

Solicitors:

Plaintiff (First defendant by counterclaim)	:	Bennett
Defendant (Plaintiff by counterclaim)	:	MPH Lawyers
Fifth defendant by counterclaim	:	Solomon Brothers
Sixth defendant by counterclaim	:	Solomon Brothers

Case(s) referred to in decision(s):

British American Tobacco Australia Ltd v Gordon [No 3] [2009] VSC 619
CC Containers Pty Ltd v Lee [2011] VSC 537
Chong v CC Containers Pty Ltd [2015] VSCA 137
DFD Rhodes Pty Ltd v Hancock Prospecting Pty Ltd [2022] WASCA 97
English v Vantage Holdings Group Pty Ltd [2021] WASCA 47
Ex parte Coffey; Re Evans [1971] 1 NSWLR 434
Fatimi Pty Ltd v Bryant [2004] NSWCA 140; (2004) 59 NSWLR 678
Interstar Pty Ltd v Halston Capital Pty Ltd [2022] WASC 105
Kingsfield Holdings Pty Ltd v Sullivan Commercial Pty Ltd [2021] WASC 289
National Australia Bank Ltd v Rowe [2018] WASC 330
Poland v Hedley [No 2] [2020] WASC 203
Poland v Hedley [No 5] [2023] WASC 294
Quinn v Leathem [1901] AC 495
Roseland Capital Pty Ltd v Neometals Ltd [2022] WASC 132
Rowe v National Australia Bank Ltd [2019] WASCA 140; (2019) 56 WAR 1
Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398

REGISTRAR JEYAMOHAN:

Summary

Bullseye Mining Ltd (Bullseye) is the defendant in the present action. By writ of summons filed 29 May 2020, the plaintiff (Cheng) claims the sum of $580,000; alternatively damages for breach of contract, interest and costs against Bullseye. Cheng's claim against Bullseye arises in respect of the following:
(a)a contract between Cheng and Bullseye by which capital raising and investor relations services were to be provided to Bullseye and by which Bullseye was to pay monthly fees to Cheng;
(b)Cheng providing and being ready, willing and able to provide the services; and
(c)Bullseye's breaches of contract by its failure or refusal to pay monthly fees since June 2018.
Cheng, in a statement of claim filed 30 June 2020 (SOC) of some three pages in length, pleads as follows. Bullseye is an incorporated unlisted public company and carries on the business of gold exploration.[1] On or about 9 October 2013, Bullseye and Cheng allegedly entered an agreement for Cheng to provide consulting services to Bullseye (Consulting Agreement).[2] Cheng alleges that the Consulting Agreement relevantly required:
(a)Cheng to undertake capital raising and investor relations activities for Bullseye; and
(b)Bullseye to pay Cheng a monthly fee of $18,000 plus GST (Fee).[3]
[1] SOC, par 1.
[2] SOC, par 2.
[3] SOC, par 3.
Cheng alleges that in or about December 2016, by verbal agreement between the parties, the Fee was increased to $22,000 plus GST per month, particulars of which are pleaded.[4] Cheng pleads that from about January 2017, Cheng invoiced and Bullseye paid the increased Fee as follows:
(a)Between October 2013 and May 2018:
(i)Cheng from time to time performed capital raising and investor relations activities as requested by Bullseye;
(ii)Cheng by his company Holy Investments Pty Ltd (Holy) rendered invoices to Bullseye each month for the Fee (as increased in about January 2017); and
(iii)Bullseye paid Cheng's invoices.[5]
[4] SOC, par 4.
[5] SOC, pars 4(iii) and 5.
Cheng claims that since June 2018, he has at all material times been ready, willing and able to perform his obligations under the Consulting Agreement.[6] Between June 2018 and May 2020, Cheng claims to have sent monthly invoices totalling $580,000 to Bullseye in respect of the Fee.[7] Cheng alleges that since June 2018, Bullseye has refused alternatively failed to pay the invoices and is indebted to Cheng in the sum of $580,000.[8]
[6] SOC, pars 4(iii) and 6.
[7] SOC, par 7.
[8] SOC, pars 8 and 9.
In the alternative Cheng alleges that Bullseye breached the Consultancy Agreement by its refusal alternatively failure to pay Cheng the Fee between June 2018 and May 2020 as a result of which Cheng has suffered loss and damage in the sum of $580,000.[9]
[9] SOC, pars 10 and 11.
Without forming a view on the substantive merits of Cheng's claim as against Bullseye, the claim is clearly pleaded and readily understood. Bullseye entered a memorandum of appearance on 12 June 2020 and filed a defence and counterclaim on 19 October 2020, joining by way of counterclaim the defendants named in the attached Schedule 1 including each of Cheng, Clark and Doonbeg (the Applicants). Bullseye's defence and counterclaim has been the subject of a number of amendments, being as follows: (a) amended defence and counterclaim filed 27 June 2023; (b) re-amended defence and counterclaim filed 16 August 2023; and (c) second re‑amended defence and counterclaim filed 7 December 2023 (Amended Counterclaim).
By its Amended Counterclaim, which runs to some 66 pages in length, Bullseye alleges that the defendants by counterclaim conspired to harm Bullseye by either unlawful means (Unlawful Means Conspiracy) or alternatively lawful means (Lawful Means Conspiracy).
Bullseye alleges that at all material times, the largest single shareholder in Bullseye was the third defendant by counterclaim, Hongkong Xinhe International Investment Company Limited (Xinhe), holding approximately 21% of its shares. Wei Huang (Huang) was the sole director and shareholder of Xinhe and his son, the fourth defendant by counterclaim, Luke Huang (Luke), represented Xinhe in its dealings with Bullseye.[10]
[10] Amended Counterclaim, pars 20.3 and 21.3.
Bullseye alleges that Wu Qiyuan, the second defendant by counterclaim (Wu), who was a director of Bullseye between 31 January 2014 and 17 September 2018, and his company, Fountain Enterprises International Co Ltd (Fountain), between them, held about 10% of the shares in Bullseye. Bullseye claims that until his removal as a director of Bullseye on 17 September 2018, Wu represented the interests of Xinhe on the Bullseye board.[11] Bullseye alleges that a further approximately 9% of the shares in Bullseye were held by Cheng (0.11%), Tina Cheng (0.3%), Ping Zhao (1.36%), R‑East International Limited (1.36%), Xinlei Wu (0.93%), Guaoli Li (0.55%), Xuefeng Ma (2.03%), Xiaoxa Yu (0.68%) and Cong Bo (0.34%) (together with Xinhe, Wu and Fountain (the Chinese Group).[12]
[11] Amended Counterclaim, par 19.
[12] Amended Counterclaim, par 8.10.4(a).
Bullseye alleges that in 2018 and 2019, the Chinese Group conspired with each other, and the other defendants by counterclaim, in seeking to acquire control of more than 50% of Bullseye shares to gain control of the company via spilling the board of Bullseye and nominating their representatives for directorships.[13] Bullseye alleges that attempts by the conspirators to enable the Chinese Group to obtain control of Bullseye included sending letters to all shareholders, in which the Bullseye directors were disparaged and denigrated; attempting to spill the board and have their nominees appointed directors via s 249D notices; surreptitiously trying to buy up Bullseye's shares in order to achieve a holding of 51% of the shares; and arranging for the extension of an off‑market takeover bid, which could not succeed, but would cause uncertainty amongst Bullseye shareholders and potential investors and starve Bullseye of funding, thereby facilitating the acquisition of Bullseye shares at a reduced price. The Chinese Group sought to avoid the more orthodox, but expensive, route to gain control of Bullseye by a genuine off-market takeover bid.[14] Bullseye pleads that the predominant purpose or intention of the conspiracy was to cause harm and injury to Bullseye by purportedly starving Bullseye of funds and the ability to raise capital from potential investors and existing shareholders, who became disgruntled with the lack of progress in its operations.[15]
[13] Amended Counterclaim, par 8.10.4(a).
[14] Amended Counterclaim, par 8.10.1.
[15] Amended Counterclaim, pars 37 and 38.
By chamber summons application filed 28 September 2023 and 11 October 2023, the fifth defendant by counterclaim (Clark) and the sixth defendant by counterclaim (Doonbeg) and the first defendant by counterclaim (Cheng), have respectively applied to strike out various paragraphs of the first defendant/plaintiff by counterclaim's (Bullseye's) re-amended defence and counterclaim filed 16 August 2023 (Applications).
In bringing the application, Clark and Doonbeg seek the following orders:
1.Pursuant to Order 3 rule 5(1) of the Rules of the Supreme Court 1971 (WA) (RSC), the period within which this application was required to have been made pursuant to Order 20 rule 19(3)(a) of the RSC is extended to the date of this application.
2.Pursuant to Order 20 rule 19(1)(a) of the RSC, further or alternatively Order 20 rule 19(1)(c) of the RSC, the counterclaim contained in the re-amended defence and counterclaim dated 16 August 2023 be and hereby is struck out.
3.The plaintiff by counterclaim shall pay the fifth and sixth defendants by counterclaim's costs of and incidental to this application, to be taxed if not agreed.
4.The plaintiff by counterclaim be refused leave to file an amended counterclaim.
5.The plaintiff by counterclaim shall pay the fifth and sixth defendants by counterclaim's costs of and incidental to the counterclaim, including any reserved costs, to be taxed if not agreed.
6.In the alternative to orders 4 and 5 above, the plaintiff by counterclaim has leave to file and serve an amended counterclaim within 21 days.
Cheng, in his application, seeks the following orders:
1.Pursuant to Order 3 rule 5(1) of the Rules of the Supreme Court 1971 (WA) (RSC), the period within which this application was required to have been made pursuant to Order 20 rule 19(3)(a) of the RSC is extended to the date of this application.
2.Pursuant to Order 20 rule 19(1)(a) of the RSC, further or alternatively Order 20 rule 19(1)(c) of the RSC, the counterclaim contained in the re-amended defence and counterclaim dated 16 August 2023 be and hereby is struck out.
3.The plaintiff by counterclaim shall pay the first defendant by counterclaim's costs of and incidental to this application, to be taxed if not agreed.
4.The plaintiff by counterclaim be refused leave to re-plead.
In the period of time between the bringing of the Applications and the hearing on 22 February 2024, Bullseye filed a second re-amended defence and counterclaim on 7 December 2023. Cheng in turn, by amended chamber summons filed 22 February 2024, applied for orders that the second re-amended defence and counterclaim be struck out.
At the hearing of the Applications on 22 February 2024, the parties advised the court that the hearing was to be limited to the hearing of the following aspects of the Applications only:
(a)orders that the counterclaim contained in Bullseye's second re‑amended defence and counterclaim dated 7 December 2023 be struck out (Strike Out Application),
with the balance of the orders sought adjourned for hearing and determination at a future date pending the outcome of the Strike Out Application.
On the question of the period within which the Strike Out Application was required to have been made pursuant to O 20 r 19(3)(a) of the Rules of the Supreme Court 1971 (WA) (RSC), Bullseye did not take issue with an extension of time being granted for the bringing of the Applications.
In addition to the oral submissions of respective counsel at the hearing on 22 February 2024:
(a)Clark and Doonbeg's Strike Out Application is supported by the affidavits of Jim Zeakis affirmed 29 September 2023 (Zeakis Affidavit); Bernard Arthur Cummins sworn 23 June 2023 (Cummins Affidavit); Thomas Anthony Coltrona sworn 11 October 2023 (Coltrona Affidavit) and written submissions filed 3 November 2023 and 21 December 2023; and
(b)Cheng's Strike Out Application is supported by the affidavit of Thomas Anthony Coltrona sworn 11 October 2023 (Coltrona Affidavit). In addition to submissions filed on 14 February 2024 in support of the Cheng application, Cheng also relies upon and adopts Clark and Doonbeg's submissions filed 3 November 2023 and 21 December 2023 in respect of the Strike Out Application.
The Applications are opposed by Bullseye who relies on the affidavit of Bernard Arthur John Cummins sworn 26 October 2023 (Cummins Second Affidavit), written submissions filed 7 December 2023 and the oral submissions made by counsel at the hearing of the matter.
For the reasons that follow, I will strike out the paragraphs pleading the conspiracy claim in their entirety being pars 28 - 40 of the Amended Counterclaim.

Leave to bring the application

The Strike Out Application was made by chamber summons filed 28 September 2023 and 11 October 2023 respectively in respect of Bullseye's counterclaim filed 16 August 2023. Subsequent to the filing of the applications, Bullseye filed the Amended Counterclaim on 7 December 2023. Cheng, Clark and Doonbeg each continue to press for orders in accordance with the Applications in respect of the Amended Counterclaim.
Order 20 r 19(3) of the RSC requires an application to strike out a pleading to be made within 21 days of the service of the pleading to which it relates. The computation of time within the meaning of O 20 r 19(3) had in fact yet to trigger in respect of the Amended Counterclaim at the time of the filing of the Applications given the Amended Counterclaim had yet to manifest. In any event, Cheng, Clark and Doonbeg have applied for an extension of time within which to bring the present application. Bullseye does not oppose the extension of time sought being granted.
The application for an extension of time is supported by the Zeakis Affidavit and the Coltrona Affidavit. I have had regard to Attachments 'JZ-1' to 'JZ-5' of the Zeakis Affidavit and Attachments 'TAC-1' to 'TAC‑3' of the Coltrona Affidavit and the conferral between the parties about the adequacy of Bullseye's pleading. I am satisfied that the extension of time sought by Cheng, Clark and Doonbeg should be granted.

Applicable principles

Pursuant to O 20 r 19(1)(a) and O 20 r 19(1)(c) of the RSC, the court may at any stage of the proceedings strike out any pleading on the ground that: (a) it discloses no reasonable cause of action; or (c) it may prejudice, embarrass or delay the fair trial of the action.
The principles to be applied on an application to strike out a pleading are well settled, and were set out comprehensively by Smith J of the Supreme Court in Vantage Holdings Group Pty Ltd v Donnelly [No 4],[16] and approved by the Court of Appeal in English v Vantage Holdings Group Pty Ltd[17] and DFD Rhodes Pty Ltd v Hancock Prospecting Pty Ltd.[18]
[16] Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398 [60] (Smith J) (Vantage Holdings v Donnelly).
[17] English v Vantage Holdings Group Pty Ltd [2021] WASCA 47 [56] (Murphy & Vaughan JJA).
[18] DFD Rhodes Pty Ltd v Hancock Prospecting Pty Ltd [2022] WASCA 97 [226].
In National Australia Bank Ltd v Rowe,[19] Vaughan J (as his Honour then was) emphasised that the efficient conduct of litigation before this court required compliance with the provisions of O 20 r 8(1) of the RSC:
[19] National Australia Bank Ltd v Rowe [2018] WASC 330.
1The terms of O 20 r 8(1) of the Rules of the Supreme Court 1971 (WA) are clear and should be obeyed. Subject to exceptions that are presently irrelevant:
… every pleading must contain, and contain only, a statement in a summary form of the material facts on which the party pleading relies for his claim or defence, as the case may be, but not the evidence by which those facts are to be proved, and the statement must be as brief as the nature of the case admits. (emphasis added)
2It is said that this rule is applied in a more flexible way than was the case in earlier times in view of the principles of positive case flow management.
3Equally, referring to case management authorities as to the modern function of pleadings, it is often sought to justify an overly lengthy pleading by reference simply to whether it identifies the issues, discloses an arguable claim and informs the parties of the case that has to be met. The strictures of O 20 r 8(1) are ignored. Evidence is pleaded, either under the guise of being a material fact or by way of particulars, and the particulars themselves go beyond that which is necessary.
4It is simply wrong to read decisions such as Barclay Mowlem Construction Ltd v Dampier Port Authority as in any way condoning this approach. To the contrary, the goal in O 1 r 4A of the Rules of the Supreme Court 1971 (WA) and the objects of O 1 r 4B are best achieved through conscientious adherence to O 20 r 8(1). Prolixity obscures identification of the true issues in contention and adversely impacts on the proper and efficient preparation of a case and its presentation at trial. Where this style of pleading must be responded to a vast number of false issues will be raised. It places a significant burden on the parties, in terms of costs, and also the resources of the court.
5The requirements of O 20 r 8(1) should be observed in preparing a pleading. Practitioners may do so confident in the knowledge that a summary statement of the material facts - and only such a summary statement - is what is required by the rules. The true significance of the case management authorities in this area is that it is unnecessary to encumber a pleading with unnecessary particulars, and all the more so evidence, as it is inevitable that there will be subsequent pre-trial disclosure of the evidence to be adduced at trial.
6A pleading must identify the issues, disclose an arguable claim or defence, and inform the parties of the case to be met. In doing so it should be clear and complete but concise. That standard is not met by over-complicating the pleading with unnecessary particulars and evidence.
7A prolix pleading, offending the requirements of O 20 r 8(1) by its incorporation of unnecessary or irrelevant material, may be struck out on the ground that it will prejudice, embarrass or delay the fair trial of the action. Doing so, approaching the pleading as a whole rather than requiring the other party and the court to undertake the oppressive task of surgical excision to remove all but the material facts, will often be the means most conductive to meeting the goal in O 1 r 4A and the objects of O 1 r 4B.
(footnotes omitted)
His Honour's observations were subsequently endorsed by the Court of Appeal[20] and repeated by Tottle J in Poland v Hedley[21] in respect of an application to strike out a pleading to a conspiracy to harm claim. The defendant in Poland [No 5] claims both damages for defamation and damages for loss caused by an alleged conspiracy between the defendants to injure him by unlawful means. Tottle J provided a synopsis of the legal principles underpinning the tort of unlawful means conspiracy wherein his Honour at [65] - [69] observed as follows:
[20] Rowe v National Australia Bank Ltd [2019] WASCA 140; (2019) 56 WAR 1 [165] (Murphy JA & Sofronoff AJA).
[21] Poland v Hedley [No 5] [2023] WASC 294 (Poland [No 5]).
65The elements of an unlawful means conspiracy are:
(a)a combination or agreement between two or more individuals;
(b)with an intent to injure the plaintiff;
(c)pursuant to which combination or agreement and with that intention certain unlawful acts were carried out; and
(d)resulting loss and damage to the plaintiff.
66There are two aspects to the element of 'unlawful means'. The first is that the acts involved are unlawful. The second is that the unlawful acts were the means of inflicting harm on the plaintiff.
67The existence of an intention to injure is a critical element of the tort. A plaintiff must prove that the unlawful act was done with the intention of injuring him and that it did so. Thus, a conspiracy to injure a person is distinguishable from an agreement to do an unlawful act that results in damage to that person.
68In Chong v CC Containers Pty Ltd, in rejecting a submission to the effect that in the absence of direct evidence, the trial judge erred in finding there was an agreement to participate in a conspiracy, the Victorian Court of Appeal explained:
As conspirators will ordinarily conceal their unlawful agreement, it will often be the case that there is no direct evidence of the combination. The conspiracy may be proved without direct evidence of an express agreement or understanding as to the common design. It is generally a matter of inference deduced from certain acts of the parties done in pursuance of the apparent purpose in common between them. The overt acts done in furtherance of the combination may support the inference that there was such an agreement or understanding to further the common unlawful object of the combination. Separate acts of co‑conspirators may be relied upon which have such a concurrence of time, character, direction and result as naturally leads to the inference that these separate acts were the outcome of pre-concert or some mutual contemporaneous engagement evidencing the common object of the combination. A mere co-incidence of separate acts however, which by their conjoined effect cause damage, will not suffice. The evidence must be such as to permit it to be inferred that the acts were undertaken in pursuit of the common object so that it may be said that the actors acted in concert towards the common end.
Where circumstantial evidence is relied upon, it is 'the weight which is to be given to the united force of all of the circumstances' in combination which must be considered.
…
Conspirators may come and go from a conspiracy. They may join a conspiracy after its inception and leave the conspiracy before its conclusion. There is no requirement that each member of a combination communicate directly with all of the other parties. The means by which a common agreement or design is reached and given effect will greatly vary. It has long been recognised that there need be no direct communication between all those who are said to be conspirators so long as it is shown that they entered into the agreement with a common purpose. So an agreement may be made where there are one or more central figures around whom other conspirators revolve. There may be an agreement where one conspirator communicates with another who in turn communicates with another in the form of a chain and where various members of the conspiracy will not meet or be aware of the identity of other members of the conspiracy. As Herron CJ and Holmes JA observed in Ex parte Coffey; Re Evans:
[A]lleged conspirators may never have seen each other and have never corresponded. One may have never heard the names of the others and yet by law they may be parties to the same common criminal agreement provided there is proof of acts on both sides which may lead a jury to infer that they were engaged in accomplishing the same common object.
(footnotes omitted)
69The tort of conspiracy requires proof of actual pecuniary or financial loss as a result of the defendants' acts done in furtherance of their agreement. Damages for conspiracy are at large in the sense that they are not limited to a precise calculation of the amount of actual pecuniary loss proved.

The Amended Counterclaim

By the Amended Counterclaim, Bullseye alleges that the Applicants (with the other defendants by counterclaim) conspired to harm Bullseye by either unlawful means or alternatively lawful means. The Amended Counterclaim commences at par 18. At pars 18 - 24 Bullseye introduces each of the defendants by counterclaim and at pars 28 - 32, Bullseye pleads to allegations of fact in respect of the defendants by counterclaim. The counterclaim brought against the Applicants commences at Amended Counterclaim par 33.

Conspiracy - Paragraphs 28 - 40 of the Amended Counterclaim

Bullseye pleads in its Amended Counterclaim that the conspirators, in such combination as the court may find after hearing the evidence, conspired with each other with the predominant purpose or the intention to cause harm and injury to Bullseye.[22] In support of this allegation, Bullseye has pleaded a combination of or agreement between two or more individuals, including Clark and Doonbeg, with the predominant purpose (Unlawful Purpose Conspiracy), alternatively, the intention (Unlawful Means Conspiracy), to cause harm and injury to Bullseye.[23] Bullseye pleads as follows in respect of the alleged acts and conduct of each of the conspirators in the circumstances:
[22] Amended Counterclaim, par 33.
[23] Amended Counterclaim, par 33.
(a)the purported knowledge of Cheng, Wu and the other conspirators, who were shareholders of Bullseye, of the results of the drilling campaign conducted by Bullseye on its tenements in the first half of 2017, which Bullseye alleges established the prospectivity of its mining tenements;[24]
[24] Amended Counterclaim, pars 33B - 33D.
(b)an introduction to the interest of Red 5 Ltd (Red 5), represented by the seventh defendant by counterclaim, Kevin Dundo (Dundo), in Bullseye and the alleged relationship between Dundo, Cheng and Wu;[25]
(c)the purported takeover bid for Bullseye by Red 5 (Red 5 Offer), through its wholly owned subsidiary, Opus Pty Ltd, on 12 April 2018, at a value which was allegedly more than 20-fold less than the average price at which Bullseye shares had then recently been issued, including the conditions to which the offer was subject, which purportedly restricted Bullseye's ability to raise funds; the eight extensions of the offer period for the maximum period allowed under the Corporations Act 2001 (Cth) (Act) of 12 months, with no material change being made to the offer, despite not a single Bullseye shareholder ever accepting the offer; and the purpose of the extensions of the offer to cause harm and injury to Bullseye;[26]
(d)the alleged attempt by the group of 12 Bullseye shareholders, termed the Chinese Group, to acquire a 51% shareholding in Bullseye; spill its board at a general meeting requisitioned by Wu and the company he controlled, Fountain, under s 249D of the Act,[27] and have their nominees Luke and Clark elected as the directors;
(e)the alleged conduct of Luke and Xinhe, in relation to the proposed joint venture between Bullseye and Resource Development Group Ltd, which was purportedly undertaken in support of the Chinese Group's attempt to spill the Bullseye board and have their nominees appointed as directors;[28]
(f)the mandate purportedly entered into between Cheng's company, Holy, and Clark's company, Doonbeg (Doonbeg Mandate) pursuant to which Holy, allegedly funded by Xinhe and Wu, purpotedly mandated Doonbeg to purchase 12% of Bullseye shares anonymously and in which Holy would have no beneficial interest, for the purpose of the Chinese Group obtaining control of Bullseye as 'cheaply' as possible and without detection of a breach of the 20% rule in s 606 of the Act;[29]
(g)Red 5 and Dundo's alleged roles in the conspiracy through the Red 5 Offer at a fraction of the value of a Bullseye share price and its extensions for an aggregate of 12 months in circumstances where not a single shareholder purportedly ever accepted the offer;[30]
(h)as part of the alleged conspiracy, at the same time as the Doonbeg Mandate was on foot, Xinhe and Au Xingao Investment Pty Ltd (Au Xingao)'s purportedly surreptitious purchase of Bullseye shares in November and December 2018, of which they allegedly took steps to disguise and suppress knowledge by use of confidentiality agreements and not lodging the transfer forms for registration, to avoid detection of a breach of s 606 of the Act;[31]
(i)on 15 February 2019, Xinhe, allegedly acting in concert with the members of the Chinese Group, and assisted by Clark and Doonbeg, under the Doonbeg Mandate, and Red 5 and Dundo, under the Red 5 Offer, purportedly lodged a requisition for a general meeting of Bullseye, pursuant to s 249D of the Act, to spill the Bullseye board and for Xinhe's nominees, Yiyang Qiu (Luke) and Dr Mingyan Wang (Wang), to be appointed as directors of Bullseye;[32]
(j)as part of the conspiracy, for the purpose of causing harm and injury to Bullseye, by dissuading investors from investing funds in Bullseye to weaken Bullseye financially by causing it to incur legal expenses; and requiring Bullseye to devote management time, effort and resources to deal with them, Cheng procured, or supported, Golden Soak Enterprises Pty Ltd in lodging applications for forfeiture, in February and March 2020, against a number of Bullseye's tenements;[33] and
(k)as part of the conspiracy, Wu and Xinhe allegedly conducted negotiations with a substantial Bullseye shareholder, Des Mullan (Mullan), for the sale of their Bullseye shares to Mullan, which Xinhe, Wu, Luke and Cheng purportedly knew the Bullseye board relied on as being genuine, which caused the board to slow the progress of operations and the making of strategic decisions, but deliberately did not tell them that the sale negotiations were not genuine.[34]
[25] Amended Counterclaim, pars 33E - 33R.
[26] Amended Counterclaim, pars 33S - 33AE.
[27] Counterclaim, pars 33AF - 33BO.
[28] Counterclaim, pars 33BP - 33CH.
[29] Counterclaim, pars 33BCI - 33DY.
[30] Counterclaim, pars 33S - 33Z and 33DZ - 33EB.
[31] Counterclaim, pars 33S - 33EC and 33EK.
[32] Counterclaim, pars 33EL - 33EW.
[33] Counterclaim, pars 33EX - 33FB.
[34] Counterclaim, pars 33FC - 33FM.
Bullseye pleads that by 30 October 2017, Cheng, Wu, Xinhe, Luke and Bullseye's other shareholders had become aware of the highly prospective nature of Bullseye's gold bearing tenements.[35]
[35] Counterclaim, pars 33B - 33D.
Bullseye's position is that each of the actions of the defendants by counterclaim contravened the Act, in that they acted in concert to acquire a relevant interest in issued voting shares in Bullseye in breach of s 606 of the Act, alternatively, the defendants by counterclaim, aside from Clark and Doonbeg, by their actions attempted to contravene the Act. In relation to Clark and Doonbeg, Bullseye will rely upon s 11.2 of the Criminal Code 1995 (Cth) (Criminal Code), in that Clark and Doonbeg purportedly aided and abetted the defendants by counterclaim in their contravention, alternatively, attempted, contravention, of the Act.[36] Bullseye pleads that the predominant purpose or intention of the conspiracy was to cause harm and injury to Bullseye by purportedly starving Bullseye of funds and the ability to raise capital from potential investors and existing shareholders, who became disgruntled with the lack of progress in its operations.[37]
[36] Counterclaim, pars 34 - 34A.
[37] Counterclaim, pars 37 and 38.
Bullseye alleges that there was a close link between Cheng and Wu, in that:
(a)Cheng, who was privy to all of Bullseye's confidential information between 9 October 2013 until on or about 8 December 2017, acted as a conduit for the provision of information about Bullseye's affairs and operations to Wu, who was based in China and did not speak English;[38] and
(b)prior to Cheng becoming the sole director and shareholder of Holy, the directors were He Ding, Wu's wife, and Nam Cheng (also known as Eddy Cheng), Cheng's son.[39]
[38] Counterclaim, pars 5.6 - 33.D.2.
[39] Amended Counterclaim, par 33CJ.
Bullseye asserts that by March 2018, Luke, on behalf of Xinhe, and Wu were planning for the Chinese Group, which then held 39% of the issued shares in Bullseye, to acquire a further 12% of the shares, thereby giving them the ability, in concert, in breach of s 606 of the Act, to control Bullseye.[40] Bullseye submits that although the plan did not succeed, by 23 July 2018, Wu, Luke and Cheng believed that they had sufficient Bullseye shares and had, and would garner, sufficient votes from the other shareholders to spill Bullseye's board. To that end, Wu and Fountain requisitioned a general meeting of Bullseye, pursuant to s 249D of the Act, to remove the directors of Bullseye and nominated Luke and Clark for election as directors of Bullseye.[41] Bullseye alleges that Luke and Cheng campaigned to promote the spill of the Bullseye board by holding meetings of Bullseye shareholders in order to persuade them to vote in favour of the spill, and addressing letters to shareholders in which they deprecated the directors and lauded their nominees for directorship and their plans.[42]
[40] Amended Counterclaim, pars 33AF - 33CH.
[41] Amended Counterclaim, pars 33BD.3 - 33BK.
[42] Amended Counterclaim, pars 33BL - 33BO and pars 33CA - 33CH.
Bullseye's claim is that as a consequence of the Chinese Group having failed in their attempt to spill the Bullseye board at the general meeting on 17 September 2018 (requisitioned by Wu and Fountain), on or about 19 November 2018, Holy, represented by Cheng, and Doonbeg, represented by Clark, entered into an agreement in terms of which Holy mandated Doonbeg to secure for it 12% of the shares in Bullseye for the purposes of achieving a change of board and a change of control of Bullseye, being the Doonbeg Mandate.[43] Bullseye alleges that the reason why the Chinese Group sought to acquire 12% of Bullseye's shares was that the Chinese Group, acting in concert, controlled about 39% of Bullseye's shares, so that an additional 12% would take their combined shareholding beyond 50% and, therefore, control of the company.
[43] Amended Counterclaim, par 33CK.
Bullseye alleges that Doonbeg carried out the Doonbeg Mandate in a way designed to obscure who, in fact, was purchasing the Bullseye shares as beneficial owner thereof.[44] Bullseye claims that Clark and, therefore, Doonbeg, purportedly knew that the purpose of the Doonbeg Mandate was to enable Chinese shareholders of Bullseye, acting in concert, to purchase shares in Bullseye anonymously in order to obviate detection that, in doing so, they would be breaching the 20% limit in s 606 of the Act.[45] Bullseye pleads that at the time of entry into the Doonbeg Mandate, Holy was not a member of Bullseye and Cheng held a fraction of a percentage of Bullseye's shares, namely, 0.11%.[46] Bullseye alleges that neither Cheng nor Holy had the wherewithal to pay the commission under the Doonbeg Mandate or fund the purchase of about 35 million shares in Bullseye, which equated to 12% of its issue share capital.[47] Further, that neither Holy nor Cheng, to the knowledge of Clark and Doonbeg, became the beneficial owner of any of the Bullseye shares purchased under the Doonbeg Mandate, despite Holy paying Doonbeg a fee of approximately $176,000 for arranging the purchases.[48]
[44] Amended Counterclaim, pars 33CS, 33CK.4.6, 33CK.4.17, 33CU, 33CV and 33CY.
[45] Act s 12(2), s 606, s 608 and s 610; Amended Counterclaim, pars 33CK.4.4, 33CK.4.16, 33CK.4.21, 33CK.4.22, 33CK.4.30, 33CQ and 33CR - 33CZ.
[46] Amended Counterclaim, par 33CL.
[47] Amended Counterclaim, par 33CP (particular (d)).
[48] Amended Counterclaim, pars 33CK.4.5 - 33CK.4.12, 33CK.4.17, 33CK.4.32 and 33CM.
Bullseye alleges that Doonbeg and Frank Torre (Torre) were paid commission for shares purchased under the Doonbeg Mandate by a third party, Mick Ruane (Ruane), through his company, Tyson Resources Pty Ltd, in which neither Xinhe, Wu, Cheng, Holy or any other member of the Chinese Group had an interest.[49] Bullseye claims that Doonbeg paid Torre tens of thousands of dollars to disguise the Doonbeg Mandate purchase transactions and anonymise the eventual beneficial owner of the Bullseye shares purchased under the Doonbeg Mandate.[50] According to Bullseye, the precedent share purchase agreements provided by Clark to Torre to be used for the purchase of Bullseye shares pursuant to the Doonbeg Mandate had been drafted by Allens Linklaters on the instruction of Luke, on behalf of Xinhe.[51]
[49] Amended Counterclaim, par 33DB.1.
[50] Amended Counterclaim, pars 33CK.4.33 and 33CK.4.34.
[51] Amended Counterclaim, par 33ED.
In this context, Bullseye pleads that Xinhe, a Hong Kong company, formerly the third defendant by counterclaim, and Wu, who together with their associates in the Chinese Group, held approximately 39% of Bullseye's issued shares, had engaged Cheng, Luke, and Holy to procure a further 12% of the shares in Bullseye in order to enable them, with their associates in the Chinese Group, to control a majority of the voting power in Bullseye.[52]
[52] Amended Counterclaim, pars 20.1, 33AF - 33AV and 33CN.
Bullseye alleges that the object of the Doonbeg Mandate was for the Chinese Group, acting in concert, to acquire 51% (that is, the aggregate of their existing 39% and the contracted for 12%) of the issued shares in Bullseye and, therefore, control of it, without a breach of the 20% rule in s 606 of the Act being detected.[53] Bullseye claims that aside from the Doonbeg Mandate, Clark was involved with Cheng, Luke, Wu and Dundo in relation to matters other than the Red 5 Offer, including in relation to the Chinese Group endeavouring to gain control of Bullseye. In support of this, Bullseye pleads to the following alleged matters:
[53] Amended Counterclaim, pars 33AY and 33AZ.
(a)in 2012, Dundo was instructed by Wu to act on his behalf, or on behalf of an entity controlled by Wu, in respect of the purchase of the Pagoda Hotel in South Perth;[54]
(b)Cheng assisted Wu with this transaction by being the conduit of information exchanged between Dundo and Wu in respect of this transaction;[55]
(c)in or around July 2018, Wu sought to instruct Dundo, in his capacity as a solicitor, to act on his behalf against Bullseye, whilst Wu was a director of Bullseye and the Red 5 Offer, promoted by Dundo, as Red 5's chairman, was on foot;[56]
(d)in or around July 2018, Cheng was in possession of an unsigned ore toll treatment agreement between the 'new Bullseye and Red 5', which had been negotiated between Wu for Bullseye, under the prospective control of the Chinese Group, and Dundo, on behalf of Red 5;[57]
(e)Wu and the company which he controlled, Fountain, on 23 July 2018, requisitioned a general meeting of Bullseye, pursuant to s 249D of the Act, to remove the directors of Bullseye, and nominated Luke and Clark for election as directors of Bullseye;[58]
(f)in relation to the affairs of Avenira Gold Ltd (Avenira), of which Holy held 4.79% of the issued share capital and Clark and Dundo were directors;[59]
(g)at Cheng's request, Linton Kirk (Kirk), who was a long-time principal technical consultant of Bullseye responsible for the coordination, and ultimate 'competent person' sign off, for all of Bullseye's feasibility studies for Bullseye's North Laverton Gold Project, met with Cheng, Clark, Dundo and Luke on 16 December 2019 to discuss a possible technical consulting role for him with Avenira;[60]
(h)Cheng and Luke campaigned on behalf of Clark to promote his nomination for a directorship of Bullseye to be voted on at the extraordinary general meeting of Bullseye, requisitioned by Wu and the company he controlled, Fountain, to be held on 17 September 2018;[61]
(i)on 11 April 2019, four days before the s 249D extraordinary general meeting of Bullseye, requisitioned by Xinhe, Clark and Cheng, they arranged a meeting with Dundo at the offices of Dundo's legal firm, KD Legal, between Torre, Cheng, representing Wu and Xinhe, and Ruane, at a time when the Red 5 Offer was still on foot;[62] and
(j)the purpose of the 11 April 2019 meeting at the legal offices of Dundo was to ensure that the Bullseye shares purchased anonymously under the Doonbeg Mandate could be voted on at the extraordinary general meeting requisitioned by Xinhe to be held on 15 April 2019, despite the fact that the transfer forms in respect of such purchases had deliberately not been lodged for registration prior to the meeting.[63]
[54] Amended Counterclaim, par 33O.
[55] Amended Counterclaim, par 33P.
[56] Amended Counterclaim, pars 24, 33Q and 33DZ.
[57] Amended Counterclaim, pars 33R and 33DZ.
[58] Amended Counterclaim, pars 33BD.3 and 33BK.
[59] Amended Counterclaim, pars 33BD.3 and 33BK.
[60] Amended Counterclaim, par 33BE.
[61] Amended Counterclaim, pars 33BM - 33BO.
[62] Amended Counterclaim, par 33DM.
[63] Amended Counterclaim, pars 33DK - 33DY.
Bullseye alleges that it should be inferred that Clark and Doonbeg participated in the Doonbeg Mandate with the intent, and for the purposes, of assisting in a larger strategy whereby the Chinese Group, led by Xinhe and Wu, were endeavouring to wrest control of Bullseye from the directors, as cheaply as possible, and by disguising a breach of the 20% rule in s 606 of the Act as a result of the following matters:
(a)Opus Pty Ltd, a wholly owned subsidiary of Red 5, offered to acquire all of the Bullseye shares, at $0.013 per share, by way of an off-market takeover offer pursuant to a Bidder's Statement, dated 12 April 2018;[64]
(b)a year later, in the absence of any significant intervening event, Avenira, of which Dundo and Clark were directors, purchased Bullseye shares at a price of $0.20 per share, just over 15 times the price offered for Bullseye shares in the Red 5 Offer;[65]
(c)as at 12 April 2018, shares in Bullseye had recently sold or been issued for an average price of $0.277 (27.7 cents) per Bullseye share, that is more than 20 times the effective price under the Red 5 Offer;[66]
(d)the Red 5 Offer period was extended on eight occasions to 12 April 2019, the maximum period allowed under s 624(1) of the Act, despite no material change being made to the offer and not a single shareholder of Bullseye ever accepting the offer;[67]
(e)the extension of the Red 5 Offer at a value for Bullseye's shares which was substantially below the value at which Bullseye's shares were trading, was, as agreed between Dundo, of Red 5, Clark, on behalf of Doonbeg, and members of the Chinese Group, for the purpose of starving Bullseye out of funds, while it was in the exploratory phase of its development and not generating any revenue, by:
(i)causing uncertainty amongst potential investors and shareholders by the low value, apparently being seriously offered, for Bullseye shares;
(ii)restricting Bullseye's ability to raise additional capital or issue any shares, thereby starving it of funding and delaying drilling and the commencement of gold production;[68] and
(iii)thereby facilitating the acquisition of shares in Bullseye under the Doonbeg Mandate at a reduced price.[69]
[64] Amended Counterclaim, pars 8.10.1(g), 8.10.1(h) and 33S - 33Y.
[65] Amended Counterclaim, par 33EA.
[66] Amended Counterclaim, par 8.10.1(i).
[67] Amended Counterclaim, pars 8.10.1(j), 8.10.1(k) and 33AD.
[68] Amended Counterclaim, par 33AC.
[69] Amended Counterclaim, pars 33BD.1 and 33BD.2.
Bullseye alleges that Clark's involvement with his co-conspirators, aside from his involvement in the Doonbeg Mandate and the Red 5 Offer, extended to the following:
(a)Clark being a director of Avenira, together with Dundo, in which Holy had invested;[70]
(b)Clark being nominated by Wu and Fountain for appointment as a director of Bullseye, together with Luke, at an extraordinary general meeting requisitioned by Wu and his company, Fountain;[71]
(c)Clark meeting with Cheng, Dundo, Luke and Kirk, who was a long-time principal technical consultant of Bullseye, on 16 December 2019, to discuss a possible technical consulting role for Kirk with Avenira;[72]
(d)Clark arranging for Cheng, Torre and Ruane to meet with Dundo, in his capacity as a solicitor, at a time when Clark knew that the Red 5 Offer, being promoted by Dundo, was still on foot;[73]
(e)Clark using the same form of share purchase agreement, in relation to the purchase of Bullseye shares under the Doonbeg Mandate, as Luke, on behalf of Xinhe and Au Xingao, used in surreptitiously purchasing Bullseye shares in late 2018. The precedent share purchase agreement had been drafted by Allens Linklaters on the instruction of Luke, on behalf of Xinhe;[74] and
(f)Clark being able, on or around 7 April 2019, to provide Torre with a copy of a final offer, dated 4 April 2019, which had been made by Mullan to Wu and Xinhe to purchase the Bullseye shares of the Chinese Group.[75]

Clark and Doonbeg's position

Imprecision as to what exactly is alleged to have been agreed by whom

[70] Amended Counterclaim, pars 8.10.1(l), 33AC, 33AE, 33EB and 38.1 - 38.5.

[71] Amended Counterclaim, pars 33 BD.3 and 33BK.

[72] Amended Counterclaim, par 33BE.

[73] Amended Counterclaim, par 33DM.

[74] Amended Counterclaim, par 33ED.

[75] Amended Counterclaim, pars 33FC - 33FJ.

Clark and Doonbeg's application alleges that various paragraphs of the Amended Counterclaim either disclose no reasonable cause of action or may prejudice, embarrass or delay the fair trial of the action. Clark and Doonbeg submit that for each of the contented conspiracies, being both unlawful and lawful, the pleading principles to be applied on an application to strike out a pleading are set out in Vantage Holdings v Donnelly and Poland [No 5].
Clark and Doonbeg submit that in Poland [No 5], Tottle J of the Supreme Court recently applied those principles to a conspiracy to harm claim, stating further that:[76]
(a)such a claim ought not indiscriminately rely on a wide range of matters known by the plaintiff about the defendants;
(b)consistently with this, it is impermissible to plead correspondence unsupported by any pleading as to the content of the correspondence and based on nothing more than speculation and suspicion from which inferences cannot be drawn;
(c)instead, a plaintiff's case needs to be pleaded with sufficient specificity to ensure that the precise factual basis on which it is contended the defendants conspired to harm the plaintiff is expressed with both sufficient clarity and certainty to enable the defendants to know how the plaintiff's case is to be advanced by the matters pleaded;
(d)as part of this, a plaintiff's case requires focus on the facts pleaded to establish the agreement or understanding that forms the basis of the conspiracy; and
(e)without a plaintiff adequately pleading its case, defendants are unable to fully consider whether the pleaded matters disclose a reasonable cause of action.
[76] Poland [No 5] [11], [34], [85] and [85(e)].
Clark and Doonbeg submit that based on these pleading principles, Bullseye is required to plead each of the following elements with respect to all of the defendants by counterclaim who Bullseye contends participated in the respective contended conspiracy (Elements):[77]
[77] See CC Containers Pty Ltd v Lee [2011] VSC 537, as applied recently in Kingsfield Holdings Pty Ltd v Sullivan Commercial Pty Ltd [2021] WASC 289 [93]; Roseland Capital Pty Ltd v Neometals Ltd [2022] WASC 132 [13]; and Interstar Pty Ltd v Halston Capital Pty Ltd [2022] WASC 105 [78]. With respect to Unlawful Means Conspiracy, see also Poland [No 5] [65] - [69].
(a)that multiple, precisely identified defendants by counterclaim combined or agreed to commit a particular act, and precisely what that act is (Agreement Element);
(b)in the case of the Unlawful Means Conspiracy, that the precise act the subject of the combination or agreement was unlawful, and the precise basis for so contending (Unlawfulness Element);
(c)that the same defendants by counterclaim did, in fact, commit the same act the subject of the combination or agreement (Action Element);
(d)that they so conspired and carried out (Purpose Element):
(i)the unlawful act intending to injure Bullseye (for Unlawful Means Conspiracy);
(ii)the lawful act for the sole or predominant purpose of injuring Bullseye (for Lawful Means Conspiracy); and
(e)in fact and as intended, the relevant act did cause loss and damage to Bullseye (Damage Element).
Clark and Doonbeg submit that critically, the cause of action requires a common thread between precisely who has agreed to do precisely what action that was ultimately committed with the same combined intentions of each of the parties[78] which caused loss and damage - and this needs to be pleaded clearly and with particularity. Clark and Doonbeg submit that notwithstanding that both Amended Counterclaim pars 33A and 38 refer to an agreement between all of the eight defendants by counterclaim, Amended Counterclaim par 33 pleads a plethora of permutations of contended co-conspirators, contending that the Applicants conspired with:
(a)each other;
(b)each of the first, second, third, fourth, seventh and eighth defendants by counterclaim;
(c)each other defendant by counterclaim individually; and
(d)every possible combination of some of the first to fourth and seventh and eighth defendants by counterclaim.
[78] See British American Tobacco Australia Ltd v Gordon[No 3] [2009] VSC 619 [51].
Having had regard to the above matters, Clark and Doonbeg submit that Amended Counterclaim par 33 pleads that such undefined group of co‑conspirators came to an agreement for which the purpose/intention was to harm Bullseye. For example, it is Clark and Doonbeg's submission that the Amended Counterclaim does not plead with any clarity - either in Amended Counterclaim par 33 or elsewhere - exactly what action(s) was (were) agreed to be carried out (that is, the Agreement Element). At its highest, Amended Counterclaim par 33A states that the undefined conspiracy 'may be inferred from' the matters pleaded in Amended Counterclaim pars 33B - 33FM ‑ which comprise approximately 62 pages of convoluted, rolled pleadings and particulars that allege different actions at different times by different defendants by counterclaim. Amended Counterclaim pars 38.1 - 38.10 plead various allegations, but these are pleaded only for an inference as to the purpose and intention of the defendants by counterclaim. Amended Counterclaim par 34 is just as unhelpful: it simply refers to '[e]ach of the actions by the defendants by counterclaim, set out above'.

Clark and Doonbeg's position is that these fundamental deficiencies infect the balance of the Amended Counterclaim such that it is impossible to sufficiently consider the extent to which Bullseye contends that these unspecified actions that were allegedly agreed by an undefined group of co-conspirators:
(a)were actually carried out by that same group (that is, the Action Element). In this regard, Amended Counterclaim par 39 contends various acts by the commission of which Bullseye alleges the conspiracy was carried into effect; however, both on its own and when read with the confusing bundle of pleadings in Amended Counterclaim pars 33B - 33FM, it does not provide any clarity;
(b)were unlawful, to the extent that Unlawful Means Conspiracy is contended (that is, the Unlawfulness Element). As noted above, Amended Counterclaim par 34 unhelpfully simply refers to 'actions … set out above';
(c)were carried out with the intention to injure Bullseye (for Unlawful Means Conspiracy) or otherwise for the predominant purpose of injuring Bullseye (that is, the Purpose Element). In this regard, the Purpose Element appears to have been pleaded in each of Amended Counterclaim pars 33, 37 and 38; and
(d)caused Bullseye to suffer loss and damage (that is, the Damage Element). The Damage Element is seemingly pleaded in Amended Counterclaim par 40; however, confusing matters further, that paragraph is also relied upon in the defence to Cheng's claim (defence and counterclaim par 16) as well as in an unrelated counterclaim made against Cheng (defence and counterclaim par 27, particular (a)).

Cheng and Doonbeg submit that these matters illustrate that the Amended Counterclaim confuses, conflates and overlooks the various Elements for different complaints. The lack of structure of the pleading makes matters worse: a large number of the paragraphs in the Amended Counterclaim are rolled, bear insufficient cross-referencing and on their face do not identify the basis for which they are pleaded. Most of the paragraphs appear largely irrelevant; or, at the very least, their relevance is unclear on their face. The pleadings are indiscriminately muddled and unfocused - thereby requiring each defendant by counterclaim (as well as the court) to strenuously sift through a forest of forensic possibilities and draw their own conclusions about what exactly is alleged against each defendant by counterclaim. It is Clark and Doonbeg's position that the Amended Counterclaim reveals an attempt by Bullseye to craft a cause of action of conspiracy to harm based on blurting a cluster of factual contentions against eight defendants by counterclaim based on nothing more than speculation and suspicion.
Clark and Doonbeg's position is that as a whole, the Amended Counterclaim is contrary to all of the principles upheld in Poland [No 5]. Consequently, because of the inadequacy of the Amended Counterclaim, the Applicants (as well as the court and the other defendants by counterclaim) are unable to properly consider whether the pleaded matters disclose a reasonable cause of action. In these circumstances, Clark and Doonbeg submit that the Amended Counterclaim may prejudice, embarrass or delay the fair trial of the action. It should be struck out pursuant to O 20 r 19(1)(c) of the RSC.

No reasonable cause of action against the Applicants

Clark and Doonbeg submit that Bullseye's complaint as against either or both of the Applicants is limited to their alleged respective roles in the Doonbeg Mandate alleged in Amended Counterclaim par 33CK and as defined in the defence and counterclaim par 8.10.1(o). In support of this, Clark and Doonbeg point to the following matters pleaded in pars 33CZ, 33EB, 34, 38.4, 38.8, 38.9 and 38.10 of the Amended Counterclaim:
(a)on or about 19 November 2018, Holy (for which Cheng was the sole director and shareholder)[79] and Doonbeg entered into an agreement in terms of which Holy mandated Doonbeg to secure for it 12% of the shares in Bullseye for the purposes of achieving a change of board and a change of control of Bullseye (Doonbeg Mandate);
(b)Doonbeg engaged and Clark instructed Torre to acquire shares in Bullseye from various third parties in a 'disguised manner' and Clark 'arranged' these purchases;
(c)Clark, on behalf of Doonbeg, was aware of and supported an extension to the 'Red 5 Offer' (as defined in the defence and counterclaim par 8.10.1(g)) because it made it easier for Clark to arrange for the purchase of Bullseye shares pursuant to the Doonbeg Mandate; and
(d)as part of this, Clark and Doonbeg (and the other defendants by counterclaim) breached s 606 of the Act.
[79] Defence and counterclaim, par 8.10.1(n).
Clark and Doonbeg submit that there is nothing at all (save for bald assertions of the existence of a conspiratorial agreement put at the highest level of generality) which is capable of establishing that the Applicants combined or agreed with any other party to do anything other than the specific step of securing 12% of the shares in Bullseye for Holy. The allegation that the Applicants were party to some broader conspiracy - which, based on Amended Counterclaim par 33A and Amended Counterclaim par 33B and the following paragraphs, was formed 18 months before the Doonbeg Mandate was entered into ‑ discloses no reasonable cause of action. It is Clark and Doonbeg's position that this alone warrants the Amended Counterclaim being struck out pursuant to O 20 r 19(1)(a) of the RSC.
Clark and Doonbeg further submit that to the extent that Unlawful Means Conspiracy is pleaded, and considering the confusing Amended Counterclaim at its highest, this conspiracy appears to be limited to claiming that the Applicants contravened s 606 of the Act. However, the Amended Counterclaim does not plead any alleged conduct of the Applicants that is capable of amounting to a contravention of s 606. Clark and Doonbeg submit that relevantly, no provision of the Act is contravened by a person having some general involvement in a contravention of s 606 by somebody else - and the Amended Counterclaim does not appear to plead any such conduct. That is, nothing pleaded (or particularised) in the Amended Counterclaim is capable of supporting a conclusion that an acquisition by Holy of 12% of the shares in Bullseye would constitute a contravention of s 606 of the Act by the Applicants. Consequently, to the extent that the Amended Counterclaim pleads Unlawful Means Conspiracy (at least against the Applicants), the Amended Counterclaim pleads no reasonable cause of action, and ought be struck out pursuant to O 20 r 19(1)(a) of the RSC.
Similarly, with respect to the extent that Lawful Means Conspiracy is pleaded, Clark and Doonbeg submit that Bullseye must prove that the Applicants' actions were agreed to and carried out for the sole or predominant purpose of injuring Bullseye (that is, the Purpose Element). Sensibly, by the latest amendments, the Amended Counterclaim no longer pleads that these actions (or any other unspecified actions) were agreed to and carried out for the sole purpose of injuring Bullseye - rather only contending a predominant purpose. The pleadings as to the Purpose Element are not supported by particulars, contrary to O 20 r 13(1)(b) of the RSC. Nothing in the taking of steps toward Holy acquiring a further 12% of Bullseye's shares, or the pursuit of a change in the composition of Bullseye's board of directors (which is all that is seemingly pleaded as against the Applicants), would, of themselves, cause harm or injury to Bullseye; and there is no allegation of there being (let alone the Applicants having knowledge of) any other factors which would result in such matters causing harm or injury.
Clark and Doonbeg submit that to the contrary, Amended Counterclaim par 33CP pleads that, pursuant to the Doonbeg Mandate, fees and costs were paid to Doonbeg. This is particularised in Amended Counterclaim par 33CP, particular (c) as comprising 'hundreds of thousands of dollars'. Having regard to this and the business of Doonbeg pleaded in Amended Counterclaim par 23.1, nothing is pleaded in the Amended Counterclaim to counter the obvious conclusion that, even if the Applicants were involved in the manner contended in pars 19.1 ‑ 19.3 of the Amended Counterclaim (which is not admitted), they did so for the predominant purpose of Doonbeg earning revenue - and not for any reason concerning Bullseye.
Clark and Doonbeg submit that the Amended Counterclaim remains speculative as against the Applicants. As to Bullseye's contention that the singular predominant purpose of Clark and Doonbeg's involvement in the alleged conspiracy was to cause harm to Bullseye, on Clark and Doonbeg's submission this defies logic. Clark and Doonbeg submit that receiving commission for carrying out the usual business of Doonbeg (of which Clark is the sole director and sole shareholder) and receiving payment for providing these services in the usual course of business is not merely an 'ancillary benefit'. On Clark and Doonbeg's submission, to the contrary, it evinces the complete disconnect between allegations made against Clark and Doonbeg and the other defendants by the Amended Counterclaim.
Clark and Doonbeg submit that no material facts are pleaded in the Amended Counterclaim which are capable of supporting the bald conclusions of a predominant purpose (directed toward a Lawful Means Conspiracy) or intention (directed toward an Unlawful Means Conspiracy) on the part of Clark and Doonbeg of causing harm or injury to Bullseye. Rather, Clark and Doonbeg submit that what is alleged regarding the conduct of Clark and Doonbeg by Bullseye is that they participated in conduct which could have involved a change of control in Bullseye and/or a change in the composition of Bullseye's board - none of which is capable of harming or injuring Bullseye. Clark and Doonbeg submit that even if the Amended Counterclaim pleads material facts that are capable of supporting a conclusion that the intention or purpose of the Applicants was to bring about such an outcome (which is not conceded), that is insufficient for liability for conspiracy.
On this basis, it is Clark and Doonbeg's position that the Purpose Element cannot be made out with respect to Lawful Means Conspiracy either, and the Amended Counterclaim fails to plead that cause of action - and therefore ought be struck out pursuant to O 20 r 19(1)(a) of the RSC.

Damage element

Clark and Doonbeg submit that the Amended Counterclaim fails to plead material facts capable of satisfying the Damage Element. In support of this submission, Clark and Doonbeg submit that there are not material facts pleaded which are capable of supporting the bald conclusion pleaded at par 37 of the Amended Counterclaim. For example, there are no material facts pleaded that connects conduct directed toward an acquisition of a controlling interest in Bullseye or a change in composition of Bullseye's board (neither of which is capable of causing harm to Bullseye) with Bullseye being starved of funds or being unable to raise capital.

Cheng's position

Cheng relies upon the Coltrona Affidavit in support of the Strike Out Application and otherwise relies upon and adopts Clark and Doonbeg's Submissions and Reply Submissions. Cheng relies upon and adopts the relevant legal principles relating to applications to strike out a pleading as set out at pars 4 - 6 of Clark and Doonbeg's Submissions, and the submissions at pars 4 - 7 of Clark and Doonbeg's Reply Submissions and the oral submissions made by Clark and Doonbeg's counsel at the hearing of the Strike Out Application.
Additionally, with respect to the conspiracy plea in the Amended Counterclaim, Cheng relies upon and adopts the relevant legal principles relating to applications to strike out a pleading as set out at pars 4 - 6 of Clark and Doonbeg's Submissions, and pars 4 - 7 of Clark and Doonbeg's Reply Submissions. Cheng also adopts and relies upon pars 25 - 32 of Clark and Doonbeg's Submissions.

Bullseye's position

Bullseye submits that Clark and Doonbeg's reliance on Poland [No 5] is misplaced. On Bullseye's submission, Tottle J, while recognising that a pleading of a conspiracy to harm a person will often depend on pleading conduct of the alleged conspirators from which inferences may be drawn.
Bullseye submits that it has not made any irrelevant allegations in its Amended Counterclaim. Rather, Bullseye pleads acts by the defendants, upon which it relies for the court to draw the necessary inferences as to a combination of the defendants with the intention and for the purpose of causing harm to Bullseye in circumstances where the defendants engaged in 'skullduggery' and underhand conduct and tactics over a lengthy period of time to harm Bullseye and facilitate obtaining control over it as cheaply as possible without adopting the appropriate (but more expensive) route of a takeover offer, under pt 6.5 of the Act.
In advancing its submission further, Bullseye points to [85] of Tottle J's decision in Poland [No 5] and the reference in that paragraph to the decision of the Victorian Court of Appeal of Chong v CC Containers Pty Ltd.[80] Relevantly, on Bullseye's submission, when one has regard to that authority, the court should bear in mind that the requirement for the plaintiff to plead all the facts and circumstances from which the court will be asked to draw certain inferences is a burden foisted on the plaintiff by defendants by counterclaim, because of the nature in which the defendants have purportedly suppressed the information and the subterfuge which they engaged in. On this basis, Bullseye has had to allege all the facts and circumstances from which the defendants by counterclaim ask the court in due course to infer the existence of the conspiracy.
[80] Chong v CC Containers Pty Ltd [2015] VSCA 137 (Chong).
That is, on Bullseye's submission, the court should not look at the facts separately and independently. Rather, on Bullseye's submission, the court should look at the united force of that and relies on Chong[81] in support of this. Bullseye's position is that the central figures in respect of the alleged conspiracy were Xinhe, Wu, Cheng and Luke. Bullseye relies on the Court of Appeal's reference in Chong to the observations of Holmes JA in Ex parte Coffey; Re Evans, of:[82]^,[83]
[A]lleged conspirators may never have seen each other and have never corresponded. One may have never heard the names of the others and yet by law they may be parties to the same common criminal agreement provided there is proof of acts on both sides which may lead a jury to infer that they were engaged in accomplishing the same common object.
(footnote omitted)
[81] Chong [33] and [147].
[82] Ex parte Coffey; Re Evans [1971] 1 NSWLR 434.
[83] Chong [147].

To advance its position that with the alleged suppression of the information and the purported subterfuge engaged in by the defendants by counterclaim, Bullseye has had to plead at such length the facts in support of the allegation in par 33 of the Amended Counterclaim. Bullseye's position is that the agreement to conspire can be established by the facts pleaded by Bullseye at par 33 in support of the allegation.
Further, Bullseye submits that it has also pleaded facts in relation to the relationship between the conspirators in support of the inferences, which it urges the court to draw from the acts of the conspirators in terms of a concurrence of time, character, direction and result as naturally to lead to the inference that these separate acts were the outcome of preconcert, or some mutual contemporaneous engagement, or that they were themselves the manifestations of mutual consent to carry out a common purpose, thus forming as well as evidencing a combination to effect the one object towards which the separate acts are found to converge. The acts of the conspirators were not disparate acts which coincidentally coalesced into a concerted attack on Bullseye. That is, on Bullseye's submission, the Chinese Group acted in concert, and in acting in concert, the Chinese Group acquired in aggregate, under s 606 of the Act, more than 20% of the shares in Bullseye, and that arrangement put the Chinese Group in breach of s 606 of the Act.
Bullseye submits that it will be relevant for the court to consider the acts of the conspirators in the light of the context of the interwoven nature of their relationships in relation to Bullseye and its affairs. In support of this, Bullseye points to the following pleaded matters:
(a)Wu was a director of Bullseye from 31 January 2014 until 17 September 2018;[84]
[84] Amended Counterclaim, pars 19.1.
(b)Wu was the sole director of Fountain and together they held approximately 10% of Bullseye's shares;[85]
[85] Amended Counterclaim, pars 19.2 and 19.3.
(c)while he was a director of Bullseye, Wu represented the interests of Xinhe on the Bullseye board;[86]
[86] Amended Counterclaim, par 19.4.
(d)Xinhe funded Wu's investment in Bullseye of $844,551 in or around November or December 2013 and Wu executed documents, on behalf of Xinhe, in relation to Xinhe's interests in Bullseye;[87]
[87] Amended Counterclaim, pars 19.5 and 20.5.
(e)Xinhe held approximately 21% of Bullseye's shares[88] and Huang was the sole director and shareholder of Xinhe and the father of Luke, who, from January 2018, was authorised to manage Xinhe's affairs in Australia;[89]
[88] Amended Counterclaim, pars 20.2 and 29.6.
[89] Amended Counterclaim, pars 20.3, 20.4 and 21.2 - 21.4.
(f)Luke was the sole director and shareholder of Au Xingao, which surreptitiously purchased shares in Bullseye in December 2018;[90]
[90] Amended Counterclaim, pars 20.3 and 33EC - 33EK.
(g)on 23 July 2018, Wu and Fountain requisitioned a meeting of Bullseye, under s 249D of the Act, to spill the Bullseye board and have Luke and Clark, the sole shareholder and director of Doonbeg, appointed directors of Bullseye;[91]
[91] Amended Counterclaim, pars 33BD.3 and 33BK.
(h)Luke convened meetings of Bullseye shareholders prior to the extraordinary general meeting requisitioned by Wu and Fountain to promote the proposed resolutions appointing Clark and him directors of Bullseye. The meetings were held at the Pagoda Hotel, owned by a company, of which Wu was chairman, and Wu engaged and paid for Karen Oswald, of NWR Communications, to monitor the RSVPs of attendance;[92]
[92] Amended Counterclaim, pars 33BN and 33BO.
(i)Clark, the sole director and shareholder of Doonbeg, was nominated by Wu and Fountain for election as a director at the extraordinary general meeting requisitioned by them on 23 July 2018;[93]
[93] Amended Counterclaim, pars 23, 33BD.3 and 33BK.
(j)Cheng, between 9 October 2013 and 8 December 2017, had a consultancy agreement with Bullseye and was embedded in Bullseye's office with access to all of its confidential information;[94]
[94] Amended Counterclaim, pars 2, 5.3 and 5.6.
(k)During the period 2013 - 2017, Cheng was Wu's interpreter and representative within Bullseye, and as such reported the day‑to‑day activities of Bullseye to Wu, and was a conduit for information exchanged between Wu, Bullseye and the other members of its board;[95]
[95] Amended Counterclaim, par 5.3.
(l)Cheng was the sole director and shareholder of Holy.[96] Prior to Cheng becoming the sole director and shareholder of Holy, its directors were He Ding, Wu's wife, and Nam Cheng (also known as Eddy Cheng), Cheng's son;[97]
[96] Amended Counterclaim, pars 8.10.1(n) and 33CI.
[97] Amended Counterclaim, par 33CJ.
(m)in November 2019, Holy, as a front for Wu and Xinhe, engaged Doonbeg, represented by Clark, to purchase 12% of Bullseye's shares anonymously (Doonbeg Mandate). Holy paid Doonbeg $176,000 in commission under the Doonbeg Mandate, but it was funded by Wu and Xinhe and Holy did not acquire beneficial interest in any of the Bullseye shares purchased;[98]
[98] Amended Counterclaim, pars 33CJ and 33CM ‑ 33CP.
(n)Cheng and Luke, representing Xinhe and Wu, gave instructions under the Doonbeg Mandate to Clark, on behalf of Doonbeg;[99]
[99] Amended Counterclaim, par 33CQ.
(o)Dundo, the seventh defendant by counterclaim, the chairman and non-executive director of Red 5, the eighth defendant by counterclaim, and Clark were directors of Avenira, in which Holy held approximately 4.79% of its issued share capital;[100]
[100] Amended Counterclaim, par 33BD.
(p)Dundo caused an approach to be made by Red 5, in October 2017, to Bullseye for Bullseye to toll treat its ore at Red 5's facility at Darlot;[101]
(q)there was a relationship between Dundo, Cheng and Wu dating back to 2012;[102]
(r)in or around 2018, Dundo entered into an agreement with Wu and Xinhe for Bullseye's ore to be processed at Red 5's Darlot facility after the Chinese Group obtained control of Bullseye;[103]
(s)Dundo, as chairman of Red 5, caused it to make an off‑market take‑over bid for Bullseye at a gross undervaluation of the company's shares, such that not a single shareholder ever accepted the bid;[104]
(t)Dundo caused the Red 5 Offer period to be extended on eight occasions, as agreed with Wu, Xinhe, Cheng, Clark, on behalf of Doonbeg, and Luke, despite no material change being made to the offer and not a single shareholder of Bullseye ever accepting the offer;[105]
(u)of the hundreds of solicitors in Perth, Clark arranged for, inter alia, Cheng to meet with Dundo, in his capacity as a solicitor, on 11 April 2019, in relation to the voting of shares purchased under the Doonbeg Mandate, for which transfer forms had not been lodged with Bullseye for registration.[106] At that time the Red 5 Offer was still on foot;
(v)in late 2018 and early 2019, Wu, on behalf of Xinhe and other members of the Chinese Group, conducted negotiations with a substantial Bullseye shareholder, Mullan, for the sale of their Bullseye shares to Mullan;[107]
(w)Clark used the same form of share purchase agreement in relation to the purchase of Bullseye shares under the Doonbeg Mandate as Luke, on behalf of Xinhe and Au Xingao, did in late 2018, in the surreptitious purchase of Bullseye shares on behalf of those companies. The precedent share purchase agreement had been drafted by Allens Linklaters on the instruction of Luke, on behalf of Xinhe;[108]
(x)the confidentiality deed, which Luke used for the purchase of Bullseye shares surreptitiously by Xinhe and Au Xingao in late 2018, was the same precedent of the confidentiality deed, which Cheng used before his meetings with various persons with whom he discussed Bullseye related matters;[109] and
(y)on 5 April 2019, Cheng produced a copy of a draft letter from Allens Linklaters, prepared by it acting on behalf of Xinhe, (which was, on its face, subject to legal professional privilege) to Corrs Chambers Westgarth, acting on behalf of Bullseye, dated 14 March 2019, with the subject line 'Bullseye Mining Ltd -Request for Information'. Bullseye submits that the irresistible inference is that the provenance of that letter was Luke.
[101] Amended Counterclaim, par 33N.1.
[102] Amended Counterclaim, pars 33O - 33Q.
[103] Amended Counterclaim, par 33DZ.
[104] Amended Counterclaim, pars 33S ‑ 33AB.
[105] Amended Counterclaim, pars 33AD, 33EA and 33EB.
[106] Amended Counterclaim, par 33DM.
[107] Amended Counterclaim, pars 33FC - 33FM.
[108] Amended Counterclaim, par 33ED.
[109] Amended Counterclaim, par 33EE.
Against this backdrop of submissions, Bullseye states that Bullseye has pleaded a combination or agreement between two or more individuals, including Clark and Doonbeg, with the Unlawful Purpose Conspiracy, alternatively, the Unlawful Means Conspiracy, to cause harm and injury to Bullseye.[110] Bullseye submits that the combination or agreement between the defendants has been pleaded in the alternative, in relation to the identity of the defendants who were participants in it, to cater for the eventuality that the court finds the case proved against some of the defendants, but not others. On Bullseye's submission, pleading in the alternative in that way is not objectionable. The necessity to do so arises from the clandestine activities undertaken by the defendants.
[110] Amended Counterclaim, par 33.
Bullseye's position is that the predominant purpose or intention of the conspiracy was to cause harm and injury to Bullseye by starving it of funds and the ability to raise capital from potential investors and existing shareholders, who became disgruntled with the lack of progress in its operations.[111]
[111] Amended Counterclaim, pars 37 and 38.
Bullseye submits that the plea of the conduct of the defendants, from which the court will be asked to infer the relevant agreement or combination between them, or some of them, is a matter for trial. The question, on the present application, is whether Bullseye's case is arguable. The task of the court is not to resolve in a final way the degree of knowledge, intent or object that the defendants must have held in order to be liable on the conspiracy claims. The defendants' attack on the conspiracy claim is an attack on the merits of the case. Whether or not the court will draw the inferences advanced by Bullseye is a matter for trial, not determination in this interlocutory application.
As to the purported conduct of Cheng, Bullseye submits that there was a close link between Cheng and Wu, in that:
(a)Cheng, who was privy to all of Bullseye's confidential information between 9 October 2013 until on or about 8 December 2017, acted as a conduit for the provision of information about Bullseye's affairs and operations to Wu, who was based in China and did not speak English;[112] and
(b)prior to Cheng becoming the sole director and shareholder of Holy, the directors were He Ding, Wu's wife, and Nam Cheng (also known as Eddy Cheng), Cheng's son.[113]
[112] Amended Counterclaim, pars 5.6 and 33.D.2.
[113] Amended Counterclaim, par 33CJ.
Bullseye submits that by March 2018, Luke, on behalf of Xinhe, and Wu were planning for the Chinese Group, which then held 39% of the issued shares in Bullseye, to acquire a further 12% of the shares, thereby giving them the ability, in concert, in breach of s 606 of the Act, to control Bullseye.[114] Bullseye in its submission acknowledges that although that plan did not succeed, by 23 July 2018, Wu, Luke and Cheng believed that they had sufficient Bullseye shares and had, and would garner, sufficient votes from the other shareholders to spill Bullseye's board. To that end, Wu and Fountain requisitioned a general meeting of Bullseye, pursuant to s 249D of the Act, to remove the directors of Bullseye and nominated Luke and Clark for election as directors of Bullseye.[115]
[114] Amended Counterclaim, pars 33AF - 33CH.
[115] Amended Counterclaim, pars 33BD.3 and 33BK.
Bullseye submits that Luke and Cheng campaigned to promote the spill of the Bullseye board by holding meetings of Bullseye shareholders, in order to persuade them to vote in favour of the spill, and addressing letters to shareholders in which they deprecated the directors and lauded their nominees for directorship and their plans.[116] Bullseye's position is that the Chinese Group having failed in their attempt to spill the Bullseye board at the general meeting on 17 September 2018 (requisitioned by Wu and Fountain), on or about 19 November 2018, Holy, represented by Cheng, and Doonbeg, represented by Clark, entered into an agreement in terms of which Holy mandated Doonbeg to secure for it 12% of the shares in Bullseye for the purposes of achieving a change of board and a change of control of Bullseye, being the Doonbeg Mandate.[117] Bullseye submits that the reason why they sought to acquire 12% of Bullseye's shares was that the Chinese Group, acting in concert, controlled about 39% of Bullseye's shares, so that an additional 12% would take their combined shareholding beyond 50% and, therefore, result in their control of the company.
[116] Amended Counterclaim, pars 33BL - 33BO and 33CA - 33CH.
[117] Amended Counterclaim, par 33CK.
Bullseye's position is that the Doonbeg Mandate was highly unusual given:
(a)Doonbeg carried out the Doonbeg Mandate in a way designed to obscure who, in fact, was purchasing the Bullseye shares as beneficial owner thereof;[118]
(b)Clark and, therefore, Doonbeg, knew that the purpose of the Doonbeg Mandate was to enable Chinese shareholders of Bullseye, acting in concert, to purchase shares in Bullseye anonymously in order to obviate detection that, in doing so, they would be breaching the 20% limit in s 606 of the Act in addition to s 12(2), s 608 and s 610;[119]
(c)at the time of entry into the Doonbeg Mandate, Holy was not a member of Bullseye and Cheng held a fraction of a percentage of Bullseye's shares, namely, 0.11%;[120]
(d)neither Cheng nor Holy had the wherewithal to pay the commission under the Doonbeg Mandate or fund the purchase of about 35 million shares in Bullseye, which equated to 12% of its issue share capital;[121]
(e)neither Holy nor Cheng, to the knowledge of Clark and Doonbeg, became the beneficial owner of any of the Bullseye shares purchased under the Doonbeg Mandate, despite Holy paying Doonbeg a fee of approximately $176,000 for arranging the purchases;[122]
(f)Doonbeg and Torre were paid commission for shares purchased under the Doonbeg Mandate by a third party, Ruane, through his company, Tyson Resources Pty Ltd, in which neither Xinhe, Wu, Cheng, Holy or any other member of the Chinese Group had an interest;[123]
(g)Doonbeg paid Torre tens of thousands of dollars to disguise the Doonbeg Mandate purchase transactions and anonymise the eventual beneficial owner of the Bullseye shares purchased under the Doonbeg Mandate;[124] and
(h)the precedent share purchase agreements provided by Clark to Torre to be used for the purchase of Bullseye shares pursuant to the Doonbeg Mandate had been drafted by Allens Linklaters on the instruction of Luke, on behalf of Xinhe.[125]
[118] Counterclaim, pars 33CS, 33CK.4.6, 33CK.4.17, 33CU, 33CV and 33CY.
[119] Amended Counterclaim, pars 33CK.4.4, 33CK.4.16, 33CK.4.21, 33CK.4.22, 33CK.4.30, 33CQ and 33CR ‑ 33CZ.
[120] Amended Counterclaim, par 33CL.
[121] Amended Counterclaim, par 33CP (particular (d)).
[122] Amended Counterclaim, pars 33CK.4.5 - 33CK.4.12, 33CK.4.17, 33CK.4.32 and 33CM.
[123] Amended Counterclaim, par 33DB.1.
[124] Amended Counterclaim, pars 33CK.4.33 and 33CK.4.34.
[125] Amended Counterclaim, par 33ED.
Bullseye submits that Xinhe, a Hong Kong company, formerly the third defendant by counterclaim, and Wu, who together with their associates in the Chinese Group, held approximately 39% of Bullseye's issued shares, had engaged Cheng, Luke and Holy to procure a further 12% of the shares in Bullseye in order to enable them, with their associates in the Chinese Group, to control a majority of the voting power in Bullseye.[126] Bullseye's position is that the object of the Doonbeg Mandate was for the Chinese Group, acting in concert, to acquire 51% (that is, the aggregate of their existing 39% and the contracted for 12%) of the issued shares in Bullseye and, therefore, control of it, without a breach of the 20% rule in s 606 of the Act being detected.[127]
[126] Amended Counterclaim, pars 20.1, 33AF - 33AV and 33CN.
[127] Amended Counterclaim, pars 33AY and 33AZ.
Bullseye further submits that aside from the Doonbeg Mandate, Clark was involved with Cheng, Luke, Wu and Dundo in relation to matters other than the Red 5 Offer, including in relation to the Chinese Group endeavouring to gain control of Bullseye. In all of the circumstances, Bullseye submits that it should be inferred that Clark and Doonbeg participated in the Doonbeg Mandate with the intent, and for the purposes, of assisting in a larger strategy, whereby the Chinese Group, led by Xinhe and Wu, were endeavouring to wrest control of Bullseye from the directors, as cheaply as possible, and by disguising a breach of the 20% rule in s 606 of the Act. Further, Clark's purported involvement with his co-conspirators, aside from his involvement in the Doonbeg Mandate and the Red 5 Offer, extended to the following:
(a)Clark being a director of Avenira, together with Dundo, in which Holy had invested;[128]
(b)Clark being nominated by Wu and Fountain for appointment as a director of Bullseye, together with Luke, at an extraordinary general meeting requisitioned by Wu and his company, Fountain;[129]
(c)Clark meeting with Cheng, Dundo, Luke and Kirk, who was a long-time principal technical consultant of Bullseye, on 16 December 2019, to discuss a possible technical consulting role for Kirk with Avenira;[130]
(d)of the hundreds, perhaps thousands, of solicitors in Perth, Clark arranging for Cheng, Torre and Ruane to meet with Dundo, in his capacity as a solicitor, at a time when Clark knew that the Red 5 Offer, being promoted by Dundo, was still on foot;[131]
(e)Clark using the same form of share purchase agreement, in relation to the purchase of Bullseye shares under the Doonbeg Mandate, as Luke, on behalf of Xinhe and Au Xingao, used in surreptitiously purchasing Bullseye shares in late 2018. The precedent share purchase agreement had been drafted by Allens Linklaters on the instruction of Luke, on behalf of Xinhe;[132] and
(f)Clark being able, on or around 7 April 2019, to provide Torre with a copy of a final offer, dated 4 April 2019, which had been made by Desmond Mullan to Wu and Xinhe to purchase the Bullseye shares of the Chinese Group.[133]
[128] Amended Counterclaim, pars 33BD.1 and 33BD.2.
[129] Amended Counterclaim, pars 33 BD.3 and 33BK.
[130] Amended Counterclaim, par 33BE.
[131] Amended Counterclaim, par 33DM.
[132] Amended Counterclaim, par 33ED.
[133] Amended Counterclaim, pars 33FC - 33FJ.
Bullseye submits that Xinhe, a Hong Kong company, formerly the third defendant by counterclaim, and Wu, who together with their associates in the Chinese Group, held approximately 39% of Bullseye's issued shares, had engaged Cheng, Luke and Holy to procure a further 12% of the shares in Bullseye in order to enable them, with their associates in the Chinese Group, to control a majority of the voting power in Bullseye.[134] Bullseye's position is that the object of the Doonbeg Mandate was for the Chinese Group, acting in concert, to acquire 51% (that is, the aggregate of their existing 39% and the contracted for 12%) of the issued shares in Bullseye and, therefore, control of it, without a breach of the 20% rule in s 606 of the Act being detected.[135]
[134] Amended Counterclaim, pars 20.1, 33AF - 33AV and 33CN.
[135] Amended Counterclaim, pars 33AY and 33AZ.

Bullsye's position is that this interaction between Clark and his purported co-conspirators was no coincidence. Rather, on Bullseye's submission, it was symptomatic of the relationship between the co‑conspirators and their purpose and intent in relation to Bullseye. Bullseye, in its submission at the hearing states that Bullseye does not rely on the acquisition of the shares. Rather, that the acts which carried the conspiracy into effect caused Bullseye to suffer damages and there, Bullseye refers to the conditions of the Red 5 Offer in conjunction with the provisions of ch 6 of the Act and the general uncertainty in the market, engendered by the Red 5 Offer severely restricted its ability to raise finance as a result of which Bullseye suffered the delay in the opportunity to do certain things. Further, that delay caused Bullseye to lose the opportunity or delayed the opportunity to construct an onsite processing plant.

Disposition - Paragraphs 28 - 40 of the Amended Counterclaim

I have carefully considered the written submissions and the evidence that the parties have sought to rely on in respect to this Strike Out Application. In so doing, the factual matters said to inform the basis of Bullseye's Amended Counterclaim are set out in substantive detail and highlight the myriad of purported participants and matters said to constitute the alleged conspiracy and resulting damage to Bullseye.
The beginning premise is this - that this is an application to strike out Bullseye's Amended Counterclaim pursuant to O 20 r 19(1)(a) and O 20 r 19(1)(c) of the RSC on the ground that (a) it discloses no reasonable cause of action; or (c) it may prejudice, embarrass or delay the fair trial of the action. The principles to be applied on an application to strike out a pleading, as set out in Vantage Holdings v Donnelly, are uncontroversial. The Applicants assert that for each of the contented conspiracies, being both unlawful and lawful, the pleading principles on an application to strike out a pleading are set out in Vantage Holdings v Donnelly and Poland [No 5]and apply to the present application.
Bullseye argues that the Applicants reliance on Poland [No 5] in the context of this Strike Out Application is misplaced in circumstances where Bullseye, on its own submission, has not made any irrelevant allegations in its Amended Counterclaim and has in fact pleaded acts by the defendants upon which it relies for the court to draw the necessary inferences as to the intention and purpose of causing harm to Bullseye. However, this presumption requires the court to accept Bullseye's assertions.

Bullseye's claim in conspiracy is lengthy and factually dense.[136] Bullseye submits that it will be relevant for the court to consider the acts of the conspirators in the light of the context of the interwoven nature of their relationships in relation to Bullseye and its affairs. Bullseye points to Chong v CC Containers Pty Ltd to say that the court should not look at the facts separately and independently, rather, that the court should look at the united facts in circumstances where the defendants by counterclaim have purportedly suppressed the information and the subterfuge which they engaged in, such that the court will be asked to draw certain inferences in respect of the alleged conspiracy. That is, on Bullseye's submission, it has had to go to such lengths in pleading the facts in support of the conspiracy allegation in par 33 by virtue of this alleged conduct (of suppression and subterfuge) on the part of the defendants by counterclaim.
[136] Amended Counterclaim, par 33.
Bullseye's pleaded case is that the interaction between the co‑conspirators, being the defendants by counterclaim, was symptomatic of the relationship between the co‑conspirators and their purpose and intent in relation to Bullseye. That intent being that the acts of the co‑conspirators carried the conspiracy into effect with the predominant purpose or intention of causing harm and injury to Bullseye by starving it of funds and the ability to raise capital from potential investors and existing shareholders, who became disgruntled with the lack of progress in its operations.[137]
[137] Amended Counterclaim, pars 37 and 38.
Notwithstanding that both Amended Counterclaim pars 33A and 38 refer to an agreement between all of the defendants by counterclaim, Amended Counterclaim par 33 pleads a wide range of matters in respect of the contended co‑conspirators without any specificity as to the precise factual basis on which Bullseye contends Clark and Doonbeg and Cheng conspired to harm Bullseye.
In my view, there is a lack of sufficient specificity of the precise factual basis pleaded on which it is contended the defendants by counterclaim conspired to harm Bullseye such that Clark and Doonbeg and Cheng are not in a position to know the alleged act(s), whether combined or otherwise, they are said to have participated in, in respect of the various contended conspiracy, both unlawful and lawful. As the Applicants contend, the paragraphs do not plead conduct on the part of the defendants and are incapable of establishing any of the matters referred to in Bullseye's contentions for this reason. Existence of an intention to injure is a critical element of the tort of unlawful means conspiracy. A plaintiff must prove that the unlawful act was done with the intention of injuring him and that it did so.
As to the loss and damage Bullseye is alleged to have suffered as a result of the acts of the conspirators, the Damage Element pleaded at par 40 of the Amended Counterclaim fails to plead material facts capable of satisfying the Damage Element. What Bullseye asserts constitutes the loss and damage is no more than a claimed delay by Bullseye in the opportunity to do certain things including raising finance allegedly as a result of the conditions of the Red 5 Offer in conjunction with the provisions of ch 6 of the Act and the general uncertainty in the market engendered by the Red 5 Offer. The tort of conspiracy requires proof of actual pecuniary or financial loss as a result of the defendants' acts done in furtherance of their agreement.[138] Damages for conspiracy are at large in the sense that they are not limited to a precise calculation of the amount of actual pecuniary loss proved.[139]
[138] Fatimi Pty Ltd v Bryant [44] (Giles JA); Poland v Hedley [No 2] [19] (Le Miere J).
[139] Quinn v Leathem [1901] AC 495, 498.
The paragraphs will be struck out on the grounds that they are embarrassing and will prejudice and delay the fair trial of the action.

Conclusion

For these reasons, I conclude that pars 28 - 40 of the Amended Counterclaim be struck out.
At the hearing of the Applications on 22 February 2024, the parties advised the court that the hearing was to be limited to the hearing of the Strike Out Application only with the balance of the orders sought, including the question of costs, adjourned for hearing and determination at a future date pending the outcome of the Strike Out Application. Any application by Bullseye for leave to replead must be supported by a minute of proposed re-amended counterclaim.

Orders

1.The counterclaim contained in pars 28 - 40 of Bullseye's Amended Counterclaim dated 7 December 2023 be struck out.

SCHEDULE 1

SCHEDULE OF PARTIES

SAM CHENG	Plaintiff / First Defendant by counterclaim
BULLSEYE MINING LTD	Defendant / Plaintiff by counterclaim
WU QIYUAN	Second Defendant by counterclaim
HONGKONG XINHE INTERNATIONAL INVESTMENT COMPANY LTD	Third Defendant by counterclaim
YIYANG QIU (also known as LUKE QIU)	Fourth Defendant by counterclaim
BRETT CLARK	Fifth Defendant by counterclaim
DOONBEG CAPITAL PTY LTD	Sixth Defendant by counterclaim
KEVIN DUNDO	Seventh Defendant by counterclaim
RED 5 LTD	Eighth Defendant by counterclaim

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
AC
Court Officer
15 APRIL 2024