TENG -v- CLARK [No 2] [2020] WASC 217 (16 June 2020)

1. For present purposes I set out only certain selected paragraphs from the ASOC of 18 December 2019.
2. But I add some of my specific observations, including as to pleading issues, at intervals along the way in the present exercise. I should also note that unless explicitly stated, matters of infelicity of grammar have not been corrected from the ASOC.
3. The ASOC begins:
   1. The Plaintiffs are natural persons and at all material times were beneficiaries of the BC & TT Family Trust. The Plaintiffs are also known as Tina Teng and Ben Chia.
   2. The First Defendant is a natural person, also known as Brendan Paul James Clark, and the husband of the Third Defendant, and at all material times was a shareholder of Australian Mining Company Zambia Limited ('AMCZ').
   3. The Second Defendant is a natural person and at all material times was a shareholder of AMCZ.
   4. The Third Defendant is a natural person, the wife of the First Defendant, an at all material times was a director and shareholder of AMCZ.
4. At the argument of these applications Mr McGowan for the plaintiffs accepted (ts 86) that what is currently seen pleaded as ASOC par 5 and par 6, is essentially irrelevant. Hence such extraneous material should be excised, in any event, as the defendants contend on their strike out application, if the action survives its greater challenges. I will proceed accordingly.
5. Next, as it manifests, ASOC par 7 should be renumbered as par 7.1 as, in effect, was again accepted by Mr McGowan at the hearing (ts 86). This is a small matter, but unless fixed may otherwise confuse.
6. ASOC par 7 also present as somewhat out of chronological order. If leave to amend were granted all of ASOC par 7 ought be shifted back, effectively, so to follow what will currently be seen as ASOC par 11 (and so, to thereby align with what is also seen under what is currently ASOC par 12). Nevertheless, I set out what should presently be renumbered in any event as ASOC par 7.1. It reads:

7. [sic, 7.1] In or around 2018, the Plaintiffs also commenced business with the Defendants in respect of a further entity, Australian Mining Company Zambia Limited ('AMCZ').

Particulars of AMCZ

(b) AMCZ holds a small scale exploration licence No. 21853-HQ-SEL, also known as TD52 ('the Exploration Licence') issued under the provisions of the Zambian Mines & Minerals Development Act 2015 and the Mines & Minerals Development General Regulations 2016.

(i) Was issued for the purposes of exploration over land identified as a 186.7211 hectare area in Kitwe, Zambia; and

(ii) Is current for a period of four years, from 4 May 2017 to 4 May 2021.

(f) 10,000 shares have been allocated, split between:

1. Following ASOC subpar 7.2, which was correctly so numbered, then reads:

7.2 Throughout 2018 the Plaintiff's invested significant time and money into developing the Exploration Licence.

(a) In March 2018, the plaintiffs considered the preliminary assessment of TD52, provided to the Plaintiffs by the First Defendant;

(b) Meeting with various potential investors, including, but not limited to, Angler Mining, Cape Lambert, Horizon, Sinosteel and Youjin. The meetings took place in either Australia, Zambia, or China and included expenses of travel to locations and entertaining the potential investors.

(c) Making payments on behalf of AMCZ, at the request of the First Defendant, including, but not limited to:

(i) $13,846 AUD on 10 December 2018 to Goodnews Restoration and Mining in respect of AMCZ JORC;

(ii) $1,704.66 AUD on 17 December 2018 to Tropics Surveying and Technical Services in respect of AMCZ Collar Surveys of Boreholes;

(iii) $25,886.26 AUD on 1 January 2019 to SGS Inspection Services Limited in respect of AMCZ for sample analysis; and

(iv) $14,014 AUD on 8 January 2019 to Dean James O'Keefe in respect of AMCZ JORC.

1. Next follows the critically important structural plea by the ASOC at par 8 (as regards the contended contract cause of action to support the plaintiffs' claims against all three defendants) and under the heading 'The Shareholders Agreement'. ASOC par 8 presently provides:
   1. The Plaintiffs and the First Defendant entered into an oral agreement made between April and November 2018 ('the Shareholders Agreement').

(a) On 12 April 2018, the First Defendant said to the First Plaintiff that she would be a partner in all of the deals she was involved in. This discussion occurred in Lusaka whilst the Plaintiffs and the First Defendant were having dinner with an associate, namely Dr Pius Kasolo, at his residence.

(b) During 2018, the First and Second Defendants often frequented the Plaintiffs' residence in Dalkeith. During these visits, the First Defendant consistently referred to the First Plaintiff as his business partner and confirmed that he would transfer 10% of the shares in the mining tenement known as TD52 held by AMCZ to the Plaintiffs. During these discussions, the First Defendant estimated that AMCZ would be worth an amount in excess of $100,000,000.00.

(c) The various verbal discussions which are outlined in paragraph 8(b) above were repeated during various telephone conversations between the Plaintiffs and the First Defendant in 2018.

(d) On 30 August 2018, the First Defendant informed the First Plaintiff that he was experiencing significant financial difficulties and asked the First Plaintiff for financial support in return for a shareholding in the mining tenement known as TD52. This discussion occurred in Dalkeith whilst the First Defendant was visiting the Plaintiffs' residence.

(e) On 18 October 2018, the First Defendant stated to the First Plaintiff that the Plaintiffs' 10% shareholding was only a starting point and that he would be fair to the Plaintiffs if the business gained more success, implying an increase to their shareholding in the future. This discussion occurred in Kitwe, Zambia in the Garden Court Hotel.

(f) On or around 24 November 2018, the First Defendant contacted the First Plaintiff by telephone whilst she was in Beijing:

(i) The First Defendant informed the First Plaintiff that he had introduced her as his partner to a British company, namely Horizon, and asked if she could meet with Horizon to arrange a business deal between Horizon and AMCZ.

(ii) The First Defendant asked the First Plaintiff to highlight the financial resources that AMCZ had available to them by way of the Plaintiffs' financial resources, to encourage Horizon to make a high offer for investment in AMCZ.

(iii) The First Defendant was creating a state of competition between Horizon and other companies including Youjin, to obtain the highest sum of money possible.

(iv) The First Plaintiff asked the First Defendant to confirm the benefit she would obtain in consideration of the financial and business support she had given and was continuing to give to the Defendants and to AMCZ. Further, the First Plaintiff asked the First Defendant to draft a shareholding agreement to formalise their arrangement.

(v) The First Defendant said to the First Plaintiff that he remained of the view that a 10% share of AMCZ remained fair but stated that it was too soon for the First Plaintiff to be recorded on the share register. The First Defendant further said that a formal shareholding agreement was not required because the First Plaintiff should trust that he would transfer the 10% shareholding to her, as he had done in previous business dealings for other entities.

(vi) The First Plaintiff reasonably believed that the First Defendant was acting in good faith and would transfer 10% of AMCZ shares to her. Further, the First Plaintiff agreed to host Horizon and impress them, which she subsequently did in China on 26 November 2018. The First Plaintiff further agreed to continue to financially support the First Defendant and AMCZ on the promise that the First Defendant would transfer a 10% shareholding in AMCZ to the First Plaintiff.

(g) On the basis of these discussions, the First Plaintiff transferred $55,449.91 in payment of the JORC report and related drilling and sample analysis, which provided an assessment of the extent of the minerals enabling assessment of the value of the ore deposit.

(h) On or around 6 December 2018, the First Plaintiff asked the First Defendant to again confirm the shareholding interest which she was to receive to which the First Defendant re-confirmed a 10% shareholding would be transferred to the First Plaintiff. This discussion occurred in Chizhou, China in a hotel room where the Plaintiffs and Defendants were staying.

1. Next follows ASOC par 9 attempting, it will be seen, to establish the terms of the par 8 oral contract, as follows:
   1. By the oral agreement made the Plaintiffs agreed with the First Defendant that:

9.1 The Plaintiffs would invest funds in AMCZ for the preparation of a report in accordance with the 2012 Australian Joint Ore Reserves Committee guidelines, SGS testing and Collar Surveying, to secure the value of the Exploration Licence;

9.2 The Plaintiffs would assist the Defendants in respect of providing introductions, resources and other marketing activities designed to encourage investment in the Exploration Licence; and

9.3 In return for its investment, the Plaintiffs would receive a 10% equity in AMCZ. At all times, this was understood by the Plaintiffs and the First, Second and Third Defendants to mean a 10% shareholding in AMCZ.

Particulars of Shareholders Agreement

(a) AMCZ has 15,000 shares.

(b) As at 22 February 2019, 10,000 shares have been allocated.

(c) Pursuant to the Shareholders Agreement, the Plaintiffs were entitled to receive 1,500 shares.

1. Then, ASOC par 10 reads:
   1. By email dated 29 November 2018, the First Defendant reiterated the terms of the Shareholders agreement that the First, Second and Third Defendants would allot 10% of the shares in AMCZ to the Plaintiffs for the Plaintiff's joint venture introductions and cash flow assistance.

1. By way of preliminary observations only, at this point, I make note of the following matters:

(a) Under what should be ASOC par 7.1 as now seen, there is an observed reference to the plaintiffs commencing business with the 'Defendants' at 'In or around 2018'. That business is said to be 'in respect of the entity AMCZ'. Reference, I take it, by par 7.1 is intended to be directed at all three defendants. However, upon closer scrutiny, the particulars only relate to AMCZ. They do not elaborate upon the nature of a 'business' so commenced upon at this suggested time in 2018.

(b) Paragraph 7.2 on examination is seen to use the past tense, ie, 'invested', as regards matters 'Throughout 2018'. The suggested investment is said to be as regards the plaintiffs' 'time and money'. The object of such time and money is stated as being towards 'developing the Exploration Licence'.

(c) Particulars of Investment (c) to par 7.2 duly identifies four sums, all in Australian dollars aggregating to $55,449.91. Two of those amounts may be seen (items (i) and (iv)) as said to concern the Zambian company's JORC - indicating thereby reference to an Australian standard of evaluating the classification of minerals at an ore deposit.

(d) By those same particulars to (c) payments were 'said to be made by the plaintiffs ' ... on behalf of AMCZ' and '... at the request of the First Defendant' (ie, by Mr Clark). Two amounts refer to 'Collar Surveys of Boreholes' (see item (c)(ii)) and sample analysis to 'SGS Inspection Service Ltd' (see item (c)(iii)).

1. By some contrast then to what was just been seen at par 7, the prefaces to ASOC pars 8 and 9 mention (for the first time) an 'oral agreement'.
2. This scheme of the ASOC pleading to this point has identified a legal conclusion as to an oral agreement as being perfected via under par 8. This par 8 as contended oral agreement, is now said to have been entered in the period between April and November 2018. That same oral agreement is defined by ASOC par 8 as a 'Shareholders Agreement'.
3. Nevertheless, ASOC par 8 displays that it contends this oral agreement was entered (only) between the plaintiffs and Mr Clark, the first defendant. No mention is found within ASOC par 8 (or par 9) of a contention that the second defendant, Mr Brand, or the third defendant, Ms Thanjekwayo - were also made extra parties to what, as there seen, is alleged as a wholly oral Shareholders Agreement entered between only the plaintiffs and Mr Clark and across a seven month period, between April to November 2018.
4. It will also gave been noticed via earlier par 7.1, under particulars (d)(ii) and (iii), that Mr Clark and Ms Thanjekwayo are two (of three) mentioned directors of AMCZ (along with a Mr Phillip Chibundi). But not the second defendant, Mr Brand. However via (f), all of the three named defendants are said to be shareholders of AMCZ, although Mr Clark held but 150 of the 10,000 allocated shares. Ms Thanjekwayo is said to have been allocated just over half of the 10,000 allocated shares, namely, 5,100 shares. Mr Brand, is mentioned merely as being a shareholder of AMCZ, with a 47.5% holding of the allocated shares.
5. Next, it may be observed that the given particulars of the contended oral discussions under ASOC par 8 so as to constitute the oral agreement, on closer examination contain nothing which was said by them, or which might otherwise support or suggest any contractual involvement on the part of the second and third defendants as extra parties to that pleaded par 8 ASOC oral agreement. Under particular 8(b) is only said as regards the second defendant, Mr Brand, that he would frequent the plaintiffs' residence at Dalkeith, along with the first defendant, Mr Clark. Of itself that is innocuous. It suggests nothing as regards his possible contractual privity as an extra party to the suggested oral Shareholders Agreement.
6. Likewise there is nothing at all to be found within the given particulars to ASOC par 8 to support any participatory involvement as an extra party to the oral agreement by the third defendant, Ms Thanjekwayo, from a possible privity perspective to the contended Shareholders Agreement. That status of being Mr Clark's wife would not be enough to suggest that, even 150 years ago, let alone in 2018.
7. I next observe by reference to ASOC par 9 that the chapeau to this plea again contends (as did ASOC par 8) only for an oral agreement made as between the plaintiffs and the first defendant, ie, Mr Clark. Then, ASOC par 9.1 through to par 9.3, variously refer to an investing of funds in AMCZ by the plaintiffs. But now via par 9.2 this is said to have been done to assist 'the Defendants' (ie, plural). By par 9.3 it is said the plaintiffs would receive equity in return for 'its investment' at par 9.3.
8. In that par 8 and par 9 ASOC context of a (wholly) contended oral Shareholders' Agreement (as defined), by the second sentence of par 9.3 there is an observed reference to 'this' (something) being 'understood' by the plaintiffs, but as well, now, by the first, second and third defendants. The first sentence of par 9.3 suggests a contended common understanding, as regards the plaintiffs' 'investment' towards which the plaintiffs would receive a '10% equity in AMCZ' (from an unstated source).
9. Whatever might be otherwise contended for under a hypothetical rectification of contract suit, or by an equitable or promissory estoppel argument grounded under some conduct created 'common understanding' that was relied upon detrimentally, the second sentence of par 9.3, as regards what is there alleged to be subjectively understood by everyone - can carry no force to support the missing privity of contract of the second and third defendants to the wholly oral Shareholders Agreement as earlier pleaded under ASOC par 8 and by the chapeau to par 9. No material facts for the suggested common understanding are provided in any event beyond that bare par 9.3 ASOC assertion.
10. The second sentence to par 9.3, however, displays what appears to be the real first indication in this pleading of some level of contended extra participation and extra party linkage to this oral contract (Shareholding Agreement) by the defendants, beyond the first defendant. But this is only by the out of place subjective notion of the suggested 'common understanding' - a notion that has no place within the common laws objective theory of contract as regards assessing contract formation.
11. Irrespective of the outcome of the defendants' summary judgment application as now observed, the pleas seen to date under the second sentence in ASOC par 9.3 at best are a misconceived and irrelevant diversion. They deliver a manifest lack of clarity. At minimum, that plea should be struck out on the basis of it being confusing and, thus, legally embarrassing. I did not understand Mr McGowan for the plaintiffs to resist that assessment at the hearing of the application, if otherwise there was leave given to the plaintiffs to amend to fix such pleading problems.
12. Next, I observe that the so-called ASOC par 9 particulars for a Shareholders Agreement, in fact, are not particulars of that at all. Subparagraphs (a) and (b) merely reiterate some minor details concerning AMCZ, and which were already seen under ASOC par 7.1 particulars (e) and (f). The plea by subpar (c) of par 9.3 as to the particulars of the Shareholders Agreement reveals only what is a bare stated conclusion as regards a 10% arithmetic calculation, carried out by reference to 15,000 shares of AMCZ. It is left to be inferred that 5,000 of AMCZ's 15,000 shares remain presently unallocated. Hence, the number of 1,500 shares is a conclusion, or inference, as regards a contended promised 10% AMCZ shareholding, or a 10% equity in AMCZ mentioned, but otherwise without underlying detail for the suggested 'Shareholders Agreement'.
13. Then, ASOC par 10, by its terms, refers to an email of 29 November 2018 sent by the first defendant, Mr Clark. This plea asserts a contended reiteration of terms of the Shareholders Agreement in the email. Yet the terms of a Shareholders Agreement as contended were seen under ASOC par 9 and its three subparagraphs. Nothing can be discerned out of ASOC par 9 as regards terms relevant to the second and third defendants themselves ever rendering any kind of promise to the plaintiffs as regards promising them to procure or bring about an allotment of 10% of the shares in AMCZ.
14. Contrary to ASOC par 10's use of the word 'reiterated' as regards express terms of a Shareholders Agreement within a 29 November 2018 email by Mr Clark, the plea by ASOC par 10 on examination, does no such thing. It merely adds, effectively, a wholly fresh assertion as to there being an extra term within the earlier perfected wholly oral agreement, as regards the first, second and third defendants all doing something as regards someone (unstated) allotting 10% of the shares in AMCZ to the plaintiffs.
15. Albeit a matter for Zambian corporation law concerning AMCZ, it might be expected, applying Australian law, that share allotment conduct as regards issuing shares which have not yet been allotted, would need to be the conduct of that company itself, ie, of AMCZ.
16. It is also possible to hypothetically contemplate the promise of an allotment of shares that was made by the board of AMCZ. Such an allotment might even be promised by a majority shareholder, or by someone with a controlling shareholder holding and majority numbers sufficient at a general meeting level, to themselves make an enforceable promise to use (ie, to vote) their majority shareholder voting power or influence, to bring about such a share procurement outcome in AMCZ to someone. What appears to lurk within all the mist of ASOC par 10 and otherwise unexplained, is, effectively, some inferential share procurement promise made by either shareholders or directors of AMCZ to the plaintiffs, made as a term of the oral Shareholders Agreement - but this is not clearly or explicitly said.
17. In any event, no evidentiary basis for a procurement promise emerges out of the particulars to ASOC par 8 or par 9 as regards the as related oral discussions, as regards the second defendant, Mr Brand, or for the third defendant, Ms Thanjekwayo.
18. With a level of generosity, it might just be said there could possibly be extracted some inference from out of the particulars to ASOC par 8 of some level of share procurement promise made to the plaintiffs just by Mr Clark (the first defendant) as regards a 10% shareholding in AMCZ. That might possibly also morph out of the par 8(b) particulars. But still all such events look to have happened, chronologically, prior to the 30 August 2018 Ms Teng and Mr Clark discussion at the plaintiffs' Dalkeith residence referred to under particular 8(d). That is the occasion at which Mr Clark is said to have informed Ms Teng he was then experiencing significant financial difficulties and had then asked for financial support. See also particular 8(e).
19. As already identified now and only up to ASOC par 10, there is an unacceptable number of pleading deficiencies warranting a strike out on the basis of legal embarrassment, they emerge simply on a basis of a preliminary review. For completeness, however, I shall continue on to set out what else may be found from ASOC par 11 onwards, as from a heading 'Performance of the Shareholders Agreement'. I will complete that task before I turn to look at the extra affidavit evidence that is relied upon by the plaintiffs in substantially resisting the defendants' applications for judgment.

1. ASOC par 11 says:
   1. On 26 November 2018, in accordance with the Shareholders Agreement, the Plaintiffs hosted four senior executives from Horizon to discuss a proposal in respect of TD52.

(a) The meeting was held in China, hosted by the Plaintiffs;

(b) In facilitating that meeting, the First Defendant represented to Horizon's senior executives, that the Plaintiffs were his business partners in respect of TD52.

(c) This is consistent with the First Plaintiff being copied into emails between the First Defendant and Horizon, including emails containing the Non-Disclosure Agreement in respect of TD52.

1. ASOC par 12 reads:
   1. Pursuant to the Shareholders Agreement and in accordance with the First Defendant's request, the BC & TT Family Trust on behalf of the Plaintiffs made several payments on behalf of AMCZ, as set out in the particulars at paragraph 7.2(c) above.
2. ASOC par 13 reads:
   1. As at 14 February 2019 the Plaintiffs had invested the monetary sum $55,416.91 [$55,449.91] into AMCZ, in addition to time, resources, introductions, travel and hosting potential investors.

1. Again, I pause to render some preliminary observations concerning ASOC pars 11 through to 13.
2. Reference in ASOC par 11 is seen to the plaintiffs hosting four senior executives of Horizon to discuss a proposal at a meeting in China. That looks to link back to a particularised plea earlier seen under ASOC par 8. At particular 8(f)(vi) (which presents more as in the nature of argument than particulars), it was contended that the first plaintiff, Ms Teng, agreed to host Horizon and to impress them, which she subsequently did in China on 26 November 2018'. No elaboration was provided as to the conduct seemingly relied upon as regards Ms Teng impressing Horizon personnel as so hosted in China.
3. Pleas now seen under the particulars to ASOC par 11(b), again refer only to the first defendant, Mr Clark, as then to his representing to Horizon's senior executives that the plaintiffs were 'his' business partners in respect of TD52, ie, the exploration licence of AMCZ. Again, there is not a hint here of any contractual privity involvement of the second and third defendants in the Shareholders Agreement.
4. The plea under ASOC par 12 regarding money payments made on behalf of AMCZ, can be contrasted to the earlier pleas seen already under ASOC par 7.2 particulars (c)(i) through (iv). The four money payments were said to be made then on behalf of AMCZ and at the request of (again, only) Mr Clark, the first defendant. Pleas under par 7.2 and par 12 as regards the plaintiffs discharging AMCZ debts of $55,449.91 (which is recorded as $55,416.90 ASOC par 13), in theory, might otherwise sustain a basis for some Magistrates Court civil claim of restitutionary relief for the plaintiffs against the party knowingly receiving the benefit of and thereby being advantaged by those payments by way of a discharge of the obligations to those creditors, namely, AMCZ's benefit. That of course is not the way the plaintiffs make their case.
5. However, the amount seen by reference to ASOC par 13 (understated by some $33) is referred to as having been 'invested' into AMCZ (in addition to other matters stated there) and so suggesting equity, not debt. This plea looks to be a basis for a contractual share equity investment in AMCZ by the plaintiffs that is made by reference to a future allocation of shares to them, albeit the 10% level percentage as is identified in ASOC par 9.3 and ASOC par 10, is not to be found in ASOC par 13.

1. Next, I turn to the ASOC pleas made under pars 14 through 22 and then finally, to ASOC prayers for relief A and B. It is unnecessary to relate the pleas as to interest, costs and other relief under prayers C, D and E.
2. These ASOC paragraphs read:

1. In breach of the Shareholders Agreement, the First, Second and third Defendants have failed to procure or co-operate in procuring or to take any step to procure the 10% of the shares (1,500 shares) to the Plaintiffs.
2. In a telephone conversation on 19 January 2019, the First Defendant expressed to the First Plaintiff his intention to resile from the Shareholders Agreement and suggested the funds outlaid were by way of a loan.
3. On 19 January 2019, following the abovementioned telephone conversation, the First Plaintiff confirmed to the First Defendant in a WeChat conversation that she expressly rejected the notion that the Plaintiffs contribution of $55,416.91 [sic] was a loan.
4. By letter dated 21 February 2019 from the Plaintiffs solicitors, the Plaintiffs demanded that the First, Second and Third Defendants transfer 10% of shares in AMCZ to the Plaintiffs by no later than 1 March 2019.
5. Despite the Plaintiffs' demand, the First, Second and Third Defendants have failed to transfer 10% of shares in AMCZ, or any shares at all, to the Plaintiffs.

1. The value of the shares has increased as a consequence of the Plaintiffs' investment for the purpose of preparation of the JORC and associated surveys.

(a) The JORC is a mandatory system for the classification of minerals. It is prepared for the purpose of informing investors and potential investors and their advisors.

(b) The Plaintiffs, in providing the funding for the JORC and associated surveys and reports, have increased the value of the shares in AMCZ by providing certainty with respect of the nature and content of mineral deposits contained within the area the subject of the small scale exploration licence.

(c) The certainty afforded by the preparation of the JORC and associated surveys and reports has thereby encouraged investment from several companies, including the current offer from Horizon.

1. The Plaintiffs have been deprived of any shares in AMCZ.
2. By reason of the First, Second and Third Defendant's breach of contract, the Plaintiffs have suffered loss and damage.

(a) The First, Second and Third Defendants have received the sum of $55,416.91 from the Plaintiffs as the intended consideration for the issue and allotment of the 1,500 shares in AMCZ;

(b) The Plaintiffs have been deprived of any shares in AMCZ; and

(c) The Plaintiffs have been deprived of the value equal to the equity in AMCZ and any payments made to AMCZ for the sale of any asset.

1. The Plaintiffs have performed the Shareholders' Agreement and are ready and willing to take 1,500 fully paid shares in AMCZ.

1. An order by way of specific performance of the Shareholders Agreement that the First, Second and Third Defendants procure the allotment of 1,500 shares in AMCZ to the Plaintiffs;
2. Any damages consequent on not having received the shareholding between April 2018 and the date of judgement [sic];

Observations on ASOC pars 14 - 22 and relief as sought

1. By reference to ASOC par 14, as may now be observed, a contention of a breach of the Shareholders Agreement is put there in respect of an alleged breach of that Agreement, by all three (3) defendants.
2. A like aggregate contention of all defendants' contractual breach of the Shareholders Agreement can also be seen in ASOC par 21 as regards loss and damage and, as well, under the prayer A. That prayer seeks an order for so‑called specific performance of the Shareholders Agreement and again, is directed against all three defendants.
3. Manifestly, there could be no basis for a legitimate contention of breach, or for any other relief by way of the equitable remedy of specific performance obtained against persons who were not themselves contracting parties to the particular agreement. That base conceptual deficiency is manifest as regards the second and third defendants concerning the primary plaintiffs' contention that all three defendants failed in aggregate to procure or co-operate in procuring, or to take any step to procure 10% of shares (1,500 shares) for the plaintiffs, as seen made under ASOC par 14.
4. During the hearing of the applications, Mr McGowan for the plaintiffs, in effect, accepted a need for there to be an ASOC amendment to make an explicit reference to the second and third defendants under ASOC par 8 and par 9 as additional parties to the oral contracts - in order to lay a proper conceptual basis to pursue any such contractual relief against them (ts 87). But that step can only be allowed if there is some evidentiary basis to support it. So far there is nothing that has emerged.
5. Manifestly, by reference to RSC O 20 r 19(1)(a), the breach pleas as seen made as regards the second and third defendants currently fail to disclose any arguable cause of action as against the second and third defendants. To that extent, these pleas must be struck out as presently failing to show a reasonable cause of action against those defendants. But are these pleas so terminally flawed that a defendant's summary judgment should issue for the second and third defendants? We will see.
6. If there is something factually plausible to be found within materials otherwise put before the court, especially under relevant components of the affidavits of the two plaintiffs, then whilst the present pleas obviously must be struck out on a basis of a manifest conceptual privity deficiency (and so not disclosing an arguable cause of action against the second and third defendants) the problem might then be fixable by amendments in future.
7. Some evidence, vis-à-vis pursuing a contract breach claim towards the goal of specific performance relief as against the second and third defendants is clearly needed to provide a basis to rebut the defendants' present summary judgment application - advanced on the basis that the oral contract Shareholders Agreement breach claim against all defendants is totally hopeless and so, should be summarily ended now without any trial.
8. Likewise, there are some already established pleading deficiencies in the ASOC as regards the absence of a reasonable breach of contract cause of action, even as against the first defendant. One pleading deficiency has been demonstrated in the observed failure to clearly plead out any procurement promise made by Mr Clark as regards AMCZ in relation to him obtaining or delivering a 10% shareholding in that Zambian corporation for the plaintiffs. Whilst that is a basis for strike out, again, if there were some available extra facts to support such a procurement promise ever being made but then breached by Mr Clark, then leave to amend to fix that currently inadequate ASOC plea could be granted. On that basis the plaintiffs could resist the summary judgment dismissal application Mr Clark presently makes on his own behalf as first defendant.
9. But there are as well even further pleading deficiencies of concept as regards all defendants to be found in the current pleas seeking loss and damage made under ASOC pars 18 through 21. Those breach damages pleas are not advanced in the alternative. That was confirmed during the course of argument by Mr McGowan for the plaintiffs (ts 87 - 88). The problem bears against the arguable reasonableness of the cause of action for breach of the oral contract generating a possible entitlement to such common law breach damages.
10. Absent seeing some further material facts supporting why it could arguably be said that the plaintiffs' failure to receive 10% of the shares in AMCZ at a time proximate to when they were promised to get such shares (whenever that might be - the issue not being addressed so far by the ASOC) the current plea cannot, of itself, give rise to any possibility of a viable claim for damages that is run in conjunction with the primary claim for specific performance as regards the plaintiffs obtaining 1,500 shares in AMCZ. The current damages plea as seen under ASOC prayer B is framed as consequent upon not having received the allegedly promised AMCZ shareholding from between April 2018 and to the date of (a) judgment.
11. Given the oral Shareholders Agreement as it is currently seen pleaded under ASOC pars 8 and 9 is only said there to have been perfected at November 2018, it is more than difficult to envisage how the contention of the plaintiffs' possibly suffering loss and breach damages, as regards not having received such a shareholding as from April 2018, is arguable.
12. However, more fundamentally, the plaintiffs currently do not plead say, that if they had received a 10% shareholding in AMCZ, that they would then have taken steps to sell off those shares and profitably so, and thereby have suffered a loss compensable by damages. Such loss would be by, say, reason of an intervening decline in the value of the AMCZ shares, providing then a basis for a plea of common law damages for loss as a result the breach of contract. That is an unaddressed conceptual ASOC problem for the plaintiffs as regards the loss and a damage claim cause of action as currently framed.
13. During the course of arguments at the hearing of the applications, Mr McGowan for the plaintiffs, also frankly accepted these damages plea deficiencies and said they would need to be addressed from a pleading amendment future perspective as a consequence of the strike out application (ts 87 -88). But currently they provide a further basis to strike out that aspect of the pleading as against all defendants.
14. Residually, the greater issue however is whether, putting all current pleading deficiencies aside, there is any reasonable basis from out of the evidence to resist the defendants' summary judgment applications (as now pressed by all the defendants in conjunction with the strike out points). It is permissible, of course, for defendants to advance both genres of challenge by application made on a joint basis: see McJannett v Gibbs [2012] WASC 369 [10].

Determination on RSC Order 16 summary judgment - the second and third defendants

1. As regards the second and third defendants, Mr Brand and Ms Thanjekwayo, the position that has emerged to date from an analysis of the current iteration of the plaintiffs' ASOC against them is that the position is demonstrably untenable. This is chiefly due to their absence of any arguable privity as parties to the oral Shareholders Agreement that is the foundational basis of the plaintiffs' contract breach cause of action put as against all defendants.
2. My focus is now on whether there is anything to be found in the affidavits of either plaintiff which might be capable of redressing that current position.
3. To that end, I turn first to the affidavit of the first plaintiff, Ms Teng, sworn 17 January 2020.

1. Within that affidavit (relevantly), at between pars 9 - 14, Ms Teng merely says:
   1. In early 2018, the First Defendant approached me with multiple business ideas and attempted to encourage investment in one or more of these ideas. [References to annexures omitted]
   2. The First Defendant was, and is, a director of AMCZ.
   3. During 2018, I was involved in oral discussions with the First Defendant regarding AMCZ and TD52. The First Defendant would visit my house in Dalkeith, Western Australia and our friendship developed into a business relationship.
   4. I financially supported a number of the First Defendant's business entities in return for shares in those companies. The contributions that I made extended beyond financial and included business introductions through my network and the provision of business advice.
   5. On 30 August 2018, the First Defendant was having dinner at my house in Dalkeith, Western Australia, when he informed me that he was experiencing financial difficulty both personally and in relation to his business endeavours including AMCZ.
   6. During the discussion between myself and the First Defendant on 30 August 2018, the First Defendant confirmed he would transfer to me a 10% share in AMCZ which owned TD52, in return for my financial support in the company AMCZ. He also told me that AMCZ was in the process of negotiating the sale of TD52. I accepted the Defendant's offer and proceeded to provide him with financial support.
2. So seen, there is nothing said there by the first plaintiff, Ms Teng, to even arguably suggest any perfected oral contract was ever consummated with the second defendant, Mr Brand, or with the third defendant, Ms Thanjekwayo.
3. It is unnecessary to recite any further ensuing paragraphs of Ms Teng's affidavit up to par 34. Upon examination, they provide no further assistance by evidence to support any possible argument to suggest the second and third defendants were ever made parties to this alleged oral agreement made with the plaintiffs and the first defendant on 30 August 2018.
4. Moreover, I reiterate my previous observations as to the way in which this oral agreement is described by Ms Teng at par 14 (and even by ASOC pars 8 and 9) in Teng v Clark [33]:

There is as well the unacceptable uncertainty in regard to the level of financial assistance promise said to have been made by [the plaintiffs] in order to create a binding and certain verbal agreement of a kind, which is 'for my financial support in the company'.

1. I said further at [37] and [38] of these earlier reasons, towards the legal uncertainty of contract issue:

Under [Ms Teng's] affidavit, the alleged agreement is unquantified in terms of the level of future financial support. The fact that subsequent moneys as a matter of evidence were advanced does not assist in terms of providing certainty over what the contractual commitment exactly was by the plaintiff at 30 August 2018. I emphasise those points because, by reference to the discretionary aspects of the present evaluation I am able to make, as regards the punitive defendant Zambian corporation, the case needs to be respectably formulated on a basis it would survive a summary dismissal challenge.

As currently formulated, and with all due respect to [the plaintiffs], I do not see the proposed pleading surviving any such challenge vis-à-vis AMCZ's as the second defendant. Even evaluated at its highest by reference to a perfected wholly oral contract of 30 August 2018 at Dalkeith, the plea is simply too weak and would not, I assess, survive a summary (dismissed) judgment application in due course, were such application brought.

1. Those earlier observations remain relevant as regard all three current defendants. Of course, in that earlier context, I was examining the potential arguability of a then proposed amended pleading which had sought to delete the second and third defendants and then substituting AMCZ, as a replacement defendant.
2. But still, for the current context and what is seen presently contended for as against all defendants via ASOC pars 8 and 9 and as by Ms Teng in her affidavit (albeit differently), I adhere to that assessment of demonstrable contractual uncertainty. The lack of any agreed specificity over the future quantum of the plaintiffs' financial commitment is a fatal problem to finding that a viable contract was ever perfected on my assessment.
3. To that overall mix, however, I now need to add what has now emerged under a later affidavit from the second plaintiff, Mr Chia, sworn 7 May 2020.

1. Mr Chia says by his par 7 that he wishes to expand on the background given to matters as earlier disclosed by his wife, Ms Teng, in her affidavit. To that end, Mr Chia seeks to canvass various matters, particularly under par 7 of his affidavit.
2. But before I advance too much further to Mr Chia's affidavit, I need to observe that it should by now be appreciated that under Ms Teng's version of events (contended via her par 14) - in her related discussions she spoke, as she relates it, only with the first defendant, Mr Clark (although it was also said his wife was present on that occasion at Dalkeith) on 30 August 2018. That was when Mr Clark's so-called 'offer' was said to be accepted, and then, that Ms Teng 'proceeded to provide him with financial support' (my emphasis).
3. That version of the perfected oral agreement events by Ms Teng does not align, at any level, with the alleged oral agreement as currently pleaded by ASOC par 8 and par 9 - as an agreement that was perfected over the period between April and November 2018. At best, Ms Teng describes an oral agreement perfected at her residence in Dalkeith on 30 August 2018. Does Mr Chia's affidavit help in resolving that inconsistency?
4. Regrettably, too much of what is found under Mr Chia's affidavit presents as his comment, conclusions or arguments. Nevertheless, on the present application such affidavit form inadmissibility was not objected to by senior counsel for the defendants. But what would otherwise be generally inadmissible evidence still does not carry much weight in the end, as I will explain.
5. Mr Chia's affidavit, however, on my assessment, as a matter of weight, is seen to be so argumentative and bereft of underlying relevant fact, that it cannot be considered to carry any significant weight. As one illustration, I mention par 7.12 and par 7.13. They read:

7.12 There was no particular valuation exercise undertaken before we invested. We knew that the projects were speculative and required investigation of the deposits. The amount that we were to invest in exchange for the shares was never specifically disclosed, we knew that there were risks and many of the projects would come to nothing even after our investment.

7.13 When we were allocated shares we would pay for things that the First Defendant could not afford to continue to secure the tenement. In effect we acted like a bank. The amount we would invest in return for our shareholding was dependent on the requirements of the particular project.

1. Little assistance for the plaintiffs can be obtained from such an argumentative and non‑factual material recitation - which rather provides a template for how not to submit evidence by affidavit - even when hearsay evidence (that is properly sourced), is admissible.
2. A feature that did emerge via Mr Chia, however, is that the quantum of the plaintiffs' future investment made 'in exchange for the shares' in AMCZ, was not specifically discussed. The missing feature only highlights and re-emphasises the legal uncertainty problem - in terms of an absent essential term of the presently contended oral contract (the alleged Shareholders Agreement).
3. ASOC pars 8 and 9 do not identify any particular amount of money to be advanced in the future by the plaintiffs. Neither do Ms Teng or Mr Chia in their affidavits. The position then as regards what future amounts of money and how much, and when the first and second plaintiffs were committed to provide it, in the future under the contended oral agreement, is seen as being left wholly open‑ended. Was it AUD$50,000 or AUD$1 million or AUD$5 million? Who knows? This issue was always a complete unknown on any version of the events to date.
4. For such circumstances having now seen Ms Teng's and Mr Chia's affidavit evidence, still the suggestion that a legally binding agreement was perfected with any defendant, albeit the level of the plaintiffs' future funding obligations was open-ended is commercially unreal.
5. What is related might be some lead-up component to eventually achieving a perfected and binding agreement later on, once more settled monetary and timing details were agreed upon. Currently however, all this essential term detail is lacking. That is a fundamental and, on my assessment, insurmountable problem as regards not merely the second and third defendants, but also as regards the first defendant, Mr Clark for a breach of contract action against them.
6. I emphasise, however, that in reaching that conclusion I am not closing off a possible restitutionary remedy for the plaintiffs as regards them recovering $55,449.91 in funds outlaid by them in December 2018 and January 2019 to the benefit of AMCZ by discharging some of AMCZ's debts are as said then to be due by AMCZ to its creditors.

1. As regards the 30 August 2018 dinner party at Dalkeith, Mr Chia's version of events commences at his par 7.21. He makes, by 7.21, only this conclusionary statement:

We were asked to invest in TD52 at a dinner party on 30 August 2018 at our home in Dalkeith.

1. After some irrelevant matters in par 7.28, Mr Chia then provides his global summary, commencing at par 8:
   1. The story of our investment in TD52 started when Brendan [the first defendant] and his wife Portia [the third defendant] joined us at our Dalkeith residence for a dinner party on 30 August 2018. Brendan had talked to us about TD52 in the past, but Cape Lambert had invested before we had come to know about the project.

1. Within this conversation he directly pitched TD52 to us ...
2. After the unhelpful form of all that, Mr Chia continues, to the effect that he says he (subjectively, that is) envisaged a sale of part of the company with a royalty being received from downstream processing. That does not help under the Australian laws objective theory of contract.
3. Finally, Mr Chia begins to relate some admissible evidence at par 11:

As best I recall the following was said at the dinner party in front of Tina, Portia and myself:

Brendan said 'Please support us financially for TD52 and in return we would exchange for shareholding in TD52 and continue our partnership in every deal'

Tina asked 'What would our shareholding be?'

Brendan said 'If you help me to get to the point that we start making money. I think the tailings end value is worth 100 to 200 million US dollars. I think it's fair that you get 10%, which would be worth 10 million US minimum'.

Tina asked 'How do you think we can make money from this? Are we going to find JV partners to build the plant, and get a profit share?'

Brendan said 'We can do that, but are you happy with the deal? Are you able to assist us financially?'

Tina said 'Yes. I think 10% is fair. Let's get on to it.'

1. Following that (admissible) version of the conversation, Mr Chia lapses back to his comments or conclusions at pars 12 and 13:
   1. From this conversation it was clear to me that we were to undertake business as we had done before; that is in exchange for our financial support to the company for the purpose of marking TD52 the First Defendant would arrange for the transfer of 10% of the shares in AMCZ to us.
   2. Our agreement to provide funds to AMCZ to market TD52, included the payment of airfares, making contact with our business contacts in China and assisting with the sale generally.
2. At the end, none of what I have now set out from these paragraphs of Mr Chia's evidence assists in providing any further body of evidence to sustain an arguable contractual claim against the second and third defendants as parties. Everything recited, as now seen relates, at best, only to the first defendant, Mr Clark.
3. However even as regards the first defendant, what Mr Chia relates is still, wholly vague as regards what the plaintiffs would need to do in the future, in order to obtain a 10% shareholding in AMCZ at some point. That may have been when it got to the point 'that we start making money'.
4. The recitation of events by Mr Chia could suggest only a particularly embryonic and unperfected future deal and with just Mr Clark - and perhaps unsurprisingly so, given the informal environment over the dinner at Dalkeith in 2018.

1. There is one further aspect to Mr Chia's evidence that was heavily relied upon by the plaintiffs in their arguments.
2. This is linked to the plea as seen already under ASOC par 10 of the existing pleading, by reference to an email of Mr Clark, of 29 November 2018. The sender sign off to that email is invoked, to support an argument that the second defendant, Mr Brand, and the third defendant, Ms Thanjekwayo, were also involved as parties contractually in the oral Shareholder Agreement.
3. The document relied on is the email found at BT2 to Mr Chia's affidavit and referred to by him at par 38, being Mr Clark's email of 29 November 2018. So seen, the email was sent at 5.24 pm, under a subject heading 'TD52'. On its face it was sent to 'Tina' at an email address and also to 'BennyChia77', at a different email address.
4. The face of the email is expressed as well as being the subject of being copied (ie, CC'ed) to 'Adam Brand' to an email address, and also to a 'PortiaClark90' at an email address.
5. The 29 November 2018 email is brief. It reads in the following terms:

Tina & Ben,

I just wanted to formalise our understanding for record purposes.

Firstly, it is very gracious how you guys are helping us with this project by assisting with cashflow for the project, without even a document signed. Thank you!!

In regards to Andy's proposed deal for TD52, we would like to offer you a 10% equity in the deal for you JV introductions and cashflow assistance.

With much respect.

Brendan, Portia & Adam.

1. The date, 29 November 2018 is of course, almost three months after the 30 August 2018 Dalkeith dinner party meeting, as the date of agreement contended for by Ms Teng's affidavit.
2. Nevertheless, as described at par 38 of his affidavit, by reference to this email Mr Chia says of it:

Later that afternoon at 5.24 pm Brendan Clark [the first defendant] wrote an email copied to Adam Brand [the second defendant] and Portia Clark [the third defendant] to 'formalise' the agreement we had. The 10% share allocation had been agreed, and we had been paying by assist with the cash flow of AMCZ.

1. A number of things may be observed towards this November 2018 email, beyond the fact that it is out of chronological alignment with a fully perfected wholly oral agreement reached as at 30 August 2018 and as Ms Teng's evidence promotes. First, if anything, the content of the email speaking of an understanding which Mr Clark wished to 'formalise'. That bears negatively against any conclusion that at any prior time there had been a binding and perfected agreement which manifested the necessary hallmarks of legal certainty.
2. Second, as Mr Chia would have matters via his par 38, he and his wife had then been 'paying by assistance with the cash flow of AMCZ'. However, that statement is completely out of alignment with the dates seen in ASOC par 7.2 as regards the par 7.2(c)(i) through to (iv) four money amounts in aggregate of $55,449.91 paid to AMCZ's creditors. As seen there, those amounts were only paid out to discharge the debts of AMCZ in respect of AMCZ's creditors in the period commencing at 10 December 2018 ending at 8 January 2019.
3. Manifestly then, at 29 November 2018, none of those four money sums had yet been paid out by the plaintiffs. There is no reference to be found to any other amounts in terms of paying the creditors of AMCZ in order to advantage that corporation.
4. Third, an observed email reference to 'Andy' and his 'proposed deal for TD52' is a reference to another Chinese gentleman said to be referred to in the pleadings - but about whom I could ascertain nothing from the pleading or other materials. At the hearing I was informed by counsel for the plaintiffs that 'Andy' was a director of one of the companies referred to in ASOC par 7.2(b) (ts 89 - 90).
5. Fourth, the content of a 'proposed deal for TD52' and the equity in the deal amount to at 29 November 2018, is not apparent.
6. Fifth, absent some evidence of an arguable level of authority in the first defendant, Mr Clark, to allow him to lawfully bind to a contractual commitment, his wife, the third defendant, or his fellow AMCZ shareholder, Mr Brand, that is simply something he cannot do. Their first names (only) are seen of course as the typed co-senders of this email, that was sent by Mr Clark and is suggested to have been copied to the email addresses of Mr Brand and, I infer, the third defendant as well. But copying them in by email is not enough without more to conclude that somehow, those extra persons were arguably privy to a wholly oral and earlier perfected contract, and that is only said to be evidenced by this later November 2018 email. (The term used in ASOC par 10 being 'reiterated' as regards this email 'the terms of the Shareholders Agreement'.)

1. Assessing matters overall then, as regards, at the outset the positions of the second and third defendants, my assessment is that there is nothing to be found emerging from the evidence before me, that is arguable from a contractual perspective in terms of supporting those defendants' arguable privity to an oral agreement perfected as between them with the plaintiffs and the first defendant. On that basis, the claim against them must be summarily dismissed.

1. As regards the first defendant, his position is different, essentially due to the state of the conflicting evidence and the even further inconvenient state of the ASOC pleas about an oral agreement which, in short, do not align with the affidavit evidence of Ms Teng and Mr Chia.
2. As I understood the submission of counsel for the plaintiffs, his contention in opposing a summary judgment as regards all defendants, was that I should assess the matter by reference to the affidavit evidence, rather than by the deficient ASOC pleading. I accept that that is the correct approach.
3. Nevertheless, as regards the first defendant, even if it can be argued that somewhere within what is otherwise an unacceptable pleading mess, that there can be inferred or winkled out a promise made by him as a director or shareholder, or, for argument's sake, as CEO of the Zambian corporation AMCZ, that Mr Clark would procure for the plaintiffs at some later time an allocation of 10% of the shares in that corporation, but which procurement promise was then later dishonoured and breached by him (and breached by him alone), that still the insuperable difficulty that confronts, is the residual problem of legal uncertainty - as regards a critically missing essential term as to the agreed level of future funding by the plaintiffs, in such a contended wholly oral contract (Shareholders Agreement).
4. I repeat again that I am putting aside any restitutionary claim by the plaintiffs against AMCZ seeking to get back the value of the benefit of moneys outlaid to AMCZ creditors for the benefit of that corporation. Such a claim would be something else altogether different to what is currently being pursued.
5. The fundamental problem encountered as regards the first defendant is the wholly open-ended and unsettled character of a future financial obligation on the plaintiffs to 'invest funds'. By my assessment, that problem is fatal. It cannot be overcome. There are also of course, some subsidiary further problems in terms of when the 10% equity in AMCZ for the plaintiffs was ever to happen. Even allowing recourse to a utilisation of the concept of a reasonable time by implication, or otherwise into the arrangements, still nothing finite in terms of a fixed premise concrete enough to be enforced by a court, emerges.
6. There is also, as was discussed with counsel for the plaintiffs, the open‑ended equivocality in terms of whether a 10% shareholding equity in AMCZ might issue to the plaintiffs' transferred from existing AMCZ shareholders, or whether 5,000 further shares needed to be allotted by AMCZ out of the 15,000 shares issued, so that 10% of 15,000, ie, 1,500, shares could later be allotted by AMCZ to the plaintiffs, or possibly to the BC & TT Family Trust.
7. But in the end no arguable basis has emerged from out of the surrounding evidence, assessed at its arguable highest, (putting aside pleading problems with the ASOC), to sustain a cause of action in contract to support the relief sought under prayers A and B, as against any of the defendants.

1. On my assessment then, the application for summary judgment under RSC O 16 against the plaintiffs' claim advanced against all defendants must be upheld. The time to make that application is extended and there will be orders to that effect issued upon the publication of these reasons.
2. Correlative to these RSC O 16 conclusions, issues concerning leave to amend the ASOC, all essentially become redundant. But had that been otherwise and had it been the case that I were prepared to grant leave to amend as regards the currently pleaded ASOC as against only the first defendant (the case against the second and third defendants always being terminally defective for their lack of privity), I would still order that the entire ASOC be struck out. This would be on the basis of the ASOC failing as presently formulated to disclose an arguable cause of action against Mr Clark - even if only for damages against him for his failure to procure an allotment of 10% of the equity in AMCZ to the plaintiffs.

1. As regards the costs of this application, it would seem prima facie, that the ordinary rule as regards costs following the event must follow as against the plaintiffs. To the extent that I do otherwise need to hear the parties concerning costs, or for special costs orders, I would indicate my inclination that any such matters should be dealt with on the papers - from a costs saving perspective and in a context of what prima facie looks to be a litigious dispute presenting at well below the threshold of economic justification for the Supreme Court. However, for the present, having made the order dismissing the action under [157], I will otherwise reserve all other residual issues, including as to costs.

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