Has DCM discharged its onus of proof?
466 The answer to this question depends on the answers to two other questions.
467 The first is whether DCM has proved that at the time it decided to remove Mr Mount, it did not believe or suspect that he had made a disclosure that qualifies for protection under Pt 9.4AAA. The second is whether that belief or suspicion was not the reason or part of the reason for its action.
468 Mr Mount did not send Mr Haindl or Mr Tucker either the First or the Second Whistleblower Reports. Mr Haindl and Mr Tucker readily admitted to reading the various emails Mr Mount sent them (and which Mr Mount contended were also disclosures that qualify for protection) but they both denied any knowledge of the existence of the Whistleblower Reports until the Fair Work Commission proceeding. Mr Tripp denied ever reading either Report.
469 Mr Mount accepted that there was no direct evidence that any of Haindl, Tucker or Tripp had seen or read or been apprised of the contents of the Reports. His argument was that the reasons the respondents gave for their decision were, in substance, confected.
470 First, Mr Mount pointed to an alleged inconsistency between evidence given by Mr Tripp and Mr Tucker about their reasons for dismissing him. He also referred to the unlikelihood that Mr Tripp had not read any of Mr Mount's emails, a matter I have already considered (at [179]-[194] above).
471 Second, Mr Mount alleged there was an inconsistency between Mr Haindl's evidence that he only decided that Mr Mount's employment should be terminated because of what occurred at the 31 March board meeting and other evidence he gave that suggested that other factors were operative.
472 Third, Mr Mount submitted that the evidence of these witnesses should not be accepted because, contrary to the evidence of Mr Tripp and Mr Tucker, there was no support for the notion that Mr Mount was pushing for a "deeply discounted capital raise". He contended that the absence of a reference to him doing so in any of the pleaded disclosures, including the two Whistleblower Reports, is "the likely reason" the respondents "sought to manufacture it" as a reason for terminating his employment. He said that the evidence Mr Tripp and Mr Tucker gave about the matter was "a cloak for the real reasons which relate to Mr Mount's efficient, open and speedy assessment that there were many problems, including safety compliance, with DCM's mine operation, the data it had available to it to make a proper assessment of commercial viability, its over-optimistic and misleading representations to shareholders about the commercial viability of the mine and tenements and its financial state", all of which were "the subject of the pleaded whistleblower disclosures".
473 Fourth, Mr Mount submitted that Mr Tucker was conscious that he was being chased by Mr Stewart for share registry documents so that the board could understand the true position in relation to the share ownership of DCM, "obscured as it was behind the Bare Trust used by Mr Tucker to evade the requirements [in s 113 of the Corporations Act] to ensure that a proprietary company have no more than 50 non-employee shareholders".
474 Consequently, Mr Mount submitted that the respondents' evidence on this question should be rejected as unreliable and given no weight and the Court should find that their evidence about the reasons for dismissing Mr Mount were "disingenuous" and accordingly, they did not discharge their onus. Despite the similarities in their accounts, however, Mr Mount did not suggest to any of the respondents that they had conspired to give false evidence and no such proposition was put to them in cross-examination. The consistency of their accounts is therefore a factor which supports a finding that their accounts were substantially true.
475 As to the first two matters, Mr Mount submitted that in the affidavits they affirmed in February 2024, each of them, like Mr Haindl, insisted that their decision to terminate Mr Mount's employment had nothing to do with any of the alleged Whistleblower Reports or disclosures or a belief or suspicion that he harboured about Mr Mount making any protected disclosures and focused on what happened at the 31 March meeting. Mr Mount argued, however, that in their earlier affidavits, Mr Tripp and Mr Tucker "made less guarded statements" about why they terminated his employment. As he put it in his written submissions (footnotes omitted):
35 While these affidavits describe the events at the 31 March board meeting, they are more expansive as to the reasons for terminating both Mr Mount and Mr Perdikaris. Mr Tripp said that he formed the view that the 31 March board meeting was an attempt by Mr Mount and Perdikaris to take control of DCM, and he agreed with Mr Tucker's view expressed in a draft email to shareholders that "one of the main reasons" Mr Mount should be terminated was he did not believe in the value of DCM and he didn't believe in or understand the data or plant's ability, all matters that were expressed in Mr Mount's whistleblower reports. Mr Tripp agreed with Mr Tucker's statement that "irreconcilable differences" culminated in the 31 March board meeting.
36 Yet in paragraph [18] of his second affidavit Mr Tripp purported to restrict his reasons for terminating Mr Mount to his description of the 31 March board meeting and a single conversation with Phil Christensen.
37 In Mr Tucker's second affidavit he makes a statement about the reasons for terminating Mr Mount, being that "following the events of the 31 March 2021 (sic) after which I formed the belief that Ryan and Chris had engaged two men to attend the meeting as a standover tactic to intimidate Matt and me, I no longer recognised Ryan as the Acting CEO of Dover and did not consider he was acting in the best interests of the business." However, he contradicts that statement in paragraph [7] where he refers to his reasons being contained in paragraph [108] of his first affidavit.
38 In his first affidavit Mr Tucker was far more expansive. He gave several reasons in paragraph [108] and elsewhere for deciding to terminate Mr Mount, including that he was making operational decisions outside his remit such as shutting down the mine site, that he and Mr Perdikaris were attempting to take over DCM, that Mr Mount had raised "alleged safety issues at the DCM sites" and had made allegations about the DCM assets not being genuine, again all matters canvassed in Mr Mount's disclosures.
476 I do not accept that there are any significant differences in the affidavits of Mr Tripp. Notably, there is no reference in Mr Mount's whistleblower reports to Mr Mount not believing in the value of DCM or not believing in or understanding the data or the plant's ability.
477 Nor do I accept that there is any relevant difference between the reasons Mr Tucker gave in his affidavits. Not only did he not resile from anything he said in his first affidavit, he also affirmed the reasons he gave there. This is what he said at paragraph 7 of his second affidavit:
My reasons for deciding to terminate Ryan's appointment as Acting CEO of Dover are as set out in paragraph 108 of my First Affidavit. These were my only reasons for making that decision. I deny that my decision to terminate Ryan's appointment as Acting CEO was because of any of the alleged whistleblower reports or disclosures, nor was it because of, or for reasons including, that I believed or suspected that Ryan had made, may have made, proposed to make, or could have made disclosures protected by Part 9.4AAA of the Corporations Act 2001(Cth) (Whistleblower Disclosures). I actually did not have any such belief or suspicion when I made that decision.
(Emphasis added).
478 At para 108 of his first affidavit Mr Tucker said:
After the attempt to remove Matt and I from the DCM board on 31 March 2021, I decided that we had to terminate Ryan's engagement as Acting CEO. I formed this view for the following reasons:
(a) from at least the 25 March 2023 board meeting, I had concerns about the suggestions that Ryan was making about DCM undertaking a deeply discounted capital raise (such as the suggestion he made during the conversations I had with him which I recount in paragraph [87] of this affidavit). I could see no financial basis for undertaking a deeply discounted raise, did not consider that Ryan had been involved with DCM for long enough to form a view that such a step was necessary, and was concerned that Ryan was attempting to deliberately devalue DCM for an ulterior purpose;
(b) I considered that Ryan was making significant operational decisions which were outside of his remit, and doing so without consulting the DCM directors first, such as shutting down the site. These were the concerns I expressed during the DCM board meeting on 25 March 2021 when Ryan was outside of the room, and which are referred to in paragraph [89] of this affidavit: and
(c) as described in paragraphs [96]-[ 100) of this affidavit, I had formed the view that Ryan had, in conjunction with Chris, orchestrated the presence of the Two Men at the DCM board meeting on 31 March 2021. I considered, and consider, the presence of the Two Men a standover tactic, designed to intimidate Matt and I, which was totally unacceptable for a director (in the case of Chris) and an Acting CEO (in the case of Ryan) to engage in. The presence of the Two Men at the 31 March 2021 board meeting reinforced my view that Ryan and Chris were acting for an ulterior purpose, namely to stage a takeover of DCM.
479 At the 25 March board meeting, while Mr Mount was out of the room, but while the proceedings were still being recorded, Mr Tucker expressed concern about "feathers being ruffled unnecessarily". He continued:
The one thing that when we discussed Ryan coming on to do his job was that he wasn't going to step on Matt's toes and he wasn't going to step on Matt's toes, and he's been anything but that. He's really upset people - closing down the mine site and putting off the contractors that we have, and all that sort of stuff. I'm also hearing innuendos and, like, untruths about stuff and I'm just, I'm just concerned that, like, out of out of the Matts and Ryan, as far as I'm concerned, Ryan is the most expendable. That's my opinion. I'm not saying that, you know- I'm just I'm just asking that Ryan stays in his fucking lane. And his lane is to get the governance in the corporate side of the company up to scratch if that's what he's meant to do.
480 Mr Tucker did not acquire or derive any of that information from either of the two Whistleblower Reports. Indeed, he agreed with a question put to him in cross-examination by senior counsel for Mr Mount that he was aware of all this "because of the emails" Mr Mount had copied to the directors and because Mr Haindl had spoken to him about what he called "the shutting down of the site".
481 Mr Tucker also agreed with the proposition that he was concerned about the mine being shut down for any reason because he would not then be able to raise capital and could not advise shareholders that any progress was being made there.
482 Mr Tucker made no secret about his negative opinion of Mr Mount.
483 Mr Tucker admitted that he was never happy with Mr Mount's employment. He was annoyed with Mr Mount's intrusion into operational matters. He maintained that he only agreed to his engagement on the basis that he would be responsible for governance matters. Moreover, as he put it at the 25 March board meeting during the discussion with the directors in Mr Mount's absence, Mr Mount "[came] in like a fucking steamroller, and he pissed everyone off". "[That's] not the way to communicate". "It's not the way to treat people". In cross‑examination he conceded that by that time he had already concluded that Mr Mount had to go and had discussed with Mr Tripp passing a resolution to that effect but Mr Tripp left the meeting early and he could not be sure the rest of the board would agree.
484 Mr Mount's reference to his disclosures at para 38 of his submissions include statements made in documents I have decided at [243]-[251] above are not disclosures which qualify for protection.
485 Mr Mount submitted that Mr Tucker accepted that his reasons for deciding to get rid of Mr Mount included him shutting down the mine and raising allegations with the other directors about Mr Tucker and Mr Haindl. That submission is based on the following exchange in cross-examination:
And the reason why you had formed a view, [by] the 25 March 2021 meeting, to get rid of Mr Mount, was because of the issues I ha[ve] been putting to you, about him shutting down the mine, and raising allegations with the other directors about you, and Mr Nettelbeck, and Mr Haindl, correct?---To a certain extent, yes.
486 Mr Mount's submission is unfair. Mr Tucker's answer ("to a certain extent, yes") is ambiguous and the cross-examiner did not attempt to remove the ambiguity. He went on to another topic. Reading Mr Tucker's answer in context and considering his evidence as a whole, I do not take him to have agreed to the proposition that, by the 25 March meeting, he had determined to remove Mr Mount for a reason which included allegations raised only with Mr Tripp and Mr Perdikaris in the First and/or Second Whistleblower Reports. To hold otherwise, would offend against the principle in Briginshaw.
487 In Mr Tucker's case, it is probably fair to say that what happened at that 31 March board meeting was the final straw. Now it was clear that Mr Haindl would support Mr Mount's removal. And Mr Perdikaris's removal would ensure that there was no opposition to such a resolution.
488 It is not to the point that factors apart from the events at the 31 March board meeting formed part of the reasons Mr Tucker decided Mr Mount should be dismissed unless one of those factors was a belief or suspicion he harboured that Mr Mount had made a disclosure which qualifies for protection. Neither the contents of the emails he was sent nor Mr Haindl's remarks to him were disclosures which qualify for protection. If he was angry about anything Mr Mount had said in the Whistleblower Reports one would expect to see a reference to them in the transcripts or of the board meetings and/or in emails or text messages sent before Mr Mount was dismissed, at the very least, a reference to the serious allegations made against him in those reports. Yet there is none.
489 Mr Mount submitted that, although Mr Haindl deposed that Mr Mount's "engagement" was only terminated because of the events that occurred at the 31 March board meeting, "he interpreted those events as a manifestation of the greater problem that Mr Mount and Mr Perdikaris were planning to drive him and Mr Tucker out of DCM". Mr Mount submitted that Mr Haindl was clearly upset by Mr Mount's attempts to supervise operations at the mine.
490 In support of the submission he pointed to remarks made by Mr Haindl in an email on 22 March in which he accused Mr Mount of pressuring employees to "illegally edit" site documents, an accusation which appears to have been based on assumptions on Mr Haindl's part, which Mr Mount refuted and which Mr Haindl readily admitted in cross-examination were an "overreaction" and that he had jumped to the wrong conclusion. He also relied on remarks Mr Haindl had made at the 25 March board meeting in the absence of Mr Mount when he appeared to agree with Mr Tucker who said he was worried about Mr Mount and did not know whether he could trust him.
491 The email in question was a response to certain inquiries made by Mr Mount. Relevantly, Mr Mount asked Mr Haindl to "reconcile" an inconsistency between the site records, which showed that Mr Arthy and Jamie Rogue were present at the site on 13 March, and something Mr Mount was told (by whom he did not say) that the only people who were working there that day were Mr Haindl and Mr Hancock. Mr Haindl took umbrage at this inquiry:
The people who signed on to the morning meeting were at the morning meeting and were at site. You should always assume that if people are signed on to the morning meeting then they were at the meeting. Especially when you were not there. Everyone on site is an honest, hard working important part of our team and should be treated as such.
Correct and diligently collected onsite documentation is very important to DCM, the Queensland mines department and QHMS. To pressure staff on-site to Incorrectly edit these legal documents is seriously concerning. It opens the company up to a plethora of legal implications and I've not heard of such a thing in my years of mining especially not from management.
…
I find it very hard to contemplate the fact that after only four days that you have been involved in our company you are willing and feel comfortable to pressure employees into illegally editing site documents. The only reason I can think of that you would suggest such a thing is to imply that my team and I are untrustworthy, and lie in site safety related legal documents. Which is absurd.
492 In cross-examination Mr Haindl readily accepted that by the time of the 25 March board meeting he had formed a negative view of Mr Mount's performance as CEO and, like Mr Tucker, was concerned about whether he could be trusted.
493 This evidence discloses that Mr Haindl was not happy with Mr Mount before 31 March. As the respondents accepted in their closing submissions, Mr Haindl had a dim view of Mr Mount's understanding of the geology and potential of the mine and his understanding of how to manage safety matters.
494 The evidence does not disclose, however, that Mr Haindl had decided that Mr Mount should be removed from his position by this time. The evidence clearly establishes that he made that decision on 31 March after the surprising turn of events at the board meeting. Moreover, the evidence does not establish that at any time before he was served with Mr Mount's application in the Fair Work Commission he believed or suspected that Mr Mount had made a disclosure that qualifies for protection under Pt 9.4AAA.
495 Whatever misgivings Messrs Haindl, Tripp and Tucker had about Mr Mount before 31 March, however, none of them took any steps to terminate his employment until after the board meeting that day.
496 That brings me to the third matter, the allegedly false evidence about Mr Mount arguing for a "deeply discounted capital raise". The submission about this matter concerns the evidence of Mr Tucker and Mr Tripp only.
497 Mr Tucker's evidence was that from the time of his appointment Mr Mount consistently advocated a "deeply discounted capital raise". In his first affidavit, Mr Tucker deposed that "the only 'strategy' that [he] heard [Mr Mount] refer to during the 17 March 2021 board meeting was to undertake a deeply discounted capital raise".
498 While transcript of the 17 March board meeting shows that Mr Mount was cautious about the mine's prospects, it does not show that he advocated a deeply discounted capital raise or expressed a view about the share price for any capital raising. Indeed, he expressly stated that he did not have a view on price. In cross-examination, Mr Tucker ultimately accepted that Mr Mount did not propose a deeply discounted capital raising at the 17 March board meeting.
499 At this meeting Mr Tucker said that the average share price of the company was 51 cents. In that context Mr Tucker said:
I mean, you know, we had that one raise at 15 cents. It started off at $1 but the large proportion of money has been raised at 55 cents.
500 Later during that meeting, Mr Mount expressed caution about the representations DCM should make in raising capital from shareholders:
MR MOUNT: Let's come back to our objective because there is a strategy here, right. I can see that there's a general - I sense a general acceptance of the larger shareholders understand that money needs to go in but at some stage you don't want to keep funding this, I presume, and then you want to go to the broader market. So if you go and JORC this and you're a public company you're going to have to disclose is, right. Now, you've just got to be careful. You could kill a project when you're saying it's--
…
MR MOUNT: There's a saying "you drill to kill", right--
….
MR MOUNT: --and so you'd be very careful what your drill target is. You can't just spitfire drilling because if you drill that you have to disclose that to the market and if you close off a project it's hard to promote it and sell it.
501 Mr Haindl appears not to have been troubled by Mr Mount's concerns. He argued that the work performed since the previous capital raise at 55 cents per share had increased DCM's value:
So since 2019 when we did our big raise at 55 cents, you know, there's a lot of value that's been added to the company, a huge amount of value. You know, we've done five diamond holes which we got the results we did.
…
We've worked out that the dumps are very valuable and that we can process them as well, which is a big thing . After corona, you know, there's this big economic rebound. The tin price has gone through the roof. You know, the tin price is greater (indistinct) and there's a huge push in the Australian government at the moment for critical and strategic metals. So we're beautifully placed in all of those areas.
502 Mr Tripp proposed a capital raise at 55 cents per share, to which Mr Tucker replied "55 cents is fair under the circumstances".
503 While Mr Mount did not express an opinion about the price, he pressed upon the board, even at this stage (before he was appointed), a relatively conservative view about the prospects of the mine on the information available to him and against the directors' optimistic opinions:
MR TRIPP: We're all really sort of basic laypeople who have had our levels of excitement raised significantly about what's here, what has been discovered. Do you see enough there to get excited?
MR MOUNT: Look, I think it's definitely hot ground. I'm just nervous about the mining. I can't tell you when I haven't seen anything.
MR TRIPP: Yeah.
…
MR MOUNT: I'll come to the exploration. So, look, I'm not saying it's not possible. I'm just saying my value, what I'd add here, I'd just tighten it right up, squeeze it together and everyone's marching along moving towards building a mine and a processing plant and selling ore and getting all the components lined up 'cause if it doesn't, you know, besides losing a lot of money along the process and not getting everything done properly in the timelines and double handling and all that, morale will go out the door and as soon as there's problems people will have to go down the road and explain to the--
MR TRIPP: If the processing plant or the mine fails this mine will fail, right?
MR MOUNT: Well, that's my concern.
MR TRIPP: Right, so we're rolling the dice by going this path but we almost have to because we don't have enough to raise sufficient money on the porphyry alone.
MR TUCKER: Then you'd raise capital, drill, then see how the drilling results come back. Then you'd either raise capital at higher or lower prices again, which is why we're going down the path.
504 Mr Mount urged the board to "work out what our objective is here" before committing more money to the mine.
505 Later in the meeting, the discussion returned to the share price for any capital raise and the mechanism by which DCM would raise capital. Mr Tucker proposed that capital be raised at 55 cents per share. Mr Mount then proposed a mechanism for raising capital in the form of a convertible note:
MR MOUNT: What we can do is, to incorporate the R&D, you can do it, set it up as a convertible note. It can be done at -you're saying it's 55. I would suggest you do 55 cents or the lesser of the price over the next six months in case something unfortunate happens and someone - because, you know, in fact, this is an emergency capital raise, right? You're saving the company. What you can do is you can do a - how much dollars were you suggesting putting in, say, 400 or 800?
506 Mr Tripp expressed concern about raising too much capital:
MR TRIPP: Because within a month you're going to get a settlement with Nettelbeck. That's going to throw in a whole lot more money. We don't want to over-raise here. Just let's - yeah.
MR STEWART: Sure (indistinct).
MR TRIPP: I mean, it's all very well to say, "Well, stick your hats up and stick more money in," but this money is being pissed on the wall and I'm not that happy just putting in too much personally.
MR STEWART: Sure. Sure.
MR TRIPP: So I want to make sure that it's minimised.
507 Mr Tripp then said that he was "fundamentally opposed to it", though it is not clear from the transcript what he was referring to. Mr Perdikaris then replied: "Hundred per cent but I'm just not happy with the price." Mr Mount then explained the basis for raising capital through the mechanism of a convertible note:
MR MOUNT: Well, I think I've dealt with that. So I suggested a ratchet that if there's some other raising in the future and it's lower than 55 cents the people putting in now-
MR TUCKER: Get that stock back, yeah.
MR TRIPP: I mean, I think it's reasonable as well, the other thing, to give maybe a one-for-one option with this maybe. Because it's an emergency raise that effectively--
MR MOUNT: But, look, the issue you've got there is you're directors, right?
MR TUCKER: Yeah, exactly.
MR MOUNT: I know you're trying to give yourself - I think that with a convertible notes you'd give yourself some downside protection.
MR TRIPP: Well, there's nothing to stick into a - if it's a--
MR MOUNT: If everything goes fine you'll never have the ratchet down, right?
MR TRIPP: Yeah .
MR MOUNT: But if something goes wrong you've got the ratchet down …
508 Mr Tripp replied that raising money "below 55 cents" would be a "terrible message" to send. Mr Perdikaris and Mr Tucker agreed. Mr Tucker expressed support for Mr Mount's proposal, saying:
We should raise what we need to raise, I agree with Ryan, for the guys who put in money in this particular raise, this emergency raise, that if the price, for any reason something goes wrong and get dropped, whatever price that gets dropped to, you guys get that stock on top of the 55 cent price. So if it drops down to 40 cents for some reason you get an extra 15 cents worth of stock.
509 Mr Perdikaris appeared to take little comfort in the proposal, saying: "You can put it in there but that's just fucking bullshit. If it drops we're fucked-".
510 Mr Tripp expressed the view that "[i]f we're raising money at 30 cents we're all gone" to which Mr Tucker responded "Yeah".
511 At the end of the discussion, Mr Perdikaris asked Mr Mount whether he had anything to say, to which Mr Mount replied: "No, no, no. I don't have a view on price. I'm not a shareholder. No".
512 In cross-examination, Mr Tucker clarified that he "agreed with the prospect of a convertible note" but "[n]ot with a deeply discounted raise". The minutes of the 17 March board meeting show that the directors agreed to raise $800,000 at 55 cents.
513 On 20 March, Mr Mount sent Mr Haindl an email requesting information about various matters, including the following:
- What is the $ amount needed to get the plant constructed and commissioned? including summarising where the money needs to be spent. (remembering we need the real number so that we do not go back to shareholders again after this next capital raising). And if there were different options/senario's [sic] for $ spend on this plant, then please explain the risks and benefits of this options.
514 About an hour later Mr Mount sent an email to the DCM board providing advice about the process of capital raising, while at the same time stating that the question of capital raising was a matter for the board. He wrote (without alteration):
Gents,
I have seen two emails and am hearing discussions regarding the next capital raising including as to matters of fees, structure & process.
The whole situation of the capital raising is a matter for the Board (not me); I however have some experience in this field and so I offer you the following advice / information on how these things are done properly:
- Sequoia to deliver to to Dover a proposal - it details the services and fees Sequoia will offer as well as timetable for the execution of the proposed transaction.
- Dover respond with comments e.g. negotiation on services, fees, comments on proposed transaction time table. Also at this point, Dover will do a check on Sequioa's AFSL to ensure they are licenced for such investment activities (I am sure they are but you MUST check )
- If Dover agree to proceed with Sequoia for the transaction then a contract (often referred to as a ;mandate') is executed between Dover and Sequioa.
- Sequioa provide all relevant documentation for the investor(s) to invest including an Offer Letter and an Acceptance Form.
- In light of the numerous reconciling items with Dovers capital raisings in the past you will want to utilise Sequioa's bank trust account i.e. all investor monies are deposited into the Sequioa Trust. Sequioa reconcile the monies and then provide Dover with a final list of the investors full registration details and corresponding share allocation amounts. On the same day Sequioa transfers the full and final $ amount to Dover's bank account (i.e. one single payment ) - Dover will register all the new issued shares into the investors names provided by Sequoia - this all occurs on the same day (often referred to as 'Settlement Day')
- I have heard that there will be a meeting of directors at a pub with the new investors as some sort of way of updating them, disclosing some of the recent issues and also pitching them for the capital raising. I would advise against this. A more appropriate process of disclosure and marketing is for Sequioa to host the new investors in their office - there should be presentation by both Sequioa and Dover as to the company including any disclosures required. We can have a few drinks and finger food after the formal part of the meeting and/or head out afterwards for a beer and meal (DO NOT mix the social and formal parts of this process under current circumstances).
As to the amount of fees charged, in the end it is a simple business decision: you pay for a service / product if it adds value to the business. You need to understand what you are paying for and you must ensure you can justify paying the fee. Especially, with this situation since Sequoia is a 'Related Party' (as defined under the corporations Act) and they appear to be the single biggest recipient of shareholders funds from Dover.
Hope this helps.
515 Mr Tripp deposed that during his meeting with Mr Perdikaris and Mr Mount on 22 March, to which I have referred at [195] above, he had the following conversation with Mr Mount:
[Mr Mount]: You guys think you're sitting on a world-scale resource. You have been misled by Matt and Nettelbeck about the scale of this resource. We will need to do a deeply discounted capital raising. I have investors in Hong Kong and other places. I've done a comparable analysis of the value of this business and we need to raise money at a substantial discount to the 55 cents per share that we have been raising money at.
[Mr Tripp]: Can you show me the comparable analysis?
([Mr Mount] did not supply it).
[Mr Mount]: I suggest a capital raise in the range 15 cents per share.
[Mr Tripp]: That's ridiculous. We can't do that.
516 In his third affidavit, Mr Mount denied Mr Tripp's account of the conversation and denied that he had ever recommended that DCM "do a 'deeply discounted capital raise'". He maintained that denial in cross-examination, and said that, while he was of the view that DCM "definitely needed to raise money", he "didn't talk about any prices".
517 Mr Tripp gave unchallenged evidence that in his experience, "seeking to raise capital at a discount is a common strategy for someone to take control of a company".
518 In an email he sent to Mr Stewart on 23 March 2021, Mr Mount stated:
There is also a concern I am "too negative" on the project (which is not the case - I just have not been given all the data purportedly available; as such I cannot see a professional basis for more spend). So therefore having experts on the call provides the Board with some perspective and clarity. On this point, it may also be an idea for the Board to bring in an independent mining expert for the day to sit in on the meeting - I will not be offended
(Original emphasis.
519 In the same email, in response to Mr Stewart identifying "emergency fundraising" would be an issue at the next board meeting, Mr Mount wrote:
i) I understand George was asked to provide a reconciliation of all shares issued, to whom, at what price - this needs to be presented as part of the Board papers.
ii) I also understand, there was also a request for George and Matt to provide minutes and resolutions from the past 12 months.
iii) George also stated there is a 200,000 shares unreconciled - we need resolution or at least more clarity on this.
In my opinion, these three items need to be reconciled or at least viewed by the Board before creating an additional mechanism to our capital structure for financing. (and all of i,ii & iii should not be difficult to produce).
520 Mr Tucker deposed that on 25 March, shortly before the board meeting was due to start but before the others had arrived, he had a conversation with Mr Mount to the following effect:
[Mr Mount]: We're going to have to do a deeply discounted raise.
[Mr Tucker]: Why?
[Mr Mount]: I think the value of the company is around $3 million.
[Mr Tucker]: How could you possibly have that level of insight into the company after being here for such a short time?
521 Mr Tucker said that he was concerned by Mr Mount's advocacy for a "deeply discounted raise" because he "could see no basis for doing so". He said that by 1 April he had become concerned that Mr Mount and Mr Perdikaris were carrying out an "effort… to steal DCM from the shareholders by devaluing the share price and undertaking a deeply discounted capital raise".
522 Mr Tripp also deposed that shortly before he attended the meeting at Mr Perdikaris's house on 24 March, Mr Perdikaris said to him:
Would you come around to my place to meet. It's just a disaster. It's like a Ponzi scheme. We're being bullshitted to about the mine, the geology. The processing plant's not going to work. Ryan is telling me we're being sold a pup and we need to do a deeply discounted capital raising.
523 While it was put to Mr Tripp in cross-examination that Mr Perdikaris said no such thing, Mr Perdikaris did not deny it in his evidence in chief and was not recalled to give evidence to the contrary in reply.
524 There is no reference in the transcript of the 25 March board meeting to Mr Mount advocating a "deeply discounted capital raise". Messrs Tucker, Perdikaris and Stewart discussed matters relating to the timing and requirements for capital raising in Mr Mount's absence. Mr Tucker supported approaching shareholders to raise capital. Mr Perdikaris suggested that shareholders should be informed that DCM was "out of money", which Mr Tucker firmly opposed. When Mr Mount returned to the meeting, he emphasised that he wanted a list of everything necessary to get the mine to commercial production, legal and regulatory requirements, and proper documentation about the company's expenses. He expressed concerns about making representations to third parties about the company's financial position without having written evidence to support those claims. There was no discussion about the share price. Mr Mount's earlier proposal of a convertible note was also not raised.
525 In cross-examination, Mr Tucker explained his understanding of Mr Mount's position as follows.
Well, just the fact that he was talking about deeply discounted raises that the company didn't, in his opinion, have the data to - to justify the valuation that we thought it had - the people that were there before he turned up.
526 In a document dated 3 April 2021, entitled "Suggested Plan", Mr Mount wrote: