WIJOAV Services Pty Ltd v Goldstone Private Equity Pty Ltd
[2025] FCA 622
•13 June 2025
FEDERAL COURT OF AUSTRALIA
WIJOAV Services Pty Ltd v Goldstone Private Equity Pty Ltd [2025] FCA 622
File number(s): NSD 310 of 2025 Judgment of: JACKMAN J Date of judgment: 13 June 2025 Catchwords: CORPORATIONS – claim brought in oppression under s 232 of Corporations Act 2001 (Cth) (Corporations Act) – where venture capital private equity business consisted of two registered companies and two limited partnerships – where two directors each owned 50% of shares in the two registered companies – where irretrievable breakdown of business relationship – where one director terminated employment of the other and through four separate resolutions of the entities, excluded the other director from management of the companies and partnerships – whether company validly formed opinion that the director had engaged in serious misconduct as a ground for termination – where nine particulars relied upon by defendants – held in relation to all nine particulars that no reasonable person could have formed the opinion that the director engaged in serious misconduct – directors termination and removal from boards held invalid – whether the four resolutions were legally valid – resolution 1 held legally valid on basis that the definition of “insolvency event” was constructed by parties with intention of avoiding risk to limited partnership – resolution 4 held legally valid on basis that strictly there was a winding up application at play
CORPORATIONS – whether oppression established – where ss 232 and 233 of Corporations Act apply to companies but not to partnerships that are not registered under or generally subject to Corporations Act – whether statutory provisions relating to oppression extend to operation of limited partnerships conducted or managed by company – where only way limited partnership can act is through its general partner, a corporate entity – where the resolutions vividly illustrate that control and management of limited partnerships is effected via corporate entities – where exclusion from management already held invalid – clear case of oppression established
CORPORATIONS – question of appropriate relief – where purpose of relief is to alleviate consequences of oppressive conduct and no more – where buy-out direction is to be determined by what the justice of the case requires, balancing all circumstances – whether buy-out order can and should extend to compulsory purchase of partnership interests – purchase of company assets deemed capable of falling within s 233(1)(j) – company’s affairs extend to management of limited partnerships in present circumstances – whether order for buy-out of partnership interests is “in relation to the company” not “in relation to the affairs of the company” – held in the affirmative due to direct implications on relations between companies and limited partnerships – question of who should buy out who – circumstances of the case considered extensively – held the defendants should buy-out the plaintiffs’ shares in the two companies and interests in the limited partnership – questions of valuation and pecuniary remedies to be deferred to subsequent hearing on 20 June 2025
DAMAGES – plaintiffs entitled to damages for defendants’ breach of shareholders’ deed
COSTS – whether defendants’ settlement offers have material bearing on question of costs – plaintiffs entitled to costs of proceedings to date on party-party basis
Legislation: Corporations Act 2001 (Cth)
Partnership Act 1892 (NSW)
Strata Schemes Management Act 2015 (NSW)
Strata Managing Agents Legislation Amendment Act 2024 (NSW)
Corporations (Ancillary Provisions) Act 2001 (NSW)
Companies Act 1995 (NZ)
Cases cited: Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223
BAM Property Group Pty Ltd as trustee for BAM Property Trust v Imoda Group Holdings Pty Ltd [2019] FCA 1192
Bartlett v Australia & New Zealand Banking Group Limited [2016] NSWCA 30; (2016) 92 NSWLR 639
Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95; (2008) 66 ACSR 359
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304
Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55; (2014) 314 ALR 62
Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38; [2009] AC 1101
Commissioner of Taxation v Esso Australia Resources Pty Ltd [2024] FCAFC 151; (2024) 306 FCR 586
Concut Pty Ltd v Worrell [2000] HCA 64; (2000) 176 ALR 693
Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654
David & Ros Carr Holdings Pty Ltd v Ritossa [2025] NSWCA 1085
Ebrahimi v Westbourne Galleries Ltd [1973] AC 360
Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672
Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [1998] NSWSC 413; (1988) 28 ACSR 688
Gooley v Westpac Banking Corporation (1995) 129 ALR 628
GTW Investments (Aust) Pty Ltd v Pacreef Investments Pty Ltd [2023] VSCA 291; (2023) 74 VR 290
John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1
John J Starr (Real Estate) Pty Ltd v Robert R Andrew (1991) 6 ACSR 63
Joint v Stephens [2008] VSCA 210; (2008) 26 ACLC 1467
Lantsbury v Hauser [2010] EWHC 390 (Ch)
Melrob Investments Pty Ltd v Blong Ume Nominees Pty Ltd [2022] SASCA 29; (2022) 141 SASR 1
Millsave Holdings Pty Ltd v Connective Group Pty Ltd [2023] VSCA 326; (2023) 75 VR 239
Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692
Munstermann v Rayward; Rayward v Munstermann [2017] NSWSC 133
North v Television Corporation Limited (1976) 11 ALR 599
Patterson v Humfrey [2014] WASC 446; (2014) 291 FLR 246
Re A company (No 00709 of 1992); O’Neill v Phillips [1999] UKHL 24; 1 WLR 1092
Re Hollen Australia Pty Ltd [2009] VSC 95
Re London School of Electronics Ltd [1986] Ch 211
Re North Coast Transit Pty Ltd [2013] NSWSC 1119
Shepherd v Felt & Textiles of Australia Pty Ltd (1931) 45 CLR 359
Slea Pty Ltd v Connective Services Pty Ltd [2022] VSC 136
Smart EV Solutions Pty Ltd v Guy [2023] FCA 1580
Thomas v H W Thomas Ltd [1984] 1 NZLR 686
Tomanovic v Global Mortgage Equity Corp Pty Ltd [2011] NSWCA 104; (2011) 288 ALR 310
Turnbull v NRMA [2004] NSWSC 577; (2004) 186 FLR 360
Walker v New South Wales Bar Association [2016] FCA 799; (2016) 114 ACSR 269
Wayde v New South Wales Rugby League [1985] HCA 68; (1995) 180 CLR 459
Zephyr Holdings Pty Ltd v Jack Chia (Aust) Ltd (1988) 14 ACLR 30
Zong v Lin [2022] NSWCA 136
Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 190 Date of last submission/s: 6 June 2025 Date of hearing: 28 May 2025 – 6 June 2025 Counsel for Plaintiffs: Mr P Flynn SC with Mr R Jameson Solicitor for Plaintiffs: Herbert Smith Freehills Kramer Counsel for Defendants: Mr A Bannon SC and Ms C Gleeson SC, with Mr T Scott and Mr M Bui Solicitor for Defendants: Ashurst ORDERS
NSD 310 of 2025 BETWEEN: WIJOAV SERVICES PTY LTD
ACN 669 325 955First Plaintiff
ALEXANDRA VICTORIA COMMINS
Second Plaintiff
AND: GOLDSTONE PRIVATE EQUITY PTY LTD
ACN 669 532 003First Defendant
GOLDSTONE FUND MANAGEMENT PTY LTD
ACN 669 531 999Second Defendant
JAMES ANGELIS (and others named in the Schedule)
Third Defendant
ORDER MADE BY:
JACKMAN J
DATE OF ORDER:
13 JUNE 2025
THE COURT DECLARES THAT:
1.The second plaintiff (Ms Commins) remains employed as the Managing Director of the first defendant (Goldstone PE).
2.The conduct of the affairs of Goldstone PE and the second defendant (Goldstone FM) has been and is contrary to the interests of the members as a whole and oppressive to, unfairly prejudicial to, and unfairly discriminatory against the first plaintiff (WIJOAV).
3.Goldstone PE has breached the Executive Employment Agreement with Ms Commins.
4.The third defendant (Mr Angelis) has breached cl 5.1 of the Shareholders’ Deed (as defined in the reasons for judgment).
THE COURT ORDERS THAT:
5.Pursuant to s 233 of the Corporations Act 2001 (Cth):
(a)the fourth defendant (Angel Holdco) purchase, and WIJOAV transfer, WIJOAV’s shares in Goldstone PE and Goldstone FM at a price to be determined by the Court; and
(b)Angel Holdco or, at its election, Mr Angelis purchase, and Ms Commins transfer, Ms Commins’ current partnership interest as a Limited Partner of the fifth defendant (VCMP) at a price to be determined by the Court.
6.The determination of the prices in Order 5 be conducted on the basis of the corporate structure of the Goldstone Fund (as defined in the reasons for judgment) as at 31 March 2025, noting that the date of valuation is yet to be determined.
7.The question of the quantification of pecuniary remedies for the breaches which are the subject of Declarations 3 and 4 be heard together with the determination of the prices in Order 5.
8.Mr Angelis, Angel Holdco, Goldstone PE and Goldstone FM be restrained from relying on or enforcing the plaintiffs’ compliance with cl 3.4 of the Shareholders’ Deed (as defined in the reasons for judgment).
9.Leave be granted to the plaintiffs to amend the Second Further Amended Originating Process in the form of the Third Further Amended Originating Process and Annexure handed up during their final address, except for the amendments concerning the appointment of a receiver set out in paras 7T to 7Y of the draft Third Further Amended Originating Process and Option 1 in the Annexure.
10.Mr Angelis’s proceedings to wind up VCMP be adjourned to the hearing referred to in Order 7.
11.Costs reserved.
12.The matter stand over to a case management hearing on 20 June 2025 at 10.30 am.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
JACKMAN J:
Introduction
To adapt Tolstoy’s famous aphorism about families, all happy businesses resemble one another, each unhappy business is unhappy in its own way. These proceedings arise out of what the parties agree is the irretrievable breakdown of a business relationship between Ms Alexandra Commins (the second plaintiff) and Mr James Angelis (the third defendant) and their respective corporate vehicles, namely WIJOAV Services Pty Ltd (WIJOAV), being the first plaintiff, and Angel Holdco Pty Ltd (Angel Holdco), being the third defendant. The dispute concerns the parties’ interests in a venture capital private equity business known as the Goldstone Private Equity Fund (the Goldstone Fund). References in this judgment to Mr Angelis are to Mr James Angelis, rather than his son John, unless otherwise stated.
Until 1 April 2025, the legal structure of the Goldstone Fund involved four entities. Two of them were companies registered under the Corporations Act 2001 (Cth) (the Corporations Act), namely Goldstone Private Equity Pty Ltd (Goldstone PE), being the first defendant, and Goldstone Fund Management Pty Ltd (Goldstone FM), being the second defendant. The shares of each of those companies are held as to 50% each by WIJOAV and Angel Holdco. On about 2 November 2023, a Shareholders’ Deed was entered into in relation to the two companies (the Shareholders’ Deed). The other two entities are limited partnerships, namely the Goldstone Private Equity VCLP, LP, ILP2300031 (VCLP), being the sixth defendant, and Goldstone Private Equity VCMP, LP, ILP2300030 (VCMP), being the fifth defendant.
VCLP and VCMP are limited partnerships pursuant to Pt 3 of the Partnership Act 1892 (NSW) (the Partnership Act). Deeds establishing those limited partnerships were executed on about 2 November 2023, and were subsequently replaced by new deeds executed in the case of VCMP in mid-September 2024 (VCMP Deed), and in the case of VCLP on 16 December 2024 (VCLP Deed). The General Partner of VCLP is VCMP, and it is common ground that the only Limited Partner of VCLP is Angel Holdco. Angel Holdco has committed $100 million in capital to VCLP, of which $32 million has been called and paid. Goldstone PE is the Manager of VCLP. The General Partner of VCMP is Goldstone FM. The Limited Partners of VCMP are three trusts, of which Ms Commins is the trustee of two trusts, and Mr Angelis is the trustee of the other trust.
Those four entities are the first, second, fifth and sixth defendants. The other defendants are corporate entities associated with Mr Angelis, and Mr Angelis himself (the Angelis Defendants).
The Goldstone Fund presently has two investments, being shares in companies known as Parabellum International Pty Ltd (Parabellum) and M Strata Group Holdings Pty Ltd (Neighbourly). VCLP holds 47.5% of the shares in Parabellum and 63% of the shares in Neighbourly. Neither of those companies is a party to these proceedings.
From about 2 November 2023, Ms Commins served as Managing Director of Goldstone PE and Goldstone FM, responsible for sourcing, executing and managing VCLP’s investments and raising further capital. Ms Commins’ employment was purportedly (and as I find below, wrongly and invalidly) terminated on 27 February 2025, and again on 2 April 2025, on the ground of alleged serious misconduct. On 6 March 2025, WIJOAV and Ms Commins commenced these proceedings. On 1 April 2025, Mr Angelis procured a number of steps to be taken including applying to the Supreme Court of New South Wales to wind up VCMP (the NSWSC Proceedings), removing VCMP as General Partner of VCLP, removing Goldstone PE as Manager of VCLP, and appointing his own entities, Goldstone Capital Pty Ltd (Goldstone Capital), being the seventh defendant, and Goldstone Capital FM Pty Ltd (Goldstone Capital FM), being the eighth defendant, as General Partner and Manager of VCLP respectively.
At the heart of the case is a claim by WIJOAV that the conduct of the affairs of Goldstone PE and Goldstone FM has been and is contrary to the interests of members as a whole and oppressive to, unfairly prejudicial to, or unfairly discriminatory against WIJOAV within the meaning of s 232 of the Corporations Act. In that regard, it should be noted at the outset that ss 232 and 233 of the Corporations Act apply to companies, but do not apply directly in express terms to partnerships that are not registered under or generally subject to the Corporations Act. The researches of counsel have not identified any previous case which raises the issue of how (if at all) the statutory provisions relating to oppression may extend to the operation of limited partnerships conducted or managed by the company or companies in question. This is an important issue in the context of private equity structures. In addition, Mr Angelis’s proceedings to wind up VCMP on the just and equitable ground have been cross-vested from the Supreme Court of New South Wales to this Court, and have been heard together with the main proceedings.
Among the matters which crossed Hamlet’s mind in his mood of near-suicidal melancholy (in Act III, scene i, lines 71–72) were the “oppressor’s wrong”, and, almost in the same breath, the “law’s delay”. There will always be oppressors who commit wrongdoing, for that is lamentably part of human nature. But delay is neither a necessary nor an inevitable feature of litigation, as the protagonists in this proceeding have shown. The final hearing (which lasted 8 days) was prepared and conducted in exactly three months from the commencement of the proceedings, and the parties and their legal representatives are to be commended on their efficiency, cooperation and expedition. I also express my gratitude to my personal staff for the efforts they have made to assist me in preparing this judgment quickly. The hearing before me has proceeded on all issues except for:
(a)the price of any buy-out order under s 233 of the Corporations Act; and
(b)the quantification of any pecuniary remedies to which the plaintiffs may be entitled.
I anticipate dealing with those remaining matters in November, being the earliest that my other commitments can accommodate.
Constituent documents
The Shareholders’ Deed
The parties to the Shareholders’ Deed are Goldstone PE, Goldstone FM, WIJOAV, Angel Holdco, Ms Commins and Mr Angelis. Recital B states that the parties have agreed to manage and control Goldstone PE and Goldstone FM (referred to as the Goldstone Companies) according to the terms of the deed.
Clause 3.1 sets out the objectives of Goldstone PE and Goldstone FM as being to:
(a)carry on the Business, with a view to maximising the value of the Partnership Assets and the quantum of the Carried Interest; and
(b) develop and expand the Business in accordance with the Business Plan.
The term “Business” is defined in cl 1.1 as meaning, in respect of:
(i)the Manager [defined as Goldstone PE], the business of providing management services to the Partnership [defined as VCLP] in accordance with the Management Agreement [defined as the management agreement to be entered into between Goldstone FM as General Partner of VCMP and Goldstone PE, in effect for VCLP] and the Partnership Deed [defined as the deed establishing VCLP]; and
(ii)the General Partner [defined as Goldstone FM], acting as General Partner of Goldstone VCMP in accordance with the VCMP Deed,
and any other activities the Shareholders decide from time to time will be carried on by the relevant Goldstone Company.
The term “Partnership Assets” takes its meaning pursuant to cl 1.1 of the VCLP Deed which defines the term as including:
All property, rights, Investments and income of the Partnership [being VCLP] and any provisions the Manager [being Goldstone PE] considers should be taken into account in determining Partnership Assets, but excludes:
(a)any amounts paid by Applicants in respect of which Partnership Interests have not been issued;
(b) proceeds from withdrawals which have not yet been paid; and
(c) any Distributable Amount awaiting payment to Limited Partners.
The term “Carried Interest” also takes its meaning from the VCLP Deed as follows:
The amount payable to the General Partner [being VCMP] or its nominee as its entitlement to carried interest in respect of the performance of the Partnership [being VCLP] as determined under clause 9.4 of this Partnership Deed, and to which section 104–255 of the Tax Act applies.
The term “Business Plan” is defined as “the one-year programme current from time to time for the conduct of the Manager’s Business during the current Financial Year” (cl 1.1(o)). Ms Commins gave unchallenged evidence that the Business Plan comprises the Fund Budget of September 2024 (CB5/188), the Investment Memorandum of September 2024 (CB5/179) and the Investment Plan of November 2023 (CB3/102) (Ms Commins’ affidavit of 18 March 2025 at [84]).
Clause 3.2 provides as follows:
To fulfil the objectives set out in clause 3.1, and subject to this deed, each Shareholder undertakes to the other Shareholder to do or cause to be done all acts necessary or desirable for the implementation of this deed including casting votes as Shareholders, executing any necessary documents and causing their appointees to the Board to implement this deed.
The plaintiffs submit, and I accept, that cll 3.1 and 3.2 indicate that the affairs of Goldstone PE and Goldstone FM include carrying on the business of managing VCLP and VCMP with a view to maximising the value of the assets of VCLP and the amount of the Carried Interest payable from VCLP to VCMP. I reject the submission of the Angelis Defendants that the affairs of Goldstone PE and Goldstone FM do not extend to the conduct of VCLP and VCMP as based on a false dichotomy. Indeed, Mr Angelis expressly volunteered in his affidavit of 1 April 2025 in the NSWSC Proceedings at [23] that, as a matter of fact, the effective functioning of VCMP is dependent on consensus between Ms Commins and himself as directors and shareholders of the corporate entities through which it operates. That reflects the reality that the only way VCMP can act is through its General Partner, namely Goldstone FM. In my view, that observation applies with at least as much force to VCLP, in relation to which Goldstone PE was appointed Manager by an agreement made with Goldstone FM as General Partner of VCMP, being the General Partner of VCLP (as I discuss below). In order for VCLP to take any step in its day-to-day operation, it does so through Goldstone PE as its Manager. Accordingly, control of Goldstone PE and Goldstone FM determines who has the day-to-day control and management of VCMP and VCLP, and of VCLP’s investments.
Clause 4.1 provides that the parties must take all actions within their respective powers to ensure that the composition of each of the companies’ boards and the procedures for board meetings are as set out in Schedule 2. Schedule 2 provides that the board will initially comprise two directors consisting of a director nominated by WIJOAV and a director nominated by Angel Holdco, and that each of those shareholders is entitled to appoint and remove, from time to time, by notice in writing, one director (cl 1(c)). The initial board comprised Ms Commins and Mr Angelis as the appointees respectively of the two shareholders (cl 2(a)). Each director has one vote at board meetings under cl 3(a), although cl 3 goes on to make a number of provisions concerning who holds a casting vote. The companies never appointed a chairman, and thus the provisions which refer to the chairman having a casting vote are not applicable. Clause 3(i) provides as follows:
Alexandra (being the Director nominated by [WIJOAV]) shall have a casting vote in respect of matters relating to the divestment of Partnership Assets that have been held for at least three years where all of the following conditions apply to the divestment:
(i)the proceeds on the sale of the Partnership Asset would not give rise to a loss, having regard to the costs in acquiring and holding that Partnership Asset and customarily applied accounting principles and practises [sic];
(ii)the Partnership Asset is not sold to [WIJOAV], or any of its Affiliates, or to any trust, trustee, limited partnership, body corporate, or general partnership that is Controlled by the [WIJOAV] appointed Director, or in which the [WIJOAV] appointed Director has an interest or is involved in as notified to Angel Holdco and James under cl 3.4(b)(i); and
(iii)the transaction for the divestment of the Partnership Asset does not involve or give rise to any economic of [sic: or] financial benefit to the [WIJOAV] appointed Director, [WIJOAV], or any of its Affiliates, or to any trust, trust deed, limited partnership, body corporate or general partnership that is Controlled by the [WIJOAV] appointed Director, except for any Carry Entitlement under the VCMP Deed or returns under the VCLP Deed (if applicable).
Although cl 3(k) provides that Ms Commins’ casting vote under cl 3(i) ceases when her employment with Goldstone PE ceases as a result of termination of her employment contract under cl 3.3(g) of the Shareholders’ Deed, the latter provision refers to termination for convenience in the circumstance where agreement was not reached on various matters, and no party in these proceedings has relied on that circumstance.
Returning to the terms of the main body of the Shareholders’ Deed, cl 4.3(a) provides relevantly that the office of a director of each of Goldstone PE and Goldstone FM becomes vacant if “in respect of any executive Director, that person is no longer employed or engaged by [Goldstone PE].” Clause 4.3(c) then provides that if a director’s office becomes vacant under cl 4.3(a), that person is no longer entitled to act as a director or officer of any entity in which VCLP has made an investment and must immediately resign as such a director or officer, and that Goldstone PE and Goldstone FM are entitled to remove that person as a director of such an entity.
Clause 5.1 provides as follows:
The Board and the Key Persons [being Ms Commins and Mr Angelis] must ensure that the Manager [being Goldstone PE] conducts the Business in each Financial Year in accordance with the Business Plan approved and adopted by the Board for that Financial Year.
Clause 5.3 then provides that if Goldstone PE’s board does not adopt the Business Plan as contemplated by cl 5.2, the Business will continue to be conducted on the basis of the then current Business Plan until a new Business Plan is adopted.
Clause 6.2 provides relevantly that Goldstone PE will own all intellectual property rights owned by or licensed to Goldstone PE in the conduct of its business, including know-how, and that nothing in the deed transfers any ownership rights in any materials containing or relating to that intellectual property to the shareholders.
Clause 9.1 relevantly defines “Event of Default” and “Defaulting Shareholder” in relation to WIJOAV as arising where Ms Commins’ employment with Goldstone PE terminates for any reason other than three specified matters, the first of which is wrongful or unlawful termination by Goldstone PE. An Event of Default gives rise to a right on the part of Goldstone PE and Goldstone FM to determine that the Defaulting Shareholder is required to sell or dispose of its shares either to the relevant Goldstone Company or to any other person by way of sale, or a combination of both.
Clause 11.1 provides as follows in relation to confidentiality obligations:
Each party must:
(a)use Confidential Information only for the purposes of the Business or to make decisions regarding their investments in the Goldstone Companies; and
(b)keep Confidential Information confidential and not disclose it or allow it to be disclosed to any third party,
except:
(c) with the prior written approval of the Board; or
(d)to officers, employees and consultants or advisers of the parties who have a need to know (and only to the extent that each has a need to know) and are aware that the Confidential Information must be kept confidential,
and the parties must take or cause to be taken reasonable precautions necessary to maintain the secrecy and confidentiality of the Confidential Information.
Clause 11.3 provides for a number of exceptions, including where the information is public knowledge (except because of a breach of the Shareholders’ Deed or any other obligation of confidence).
Clause 14(a) relates to the payment of the Carried Interest and provides relevantly that the parties agree that the payment of Carried Interest shall occur in a timely manner in accordance with the terms of the VCMP Deed, and cl 14(b) provides a dispute resolution mechanism in the event of disagreement as to whether the Carried Interest should be paid.
Clause 16.9 is an entire agreement clause which provides that the Shareholders’ Deed, together with the other “Transaction Documents” constitutes the entire agreement between the parties in connection with its subject matter and supersedes all previous agreements or understandings between the parties in connection with its subject matter. The Transaction Documents are defined to include the VCLP Deed, the VCMP Deed, the Management Agreement relating to Goldstone PE as Manager of VCLP, and Ms Commins’ employment contract.
The VCMP Deed
Clause 3.1 of the VCMP Deed divides the partners into the General Partner and the Limited Partners, and provides that the Limited Partners must not take part in the management of the business of VCMP within the meaning of the Partnership Act. Clause 4.1(a) provides that the General Partner (that is, Goldstone FM) must conduct the “Partnership Business” for the benefit of VCMP. The “Partnership Business” is defined as meaning the activities undertaken by VCMP for the purposes of being the General Partner of VCLP and carrying on the activities that are related to being VCLP’s General Partner, subject to the terms of the deed. In other words, cl 4.1(a) has the effect that Goldstone FM’s affairs include the conduct of the affairs of both VCMP and VCLP.
The Limited Partners of VCMP are set out in Schedule 1 as follows:
(a)the Goldstone Carry Trust, of which Ms Commins is the trustee, with a Carry Entitlement of 50%;
(b)the JA Goldstone Carry Trust, of which Mr Angelis is the trustee, with a Carry Entitlement of 20%; and
(c)the Goldstone Executive Trust, of which Ms Commins is the trustee, with a Carry Entitlement of 30%.
Clause 8.1 provides that Goldstone FM, being the General Partner, will use its best endeavours to make distributions of all “Distributable Amounts” within 20 business days of receipt from VCLP. Distributable Amounts are defined as meaning any amounts received by VCMP as a distribution or carry entitlement from VCLP. Clause 8.4 provides that Goldstone FM must apply the assets of VCMP to make distributions of the Distributable Amounts to Limited Partners in accordance with the Carry Entitlements of the Limited Partners at the time of the distribution.
Clause 16 deals with meetings, and includes cl 16.13 concerning written resolutions as follows:
Any decision or matter which may otherwise be required to be decided at a meeting of Limited Partners, or any resolution which would otherwise be required to be passed at a meeting of Limited Partners, may be decided or passed by means of the required number of Limited Partners signing a document recording the making of the decision or passing of the resolution. The resolution may consist of several documents in the same form, each signed by one or more of the Limited Partners.
The VCLP Deed
Clause 3.1 refers to the Initial Limited Partner, who was Ms Commins, as not having made any capital contribution to VCLP and ceasing to be a Limited Partner when any other person is admitted as a Limited Partner. Although there was a dispute until the morning of the first day of the hearing before me as to whether Angel Holdco was properly to be regarded as the Limited Partner, the plaintiffs accepted during the course of their oral opening that that was the case (T52.6–35), consistently with how Ms Commins had viewed the position in her first affidavit in these proceedings (Ms Commins’ affidavit of 6 March 2025 at [53]). The General Partner is VCMP “and its successors appointed under this Partnership Deed” (cl 1.1).
Clause 5 deals with Capital Calls, which as I have indicated above, have been made and met to the extent of $32 million of the amount of $100 million in Committed Capital on the part of Angel Holdco as Limited Partner.
Clause 6 deals with the concept of a “Defaulting Limited Partner”, and I will set out in full the terms of cll 6.1, 6.2, 6.3 and 6.6, as they are important to the remedies which the plaintiffs seek:
6.1 Default
A Limited Partner is a Defaulting Limited Partner if:
(a)the Limited Partner has not paid any Call or any other amount of money owing to the General Partner or the Partnership under this Partnership Deed on or by the day specified for payment;
(b)the Limited Partner is prohibited by an applicable law from being a Limited Partner of the Partnership;
(c)the General Partner [being VCMP] reasonably believes, in respect of a Limited Partner, Partnership Interests are held in circumstances which have or will result in a violation of an applicable law or regulation by the General Partner, the Manager, the Partnership or a Limited Partner, or which has subjected, or will subject, the Partnership to taxation or otherwise adversely affect the Limited Partners, General Partner, the Manager or the Partnership in any material respect; or
(d)the General Partner or Manager is of the reasonable opinion that the Limited Partner made a material misrepresentation in acquiring its Partnership Interest.
6.2 Default Notice
If a Limited Partner is a Defaulting Limited Partner, the Manager may, at its discretion, serve a notice on the Defaulting Limited Partner (Default Notice). A Default Notice must specify:
(a) the breach or event;
(b)any amounts that may be payable pursuant to clause 6.1(a) plus any interest payable in accordance with cl 6.4; and
(c)that in the event the breach is not remedied within a provided time period (Specified Time), the Partnership Interests of the Defaulting Limited Partner will be liable to be forfeited.
6.3 Forfeiture
(a)If the requirements of a Default Notice are not complied with by the Specified Time, Partnership Interests of the Defaulting Limited Partner may be forfeited to the General Partner if the Manager [being Goldstone PE] so determines, and all voting rights and entitlements to the distribution of Distributable Amounts in connection with the Defaulting Limited Partner’s Partnership Interest are suspended until reinstated by the General Partner.
(b)At any time before sale or disposition of a forfeited Partnership Interest by the General Partner, the forfeiture may be cancelled if the Defaulting Limited Partner pays the Manager the full amount outstanding, together with any other amounts in respect of the forfeiture (including interest).
. . . .
6.6 Sale of forfeited Partnership Interests
(a)A Partnership Interest forfeited under cl 6.3 may be sold or otherwise disposed of as a fully paid Partnership Interest at any price the General Partner can obtain.
(b)The General Partner and Manager are not liable to a Limited Partner for any loss suffered by the Limited Partner as a result of the sale.
(c)If the General Partner sells or disposes of the forfeited Partnership Interests it must account to the Limited Partner or former Limited Partner who held the Partnership Interest prior to its forfeiture under cl 6.3 for any balance remaining after deducting from the sale price or disposal proceeds the General Partner receives for the Partnership Interest the amount owing to the General Partner and the reasonable costs of the sale (including interest).
“Partnership Interest” is defined in respect of any Partner as the right and obligations of the Partner under the VCLP Deed and all other interests of the Partner in VCLP.
Clause 9 deals with distributions from the partnership. Clause 9.1 provides that the General Partner (that is, VCMP) will use its best endeavours to make distributions of all Distributable Amounts in accordance with cl 9.4. Clause 9.4 provides as follows in relation to the priority of distributions and Carried Interest, in a form often described as a “European waterfall” (in contrast to an “American waterfall”):
9.4 Priority of distributions and Carried Interest
For all distributions to Limited Partners, the General Partner must apply Partnership Assets in proportion to the Limited Partners’ Committed Capital and to pay the Carried Interest to the General Partner in the following order of priority:
(a)Capital return. First, 100% to the Limited Partners until each such Limited Partner has received cumulative distributions (including tax credits) from the Partnership equal to its Drawn Capital at the time of calculation.
(b)Preferred return. Second, 100% to the Limited Partners until each such Limited Partner has received cumulative distributions (including tax credits) from the Partnership in excess of its Drawn Capital equal to 8% IRR at the time of calculation.
(c)Catch-up. Third, 100% to the General Partner until the General Partner has received cumulative distributions (including tax credits) from the Partnership equal to 25% of the excess over the Drawn Capital at the time of calculation.
(d)80/20 split. Thereafter, 80% to the Limited Partners and 20% to the General Partner.
Clause 9.5(a) provides that the Carried Interest is payable to the General Partner, by way of the amount that it receives pursuant to cl 9.4 and is in addition to the fee payable to Goldstone PE under its Management Agreement.
Clause 13.1(b) provides that the Limited Partner must not take part in the management of the business of VCLP within the meaning of the Partnership Act.
Clause 14.1 sets out the obligations of the Manager, being Goldstone PE. The Manager must perform its duties under the VCLP Deed and the Management Agreement for the benefit of the Limited Partners, act honestly and with due diligence, and ensure compliance with the Investment Policy. The Manager must act in the best interests of the Limited Partners generally and not prefer its own interests where they diverge. Clause 14.2 provides that the Manager is also required to provide reasonable assistance to the General Partner in implementing any directions under the Deed or the Management Agreement.
Clause 15.2 provides that the General Partner (that is, VCMP) agrees that it will exercise all due diligence and vigilance in carrying out its functions and duties under the deed and protecting the rights and interests of the Limited Partners under the deed, and will at all times act in the best interests of the Limited partners. Clause 15.3(a) provides that the General Partner (that is, VCMP) may from time to time appoint a person to exercise some or all of the rights and powers of the General Partner under the VCLP Deed.
The VCLP Deed does not in terms exclude or otherwise refer to the existence of a fiduciary relationship or fiduciary duties. The statutory exclusion in s 53C(1)(b) of the Partnership Act therefore applies, with the effect that Angel Holdco is not a fiduciary for VCLP. However, that does not exclude the possibility that VCMP (as General Partner of VCLP) might be a fiduciary for Angel Holdco, consistently with s 53C(1)(a), although I do not have to decide that question.
Clause 19 deals with meetings, and includes cl 19.10 which provides as follows:
Any decision, matter or resolution, which may otherwise be required to be decided or passed at a meeting of Limited Partners, may be decided or passed by means of the required number of Limited Partners signing a document recording the making of the decision or passing of the resolution. The resolution may consist of several documents in the same form, each signed by one or more of the Limited Partners.
Clause 20 deals with the Investment Committee, made up of representatives of Goldstone PE responsible for approving investments for VCLP. The Investment Committee initially comprised Mr Angelis, Ms Commins, Mr Butcher and Mr Hunter. Mr Butcher subsequently resigned from the Investment Committee and Mr Burrows (a member of the Advisory Board of the Goldstone Fund) became a member of the Investment Committee. Clause 20(c) provides that decisions of the Investment Committee are by unanimous approval.
Clause 22 deals with the retirement or removal of the General Partner and provides relevantly as follows:
22.2 Removal of the General Partner for cause
The General Partner [being VCMP] may be removed by Special Resolution of the Limited Partners [being Angel Holdco] at a Limited Partners’ meeting called in accordance with cl 19.1(b) where:
(a) the General Partner is subject to an Insolvency Event; or
(b)the General Partner has breached any material provision of this deed and has not remedied such default within one month of receiving notice from the Limited Partners of the same.
22.3 Appointment of a new General Partner
On the retirement or removal of the General Partner:
(a)the Manager [being Goldstone PE] must by deed appoint a new General Partner after obtaining any approval required by law;
(b)the Manager is required to appoint a new General Manager approved by Special Resolution of the Limited Partners; and
(c)the Limited Partners may, with approval by Special Resolution, directly appoint a new General Partner.
22.4 Actions on retirement or removal
The outgoing General Partner must:
(a) as soon as practicable, vest the Partnership Assets in the new general partner;
(b)give the new general partner any books and records in the outgoing General Partner’s possession or control in relation to the Partnership; and
(c)give other reasonable assistance to the new general partner to facilitate the change of general partner.
. . .
22.6 Carried Interest following retirement or removal
For the avoidance of doubt, the retirement or removal of the General Partner does not affect its rights to its Carried Interest under this deed, which shall continue as if the General Partner had remained the general partner of the Partnership.
The term “Insolvency Event” in relation to any party to the VCLP Deed is defined relevantly as the occurrence of a “resolution proposed, petition presented or order made for the winding up of that party”.
The Management Agreement
The Management Agreement of VCLP was entered into, on the one hand, by Goldstone FM as General Partner of VCMP (in apparent exercise of its powers under cl 4.1(a) of the VCMP Deed), and, on the other hand, by Goldstone PE as Manager. The Management Agreement is expressed to terminate on the earlier of (a) the date on which the termination of the appointment of the Manager occurs under cl 8, and (b) the termination of VCLP under the VCLP Deed.
The duties of the Manager are set out in cl 3.1 and include:
(b)manage and administer the Partnership [being VCLP] for and on behalf of the General Partner [being Goldstone FM as General Partner of VCMP] in accordance with the Partnership Deed [being the VCLP Deed] and this agreement;
(c)comply with all lawful directions of the General Partner and the Partnership Deed in so far as those directions or the Partnership Deed relate to the management of the Partnership or the obligations of the Manager under this agreement;
(d)identify, assess and evaluate Investments which may represent potential objects of investment for the Partnership and also, in conjunction with legal and other advisers:
(i)assist in the preparation of all legal and other documents required to make any such investment;
(ii) negotiate the pricing and structure of any such Investment; and
(iii)complete any due diligence enquiries in connection with any such Investment;
(e) after making an Investment:
(i)monitor and continue to evaluate the Investment, including, but not limited to, the adherence to the investment strategy of the Investment by the manager of the Investment, tracking cash flow movements into and out of the Investment, tracking investment performance of the Investment, and voting on corporate actions applicable to the Investment; and
(ii)as appropriate, recommend the General Partner vary, dispose or exit the Investment;
…
(g)perform all obligations of the General Partner under the Partnership Deed in connection with:
(i) the review of subscriptions for Partnership Interests;
(ii) the issue of Partnership Interests;
(iii) any transfer of Partnership Interests;
(iv) the making of calls on the Limited Partners;
(v) the forfeiture of any Partnership Interests; and
(vi) the distribution of the income and capital of the partnership.
The term “Partnership Interest” has the same meaning as in the VCLP Deed, which I have set out above. The term “Investment” is also defined by reference to the VCLP Deed, where it is defined as meaning investments made by VCLP.
Clause 6 deals with the Management Fee payable to Goldstone PE as Manager in an amount equal to 2% per annum of the aggregate Committed Capital during the Investment Period, and 1.75% per annum of the Invested Capital after the Investment Period until the end of the term of the Management Agreement. The Investment Period is defined by reference to the definition in the VCLP Deed and there is no dispute that the Investment Period is still on foot.
Clause 8 deals with the termination and retirement of the Manager. Clause 8.2 is of particular importance in this case and provides:
The Manager [that is, Goldstone PE] may be removed by Special Resolution of the Limited Partners at a Limited Partners’ meeting called in accordance with clause 18.1(b) of the Partnership Deed where:
(a) the Manager is subject to an Insolvency Event; or
(b)the Manager has breached any material provision of this deed and has not remedied such default within one month of receiving notice from the Limited Partners of the same.
The term “Insolvency Event” is defined by reference to the VCLP Deed, which, as I have stated above, includes the occurrence of a “resolution proposed, petition presented or order made for the winding up of” any party to the VCLP Deed. Clause 8.7 deals with the replacement of the Manager and provides as follows:
If the Manager retires or is removed in accordance with this agreement, the General Partner:
(a)must convene a meeting of Limited Partners for the purpose of the Limited Partners considering a resolution prepared by the General Partner to recommend the appointment of a new manager of the Partnership;
(b)must appoint the new manager of the Partnership only upon a Special Resolution;
(c)may act as manager of the Partnership until a new manager is appointed (and in respect of any such period will accrue fees which the Manager would have accrued as manager of the Partnership); and
(d)will not appoint any person or entity as new manager of the partnership unless such person or entity accepts such appointment on the same terms and conditions as set out in this agreement, unless otherwise agreed by a Special Resolution.
Clause 11 deals with the capacity in which the General Partner is acting and provides relevantly:
(a)The General Partner enters into this agreement as general partner of the Partnership and in no other capacity.
As indicated above, the General Partner in the Management Agreement is defined as Goldstone FM, as General Partner of VCMP. It is common ground that VCMP was the General Partner of VCLP, at least until 1 April 2025. The drafting of cl 11.1(a) is therefore infelicitous in that it might be read as referring to Goldstone FM being the General Partner of VCLP. The strictly correct position is that Goldstone FM was the General Partner of VCMP. Accordingly, I read the reference to “the Partnership” in cl 11.1(a) as intended to be a reference to VCMP, noting that as the General Partner of VCMP, Goldstone FM was authorised to conduct the business of VCMP under cl 4.1(a) of the VCMP Deed, and in that way was acting on behalf of VCMP in entering into the Management Agreement.
The Executive Employment Agreement
The Executive Employment Agreement is dated 1 November 2023 between Goldstone PE as the Company, and Ms Commins as the Executive. The agreement is not signed, but it is common ground that it is binding between the parties, although the Angelis Defendants submit that it may not be complete, in particular because of the existence of implied terms (T71.14–22).
Clause 1(a) provides that Ms Commins’ specific duties are set out in the position description in Schedule 2, and that Ms Commins will report to the board. Schedule 2 states as follows:
The Managing Director of the Company is required, amongst other things, to:
•Make decisions regarding the fund and its management.
•Generate investment opportunities.
•Prepare proposals for the investment committee.
•Manage the staff of the Company ensuring compliance with relevant standards and legislation.
•Ensure compliance with the funds license [sic] regime.
•Manage the Company budget.
•Grow the presence of the manager domestically and globally.
•Build value in the portfolio companies.
•Aim to turn investments to account within a three to five year time horizon.
Clause 18 deals with termination of employment. Clause 18.2 deals with termination on notice, and provides that at any time outside of any applicable Probationary Period, Ms Commins may terminate her employment by giving written notice of termination as specified in the Key Terms Table in Schedule 1. However, the Key Terms Table stipulates in relation to both the Probationary Period and the notice period following any applicable Probationary Period, that those concepts are “Not applicable”. In any event, Ms Commins did not at any time seek to terminate her employment on notice, nor has Goldstone PE sought to terminate Ms Commins’ employment on notice at any time.
Clause 18.3 is an important provision in the context of the present case and provides as follows:
(a) The Company may only terminate the Executive’s Employment if:
(i)in the Company’s opinion, the Executive’s conduct (whether by act or omission) amounts to serious misconduct, including, without limitation:
(A)wilful or deliberate behaviour by the Executive that is inconsistent with the continuation of the contract of employment;
(B) Conduct that causes imminent or serious risk to:
1. the health or safety of a person; or
2. the reputation or viability of the Company;
(C)engaging in dishonesty, theft, fraud or assault in the course of the Executive’s Employment;
(D)being charged with any criminal offence in circumstances which bring the Executive or the Company into disrepute; or
(E) being intoxicated at work.
(b)If the Employer terminates the Executive’s Employment in accordance with clause 18.3(a), the Employer does not need to provide the Executive with notice (or payment in lieu of notice).
Clause 18.5(a) provides that if the Executive’s employment is terminated for any reason, and the Executive is a director or other officer of the Company or any Related Company then, if requested by the Company, the Executive must resign as a director or other officer as soon as practicable after the request by the Company.
The Credibility of Witnesses
Ms Commins generally gave clear and direct answers to the questions in her lengthy cross-examination, and I regard her as a reliable and credible witness. She had a good memory of the relevant events, and her recollection of the key conversations was supported by detailed file notes made shortly after those conversations. On one occasion, Ms Commins volunteered a concession against her interests in significantly wider terms than the cross-examiner sought (T216.1–8), which revealed the extent to which she was determined to tell the whole truth. I do not have any hesitation in accepting the candour of her evidence, and in areas where her evidence conflicted with that of Mr Angelis and Mr Ranocchia, I strongly prefer the evidence of Ms Commins.
Ms Nadenbousch was also a credible and reliable witness, whose evidence I accept.
Evidence was also given by several potential investors in the Goldstone Fund, namely Mr Paton, Mr Haigh and Mr McConnell. Each of those witnesses gave clear and credible evidence, which I accept. Mr Burrows made an affidavit but was not required for cross-examination, and I accept his evidence.
Mr Angelis was the subject of a lengthy cross-examination, and I do not regard him as a reliable or credible witness. He was evasive when put in an awkward position, he gave inconsistent answers on a number of occasions, and aspects of his evidence were completely implausible. I give some examples of these features of his evidence in analysing the salient facts below.
I also have reservations as to the credibility of Mr Ranocchia. His affidavit gave various instances of what he perceived to be negative impressions of the Goldstone Fund, but omitted what he regarded as positive impressions of the Goldstone Fund. He said in cross-examination that he did not regard the positive aspects as relevant because he wanted to support Mr Angelis’s side of the case (T592.10–24). In other words, his evidence was consciously partisan. The unbalanced nature of his affidavit is readily explained by the fact that he was seeking to please Mr Angelis, who had offered to reinstate him to his position at the Goldstone Fund. As Mr Ranocchia conceded in cross-examination, he was concerned to give Mr Angelis information which would put Ms Commins in as unfavourable a light as possible so as to maximise his chances of reinstatement (T575.29–31). His conduct in altering his file note of the conversation with Ms Commins of 13 February 2025 (to which I refer below) also casts doubt over his credibility, even though the changes which he made to the note were subtle and nuanced. It is an unfortunate aspect of this litigation that I have to make certain findings on contested aspects of Mr Ranocchia’s personal conduct, particularly as he is not a party to the proceedings, and he is evidently a person of very considerable ability. However, that is a consequence of the way in which the Angelis Defendants have conducted the litigation.
Mr Lynass was a credible witness. While there are areas of dispute between him and Ms Commins, most of them concern legitimate and genuine differences of perception or judgment on matters where this is no uniquely correct position, and to some extent, are reflective of Mr Lynass (in his role as Chairman of Parabellum) not being fully aware of the work done by Ms Commins.
Salient Facts
Ms Commins has spent over 25 years working in the private equity market. In March 2018, she founded her own private equity firm, AVC Enterprises International Pty Ltd (AVC Enterprises), with the strategy of identifying small to mid-sized businesses in the essential services sector with high growth potential and providing them with hands-on support in achieving their business potential, with Ms Commins as a director of the investee companies. Since 2018, Ms Commins has raised over $70 million in investments in AVC Enterprises’ three platform companies, Cleanway Holdings Pty Ltd (trading as Evoro), Asset Reliability Inspection (ARI) and Halgan Pty Ltd (Halgan). Ms Commins has contributed to: (a) the growth of Evoro’s annual revenue from $11 million to $70 million in approximately three and a half years and increased its profitability four-fold; (b) the growth of ARI’s annual revenue from $5.2 million to $28 million within two and a half years and increased its profitability three-fold; (c) Evoro and ARI exceeding the revenue forecast set out in their respective investment memorandum; and (d) the increase in Halgan’s equity value between April 2019 and January 2022, delivering a 16.5% gross internal rate of return to investors. Mr Burrows, with over 50 years’ experience in investment banking and mergers and acquisitions, praised Ms Commins as having an exceptional skill set as a private equity manager and a disciplined approach to investments (Mr Burrows’ affidavit of 21 May 2025 at [14]–[15]).
In January 2023, Ms Commins decided to build upon AVC Enterprises’ business by establishing a second fund, and began seeking potential investors in the new fund. One such potential investor was Mr Angelis. Mr Angelis is a successful businessman and investor with over 30 years’ experience in construction, insurance and private equity. In 1988, he co-founded Interak Pty Ltd, which grew into one of Sydney’s leading office fit-out contractors. He left the business in 1995 after a management buy-out. In 1994, Mr Angelis co-founded Coverforce MAL (Coverforce), a specialist provider of income protection and workers’ compensation insurance to the construction industry. He was appointed CEO in 2004 and soon afterwards acquired full ownership of the business. Under his leadership, annual sales grew from approximately $12 million to over $600 million, supported by more than 30 strategic acquisitions, mergers and partnerships. In 2021, he sold Coverforce to Steadfast Group Limited (the Steadfast Group) for approximately $411 million. In 2022, Mr Angelis established Angel Holdco, of which he and his wife are directors and he is the sole shareholder, as trustee of the Angel Holdco Family Trust. Angel Holdco is the vehicle through which Mr Angelis invests in private equity.
On 30 March 2023, Ms Commins and Mr Angelis met at a café in Barangaroo to discuss Ms Commins’ proposed new fund. The following day, Ms Commins sent Mr Angelis an email setting out various proposals for structuring a fund, including that there would be an investment committee, on which Mr Angelis would have a right of veto, and possibly requiring a unanimous vote before investments were made. The email also proposed that Mr Angelis would own 25% of the General Partner, Ms Commins would own 60% and a third participant would own 15%, noting that the fees would be paid to the General Partner.
Negotiations continued over the following six months. On 18 May 2023, Mr Angelis agreed to Ms Commins’ request for the new fund to use as its office the existing office space leased by Angel Holdco at the Quay Quarter Tower at 50 Bridge Street, Sydney. Ms Commins agreed to Mr Angelis’s request to adopt the name “Goldstone Private Equity”. On 7 July 2023, Goldstone PE and Goldstone FM were incorporated, and they were registered with NSW Fair Trading later that month. On 15 September 2023, Mr Angelis sent an email to Ms Commins proposing that he would raise his commitment to $100 million, and that each of them would have a 50% shareholding. The email stated: “The umbrella shareholders agreement that is put in place to be reflective of a joint ownership position but no change to the carried interest arrangement agreed between us” (CB2/76). On 20 September 2023, Ms Commins replied, expressing gratitude for Mr Angelis offering to commit up to $100 million in the new fund, but emphasising that the fund should not be a “family office”, explaining that it would inhibit investment from Australian and global markets if the fund were so perceived (CB2/76).
On 2 November 2023, the constituent documents to which I have referred above were entered into, namely the Shareholders’ Deed, the VCMP Deed, the VCLP Deed, and the Management Agreement. As I have noted above, the Executive Employment Agreement is dated 1 November 2023 but has never been signed. On 3 November 2023, Mr Angelis caused Angel Holdco to execute a subscription deed by which it committed $100 million in capital to VCLP and applied to become the Limited Partner in place of Ms Commins (who had been the Initial Limited Partner) (CB3/98). On 6 November 2023, Ms Commins sent an email to Mr Angelis attaching draft employment contracts for herself, Mr Johnson (who has since left the Goldstone Fund), and members of the Goldstone Fund’s Investment Committee and Advisory Board (CB3/100). On 15 November 2023, Angel Holdco lent $1.2 million to Goldstone PE pursuant to cl 3.7 of the Shareholders’ Deed for the purpose of Goldstone PE applying those proceeds for working capital purposes. The loan is interest free under cl 3.7(c).
Since November 2023, the Goldstone Fund has operated from Angel Holdco’s office in Sydney. Mr Angelis and his wife handle all day-to-day administration associated with the running of the Goldstone Fund, including payment of creditors, tax and payroll, but not company secretarial matters, which were Ms Commins’ responsibility as company secretary for both Goldstone PE and Goldstone FM.
On 29 August 2023, Ms Commins emailed Mr Angelis identifying Parabellum as a new deal, following an introduction by Mr Berkefeld (T286.4–5), a member of the Goldstone Fund’s Investment Committee and Advisory Board. The evidence of Ms Commins, which I accept, is that (apart from the initial introduction by Mr Berkefeld) she personally originated, negotiated and structured the purchase of shares in Parabellum over a nine-month period starting in about July 2023, and as part of that process she led financial, legal and commercial due diligence processes with support from McGrathNicol, Thomson Geer and industry experts, and Mr Angelis did not have any involvement in any stage of that process (Ms Commins’ affidavit of 12 April 2025 at [9]). On 23 May 2024, a Shareholders’ Agreement was entered into between Parabellum, VCLP and corporate shareholders associated with Parabellum’s founders, Mr Navin Vij and Ms Jessica Keogh (CB4/140). Goldstone PE, as Manager of VCLP, initially held 50% of the shares in Parabellum, and now holds 47.5% of the shares. Ms Commins and Mr Johnson were appointed as directors of Parabellum, as representatives of Goldstone PE. In June 2024, Mr Ranocchia of Goldstone PE was appointed to the board in place of Mr Johnson.
In or about February 2024, Mr Angelis introduced Ms Commins to Mr Papageorgiou, the founder of Neighbourly. From then until July 2024, Ms Commins corresponded with Mr Papageorgiou and Neighbourly’s financial advisers in relation to the proposed Neighbourly investment, and Goldstone PE also undertook due diligence with the assistance of Corrs Chambers Westgarth, McGrathNicol, Genesis Advisory and KPMG. On 17 June 2024, VCLP, Mr Papageorgiou and others entered into a Share Sale Agreement by which VCLP’s investment in Neighbourly was effected (CB4/149). On 15 July 2024, Neighbourly and its shareholders (including VCLP) entered into a Shareholders’ Deed (Neighbourly Shareholders’ Deed) (CB5/160). Ms Commins and Mr Angelis were appointed directors of Neighbourly as VCLP’s representatives on the board. Mr Papageorgiou remained a director. Until December 2024, when Neighbourly acquired Bluestone OCM Pty Ltd (Bluestone), Mr Papageorgiou had two votes at Neighbourly board meetings (Neighbourly Shareholders’ Deed, Sch 1, cl 3(b)(ii) and T384.19–21). Thereafter, Mr Papageorgiou had one vote, and Ms Commins and Mr Angelis had one vote each and also had a third vote which they had to exercise jointly (T418.26–47).
Ms Commins gave evidence, which I accept, that in June 2024, Mr Angelis told her that his son, John, had started an insurance broking business and that John would be able to help with Neighbourly’s extensive insurance program (Ms Commins’ affidavit of 6 March 2025 at [37]). Ms Commins also gave evidence that Mr John Angelis had once visited the Goldstone Fund’s office and spoke in general terms about the strata insurance brokerage model (Ms Commins’ affidavit of 4 May 2025 at [28]). Ms Commins’ evidence, which I also accept, is that she did not learn until 13 February 2025 that Mr John Angelis’s insurance broking business was called Clearlake (Ms Commins’ affidavit of 21 May 2025 at [28] and see T306.38–41, T302.29–47, 303.17–304.2 and 306.23–31). The Angelis Defendants place heavy emphasis on the footer in red print to an email chain on 27 September 2024 saying that Coverforce was rebranding to Clearlake Insurance Brokers Pty Ltd (Clearlake), and indicating elsewhere an association with Mr John Angelis (Ms Commins’ cross-examination bundle, tab 75), but I accept Ms Commins’ evidence that she did not scroll down to read the red footer (T302.29–32). I reject the evidence of Mr Angelis that from July 2024, he informed the members of the board of Neighbourly (including Ms Commins) about his son’s and his own connection to Clearlake and did not seek to hide that fact (Mr Angelis’s affidavit of 14 May 2025 at [81], T389.45–390.2, 402.13–22, 425.30–32, 467.31–354, 468.14–16). Mr John Angelis is the Co-CEO, the company secretary and one of two directors of Clearlake. The sole shareholder of Clearlake, MAL Insurance Services Pty Ltd, has two corporate shareholders, one of which (Metron Developments Pty Ltd) is wholly owned by Mr John Angelis. Clearlake’s former name was “Coverforce MAL”.
In 2024, public concerns were expressed as to the conduct of insurance brokers and strata managing agents, in relation to securing allegedly excessive commissions on insurance policies placed by strata managing agents on behalf of owners’ corporations, without the owners’ corporation having full knowledge of the arrangements. Neighbourly itself experienced some of the regulatory consequences of those concerns. In July 2024, Southern Cross Strata Management, one of the subsidiaries of Neighbourly which acted as a managing agent, provided undertakings to the NSW Commissioner of Fair Trading in respect of Neighbourly’s revenue generated from insurance commissions (CB8/374). The undertakings included that it would:
a.Develop and implement operational procedures for the handling of insurance policies for strata plans under management by the licence holder under which all commissions and training services are recorded and disclosed in accordance with section 60 of the SSM Act.
b.Develop and implement training for new employees on the requirements relating to commissions and trading services and on the operational procedures in a. above.
c.Implement a procedure to ensure that all employees, servants and agents receive conflict of interest training and ensure that such training is provided on an annual basis for the duration of this Undertaking.
In September 2024, the ABC television program “Four Corners” broadcast a program on the subject entitled “The Strata Trap” (Mr Angelis’s cross-examination bundle, tab 7) and published a report headed “Strata companies’ hidden fees, secret kickbacks and developer deals costing apartment owners” (CB5/178). This included reporting concerning strata managers receiving commissions for insurance policies acquired on behalf of owners’ corporations, which involved the strata managers and insurance brokers cooperating with one another so as to each secure a commission comprising a percentage of the insurance premium acquired, without providing full transparency to the owners’ corporations. The report included exposing connections between some strata managers and their insurance brokers, such as the strata manager Cambridge Management Services and a brokerage firm, Collective Insurance Brokers, which was controlled by the Steadfast Group. An interview with the CEO of the Steadfast Group indicated that insurance brokers and strata managers obtained insurance commissions without the knowledge of the owners’ corporation.
On 19 September 2024, the New South Wales Parliament amended the Strata Schemes Management Act 2015 (NSW), by passing the Strata Managing Agents Legislation Amendment Act 2024 (NSW) (the Amending Act). The Second Reading Speech given on 14 August 2024 by the responsible Minister referred to “troubling instances of strata managing agents taking advantage of strata owners”, including “owners’ corporations being charged excessive fees when securing strata insurance for their buildings; agents being swayed to buy products from certain companies over others because they get a benefit, such as a commission; and agents using the services of related entities to obtain financial benefits without the knowledge of the owners’ corporation”. The Amending Act commenced in full by 3 February 2025, and sought, among other things, to introduce greater disclosure and approval obligations in respect of whether a strata managing agent is connected with another person supplying a service to the managing agent and any commissions received (in particular in s 57(3A) and (3B) of the Amending Act). In short, the new provisions relevantly extended the circumstances which attract penalties. Where strata managing agents request or accept a monetary benefit from another person in connection with the provision of services as a strata managing agent, the Amending Act requires that the approval of the benefit by the owners’ corporation be by a resolution of the owners’ corporation at a general meeting after the relevant details have been disclosed to the participants, including a statement as to the absence of a conflict of interest on the part of the managing agent.
On 3 January 2025, Mr Angelis sent an email to Ms Commins attaching a proposed budget which he had prepared for the Goldstone Companies, and criticising the current financial arrangements within the Goldstone (CB6/235). The email proposed various changes as follows:
1. That director fees derived from portfolio companies are paid to Goldstone;
2.That Partners rely on profit distributions from managing an efficient company rather than director fees or bonus payments (refer budget spreadsheet);
3.From 1 January 2025, I am paid a salary equal to 3 days per week (same deal as Matt Hunter); and
4.That Goldstone makes a one third contribution to rent. I will continue to cover the cost of Parking.
On 21 January 2025, Ms Commins and Mr Angelis met in person after Ms Commins had returned from holiday. There is a dispute between them as to what was said at the meeting, in relation to which I prefer the account given by Ms Commins. Ms Commins’ evidence, which I accept, is that when she pushed back on Mr Angelis’s demands reflecting his email of 3 January 2025, Mr Angelis became very aggressive and made comments which included: “This is my money and I do what I like”, “I do not care what you think”, “I do not need you to run Goldstone”, “I will continue to manage the finances of the fund and you should back off”, and “if you do not agree with what I have suggested then I am out and I’ll exercise my rights” (Ms Commins’ affidavit of 6 March 2025 at [62]). I also accept Ms Commins’ evidence that during the week in which that conversation took place, Mr Angelis said “I am not interested in having outside investors in the fund. I am not keen on making more than three investments into Goldstone” (at [63]). In the week beginning 27 January 2025, Ms Commins accepted that the Goldstone Fund would not raise outside capital, although that was a disappointment to her as it would be a significantly smaller fund than Ms Commins had expected and would in effect be a “private family office” (at [65]–[66]).
On 22 January 2025, Mr John Angelis forwarded an email to his father, which appears to have been a draft intended to be sent to Mr Bayot (T404.22–26), the CEO of Neighbourly (CB6/240). The email attached Clearlake’s proposal for insurance broking services with a revenue-sharing model whereby 70% of revenue would be paid to Neighbourly and 30% to Clearlake. Mr Angelis expressed the view in his evidence that this represented a material improvement in revenue for Neighbourly compared to the then existing 50/50 split and was substantially better than the standard market arrangement (Mr Angelis’s affidavit of 14 May 2025 at [80]). In addition, the attached spreadsheet indicated that Clearlake proposed to increase the dollar figure of the broker fee. The document was in effect a proposal for Clearlake to replace the incumbent insurance broker, Honan, for Neighbourly’s strata schemes under a proposed arrangement whereby Clearlake would take a larger broker’s fee than Honan, but then share a greater percentage of the revenue received with Neighbourly. Instead of splitting total revenue equal to 40% of the base premium 50/50 with Neighbourly, as Honan had done (that is, 20% each), the proposal was for Clearlake to split 43% of the base premium in the ratio 30/70, with 13% going to Clearlake and 30% going to Neighbourly.
I reject Mr Angelis’s evidence that Ms Commins and Mr Papageorgiou had agreed in the latter half of 2024 that Neighbourly’s insurance portfolio would be transferred from Honan to Clearlake (see T386.1–34, 400.38–401.7, 421.21–37, 430.19–24, 468.1–5). An email exchange in early December 2024 between Mr Angelis, Mr Bayot and Mr Papageorgiou (Exhibit 3) indicates that Mr Papageorgiou was looking favourably at a 70/30 share between Neighbourly and the insurance broker, but the emails do not prove firm acceptance of a detailed proposal. Further, it appears that the then proposal involved only buildings managed by Neighbourly’s subsidiary, Strata Professionals, as a pilot program. That is consistent with an email from Mr Papageorgiou to Mr Angelis and Ms Commins on 7 February 2025, referring to a recent telephone call between Mr Papageorgiou and Mr Angelis, and saying that he was only happy to authorise Clearlake to do 617 schemes for Strata Professionals at this stage, and that no further instructions or letters of appointment were to be given to Clearlake to replace Honan until a formal board resolution was made (CB6/249). Ms Commins replied, saying that it is “always best to address these matters openly” and that “Transparency and strong governance are priorities for all of us” (CB6/249). Despite those emails, Clearlake managed to become appointed by Neighbourly’s management as the insurance broker for properties managed by Neighbourly’s subsidiary, Integrity Strata Management Pty Ltd, by 21 January 2025 (Mr Angelis’s cross-examination bundle, tab 10) to the knowledge of Mr Angelis but without the knowledge of Mr Papageorgiou (T399.31–46).
On 31 January 2025, Mr Angelis sent an email to Mr Hodson of Thomson Geer, copying Ms Commins (CB6/244). The email referred to his recent discussion with Ms Commins (from 21 January 2025) and claimed that various matters had been agreed, including removing Ms Commins’ entitlement to director fees from portfolio companies (which were to be paid to Goldstone PE), distributing actual free cash in Goldstone PE annually to shareholders, that the Goldstone Fund would not seek any external investors, Goldstone PE would pay rent and a service charge to Angel Holdco, Ms Commins’ annual salary would increase to $523,699.92 “inclusive of superannuation”, and Mr Ranocchia (an employee in the investment team of the Goldstone Fund) would be given a 10% Carried Interest. Ms Commins gave evidence, which I accept, that the latter two matters did not reflect the matters which had been specifically agreed at that point in time, and that she decided to wait until seeing Mr Hodson’s draft before altering the word “inclusive” to “exclusive”: T260.13–26, 317.4–320.36. Ms Commins’ evidence is supported by an email exchange on 17 February 2025, in which Ms Commins said, in relation to her proposed edits to Mr Hodson’s draft as attached (including the alteration of her salary being “inclusive” rather of “exclusive” of superannuation: CB6/258), that “the agreement needs to be more specific”, to which Mr Angelis responded “I agree we need to be specific” (Mr Angelis’s cross-examination bundle, tab 13A).
On 12 February 2025, Ms Commins had a telephone conversation with Mr Angelis in which Ms Commins said that she proposed to terminate the employment of Mr Ranocchia. Ms Commins explained in her oral evidence, which I accept, that while there were aspects of Mr Ranocchia’s performance which were worthy of praise, there were other aspects of his conduct which made it inappropriate for him to remain part of the team of the Goldstone Fund (T239.15–18). Both Ms Commins and Mr Angelis had sought to encourage Mr Ranocchia to improve those aspects of his conduct in 2024. Further, Ms Commins had sent Mr Ranocchia an appreciative letter on 22 November 2024 telling him that he would be paid his full bonus (Ms Commins’ cross-examination bundle, 2/101), which Ms Commins regarded as part of her efforts to invest in Mr Ranocchia by way of encouragement and support, despite the warnings which she had given him (T244.6–245.34).
The conversation on 12 February 2025 was the third time that Ms Commins had broached her concerns about Mr Ranocchia to Mr Angelis (Ms Commins’ affidavit of 6 March 2025 at [76]). Ms Commins said to Mr Angelis that she had been told that Mr Ranocchia was disparaging her and Goldstone to Parabellum and others, and that this undermining in a small team was unacceptable (Ms Commins affidavit of 21 May 2025 at [23], T252.18–32). She told Mr Angelis that it would be inappropriate for Mr Ranocchia to remain with the business. Mr Angelis said that he would support Ms Commins in this instance, and also said “I want to check if you are going to accept the Neighbourly insurance business going to Clearlake” to which she replied that “this needs to be done properly and with good governance” (Ms Commins affidavit of 6 March 2025 at [76]). In my view, that comment by Mr Angelis concerning Neighbourly’s insurance business reflects the matter that was uppermost in his mind at the time relating to the Goldstone Fund. I reject Mr Angelis’s evidence of the conversation with Ms Commins to the extent that it is inconsistent with Ms Commins’ evidence (including her disagreement with Mr Angelis’s version in her cross-examination: T251.12–253.40). In particular, I reject Mr Angelis’s evidence that Ms Commins referred in that conversation to having received complaints from Parabellum about Mr Ranocchia (Mr Angelis’s affidavit of 14 May 2025 at [127]; Ms Commins at T264.46–265.2). That is a significant matter, because the evidence given by Mr Angelis in cross-examination was that Ms Commins’ alleged statement that Parabellum were complaining about Mr Ranocchia was “the thing that tipped it over for me” in not believing Ms Commins any more (T480.11–20). But I find that Ms Commins never made that statement to Mr Angelis.
Ms Commins accepted in her cross-examination that, in the specific conversation on 12 February 2025 in connection with her reasons for terminating Mr Ranocchia, she did not mention his failing to do important tasks or generate deals, his mistreatment of Ms Nadenbousch (an Investment Analyst) or acting outside his authority (T262.16–24). I accept Ms Commins’ explanation for not referring to those matters, namely that she regarded it as common knowledge that there was dissatisfaction with certain aspects of Mr Ranocchia’s performance (T262.26–29). I also accept Ms Commins’ evidence that she had given him oral warnings on two occasions that, if his conduct continued, he would be terminated (T262.35–263.20).
On 12 February 2025, Ms Commins sent Mr Ranocchia a text message saying that she had “received certain information which [was] a source of considerable concern pertaining to [his] employment” and asked him to see her the next morning (Ms Commins’ cross-examination bundle, tab 178). Ms Commins said, and I accept, that she was referring to information which she had received over the previous month or so, including a conversation with Ms Nadenbousch shortly before sending the text message, which Ms Commins regarded as the “straw that really broke the camel’s back” (T247.15–248.21, 269.34–37). Ms Nadenbousch told Ms Commins in that conversation that Mr Ranocchia had been speaking negatively about Ms Commins’ performance to Ms Nadenbousch, Ms Grouse (an Investment Associate) and Mr Heilman (Investment Manager) (T249.42–250.6, and Ms Nadenbousch’s affidavit of 21 May 2025 at [30]), all of them being employees of the Goldstone Fund.
On 13 February 2025, Ms Commins met with Mr Ranocchia and terminated his employment, telling him that he would be paid four weeks’ salary in lieu of notice and his outstanding entitlements (Ms Commins’ affidavit of 6 March 2025 at [77]). Ms Commins agreed that Mr Ranocchia’s note of the conversation reflected the substance or essence of what was said (T273.28–274.43). The version Ms Commins was shown in cross-examination was the amended version which Mr Ranocchia created on 25 February 2025 (CB7/274) rather than the original version which he created on 13 February 2025 (Mr Angelis’s cross-examination bundle, tab 12B). The note records Ms Commins saying that “It has come to my attention that you have said negative things about me, my leadership style, and Goldstone” and that was the reason for his termination. Ms Commins declined to give examples, and said that she had heard it from 6 or 7 sources, without naming them. Ms Commins also declined to explain what he was accused of saying. To the extent that the differences in the two versions of the note have any significance, I prefer the first of them (CB7/274) being closer in time to the conversation, and composed without the influence of Mr Angelis’s offer of reinstatement.
I accept Ms Commins’ evidence as to her reasons for terminating the employment of Mr Ranocchia (Ms Commins’ affidavit of 21 May 2025 at [99]). Those reasons are given under four topics.
First, Ms Commins says that Mr Ranocchia actively undermined her in her role as Managing Director. Ms Commins gives as one example, that in internal meetings and external meetings, Mr Ranocchia would interrupt her, contradict her points, and make faces when she was speaking or presenting, and that behaviour in Ms Commins’ view was harmful to the reputation of Goldstone as it reflected poorly on Goldstone. Another example is that Mr Ranocchia would refuse to do tasks that Ms Commins requested him to do, such as refusing to complete important due diligence on the HOST customer pipeline because he “didn’t see the point”, and Ms Commins had to ask Mr Hunter to take over leading this task with Mr Ranocchia. Although Ms Commins sent an email on 30 August 2024 complimenting Mr Ranocchia on his work in relation to the HOST transaction (Ms Commins’ cross-examination bundle, 3/188), I accept Ms Commins’ explanation that she was trying to give him a lot of encouragement and support (T239.5–7). Further, Ms Commins says that she was aware of Mr Ranocchia speaking negatively about her and the Goldstone Fund. She refers to an instance where she overheard Mr Ranocchia speaking with Mr Keating (the founder and CEO of HOST, which Parabellum had acquired). Although Ms Commins says that she could not hear the precise words that Mr Ranocchia was saying, Mr Ranocchia admitted in his cross-examination that he said to Mr Keating on about 4 July 2024 that the dysfunction in the transaction process of the Goldstone Fund and the Parabellum board was “a s..t show”, and accepted that the statement was unprofessional (Mr Ranocchia’s affidavit of 14 May 2025 at [39] and T585.35–586.22). Further, Mr Ranocchia admitted in cross-examination that in late 2024, he said to Ms Grouse and Ms Nadenbousch that Ms Commins was “a f…ing bitch”, that Ms Commins was “an absolute shambles”, and that the fund was “a f…ing joke”, and that if “Ms Commins hangs around, then I’m out” (T587.11–16, 587.45, 588.4–9; the apparent source of the questions being Ms Nadenbousch’s affidavit of 21 May 2025 at [30], which I accept).
The parties are in dispute as to whether a 50% shareholder is prevented from seeking relief under s 232 of the Corporations Act. The plaintiffs submit that there is no statutory or other impediment preventing relief, particularly where, as here, the 50% shareholder does not have control in the form of power to prevent the oppression: Munstermann at [22], citing Patterson v Humfrey [2014] WASC 446; (2014) 291 FLR 246 at [53] (Patterson) (Le Miere J).
The Angelis Defendants submit at [111] of their written opening submisisons, that where shareholders possess equal voting power, and each is a director, “there can be no oppression using the administrative machinery of the company” and any oppression must consist of one participant “overbearing” the other, and it must be continuing at the date of hearing: Campbell NSWCA at [387]–[395]. However, in Campbell NSWCA, Young CJ in Eq did not come to any firm view on the point: Patterson at [52]. Indeed, later in Tomanovic, Young JA referred to his Honour’s judgment in that case (at [321]), noting that there are “conceptual difficulties in applying the [oppression principle] to a 50/50 company unless there [are] at least individual strong-arm tactics by the person [holding] the 50%”. Justice Young took into account (at [321]) that “ordinarily it is difficult to say there has been oppression in a 50/50 company between two persons of equal strength of character” but thought it unwise to decide the point. The High Court did not consider the matter.
In Patterson, having set out Young J’s position (at [52]), Le Miere J then held (at [53]) that “There is no reason in principle why a holder of 50% of the shares of a company should be denied relief under s 232” (emphasis added). This was cited with approval in Munstermann at [22(6)]. Justice Le Miere said that the statutory power “is necessary only where an applicant does not itself have the power to prevent oppression”, adding, “it would seem unnecessary to protect those who can control, by their majority shareholding, the affairs of a company against the oppression of others”. His Honour referred to Chesterman J, who wrote extra-curially, after reviewing relevant authorities, that “what disentitles a member… from complaining about oppression is not necessarily a majority of shares but a majority of votes. A member who does not control a majority of votes may seek the court’s intervention”: The Hon Mr Justice R N Chesterman RFD, “Oppression by the Majority – Or of it?” (2004) 25(2) Aust Bar Rev 103; Patterson at [53].
In the present case, Angel Holdco was able to use the mechanism of the VCLP Deed to gain control and remove Goldstone FM and Goldstone PE from the structure of the Goldstone Fund. Accordingly, this is not a case in which an evenly divided shareholding corresponded to equality of power in controlling the companies’ affairs.
Application to the facts of the present case
The claim for oppression is made by WIJOAV, being one of the two members of Goldstone PE and Goldstone FM, with an equal shareholding to that of Angel Holdco. WIJOAV is also a party to the Shareholders’ Deed. As I have said at [16] above in analysing the terms of the Shareholders’ Deed, cll 3.1 and 3.2 indicate that the affairs of Goldstone PE and Goldstone FM included carrying on the business of managing VCLP and VCMP with a view to maximising the value of the assets of VCLP and the amount of the Carried Interest payable from VCLP to VCMP. Further, in analysing the terms of the VCMP Deed, cl 4.1(a) has the effect that Goldstone FM’s affairs included the conduct of the affairs of both VCMP and VCLP (see [26] above).
Accordingly, the control and management of Goldstone PE and Goldstone FM cannot be separated from the control and management of VCMP and VCLP. The point is vividly illustrated by the conduct procured by Mr Angelis on 1 April 2025. By removing VCLP from the affairs of Goldstone PE and Goldstone FM, and reassigning its management to his own newly created companies, Goldstone Capital and Goldstone Capital FM, he has complete control over VCLP to the exclusion of Ms Commins and WIJOAV. Goldstone PE and Goldstone FM have been left with no meaningful role to perform. That constitutes conduct of the affairs of Goldstone PE and Goldstone FM within the ambit of s 232(a). The first three of the Resolutions effecting those changes in control were under the VCLP Deed, but they were merely the legal mechanism for effecting fundamental changes to the management of the Goldstone Companies’ affairs. Resolution 4 was expressly made under cl 8 of the Management Agreement, being a contract entered into between Goldstone PE and Goldstone FM (the latter in its capacity as General Partner of VCMP).
The focus of WIJOAV’s case on oppression is the conduct of excluding Ms Commins (being WIJOAV’s appointee as director) and WIJOAV from any role in the conduct of the Goldstone Fund. Exclusion from management is a common form of commercial unfairness giving rise to oppression in circumstances where (as here) there is a right or expectation of participation in management. Under the Shareholders’ Deed, Ms Commins was WIJOAV’s appointee as a director on the boards of the two Goldstone Companies, with a casting vote on matters relating to the divestment of VCLP’s assets on certain conditions. Those directorships depended on her continued employment by Goldstone PE, as too did her directorships of the companies in which VCLP had made investments, namely Neighbourly and Parabellum (see [18] above). I have found that Mr Angelis’s purported termination of her employment was unlawful and invalid. Accordingly, and contrary to the submission put by the Angelis Defendants, WIJOAV’s expectation of continued board participation by Ms Commins as its appointee was not spent. Further, on the basis of my findings above in relation to Neighbourly and Clearlake, the unfairness of the actions of Mr Angelis and Angel Holdco in excluding WIJOAV and Ms Commins from any role in managing the affairs of Goldstone PE and Goldstone FM, is compounded by my findings that those actions arose from Mr Angelis’s ill-tempered resentment at Ms Commins not agreeing to transfer Neighbourly’s insurance broking work to his son’s business, Clearlake, and his strong desire to prevent her from being an obstacle to that transfer of business. In my view, the conduct amounts to a clear case of oppression.
What is the appropriate remedy under s 233?
The scope of s 233
Section 233(1) provides as follows:
The Court can make any order under this section that it considers appropriate in relation to the company, including an order:
(a) that the company be wound up;
(b) that the company’s existing constitution be modified or repealed;
(c) regulating the conduct of the company’s affairs in the future;
(d)for the purchase of any shares by any member or person to whom a share in the company has been transmitted by will or by operation of law;
(e)for the purchase of shares with an appropriate reduction of the company’s share capital;
(f)for the company to institute, prosecute, defend or discontinue specified proceedings;
(g)authorising a member, or a person to whom a share in the company has been transmitted by will or by operation of law, to institute, prosecute, defend or discontinue specified proceedings in the name and on behalf of the company;
(h)appointing a receiver or a receiver and manager of any or all of the company’s property;
(i)restraining a person from engaging in specified conduct or from doing a specified act;
(j) requiring a person to do a specified act.
In exercising the discretion under s 233, the purpose of relief is to end the effects of oppression; the remedy chosen will depend on the conclusions drawn as to what the oppressive conduct was, and the Court will choose the remedy which is least intrusive: Zong v Lin [2022] NSWCA 136 at [79] (Gleeson JA, with whom Leeming and Kirk JJA agreed); Millsave Holdings Pty Ltd v Connective Group Pty Ltd [2023] VSCA 326; (2023) 75 VR 239 at [1024] (McLeish and Macaulay JJA) (Millsave Holdings). The fundamental principle has been said to be that the remedy under s 233 must be calculated to alleviate the consequences of the oppressive conduct and no more; that is, to place the oppressed party in a position equivalent to that in which it would have been but for the oppression, but not to improve its position over and above that which would have prevailed but for the oppression: Re North Coast Transit Pty Ltd [2013] NSWSC 1119 at [24] (Brereton J).
Most oppression cases have involved the majority (being the oppressor) purchasing the shares of the minority (being the oppressed). However, that is not necessarily so, as is shown in the very thorough analysis of minority buy-out orders by Robson J in Slea Pty Ltd v Connective Services Pty Ltd [2022] VSC 136 at [1649]–[1808] (Slea). In Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672, Fitzgerald JA at [705] was more open to minority buy-out orders than Spigelman CJ at [160]–[166], both passages being obiter dicta. The analysis of Robson J in Slea also included two cases of equal shareholders, where the oppressed party was permitted to buy out the oppressor: Lantsbury v Hauser [2010] EWHC 390 (Ch) (Moss J); Munstermann. On appeal from Robson J’s judgment, the Victorian Court of Appeal in Millsave Holdings agreed with Robson J’s conclusion expressed at [1737(b)], that the “direction” of any buy-out was to be determined by what the justice of the case requires on the basis of all the circumstances of the case (per McLeish and Macaulay JJA at [1025]). I respectfully agree.
A particular issue is whether a buy-out order can and should extend to the compulsory purchase of partnership interests in the present case. Sub-sections 233(1)(d) and (e) refer only to the purchase of shares in the company, but the purchase of other assets is capable of falling within s 233(1)(j), and in any event the list of orders in s 233(1) is expressed to be inclusive rather than exhaustive. As I have said above, the affairs of Goldstone PE and Goldstone FM within the meaning of s 232 extend to the control and management of VCLP and VCMP. Under s 233(1), the question is whether an order for the buy-out of the partnership interests is “in relation to the company”, not “in relation to the affairs of the company”.
A similar issue has arisen from time to time in relation to remedies for oppression in the context of trustee companies, as to whether the Court can order a buy-out of a beneficiary’s interest in the assets held on trust by the company. Fortuitously, the New South Wales Court of Appeal resolved that controversy in the week before the final hearing of these proceedings: David & Ros Carr Holdings Pty Ltd v Ritossa [2025] NSWCA 1085 at [109]–[112] (Leeming JA, with whom Stern JA and Griffiths AJA agreed). Justice Leeming regarded the supposed dichotomy between orders relating to the company and orders relating to the trust of which the company is trustee as a false one, as the two categories are not mutually exclusive. His Honour held that an order “in relation to the company” can extend, where the company is a trustee, to an order that one trust beneficiary buy out another. Among the reasons given for that view, is that such an order will directly affect the relations between the company as trustee and the beneficiaries of the trust. In particular, it will bring about the result that the company, as trustee, will no longer owe obligations to the beneficiary who has been bought out (at [111(5)]). However, his Honour’s reasoning concerned the extent of the power conferred by s 233, not the occasion for its exercise, and Leeming JA expressed doubt that such occasions would be frequent.
In the present case, if the Resolutions of 1 April 2025 were set aside as oppressive then an order for the compulsory purchase of Ms Commins’ partnership interests as a Limited Partner of VCMP would certainly be in relation to Goldstone FM in the way in which Leeming JA illustrated the point (at [111(5)]); that is, in identifying to which parties Goldstone FM owes its obligations to distribute money under cl 8.4 of the VCMP Deed. Moreover, in the present case, the relationship between both Goldstone PE and Goldstone FM and a buy-out order of Ms Commins’ partnership interests in VCMP is more fundamental and pervasive. Looking at the question on the basis that Ms Commins’ partnership interest as a Limited Partner in VCMP is to be bought out by Angel Holdco or Mr Angelis:
(a)Before 1 April 2025, Goldstone PE as the Manager of VCLP, had to make recommendations to Goldstone FM on behalf of the General Partner of VCLP to dispose of or exit investments (cl 3.1(e)(ii) of the Management Agreement), and it is the sale of those investments which gives rise to the payment of Carried Interest to VCMP. The Shareholders’ Deed gave Ms Commins a casting vote at board meetings on the divestment of Partnership Assets on certain conditions (Schedule 2, cl 3(i)).
(b)When Goldstone FM receives VCMP’s share of the Carried Interest, it is bound by cl 8.4 and Schedule 1 of the VCMP Deed to pay the Limited Partners of VCMP their Carry Entitlements, namely 80% to Ms Commins and 20% to Mr Angelis.
(c)The Resolutions of 1 April 2025 have prevented Goldstone PE and Goldstone FM from being in a position to carry out those obligations, and they no longer have a meaningful role to play in the Goldstone Fund structure. That is completely contrary to the objectives set out in cl 3.1 of the Shareholders’ Deed, whereby Goldstone PE and Goldstone FM would carry on the Business with a view to maximising the value of the Partnership Assets and the quantum of the Carried Interest.
(d)If Ms Commins’ Carry Entitlement in VCMP is not purchased by Mr Angelis, she no longer has the protection of the Shareholders’ Deed to participate in decisions of Goldstone PE and Goldstone FM as to how best to manage VCLP’s investments and realise its assets, and thereby earn her Carry Entitlement. Mr Angelis may be content not to realise investments in Neighbourly and Parabellum for many years, especially if Clearlake were to revive its earlier intention of seeking Neighbourly’s insurance broking work. Mr Angelis gave evidence that “even today” he thinks that it is of critical business importance for Neighbourly to implement Clearlake’s proposal (T470.17–28). Ms Commins may therefore find herself waiting an unexpectedly long time to realise her Carry Entitlement, well beyond the usual expectations of private equity investors. Ms Commins’ expectation before her removal was that the Goldstone Fund would sell its shares in Neighbourly and Parabellum in the financial year ended 30 June 2029 (Ms Commins’ affidavit of 26 April 2025 at [86]). Leaving decisions as to the management and sale of VCLP’s assets entirely in Mr Angelis’s control to the exclusion of Ms Commins would perpetuate the effects of the oppression for an indefinite period of time.
(e)If Ms Commins’ Carry Entitlement in VCMP is purchased by Angel Holdco, along with WIJOAV’s shares in Goldstone PE and Goldstone FM, it remedies the oppression occasioned by the effect of the 1 April 2025 Resolutions, because the only Limited Partners of VCMP and VCLP will be Mr Angelis and Angel Holdco, and thus they will be the only parties with a commercial and legal interest in the Carried Interest and Carry Entitlement.
Who should buy out whom?
Ms Commins has a significant claim to be considered as the potential purchaser under a buy-out order, accompanied by an order setting aside the Resolutions of 1 April 2025. She established the structure of the Goldstone Fund, and was instrumental in implementing and managing its investments in Neighbourly and Parabellum. The law is not coldly indifferent to the non-pecuniary aspects of the reward and satisfaction inherent in creating a business and seeing it through to successful fruition, as well as the non-pecuniary consequences of being shut out of that opportunity by acts of oppression. Nor should the law encourage oppressors to think that they are not (or only exceptionally) at risk of being bought out themselves.
However, Ms Commins faces a major obstacle in purchasing Angel Holdco’s interest in Goldstone PE, Goldstone FM and VCLP, and Mr Angelis’s interest in VCMP, in that she does not have the wherewithal to do so herself, and has thus sought out third parties who may be interested in making such a purchase. The evidence of Mr Paton, Mr Haigh and Mr McConnell establishes that their respective entities have expressed interest in making such a purchase. However, none of them is in a position to say that such a purchase would be more likely than not to occur, and their analysis is at too preliminary a stage to identify a price (or price range) at which they would be prepared to make an offer, or when such a purchase would occur. If Ms Commins were ordered to purchase the Angelis Defendants’ shares and partnership interests, there would be a period of some months before the price would be determined by the Court and before Ms Commins then ascertains whether she can procure a purchaser at that price. I note that Ms Commins seeks to use the process under cl 6 of the VCLP Deed, as an alternative, to bring about a forfeiture and sale of Angel Holdco’s Limited Partnership interest in VCLP, but even if that were available (as to which I make no finding), it does not deal with Mr Angelis’s Limited Partnership interest in VCMP, and it strikes me as unfair to Angel Holdco for the sale to be “at any price the General Partner can obtain” under cl 6.6(a).
If Ms Commins turns out to be unable to procure a purchaser at what the Court determines to be fair value, the order for such a compulsory purchase would have to be reconsidered, and the most likely scenario would then be an order that the Angelis Defendants buy out Ms Commins’ shares in Goldstone PE and Goldstone FM and her Limited Partnership interests in VCMP by way of Carry Entitlement. In the meantime, however, decisions must be made in relation to the Goldstone Fund and its portfolio investments, which require certainty as to the on-going ownership of the Limited Partnership interests in VCLP and VCMP. For example, the confidential evidence indicates that decisions are likely to be required in relation to Neighbourly which can only be made if the shareholders and directors of Neighbourly know who will have the economic and legal interests in VCLP in the foreseeable future. Similarly, decisions would be required in relation to employees of the Goldstone Fund, particularly given the starkly divergent views between the two protagonists over the appropriateness of employing certain people in the Goldstone Fund.
Accordingly, in the circumstances of the present case, the Court should exercise its discretion in making orders for the buy-out at a fair valuation which it can be confident will be performed. That requires that it should be the Angelis Defendants who buy out WIJOAV’s shares in Goldstone PE and Goldstone FM as well as Ms Commins’ Limited Partnership interests in VCMP. No question has been raised as to their capacity to do so. An order for the purchase of WIJOAV’s shares in the two companies and Ms Commins’ interests as Limited Partner in VCMP by the Angelis Defendants is appropriate to remedy the oppression in WIJOAV and its appointed director being deprived of any role in managing the Goldstone Fund and in deciding when and for how much to sell VCLP’s investments, so as to give rise to the payment of Ms Commins’ Carry Entitlement in VCMP. Orders to that effect have been sought in the Second Further Amended Originating Process (2FAOP) (see [2A]).
The 2FAOP also seeks an order restraining the defendants from relying on or enforcing the plaintiffs’ compliance with the restraint of trade provisions in cl 3.4 of the Shareholders’ Deed. Clause 3.4 relevantly would prevent the plaintiffs’ from competing with the Goldstone Fund or its investee entities. In my view, it would compound the oppression which has already occurred if the Angelis Defendants were to insist on the plaintiffs complying with cl 3.4, in that not only have the plaintiffs been oppressively excluded from any role in managing the Goldstone Fund, but they would be prevented from deploying their abilities and resources in a substantially similar way in the future. Mr Angelis has given evidence that if WIJOAV is bought out of its shares in Goldstone PE, neither the company nor Mr Angelis would enforce the restraints in cl 3.4 (Mr Angelis’s affidavit of 14 May 2025 at [158]). That is not a formal or binding undertaking, and I regard it as prudent to make an order reflecting Mr Angelis’s intention not to enforce cl 3.4.
The plaintiffs’ application to amend the remedies sought
In the course of their final address at the conclusion of the hearing, the plaintiffs sought to amend the 2FAOP by including remedies, principally by way of:
(a)the appointment of a receiver to the various entities referred to in cl 6 of the VCLP Deed, to form the belief and exercise the discretions required of the entities referred to in cl 6, rather than the Court ordering those entities to do so; and
(b)an order for the compulsory purchase of Angel Holdco’s Limited Partnership interest in VCLP and Mr Angelis’s Limited Partnership interest in VCMP, together with injunctions restraining Mr Angelis from participating in the affairs of the Goldstone Fund, Neighbourly and Parabellum until completion of that purchase.
The proposed amendments are set out in a draft Third Further Amended Originating Process, and a document head “Annexure” (the Proposed Amendments).
The Proposed Amendments are academic on the view I have formed as to the appropriate remedy. However, for the sake of good order, I will decide the application to amend by the plaintiffs. I accept the submission of the Angelis Defendants that they are irremediably prejudiced by the Proposed Amendments in relation to a receivership, as they have been deprived of the opportunity of adducing evidence as to the impact of such appointments on the price reasonably obtainable in the market for their respective partnership interests, the potential impact of such appointments on Neighbourly and Parabellum, and evidence of the cost of such appointments. I therefore refuse leave to amend to claim orders for the appointment of receivers. As to the other amendments, I am not persuaded that they raise any factual issue or issue of legal principle which was not already raised by the 2FAOP, and would therefore allow those amendments.
The plaintiffs’ claims for damages
Ms Commins is entitled to damages (or judgment for debt) arising out of the wrongful termination of the Executive Employment Agreement.
Mr Angelis has breached cl 5.1 of the Shareholders’ Deed by failing to ensure that Goldstone PE conducts the Business in each Financial Year in accordance with the Business Plan, by replacing Goldstone PE with Goldstone Capital FM. Each of the plaintiffs is entitled to seek damages for that breach.
The plaintiffs submit that Mr Angelis and Angel Holdco have breached cl 14(a) of the Shareholders’ Deed, which requires the payment of the Carried Interest to occur in a timely manner in accordance with the terms of the VCLP Deed. However, the time for such payment does not arise until the disposal of VCLP’s investments, which has not yet occurred and is unlikely to occur for a number of years. Accordingly, no breach of cl 14(a) has been established.
Mr Angelis’s application to wind up VCMP
The irretrievable breakdown of the relationship on which VCMP was founded would be a sufficient basis to wind up VCMP on the just and equitable ground. Further, on the orders which I regard as appropriate, VCMP has no meaningful on-going function to perform. The Resolutions of 1 April 2025 were valid (albeit oppressive) and I have not set them aside. Goldstone Capital has undertaken to ensure that the amount equating to Ms Commins’ Carry Entitlement is paid to her, via the Deed Poll. In any event, Ms Commins’ interest as Limited Partner in VCMP is to be compulsorily purchased by Angel Holdco. All of that points strongly towards the winding up of VCMP.
However, against the possibility that there may be a successful application for leave to appeal in a way which might give VCMP a meaningful role to perform in the future, I will defer ruling on the winding up of VCMP until the next stage of the hearing, which will involve the questions of valuation and the assessment of pecuniary remedies.
Costs
The plaintiffs have enjoyed substantial success, although they have not obtained their preferred remedy. They had to approach the Court to obtain that success, and the time and expense involved in preparing for and conducting the hearing would not have been greatly reduced if the plaintiffs had sought only the remedies which they have actually obtained.
An open offer was made to settle the proceedings by the Angelis Defendants on 23 May 2025 on the basis that Angel Holdco would purchase WIJOAV’s shareholding in Goldstone PE and Goldstone FM for $700,000, and that each party would bear its own costs up to that date (Exhibit A). The offer did not extend to purchasing Ms Commins’ partnership interests in VCMP. That offer appears to me at this stage to fall well short of the measure of Ms Commins’ success, particularly taking into account that the costs incurred by the plaintiffs must be very substantial, irrespective of the value of her partnership interests in VCMP.
A further open offer was made on 3 June 2025 (the fifth day of the hearing) whereby the Angelis Defendants would purchase WIJOAV’s shares in Goldstone PE and Goldstone FM and Ms Commins’ current partnership interests as a Limited Partner of VCMP through a referee process supervised by the Court, and the Angelis Defendants would pay the plaintiffs’ costs of the proceedings (Exhibit 6, as clarified in relation to costs by Senior Counsel for the Angelis Defendants orally correcting a typographical error in [2(d)]). The referee process contemplates that there would be two referees, one being an expert in valuing private equity investments to value Ms Commins’ Carry Entitlement, and the other being a senior lawyer to decide the quantum of the damages claims. On the last day of the hearing, that offer was extended to be open until 48 hours after judgment is given, and its terms were improved by the Angelis Defendants offering to pay the fees of the two referees (T951.39–952.19). The latter aspect was designed to put the plaintiffs in the same financial position as if the Court were to decide the questions of valuation and damages. However, the amended offer does not put the plaintiffs in the same position financially as they would be if the Court decided the questions of valuation and pecuniary remedies itself, as there are still the potential costs of the hearing as to adoption or otherwise of the referees’ reports to be taken into account, and it is by no means certain that the Court would adopt the referees’ reports. Having regard to that matter, together with the lateness of the offer, and my own strong view that the Court should decide the questions of valuation and pecuniary remedies itself, I do not regard the second offer as having a material bearing on the question of costs. Nor do I regard it as negating the plaintiffs’ case of oppression.
In my preliminary view, on the material currently available to me, the plaintiffs are entitled to an order for costs of the proceedings to date on the ordinary party-party basis. If the parties inform me that the question of costs may be affected by one or more offers marked “without prejudice save as to costs” then I will have to defer making a decision on costs until after the hearing on valuation and pecuniary remedies. Otherwise, I will hear the parties on 20 June 2025 on costs, including any application for a special order as to costs, such as a lump sum order, and whether those costs should be payable forthwith. Any affidavits and written submissions should be sent to my Associate by 2pm on 19 June 2025.
I certify that the preceding one hundred and ninety (190) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackman. Associate:
Dated: 13 June 2025
SCHEDULE OF PARTIES
NSD 310 of 2025 Defendants
Fourth Defendant:
ANGEL HOLDCO PTY LTD
ACN 662 312 049Fifth Defendant:
GOLDSTONE PRIVATE EQUITY VCMP LP, ILP2300030
Sixth Defendant:
GOLDSTONE PRIVATE EQUITY VCLP LP, ILP2300031
Seventh Defendant:
GOLDSTONE CAPITAL PTY LTD
ACN 685 739 548Eighth Defendant: GOLDSTONE CAPITAL FM PTY LTD
ACN 685 771 457
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