HONGKONG XINHE INTERNATIONAL INVESTMENT COMPANY LTD -v- BULLSEYE MINING LTD [No 3] [2021] WASC 260 (2 August 2021)

(c) the first defendant should provide further and better particulars of [88.10], [160.5] and [160.40] of its defence;

(d) the second to fourth defendants should provide further and better particulars of [88(7C)] of their defence.

1. The plaintiff's applications will otherwise be dismissed.

1. The plaintiff is a substantial shareholder in the first defendant, an unlisted public company which has more than 50 shareholders.
2. By originating summons filed 3 July 2020, the plaintiff seeks orders under s 232 and s 233 of the Corporations Act 2001 (Cth) (Act) as to the conduct of the affairs of Bullseye by its directors. The plaintiff contends that the affairs of Bullseye have been conducted contrary to the interests of the members as a whole and oppressive to the members of the first defendant including the plaintiff.
3. A significant number of matters are pleaded in the third amended statement of claim (statement of claim) as comprising the oppressive conduct by the defendants. These matters commence in May 2018, with the entry into a loan agreement with Mr Mullan, the father of the fourth defendant. The oppressive conduct includes allegations that the defendants have:

(a) entered into a series of transactions with related parties that are destructive of shareholder value;

(b) failed to lodge their financial reports or hold their annual general meetings within the timeframes specified in the Act;

(c) have rejected funding offers provided by the plaintiff;

(d) refused to register some share transfers and registered others, including some transfers facilitated by the defendants;

(f) failed to keep shareholders informed or properly informed of various matters.

1. Relevantly, for the purpose of the discovery application, the plaintiff contends that:

(a) the first defendant has failed to conduct its principal activities of exploration for and development of mineral resources in the interests of members.[1] The plaintiff pleads a number of specific claims in relation to prospecting licence 77/4034. These contend that shortly prior to the expiration of the licence, drilling contractors were engaged to undertake work on the tenement, the first defendant has not reported these results, the licence was allowed to expire so this expenditure is wasted and the first defendant has failed to comply with its rehabilitation requirements;[2]

(b) the first defendant has failed to disclose information about a transaction with Troy Gold or why Troy Gold is a production partner of Bullseye. The plaintiff contends that the Troy Gold transaction is a related party transaction requiring shareholder approval which has not been sought or obtained;[3]

(c) the first defendant has failed to deal fairly with shareholders by refusing to register certain share transfers while registering other share transfers and facilitating 'grey market' share trading to enable the sale of shares to shareholders supportive of the incumbent directors.[4]

1. The first defendant has filed a lengthy pleading which denies the plaintiff's allegations and pleads what it says is the correct factual background to the matters raised by the plaintiff. At [159], the first defendant pleads its response to the allegations of oppression and specifically addresses the matters raised by the plaintiff. The first defendant, in essence, pleads that:

(a) the second to fourth defendants, as directors of the first defendant, are charged with the conduct and management of the first defendant;

(b) the plaintiff's entitlement to information is set out in the Act and the constitution of the first defendant. It has no specific entitlement to receive information about or vote on transactions entered into by the first defendant;

(c) the plaintiff has been unsuccessful in having its nominees appointed to the board of the first defendant or having the second to fourth defendants removed as directors.

1. Relevantly, in relation to the matters I have summarised at [8], the first defendant pleads that:

(a) shortly prior to the expiration of prospecting licence 77/4034, drilling work was done on the tenement to determine the extent of mineralisation. As a result of this work, the first defendant determined that it should allow the licence to expire. The first defendant pleads that it had until 12 February 2021 to complete any statutory rehabilitation requirements;[5]

(b) the first defendant has not entered into a transaction with Troy Gold in the form alleged by the plaintiff in [106] of the statement of claim;[6]

(c) the first defendant has not registered certain share transfers as it is conducting an investigation into the circumstances of these transfers, following receipt of correspondence from ASIC.[7] The first defendant denies that its directors have facilitated grey market share trading to shareholders supportive of the directors.[8]

1. The first defendant denies that its affairs have been conducted contrary to the interests of members as a whole or oppressively to the plaintiff or other members.[9]
2. At [160] the first defendant denies that the plaintiff is entitled to the relief claimed or any other relief. It then pleads a significant number of matters (over more than 30 pages) in relation to the conduct of Mr Cheng (who it pleads represented the plaintiff in many of its dealings with the first defendant), the plaintiff and others in relation to the first defendant. This paragraph is the subject of the strike out application by the plaintiff. The matters pleaded by the first defendant include:

(a) allegations as to what is termed the 'Doonbeg Mandate' including that the plaintiff and a number of other shareholders of the first defendant referred to as 'the Chinese Group', were acting in concert to control or influence the composition of the board of the first defendant and the conduct of its affairs;[10]

(b) that the purpose of a takeover offer by Red 5 Limited and its extensions was to cause uncertainty and facilitate the acquisition of shares in the first defendant at a reduced price;[11]

(c) the filing of forfeiture applications in respect of a number of the first defendant's tenements was to cause harm and injury to the first defendant and facilitate the 'Chinese Group' gaining control of the first defendant;[12]

(d) the outcome of voting on the reappointment of directors at the 2019 and 2020 annual general meetings;[13] and

(e) the details of a funding offer made by the plaintiff to the first defendant.[14]

1. Before turning to substantively address each of the interlocutory applications, I observe that this matter has already been the subject of a significant number of interlocutory disputes including protracted disputes about the subpoenas issued by both parties and the extent of the parties' discovery obligations. Pleadings have been amended on numerous occasions by all parties to add lengthy additional claims.
2. The matter was originally provisionally listed for a seven day trial in March 2021. It was not possible to confirm these provisional trial dates for two reasons: first, as at March 2021, there were still a number of interlocutory disputes outstanding; and second, the length of the trial had significantly increased, from seven days to 20 days.
3. If the parties continue to take an overly combative approach to these proceedings, it is possible the trial dates set aside in September 2021 will also be at risk. For that reason, I urge the parties and their advisers to consider, in accordance with O 1 r 4A and O 1 r 4B of the Rules of the Supreme Court 1971 (WA) (Rules), whether it is necessary and in their best interests to take each point, even if it is arguable.

1. On 23 September 2020, the parties, by consent, were ordered to give general discovery, rather than discovery by categories.
2. On 16 March 2021, the plaintiff filed a minute of proposed orders which sought discovery of four categories of documents, namely:

(a) documents relating to the amendments made to the pleadings by the parties between 20 January 2021 and 4 February 2021;

(b) documents relating to the exploration, expenditure, environmental rehabilitation, drilling, results in respect of Prospecting Licence 77/4034 and any decision to convert, relinquish or otherwise deal with that tenement;

(i) any transaction or proposed transaction involving the first defendant or any of its subsidiaries; and

(ii) 'Troy Gold' and the posting of the Troy Gold logo on the first defendant's website;

(d) documents relating to the transactions referred to in [126A] ‑ [126C] of the statement of claim including communications between the defendants (or any of them) and the persons involved in the transactions.

1. In support of its application, the plaintiff relied on the sixth affidavit of Alexander James Tharby filed 1 March 2021.
2. On 18 March 2021, the court made orders for discovery in terms of the first category and adjourned the hearing of whether orders should be made in terms of the remaining categories until 30 March 2021.
3. The plaintiff's application for discovery was opposed by the defendants primarily on the basis that the categories of discovery sought in the second and fourth categories were the subject of the orders made by the court on 18 March 2021. On this basis, the first defendant contended that the orders sought by the plaintiff duplicated orders already made by the court and were unnecessary. In addition, the first defendant submitted that the categories of documents sought by the plaintiff went beyond the pleaded issues.

Legal principles governing application for discovery

1. The obligation of general discovery requires the parties to discover all documents which are, or have been, in their possession, custody or power and relate to any matter in question in the proceedings. The matters which are in issue must be determined by reference to the pleadings, including the admissions of the parties and the nature of the action.[15]
2. Traditionally in this court, the obligation of general discovery applied the Peruvian Guano test, namely that a document is discoverable if it is reasonable to suppose that it contains information which may either directly or indirectly enable the party seeking discovery to either advance their case or damage their adversary's, including documents which may fairly lead to a chain of inquiry which has either of these consequences.[16]
3. Recent decisions of this court, particularly for matters in the Commercial and Managed Cases list, have emphasised that this obligation must be tempered by the principles set out in the Rules and in particular, the principles set out in O 1 r 4A and O 1 r 4B.[17]
4. The plaintiff's application is brought under O 26 r 6 alternatively, O 26 r 7 of the Rules.
5. On an application under O 26 r 6, it is necessary for an affidavit to be sworn in support of the application which states the deponent's belief that the documents are in the possession, custody or power of the other party and they relate to one or more of the matters in question. The court will only make an order for further discovery if it has reasonable grounds for being fairly certain that the particular documents sought exist, are relevant and ought to have been discovered.
6. The onus is on the party seeking orders for further discovery under O 26 r 6 to satisfy the court of three matters:[18]

(a) the court has reasonable grounds for being fairly certain that the documents sought (or class of documents sought) are in existence;

1. In considering whether or not to make an order for discovery, it is necessary to consider the broad overriding objectives of case flow management set out in O 1 r 4B of the Rules.
2. The discretionary power to order discovery is to be exercised having regard to:[19]

(b) the timely and cost-effective disposal of litigation including whether the categories of discovery are necessary for fairly disposing of the proceedings;

1. An application for an order for discovery under O 26 r 7 may be made at any time by a party whose request under O 26 r 1 for discovery has not been satisfied. It is not necessary for a party to file an affidavit in support of the application.
2. I turn now to consider the three categories of documents sought by the plaintiff.

1. The allegations concerning prospecting licence 77/4034 and the grey market share trading were first pleaded by the plaintiff in amendments made to the statement of claim in January 2021. The defendants responded to these allegations by defences filed 4 February 2021.
2. On this basis, I accept the first defendant's submission that these categories of documents were the subject of the court's orders on 18 March 2021. Given that an order for discovery has already been made under O 26 r 7 of the Rules, I consider it is premature to make any order for further and better discovery under O 26 r 6 in respect of either of these categories until the defendants have been given the opportunity to provide discovery in relation to these matters.
3. Accordingly, the plaintiff's application for discovery of these categories is refused.
4. I note, for completeness, that the plaintiff renewed its application for further and better discovery of certain documents in relation to Prospecting Licence 77/4034 on 30 April 2021. Orders were made on that date for certain documents to be discovered by the first defendant.

1. The plaintiff's allegations concerning Troy Gold are set out in [105] ‑ [113] of the statement of claim. These matters have always been part of the dispute between the parties. They were referred to in the affidavit of Mr Huang filed 3 July 2020 in support of the originating process, the interlocutory process filed on 7 July 2020, the statement of facts, issues and contentions (SFIC) filed 17 July 2020 and pleaded in the original statement of claim filed by the plaintiff on 21 August 2020. The allegations have not been amended since this date.
2. Specifically, the plaintiff pleads that:

(a) 'Troy Gold' is the trading name of Tipbot Ltd, a company associated with Mr Mullan,[20] the father of Ms Mullan (the fourth defendant),[21] a director of the first defendant;[22]

(b) in July 2019, Troy Gold represented on its website that it had a contract with Bullseye to take the first 20,000 ounces of gold produced by Bullseye at its North Laverton Gold Project for US$1,350 per ounce. This is defined in the statement of claim as the Troy Gold Transaction;[23]

(c) from January 2020 to mid July 2020, the logo of 'Troy Gold' was on the Production Partners page of Bullseye's website;[24]

(d) in July 2020, the first to fourth defendants, in a letter from their solicitors, asserted that the 'Troy Gold transaction' was subject to an option period and conditions precedent which had not yet been fulfilled;[25]

(e) in July 2020, Mr Burns filed an affidavit on behalf of the first to fourth defendants which stated 'there is no agreement between Bullseye and Troy Gold and the reference to 'Troy Gold' is an internal reference to another transaction with Bullseye';[26]

(f) in its SFIC filed 11 August 2020, Bullseye asserted there was no contract between Bullseye and Troy Gold;[27]

(g) there has been no disclosure to shareholders about the Troy Gold Transaction or why Troy Gold is a Production Partner of Bullseye;[28]

(h) the Troy Gold Transaction is a related party transaction[29] which required shareholder approval which has not been sought or obtained.[30]

(a) admits that the logo of 'Troy Gold' was on the Production Partners page of the first defendant's website;[31]

(b) admits that in its SFIC filed 11 August 2020, the first defendant stated there was no contract between Bullseye and Troy Gold;[32]

(c) denies the existence of the Troy Gold Transaction or that Tipbot, trading as Troy Gold, is a production partner of Bullseye;[33]

(d) does not admit the remaining matters pleaded by the plaintiff.[34]

1. The plaintiff contends that the defendants have not pleaded what the 'true state of affairs' was in relation to Troy Gold. The plaintiff submits that the statements in the letter from the first defendant's solicitors dated 9 July 2020 as well as statements in an affidavit of the second defendant confirm there are documents likely to be in existence which will disclose the 'true state of affairs'.[35]
2. The letter from the first defendant's solicitors referred to in the pleadings was in evidence before me.[36] This letter was sent immediately after the first defendant's solicitors were served with these proceedings. It was sent in response to the interlocutory application filed by the plaintiff seeking authorisation to inspect certain books and records, including any agreement between the defendants and Troy Gold and any correspondence between the defendants and representatives of Troy Gold. Relevantly, it states that:

The 'Troy Gold' transaction, referred to in paragraph 1.1 of the interlocutory application, has been referred to on Bullseye's website for over 6 months. This transaction is subject to an option period and conditions precedent which have not yet been fulfilled[.]

1. In the second defendant's affidavit filed 14 July 2020, the second defendant deposed that:[37]

There is no agreement between Bullseye and Troy Gold and the reference to 'Troy Gold' is an internal reference to another transaction with Bullseye.

1. This is the only paragraph of the affidavit which refers to Troy Gold.
2. Screen shots of the relevant pages of the websites of both Troy Gold and the first defendant which are referred to in the pleadings were also in evidence before me.[38]
3. The plaintiff's evidence is that the only document that has been discovered by the first defendant in relation to the Troy Gold transaction is a letter from the first defendant's solicitors and Tipbot Ltd dated 2 September 2020.[39] This letter denies that there is a contractual or other relationship between the first defendant and Troy Gold or Tipbot Ltd and demands that all statements or references to the first defendant be removed from Troy Gold's website.
4. The first defendant submitted that the only transaction pleaded by the plaintiff in its statement of claim concerning Troy Gold is the contract to take the first 20,000 ounces of gold produced by the first defendant from its North Laverton Gold Project at $1,350 an ounce. On this basis, the first defendant submitted this was the only transaction the first defendant was required to give discovery of and denied that the plaintiff was entitled to discovery of 'any other transaction' between Bullseye and Troy Gold or any proposed transaction even if these existed.[40] In the alternative, the first defendant submitted that the court should not order the first defendant to give discovery of documents in relation to a transaction which the first defendant denies the existence of.
5. Turning first to the last matter raised by the first defendant, while I accept that the first defendant by its solicitor's letter of September 2020 to Tipbot denies there is any existing contract with Troy or Tipbot Ltd, in my view, this is not a complete answer to the plaintiff's application. The plaintiff has pleaded a number of apparently contradictory responses it has received from the first defendant in relation to Troy Gold, namely that:

(a) in July 2020, the first defendant's solicitors informed the plaintiff there was a transaction with 'Troy Gold' which was subject to an option period and conditions precedent;

(b) in the same month, the second defendant deposed that the reference to 'Troy Gold' is an internal reference to another transaction.

1. That is, to date, three different positions have been put forward by the defendants in relation to Troy Gold: first, there is a transaction which is subject to an option period and conditions precedent; second, this is an internal reference to another transaction; and third, there is no agreement with Troy Gold or Tipbot Ltd.
2. Given this, I accept it is likely that the first defendant is in possession of documents which relate to or concerning a transaction between the first defendant and 'Troy Gold'.
3. The question as to whether there is a transaction between Troy Gold and the first defendant and whether this is a related party transaction is an issue in the proceedings. In order to determine whether any transaction is a related party transaction, it is necessary to consider first whether there is a transaction; second, if so, whether it is between related parties; and third, whether shareholder approval is required for the transaction. On this basis, I consider that documents relating to any transaction or proposed transaction between the first defendant and 'Troy Gold' are relevant to the determination of this issue and should have been discovered by the first defendant.
4. I consider that documents that evidence or relate to the existence or non-existence of an agreement or transaction with 'Troy Gold' or evidence or relate to whether this is an internal reference to another transaction, will provide support to or damage the position contended for by the defendants. Alternatively, I consider these documents may fairly lead to a chain of inquiry by the plaintiff which will have either of these effects.
5. There is no evidence before me that ordering discovery of these documents would lead to delay or incur disproportionate costs or otherwise be burdensome.
6. For these reasons, I am satisfied that documents relating to any transaction or proposed transaction between the first defendant and 'Troy Gold' are discoverable by the first defendant and should be the subject of an order.
7. The plaintiff also sought discovery of documents relating to the posting of the Troy Gold logo on the first defendant's website.
8. The plaintiff, in its statement of claim, pleads that the Troy Gold logo is posted on the first defendant's website. This is admitted by the first defendant. Given this admission, I do not consider that there is an issue on the pleadings as to whether the Troy Gold logo is posted on the website. However, for the sake of clarity, if documents concerning the posting of the logo on the website relate to the issue of whether there is or is not an agreement or transaction between the first defendant and 'Troy Gold', these documents will fall within the order I proposed to make as set out in [51].

Application to strike out [160] of the first defendant's defence

1. On 17 March 2021, the plaintiff filed an application to strike out [160] of the first defendant's third re-amended defence, alternatively that [160.3] ‑ [160.17], [160.19], [160.20], [160.22]. [160.23], [160.27], [160.33] ‑ [160.36] and [160.40] be struck out without leave to replead.
2. The application came before me at a directions hearing on 18 March 2021. On that date, the application was adjourned for hearing at a special appointment and directions were made for the parties to file and serve submissions.
3. On 22 March 2021, in accordance with these orders, the plaintiff filed its submissions in support of its application together with an affidavit of Mr Tharby in support of the application.[41] In its submissions, the plaintiff stated that the application to strike out [160] of the first defendant's defence was made on a number of grounds including that:

(a) parts of [160] disclose no reasonable defence to the plaintiff's claim;

(c) it may prejudice, embarrass or delay the fair trial of the action;

(d) it was otherwise an abuse of process of the court.

1. On 25 March 2021, following a request by the first defendant to relist the application, the matter was relisted for directions. Counsel for the first defendant sought to vacate the orders made on 18 March 2021 on the basis that the submissions filed by the plaintiff went beyond the basis of the application that had been raised by the plaintiff with the first defendant and the court on 18 March 2021. At this hearing, it was agreed that the hearing of the plaintiff's application on 30 March 2021 would be confined to three issues:[42]

(a) whether the matters pleaded in [160] are relevant or disclose a reasonable defence;

(b) whether [160] was an abuse of process as these same matters are raised in the first defendant's defence and counterclaim to proceedings in the District Court and there was a possibility of inconsistent findings on the same issues; and

(c) who bears the onus of proof on these matters raised in [160] and what consequences, if any, flow from this.

1. At the hearing before me, the first defendant's current pleading was the third re‑amended defence. Since the date of the hearing, the first defendant has filed a fourth re‑amended defence. This pleading does not address any of the complaints raised by the plaintiff on the strike out application. For this reason, I have referred to the earlier version of the defence which was the subject of submissions before me.

1. The principles which govern this application were not in dispute between the parties. The principles were summarised by Smith J in Vantage Holdings Group Pty Ltd v Donnelly [No 4] in the following terms:[43]

(a) the essential functions of a pleading are to define and limit the issues for decision, to provide the basis for determining discovery and the admissibility of evidence for trial, and to ensure a fair trial by putting the other side on notice of the case it must meet;

(b) a statement of claim must not plead allegations at too high a level of generality. A pleading must be sufficiently particular to conform with one of the primary objects of pleadings, to inform the opposing party of the case that it must meet;

(c) a statement of claim must state specifically the relief or remedy claimed;

(d) the court should proceed with caution before striking out a pleading on the ground that it does not disclose a reasonable cause of action. While the court may determine a difficult question of law on such an application, it would usually be appropriate to leave the determination of such questions for trial;

(e) in alleging no reasonable cause of action:

(i) the question to be decided is not whether the facts pleaded are in themselves sufficient to give rise to a cause of action. Rather, the question is whether it would be open to the party (on its pleadings) to prove facts at the trial which would constitute a cause of action; and

(ii) 'reasonable' means reasonable according to law. If the facts pleaded conceivably give rise to relief, then the cause of action should be held to be reasonable;

(f) the mere fact that a case appears weak is not of itself sufficient to strike out the action;

(g) in considering a strike out application, it is now necessary to consider the role of pleadings in the context of case management techniques. Case management considerations are not, however, necessarily antithetical to the observance of pleading rules. The objects of O 1 r 4A and 4B of the Rules of the Supreme Court 1971 (WA) are often promoted by a clear and precise statement of the issues for decision;

(h) provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action (or defence), and apprising the parties of the case that has to be met, the court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the court to be spent extensively debating the application of technical pleading rules that evolved in, and derive from, a very different case management environment;

(i) pleadings may be struck out on the ground that they may prejudice, embarrass or delay the fair trial of the action because they are evasive, they conceal or obscure the real questions in controversy, they are ambiguous or not reasonably intelligible, they raise immaterial or irrelevant issues, they fail to confine the issues or state the case of the party in question with reasonable particularity, or they raise a case in terms which are simply too general; and

(j) irrelevant or unnecessary pleas in a statement of claim will be struck out on the grounds that they will prejudice, embarrass or delay the fair trial of the action where the defendant must traverse the allegations and, thereby, raise false issues. (citations omitted)

1. This summary was accepted by Murphy and Vaughan JJA on the appeal as being a comprehensive and correct summary.[44]
2. A pleading will be struck out as scandalous if the matter alleges:[45]

Anything which is unbecoming to the dignity of the Court to hear or is contrary to good manners or which charges some person with a crime not necessary to be shown in the cause, to which may be added that any unnecessary (not relevant to the subject) allegation bearing cruelly upon the moral character of an individual is also scandalous.

1. However, for a matter which is scandalous to be struck out, it must also be irrelevant.[46]
2. As a general rule, a party is entitled to have its case heard, the facts found and to have the opportunity to make submissions in relation to the issues of law that arise. It is only where, even if the facts are found as pleaded by a party, there is no basis for the legal conclusion contended for that a pleading should be struck out.[47] For this reason, in considering the application to strike out a pleading, all of the facts that are alleged in the pleading must be accepted as true.[48]

Is [160] relevant to the issues in the proceedings and does it disclose a reasonable defence?

1. The plaintiff's primary complaint is that [160] of first defendant's defence pleads a range of matters, many going to an alleged undisclosed association between members of the first defendant, without linking these allegations to the relief sought by the plaintiff or why these matters are relevant to that issue.[49]
2. The first defendant contends that the matters pleaded in [160] are relevant to both the question of oppression and what relief, if any, ought be granted in the event that oppression is found.[50] Counsel for the first defendant submitted that the matters in [160] set out the facts known to both parties at the time of the alleged acts of oppression, provided the context to these alleged acts, including whether the acts of the plaintiff have baited the defendants, and would enable the court to balance the competing considerations and interests of the parties.
3. On an application under s 232 of the Act for orders pursuant to s 233 of the Act, the court may make orders where the conduct, act or proposed act or resolution is either contrary to the interests of the members as a whole or 'oppressive to, unfairly prejudicial to, or unfairly discriminatory against' a member or members whether in that capacity or in any other capacity.[51] The weight of authority is that this is a composite phrase and that these individual elements are simply different aspects of what is the essential criterion of the section, namely commercial unfairness.[52]
4. Richardson J in Thomas v HW Thomas Ltd observed that:[53]

Fairness cannot be assessed in a vacuum or simply from one member's point of view. It will often depend on weighing conflicting interests of different groups in the company. It is a matter of balancing all the interests involved in terms of the policies underlying the companies legislation in general and sec 209 [the NZ provision] in particular; thus to have regard to the principles governing the duties of a director in the conduct of the affairs of a company and the rights and duties of a majority shareholder in relation to the minority; but to recognise that sec 209 is a remedial provision designed to allow the Court to intervene where there is a visible departure from the standards of fair dealing; and in the light of the history and structure of the particular company and the reasonable expectations of the members to determine whether the detriment occasioned to the complaining member's interests arising from the acts or conduct of the company in that way is justifiable.

1. In considering whether the conduct complained of by the plaintiff is oppressive, it is relevant to consider the course of conduct of the parties, including the conduct of the plaintiff. In Re London School of Electronics Ltd, Nourse J explained why the plaintiff's conduct was relevant in the following terms:[54]

The conduct of the petitioner may be material in a number of ways, of which the two most obvious are these. First, it may render the conduct of the other side, even if it is prejudicial, not unfair. Secondly, even if the conduct on the other side is both prejudicial and unfair, the petitioner's conduct may nevertheless affect the relief which the court thinks fit to grant under subsection (3). In my view there is no independent or overriding requirement that it should be just and equitable to grant relief or that the petitioner should come to the court with clean hands. (footnotes omitted) (citations omitted)

1. A particular matter that is taken into account in assessing an allegation of oppression is the extent to which the minority shareholders has 'baited' the majority shareholder to act in an oppressive manner.[55] While provocation or contributory negligence are not defences to a claim of oppression, if the majority's conduct is the 'natural result' of the minority's conduct, the conduct will be assessed with that in mind and may have lesser significance than it would otherwise.[56] This is a factual matter that is relevant to the exercise of the court's discretion whether or not to grant relief.[57]
2. In considering whether the conduct complained of is oppressive, the court considers this conduct as at the date the proceedings were commenced. The question as to whether the alleged oppressive conduct is continuing and what relief ought be granted is determined as at the date of the hearing.[58]
3. On the basis of these authorities, I accept that, in determining the plaintiff's claim, it may be relevant for the court to consider, amongst other things, the conduct of the plaintiff and in particular:

(a) whether the plaintiff has 'baited' the defendants to act in the manner alleged such that the conduct is not unfair;

(b) the relevance of this conduct to the relief sought and what relief is appropriate to remedy any grounds of oppression that have been made out.

1. However, in accordance with the role of pleadings summarised above at [59(a)] and [59(b)], if the plaintiff's conduct is to be relied upon by the defendants in this manner, it must be specifically pleaded so as to put the other party on notice of the case it must meet at trial.
2. At present, neither the third amended defence nor the fourth amended defence pleads that [160] is relied upon by the first defendant for both an assessment of whether the conduct complained of is oppressive and what relief, if any, ought be granted. This paragraph is pleaded only in answer to the relief sought by the plaintiff. If the first defendant intends to advance at the final hearing of this matter that the plaintiff, through certain acts, has 'baited' the defendants to act in the manner alleged and that these matters are relevant to a consideration of whether the conduct of the defendants is oppressive, this must be specifically pleaded.
3. For that reason, I have confined my consideration of [160] to the question as to whether these matters are relevant to the relief that may be granted by the court in the event that the plaintiff succeeds in its claim.
4. For the following reasons, I decline to strike out [160] on this ground.
5. First, in its statement of claim, the plaintiff seeks a number of orders to remedy the alleged oppressive conduct. These include orders for the appointment of Mr Luke Huang as a director of the first defendant and the removal of the second to fourth defendants as directors. The alleged acts of oppression commenced in about May 2018, with the entry into a loan agreement with Mr Mullins, and have, on the plaintiff's case, continued to the present date. The matters pleaded by the first defendant in [160] commence with the takeover offer by Red 5 Ltd in December 2017, which did not close until April 2019, and continue to the annual general meeting in 2020. On this basis, I accept there is a temporal connection between the matters pleaded in [160] and the acts of oppression. As such, these matters may be considered as being relevant to the relief that is granted.
6. Second, the first defendant contends in [160] that the plaintiff and its representatives sought to procure a further 12% of the issued share capital of the first defendant in breach of the Act, that there is an undisclosed association between various members of the first defendant in breach of the Act, and that it has procured applications for forfeiture to be lodged against the first defendant's mining tenements and mining leases. The first defendant also refers to the results of the 2019 and 2020 annual general meetings of the first defendant which re‑elected the second and third defendants as directors of the first defendant. Whether the plaintiff and its representatives have acted in breach of the Act and procured some of the events that it complains of as constituting oppression may be relevant to a consideration of whether the court should order the appointment of Mr Huang as a director. Similarly, the question as to whether the second to fourth defendants have the support of a majority of the first defendant's shareholders may be relevant to a consideration of whether the court should order the removal of the second and fourth defendants or make a different order in the event the plaintiff succeeds in establishing oppression.
7. For these reasons, I decline to strike out [160] of the defence in its entirety, subject to the question as to whether these matters are properly particularised which I address below.

Is the inclusion of [160] in the first defendant's defence an abuse of the processes of the court?

1. The evidence before me is that Mr Sam Cheng has commenced proceedings in the District Court against the first defendant, being CIV 1987 of 2020. On 19 October 2020, the first defendant filed a defence and counterclaim against Mr Cheng, the plaintiff, and six others which pleads substantially similar matters to those raised by [160] of the defence.[59]
2. The plaintiff contends that the pleading of substantially similar allegations in different proceedings is an abuse of process as there is a risk of inconsistent findings in different courts on the same facts and exposes the plaintiff 'to being vexed with the allegations twice'.[60]
3. The first defendant denies that its conduct constitutes an abuse of the processes of the court. The first defendant emphasised that it has not commenced either the District Court proceedings or these proceedings. The allegations in [160] are pleaded by way of defence and in answer to the relief sought by the plaintiff in these proceedings and in the defence and counterclaim in the District Court proceedings.[61] For this reason, the first defendant denied that it was making a claim in these proceedings which should have been made in an earlier or different proceeding or that it was dividing the remedy it was seeking between the two proceedings.[62] In addition, the first defendant noted that at this stage, neither of the proceedings had been determined and no findings of fact had been made in either court.[63]
4. The circumstances in which the use of the court's process will constitute an abuse of process cannot be exhaustively defined. One of two conditions which enliven the court's discretion to exercise its power to permanently stay proceedings as an abuse of the process of the court, namely:

(a) where the use of the court's procedures occasions unjustifiable oppression to a party; or

(b) where the use of the court's processes bring the administration of justice into disrepute.[64]

1. In Re Griffiths; Ex parte Homestyle Pty Ltd, McLure JA summarised the circumstances in which the doctrine of abuse of process have been applied in the following terms:[65]

The doctrine of abuse of process has been applied when an issue determined in earlier criminal proceedings is sought to be relitigated in subsequent criminal proceedings; when an issue determined in earlier civil proceedings is sought to be relitigated in subsequent civil proceedings; when an issue determined in earlier criminal proceedings is sought to be relitigated in subsequent civil proceedings. Other variants include raising in subsequent proceedings matters which could and should have been raised in earlier proceedings and where there are concurrent overlapping proceedings when a complete remedy could be obtained in one proceeding.

In each of the above situations the doctrines of res judicata and issue estoppel (and their criminal law analogues) have no application; there is, in effect, an improper collateral attack on an earlier decision that has not been set aside; and the abuse lies in a party to the earlier proceeding seeking to litigate the issue in subsequent proceedings. A party who was not involved in the earlier proceedings is, however, not prevented from raising or pursuing an issue that has been determined between different parties in earlier proceedings. (citations omitted)

1. For the following reasons, I do not consider that the inclusion of [160] in the defence constitutes an abuse of the processes of the court. First, at this stage, the matters pleaded by the first defendant have not been the subject of a final determination by either this court or the District Court. Second, the first defendant did not commence these proceedings and, accordingly, has not attempted to split its claims between the two proceedings. Third, the first defendant does not seek any relief in these proceedings; these matters are pleaded as factors for the court to take into account in considering what relief, if any, ought be granted to the plaintiff.
2. While I accept that, on case management principles, it is not desirable for similar claims to be the subject of both proceedings, I do not consider that the inclusion of [160] is an abuse of the processes of the court. I refuse to strike out [160] of the first defendant's defence on this ground.

Who bears the onus of proof of the matters in [160]?

1. On 17 December 2020, the parties were ordered to file and serve witness outlines on the issues on which they bear the onus of proof by 29 January 2021. At that time, counsel for the plaintiff submitted that an order should be made in these terms as 'there are an enormous number of issues raised by [the amended defence], and in respect of which the first defendant would bear the onus, the primary onus'. At that hearing, counsel for the first defendant accepted this submission.[66]
2. The date for the first defendant to comply with this order has been extended on three occasions on 9 February 2021 (until 23 February 2021), 12 February 2021 (until 2 March 2021) and 4 March 2021 (until 16 March 2021). On 9 February and 4 March 2021, the court confirmed that this order required the first defendant to file outlines on which the first defendant bore the legal onus of proof.[67]
3. The plaintiff contends that the court's order required the first defendant to file witness outlines addressing the matters raised in [160] for three reasons. First, the first defendant has pleaded a positive case in response to the plaintiff's claim and, as such, bears the legal onus of proving the matters in [160]. Second, the construction of the order contended for by the first defendant would require the plaintiff to file its witness statements first on the matters raised in [160] and then the defendant, which could not have been intended. Third, the orders of the court did not provide for witness outlines in reply. This would mean that the plaintiff would not be entitled on the present case management orders to respond to the first defendant's allegations.
4. In an action for oppression, the legal onus of proof on establishing conduct that is 'oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member' is on the plaintiff.[68] If oppression is established, the court has a wide discretion under s 233 as to the remedy that ought be granted to deal with the conduct.[69] This discretion must be exercised judicially. Both s 232 and s 233 are to be read broadly and limitations on their scope should not be readily imposed.[70] The remedy should be the least intrusive and seek to remove the oppression found by the court.[71]
5. The matters pleaded in [160] concern the question of what relief should be granted by the court in the event that oppression is found. I accept the submission of the first defendant that it does not bear the legal onus of establishing what relief should be granted. However, the first defendant bears an evidentiary onus to establish the matters pleaded in [160].
6. In this case, the orders of the court on 17 December 2020 required the parties to file and serve witness outlines on the issues on which they bear the onus of proof. While counsel for the first defendant appeared to accept at that hearing that this required the first defendant to file its witness outlines on the matters set out in [160] by 29 January 2021, this position had changed by the directions hearing in February 2021 and March 2021. I accept that, as a consequence, of the exchanges in February 2021, the first defendant was proceeding on the basis that it was required to file its witness statements only on the matters on which it bore the legal onus of proof and that this was made plain to the plaintiff. As a consequence, I do not consider that [160] of the defence should be struck out on the basis that the first defendant had not filed its witness outlines in relation to these matters by 16 March 2021.
7. I note that subsequent to the hearing of this application, the first defendant has filed a further nine witness outlines. These outlines address, at least in part, the matters raised by [160] of the defence. On this basis, I consider that the plaintiff is now aware of the matters which will be raised by the first defendant. Any prejudice the plaintiff has suffered by the failure of the first defendant to file witness outlines by 16 March 2021 can be addressed by further orders of the court, including orders for the filing of responsive witness outlines to these matters.
8. For these reasons, I decline to strike out [160] of the defence on this ground.

1. On 12 January 2021, the plaintiff requested that the defendants provide further and better particulars of their amended defences filed on 7 January 2021. On 9 February 2021, orders were made for answers to be filed by 23 February 2021. On 12 February 2021, this date was extended until 2 March 2021. On 2 March 2021, the defendants filed responses to these requests.
2. On 18 March 2021, the plaintiff sought orders for the defendants to file further or amended answers to the request for particulars to address issues that had been raised in correspondence. This was not opposed by the defendants and, as a result, orders were made for the filing of further or amended answers by 23 March 2021 and for any remaining dispute concerning the particulars to be determined on the papers.
3. There is a continuing dispute between the parties as to the adequacy of particulars that have been provided to six paragraphs of the defences filed by each of the defendants. As noted by the plaintiff, the defence filed by the second to fourth defendants substantially mirrors that filed by the first defendant save for [160] and the same issues arise in respect of each of these paragraphs of their respective defences. The primary difference between the defences concerns [160]. The second to fourth defendants deny the plaintiff is entitled to the relief sought or any relief at all but do not plead the remaining matters which I have summarised above at [12].
4. In considering the adequacy of the particulars that have been filed, I have had regard to the case management orders made in this matter, including for the filing and exchange of expert evidence and witness outlines. I also note that the plaintiff has filed a reply to each of the defences.

1. A party's obligations in respect of pleadings is set out in O 20 of the Rules. Relevantly, a defendant must:

(a) specifically respond to each allegation of fact made in the statement of claim (O 20 r 14);

(c) ensure the defence contains 'the necessary particulars' (O 20 r 13).

1. The purpose of particulars is to enunciate the issues that are to be tried and to identify the case that has to be met at trial. A party is entitled to a sufficiently clear statement of the opponent's case to enable them to have a fair opportunity to meet it.[72] For this reason, the requirement to provide proper particulars may sometimes require that some parts of the evidence and the names of witnesses be disclosed.
2. In considering whether the particulars provided are adequate, it is not a question as to whether a party has adequate knowledge of the actual facts but whether they have adequate knowledge of what the other party alleges are the facts.[73]
3. The adequacy of the particulars must also be assessed in accordance with current case management principles (including those set out in O 1 r 4A and O 1 r 4B of the Rules) and what other orders will be made to define the issues and appraise the parties of the case they have to meet at trial. It is only where the criticism of the pleading will significantly impact on the proper preparation of a case and its presentation at trial that criticisms of pleadings and their lack of particularisation will be 'seriously entertained'.[74]
4. While the current practice has changed since 2006, by reverting to evidence in chief of witnesses being adduced orally rather than through the tender of a witness statement, parties are required to file outlines of the evidence in chief of each witness.[75] This requirement reduces the risk of a party being taken by surprise at trial.
5. I turn then to consider the specific paragraphs that are the subject of dispute.

1. At [34] to [37] of the statement of claim, the plaintiff pleads that arrangements entered into between Mr Mullan and Saghtar were related party transactions which required the approval of shareholders. The defendants deny that shareholder approval was required including in [37.1] on the basis that 'the financial benefit was on terms that would be reasonable, in the circumstances, if Bullseye, Mr Mullan and Saghtar were dealing at arm's length'.
2. The plaintiff sought particulars of the basis on which the defendants allege that the financial benefit was on terms that would be reasonable. The answers filed by the first defendant and the second to fourth defendants on 2 March 2021 are identical (apart from the numbering system adopted).
3. In the answers, the defendants confirm that they intend to lead expert evidence on this issue and set out the basis on which the directors formed the view that the Mullan Proposal was reasonable and on arm's length terms. The answers state that the terms of the Mullan Proposal were comparable to those of similar transactions completed in similar circumstances and, in relation to the Gold Repayment Deed, 'extensive market research'.
4. Further particulars were sought by the plaintiff as to what was meant by certain answers provided by the defendants as well as details of the similar transactions, comparable companies and the particular risks associated with the first defendant for which adjustments were made. The further answers filed by the first defendant (on 19 March 2021) and the second to fourth defendants (on 23 March 2021) are identical (apart from the numbering system adopted).
5. In the further answers filed by the defendants, additional particulars were provided of [37.1]. These particulars detailed the other funding options the first defendant had investigated, as well as details of the companies the third defendant recalled considering as similar transactions and the specific risks relevant to the first defendant.
6. The plaintiff's complaint is that the defendants have failed to provide sufficiently detailed particulars to enable the plaintiff to assess the accuracy of what is pleaded. By way of example, the plaintiff says that in providing particulars of the similar transactions completed in similar circumstances, the defendants refer to a 'permanent watch list' kept by the third defendant. The plaintiff says the defendants have failed to discover 'the permanent watch list'. The plaintiff also complains that the defendants have not identified the terms of the convertible notes the third defendant considered or identified what the relevant circumstances were at the time each transaction was entered into.
7. The defendants deny that the particulars they have given are inadequate and sufficiently identify the case the plaintiff has to meet. They also note that these matters are to be the subject of expert evidence filed by the defendants.
8. The question as to whether shareholder approval was required for the Mullan Proposal requires the court to assess the terms of the transaction against 'objective standards'. What the directors thought about the reasonableness of the terms is relevant as an explanation of the transaction but is not decisive.[76]
9. Since filing these submissions, a detailed outline of evidence of the third defendant has been filed as well as the first defendant's expert evidence in relation to this transaction.[77] The plaintiff has filed expert evidence in response.[78]
10. In my view, the defences together with the particulars set out the basis on which the defendants allege that shareholder approval was not required. The defendants rely on the exception contained in s 210(a) of the Act. Particulars have been provided as to the basis upon which the directors formed this view. The plaintiff has also now been served with the evidence that will be led by the first defendant in support of the case it has pleaded, including its expert evidence. On this basis, I consider that the plaintiff is sufficiently aware of the case that it has to meet at trial and that further particulars are not required.
11. While I accept that more detail could have been provided by the defendants in answer to the request, I do not accept that these details are required by the plaintiff. For these reasons, I decline to order the defendants to provide the further particulars requested.

1. At [70] of the statement of claim, the plaintiff pleads that the first defendant has not sought nor obtained shareholder approval for the remuneration paid to the second to fourth defendants. In response, the defendants accept this is the case and plead, at [70.2], that shareholder approval was not required. The defendants have provided particulars of this contention, namely that the terms for payment were reasonable, the giving of remuneration was reasonable and that further particulars will be provided in particulars or evidence prior to trial.
2. Further particulars were provided on 2 March 2021 which referred to the circumstances of both the first defendant (by reference to its annual reports) and the second to fourth defendants as directors of the first defendant. The particulars also referred to independent remuneration advice that had been obtained as well as internal benchmarking.
3. The plaintiff sought further particulars of the market capitalisation and prospects set out in each of the 2018, 2019 and 2020 Annual Reports and what specific remuneration was considered for persons with analogous positions in analogous resources companies. The additional particulars filed on 19 and 23 March 2021 detailed the pages of the annual reports and the specific documents relied upon by the defendants.
4. The plaintiff's complaint is that the reference to the first defendant's prospects as being described in the annual report is imprecise, embarrassing as well as hearsay opinion evidence. The plaintiff also contends that the defendants should identify all the documents it relies upon, which it has not done, as evidenced by the use of the word 'including'.
5. The defendants say that they have provided proper particulars of their case and the plaintiff is not in any reasonable doubt as to the case it has to meet.
6. Since the filing of these particulars, the plaintiff has been served with detailed outlines of evidence of the second to fourth defendants as well as expert evidence.[79]
7. In my view, the particulars that have been provided, together with these additional documents, provide the plaintiff with necessary particulars of the case they have to meet at trial as well as the evidence the defendants will rely on. The question of whether this evidence is hearsay opinion evidence is a matter to be determined at trial; it is not relevant to the question of whether the particulars are inadequate.
8. If additional particulars are to be relied upon, as foreshadowed in the defences that have been filed, these particulars must be provided as soon as possible. However, on the material that has been provided, I consider that the plaintiff is aware of the case it has to meet at trial on the remuneration issue and that further particulars are not required to be given.

1. At [83] - [87] of its statement of claim, the plaintiff pleads that it provided a funding offer to the plaintiff in October 2018. In answering this allegation, the defendants have pleaded at [86.2] that when the directors initially assessed the proposal, they formed the preliminary view the proposal was not genuine or in the best interests of the first defendant.
2. The plaintiff requested particulars of the 'acts, facts, matters and things relied upon' by the directors informing this preliminary view. The defendants have provided almost six pages of particulars in answer to this request. These include reference to previous funding agreements entered into between the plaintiff and the first defendant including an oral undertaking said to have been provided in mid 2016. The defendants say that the first defendant came 'close to collapse' due to the plaintiff's failure to advance funds timeously.
3. The plaintiff has sought further particulars of a number of the particulars that have been provided. By way of example, this includes a request as to what the first defendant meant by 'close to collapse'. In response, the first defendant says that the response 'means that Bullseye had almost run out of money'. The plaintiff contends that this response is imprecise.
4. In my view, it cannot reasonably be contended that the plaintiff does not understand the case it has to meet from the defences that have been filed or the particulars that have been filed. In my view, further particulars are not required to identify the issues that are raised by the defendants. I consider that the further particulars that have been requested are not directed to understanding the nature of the case that is made on behalf of the defendants but to advance the plaintiff's submissions it proposes to make at trial. It can make those submissions without the provision of further particulars. Accordingly, I do not accept that further particulars are required.

1. At [88] ‑ [94], the plaintiff refers to various agreements the first defendant has entered into with Resource Development Group (RDG) and complains that information has not been provided to shareholders about these agreements.
2. At [88.7] of the defences, the defendants refer to a letter the plaintiff wrote to shareholders in which they say a number of false claims were made.
3. In answer to the plaintiff's request for further and better particulars of these paragraphs, the defendants have set out what they say was the correct position[80] and why certain matters were not the case[81] in respect of RDG.
4. The plaintiff contended that answer 10.5 of the particulars, which identifies a number of documents said to evidence the negotiations with RDG [88.7], does not disclose an arguable case that the alleged claim by the plaintiff was false. As a consequence, the plaintiff sought further particulars as to the negotiations between the defendants and RDG. In response, the defendants say that the negotiations commenced in October 2017 and refer to a number of documents that have been discovered by the first defendant.
5. The plaintiff submits that the answer simply identifies the documents that evidence such negotiations and do not disclose an arguable case. I note that the plaintiff has not sought to strike out this paragraph.
6. Once again, I consider that it is clear from the particulars that have already been provided as to the case the plaintiff has to meet at trial. The further particulars that have been requested do not seek to clarify or understand the case of the first defendant. The question as to whether the particulars support the contention pleaded by the defendants and whether this should be accepted by the court is a matter for trial. In my view, no further specification is required to enable the plaintiff to understand the case against it.

1. This paragraph also concerns the response to the pleading concerning the agreements entered into with RDG. At [88.10], the first defendant refers to events that occurred on 1 September 2018 and pleads that Mr Huang representing the 'Chinese Group' contacted RDG and falsely claimed that the first defendant had rejected the deal. An identical plea is contained in the second to fourth defendants' defence at [88.7C].
2. In answer to the plaintiff's request for further and better particulars of these paragraphs, the defendants have set out the basis on which they contend an inference should be drawn that Mr Huang represented the 'Chinese Group'. Part of this answer[82] refers to certain paragraphs of the Takeover Panel application lodged by the first defendant in July 2018.
3. The plaintiff contended that it was not permissible to include a reference to the application in this manner and that the particulars needed to be contained in a document filed in this court. In response, the defendants quoted these paragraphs from the Takeovers Panel application. They did not include the annexures referred to in these paragraphs.
4. The plaintiff contends that the incorporation by the first defendant of parts of its submission to the Takeovers Panel is 'lazy and embarrassing'. The defendants say that the plaintiff is 'pettifogging' and that they know precisely what the case is that has to be met at trial. In this regard, the defendants emphasised that the plaintiff has a copy of the Takeovers Panel application, which has been discovered in these proceedings, and knows what is being referred to.
5. In my view, the submissions of both parties evidence the animosity between them and the combative approach I referred to earlier. In considering whether the particulars that have been provided are adequate, the question for the court is not whether the approach adopted by the defendant is lazy or embarrassing but whether the plaintiff knows the case it has to meet. I observe, however, that prior to trial it will be necessary for papers for the judge to be filed which incorporates not only the pleadings but the particulars that have been provided. If the particulars refer to documents that are not incorporated within the book, this may not be optimal.
6. Turning to the substantive matter, the plaintiff requested particulars as to the acts, facts, matters and things on which it relied upon in alleging that Mr Huang represented the parties in relation to a conversation that took place on 1 September 2018.
7. The initial answers provided by the defendants refer to 25 separate matters, one of which is that Mr Huang has represented the plaintiff since about January 2018 [11.1.2]. Many of the remaining particulars concern events in 2014 when some of these entities obtained or purchased their shareholdings in the first defendant and have no apparent relevance to the events in September 2018. Dealing specifically with the reference to the application to the Takeovers Panel, these paragraphs address the alleged connection of Mr Wu to other parties and concern events that took place prior to January 2018. They do not specifically address the basis on which the defendants say that an inference should be drawn that Mr Huang represented the parties.
8. The particulars provided by the defendants do not articulate the basis upon which the defendants contend that Mr Huang was representing the parties or the case that the plaintiff has to meet at trial. In my view, the defendants are required to provide proper particulars of the initial request made by the plaintiff, namely what acts, facts, matters and things are relied upon in alleging that Mr Huang represented the parties referred to.

1. The plaintiff did not provide any additional written submissions as to why the particulars provided in respect of [160] of the defence were inadequate. It simply relied on its submissions filed in support of the strike out application.
2. The plaintiff, in its request for particulars, sought further and better particulars of [160.5], [160.6], [160.7], [160.8], [160.9], [160.14], [160.27], [160.36] and [160.40].
3. The plaintiff contends that the answers that have been provided do not answer the request (requests 15.1, 20 and 22), are inadequate (request 23), are inconsistent (request 19) or asks how certain assertions are made (request 15.2, 16.3, 18).
4. Request 15 seeks particulars of [160.5] which pleads an association between the plaintiff, Mr Wu and 'their associates in the Chinese Group' and that these parties were acting or proposing to act in concert to control or influence the composition of the board and the conduct of the affairs of the first defendant. In answer 15.1, the first defendant repeats the particulars provided in answer 11. These particulars are provided in relation to [88.10] of the first defendant's defence as to the basis on which the first defendant contends that Mr Huang represented the Chinese Group in dealings with RDG.
5. Section 12 of the Act defines 'associates'. A person is only treated as an associate of another, for the purposes of the takeover provisions, if at least one of the criteria in s 12 is met. The first defendant relies on s 12(b) and s 12(c) which provide that:

(b) the second person is a person with whom the primary person has, or proposes to enter into, a relevant agreement for the purpose of controlling or influencing the composition of the designated body's board or the conduct of the designated body's affairs;

(c) the second person is a person with whom the primary person is acting, or proposing to act, in concert in relation to the designated body's affairs.

1. Section 16(1) of the Act specifically excludes certain persons from this definition. It provides that:

A person is not an associate of another person by virtue of section 12 or subsection 15(1), or by virtue of subsection 15(2) as it applies in relation to section 12 or subsection 15(1), merely because of one of or more of the following:

...

(d) one has appointed the other, otherwise than for valuable consideration given by the other or by an associate of the other, to vote as a proxy or representative at a meeting of members, or of a class of members, of the body corporate.

1. Circumstances which are relevant to establishing an association include:

1. An association can be inferred from the actions of the relevant parties as well as surrounding circumstances.
2. Section 606(1) of the Act prohibits a person acquiring a relevant interest in a company's shares if, because of the transaction, that person's or someone else's voting power in the company increases from 20% or below to more than 20%, or from a starting point that is above 20% and below 90%. This section applies to the first defendant as an unlisted company with more than 50 members.[83]
3. Pursuant to s 608(1) of the Act, a person has a relevant interest in securities if they have power to exercise, or control the exercise of a right to vote or power to dispose of or control the exercise of a power to dispose of the securities.
4. Section 609 of the Act provides that the fact that a person has been appointed as a proxy or representative of a shareholder will not give that person a relevant interest in securities if the appointment is for one meeting only and no valuable consideration has been given for the appointment.
5. In considering whether a person has 'acquired' a relevant interest, the term 'acquired' is not to be given a narrow interpretation. The acquisition of a relevant interest can be by informal arrangement or understanding that has no legal or equitable force.[84]
6. Determining whether or not an association exists between shareholders depends on the facts of each case. As has been acknowledged in previous decisions, this often requires analysis of complex circumstances. It has also previously been recognised that issues of association are difficult to prove as the party seeking to demonstrate the association rarely has access to the evidence. For this reason, these allegations frequently depend on inferences being drawn from evidence, patterns of behaviour and a lack of a commercially viable explanation for the circumstances that have arisen.
7. In considering this matter, it is important to keep in mind that shareholders in a company are entitled to seek to change the composition of the board of the directors. It is not unlawful for shareholders to discuss the merits of the board or individual members of the board or a change in the composition of the board. Similarly, it is not unlawful for shareholders to seek to persuade other shareholders of their view that the composition of the board should change or to canvass support for a particular resolution.
8. As was noted by the Full Court of the South Australian Supreme Court in Flinders Diamonds Limited v Tiger International Resources Ltd [2004] SASC 119:

The provisions of Chapter 6 of the Corporations Act are not intended to render directors of a company immune from the legitimate scrutiny of and control by shareholders. Directors are not immune from replacement by the vote of shareholders. Instead, the intent is that, if shareholders wish to change the composition of the Board, they should not reach secret understandings or arrangements as to voting.

...

In short, incumbent directors are not entitled to be placed in some kind of cocoon, immune from having to face a group of hostile shareholders, nor should remedies available to a court necessarily enable incumbent directors to acquire or retain control of the company indefinitely.

1. While I accept that a number of the particulars in answer 11 address the alleged association between the plaintiff, Mr Wu and the 'Chinese Group', not all of the particulars do. By way of example, answers 11.1.1 to 11.1.3 address the basis upon which it is contended that Mr Huang represented this group and 11.1.19 and 11.1.20 concern a telephone conversation and an email between Mr Ellison and the third defendant in relation to the RDG deal. While these are particulars of the allegation in [88.10] of the defence, it is not immediately clear how they relate to the allegation in [160.5] or how the court will draw an inference of association from these matters.
2. In addition, many of the answers refer to historical matters in 2014, where shares were transferred or acquired by various members. It is not apparent how these matters are relevant or support an inference being drawn in respect of conduct which occurred more than four years later.
3. Finally, the answers at 11.1.15 and 11.1.16 which refer to proxy forms in September 2016 and December 2017 on their face fall within the exceptions in s 16(1)(d) and s 609 of the Act. These matters cannot support an inference of an association unless the proxies were granted for more than one meeting or for valuable consideration. These matters have not been pleaded.
4. Given the serious nature of the allegation that is made in [160.5], I consider that it is necessary for the first defendant to specifically identify the matters it relies on for this allegation.
5. Request 20 seeks particulars of [160.14] which refers to instructions given by Mr Brett Clark to Mr Frank Torre. The plaintiff requested particulars of the instructions and whether they were in writing, oral or to be implied. The particulars in the defence refer to an email from Mr Clark to Mr Torre dated 8 January 2019. In my view, it is clear from the amended defence that the first defendant contends that the instructions are in writing and identifies the document relied upon. I do not consider that further particulars are required to be provided to enable the plaintiff to understand the case against it.
6. Request 22 seeks particulars of the alleged purpose in [160.36]. This paragraph pleads that the purpose of the extensions of the takeover bid by Red 5 Ltd was to cause uncertainty amongst the first defendant's shareholders, starve the first defendant of funding and facilitate the acquisition of shares at a reduced price. In its amended defence, the first defendant provides particulars of the alleged purpose. These particulars contend that the purpose is to be inferred from a number of matters, including that there was no prospect the offer would be accepted as the price was at an undervalue, Red 5 Ltd did not expect the offer to be accepted, the restrictions that were placed on the first defendant by the Act while a takeover offer was open and the harm this caused.
7. In my view, it is clear from the particulars that have been provided as to the basis on which the first defendant contends the alleged purpose should be inferred. I do not consider that further or additional particulars are required to be provided to enable the plaintiff to understand that case against it.
8. Request 23 seeks particulars of [160.40] of the defence. This paragraph pleads that it should be inferred that Mr Cheng procured the applications for forfeiture lodged in February 2020 and March 2020 in respect of the first defendant's tenements 'with the support of Xinhe, Mr Wu and Luke and the rest of the Chinese Group'.
9. The plaintiff sought particulars of the alleged support and what matters constituted the support. In response, the first defendant repeated 'the particulars above in relation to the association between the parties to obtain control of Bullseye.' In its further answers, the first defendant clarified that the particulars referred to were the particulars in answers 15 to 17 of the further particulars. In turn, each of these refer to answer 11.
10. At [139] - [140] of these reasons, I have set out my views as to the issue in incorporating particulars in this manner when the allegations in the pleading are not identical. Given the serious nature of the allegations, I consider it is necessary that the first defendant provide proper particulars of the alleged support.
11. Request 19 seeks particulars of [160.9] of the defence. This paragraph pleads that instructions for the purchase of shares in the first defendant under the Doonbeg Mandate were provided by Mr Cheng and Mr Huang. Particulars were sought by the plaintiff as to the instructions and whether the instructions were in writing, oral or to be implied.
12. In answer to the request for particulars, the first defendant has said that the instructions were oral and that further particulars will be provided following the production of documents under subpoenas.
13. The plaintiff contends that this response is inconsistent in that it is said that the instructions were oral but that particulars may be given following inspection of documents. The first defendant denies that there is any inconsistency in this response and explained that documents may be produced on subpoena which infer that oral instructions have been given. A number of documents are listed to support this contention.
14. In my view, it is clear from the particulars that have been provided what the first defendant alleges. It contends that oral instructions were provided by Mr Cheng and Mr Huang. At this stage, it has not been able to particularise when each of these conversations took place but may provide further particulars after it has had an opportunity to inspect subpoenaed documents which may refer to or evidence these conversations. In this regard, I do not consider there is any inconsistency in the response that has been provided by the first defendant and do not consider that further particulars are required.
15. Request 15 concerns the particulars provided by the first defendant in relation to [160.5] of the defence which I have summarised at [144] above. In its answers, the first defendant refers to a conversation that Mr Cheng is said to have had with Ms Singh.
16. The plaintiff's request for further particulars asked how the first defendant intended to prove this and why anything that was said was relevant to the plaintiff.
17. The first defendant's answers confirmed that it intended to file a witness outline of Ms Singh, which has now occurred
18. On this basis, it is my view that the plaintiff is aware of the case that it has to meet at trial and that further particulars, in relation to Ms Singh, are not required. I note that the request for particulars was not directed at understanding the case of the first defendant but instead as to how the first defendant intended to prove it. I do not consider that this is the role of particulars or a proper request.
19. Request 16 suffers from the same complaint. This request concerns [160.6] of the defence which pleads that the plaintiff and Mr Wu engaged Mr Cheng, Mr Huang and Holy Investments to procure a further 12% of the voting power in Bullseye. The request for particulars sought particulars of the acts, facts, matters and things relied upon in alleging the engagement and requests particulars as to whether the engagement was in writing, oral, or to be implied. In response, the first defendant says that the engagement is to be inferred from a number of matters, including the absence of the ability of either Mr Cheng or Holy Investments to fund the Doonbeg Mandate.
20. The plaintiff requested further particulars as to the basis upon which the financial capacity of Mr Cheng and Holy Investments was made. This request is not directed at understanding the case of the first defendant but instead at how the first defendant intends to prove it. It is my view that on the particulars that have been provided, the plaintiff is aware of the case that it has to meet at trial and that further particulars are not required.
21. Request 18 also falls into this category. This request seeks particulars of [160.8] of the defence. This pleads that the plaintiff and Mr Wu provided Holy Investments with the funds to be paid to Doonbeg Capital to enable the purchase of the additional shares. Particulars were sought as to the acts, facts, matters and things relied upon in alleging the funds were provided by the plaintiff and Mr Wu. In response, the first defendant says that this inference arises because neither Mr Cheng nor Holy Investments had the 'wherewithal to do so'.
22. The plaintiff then requested further particulars as to the basis for the assertion of the financial capacity of Mr Cheng and Holy Investments. Once again, this request is not directed at understanding the case of the first defendant but instead at how the first defendant intends to prove it. It is my view that on the particulars that have been provided, the plaintiff is aware of the case that it has to meet at trial and that further particulars are not required.

1. For these reasons, I would allow the application for further and better discovery of the Troy Gold transaction and dismiss the application to strike out [160] of the first defendant's defence.
2. In relation to the application for further and better particulars, I consider that further particulars of [88.10], [160.5] and [160.40] of the first defendant's defence and [88(7C)] of the second to fourth defendants' defence should be provided but that the plaintiff's application should otherwise be dismissed.
3. I will hear from the parties as to the formal orders that should be made to reflect these reasons and as to the costs of the applications.

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

[2] Statement of claim [76C] - [76I].

[3] Statement of claim [105] - [113].

[4] Statement of claim [114] - [126C].

[15] Atlas Copco Australia Pty Ltd v Oxair Gases Pty Ltd [2013] WASCA 43 [20].

[16] Compagnie Financiere et Commercial du Pacifique v Peruvian Guano Co (1882) 52 LJQB 181.

[17] See for example, Roe v Western Australia [2013] WASC 130 [10] - [13]; Singh v Friedman [2013] WASC 78 [3] - [7].

[18] Perpetual Trustees Co Ltd v Burniston [2012] WASC 26 [29].

[19] Roe v Western Australia [10] - [13]; Singh v Friedman [3] - [7].

[34] Defence [105], [106], [108], [109], [111].

[36] Sixth affidavit of Alexander James Tharby filed 17 March 2021 'AJT-39'.

[37] Affidavit of Peter Gerard Burns filed 14 July 2020 [64].

[38] Sixth affidavit of Alexander James Tharby filed 17 March 2021 'AJT-36', 'AJT-38'.

[39] Sixth affidavit of Alexander James Tharby filed 17 March 2021 'AJT-40'.

[40] First defendant's submission [22.2].

[41] Seventh affidavit of Alexander James Tharby filed 22 March 2021.

[43] Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398 [60].

[44] English v Vantage Holdings Group Pty Ltd [2021] WASCA 47 [56].

[45] Legal Practice Board v Said (unreported, WASC, Library No 940003, 12 January 1994) (Seaman J) 3.

[46] Christie v Christie [1873] UKLawRpCh 36; (1873) LR 8 Ch App 499, 503.

[47] Dalgety Australia Ltd v Rubin (unreported, WASCFC, Library No 5485, 24 August 1984) 3.

[48] Niven v Grant [1903] VicLawRp 54; (1903) 29 VLR 102; (1903) 9 ALR 122, 106.

[50] First defendant's submissions [23].

[51] Corporations Act, s 232.

[52] Morgan v Flers Avenue Pty Ltd (1986) 10 ACLR 692, 704 (Young J); Joint v Stephens [2008] VSCA 210 [134]; Hillam v Ample Source International Ltd (No 2) (2012) 202 FCR 336; [2012] FCAFC 73 [4]; Russell v Lee Holdings Pty Ltd [No 3] [2020] WASC 346 [137].

[53] Thomas v HW Thomas Ltd [1984] 1 NZLR 686; (1984) 2 ACLC 610, 618; cited with approval in Re Ledir Enterprises Pty Ltd [2013] NSWSC 1322; (2013) 96 ACSR 1 [179] (Black J).

[54] Re London School of Electronics Ltd [1986] Ch 211, 222; [1985] 3 WLR 474, 482, cited with approval in Australian Institute of Fitness Pty Ltd v Australian Institute of Fitness (Vic/Tas) Pty Ltd (No 3) [2015] NSWSC 1639; (2015) 109 ACSR 369 [102].

[55] Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [1988] NSWSC 413; (1988) 28 ACSR 688, 741 cited with approval in Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152 [39] (not challenged on appeal in Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104; (2011) 84 ACSR 121 [140]).

[56] Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd, 741.

[57] Tomanovic v Argyle HQ Pty Ltd [140]; Re Ledir Enterprises Pty Ltd, [215].

[58] Munstermann v Rayward [2017] NSWSC 133 [22] (Stephenson J); Pages Property Investments Pty Ltd v Boros [2020] NSWSC 1270 [201] (Black J).

[59] Seventh affidavit of Alexander James Tharby filed 22 March 2021 'AJT-50'.

[61] First defendant's submissions [28].

[62] First defendant's submissions [31].

[63] First defendant's submissions [33].

[64] UBS AG v Tyne [2018] HCA 45; (2018) 265 CLR 77 [1].

[65] Re Griffiths; Ex parte Homestyle Pty Ltd [2005] WASCA 103 [27] - [28].

[67] ts (9 February 2021) 216; ts (4 March 2021) 306.

[68] Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd, 740.

[69] Jenkins v Enterprise Gold Mines NL (1992) 6 ACSR 539, 561.

[70] Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 [72] (French CJ).

[71] Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd, 742.

[72] Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658, 664.

[73] Sims v Wran [1984] 1 NSWLR 317, 321 cited with approval in Attorney General of Western Australia v President of the Legislative Council of Western Australia [2020] WASC 399 [104].

[74] Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281 [6] - [8].

[75] Consolidated practice direction 4.5.

[76] Australian Securities and Investments Commission v Australian Investors Forum Pty Ltd (No 2) [2005] NSWSC 267; (2005) 53 ACSR 305 [455].

[77] Report of Mr Gray, Moore Australia Corporate Finance (WA) Pty Ltd dated 6 April 2021.

[78] Report of James Turnbull, Stantons Corporate Finance Pty Ltd, 25 June 2021.

[79] Report of David Edwards, 21 June 2021.

[80] First Defendant's particulars [10.1] - [10.3]; Second to Fourth Defendants' particulars [46] - [48].

[81] First Defendant's particulars [10.4] - [10.8]; Second to Fourth Defendants' particulars [49] - [53].

[82] First defendant's particulars [11.1.21]; Second to fourth defendants' particulars [55(21)].

[83] Third amended statement of claim [4.2].

[84] ASIC v Yandal Gold [1999] FCA 799; (1999) 32 ACSR 317, 338 [83].