Endless Solar Corporation Limited v Australian Securities and Investments Commission, in the matter of Speedpanel Australia Ltd

THE COURT DECLARES THAT:

1. The register of members of the Company is in the form set out in the spreadsheet produced at page 123 of Annexure DDV-2 to the affidavit of David Dirk Visser affirmed 16 February 2024, excluding columns T and U.
2. The current shareholdings of each member of the Company is as shown in the Annexure to these orders.

THE COURT ORDERS THAT: 3. Subject to order 4, each party is to bear their own costs of and incidental to giving discovery and the determination of the form and content of the register of members of the Company pursuant to paragraphs 1 and 2 of these orders. 4. The Second Defendant is to pay the Plaintiff's costs of the hearing conducted on 12 March 2024, including the costs of preparation for the hearing on and after 9 March 2024. 5. The parties are to confer and seek to agree orders to be made by the Court: (a) to convene a meeting of the members of the Company for the purpose of appointing and/or removing directors including as to the resolutions to be put at the meeting; or (b) alternatively, for the final disposition of the Plaintiff's interlocutory application dated 1 December 2023. 6. If the parties are unable to agree the form of orders as contemplated by paragraph 5 above, by 12 April 2024 the parties are to file and serve proposed orders together with an outline submission of no more than 5 pages. 7. Any further hearing of the Plaintiff's interlocutory application dated 1 December 2023 is to be listed for hearing before the Commercial and Corporations Duty Judge on a date to be fixed after 12 April 2024. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. ANNEXURE No Name Shareholding 1001 Auth. Inv Fund Ltd 4,887,500 1002 M & S Byrne 228,572 1003 Cons Fin. Serv Ltd 925,714 1004 Heritage Ptrs P/L 462,857 1005 LW Nominees P/L 0 1006 Nathan Scheuer 500,267 1007 Spedwl Hold P/L 6,795,833 1008 Asher & Wald Trust 11,154,440 1009 Aussie Dist P/L 12,601,490 1010 Endless Solar Corp Ltd 636,338 1011 Harvard Nominees P/L 3,643,870 1012 Favetti Bricklaying 756,228 1013 J & J Interiors 756,228 1014-1017 Dr George Muchnicki 4,347,819 1018 Sim Juay Cheow 485,507 1019-1023 Howitt Nominees Pty Ltd 0 1020 & 1024 Lambo Investments Pty Ltd 0 1021 & 1025 Backpacker Property Holdings Pty Ltd 0 1022 Adalane Pty Ltd 1,648,096 Total 49,830,759

Introduction 1 The background to this proceeding is set out in Endless Solar Corporation Limited v Australian Securities and Investments Commission, in the matter of Speedpanel Australia Ltd [2023] FCA 720 and Endless Solar Corporation Limited v Australian Securities and Investments Commission, in the matter of Speedpanel Australia Ltd (No 2) [2023] FCA 1290 (Endless Solar No 2). It is also necessary to refer to a related proceeding VID 187 of 2023, the events of which are described in Scheuer (Trustee) v Endless Solar Corporation Limited [2023] FCA 299 (Scheuer No 1) and Scheuer (Trustee) v Endless Solar Corporation Limited (No 2) [2023] FCA 1658 (Scheuer No 2). These reasons assume familiarity with those judgments and will avoid repetition as far as possible. 2 On 19 June 2022, Speedpanel Australia Ltd ACN 107 723 240 (SPA) was deregistered by the Australian Securities and Investments Commission (ASIC) pursuant to s 601AB of the Corporations Act 2001 (Cth) (Act). At the time of deregistration, SPA had no directors. 3 On 28 February 2023, the plaintiff (Endless Solar) filed an originating process in this proceeding seeking an order under s 601AH(2)(a)(i) of the Act that ASIC reinstate the registration of SPA. On 2 March 2023, the Court made an order that ASIC reinstate the registration of SPA. 4 Endless Solar applied for the reinstatement of SPA to enable it to bring proceedings against SPA and, amongst others, its former directors, Nathan Joseph (Nick) Scheuer, Dr Jerzy (George) Muchnicki and Mr Peter Bernhardt, for oppression. To that end, Endless Solar filed two writs in the Supreme Court of Victoria on 6 March 2023 and 17 March 2023 respectively. 5 Shortly thereafter, Endless Solar attempted to convene a general meeting of the members of SPA to be held on 30 March 2023. In proceeding VID 187 of 2023, Mr Scheuer successfully applied for an interlocutory injunction to restrain the conduct of that meeting: see Scheuer No 1. 6 Subsequently, Mr Scheuer brought an application in this proceeding to set aside the order reinstating the registration of SPA. On 27 October 2023, the Court dismissed that application: see Endless Solar No 2. 7 Having reinstated the registration of SPA, it became necessary to appoint directors and at least one secretary. As an interim step, on 21 November 2023 the Court made orders pursuant to s 601AH(3)(d) of the Act that: (a) David Harold Allen Craig, Wei (Cathy) Hua Lin, Mr Scheuer and Dr Muchnicki be appointed as directors of SPA; and (b) Mr Craig and Mr Scheuer be appointed as secretaries of SPA. 8 Mr Craig is a director of Endless Solar and Ms Lin is a person nominated by Mr Craig to be a director. Each of Mr Scheuer and Dr Muchnicki is a former director of SPA. Having regard to the proceedings that have been filed in the Supreme Court of Victoria, Mr Craig and Ms Lin on the one hand, and Mr Scheuer and Dr Muchnicki on the other, can be described as being in opposing camps. 9 Endless Solar wishes to convene a general meeting of SPA to enable the members of SPA to determine the composition of the board of directors going forward. However, the parties have also been in dispute with respect to the content of the register of members of SPA: see Scheuer No 1. 10 On 1 December 2023, Endless Solar filed an interlocutory application pursuant to ss 249G, 601AH(3)(d) and 1319 of the Act and/or pursuant to ss 19, 20 and 21 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) seeking the following orders: 1 An order that Speedpanel Australia Limited ACN 107 723 240 (the Company) be joined as the Third Defendant to this proceeding for the purposes of the relief sought on this application. 2 A declaration as to the form and content of the register of members of the Company. 3 An order that a meeting of members of the Company be called and held for the purpose of electing a board of directors, on terms, including as to the resolutions to be put at the meeting, which this Honourable Court deems fit (Meeting). 4 Directions as to the conduct of the Meeting. 5 An order that the Plaintiff's costs of this application be paid by the Second Defendant. 6 Such further or other orders as the Court deems fit. 11 The application was supported by an affidavit of Mr Craig sworn 1 December 2023. 12 On 14 December 2023, I made orders that an initial hearing be conducted for the purposes of determining the content of the register of members of SPA. I also made orders joining SPA as a third defendant to the proceeding, for the parties to give discovery in relation to the composition of the register of members and for the filing of evidence and submissions on that question. The parties have given discovery pursuant to those orders. 13 For the purposes of determining the content of the register of members of SPA, Endless Solar relied on an affidavit of David Dirk Visser, the Managing Director of SPA from about 2000 until 9 October 2017, affirmed 16 February 2024 and written submissions filed on 8 March 2023. Endless Solar also relied on: (a) evidence given by Mr Bernhardt in an affidavit affirmed on 11 August 2023 which was read in this proceeding in connection with Mr Scheuer's application to set aside the order reinstating the registration of SPA; (b) an affidavit of one of the administrators appointed to SPA on 21 March 2017, Sam Kaso, made on 27 March 2017 and filed in the Supreme Court of Victoria proceeding no. S CI 2017 1093, which affidavit was exhibited to Mr Bernhardt's affidavit; and (c) exhibit SK-4 to Mr Kaso's affidavit. 14 Mr Scheuer relied on his affidavit sworn 4 March 2024 and written submissions filed on 8 March 2023. 15 Neither Mr Visser nor Mr Scheuer were required for cross-examination. 16 Mr Scheuer participated in the hearing as a contradictor and disputed the form of relief sought by Endless Solar with respect to the content of the register of members of SPA. These reasons concern that dispute. As discussed below, the dispute is in narrow compass. 17 For the reasons set out below, the register of members of SPA is as submitted by Endless Solar, being in the form set out in the spreadsheet reproduced at page 123 of Annexure DDV-2 to Mr Visser's affidavit, excluding columns T and U. I reject Mr Scheuer's submissions in opposition. I address the question of the costs of this hearing later in these reasons.

Power of the Court to determine the content of the register of members of SPA 18 There are numerous sources of power for the Court to determine the composition of the register of members of SPA. The most proximate source of power is contained in s 601AH(3)(d). Section 601AH of the Act relevantly provides as follows: 601AH Reinstatement … Reinstatement by Court (2) The Court may make an order that ASIC reinstate the registration of a company if: (a) an application for reinstatement is made to the Court by: (i) a person aggrieved by the deregistration; or (ii) a former liquidator of the company; and (b) the Court is satisfied that it is just that the company's registration be reinstated. (3) If: … (b) the Court makes an order under subsection (2); the Court may: (c) validate anything done during the period: (i) beginning when the company was deregistered; and (ii) ending when the company's registration was reinstated; and (d) make any other order it considers appropriate. 19 In my view, the power conferred by s 601AH(3)(d) is sufficiently broad to enable the Court to determine who are the members of the reinstated company and to declare the form and content of the register of members. As observed by McKerracher J in Bell Group Ltd v Australian Securities and Investments Commission [2018] FCA 884; 358 ALR 624 at [136]: The power has always existed to achieve the primary purpose of treating a company upon reinstatement as though it had continued in existence from the date of deregistration, that is to say, the 'as-you-were' position. 20 The Court also has a general power under s 21 of the FCA Act to make binding declarations of right, whether or not any consequential relief is or could be claimed. It is both within the Court's power and appropriate to grant declaratory relief in the present case as there exists a dispute with respect to the form and content of the register of members and Endless Solar has a real interest in having the dispute determined as the Court's determination will enable a general meeting of the members of SPA to be convened: see generally Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-2 (Mason CJ, Dawson, Toohey and Gaudron JJ). 21 Mr Scheuer adverted to s 175 of the Act which empowers the Court to correct a register kept by a company under Pt 2C.1 (which includes the register of members required to be kept under s 169). On the assumption that that is the only source of power for the Court to declare the form and content of the register of members of SPA, Mr Scheuer submitted that: (a) ordinarily, an applicant for relief under s 175 should notify ASIC of the proposed orders, to ensure that ASIC is able to rectify the register in the way sought, but it is unclear whether Endless Solar has taken any steps to do so; and (b) it is unclear what steps Endless Solar has taken to notify the members (or potential members) of SPA whose interests are directly affected by the application of its interlocutory process and their positions on the orders sought by Endless Solar. 22 At the initial hearing, Mr Scheuer did not press the submission concerning notification to ASIC. In any event, I note that ASIC is a party to this proceeding and can be presumed to be aware of the initial hearing. ASIC has elected not to participate. In respect of notification to members or potential members, Mr Scheuer submitted that the Court should not proceed to determine the register of members in circumstances where members or potential members, whose interests may be affected by the determination, have not been notified of the application. Mr Scheuer placed reliance on the decision of Black J in Gouros v Order of AHEPA NSW Incorporated [2023] NSWSC 1281 (Gouros) at [151]. 23 I reject those submissions. As already noted, the Court is empowered to declare the form and content of the register of members of SPA by s 601AH(3)(d). The power is incidental to the power to reinstate the registration of SPA. The register of members is a register that is required to be kept by the company (see s 168). It is therefore necessary and appropriate that SPA is a party to the proceeding so as to be bound by the determination made by the Court. By orders made on 14 December 2023, SPA was joined as a defendant to the proceeding. 24 The decision of Black J in Gouros concerned an application under s 175 of the Act to rectify the register of members (at [149]). His Honour refused to make an order rectifying the register for reasons that included that the rectification would exclude numerous persons from membership where they claimed to be members, and the affected persons had not been joined as parties to the proceeding. I accept the submission of Endless Solar that the facts and circumstances in Gouros are distinguishable from the present case. The application in the present case is not to rectify the register of members of SPA, and the effect is not to remove persons from the register. Rather, the application is only to determine and declare the form and content of the register immediately prior to the deregistration of SPA. The company, SPA, is a necessary party, and Mr Scheuer has acted as contradictor. It is not necessary for Endless Solar to notify all members or potential members of SPA of this application. 25 I also consider that Mr Scheuer's submission on this point is disingenuous. At the time that Endless Solar brought its application for the Court to declare the form and content of the register of members of SPA, Mr Scheuer was both a defendant to the proceeding and a director of SPA (together with Dr Muchnicki). At the case management hearing on 14 December 2023, at which programming orders were made to hear and determine Endless Solar's application, Mr Scheuer did not suggest that all members of SPA ought to be notified of the application. Further, despite being a director of SPA, there is no evidence that, at any time between 14 December 2023 and the filing of submissions on 8 March 2024, Mr Scheuer requested the board of directors of SPA to notify all members of the application. In the circumstances, it appears that Mr Scheuer's submission on this point was intended to bring about delay in the hearing and determination of this application.

Discovery 26 As noted above, on 14 December 2023 I made orders for the parties to give discovery in relation to the composition of the register of members. It is necessary to say something about the background to that order as it affects the costs to be awarded on this application. 27 As noted earlier, following the reinstatement of SPA, Endless Solar purported to convene a general meeting of SPA on 30 March 2023. Mr Scheuer successfully brought an interlocutory application in proceeding VID 187 of 2023 to restrain the holding of that meeting: see Scheuer No 1. At the time of the interlocutory hearing, a question was raised as to the shareholdings in SPA. The evidence established a prima facie case that: first, the list of shareholders to whom notices of general meeting were sent was not a complete list of the current members of SPA; and second, that Endless Solar was not in possession of an accurate register of members (at [34]). At that time, I ordered that proceeding VID 187 of 2023 be case managed with this proceeding given the connection between the two proceedings. In proceeding VID 187 of 2023, Mr Scheuer applied for orders to ensure that the members of SPA were properly identified so that they could receive notice of any meeting to consider the appointment of new directors. That was also a matter that arose in this proceeding. At the time, I contemplated that steps would need to be taken to identify the members of SPA and, if sought by Endless Solar, for the Court to supervise the convening of a meeting of members of SPA under s 249G of the Act (at [44]-[45]). 28 On 17 November 2023, I made orders to finalise proceeding VID 187 of 2023 by dismissing Mr Scheuer's originating process, save for the question of costs. At a joint case management hearing conducted on 17 November 2023, I expressed the view to the parties that the appointment of directors to SPA and the resolution of any questions concerning the membership and shareholdings in SPA would be best resolved in this proceeding and, as such, there was no longer any utility in continuing proceeding VID 187 of 2023 (Scheuer No 2 at [16]). The parties largely agreed with that conclusion and, as a consequence, I made orders vacating the extant orders and dismissed proceeding VID 187 of 2023 save for the question of costs (Scheuer No 2 at [17]). On 20 December 2023, I made orders that Endless Solar pay Mr Scheuer's costs of proceeding VID 187 of 2023 incurred until and including 29 March 2023 (the date on which the interlocutory injunction was granted) and I also ordered that: Any costs incurred by the parties in connection with paragraphs 1 and 3 of the orders made on 11 April 2023 (until those orders were vacated by the orders made on 17 November 2023) will be costs in proceeding NSD 172 of 2023. 29 The latter order was directed to costs incurred in connection with the giving of discovery in proceeding VID 187 of 2023. If any such costs had been incurred in that proceeding, they are to be treated as costs in this proceeding. 30 In compliance with the orders for discovery made in this proceeding on 14 December 2023, Mr Scheuer swore an affidavit of discovery on 5 February 2024 and Mr Craig swore an affidavit of discovery on behalf of Endless Solar on 6 February 2024.

Issue in dispute 31 Following the giving of discovery and the filing of evidence on this application, the parties have acknowledged in their submissions that there is now little dispute with respect to the form and content of the register of members of SPA. 32 The parties do not dispute that a spreadsheet at page 47 of annexure DDV-2 to Mr Visser's affidavit which is titled "SPA Shares and Options Register May 2015" is an accurate reflection of the share register at that time. Mr Scheuer submitted that there are four key matters which bear on the identity of the shareholdings in SPA after that date: (a) the proposal to issue further shares in SPA in 2016 (2016 Share Rights Issue); (b) the proposal to issue further options in SPA in 2016 (2016 Options Issue); (c) the proposed merger between the business owned by Speedpanel International Ltd (ACN 124 437 181) and SPA (Proposed Merger); and (d) the purported transfer of shares from a group of shareholders to Aussie Distributors Pty Ltd (ACN 120 549 055) (Aussie Distributors) in March 2017 (March 2017 Share Transfers).

2016 Share Rights Issue 33 The parties are agreed that, in around August 2016, SPA issued new shares pursuant to a non-renounceable rights issue. The terms of the non-renounceable rights issue were recorded in a letter from SPA to its shareholders dated 26 July 2016, which was annexed to Mr Scheuer's affidavit. Page 123 of exhibit DDV-2 of Mr Visser's affidavit records the shareholdings in SPA following the rights issue. There was no dispute between the parties as to the content of the share register following the rights issue. In his affidavit, Mr Scheuer deposed that he requested that the shares to be issued pursuant to his acceptance of the rights issue be issued to another entity (controlled by him) called Henry & Ruth Investments Pty Ltd (ACN 004 891 347). That did not occur, but Mr Scheuer did not press any argument about that.

2016 Options Issue 34 Under the terms of the 2016 non-renounceable rights issue, participating shareholders were also entitled to receive "stapled options". The entitlement to shares and options was stated as follows: Shareholders are offered the right to acquire new ordinary shares in SPA, in proportion to their existing Shareholding in SPA for a total payment of 0.637100788 cents per share, with a stapled option to acquire 1 ordinary share for every 2 ordinary shares subscribed for under this offer, in consideration of an Option Fee of $1.00, exercisable at any time up to 24 Months after the closing date of this offer. The exercise price of the shares in connection with the option granted will also be 0.637100788 cents per share. 35 Thus, shareholders taking up their rights under the rights issue were entitled to receive a stapled option to acquire 1 ordinary share for every 2 ordinary shares subscribed for under the rights issue upon payment of $1.00 for the options. The options were exercisable at any time up to 24 months after the closing date of the rights issue offer (17 August 2016) at an exercise price of 0.637100788 cents per share. 36 There is evidence that at least some shareholders who participated in the rights issue acquired stapled options. Mr Visser deposed that, by 15 March 2017, he was aware that none of the options issued pursuant to the 2016 rights issue had been exercised. There is no evidence of any options being exercised either before or after 15 March 2017. In respect of the period after 15 March 2017, administrators were appointed to SPA on 21 March 2017 (Endless Solar No 2 at [16(c)]). On 10 October 2017, a deed of company arrangement (DOCA) for SPA and its related companies, which had been proposed by Mr Scheuer, was executed, after receiving approval from creditors (Endless Solar No 2 at [16(g)]). Under the DOCA, the business of SPA was transferred to interests associated with Mr Scheuer. SPA shareholders did not receive any return. The options would have expired in accordance with their terms by 17 August 2018. 37 Mr Scheuer's submissions with respect to the stapled options were obscure, to say the least. Despite raising the stapled options as an issue for consideration by the Court, Mr Scheuer adduced no evidence that would support a finding that any options had ever been exercised. None of the evidence adduced at the hearing suggests that any options were exercised. 38 I therefore find that SPA's share capital was not altered by the exercise of any options issued pursuant to the 2016 rights issue.

Proposed Merger 39 As to the third matter, the Proposed Merger, it is common ground between the parties that the merger did not proceed and there was no change to SPA's shareholdings.

March 2017 Share Transfers 40 The parties are in dispute with respect to the fourth matter, being the transfer of shares from Howitt Nominees Pty Ltd (Howitt), Lambo Investments Pty Ltd (Lambo) and Backpacker Property Holdings Pty Ltd (Backpacker) to Mr Visser's company, Aussie Distributors. The total number of shares transferred was 7,887,205. 41 Endless Solar submitted that the transfers were recorded in the SPA register on 10 March 2017 and there is no evidence that the board of SPA declined to register the transfers. In those circumstances, Endless Solar submitted that the share transfers were completed and SPA's register of members correctly shows Aussie Distributors as the registered holder of those shares. 42 Mr Scheuer submitted that the registration of a transfer of shares in SPA requires the approval of the directors of SPA and that there is no evidence that the board of SPA resolved to register the transfers to Aussie Distributors. 43 The resolution of this dispute requires reference to the legal framework governing the registration of a transfer of shares in SPA under the Act and the Constitution of SPA and the evidence concerning the transfers in question.

Legal framework 44 By s 168 of the Act, a company is required to set up and maintain a register of members, the requirements of which are governed by s 169. Under s 169, the register is required to include the member's name and address and the date on which the entry of the member's name in the register is made. Section 176 stipulates that, in the absence of evidence to the contrary, a register kept under Ch 2C is proof of the matters shown in the register. 45 Clause 1 of SPA's Constitution stipulates that the "replaceable rules" in the Act do not apply to SPA. SPA's Constitution contains the following provisions governing the register of members and the registration of share transfers: 21. (1) Subject this Constitution, a member may transfer all or any of his shares by instrument in writing in any usual or common form or in any other form that the Directors approve. (2) An instrument of transfer referred to in Sub-Clause (1) shall be executed by or on behalf of both the transferor and the transferee. (3) A transferor of shares remains the holder of the shares transferred until the transfer is registered and the name of the transferee is entered in the register of members in respect of the shares. 22. The instrument of transfer must be left for registration at the registered office of the Company, together with such fee (if any) not exceeding $1.00 as the Directors require, accompanied by the certificate of the shares to which it relates and such other information as the Directors properly require to show the right of the transferor to make the transfer, and thereupon the Company shall, subject to the powers vested in the Directors by this Constitution, register the transferee as a shareholder. 23. The Directors may decline to register any transfer of shares without assigning any reason therefor. … 25. The registration of transfers may be suspended at such times and for such periods as the Directors from time to time determine not exceeding in the whole 30 days in any year. 46 It can be seen that, under cl 21(1), a member is permitted to transfer their shares by instrument in writing in any usual or common form. By cl 21(3), a transfer of shares is complete when it is registered on the SPA register of members. Clause 22 governs the procedures to be followed for the purposes of registration. The clause stipulates that, if the procedures are followed, "the Company shall, subject to the powers vested in the Directors by this Constitution, register the transferee as a shareholder". Thus, SPA is required by its Constitution to register a transfer subject to the powers vested in the Directors by the Constitution. Relevantly, the powers vested in the Directors includes the power given by cl 23 to "decline to register any transfer of shares without assigning any reason therefor". Construing the foregoing provisions in accordance with their ordinary meaning, SPA's Constitution requires SPA to register a transfer of shares unless the Directors make a decision to decline to register the transfer. 47 The foregoing provisions of SPA's Constitution bear similarities to the replaceable rules contained in ss 1072F and 1072G of the Act. However, there is also a significant difference. Most notably, cl 22 contains an express requirement for the company to register a transfer of shares unless the Directors make a decision to decline to register the transfer. 48 Clause 23 of SPA's Constitution is similar to the replaceable rule in s 1072G of the Act (save that the latter only applies to proprietary companies). A power conferred on the directors to decline to register a transfer of shares is not unfettered; the power must be exercised in good faith and honestly in the company's interests: see Australian Metropolitan Life Assurance Co Ltd v Ure (1923) 33 CLR 199. That common law position has also been supplemented by ss 1071E and 1071F of the Act. Relevantly, s 1071E stipulates that: If a company refuses to register a transfer of a security of the company, it must, within 2 months after the date on which the transfer was lodged with it, give the transferee notice of the refusal. 49 A failure to comply with s 1071E is an offence. Section 1071F entitles a transferee to apply to the Court for an order that a transfer of shares be registered.

Evidence concerning the transfers 50 Mr Visser deposed that Dr Alan Finkel purchased shares in SPA indirectly through Howitt during the course of the financial year ending 30 June 2015. At around the same time, Dr Finkel's associates, Daved Lambert and Ronald Lazarovits, also purchased shares in SPA through Lambo and Backpacker respectively. Dr Finkel announced to the SPA board in about October 2015 that he would resign as a director and the Chairman of SPA on account of his imminent appointment as Chief Scientist of Australia. Mr Lazarovits was elected to the SPA board in Dr Finkel's place, but resigned on 7 March 2017. 51 Mr Visser deposed that, on 9 March 2017, each of Howitt, Lambo and Backpacker executed non-market share transfer forms for the transfer of their shares in SPA to Aussie Distributors for $1 consideration per shareholding. A copy of the executed share transfer forms was annexed to Mr Visser's affidavit. Each transfer form was executed by a director of the relevant entities: Mr Lazarovits for Backpacker; Mr Lambert for Howitt; Mr Lambert for Lambo; and Mr Visser for Aussie Distributors. Endless Solar submitted, and I accept, that Aussie Distributors (and SPA) was entitled to assume that the execution of the share transfers by Mr Lazarovits for Backpacker, and by Mr Lambert as director for, relevantly, Howitt and Lambo, was duly authorised (as per ss 128 and 129 of the Act). 52 As discussed in Endless Solar No 2, during 2016 SPA and its related companies were facing financial difficulties (at [16(b)]). On 21 March 2017, administrators were appointed to SPA (at [16(c)]). Thus, the transfers were made a short time before the appointment of administrators. At the time of the transfers, the directors of SPA were Peter Bernhardt, Mr Scheuer, Dr Muchnicki, Mr Visser and Mr Happell (at [17]). Each of Messrs Visser, Happell and Bernhardt had executive roles with SPA. Mr Visser was Managing Director, Mr Happell was a General Manager (and contemporaneous documents designate him as Chief Operations Officer) and Mr Bernhardt was a Technical Manager (responsible for product development and manufacturing, research, and development, and developing and maintaining SPA's IT systems) (at [18]). In the lead up to the appointment of administrators, there was considerable turmoil within SPA at board level. On 3 January 2017, Mr Visser sent an email to the board calling for an extraordinary general meeting of the shareholders of SPA to vote on vacating all director positions and conducting a new election of directors. The extraordinary general meeting was postponed on a number of occasions and was ultimately held on 20 March 2017 (at [21(i)]). During the evening of Sunday, 19 March 2017, Mr Scheuer sent an email to SPA shareholders stating that the board had received an offer from Mr Scheuer (or his nominated entity) to subscribe for 28,079,551 shares in SPA at a total price of $1.25 million ($0.0445 per share) on or before 30 March 2017 (at [21(q)]). The extraordinary general meeting of the members of SPA was held on 20 March 2017. Mr Visser deposed that proxies already submitted were voted and SPA's shareholders passed a resolution removing Mr Scheuer and Dr Muchnicki as directors (at [21(r)]). 53 Mr Visser deposed that he was at SPA's premises at the time of the transfers (9 March 2017), together with Mr Happell. Mr Visser further deposed that he informed Mr Bernhardt of the transfers and that Mr Happell called Mr Scheuer to inform him of the transfers. 54 A meeting of the directors of SPA was held on 10 March 2017. A copy of unsigned minutes of the meeting were in evidence. Mr Visser deposed that the minutes accord with his recollection of what took place at the meeting. In his affidavit, Mr Scheuer did not dispute the content of the minutes. The March 2017 share transfers are not referred to in those minutes. 55 On 12 March 2017, Dr Muchnicki sent an email to Messrs Visser and Happell, copied to Dr Finkel, Mr Lazarovits, Mr Lambert and Mr Scheuer, asserting Dr Muchnicki's belief that "there are serious irregularities associated with the transfer of a large number of SPA share [sic] recently". Dr Muchnicki's email did not explain the nature of the irregularities or the basis for his belief. Later that day, Mr Happell replied, as Chief Operations Officer, stating: "We believe the recent transfer of SPA shares to be in accordance with the regulations, however just to make sure I will refer to our lawyers for review". 56 On 13 March 2017, proxy forms for the general meeting scheduled for 20 March 2017 were distributed to SPA shareholders. The proxy forms were not sent to any representatives of the transferors, Howitt, Lambo and Backpacker. 57 Also on 13 March 2017, Mr Happell sent an email to Mr Scheuer requesting his agreement to waive the 21 day notice period for the shareholders meeting scheduled for 20 March 2017. Mr Scheuer replied to that email stating that he did not agree to waive the notice period. Mr Scheuer copied his reply to Dr Finkel, Mr Lambert and Mr Lazarovits. Mr Lambert replied to Mr Scheuer's email stating: As I'm sure you are now fully aware Howitt Nominees, Lambo Investments and Backpackers Property Pty Ltd have sold all their shares in both SPA and SPI to a company associated with David Visser and therefore do not need or want to be on any further emails regarding these companies. 58 On 15 March 2017, Mr Happell sent an email to Leonie Ladgrove of Stantins, SPA's accountants, copying Mr Scheuer and Mr Visser, attaching an updated copy of SPA's share register recording the March 2017 transfers of shares to Aussie Distributors. The date of the registration of the transfers was recorded in the register as 10 March 2017. The updated copy of the share register appears at page 123 of Annexure DDV-2 to Mr Visser's affidavit. 59 Email correspondence on 16 March 2017 shows that Mr Scheuer requested Laura Stewart of Stantins to prepare a version of the SPA share register which was based upon Mr Happell's updated copy from the previous day and which included a proposed issue of 28,079,551 shares in SPA to the Asher & Wald Trust (which would take Mr Scheuer's total shareholding to 50.36%). It is apparent that Mr Scheuer requested this version of the SPA register to be prepared in connection with his offer to subscribe for that number of shares in SPA. Mr Scheuer sent a copy of that version of the SPA share register to the SPA directors at 4.40 pm on 16 March 2017. Later that day, Mr Scheuer sent another version of the document to the directors which included a proposed issue of 74,798,475 shares in SPA to the Asher & Wald Trust (which would take Mr Scheuer's total shareholding to 74.67%). Endless Solar submitted, and I accept, that the significance of these document is that it shows that Mr Scheuer was aware of the inclusion of the March 2017 transfers in the SPA share register at that time and that Mr Scheuer accepted that updated version of the SPA share register in formulating his offer to subscribe for further shares in SPA. 60 On 19 March 2017, Mr Scheuer sent an email to all SPA shareholders attaching an offer to subscribe for 28,079,551 shares in SPA at a total price of $1,250,000 (being $0.0445 per share) on or before 30 March 2017. Significantly, the offer was not addressed to, and did not include any documents prepared for execution by Howitt, Lambo or Backpacker. 61 Inconsistently with his conduct to that point, at 6.36 am on 20 March 2017 Mr Scheuer forwarded his email of 19 March 2017 to Dr Finkel, copied to Mr Lambert and Mr Lazarovits, with the message: Hi Guys, pls be advised that you may need to vote on above as the recent share transaction/s are likely to be reversed. Regards, Nick 62 Mr Lambert responded at 11.02 am as follows: Good morning Nick, According to my records the shares previously held by Howitt Nominees P/L, Lambo Investments P/L and Backpacker Property Holdings P/L where [sic] transferred to Aussie Distributors P/L on the 9th of March 2017 and therefore we are no longer members of SPA. Regards, Daved 63 Mr Scheuer replied to Mr Lambert, copied to Dr Finkel, Mr Lazarovits and the other directors of SPA, stating as follows: Hi Guys, Pursuant to SPA's constitution, as you would be aware, SPA's board has the ability pursuant to c23 to decline a transfer for any reason. SPA's board on the 10th march declined to record all 3 transfers and there is a resolution to this affect, signed by majority of the board on that date. Further the transfers are ineffective in addition to the right provided under c23 of SPA's constitution as the purported transferee was not entered into SPA's register of members. For this reason Howitt, Lambo and Backpacker remain the holder of the shares purportedly transferred to Aussie Distributors. For this reason, these 3 companies will continue to have rights as shareholders under SPA's constitution. Regards, Nick 64 No evidence has been adduced that there exists a resolution of SPA's board, signed by a majority of the directors on 10 March 2017, declining to register the March 2017 transfers of shares. To the contrary, the unsigned minutes of the board meeting held on that day do not refer to the transfers. As noted above, Mr Scheuer did not dispute the content of the minutes in his affidavit. On this application, Mr Scheuer did not give any evidence to support or explain the assertion in his email that the board had resolved to decline to register the March 2017 transfer of shares. On the evidence adduced on this application, I find that that statement in Mr Scheuer's email was false. The further statement in the email, that "the purported transferee was not entered into SPA's register of members", was also false. The updated copy of SPA's share register circulated by Mr Happell on 15 March 2017 recorded that Aussie Distributors was entered on SPA's register as the holder of the transferred shares. Mr Scheuer was aware of that when he sent the email. Mr Scheuer had not only received a copy of the updated register on 15 March 2017, he had adopted it in formulating his own offer to subscribe for shares in SPA. 65 As noted above, administrators were appointed to SPA on 21 March 2017. The administrators were Sam Kaso and Bruno Secatore of Cor Cordis. On 28 March 2017, the administrators made an application in the Supreme Court of Victoria for orders declaring that their appointment was valid. The application was supported by an affidavit made by Mr Kaso on 27 March 2017. In that affidavit, Mr Kaso deposed that Mr Scheuer had provided him "with a document he has produced which reflects his understanding of the current shareholding in SPA". The document was marked "SK-4" and was tendered by Endless Solar in this proceeding. The document was the same document as sent by Mr Scheuer to the SPA directors at 4.40 pm on 16 March 2017, being a version of the SPA share register which was based upon Mr Happell's updated copy from the previous day and which included a proposed issue of 28,079,551 shares in SPA to the Asher & Wald Trust (which would take Mr Scheuer's total shareholding to 50.36%). In his affidavit, Mr Scheuer deposed that he does not recall "how I gave Mr Kaso the document", but he does not contest Mr Kaso's evidence. Endless Solar submitted, and I accept, that Mr Kaso's evidence is significant because it shows that Mr Scheuer accepted the updated share register provided by Mr Happell (which records the registration of the March 2017 share transfers).

Findings with respect to the share transfers 66 The evidence concerning the transfers set out above establishes that: (a) duly executed transfer forms were lodged at SPA's registered office on 9 March 2017; (b) all of the directors were notified of the transfers; (c) at no time did the directors resolve to decline to register the transfers; (d) the transfers were registered in SPA's register of members no later than 15 March 2017, with the registration date recorded as 10 March 2017; and (e) the updated register of members was subsequently circulated to the directors and was adopted by Mr Scheuer. 67 Although Mr Scheuer asserted in email correspondence on 20 March 2017 that the directors had resolved to decline to register the transfers and that the transfers had not been registered, those assertions are contradicted by the evidence and I find them to be false. 68 Having regard to the totality of the evidence, I find that the March 2017 transfers of shares were registered by SPA in accordance with cl 22 of its Constitution. 69 There were no further changes to SPA's share capital after the registration of the March 2017 share transfers. It follows that SPA's share register is in the form of the register that was attached to Mr Happell's email dated 15 March 2017. The share register appears at page 123 of Annexure DDV-2 to Mr Visser's affidavit. It is appropriate for the Court to make a declaration to that effect.

Costs 70 At the hearing, Mr Scheuer sought an order to the effect that Endless Solar pay his costs of and incidental to the application on an indemnity basis. Mr Scheuer submitted that he is, in effect, a volunteer in this proceeding and should be made whole for the costs incurred. Mr Scheuer further submitted that it is open for Endless Solar to contend in the Supreme Court proceedings (for oppression) that those costs properly form part of its costs of those proceedings. 71 I reject the premise of Mr Scheuer's application for costs. Mr Scheuer is not a volunteer in this proceeding, and was not a volunteer in proceeding VID 187 of 2023. Through both proceedings, Mr Scheuer has challenged the relief sought by Endless Solar in this Court for reinstatement of the registration of SPA and the convening of a general meeting of the members of SPA to determine the composition of the board going forward. 72 On 27 October 2023, I made orders in this proceeding that each party and interested party is to bear their own costs (associated with Mr Scheuer's application to set aside the order reinstating the registration of SPA). In reaching that conclusion, I took into account a range of factors which were set out in Endless Solar No 2 at [54]-[55]. 73 On 20 December 2023, I made orders that Endless Solar pay Mr Scheuer's costs of proceeding VID 187 of 2023 incurred until and including 29 March 2023 (the date on which the interlocutory injunction was granted). I also ordered that any costs incurred by the parties in connection with the giving of discovery in proceeding VID 187 of 2023 will be costs in this proceeding. 74 The further costs incurred in this proceeding are the costs associated with the giving of discovery concerning SPA's share register (including any costs that have been carried over from proceeding VID 187 of 2023 pursuant to the orders made on 20 December 2023) and the costs of the present hearing. There are two principal factors that bear upon the question whether an award of costs should be made in favour of any party. 75 The first factor is that this proceeding is the continuation of Endless Solar's application for reinstatement of the registration of SPA. The purpose of the reinstatement is to enable Endless Solar to pursue claims against SPA and its directors, amongst others. It is not certain at this time whether the claims will be pursued and, of course, it cannot be known whether the pursuit of any such claims will be successful. The steps being taken by Endless Solar to reinstate the registration of SPA, confirm its share register and convene a general meeting of members to appoint directors are necessary, preliminary steps to enable Endless Solar to pursue its claims. These considerations weigh in favour of Endless Solar bearing its own costs of the present application. 76 The second factor is the conduct of the present application by Mr Scheuer. As already noted, Mr Scheuer is not a volunteer in this proceeding. Mr Scheuer initiated proceeding VID 187 of 2023 and made himself a party to this proceeding so as to oppose the relief sought by Endless Solar. The Court made orders for discovery largely because Mr Scheuer put in issue the form and content of SPA's register of members. Most significantly, Mr Scheuer has been unsuccessful on all issues raised by him in the present application. The evidence adduced on this application showed that there was no real doubt about the form and content of SPA's register of members. Acting reasonably, Mr Scheuer ought to have conceded as much and avoided a contested hearing. I have earlier concluded that Mr Scheuer's submissions concerning the Court's power to declare the form and content of the register of members and the need to notify the members and potential members of SPA were disingenuous. 77 Balancing the above matters, I consider that it is just that each party bear their own costs of giving discovery concerning SPA's share register (including any costs that have been carried over from proceeding VID 187 of 2023 pursuant to the orders made on 20 December 2023) and their costs incurred up to an including the filing of submissions on 8 March 2024. That order reflects the fact that it was necessary for Endless Solar to incur costs in order to satisfy the Court as to the composition of SPA's register of members, and that Mr Scheuer chose to oppose the relief sought by Endless Solar. However, I consider that Mr Scheuer's continued opposition to the relief sought by Endless Solar from 9 March 2024, including at the hearing on 12 March 2024, was unreasonable. Mr Scheuer should pay Endless Solar's costs of the hearing conducted on 12 March 2024, including the costs of preparation for the hearing on and after 9 March 2024.

Residual matters 78 By its interlocutory application dated 1 December 2023, Endless Solar also sought orders from the Court convening a meeting of members of SPA and for directions as to the conduct of the meeting. That application reflected observations made by the Court in the course of case managing this proceeding and proceeding VID 187 of 2023. 79 Following the Court's determination of the form and content of the register of members of SPA by this judgment, it ought to be possible for the parties, acting consistently with their obligations under s 37M of the FCA Act, to agree a form of orders to be made by the Court to convene a meeting of members of SPA or, alternatively, to convene a meeting of members of SPA without the assistance of the Court. Accordingly, I will also make orders for the parties to confer and seek to agree orders to be made by the Court: (a) to convene a meeting of the members of the Company for the purpose of appointing and/or removing directors including as to the resolutions to be put at the meeting; or (b) alternatively, for the final disposition of Endless Solar's interlocutory application dated 1 December 2023. 80 I will also order that, if the parties are unable to agree a form of orders, the parties are to file and serve proposed orders together with an outline submission of no more than 5 pages. I certify that the preceding eighty (80) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Bryan.