Metalicity Ltd v Allen [No 2] - [2022] WASC 420

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   METALICITY LTD -v- ALLEN [No 2] [2022] WASC 420
CORAM:   HILL J
HEARD:   14, 15 & 17 NOVEMBER 2022
WRITTEN SUBMISSIONS 21, 25 & 27 NOVEMBER 2022

DELIVERED          :   9 DECEMBER 2022
FILE NO/S:   COR 140 of 2022
BETWEEN:   METALICITY LTD
Plaintiff
AND
KENNETH MALCOLME ALLEN
First Defendant
KENNETH MALCOLME ALLEN as trustee for THE ALLEN SUPER FUND A/C
LEE KIANG ALLEN as trustee for THE ALLEN SUPER FUND A/C
Second Defendants
THOMAS FRANCIS PERCY
Third Defendant
HOCK HOO CHUA
Fourth Defendant
B3 PROSPECTING PTY LTD
Fifth Defendant
LEE KIANG ALLEN
Sixth Defendant
LEE KIANG ALLEN as trustee for ANDREA K ALLEN
Seventh Defendant
LEE KIANG ALLEN as trustee for ROYCE K ALLEN
Eighth Defendant
LEE KIANG ALLEN as trustee for AMELIA V ALLEN
Ninth Defendant
ANDREA KATHLEEN HUANG LING ALLEN
Tenth Defendant
BRETT ROYLE
Eleventh Defendant
PECK CHONG YEO
Twelfth Defendant
HOCK PENG CHUA
Thirteenth Defendant
AGENOR PTY LTD as trustee for THE GLAMUZINA SUPER FUND
Fourteenth Defendant
MATE AUTO ELECTRICAL PTY LTD
Fifteenth Defendant
MATTHEW GUY MAYNE as trustee for THE MAYNE SUPER FUND
LISA MAYNE as trustee for THE MAYNE SUPER FUND
Sixteenth Defendants
TOPRANGE PTY LTD as trustee for THE KEVDEN SUPER FUND
Seventeenth Defendant
JETT HOLDINGS PTY LTD
Eighteenth Defendant
SIANG JOON GOH
Nineteenth Defendant
BARRY LUCAS
Twentieth Defendant
DION GERALD MEREDITH
Twenty First Defendant
PETER VANDA RESOURCES PTY LTD
Twenty Second Defendant
HIGHAM HILL PTY LTD
Twenty Third Defendant
ALIC TRPCEV
Twenty Fourth Defendant
EFFIS PTY LTD
Twenty Fifth Defendant
ROBERT RITCHER as trustee for THE ROBERT RICHTER SUPER FUND NO 2
ANNE LYELL RITCHER as trustee for THE ROBERT RICHTER SUPER FUND NO 2
Twenty Sixth Defendants
NEX METALS EXPLORATIONS LTD
Twenty Seventh Defendant

Catchwords:

Corporations – Meetings – Proxies – Requirements for lodgment of valid and effective proxy – Electronic lodgment of proxy – Whether documents evidencing authority required to be lodged with company at least 48 hours prior to meeting if electronic proxy not lodged by shareholder – Proper construction of s 250(1)(b), Corporations Act 2001 (Cth)

Corporations – Allegation of undeclared association – Whether undeclared association – Whether defendants or any of them had arrangement or understanding or were acting in concert in relation to the control of the board of Nex – Whether the first defendant has a relevant interest in the shares of the defendants or any of them – 'Hub' and 'spokes' – Turns on own facts

Corporations – Delay in seeking relief in relation to resolutions at annual general meeting – Effect of similar resolutions being passed at subsequent extraordinary general meeting – Discretion to order relief

Legislation:

Corporations Act 2001 (Cth) s 9, s 64(a), s 250A, s 250B, s 606, s 608, s 609(5), s 610, s 1325A
Corporations Regulations 2001 (Cth), reg 2G.2.01

Result:

Originating process dismissed

Category: A

Representation:

Counsel:

Plaintiff	:	G D Cobby SC
First Defendant	:	G Donaldson SC & J Sippe
Second Defendants	:	G Donaldson SC & J Sippe
Third Defendant	:	R J Lee
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance
Sixth Defendant	:	G Donaldson SC & J Sippe
Seventh Defendant	:	G Donaldson SC & J Sippe
Eighth Defendant	:	G Donaldson SC & J Sippe
Ninth Defendant	:	G Donaldson SC & J Sippe
Tenth Defendant	:	G Donaldson SC & J Sippe
Eleventh Defendant	:	No appearance
Twelfth Defendant	:	No appearance
Thirteenth Defendant	:	No appearance
Fourteenth Defendant	:	No appearance
Fifteenth Defendant	:	No appearance
Sixteenth Defendants	:	No appearance
Seventeenth Defendant	:	No appearance
Eighteenth Defendant	:	No appearance
Nineteenth Defendant	:	No appearance
Twentieth Defendant	:	No appearance
Twenty First Defendant	:	No appearance
Twenty Second Defendant	:	L A Tsaknis
Twenty Third Defendant	:	L A Tsaknis
Twenty Fourth Defendant	:	L A Tsaknis
Twenty Fifth Defendant	:	L A Tsaknis
Twenty Sixth Defendants	:	L A Tsaknis
Twenty Seventh Defendant	:	R J Lee

Solicitors:

Plaintiff	:	Tottle Partners
First Defendant	:	Dominion Legal
Second Defendants	:	Dominion Legal
Third Defendant	:	Zafra Legal
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance
Sixth Defendant	:	Dominion Legal
Seventh Defendant	:	Dominion Legal
Eighth Defendant	:	Dominion Legal
Ninth Defendant	:	Dominion Legal
Tenth Defendant	:	Dominion Legal
Eleventh Defendant	:	No appearance
Twelfth Defendant	:	No appearance
Thirteenth Defendant	:	No appearance
Fourteenth Defendant	:	No appearance
Fifteenth Defendant	:	No appearance
Sixteenth Defendants	:	No appearance
Seventeenth Defendant	:	No appearance
Eighteenth Defendant	:	No appearance
Nineteenth Defendant	:	No appearance
Twentieth Defendant	:	No appearance
Twenty First Defendant	:	No appearance
Twenty Second Defendant	:	TGC Lawyers
Twenty Third Defendant	:	TGC Lawyers
Twenty Fourth Defendant	:	TGC Lawyers
Twenty Fifth Defendant	:	TGC Lawyers
Twenty Sixth Defendants	:	TGC Lawyers
Twenty Seventh Defendant	:	Zafra legal

Cases referred to in decision:

Adsteam Building Industries Pty Ltd v Queensland Cement & Lime Co Ltd [1985] 1 Qd R 127
Aguia Resources Ltd [2019] ATP 13
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27
Amaca Pty Ltd (formerly James Hardie & Co Pty Ltd) v Hannell [2007] WASCA 158
Armstrong v Landmark Corporation Ltd [1967] 1 NSWR 13
Atkins v St Barbara Mines Ltd (1997) 138 FLR 425
Aurora Funds Management Ltd v Australian Government Takeovers Panel [2020] FCA 496; (2020) 144 ACSR 593
Bateman v Newhaven Park Stud Ltd [2004] NSWSC 566; (2004) 49 ACSR 587
Bentley Capital Ltd 01R [2011] ATP 13
Briginshaw v Briginshaw (1938) 60 CLR 336
Cathro (liquidator) in the matter of Petsamo No 14 Pty Ltd (in liq) v Thomassian [2022] FCA 399
CellOS Software Ltd v Wong [2017] FCA 95; (2017) 118 ACSR 501
Cordiant Communications (Australia) Pty Ltd v The Communications Group Holdings Pty Ltd [2005] NSWSC 1005; 194 FLR 322
Cousins v International Brick Co Ltd [1931] 2 Ch 90
Director General of Department of Transport v McKenzie [2016] WASCA 147; (2016) 77 MVR 306
Fast Scout Ltd v Bergel [2001] WASC 343; (2001) 25 WAR 244
Flinders Diamonds Limited v Tiger International Resources Ltd [2004] SASC 119; (2004) 88 SASR 281
G v H [1994] HCA 48; (1994) 181 CLR 387
Hongkong Xinhe International Investment Company Ltd v Bullseye Mining Ltd [No 3] [2021] WASC 260
Metalicity Ltd v Nex Metals Explorations Ltd [2022] WASC 234
Molopo Energy Ltd 01 & 02 [2017] ATP 10
MTQ Holdings Pty Ltd v RCR Tomlinson Ltd [2006] WASC 96
New South Wales Henry George Foundation v Booth [2002] NSWSC 245; (2002) 54 NSWLR 433
NT Power Generation Pty Ltd v Trevor [2000] WASC 254; (2000) 23 WAR 482
Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589
Rayney v State of Western Australia [No 4] [2022] WASCA 44
Re Advance Bank Australia Ltd (No 2) (1997) 22 ACSR 513
Re Asia Pacific Data Centre Ltd [2018] NSWSC 1375; (2018) 130 ACSR 212
Re Fairfax Media Ltd [2018] FCA 1930; (2018) 366 ALR 516
Re Freehouse Pty Ltd; Jordan v Avram (1997) 26 ACSR 662
Re Golden West Resources Ltd [2008] FCA 1362; (2008) 170 FCR 409
Re NRMA Ltd (No 1) [2000] NSWSC 82; (2000) 33 ACSR 595
Seltsam Pty Ltd v McGuiness [2000] NSWCA 29; (2000) 49 NSWLR 262
Smargiassi Nominees Pty Ltd v Shire of Collie [2021] WASCA 107
Sun Hung Kai Investment Services Ltd v Metals X Ltd [2019] FCA 1673; (2019) 139 ACSR 361
Vero Insurance Ltd v Kassem (as joint administrators of Ungul Properties Pty Ltd) [2010] NSWSC 838; (2010) 79 ACSR 330

TABLE OF CONTENTS

Introduction

Factual background

Evidence on the application

Onus and standard of proof

Drawing of inferences

Procedural background

Issues for determination

Relevant provisions of the Act and Constitution

Relevant provisions of the Corporations Act 2001 (Cth)

Lodgment of proxies
Association or acting in concert

Relevant clauses of the Constitution

Annual general meeting

Notice of meeting

Lodgment of proxies for the AGM

Conduct of the AGM

Extraordinary General Meeting

Notice of meeting

Lodgment of proxies

Conduct of the EGM

Requirements for proxies to be valid and effective

Parties' submissions

Legal Principles

Disposition

Is there an undeclared association between the defendants or any of them?

Parties' submissions

Legal Principles

Disposition

Validity of votes cast at AGM

Parties' submissions

Legal principles

Disposition

Validity of votes cast at EGM

Is any invalidity a 'procedural irregularity or a 'substantive irregularity'?

Delay in seeking relief in relation to AGM

Legal Principles

Exercise of discretion

Issues of shares announced by Nex on 30 September 2022

Conclusion and Orders

Annexure A - Description of defendants and ownership of shares in Nex

Annexure B - Relevant interest (AGM)

Annexure C - Relevant interest (EGM)

HILL J:

Introduction

Since about September 2021, the plaintiff, Metalicity Ltd (Metalicity), and the twenty-seventh defendant, Nex Metals Explorations Ltd (Nex), have been in dispute about a range of matters, including the composition of the board of Nex. To date, two proceedings have been commenced in this court in relation to this issue. There have also been two separate proceedings commenced in this court concerning the joint venture between Metalicity, one of its subsidiaries (Kym Mining Pty Ltd) and Nex, as well an action for oppression and a number of applications to the Takeovers Panel.
These proceedings concern the validity of resolutions of shareholders at two separate meetings of Nex: the 2021 annual general meeting held on 31 March 2022 (AGM) and an extraordinary general meeting held on 25 July 2022 (EGM). The EGM was held following my judgment in earlier proceedings between Nex and Metalicity.[1] At both meetings, the nominees of Metalicity were not elected as directors of Nex and the incumbent directors of Nex were not removed.
[1] Metalicity Ltd v Nex Metals Explorations Ltd [2022] WASC 234.
Metalicity contends the proxies lodged by the first to twenty-sixth defendants at the AGM were not effective and that, as a consequence, Mr Percy KC was not re‑elected and its nominees were. Metalicity also alleges there is an undeclared association between the first to twenty‑sixth defendants in breach of ch 6 of the Corporations Act 2001 (Cth) (Act). Metalicity contends two matters should flow from this. First, the votes cast at the EGM by these parties should be discounted in their entirety and second, orders should be made vesting the shares owned by these defendants in the Australian Securities and Investments Commission (ASIC) for sale.
The defendants who participated in these proceedings strenuously deny the allegations made against them. The defendants accept the issues raised by Metalicity in respect of the proxies are relevant to three matters: first, the effectiveness of the proxies lodged for the AGM; second whether there has been a contravention of s 606 of the Act; and third, whether any non-compliance with the Act has caused any substantial injustice.
In response, the defendants say that, on a proper construction of the Act, there was no requirement for any documents to be lodged by them, or on their behalf, with Nex prior to the AGM. They contend that the fact that each of the defendants (apart from the twenty‑seventh defendant) voted in a similar fashion at the two meetings does not give rise to an inference there is an undeclared association or any other conduct in breach of the Act. Finally, if there has been any irregularity or non-compliance with the Act, which is denied, the defendants say no relief should be granted due to Metalicity's delay in seeking relief in respect of the AGM, and because the votes that were cast at both meetings represent the views of shareholders. On this basis, they say no substantial injustice has occurred.
For the reasons that are set out below, it is my view that:
(a)where a proxy is signed or lodged online by a person other than the shareholder, s 250B(1)(b) of the Act requires the authority under which the appointment was signed or authenticated to be received by the company not less than 48 hours prior to the meeting;
(b)where shareholders gave Mr Allen the right to lodge a proxy without directing the manner in which those votes were to be cast, this gave Mr Allen a relevant interest in these shares;
(c)there was an arrangement or understanding between Mr Allen and Mr Papamihail whereby Mr Papamihail would seek to obtain votes for both the AGM and EGM to retain the incumbent directors and not to appoint the nominees of Metalicity. This gave Mr Allen a relevant interest in the shares of the twenty-fifth defendant;
(d)neither of the matters referred to in (b) or (c) gave Mr Allen a relevant interest in more than 20% of the issued share capital of Nex and there has been no breach of s 606 of the Act;
(e)while the failure to lodge the necessary authorities prior to the AGM meant that a number of the proxies submitted for the AGM were ineffective, in circumstances where almost identical resolutions have been considered and voted on at a subsequent meeting, namely the EGM, I do not consider I should exercise my discretion to grant any relief.
On this basis, I consider the originating process should be dismissed. The detailed basis for my reasons are set out below.

Factual background

Metalicity and Nex are public companies, whose securities are listed on the Australian Securities Exchange (ASX).
Nex has three directors: Mr Kenneth Malcolme Allen (the first defendant), Mr Thomas Francis Percy KC (the third defendant)[2] and Mr Hock Hoo Chua (the fourth defendant). Each owns shares in Nex.
[2] In these reasons, I have used the post-nominal KC for both Mr Percy KC and Mr Richter KC even though prior to the death of Queen Elizabeth II on 8 September 2022 each was a QC.
The remaining defendants are all shareholders of Nex. Attached as Annexure A to these reasons is a description of each of the defendants and the number of shares that each held at the date of the AGM. There was no change in the number of shares that each held between the dates of each meeting the subject of these proceedings. These defendants include Mr Allen's wife (the sixth defendant and second-named second defendant and seventh to ninth defendants in her capacity as trustee) and daughter (the tenth defendant).
Metalicity and its wholly owned subsidiary, Kym Mining Pty Ltd (Kym Mining), and Nex are parties to a joint venture agreement dated May 2019.
On 14 September 2021, Metalicity made an off market takeover offer for the shares in Nex. The takeover ultimately closed at 5.00 pm on 29 August 2022. There were a significant number of disputes in relation to the takeover and numerous applications were made to the Takeovers Panel.
On 3 March 2022, Nex issued a notice of meeting for its AGM to be held at 2.00 pm on 31 March 2022.[3] The resolutions to be considered at this meeting included the re‑election of Mr Percy KC and the appointment of Mr Alexander James Neuling, Mr Justin Charles Barton and Mr Kevin David O'Sullivan, who had been nominated by Metalicity in a s 203D notice dated 17 February 2022.[4]
[3] Affidavit of Justin Charles Barton filed 3 June 2022 'JB10'.
[4] Affidavit of Justin Charles Barton filed 3 June 2022 'JB18'.
At the time of the AGM, Metalicity and Kym Mining owned 88,500,612 shares in Nex or approximately 33.14% of the issued share capital of Nex.[5] At the AGM, Mr Percy KC was re‑elected and the resolutions to appoint Mr Neuling, Mr Barton, and Mr O'Sullivan were not carried. The turnout at the AGM was significantly greater than at the annual general meeting for the year ending 30 June 2020 (59,578,617 shares voted) and the year ending 30 June 2019 (81,350,727 shares voted).[6]
[5] Affidavit of Justin Charles Barton filed 3 June 2022 [19].
[6] Affidavit of Justin Charles Barton filed 3 June 2022 [32], 'JB14'.
On 1 April 2022, the solicitors for Metalicity wrote to Nex's then solicitors requesting production of a number of documents including details of the IP addresses from which each of the online proxies was lodged. On 4 April 2022, Nex, by its then solicitors, responded to this letter and 'vehemently' denied there had been any interference with the voting process or that there was any improper conduct associated with the voting at the AGM.[7] No documents were produced by Nex to Metalicity at that stage.
[7] Affidavit of Justin Charles Barton filed 3 June 2022 'JB15'.
On 3 June 2022, Metalicity commenced proceedings in this court, being COR 97 of 2022, seeking orders for the court to convene a meeting under s 249G of the Act (First Proceedings). On the same date, Nex issued a notice for the EGM which was scheduled to be held at 8.00 am on 4 July 2022.[8]
[8] Supplementary affidavit of Kenneth Malcolme Allen filed 22 June 2022 'KMA-13'.
The First Proceedings were heard on 30 June 2022. At the conclusion of the hearing, I delivered reasons for my decision dismissing Metalicity's application for a court ordered meeting, declaring a notice of meeting that had been issued by Metalicity to be invalid, and adjourning the EGM that had been convened by Nex to be held at 8.00 am on 4 July 2022 until 25 July 2022.
At the EGM on 25 July 2022, the resolutions to remove each of the incumbent directors of Nex were not carried, nor were the resolutions to appoint Mr Neuling, Mr Barton, and Mr O'Sullivan as directors.
As at 29 September 2022, Metalicity and Kym Mining owned 91,615,106 shares of the 267,014,768 shares on issue in Nex. This equated to approximately 34.31% of Nex's issued share capital.[9]
[9] Affidavit of Caroline Cecilie Spencer filed 30 September 2022 [17.1].

Evidence on the application

The hearing before me proceeded on affidavit evidence. The parties were given leave to cross‑examine the deponents, subject to advance notice being given. A number of witnesses were called and cross‑examined at the hearing.
Metalicity relied on 20 affidavits filed in both these proceedings and the First Proceedings,[10] namely:
(a)two affidavits of Mr Allen, the managing director of Nex, filed in the First Proceedings on 22 June 2022[11] and 28 June 2022;[12]
(b)four affidavits of Mr Barton, the managing director of Metalicity, filed 3 June 2022 (in the First Proceedings),[13] 27 July 2022,[14] 1 August 2022 and 26 October 2022;
(c)an affidavit of Christian Hernandez, the Western Australia State Manager for the Client Relationship Group of Link Market Services, filed in the First Proceedings on 15 June 2022;
(d)three affidavits of Audrey Pieterse, a solicitor employed by Tottle Partners, the solicitors for Metalicity, filed 24 June 2022 (in the First Proceedings), 2 September 2022 and 8 September 2022;
(e)four affidavits of Caroline Cecilie Spencer, a solicitor employed by Tottle Partners, filed 30 September 2022, two filed on 4 October 2022, and 11 October 2022;
(f)three affidavits of Evan Leslie Taylor, a solicitor employed by Tottle Partners, filed 2 August 2022, 9 August 2022 and 16 September 2022;
(g)two affidavits of Kristie Louise White, an employee of Tottle Partners, filed 1 November 2022 and 4 November 2022;[15] and
(h)an affidavit of Benjamin Thomas Bartholomew Craig-Wadham, a solicitor employed by Tottle Partners, filed 11 November 2022.
[10] Leave to rely on these affidavits was pursuant to orders in the First Proceedings on 29 July 2022.
[11] Limited to par 1 - 15, attachments 'KMA-11', 'KMA-13'.
[12] Limited to par 1 - 85, attachments 'KMA-15' - 'KMA-27'.
[13] Limited to par 1 - 65, attachments 'JB1' - 'JB34'.
[14] Limited to par 1 - 18, 23 - 24, 26 - 45, attachments 'JB2' - 'JB9', 'JB12' - 'JB17'.
[15] Limited to par 1 - 5, attachments 'KLW9' - 'KLW12'.

None of the defendants required any of these witnesses to be produced for cross‑examination.
Metalicity also subpoenaed two witnesses, Mr Kenny Chan Chun In (Mr Chan) and Mr Bradley Romano, to give evidence. Until May 2022, Mr Chan was employed by Mr Papamihail in his legal practice. Mr Romano is currently employed as a legal clerk by Mr Papamihail's legal practice.
Mr Chan gave evidence by way of Microsoft Teams from interstate, where he now resides and works. Mr Chan answered the questions asked of him succinctly and directly. I accept his evidence in its entirety.
Mr Romano also answered the questions asked of him directly, although somewhat repetitively. His response to many of the questions asked of him was that he undertook the tasks asked of him at the instruction of his employer, Mr Papamihail. Given Mr Romano's youth and the fact he is not yet admitted to practice, I accept this is the case. I also accept his evidence in its entirety.
The twenty-second to twenty-sixth defendants called four witnesses, namely John Anthony Zamboni, Alic Trpcev, Phillip Silich and George Papamihail. The affidavits of each of these witnesses was tendered,[16] each was asked some brief supplementary questions in chief, and was then cross-examined by senior counsel for Metalicity. These defendants also read the affidavit of Mr Richter KC, the first named twenty sixth defendant, filed 25 October 2022.[17] Mr Richter KC was not required to attend for cross‑examination.
[16] Ex 1 (Affidavit of John Anthony Zamboni filed 25 October 2022); Ex 2 (Affidavit of Alic Trpcev filed 25 October 2022, limited to p 1 - 17); Ex 3 (Affidavit of Phillip Silich filed 26 October 2022 subject to the amendments made - see ts 281); Ex 4 (Affidavit of George Papamihail filed 28 October 2022); Ex 5 (Affidavit of George Papamihail filed 14 November 2022).
[17] Subject to the objections to par 22 which were upheld (ts 231 - 234).
Mr Zamboni answered the questions asked of him directly and somewhat forcefully. In cross‑examination, his answers were clear and responsive to the questions that he was asked. If he did not have a recollection of matters, he made this clear. I accept Mr Zamboni's evidence in its entirety.
Mr Trpcev was also clear and relatively forceful in the answers he gave in cross‑examination. However, on a number of occasions, he was mistaken in relation to the evidence he gave (such as the effect of not lodging a proxy). That said, I accept that Mr Trpcev genuinely believed the answers he gave and that he was an honest witness. In assessing his evidence, I consider the contemporaneous documents to be the most accurate record of what occurred.
Mr Silich is an accountant and has run his own business for approximately 30 years. In his affidavit, Mr Silich explained he has had some memory loss since July 2018 as a consequence of a hypoglycaemic coma. This has affected his memory of events both before and after this time.[18] Mr Silich's evidence was very limited. He had very little recollection of the events that had occurred and when these happened. I accept this is due to his medical episode and he was not avoiding answering the questions asked of him. In assessing the evidence of Mr Silich, I consider the contemporaneous documents are the best evidence of what occurred.
[18] ts 282.
Mr Papamihail is a legal practitioner who has been admitted to practice for nearly 30 years and is the sole director of Effis Pty Ltd (Effis), the twenty‑fifth defendant. Mr Papamihail gave evidence by way of Microsoft Teams because of a medical incident he had suffered that week.
Senior counsel for Metalicity submitted that Mr Papamihail was 'an interesting and combative witness'.[19] Counsel for Effis submitted that it would be open to the court to find that Mr Papamihail did not pay close attention to the matters that were the subject of these proceedings and had 'his fingers in many pies'.[20]
[19] ts 436.
[20] ts 372.
In my view, Mr Papamihail was an unimpressive witness, particularly for someone who is a legal practitioner. This was primarily because he was argumentative and combative in the responses he gave to the questions asked of him in cross‑examination. Mr Papamihail was reluctant to accept anything that was put to him in cross‑examination or to make any appropriate concessions. I set out below five examples of this.
First, when he was asked whether Nex was successful in any of the matters that he acted on in the Takeovers Panel, Mr Papamihail's exchange with senior counsel for Metalicity was as follows:[21]
Now, you acted for Nex in each of the matters before the takeover panel; is that right?---Correct.
Were you successful in any one of those matters?---I think the history speaks for itself – yes.
And how is that that you were successful?---The – at the end of the day they withdrew their bid.
And that's what you regard as success in the takeover panel matters, was it?---Correct.
Isn't it the case that in four of the manners the panel ruled against Nex Metals?---And in each of those cases I believe the panel was wrong, and at the end of the day it made no material difference.
It made no material difference?---Yes.
And the two applications that you brought on behalf of Nex Metals they each failed, didn't they?---It appears so.
[21] ts 297.
Second, while Mr Papamihail accepted he was in Greece at the time of the AGM, he would not accept that some of the times recorded in the emails reflected either the time it was read in Western Australia or the time it was received by him in Greece. When asked whether this might be the case, he responded that he did not know this to be the case.[22]
[22] ts 299.
Third, Mr Papamihail would not accept the proxy form attached to the notice of meeting for the AGM was a proxy form or that he received it. His response was that it 'appears to be a proxy form'. This was despite the fact that document he was referred was produced on subpoena by him.[23]
[23] ts 299 - 301.
Fourth, in answer to a question as to what he understood about an email sent by one of his employees, which he was copied into, Mr Papamihail responded that 'I can't understand what somebody else wrote.'[24] As senior counsel for Metalicity submitted, this was a 'very unusual position for a practitioner to take'.[25]
[24] ts 310.
[25] ts 437.
Fifth, Mr Papamihail on a number of occasions denied telling his clients how to vote. His evidence was:[26]
I did not tell them to tell the clients how to vote. They could do as they saw fit. I would be the last person in the world to tell Phillip Silich and Robert Richter or Zamboni or Trpcev, very smart men, how to vote. That would be presumptuous.
[26] ts 313.
This evidence is in direct conflict with the emails that were sent by Mr Romano in relation to the EGM (to which Mr Papamihail was copied) which asked the recipients to sign the proxy and complete it by appointing the chair and voting against resolutions 1 to 6.[27] When asked whether he did anything as a result of seeing this email, he denied it told Mr Richter how to vote. His evidence was that:[28]
It's confirming that we had a conversation, and we're helping him vote – vote – make his vote.
[27] Further supplementary affidavit of Evan Leslie Taylor filed 16 September 2022 'ELT30', p 86.
[28] ts 321.
In a number of instances, Mr Papamihail's evidence was inconsistent with earlier answers he had given. By way of example, when asked why he asked Mr Romano to make enquiries about whether certain people or companies were still shareholders of Nex, his initial response was that they were clients of his office. His evidence was that he always retains a list of clients that put money into a capital raising and wanted to know who had retained their interest.[29] He subsequently accepted that not all of the people on this list were clients as they included his son, as well as senior counsel who were briefed by his office.
[29] ts 295.
Another example was the evidence Mr Papamihail gave about the instructions he had given to Mr Chan. He denied asking Mr Chan to obtain proxy votes from a number of people and said he had asked him to remind them to exercise their votes. Mr Papamihail maintained this was the case despite being shown the emails sent by Mr Chan (to which he was copied into and subsequently responded), which asked the shareholders to send a reply email nominating the Chair to vote as their proxy.[30] Mr Papamihail denied this was done on his instructions, that he was responsible for how Mr Chan wrote his emails, and said that he did not know what conversation Mr Chan had with Mr Trpcev. Subsequently, Mr Papamihail's evidence was that:[31]
my employees, when I ask them to do something – administrative or whatever – know they have to report back to me. I check everything when I ask them to do something.
[30] ts 302 - 303.
[31] ts 308.
More relevantly, Mr Papamihail's evidence was inconsistent with that of Mr Chan and Mr Romano as well as the documentary evidence in a number of respects. Given that both Mr Chan and Mr Romano were only junior employees in Mr Papamihail's office and Mr Romano was and still is a law student, I do not accept they would have undertaken the tasks they did without specific instruction from Mr Papamihail. Mr Papamihail's response that he closely supervised his employees and required them to report back to him is more consistent with both the difference in seniority between Mr Papamihail and his junior employees and the personalities of each of them. Mr Chan and Mr Romano were quiet and reserved in giving their evidence. In contrast, as noted above, Mr Papamihail was overly confident and combative. Where Mr Papamihail's evidence differs from Mr Chan and Mr Romano, I prefer the evidence of Mr Chan and Mr Romano.
For these reasons, it is not possible to accept Mr Papamihail's evidence as generally reliable. In considering Mr Papamihail's evidence, I have placed primary emphasis on the contemporaneous documents, the objective facts that have been proved, and the inherent commercial probabilities.
Counsel for the third defendant called Mr Percy KC to give evidence. Mr Percy KC's affidavit filed 10 November 2022 was tendered[32] and he was then cross‑examined by senior counsel for Metalicity. Mr Percy KC was careful and methodical in the answers he gave to the questions he was asked. It was clear from the responses he gave to a number of questions that Mr Percy KC only had a limited recollection of the events that had occurred and that he did not have any significant role or direct involvement in many of the matters that are the subject of these proceedings. I accept the evidence of Mr Percy KC in its entirety.
[32] Ex 6.
None of the first, second, sixth to tenth or twenty‑seventh defendants adduced any evidence at the hearing.
A significant amount of material was in evidence before me. During the course of the hearing, I was not taken to all of this material. Given the urgency in delivering these reasons, I primarily have had regard to the documents on which the parties relied in their submissions (both opening and closing), the plaintiff's chronology and the aide memoire that counsel for Nex handed up at the close of evidence.

Onus and standard of proof

Metalicity accepts that it bears the onus of proof in establishing the invalidity of the proxies and the association between the defendants. The standard of proof is the balance of probabilities.
The defendants contended that due to the seriousness of the allegations made against them, the court should approach the evidence in accordance with the principle in Briginshaw v Briginshaw.[33] There is some debate as to whether this principle requires a different consideration than that which applies on the balance of probabilities test. As was noted by Spiegelman CJ in Seltsam Pty Ltd v McGuiness:[34]
The predominant position in Australian case law is that a balance of probabilities test requires a court to reach a level of actual persuasion. This process does not involve a mechanical application of probabilities.

Drawing of inferences

[33] Briginshaw v Briginshaw (1938) 60 CLR 336, 361 - 362.

[34] Seltsam Pty Ltd v McGuiness [2000] NSWCA 29; (2000) 49 NSWLR 262 [136]. Cited with approval in Amaca Pty Ltd (formerly James Hardie & Co Pty Ltd) v Hannell [2007] WASCA 158 [36] (Martin CJ).

Metalicity accepts it has no direct evidence in relation to its allegation of association between the defendants; its case is an inferential one. In the absence of direct evidence, a party may rely on inferences that can be drawn from the facts that have been established. This requires the court to be satisfied that it is reasonably probable the facts exist. A mere suspicion, conjecture or possibility is insufficient.[35]
[35] Rayney v State of Western Australia [No 4] [2022] WASCA 44 [122].
Brennan and McHugh JJ explained what an inference was in the context of judicial decision making in G v H in the following terms:[36]
An inference is a tentative or final assent to the existence of a fact which the drawer of the inference bases on the existence of some other fact or facts. The drawing of an inference is an exercise of the ordinary powers of human reason in the light of human experience; it is not affected directly by any rule of law. Legal principle may confine the basic facts in order to exclude irrelevancies and, where proof beyond reasonable doubt is required, the legal standard of proof precludes the drawing of an inference for the purpose of determining an issue in litigation when the basic facts are consistent with an innocent inference. But the drawing of an inference is part of the process of fact finding: it has to do with the minor premiss in the syllogism of judgment, not with the major premiss of legal principle.
[36] G v H [1994] HCA 48; (1994) 181 CLR 387, 390.

Procedural background

Metalicity commenced these proceedings on 27 July 2022. As is common for matters within the Corporations List, the parties were required to file concise statements setting out the legal and factual basis for the contentions they advance. The purpose of concise statements is to identify the issues between the parties which require resolution as well as the facts which are in dispute. These statements ensure that each of the parties understands the position of the other and the scope of the matters to be raised at the hearing. However, these documents are not pleadings and the matter did not proceed by way of pleadings.
Metalicity amended its concise statement on three occasions. The Further Re-amended Concise Statement filed 26 October 2022 was the statement on which the hearing proceeded.
All of the defendants who appeared at the hearing (save for the third defendant) filed responses to the concise statement. The third defendant, Mr Percy KC, only filed a notice of intention to be heard on 8 November 2022 and is represented by the same solicitors as Nex.
During the course of the matter, Metalicity requested discovery be given by a number of the parties and also sought leave to issue a number of subpoenas, including to Nex. At the time I granted leave for a subpoena to be issued to Nex, Nex had not filed a notice of intention to be heard on the application. On 11 October 2022, Nex filed a notice of intention to be heard. On 26 October 2022, I ordered that Nex provide limited discovery in relation to the share issues that are the subject of complaint by Metalicity but otherwise dismissed the application for discovery.

Issues for determination

From the concise statements that have been filed by the parties, the issues that require determination are:
(a)What are the requirements under the Act and Corporations Regulations for the lodgment of a valid and effective online proxy? In particular, does the Act impose a requirement to lodge with the company at least 48 hours prior to the meeting the documents under which any appointment is signed or authenticated by a person other than the shareholder?
(b)Are the first to twenty-sixth defendants or any of them associates, as that term is defined in the Act? If so, what is the extent of their voting power?
(c)Do either of these matters impact the validity and/or effectiveness of any votes cast at the AGM or EGM?
(d)If the validity of any votes is impacted, is this a substantial or procedural irregularity? Is there any utility in granting relief?
(e)Is Metalicity entitled to seek relief in relation to the AGM or does an Anshun estoppel arise? Do the principles set out in UBS AG v Tyne[37] prevent Metalicity from advancing any claims in these proceedings? Are there other discretionary reasons that relief ought be refused?
(f)What relevance, if any, does the issue of shares announced on 30 September 2022 have to the relief sought?
[37] UBS AG v Tyne [2018] HCA 45; (2018) 265 CLR 77.

Relevant provisions of the Act and Constitution

Before turning to consider these issues, it is useful to consider the requirements of both the Act and the constitution of Nex (Constitution) in relation to these issues.[38]

Relevant provisions of the Corporations Act 2001 (Cth)

Lodgment of proxies

[38] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 'KMA-27'.

Part 2G.2 of the Act governs meetings of members of companies.
Division 6 of pt 2G.2 addresses the appointment of proxies and body corporate representatives. Pursuant to s 250A of the Act:
(1)An appointment of a proxy is valid if it is signed, or otherwise authenticated in a manner prescribed by the regulations, by the member of the company making the appointment and contains the following information:
(a)the member's name and address;
(b)the company's name;
(c)the proxy's name or the name of the office held by the proxy;
(d)the meetings at which the appointment may be used.
An appointment may be a standing one.
(1A) The regulations made for the purposes of subsection (1) may prescribe different requirements for the authentication of an appointment given to the company by different means (electronic or otherwise).
(2)If a company has a constitution, the constitution may provide that an appointment is valid even if it contains only some of the information required by subsection (1).
(3)An undated appointment is taken to have been dated on the day it is given to the company.
(6)An appointment does not have to be witnessed.
(7)A later appointment revokes an earlier one if both appointments could not be validly exercised at the meeting.
Section 250B relevantly provides that:
(1)For an appointment of a proxy for a meeting of a company's members to be effective, the following documents must be received by the company at least 48 hours before the meeting:
(a)the proxy's appointment;
(b) if the appointment is signed, or otherwise authenticated in a manner prescribed by regulations made for the purposes of subsection 250A(1), by the appointor's attorney - the authority under which the appointment was signed or authenticated or a certified copy of the authority.
The requirements for the electronic authentication of the appointment of a proxy for the purposes of these sections are set out in reg 2G2.01 of the Corporations Regulations 2001 (Cth). Reg 2G.2.01 provides that:
Authentication of appointment of proxy (Act s 250A)
(1)For subsection 250A(1) of the Act, an electronic authentication of an appointment of a proxy must include:
(a)a method of identifying the member; and
(b) an indication of the member's approval of the information communicated.
(2)If a member appoints a proxy by e-mail or Internet-based voting:
(a) the member must be identified by personal details (for example, the member's name, address and date of birth); and
(b) the member's approval of the information communicated must be communicated by a form of security protection (for example, the entering of a confidential identification number such as a shareholder registration number or holder identification number).

Where a member has appointed a proxy who is not the chair of the meeting, and the appointment specifies the way in which the proxy is to vote, s 250BC of the Act relevantly provides that if the proxy does not vote on the resolution:
the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at that meeting.

Association or acting in concert

Section 606(1) of the Act prohibits a person acquiring a relevant interest in a company's securities if, because of the transaction, that person's or someone else's voting power in the company increases from 20% or below to more than 20%, or from a starting point that is above 20% and below 90%. Securities is defined in the Act to include shares (s 92).
Entering into a 'transaction' in relation to shares in ch 6 of the Act is specifically defined to include entering into or becoming a party to a 'relevant agreement' in relation to the shares (s 64).
The concept of an 'associate' is set out in s 12 of the Act. For the purposes of ch 6, a person is only treated as an associate of another, if at least one of the criteria in s 12 (which defines 'associate') is met. Metalicity relies on pars 12(2)(b) and (c) of the definition[39] which provide that:
(b) the second person is a person with whom the primary person has, or proposes to enter into, a relevant agreement for the purpose of controlling or influencing the composition of the designated body's board or the conduct of the designated body's affairs;
(c) the second person is a person with whom the primary person is acting, or proposing to act, in concert in relation to the designated body's affairs.
[39] ts 185.
Subsection 12(2)(b) refers to a 'relevant agreement' which is defined in s 9 of the Act as follows:
'relevant agreement' means an agreement, arrangement or understanding:
(a)whether formal or informal or partly formal and partly informal; and
(b)whether written or oral or partly written and partly oral; and
(c)whether or not having legal or equitable force and whether or not based on legal or equitable rights.
Section 16(1) of the Act specifically excludes certain persons from this definition. It provides that:
A person is not an associate of another person by virtue of section 12 or subsection 15(1), or by virtue of subsection 15(2) as it applies in relation to section 12 or subsection 15(1), merely because of one of or more of the following:
…
(d)one has appointed the other, otherwise than for valuable consideration given by the other or by an associate of the other, to vote as a proxy or representative at a meeting of members, or of a class of members, of a body corporate.
Pursuant to s 608(1) of the Act, a person has a relevant interest in securities if they have power to exercise, or control the exercise of a right to vote or power to dispose of or control the exercise of a power to dispose of the securities.
Section 609 of the Act sets out a number of situations which do not give rise to a relevant interest. These include the appointment of a person as a proxy or representative of a shareholder for one meeting only, where no valuable consideration has been given for the appointment (s 609(5)). It also includes a director of a body corporate which has a relevant interest in securities (s 609(9)).
Pursuant to s 1325A of the Act, the court has power to make any orders (including a remedial order) that it considers appropriate if there has been a contravention of ch 6 of the Act. Remedial orders are defined in s 9 of the Act and include orders to restrain the exercise of voting rights attached to shares and directing a person to dispose of shares, including the conditions on which any disposal should occur.

Relevant clauses of the Constitution

Clause 14 of the Constitution concerns meetings of members. In relation to the validity of votes cast at a meeting, cl 14.12 provides that:
No objection may be made to the validity of any vote except at a Meeting or adjourned Meeting or poll at which such vote is tendered and every vote not disallowed at any such Meeting or poll is valid for all purposes.
The Chairman of any Meeting is the sole judge of the validity of every vote tendered and the Chairman's determination is final.
Clause 15 of the Constitution sets out how a member of Nex can vote. Under cl 15.1(a), a member may vote in person or 'by proxy, attorney or in the case of a body corporate, by its Representative'.
Clause 15.3 of the Constitution relevantly provides that:
(a) The instrument appointing a proxy (and the power of attorney (if any) under which it is signed or proof of such appointment to the satisfaction of the Chairman or the Chairman's delegate) must be received by or on behalf of the Company at such place, fax number or electronic address notified in the notice of Meeting not less than 48 hours before the Meeting or adjourned Meeting at which the person named in such instrument proposes to vote.
(b) For the purposes of clause 15.3(a), where a notice of Meeting provides for electronic lodgement of proxies, a proxy lodged at the electronic address specified in the notice is taken to have the same effect as the lodgment of a proxy given in writing and duly signed by the Member if the proxy complies with the requirements set out in the notice.
(c) An instrument appointing a proxy must be in writing under the hand of the appointor or the person's attorney duly authorised in writing or if such appointor is a corporation executed in accordance with the corporation's constitution or as authorised by the Corporations Act. Subject to clause 15.3(d), the instrument appointing a proxy is deemed to confer authority to vote on a show of hands, to demand or join in demanding a poll and to vote on an adjournment of a Meeting.
…
(e) An appointment of proxy must contain the following information:
(i) the Member's name and address;
(ii) the Company's name;
(iii) the proxy's name or the name of the office held by the proxy; and
(iv) the meetings at which the appointment may be used (or in the case of a standing appointment, that the appointment is a standing appointment).

Annual general meeting

Notice of meeting

On 3 March 2022, Nex issued a notice of meeting for its 2021 AGM (AGM Notice).[40]
[40] Affidavit of Justin Charles Barton filed 3 June 2022 [16], 'JB10'.
The AGM Notice confirmed the AGM would be held as a virtual meeting, accessible as a live webinar to allow the participation of shareholders. Details were provided in the AGM Notice as to how shareholders could log in. The AGM Notice disclosed that all resolutions at the AGM would be voted on by poll and that shareholders could vote by either appointing a proxy or by submitting online poll votes during the meeting. Where a proxy form was lodged on behalf of a shareholder, the shareholder could still attend the AGM but 'the person you have appointed as proxy will cast your vote on your behalf'.[41]
[41] Affidavit of Justin Charles Barton filed 3 June 2022 'JB10', p 175.
In relation to voting by proxy, the AGM Notice stated that shareholders could appoint the chair as their proxy and provide specific instructions on how their vote was to be exercised. Where this occurred, the chair was required to follow their instructions. Both the AGM Notice and the proxy form disclosed that the chair's voting intentions in relation to undirected proxies was to vote in favour of resolutions one to three, and against resolutions four to six.[42] If the shareholder failed to nominate a proxy (or left this part of the form blank), the chair of the AGM was appointed as proxy.[43]
[42] Further supplementary affidavit of Kenneth Malcolm Allen filed 28 June 2022 'KMA-17'.
[43] Affidavit of Justin Charles Barton filed 3 June 2022 'JB10', p 191.
Both the AGM Notice and the proxy form provided that proxies for the AGM could be lodged online via the share registry of Nex, by mail, by facsimile, by email or in person and that the proxy instruction was required to be received not later than 48 hours before the commencement of the AGM. The proxy form provided that:[44]
This form should be signed by the shareholder. If a joint holding, all the shareholders should sign. If signed by the shareholder's attorney, the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company, the form must be executed in accordance with the company's constitution and the Corporations Act 2001 (Cth).
[44] Affidavit of Justin Charles Barton filed 3 June 2022 'JB10', p 199.
An explanatory memorandum accompanied the AGM Notice. The explanatory memorandum set out the recommendations of the directors in respect of the resolutions. In relation to the re‑election of Mr Percy KC, the explanatory memorandum recorded that all directors (apart from Mr Percy KC) recommended that shareholders vote in favour of the resolution. In relation to the resolutions for the appointment of the directors nominated by Metalicity, the explanatory memorandum stated (in capitals) that the board did not endorse their appointment and recommended shareholders vote against these resolutions. The explanatory memorandum set out the basis for this recommendation.[45]
[45] Affidavit of Justin Charles Barton filed 3 June 2022 'JB10', p 188.
Mr Percy KC could not recall, without access to his documents, whether there was a specific meeting at which the directors of Nex considered the AGM Notice, although the directors met frequently over this period by phone, Zoom and in person. He considered the finalisation of the material for the AGM was an administrative matter which he left to Mr Allen.[46] While he could not specifically recall reviewing the draft material, he was sure he would have.[47]
[46] ts 329.
[47] ts 330.
Mr Percy KC explained it was not necessary for there to be a specific discussion between the directors in relation to how he would exercise undirected proxies or whether the directors would support or oppose the resolutions to be put to the AGM as 'it just went without saying' and 'would have been understood'.[48] This was because the resolutions were being proposed in the context of the takeover offer, which they all opposed. As he put it:[49]
There wasn't much to discuss because we considered the takeover bid manifestly against the interests of the company and the shareholders. It didn't take much working out that that's the way we would all vote. Didn't have to discuss it.
[48] ts 330.
[49] ts 330.
Mr Percy KC was then asked whether he had a discussion with Mr Allen and Mr Chua in relation to the resolution to support his re‑election. His response was:[50]
Well, if they had to do that, I mean, there was never any division on the board, we never ever had any arguments, quarrels, there was never any suggestion I should stand down. I didn't need to say are you going to support me on this? It went without saying. But we may have discussed it. I can't remember it specifically.

Lodgment of proxies for the AGM

[50] ts 331.

In order to lodge an online proxy for the AGM, the following information was required: the holder identification number of the shareholder, the company name or code, the country and the postcode of the shareholder as recorded in Nex's share register.[51] All of these details are recorded in the share register of Nex.[52]
[51] Affidavit of Justin Charles Barton filed 3 June 2022 'JB11'.
[52] Affidavit of Justin Charles Barton filed 3 June 2022 'JB12', p 195.
Where an online proxy was lodged, the information recorded by Nex's share registry included the name of the shareholder, the name or title of the proxy holder, whether the proxy is directed or undirected, the date and time of receipt of the online proxy, and the internet protocol (IP) address from which the proxy was lodged.[53]
[53] See, for example, affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 18 - 25.
On 3 March 2022, Mr Allen sent an email to Mr Papamihail which confirmed the AGM Notice and proxy form had been lodged with the ASX. In a reply email to Mr Allen, which was copied to Mr Chan and Mr Romano, Mr Papamihail asked Mr Chan to 'arrange a proxy for Effis please'.[54] At that time, Mr Papamihail was in Greece, where he remained until 1 April 2022.[55]
[54] Further supplementary affidavit of Evan Leslie Taylor filed 16 September 2022 'ELT30', p 20.
[55] Ex 4 [10] - [12].
Mr Chan's evidence was that after receiving this email, he made arrangements to 'get the proxies for Effis'.[56] When asked how he knew which way to vote, his evidence was that:[57]
I know George, he wanted me to (indistinct) he wanted me to proxy the vote to the chairman, because he was not in Australia, if I remember. I think he was overseas.
[56] ts 220.
[57] ts 221.
On 25 March 2022, Mr Chan emailed Mr Papamihail to say he had tried to lodge a proxy for Effis but there was no holding. Mr Papamihail provided him with the details of his stockbroker and asked him to contact them immediately as well as to contact Mr Allen.[58] At 5.05 pm on 25 March 2022, an online proxy was lodged from the offices of Mr Papamihail appointing the chair as proxy. No direction was given as to how the votes should be cast on the resolutions.[59]
[58] Further supplementary affidavit of Evan Leslie Taylor filed 16 September 2022 'ELT30', p 48.
[59] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 52.
Between 15 March 2022 and 29 March 2022, Mr Allen lodged proxies on behalf of the first to twenty-first defendants in relation to the AGM. Mr Allen deposed that:[60]
At the time I lodged the online votes, I understood that I held the authority of the relevant shareholder to do so. I have explained the circumstances in which I received such authority below.
[60] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [7], 'KMA-15',
Between 15 and 29 March 2022, Mr Allen had similar conversations with representatives of the second to twenty‑first defendants (apart from the third and fourth defendants) to the following effect. Mr Allen noted that Nex was the subject of a hostile takeover bid by Metalicity and that Metalicity was trying to remove the current board of directors of Nex and appoint three new directors. At the AGM, the resolutions to be voted on included the adoption of the remuneration report, the re‑election of Mr Percy KC and the appointment of three new directors proposed by Metalicity. Mr Allen expressed the opinion to each of the shareholders that he considered it was inappropriate in the middle of a takeover bid for Metalicity to attempt to circumvent the takeover process. His evidence is that:[61]
The member said to me words to the effect that they were happy for me to lodge online votes on their behalf in a manner I saw fit.
[61] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [8.2].
Mr Allen then gave evidence of the conversations or text message exchanges he had with each of these shareholders.
Relevantly, for the purposes of this application, Mr Allen deposes that:
(a)on or about 16 March 2022, he telephoned Brett Royle, the eleventh defendant. During this conversation, Mr Royle said 'he was happy for me to lodge online votes on his behalf as discussed' which Mr Allen understood to mean that he had authorisation to lodge votes on his behalf.[62] At 12.40 pm on 16 March 2022, Mr Allen lodged an online proxy for Mr Royle in favour of the Chair directing the Chair to vote for resolutions 1 to 3 and against 4 to 6 in respect of one of Mr Royle's parcels of shares.[63] He lodged a proxy in respect of the second parcel of Mr Royle's shares at 2.33pm on 25 March 2022;[64]
[62] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [34] - [36].
[63] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 85.
[64] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 61.
(b)on 16 March 2022, he received a proxy form signed by his daughter, Ms Andrea Allen, the tenth defendant, appointing the Chair as her proxy for the AGM. The proxy form directed the Chair to vote for resolutions 1 to 3 and against resolutions 4 to 6.[65] At 12.43 pm and 12.45 pm Mr Allen lodged online proxies for Ms Allen reflecting the directions in her proxy;[66]
[65] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [11], 'KMA-17'.
[66] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 85.
(c)at 10.28 am on 21 March 2022, Mr Allen lodged an online proxy for his own shares. Mr Allen appointed the Chair as proxy, directed the Chair to abstain in relation to resolution 1, vote for resolutions 2 and 3, and against resolutions 4 to 6.[67] He subsequently lodged another online proxy in respect of these shares at 4.13 pm on 28 March 2022;[68]
[67] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 108.
[68] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 24.
(d)on 21 March 2022, he received a proxy form from his wife, Ms Lee Allen, the sixth defendant, appointing the Chair as her proxy for the AGM. The proxy form directed the Chair to vote for resolutions 1 to 3 and against resolutions 4 to 6.[69] Between 10.32 am and 10.45 am on 21 March 2022, Mr Allen lodged online proxies for Ms Allen in her capacity as trustee (the seventh to ninth defendants), joint trustee (the second defendant) and for the second parcel of shares she owned in her own name.[70] None of these related to the shareholding of the proxy he had received (in respect of the second parcel of shares owned by Ms Allen of 3,174,603 shares).[71] This proxy was lodged online at 2.27 pm on 25 March 2022.[72] At 10.33 am on 29 March 2022, Mr Allen lodged a further proxy in relation to the second defendant's shares, which are owned jointly by him and his wife as trustees of the Allen Superannuation Fund;[73]
[69] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [9], 'KMA-16'.
[70] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 108.
[71] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [9], 'KMA-16'; Affidavit of Justin Charles Barton filed 3 June 2022 'JB12', p 195.
[72] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 62.
[73] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 21.
(e)on 24 March 2022 at 4.54 pm, Mr Allen sent a WhatsApp message to Mr Jim Passaris, who works for Mr John Doutch, at Classic Minerals Pty Ltd. Mr Allen asked him to ask Mr Doutch 'to please do his proxy online or give me authority to do it for him'. Mr Allen's evidence is that he was referring to Jett Holdings Pty Ltd, the eighteenth defendant, which 'is John's family business'. Mr Passaris responded 'Speaking to John now and you have authority'. A copy of a shareholder statement is embedded in the WhatsApp message although it is not possible to discern which shareholding this relates to.[74] At 7.50 am on 29 March 2022, Mr Allen lodged an online proxy for Jett Holdings appointing the Chair as proxy and directing that he vote in favour of resolutions 1 to 3 and against resolutions 4 to 6;[75]
[74] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [37] - [43], 'KMA-20'.
[75] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 22.
(f)on 25 March 2022 at 8.28 am, he received a text message from Mr Mate Barac, the sole director of Mate Auto Electrical Pty Ltd, the fifteenth defendant, who had COVID-19 at that time, asking that Mr Allen come to his workshop to pick up his signed proxy forms. The proxy form for the fifteenth defendant was signed but left blank. Mr Allen then called Mr Barac and suggested he voted to 'keep Tom and against appointing the proposed directors', to which Mr Barac responded that he was happy with that.[76] Mr Allen lodged an online proxy for the fifteenth defendant at 3.07 pm appointing the Chair as proxy and directing that he vote in favour of resolutions 1 to 3 and against resolutions 4 to 6;[77]
[76] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [18] - [22].
[77] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 59.
(g)on or around 29 March 2022, Mr Allen spoke to Kevin Norman, the husband of Denise Norman, a director of Toprange Pty Ltd (Toprange), the seventeenth defendant. During this conversation, Mr Norman told Mr Allen that 'Denise was happy for me to lodge an online vote on behalf of Toprange'.[78] At 3.11 pm on 25 March 2022, Mr Allen lodged an online proxy for Toprange Pty Ltd appointing the Chair as proxy and directing that he vote in favour of resolutions 1 to 3 and against resolutions 4 to 6;[79]
(h)on 24 March 2022, Mr Allen called Mr Dion Meredith, the twenty-first defendant, who, during the conversation, said he was happy for him to lodge an online vote on his behalf.[80] At 3.29 pm on 25 March 2022, Mr Allen lodged an online proxy for Mr Meredith appointing the Chair as proxy and directing that he vote in favour of resolutions 1 to 3 and against resolutions 4 to 6;[81]
(i)on 24 March 2022, Mr Allen spoke with Mr Paul Lambert who is the stockbroker of Mr Barry Lucas, the twentieth defendant. During the conversation, Mr Lambert said that he could lodge an online vote on behalf of Mr Lucas.[82] At 3.31 pm on 25 March 2022, Mr Allen lodged an online proxy for Mr Lucas appointing the Chair as proxy and directing that he vote in favour of resolutions 1 to 3 and against resolutions 4 to 6;[83]
(j)on 24 March 2022, Mr Allen emailed the share registry to request that proxy forms for a number of shareholders, including the fourth, twelfth, and thirteenth defendants, be sent to '[email protected]'.[84]
(k)at 10.06 am on 28 March 2022, Mr Chua emailed Mr Allen the proxy forms of Hock Peng Chua, the thirteenth defendant, which was unsigned,[85] and Peck Chong Yeo, the twelfth defendant. Mr Yeo's proxy was an open proxy.[86] At 10.54 am that day, Mr Allen lodged an online proxy for Mr Hong Peng Chua and at 10.59 am for Mr Yeo. Each appointed the Chair as proxy and directed the Chair to vote in favour of resolutions 1 to 3 and against resolutions 4 to 6.[87] A further online proxy was lodged on behalf of Mr Hock Peng Chua at 3.27 pm in an identical form;[88]
(l)in the same email set out in paragraph (k), Mr Chua asked Mr Allen to send him his proxy form 'or fill up the form on my behalf because I didn't receive it yet'. to which Mr Allen responded 'Will do'.[89] At 12.16 pm on 26 March 2022, Mr Allen lodged a proxy on behalf of Mr Chua, the fourth defendant, appointing the chair as proxy and directing the chair to abstain on resolution 1, vote for resolutions 2 and 3 and against resolutions 4 to 6;[90]
(m)on 28 March 2022, Mr Allen spoke with Mr Tony Ong, a close friend of the fourth defendant, who informed him that Mr Goh, the nineteenth defendant, had authorised Mr Allen to vote online on his behalf at the AGM.[91] At 8.18 am on 28 March 2022, Mr Allen lodged an online proxy for Mr Goh appointing the Chair as proxy and directing the chair to vote in favour of resolutions 1 to 3 and against resolutions 4 to 6;[92]
(n)on or about 28 March 2022, Mr Allen called Mr Bradley Kidd, the sole director and company secretary of B3 Prospecting Pty Ltd (B3 Prospecting), the fifth defendant. During the conversation, Mr Kidd told Mr Allen that he was happy for him to lodge an online vote on behalf of B3 Prospecting.[93] At 1.20 pm on 28 March 2022, Mr Allen lodged an online proxy for B3 Prospecting. The proxy appointed the Chair as proxy and directed the chair to vote in favour of resolutions 1 to 3 and against resolutions 4 to 6;[94]
(o)on or about 28 March 2022, Mr Allen called Mr Matthew Mayne, one of the sixteenth defendants. During the conversation Mr Mayne told him words to the effect that he was happy for him to lodge online votes on his behalf. At 2.42 pm on 28 March 2022, Mr Allen lodged an online proxy on behalf of Mr and Mrs Mayne as trustees for the Mayne Super Fund, the sixteenth defendants. I infer from the documents that have been lodged that the proxy appointed the Chair as proxy and directed the chair to vote in favour of resolutions 1 to 3 and against resolutions 4 to 6;[95]
(p)on 28 March 2022, a hard copy proxy was received by the share registry from Agenor Pty Ltd (Agenor), the fourteenth defendant, signed by only one director. The form appointed the chair as their proxy and directed that the Chair vote in favour of resolutions 1 to 2 and abstain from voting on the remaining resolutions.[96] At 3.50pm that day, Mr Allen sent a text message to Mr Glamuzina saying 'For 1 to 3. Against 4 to 6.' In response, Mr Glamuzina responded saying 'please amend my votes for resolutions to read For resolutions 1 to 3 and Against for resolutions 4 to 6'.[97] Mr Allen's evidence is that he understood Mr Glamuzina to be the 'controlling mind' of Agenor. At 4.05pm on 28 March 2022, Mr Allen lodged an online proxy for Agenor appointing the Chair as proxy and directing the Chair to vote in favour of resolutions 1 to 3 and against resolutions 4 to 6.[98]
[78] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [47] - [50].
[79] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 59.
[80] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [65] - [66].
[81] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 59.
[82] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [68] - [70].
[83] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 58.
[84] Third affidavit of Audrey Pieterse filed 8 September 2022 'AP8', p 38.
[85] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 'KMA-25', p 32 - 33.
[86] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 'KMA-25', p 34.
[87] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 50.
[88] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 49.
[89] Supplementary affidavit of Caroline Cecilie Spencer filed 4 October 2022 'CS9', p 186.
[90] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 52.
[91] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [71].
[92] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 51.
[93] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [54] - [56].
[94] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 50.
[95] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 49. The entry at the top of the page matches the number of shares that the sixteenth shareholders have in Nex.
[96] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 35.
[97] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [58] - [60]; 'KMA-22'.
[98] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 25.

On the morning of 21 March 2022, Mr Allen was copied into an email from Mr Albert Longo to the share registry asking 'Are you able to provide the progress of resolution acceptances for the AGM?'[99] A copy of a proxy report as at 21 March 2022 was provided at 12.49 pm that day. At that stage, votes of almost 38 million had been received voting in favour of resolutions 2 and 3 and against resolutions 4 to 6.
[99] Supplementary affidavit of Caroline Cecilie Spencer filed 4 October 2022 'CS9', p 32.
At approximately 3.00 pm on 23 March 2022, Mr Allen was copied into an email from the share registry of Nex attaching a proxy report 'as at 23/03/22' for the upcoming AGM.[100] The report disclosed that at that time, proxies equating to approximately 43 million shares had been given to vote in favour of the re‑election of Mr Percy KC and against the appointment of the nominees of Metalicity. This report was provided in answer to a request from Mr Longo (copied to Mr Allen) for a copy of the report that day and also on the Friday.[101] Shortly after receipt of this email and proxy report, Mr Allen forwarded the proxy report to Mr Percy KC, his assistant, Mr Chua, and the company's solicitor.[102] Mr Longo subsequently emailed Mr Allen, stating 'Half way there'.[103]
[100] Supplementary affidavit of Caroline Cecilie Spencer filed 4 October 2022 'CS9', p 60, 66 - 68.
[101] Supplementary affidavit of Caroline Cecilie Spencer filed 4 October 2022 'CS9', p 61.
[102] Supplementary affidavit of Caroline Cecilie Spencer filed 4 October 2022 'CS9', p 87.
[103] Supplementary affidavit of Caroline Cecilie Spencer filed 4 October 2022 'CS9', p 103.
Mr Allen received a further proxy report at 4.22 pm on 25 March 2022. At that stage, approximately 59 million votes were in favour of resolutions 2 to 3 (with 92.5 million against) and 62.8 million votes against resolutions 4 to 6 (with 88.6 million for). In addition, there were almost 4.5 million open useable proxies.[104]
[104] Supplementary affidavit of Caroline Cecilie Spencer filed 4 October 2022 'CS9', p 151 - 161.
An updated proxy report was received by Mr Allen from the share registry at 3.15 pm on 28 March 2022. At that stage, approximately 93 million votes were in favour of resolutions 2 to 3 (with 92.5 million against) and 94.8 million votes against resolutions 4 to 6 (with 88.6 million for). At that stage, there were almost 5.5 million open useable proxies.[105]
[105] Supplementary affidavit of Caroline Cecilie Spencer filed 4 October 2022 'CS9', p 113 - 122.
On 29 March 2022 at 10.53 am, Mr Allen circulated a further updated proxy report to Mr Papamihail, Mr Chan, and others. At that stage, approximately 98.5 million votes were in favour of resolutions 2 to 3 (with 92.5 million against) and 102.4 million votes against resolutions 4 to 6 (with 88.5 million for), with almost 7.2 million open useable proxies.[106]
[106] Further supplementary affidavit of Evan Leslie Taylor filed 16 September 2022 'ELT30', p 66 - 67.
In relation to the lodgment of proxies on behalf of Mr Percy KC, Mr Percy's evidence was that:[107]
On 22 March 2022, a proxy form was submitted by Ken Allen in respect of my shareholding, as appears in the affidavit of Audrey Pieterse sworn on 24 June at Attachment "AP1", pages 124 - 125. To the best of my recollection, this occurred by me causing the form to be completed by my personal assistant, by me signing it, and then providing it to Mr Allen to lodge.
On 28 March 2022, two proxy forms were submitted by Ken Allen in respect of my shareholding, at 4:06pm and 4:10pm, as appears in the affidavit of Audrey Pieterse sworn on 24 June at Attachment "AP1", pages 24 - 25. To the best of my recollection, the first form directed votes for resolution 1 at the AGM, for which I had to abstain. Both submissions happened by me completing the form or causing the form to be completed, by me signing it and providing it to Mr Allen to lodge.
Mr Allen had my authority to lodge all three proxy forms (the first on 22 March 2022, and the latter two lodged on 28 March 2022). This was done on my part as a matter of convenience.
[107] Ex 6 [13] - [15].
The documents to which Mr Percy KC refers are a proxy form that has been signed by him and then forwarded by Mr Allen to 'Admin'[108] and an extract of a document entitled 'proxy processing summary' dated 29 March 2022. The extract records that two forms were lodged on behalf of Mr Percy KC on 28 March 2022 at 4.06 pm and 4.10 pm from Mr Allen's IP address.[109] Mr Percy KC confirmed that Mr Allen was authorised to lodge proxy forms on his behalf because he sent the proxies through to him for lodgment.[110] In cross‑examination, Mr Percy KC could not specifically recall whether he signed any additional proxy forms on 28 March 2022. He explained that before coming to court to give evidence, he had asked his secretary to find the emails which sent these proxies through, but she had been unable to find them. He confirmed Mr Allen had his authority to lodge electronically on his behalf whatever had been submitted by Mr Allen.[111]
[108] Affidavit of Audrey Pieterse filed 24 June 2022 p 124 - 126.
[109] Affidavit of Audrey Pieterse filed 24 June 2022 p 24 - 25.
[110] ts 334.
[111] ts 336.
Counsel for Metalicity submitted, which I accept, that Mr Percy KC was mistaken in saying he signed two proxy forms on 28 March 2022. I find that Mr Percy KC signed one proxy form on or about 22 March 2022 which was provided by his assistant to Mr Allen for lodgment. The proxy appointed the Chair as his proxy and directed the Chair to abstain on resolutions 1 and 2, vote in favour of resolution 3 and vote against resolutions 4 to 6. I find that this was amended by Mr Allen on 28 March 2022 when he lodged an online proxy on behalf of Mr Percy KC to vote in favour of resolution 2. I infer that this was done because Mr Percy KC was not required to abstain from voting on this resolution and that this change reflected Mr Percy KC's intention as set out in the AGM notice.
On 25 March 2022, Mr Chan, an employee of Mr Papamihail, emailed a number of shareholders of Nex, including Mr Silich (of the twenty‑third defendant), Mr Trpcev (the twenty‑fourth defendant), Mr Zamboni (of the twenty‑second defendant), and possibly others.[112] The emails stated that:[113]
Nex Metals Explorations Limited is having a general meeting on the 31 March 2022.
I am not sure if you have receive the notice from Advanced Share Registry.
If you have not already cast your vote, you can send us a reply email, confirming as director of Higham Hill Pty Ltd [or the relevant shareholder], nominating the Chairman, Tom Percy QC, to vote as your proxy. Thanks
[112] ts 224.
[113] Further supplementary affidavit of Evan Leslie Taylor filed 16 September 2022 'ELT30', p 70 - 71.
Mr Chan's evidence was that he was instructed by Mr Papamihail during a telephone conversation, when he believed Mr Papamihail was overseas, to contact clients and friends of Mr Papamihail who were shareholders of Nex and ask if they had already voted in relation to the AGM or whether 'we can assist them in proxying their vote to the chairman'.[114] Mr Papamihail denied he instructed Mr Chan to ask shareholders to nominate the Chair as proxy for the meeting. His recollection was that he told him to 'seek people out so that they could exercise their votes and vote as they saw fit'.[115] I do not accept Mr Papamihail's evidence and prefer Mr Chan's evidence which is more consistent with the contemporaneous documents, including the emails that were subsequently sent by Mr Chan.
[114] ts 221 - 222.
[115] ts 304.
Mr Papamihail replied to the emails sent by Mr Chan, copying in both the addressee of the email and Mr Allen, asking the matter be treated as a priority and if assistance was required, to contact Daniel from his office.[116]
[116] Further supplementary affidavit of Evan Leslie Taylor filed 16 September 2022 'ELT30', p 70;
Mr Trpcev's evidence was that he and Mr Papamihail have known each other for over 60 years, since childhood. He owns shares in approximately 125 listed companies. He accepted that he receives a significant amount of material from these companies which he flicks through and then generally throws out. He usually does not 'deal with proxies' or attend general meetings.[117] In cross‑examination, it was apparent that Mr Trpcev was mistaken about the consequences of not lodging a proxy. On a number of occasions, he expressed the belief that if he did not lodge a proxy, his vote defaulted to the chair.[118] He explained that, ultimately, he decided to lodge a proxy because he was 'getting tired' of being harassed.[119]
[117] ts 271.
[118] ts 271 - 272.
[119] ts 272.
Mr Trpcev agreed he received the emails from Mr Chan and Mr Papamihail referred to at [97] and [99]. On 26 March 2022, Mr Trpcev responded to the email from Mr Chan stating 'I'll confirm Mr Percy can be my proxy'.[120] Mr Trpcev's evidence was the decision to appoint Mr Percy KC was his decision. He has known Mr Percy KC since the late 1980s from Kalgoorlie, was aware that Mr Percy KC was a prominent lawyer and believed he was best suited to represent his best interests at the AGM.[121] When asked in cross‑examination what he considered his best interests were, Mr Trpcev responded:[122]
Well, my best interest was when you buy shares, you buy shares to make money. And by accepting the offer, I considered that I was going to lose a lot of money in preference to selling my shares and losing a little bit of money. And – and I just wanted nothing to do with the offer. And having Mr Percy as the chair, I was just comfortable for Nex to continue on as they are.
[120] Ex 2 'AT2'.
[121] Ex 2 [8] - [11].
[122] ts 273.
Subsequently, on 28 March 2022, Mr Trpcev received an email from Mr Chan offering to lodge his proxy online and noting he would require Mr Trpcev's HIN number. Mr Trpcev responded by providing his HIN number and saying 'Ok thanks Kenny'. At 2.47 pm on 28 March 2022, an online proxy was lodged for Mr Trpcev appointing the chair as proxy.[123] The proxy was an open proxy. Mr Trpcev subsequently received from Mr Chan confirmation that a proxy had been lodged on his behalf.[124] Each of these emails were copied to Mr Allen at his email address '[email protected]'. Mr Trpcev denied he accepted Mr Chan's recommendation to appoint the chair and said this was his decision.[125]
[123] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1' p 49.
[124] Ex 2 [14], 'AT3'.
[125] ts 274.
Mr Richter KC is a barrister based in Melbourne, Victoria. He has known Mr Papamihail since the 1980s. On 25 March 2022, Mr Richter KC sent an email to the share registry of Nex (copied to Mr Percy) nominating Mr Percy KC, Chair of the Nex AGM, to:[126]
vote as proxy for the shareholding in NEX of the Robert Richter Superannuation Fund which holds 2,601,960 shares in NME and he is hereby authorised to vote at the General Meeting to be held on 31 March 2022 according to his indicated preferences.
[126] Further supplementary affidavit of Evan Leslie Taylor filed 16 September 2022 'ELT30', p 50.
Mr Richter KC's evidence was that he nominated Mr Percy KC because he considered this to be in the best interests of Nex shareholders. He did not speak to anyone else (including Mr Chan, Mr Papamihail or Mr Allen) before sending this email or seek their input.[127]
[127] Affidavit of Robert Richter filed 25 October 2022 [9] - [11].
At 3.17 pm on 25 March 2022, Mr Chan received an email from Mr Allen forwarding an email received from Mr Percy KC, which in turn forwarded the email Mr Percy KC had received from Mr Richter KC.[128] Mr Chan responded shortly afterwards to Mr Allen 'Robert is done'.[129] At 4.02 pm, an online proxy was lodged for the twenty-sixth defendants appointing the chair as proxy.[130] The proxy was an open proxy.
[128] Further supplementary affidavit of Evan Leslie Taylor filed 16 September 2022 'ELT30', p 49.
[129] Further supplementary affidavit of Evan Leslie Taylor filed 16 September 2022 'ELT30', p 49.
[130] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 57.
Mr Zamboni is the sole director of the twenty-second defendant. He has been a client of Mr Papamihail since about 2019. In late March 2022, he spoke with Mr Papamihail by telephone. Mr Papamihail accepted that he called Mr Zamboni from Greece.[131]
[131] ts 305.
During this call, the topic of Nex and the upcoming AGM came up. Mr Zamboni's evidence was that:[132]
I remember telling George that I didn't think the takeover bid offer for Nex Metals represented good value for me as a shareholder. I said I had real reservations about it and I was highly sceptical of it.
I told George I wouldn't be attending the AGM in person, that I was very busy and would be lodging a proxy as soon as my busy work schedule allowed me too.
George said to me 'if you're pressed for time we can do it for it if you like ... you just complete the form and we will lodge it for you" (or words to that effect). He told me he was about to go overseas for a short period but that one of his solicitors Kenny Chan (who I already knew) would lodge the proxy for me.
[132] Ex 1 [11] - [13].
In cross-examination, Mr Zamboni accepted that at the time of this call, he had 'probably' received the AGM Notice but had probably disposed of it as he does not usually participate in meetings of the companies in which he holds shares.[133]
[133] ts 259 - 260.
Mr Papamihail denied that during the phone call, he said to Mr Zamboni that if he was pressed for time, he could organise to lodge a proxy on his behalf.[134] I do not accept this evidence and prefer the evidence of Mr Zamboni which is more consistent with the contemporaneous documents and the events that subsequently occurred.
[134] ts 307.
Shortly after this, Mr Chan contacted Mr Zamboni and offered to assist with the lodgment of his proxy. Mr Zamboni's evidence was that he told Mr Chan that he wanted to 'leave my votes to the chairman's discretion' and that Mr Chan told him he required written instructions to that effect.[135] At 11.56 am on 29 March 2022, Mr Zamboni sent an email to Mr Chan which stated 'As discussed, please proxy my votes to the chairman for tomorrows (sic) meeting.'[136]
[135] Ex 1 [16].
[136] Ex 1 'JAZ1'.
At 11.55 am on 29 March 2022, Mr Chan emailed Mr Allen (copied to Mr Papamihail) to inform him that he had received 'Jose Beneit and Zamboni authority to proxy.' Mr Chan requested that Mr Allen provide him with the HIN for Peter Vanda Resources Pty Ltd (Peter Vanda Resources), the twenty‑second defendant. At 12.00 pm on 29 March 2022, an online proxy was lodged for Peter Vanda Resources appointing the chair as proxy.[137] The proxy was an open proxy. At 12.01 pm, Mr Chan sent a further email saying 'All done. Proxy to chairman.'[138]
[137] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 20.
[138] Further supplementary affidavit of Evan Leslie Taylor filed 16 September 2022 'ELT30', p 72 - 73.
Mr Chan explained that he had copied Mr Allen into this email because he needed the shareholders' HIN to be able to lodge their proxies, and copied Mr Papamihail in 'to be transparent'.[139] Mr Chan's evidence, which I accept, was that these shareholders authorised him either by email or phone to obtain their HIN number from Mr Allen.[140]
[139] ts 226.
[140] ts 227.
Mr Silich accepted that he received the emails from Mr Chan and Mr Papamihail on 25 March 2022 (referred to at [97] and [99]). At that time, he had never met Mr Chan.[141] Mr Silich's evidence was that he received a call from Mr Chan on 29 March 2022 following up whether he was going to vote at the AGM and that he told Mr Chan that he was going to give his proxy to Mr Percy KC.[142]
[141] Ex 3 [6].
[142] Ex 3 [7].
At 12.59 pm, an online proxy was lodged for Higham Hill Pty Ltd (Higham Hill), the twenty‑third defendant, appointing the chair as proxy.[143] The proxy was an open proxy. At 1.01 pm, Mr Chan emailed Mr Allen (copied to Mr Papamihail) informing them that he had spoken to Mr Silich of Higham Hill and had his authority to lodge a proxy. The email concluded 'I already proxy his votes'.[144] At 1.04 pm on 29 March 2022, Mr Silich sent an email to Mr Papamihail and Mr Chan (copied to Mr Allen) confirming his telephone conversation with Mr Chan 'that I have given my proxy to the chairman' for the AGM. The email set out the HIN of Higham Hill.[145]

Conduct of the AGM

[143] Affidavit of Audrey Pieterse filed 24 June 2022 'AP1', p 20.

[144] Further supplementary affidavit of Evan Leslie Taylor filed 16 September 2022 'ELT30', p 72.

[145] Further supplementary affidavit of Evan Leslie Taylor filed 16 September 2022 'ELT30', p 70;

Mr Percy KC's evidence was that he did not see the report from Advanced Share Registry in respect of the online proxies for the AGM and that he relied on the chairman's script which had been provided to him by Mr Allen and checked by Nex's solicitors, Lawton Gillon.[146] Mr Percy KC accepted that 'meeting procedure is not my area of expertise' and that he relied on Mr Allen and Nex's solicitors.[147]
[146] ts 338.
[147] Ex 6 [24] - [28].
Mr Percy KC explained that in relation to the proxies for the meeting, the proxies are lodged with the share registry who tell 'us' if there are any problems and he takes their advice. The auditors of Nex also attended the meeting. Mr Percy KC did not check any proxy for the meeting and did not consider that to be his role. His evidence was that he considered this to be the duty of the share registry who would advise him if there were any irregularities. Mr Percy KC confirmed that Mr Allen 'was the person responsible for engaging with the share registry' and he had no reason to suspect there were any problems with the proxies at the AGM.[148]
[148] ts 337.
This evidence is consistent with the documentary evidence before the court which makes plain that the registry sought the advice of Mr Allen as to how proxy forms should be processed for the purpose of the meeting. Specifically, the registry sought advice as to how registered holdings in joint names should be processed if there was only one signature and where a company only had one signature, without being signed as a sole director/secretary. Mr Allen instructed the registry to process each of these as valid proxies.[149]
[149] Supplementary affidavit of Caroline Cecilie Spencer filed 4 October 2022 p 171 - 172.
At the meeting, no objections were taken to any votes that were cast at the meeting nor were any queries raised about the invalidity of any of the proxies.[150]
[150] Ex 6 [29] - [30].
At 2.37 pm on 31 March 2022, Mr Ming of Advanced Share Registry sent an email to Mr Allen which said 'We'll process the poll and provide the meeting results shortly.[151] At 2.43 pm on 31 March 2022, Mr Ming sent a further email to Mr Allen which stated:[152]
We notice Mr Hock Hoo Chua also appointed as a Proxy holder.
Can you please return his voting card as well?
[151] Supplementary affidavit of Caroline Cecilie Spencer filed 4 October 2022 p 392.
[152] Supplementary affidavit of Caroline Cecilie Spencer filed 4 October 2022 p 392.
The AGM closed at or around 2.46 pm.
Between 3.02 pm and 3.15 pm, emails were exchanged between the share registry and Mr Allen, and Mr Allen and Mr Chua.[153] At 3.17 pm, Mr Allen forwarded a copy of Mr Chua's completed proxy voting card to the share registry.[154]
[153] Affidavit of Audrey Pieterse filed 8 September 2022 'AP8', p 61 - 62; Supplementary affidavit of Caroline Cecilie Spencer filed 4 October 2022 p 402.
[154] Affidavit of Audrey Pieterse filed 8 September 2022 'AP8', p 61 - 62.
Following the AGM, Nex lodged an announcement with the ASX. The announcement disclosed that:[155]
(a)the resolution to re-elect Mr Percy KC was passed on a poll. 109,739,697 votes were voted in favour of the resolution and 92,551,370 votes against. That is, the resolution was carried by 17,188,327 votes; and
(b)202,291,067 shares were voted in relation to each of resolutions 4, 5 and 6 which equated to 75.76% of the total number of issued shares in Nex. 88,530,612 shares were voted in favour of these resolutions and 113,592,794 shares against these resolutions. That is, the resolutions failed by 25,062,182 votes.
[155] Affidavit of Justin Charles Barton filed 3 June 2022 'JB13'; Supplementary affidavit of Kenneth Malcolme Allen filed 22 June 2022 'KMA-11'.

Legal Principles

[341] Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589.

In Smargiassi Nominees Pty Ltd v Shire of Collie, the Court of Appeal explained the differences between the doctrines of issue estoppel, Anshun estoppel and abuse of process.[342] As was noted by the Court of Appeal:[343]
Each doctrine is informed by the public interest in finality in litigation and the conclusiveness of judicial decisions: controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances.
[342] Smargiassi Nominees Pty Ltd v Shire of Collie [2021] WASCA 107 [41] - [66].
[343] Smargiassi Nominees Pty Ltd v Shire of Collie [42].
The Court of Appeal explained Anshun estoppel in the following terms:[344]
Anshun estoppel is so-called in recognition of the relevant principle as expounded in Port of Melbourne Authority v Anshun Pty Ltd (although sometimes it is referred to as the 'extended principle' in Henderson v Henderson). It is an extension of cause of action estoppel and issue estoppel and also potentially precludes assertion of a right or obligation, or the raising of an issue of fact or law, between parties to a proceeding or their privies. In Tomlinson v Ramsey Food Processing Pty Ltd the plurality referred to Anshun estoppel in these terms:
[It] operates to preclude the assertion of a claim, or the raising of an issue of fact or law, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding. (citations omitted)
[344] Smargiassi Nominees Pty Ltd v Shire of Collie [55].
In respect of abuse of process, the Court of Appeal stated that:[345]
The doctrine of abuse of process is informed in part by similar considerations of finality and fairness as underpin both issue estoppel and Anshun estoppel. However, the doctrine is inherently broader and more flexible than issue or Anshun estoppel and is capable of application in any circumstance in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. In that respect:
[I]t has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. (citations omitted)

Exercise of discretion

[345] Smargiassi Nominees Pty Ltd v Shire of Collie [64].

In this case, I accept the submission of Metalicity that it was not unreasonable for it not to seek relief in relation to the AGM in the First Proceedings. At the time of the hearing of the First Proceedings, the s 249F Meeting that had been sought to be convened by Metalicity as well as the EGM were scheduled to be held on 4 July 2022. Had Metalicity sought to include relief in relation to the AGM, I accept it was likely that an application for an adjournment of the hearing would have been made. However, the hearing needed to proceed at that time to address the issues raised in respect of these proposed meetings. In these circumstances, I do not accept that Metalicity was required to bring any claim for relief in respect of the AGM in the First Proceedings and that it should be prevented from raising these issues in these proceedings.
The more relevant issue, in my view, is whether the court should exercise its discretion to make declaratory orders in relation to the resolutions of the AGM when similar resolutions were considered by shareholders at the EGM.
For the reasons set out above, I do not consider there was any understanding or arrangement between the first to twenty-sixth defendants in respect of the resolutions to be considered at the EGM. This was the only basis on which the resolutions passed at this meeting were challenged. For this reason, I consider that there would be no utility in making any orders in respect of the AGM as these would not impact or overturn the resolutions that were validly passed at the EGM.

Issues of shares announced by Nex on 30 September 2022

Given these findings, it is unnecessary for me to consider the issue of shares announced on 30 September 2022 nor do I consider it appropriate to do so. These matters are raised in separate proceedings for oppression and can be considered in those proceedings.

Conclusion and Orders

For the reasons set out above, I consider the originating process should be dismissed. I will hear from the parties as to the appropriate order as to costs.

Annexure A - Description of defendants and ownership of shares in Nex

1.The first defendant, Mr Allen, owns 7,128,303 shares (or 2.67% of the issued capital of Nex). Mr Allen is the managing director of Nex.
2.Mr Allen and his wife, Lee Allen, as trustees for the Allen Super Fund (the second defendants) own 530,000 shares in Nex (or 0.20% of the issued capital of Nex).
3.The third defendant, Mr Percy KC owns 1,016,000 shares (or 0.38% of the issued capital of Nex). Mr Percy KC is the chair of Nex.
4.The fourth defendant, Mr Chua, owns 860,000 shares (or 0.32% of the issued capital of Nex). Mr Chua is a director of Nex.
5.B3 Prospecting Pty Ltd (the fifth defendant) owns 17 million shares in Nex (or 6.37% of the issued capital of Nex). The sole director and company secretary of B3 Prospecting is Mr Bradley Kidd,[346] a long term friend of Mr Allen.[347]
[346] Affidavit of Justin Charles Barton filed 27 July 2022 'JB3'.
[347] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [55].
6.Ms Allen (both in her individual capacity and as trustee for each of their three children) (the sixth to ninth defendants) is the registered owner of 9,674,603 shares (or 3.61% of the issued capital of Nex). Ms Allen is the wife of Mr Allen.
7.Andrea Allen (the tenth defendant) owns 2,638,500 shares in Nex (or 0.99% of the issued capital of Nex). Ms Allen is the daughter of Mr and Ms Allen.
8.Mr Brett Royle (the eleventh defendant) owns 4,063,533 shares in Nex (or 1.52% of the issued capital of Nex). Mr Royle has been a friend of Mr Allen for more than 40 years.[348]
[348] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [34].
9.Mr Peck Chong Yeo (the twelfth defendant) owns 1,974,000 shares in Nex (or 0.74% of the issued capital of Nex).
10.Mr Hock Peng Chua (the thirteenth defendant) owns 1,650,000 shares in Nex (or 0.62% of the issued capital of Nex).
11.Agenor Pty Ltd as trustee for the Glamuzina Super Fund (the fourteenth defendant) owns 1,218,604 shares in Nex (or 0.46% of the issued capital of Nex). The directors of Agenor are Joseph Len Glamuzina and Pia Louise Glamuzina.[349]
[349] Affidavit of Justin Charles Barton filed 27 July 2022 'JB4'.
12.Mate Auto Electrical Pty Ltd (the fifteenth defendant) owns 1,000,000 shares in Nex (or 0.37% of the issued capital of Nex). The sole director and company secretary of Mate Auto Electrical is Mr Mate Barac,[350] who is a long term friend and client of Mr Allen.[351]
[350] Affidavit of Justin Charles Barton filed 27 July 2022 'JB5'.
[351] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [18].
13.Mr Matthew Mayne and Ms Lisa Mayne as trustees for the Mayne Super Fund (the sixteenth defendants) own 970,000 shares in Nex (or 0.36% of the issued capital of Nex). Mr Mayne has been a client of Mr Allen for over 20 years.[352]
[352] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [44].
14.Toprange Pty Ltd (the seventeenth defendant) owns 1,000,000 shares in Nex (or 0.37% of the issued capital of Nex). The sole director and company secretary of Toprange is Denise Norman. Mrs Norman and her husband are close friends of Mr Allen.[353]
[353] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [47] - [48].
15.Jett Holdings Pty Ltd (the eighteenth defendant) owns 650,000 shares in Nex (or 0.24% of the issued capital of Nex). The sole director and company secretary of Jett Holdings is Mr William Fogarty. The sole shareholder of Jett Holdings is Tracey Pearson.[354]
[354] Affidavit of Justin Charles Barton filed 27 July 2022 'JB6'.
16.Mr Siang Joon Goh (the nineteenth defendant) owns 596,251 shares in Nex (or 0.22% of the issued capital of Nex).
17.Mr Barry Lucas (the twentieth defendant) owns 500,000 shares in Nex (or 0.19% of the issued capital of Nex).
18.Mr Dion Gerald Meredith (the twenty-first defendant) owns 500,000 shares in Nex (or 0.19% of the issued capital of Nex). Mr Meredith has known Mr Allen since childhood.[355]
[355] Further supplementary affidavit of Kenneth Malcolme Allen filed 28 June 2022 [65].
19.Peter Vanda Resources Pty Ltd (the twenty-second defendant) owns 525,614 shares in Nex (or 0.20% of the issued capital of Nex). Peter Vanda Resources is the trustee of the John Anthony Zamboni Family Trust and in that capacity owns these shares.[356] Mr John Zamboni is the sole director of Peter Vanda Resources.
[356] Ex 1 [2].
20.Higham Hill Pty Ltd (the twenty-third defendant) owns 1,694,340 shares in Nex (or 0.63% of the issued capital of Nex). Mr Phillip Silich is the sole director of Higham Hill. The company secretary is Kenneth Fogo.
21.Alic Trpcev (the twenty-fourth defendant) owns 836,209 shares in Nex (or 0.31% of the issued capital of Nex).
22.Effis Pty Ltd (the twenty-fifth defendant) owns 806,310 shares in Nex (or 0.30% of the issued capital of Nex). The sole director and company secretary of Effis is Mr George Papamihail,[357] who has acted for Mr Allen and Nex over the years, including in relation to the takeover offer by Metalicity.
[357] Affidavit of Justin Charles Barton filed 27 July 2022 'JCB12'.
23.Robert Richter KC and Anne Richter as trustees for the Robert Richter Super Fund No 2 (the twenty-sixth defendants) own 2,601,960 shares in Nex (or 0.97% of the issued capital of Nex).

Annexure B - Relevant interest (AGM)

Shareholder	Defendant	% Interest
Kenneth Malcolme Allen	1^st	2.67
Kenneth Malcolme Allen and Lee Allen as trustees for the Allen Super Fund	2^nd	0.2
B3 Prospecting Pty Ltd	5^th	6.37
Lee Allen	6^th	1.31
Lee Allen as trustee for Andrea K Allen	7^th	0.37
Lee Allen as trustee for Royce Allen	8^th	0.37
Lee Allen as trustee for Amelia Allen	9^th	0.37
Brett Royle	11^th	0.89
Hock Peng Chua	13^th	0.62
Toprange Pty Ltd	17^th	0.37
Jett Holdings Pty Ltd	18^th	0.24
Siang Joon Goh	19^th	0.22
Dion Gerald Meredith	21^st	0.19
Effis Pty Ltd	25^th	0.3
Total		14.49

Annexure C - Relevant interest (EGM)

Shareholder	Defendant	% Interest
Kenneth Malcolme Allen	1^st	2.67
Kenneth Malcolme Allen and Lee Allen as trustees for the Allen Super Fund	2^nd	0.2
Effis Pty Ltd	25^th	0.3
Total		3.17

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

HW
Associate to the Honourable Justice Hill

9 DECEMBER 2022

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: METALICITY LTD -v- ALLEN [No 2] [2022] WASC 420 (S)
CORAM:   HILL J
HEARD:   16 DECEMBER 2022
DELIVERED          :   16 DECEMBER 2022
PUBLISHED           :   13 JANUARY 2023
FILE NO/S:   COR 140 of 2022
BETWEEN:   METALICITY LTD
Plaintiff
AND
KENNETH MALCOLME ALLEN
First Defendant
KENNETH MALCOLME ALLEN as trustee for THE ALLEN SUPER FUND A/C
LEE KIANG ALLEN as trustee for THE ALLEN SUPER FUND A/C
Second Defendants
THOMAS FRANCIS PERCY
Third Defendant
HOCK HOO CHUA
Fourth Defendant
B3 PROSPECTING PTY LTD
Fifth Defendant
LEE KIANG ALLEN
Sixth Defendant
LEE KIANG ALLEN as trustee for ANDREA K ALLEN
Seventh Defendant
LEE KIANG ALLEN as trustee for ROYCE K ALLEN
Eighth Defendant
LEE KIANG ALLEN as trustee for AMELIA V ALLEN
Ninth Defendant
ANDREA KATHLEEN HUANG LING ALLEN
Tenth Defendant
BRETT ROYLE
Eleventh Defendant
PECK CHONG YEO
Twelfth Defendant
HOCK PENG CHUA
Thirteenth Defendant
AGENOR PTY LTD as trustee for THE GLAMUZINA SUPER FUND
Fourteenth Defendant
MATE AUTO ELECTRICAL PTY LTD
Fifteenth Defendant
MATTHEW GUY MAYNE as trustee for THE MAYNE SUPER FUND
LISA MAYNE as trustee for THE MAYNE SUPER FUND
Sixteenth Defendants
TOPRANGE PTY LTD as trustee for THE KEVDEN SUPER FUND
Seventeenth Defendant
JETT HOLDINGS PTY LTD
Eighteenth Defendant
SIANG JOON GOH
Nineteenth Defendant
BARRY LUCAS
Twentieth Defendant
DION GERALD MEREDITH
Twenty First Defendant
PETER VANDA RESOURCES PTY LTD
Twenty Second Defendant
HIGHAM HILL PTY LTD
Twenty Third Defendant
ALIC TRPCEV
Twenty Fourth Defendant
EFFIS PTY LTD
Twenty Fifth Defendant
ROBERT RITCHER as trustee for THE ROBERT RICHTER SUPER FUND NO 2
ANNE LYELL RITCHER as trustee for THE ROBERT RICHTER SUPER FUND NO 2
Twenty Sixth Defendants
NEX METALS EXPLORATIONS LTD
Twenty Seventh Defendant

Catchwords:

Costs - Application for costs - Whether costs should follow the event - Whether special costs orders should be made - Turns on own facts

Legislation:

Legal Profession Act 2008 (WA) s 280
Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 (WA)
Legal Profession Uniform Law Application Act 2022 (WA) s 141
Supreme Court Act 1935 (WA) s 37

Rules of the Supreme Court1971 (WA) O 66 r 1(1)

Result:

Plaintiff to pay the defendants' costs of the proceedings

Special costs orders made

Category: B

Representation:

Counsel:

Plaintiff	:	G D Cobby SC
First Defendant	:	J Sippe
Second Defendants	:	J Sippe
Third Defendant	:	R J Lee
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance
Sixth Defendant	:	J Sippe
Seventh Defendant	:	J Sippe
Eighth Defendant	:	J Sippe
Ninth Defendant	:	J Sippe
Tenth Defendant	:	J Sippe
Eleventh Defendant	:	No appearance
Twelfth Defendant	:	No appearance
Thirteenth Defendant	:	No appearance
Fourteenth Defendant	:	No appearance
Fifteenth Defendant	:	No appearance
Sixteenth Defendants	:	No appearance
Seventeenth Defendant	:	No appearance
Eighteenth Defendant	:	No appearance
Nineteenth Defendant	:	No appearance
Twentieth Defendant	:	No appearance
Twenty First Defendant	:	No appearance
Twenty Second Defendant	:	L A Tsaknis
Twenty Third Defendant	:	L A Tsaknis
Twenty Fourth Defendant	:	L A Tsaknis
Twenty Fifth Defendant	:	L A Tsaknis
Twenty Sixth Defendants	:	L A Tsaknis
Twenty Seventh Defendant	:	R J Lee

Solicitors:

Plaintiff	:	Tottle Partners
First Defendant	:	Dominion Legal
Second Defendants	:	Dominion Legal
Third Defendant	:	Zafra Legal
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance
Sixth Defendant	:	Dominion Legal
Seventh Defendant	:	Dominion Legal
Eighth Defendant	:	Dominion Legal
Ninth Defendant	:	Dominion Legal
Tenth Defendant	:	Dominion Legal
Eleventh Defendant	:	No appearance
Twelfth Defendant	:	No appearance
Thirteenth Defendant	:	No appearance
Fourteenth Defendant	:	No appearance
Fifteenth Defendant	:	No appearance
Sixteenth Defendants	:	No appearance
Seventeenth Defendant	:	No appearance
Eighteenth Defendant	:	No appearance
Nineteenth Defendant	:	No appearance
Twentieth Defendant	:	No appearance
Twenty First Defendant	:	No appearance
Twenty Second Defendant	:	TGC Lawyers
Twenty Third Defendant	:	TGC Lawyers
Twenty Fourth Defendant	:	TGC Lawyers
Twenty Fifth Defendant	:	TGC Lawyers
Twenty Sixth Defendants	:	TGC Lawyers
Twenty Seventh Defendant	:	Zafra Legal

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

Amica Pty Ltd v Hannell [2007] WASCA 158 (S)
Coastal Hire Pty Ltd v Ewers [2009] WASCA 36 (S)
Crawley Investments Pty Ltd v Elman [2014] WASC 233 (S)
Frigger v Lean [2012] WASCA 66
KSG Investments Pty Ltd v Open Markets Group Ltd (No 2) [2021] VSC 359
May v Thomas [2014] WASCA 176 (S)
Metalicity v Allen [No 2] [2022] WASC 420
Oshlack v Richmond River Council (1998) 193 CLR 72
State of Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC 174
Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388
The Pilbara Infrastructure Pty Ltd v Brockman Iron Pty Ltd [No 2] [2014] WASC 345 (S)

HILL J:

(This judgment was delivered extemporaneously and has been edited from the transcript.)

On 9 December 2022, I delivered my reasons for decision following the trial in this matter (Reasons).[358] Orders were made for the parties to file minutes of orders, affidavits, and submissions in support of the costs orders they contended should be made and the matter was relisted for hearing before me this morning.
[358] Metalicity v Allen [No 2] [2022] WASC 420.
Like with many things in relation to this matter and the issues between these parties, the parties were diametrically opposed in their submissions as to what costs orders should be made by the court.
The two primary issues in dispute between the parties on this occasion are: first, who should bear the costs of the proceedings; and second, whether special costs orders should be made in favour of the defendants.

General principles as to costs

Under s 37 of the Supreme Court Act 1935 (WA), the court has a wide discretion to award costs. However, the discretion is not unfettered and must be exercised judicially.[359]
[359] Frigger v Lean [2012] WASCA 66 [53].
The general rule is that costs should follow the event; that is, the successful party should recover their costs from the opposing party. It is incumbent on an unsuccessful party to satisfy the court that there are good reasons it should not pay the successful party's costs.[360]
[360] Rules of the Supreme Court1971 (WA) O 66 r 1(1).
As was noted by the Court of Appeal in Strzelecki Holdings Pty Ltd v Jorgensen:[361]
What constitutes 'success' in proceedings is to be determined by the reality of the circumstances involved in the case. The Court may depart from the general rule that costs follow the event and modify a costs order to take into account matters such as any unreasonable conduct of a generally successful party, or to the failure of that party on one or more specific issues. The exercise of the discretion in that way is recognised by a number of rules in the [Rules of the Supreme Court], together with the practice of the Court, and authority. So, for example, if the Court is of the opinion that the conduct of a successful party - either before or after the commencement of the litigation - has resulted in costs being unnecessarily or unreasonably incurred, the Court may deprive that party of costs, either wholly or in part, and it may further order that party to pay the costs of an unsuccessful party, either wholly or in part …
Under O 66 r 1(3) RSC, where a party, though generally successful in an action, has, by the introduction of some issue or issues on which it has failed, increased the costs, the Court may order such party to pay the costs of such issue or issues. It is well-recognised that an order that a successful party recover only a portion of its costs, where it has not been wholly successful, should not be made as a matter of course, for at least two reasons. First, it is often the case that a successful party will not succeed on every issue raised. Secondly, to attempt, in every case, an analysis of which party was successful on which issue would add uncertainty and complexity to the outcome of litigation, and add to the time and cost of costs arguments. Consequently, the power to apportion costs in this way should only be exercised where there are discrete and severable issues on which the generally successful party failed, and which added to the cost of the proceedings in a significant and readily discernible way. Furthermore, while parties should be encouraged to consider carefully what matters they put in issue, justice may not be served if, by too ready a resort to deciding questions of costs according to success on particular issues, parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case.
Where the Court decides, in the exercise of its discretion, to modify the usual costs orders to reflect the limited success of the successful party, that power will be exercised broadly, and as a matter of impression, and without any attempt at mathematical precision (which is likely to prove illusory in any event). That approach reflects the fact that it may be difficult to separate the factual and evidentiary substratum of different issues, the fact that some issues are more important than others, and the fact that some issues are subsidiary to others. (footnotes omitted)
[361] Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388 [50] ‑ [52].

However, even if a court does not accept all of a successful party's arguments at a trial, this does not, of itself, mean that it is appropriate to deal with costs orders on an issue by issue basis.[362] The court's discretion to render an award of costs by undertaking an assessment conducted by reference to issues at trial that have been won or lost, should only to be exercised in the clearest of cases.[363] The court's discretion to reduce costs for a successful party is approached as a matter of overall impression, without requiring any higher degree of mathematical precision.[364]
[362] State of Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC 174 [8] (Emmett, Kenny & Middleton JJ).
[363] KSG Investments Pty Ltd v Open Markets Group Ltd (No 2) [2021] VSC 359 [8] (Nichols J).
[364] Amica Pty Ltd v Hannell [2007] WASCA 158 (S) [6]; May v Thomas [2014] WASCA 176 (S) [5].
The plaintiff contends that Mr Allen and Mr Papamihail should be deprived of their costs because of their conduct as found in my Reasons. The principles as to the circumstances in which a successful party should be deprived of costs are well settled.
In Oshlack v Richmond River Council,[365] McHugh J said at 97 ‑ 98:
The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion. In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd, Devlin J formulated the relevant principle as follows:
No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct.
'Misconduct' in this context means misconduct relating to the litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute.
[365] Oshlack v Richmond River Council (1998) 193 CLR 72.
The plaintiff also sought a Sanderson order that Mr Papamihail, alternatively Effis Pty Ltd, pay the costs of the twenty‑second to twenty‑fourth defendants and twenty‑sixth defendant. A Sanderson order is an order that shifts the liability to pay a successful defendant's costs of the proceedings from a plaintiff to an unsuccessful defendant.
It is not in dispute that the court has a discretion to make a costs shifting order. In Coastal Hire Pty Ltd v Ewers,[366] Newnes JA (with whom Wheeler and Buss JJA agreed) discussed the relevant principles concerning the exercise of the court's discretion to make a Sanderson order as follows. First, the court has a very wide discretion in relation to costs; it is a discretion to be exercised judicially and in the exercise of the discretion the fundamental question must always be what is just in the particular circumstances of the case. Second, where a Sanderson order is sought, ultimately the question must always be whether it is just that, as between the plaintiff and the unsuccessful defendant, the unsuccessful defendant should bear the burden of the successful defendant's costs. Third, the exercise of the relevant discretion is not amenable to hard and fast rules. Fourth, normally a Sanderson order will be made only where:
(a)the plaintiff's claims against two or more defendants are substantially connected or interdependent;
(b)the plaintiff acted reasonably in suing the successful defendant; and
(c)there is something in the conduct of the unsuccessful defendant which makes it just to move the burden of the successful defendant's costs from the plaintiff to the unsuccessful defendant.
[366] Coastal Hire Pty Ltd v Ewers [2009] WASCA 36 (S) [22] ‑ [34].
Section 141(3) of the Legal Profession Uniform Law Application Act 2022 (WA) gives the court power to make special costs orders. This section is in identical terms to the now repealed s 280 of the Legal Profession Act 2008 (WA). Given the identical language of these provisions, it is my view that the principles that govern the making of special costs orders, which are well established, continue to apply.
The questions for the court in considering an application for special costs are:
(a)First, is the maximum amount allowable under the applicable costs determination inadequate in the sense that there is a fairly arguable case that, on taxation, costs may properly be allowed in an amount greater than that maximum amount?
(b)Second, does the inadequacy of the costs allowable under the costs determination arise because of the unusual difficulty, complexity, or importance of the matter?

Parties' submissions

The plaintiff contended that given the factual findings made by the court, the appropriate costs order was that the first and twenty‑fifth defendants pay 50% of the plaintiff's costs of the proceeding, to be assessed if not agreed, and Mr Papamihail, alternatively Effis Pty Ltd, pay 50% of the twenty‑second, twenty‑third, twenty‑fourth and twenty‑sixth defendants' costs of the proceedings and there otherwise be no order as to costs.
Senior counsel for the plaintiff submitted that these orders reflected the plaintiff's partial success in the proceedings, the different outcomes in relation to the defendants, the defendants' conduct, and their view that the twenty‑seventh defendant should have had no involvement in the proceedings. In relation to the contention it was partially successful in its claim, the plaintiff emphasised that a significant amount of time was directed to the proxies lodged for the AGM and that it succeeded in its argument on this basis. The plaintiff also contended that the conduct of a number of the parties, namely Mr Allen, Mr Papamihail and Mr Percy KC, had contributed to the proceedings and that this should be reflected in any costs order made.
In contrast, each of the other defendants sought orders for the plaintiff to pay their costs on the basis that the usual orders should apply and that costs should follow the event, and that special costs orders be made under s 141(3) of the Legal Profession Uniform Law Application Act 2022 (WA).
The special costs orders sought by the first, second and sixth to tenth defendants was that their costs be taxed without regard to the limit imposed for senior counsel fixed under the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 (WA) (Costs Determination) and that allowance be made for briefing both senior and junior counsel and the involvement of senior and junior counsel in the preparation of the matter. An affidavit of Mr Downey, the principal of these defendants' solicitors, was filed in support of the application.
The twenty-second to twenty-sixth defendants sought three special costs orders, namely that:
(a)there be an uplift of 25% on the fees for counsel;
(b)the time allowed for the preparation of the case be increased from 50 hours to 130 hours; and
(c)there be an allowance for their costs of preparing the written submissions filed 25 November 2022.
An affidavit of Mr Galic, the solicitor for these defendants, was filed in support of the application.
The third and twenty‑seventh defendants also sought three special costs orders. First, there be an allowance of up to four days preparation for counsel, including the preparation of written submissions. Second, the daily rate for attendance at the hearing by a senior practitioner be increased to $5,060. Third, that there be an allowance for the preparation of an affidavit of the third defendant. No affidavit was filed in support of this application.

Disposition

It was not in dispute that there were three main issues in the proceedings: first, the requirements of a valid and effective proxy and whether all proxies lodged in relation to the AGM were effective; second, whether there was an undeclared association between the defendants or any of them which constituted a breach of s 606 of the Corporations Act 2001 (Cth) (Act); and third, whether the court should make any orders in respect of the resolutions passed at the AGM and EGM.
I accept the plaintiff was successful in its submissions on the proper construction of the Act in relation to the requirements of an effective proxy and that this impacted the effectiveness of a number of proxies lodged in respect of the AGM. However, the plaintiff was unsuccessful in establishing any association in breach of s 606 of the Act, or that the court should exercise its discretion to make any orders in respect of the resolutions at either meeting, including in relation to the effectiveness of the proxies that were lodged for the AGM.
In considering the appropriate order as to costs, it is important to emphasise that, in my view, the defendants were the wholly successful parties at trial. This is evident from the order made on 9 December 2022 that the originating process be dismissed as against all defendants. Prima facie, the defendants are entitled to receive their costs of the action, subject to any discount for the matters raised by the plaintiff.
I accept the plaintiff's submission that the question of the validity and effectiveness of the proxies was a distinct issue that was the subject of significant evidence at trial and that the defendants were unsuccessful on the position they contended in relation to this matter. However, as I raised with counsel for the plaintiff at an early stage of the proceedings, this issue was, to a large extent, overtaken by events when the EGM was held and no similar issue arose in relation to the proxies.
In my view, none of the matters that have been raised by the plaintiff would warrant a departure from the usual costs order that costs should follow the event. In particular, while I accept that findings were made in respect of the conduct of Mr Allen and the credibility of Mr Papamihail, I do not consider that either of these matters amount to 'misconduct' in the context referred to in the authorities to which I have referred. On this basis, it is my view that the plaintiff should pay the defendants' costs of the proceedings.
Turning then to the question as to whether special costs orders should be made. The relevant scale item is Table B, item 11 of the Costs Determination, namely for originating processes. Under that item, an allowance is made for two days preparation, one day hearing and 50 hours for the preparation of the case. Where senior counsel is briefed with a junior counsel, the allowance is $60,280. Where counsel alone is briefed, the allowance is $39,490. A separate allowance is made for second and subsequent hearing days, attendance at the hearing by an instructing legal practitioner, and attendance at directions hearings.
No separate allowance is made for the preparation of affidavits, statements of facts, issues or contentions, discovery, or written submissions. In my view, all of these matters fall within 'preparation of the case'.
This application was heard over three days (although the total hearing time was somewhat less that this). Significant numbers of affidavits were filed, as well as detailed submissions by each of the parties. The proceedings involved consideration of sections of the Act that have not been the subject of significant previous judicial determination. In this regard, I accept that there was a degree of complexity involved in the matter that made the allowance under the Costs Determination inadequate.
I also accept that the application was important. While I accept that all cases are important to the parties involved, this case involved the control of the board of a public company which is important not only to the parties to the proceedings (whether involved in the proceedings or not) but to the shareholders of both public companies. I also accept that the application raised serious matters concerning the conduct of a number of the parties including the first defendant, the third defendant, and a number of the shareholders.
The evidence of the first, second, and sixth to tenth defendants was that Mr Donaldson charged $1,000 per hour and $10,000 per day, each excluding GST. While I accept this evidence, the court does not lift the limit on hourly rates simply because a party has engaged lawyers who charge at a higher rate.[367] That said, it is not uncommon for rates for senior counsel to be lifted above that allowed in the Costs Determination. In considering the costs of these parties, I will allow an uplift of 25% on the rate in the Costs Determination for senior counsel. This is on the basis that, in my view, as is recognised in the establishment of a corporations list in this court, there is a degree of complexity in relation to matters involving the Act and a limited number of counsel who specialise in this area, particularly at a senior counsel level. I also consider it is appropriate that, on any assessment of costs, the assessment of costs proceed on the basis that the briefing of senior and junior counsel and their involvement in preparing the case be included in the assessment of that item.
[367] Crawley Investments Pty Ltd v Elman [2014] WASC 233 (S); The Pilbara Infrastructure Pty Ltd v Brockman Iron Pty Ltd [No 2] [2014] WASC 345 (S).
The evidence of the twenty‑second to twenty‑sixth defendants was that Mr Tsaknis charged $605 per hour and $6,050 per day (inclusive of GST) and that he spent almost 138 hours preparing for the matter. Mr Galic spent 25 hours preparing for trial.
In considering these parties' costs, consistent with the approach I have taken to the first, second, and sixth to tenth defendants, I will allow an uplift of 25% on the rate in the Costs Determination for counsel. In respect of the application to lift the time allowed for preparation, no evidence was adduced as to the nature of the work that was done, or why 130 hours is considered to be an appropriate allowance. That said, each of these parties filed affidavits in opposition to the orders sought and all, apart from Mr Richter KC, were called to give evidence. I accept that it is appropriate in these circumstances to lift the allowance but not to the extent claimed. In my view, given the complexity of the matter and the work that was done that is evident on the court file, I consider the allowance should be lifted to 80 hours of preparation. I also consider that it is appropriate that a specific allowance be made for the filing of written submissions on 25 November 2022, which was after the conclusion of the trial and in accordance with a specific order of the court.
No evidence was adduced by the third and twenty‑seventh defendants as to the special costs orders sought by them. In particular, I do not have any evidence as to the rates of the practitioners who attended trial, or why it is considered that a daily rate should apply as opposed to the hourly rate provided in the Costs Determination. In these circumstances, I do not consider that any special costs order should be made in respect of the attendance at the hearing. In relation to the costs of the preparation of the affidavit of third defendant, in my view, while no separate allowance is made for this, this falls within the preparation of the case for trial, for which an allowance of 50 hours is made. There is no evidence before me as to the time spent by counsel or solicitors for these parties, or why this allowance is not adequate. In this regard, I note that the third defendant only filed a notice of intention to be heard on 8 November 2022 and did not file a response to the concise statement, and that the twenty‑seventh defendant only filed a notice of intention to be heard on 11 October 2022. In the circumstances, I do not consider there is an evidentiary basis before the court on which a special costs order should be made.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

FD
Associate to the Honourable Justice Hill

13 JANUARY 2023

'KMA-26'.

Ex 2 'AT1'.

Ex 3 'PS2'.