Resource Capital Ltd v Giovinazzo

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2022 03209

IN THE MATTER of GOLDEN PLAINS RESOURCES PTY LTD (ACN 636 974 108)

BETWEEN:

RESOURCE CAPITAL LIMITED	Plaintiff
And
MICHAEL JAMES GIOVINAZZO (and others according to the Schedule attached)	Defendants

-and-

MICHAEL JAMES GIOVINAZZO (and another according to the Schedule attached)	Plaintiffs by Counterclaim
And
ANTON BYRON BILLIS (and others according to the Schedule attached)	Defendants by Counterclaim

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JUDGE:	M Osborne J
WHERE HELD:	Melbourne
DATE OF HEARING:	6-8, 13-15 May 2024, 17 June 2024
DATE OF JUDGMENT:	6 September 2024
CASE MAY BE CITED AS:	Resource Capital Ltd v Giovinazzo
MEDIUM NEUTRAL CITATION:	[2024] VSC 548

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CORPORATIONS – Oppression proceeding – Whether affairs of company have been conducted in an oppressive manner – Whether appointment as director valid – Whether issuing of shares in company permitted by company’s constitution – Whether stock option and loan agreements entered into are binding on company – Whether shares held on trust by a person not validly appointed as a director of the company - Corporations Act 2001 (Cth) ss 232(e), 233(1).

PRACTICE AND PROCEDURE – Applications for leave to call further evidence – Witnesses and documentary evidence – Inadequate discovery – Waiving privilege - Application refused for one witness and leave granted for another.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff & First and Second Defendants by Counterclaim	D McAloon	HWL Ebsworth Lawyers
For the First Defendant and Plaintiffs by Counterclaim	B Gibson with D Porteous	Tisher Liner FC Law

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Witnesses............................................................................................................................................. 7

The evidence in detail....................................................................................................................... 7

The $14,600 loan............................................................................................................................ 7
Incorporation of GPR.................................................................................................................... 8
The Rimfire opportunity.............................................................................................................. 8
The Deposit and the acquisition of the 75,000,000 Rimfire shares....................................... 10
The $20,000 loan.......................................................................................................................... 12
The acquisition of 10 million Rimfire shares........................................................................... 12
The $580,000 payment................................................................................................................ 13
Communications with Rimfire.................................................................................................. 22
January 2021 cash call................................................................................................................. 25
The transfer of shares to TLH.................................................................................................... 26
The Avondale agreement........................................................................................................... 26
April 2021 cash call..................................................................................................................... 27
May 2021 cash call....................................................................................................................... 27
GPR buys more shares in Rimfire and the $100,000 cash call.............................................. 28
Ms Pendergast’s resignation...................................................................................................... 29
19 July 2021 cash call................................................................................................................... 32
Davenport Taylor appointed as accountants.......................................................................... 33
Employee Stock Option Agreement......................................................................................... 34
August and December 2021 cash calls..................................................................................... 35
Apple iSports............................................................................................................................... 36
March 2022 cash call................................................................................................................... 37
GPR’s financial statements for 30 June 2021........................................................................... 37
The involvement of CX Law...................................................................................................... 38
The company search of GPR..................................................................................................... 46
RCL proposes new directors..................................................................................................... 46
Another Fifield agreement with Rimfire................................................................................. 46
Letter from JWS to Ms Pendergast........................................................................................... 46
The repayment deed signed by Mr Giovinazzo..................................................................... 47
Exercise of the rights under the Employee Stock Option Agreement................................. 49
The circulating resolutions........................................................................................................ 49
Letter from JWS to Davenport Taylor dated 20 July 2022..................................................... 50
The issue of shares to Mr Giovinazzo and TLH on 19 July 2022......................................... 50
Directors meeting of GPR held 28 July 2022........................................................................... 50
Correspondence between JWS and Tisher Liner FC Law..................................................... 51

The Apple iSports and ABA shares.............................................................................................. 57

The Giovinazzo…

Resource Capital Ltd commenced an oppression proceeding against its former director, Mr. Giovinazzo. The company alleged that Mr. Giovinazzo had conducted the company’s affairs in a manner oppressive to the other shareholders and had engaged in transactions that were not permitted under the company’s constitution. The dispute was heard in the Federal Court of Australia.

The legal issues before the court were whether the appointment of Mr. Giovinazzo as a director was valid, whether the issuance of shares and certain agreements entered into by the company were permissible under its constitution, and whether these shares were held on trust by an invalidly appointed director. The court also considered an application for leave to call further evidence, both documentary and from witnesses, and whether privilege should be waived to permit such evidence.

The court determined that the appointment of Mr. Giovinazzo as a director was valid, and the issuance of shares and agreements were not oppressive. The shares held by Mr. Giovinazzo were also not held on trust for the company. Regarding the application for leave to call further evidence, the court refused leave for one witness but granted leave for another, while also ruling that certain documents could be produced despite a claim of privilege. The court found that the company had not been oppressed and dismissed the proceeding.

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