Wilson v Manna Hill Mining Company Pty Ltd

THE APPLICANTS' CLAIMS 12 I have identified three questions that are required to be answered in these proceedings. Broadly, the applicants' claim relief under s 232 and s 233 of the Corporations Act 2001 (Cth) (the Act). They claim that the affairs of Manna Hill Mining are being conducted in a manner which is contrary to the interests of the members as a whole and/or oppressive and unfairly prejudicial to or discriminatory against the interests of the applicants who are shareholders and were, until the conduct complained about, directors of the first respondent. 13 The applicants have sought a number of declarations and orders relating to a series of meetings of directors of Manna Hill Mining and seek orders setting aside share allotments and appointments of persons as directors at those meetings. The applicants claim that the resolutions purportedly passed at those meetings are void and of no effect. The applicants also seek a declaration that the resolutions purportedly passed at an extraordinary general meeting held on 20 January 2004 are void and of no effect. Fifteen separate declarations and ten separate orders are sought. 14 For the reasons which follow, this is the clearest case for the relief sought.

THE LAW 15 It is convenient, before examining the facts relevant to the various meetings, to identify the principles applicable to directors' meetings and general meetings.

Directors' Meetings 16 Ordinarily, less formality is required for a directors' meeting than a meeting of members of a corporation. 17 A directors' meeting must be convened in accordance with the company's constitution. In this case, Manna Hill Mining's constitution does not provide for any particular procedure to be followed in convening a meeting. Article 96 provides: 'The Directors may meet together for the despatch of business and adjourn and otherwise regulate their meetings as they think fit. At the request of any Director the Secretary of the Company shall call a meeting of Directors. If there is only one director business may be despatched by that director alone.' 18 The constitution of the company does not provide what notice or the contents of the notice which needs be given to the directors prior to the meeting. Section 249C of the Act, which is a replaceable rule and which empowers a director to call a meeting of the company's members, does not apply. The replaceable rules do not apply to Manna Hill Mining which was incorporated before 1 July 1998 and has not thereafter repealed its constitution: s 135 of the Act. 19 Any director of Manna Hill Mining is entitled to convene a meeting of directors by requesting the secretary (Mr Moore) to call a meeting. A director could validly convene a meeting of directors by advising all other directors of the time and place of the meeting. Because the constitution does not say otherwise, notice can be given orally or in writing: Browne v La Trinidad (1887) 37 Ch D 1. If oral, it could be given by telephone. 20 Each director, within reach of notice, must individually be given notice of the meeting: In Re Portuguese Consolidated Copper Mines Ltd (1889) 42 Ch D 160; Young v Ladies' Imperial Club Ltd (1920) 2 KB 523. A director is within reach of notice where 'his place of residence and the ordinary means of communicating with him are such that, if notice had to be given to him as provided for by the articles of association, this would involve such delay as seriously to hamper the transaction of business': In Re Merchants and Shippers SS Co Ltd (1916) 17 SR NSW 21 at 27-28 per Street J; Mitropoulos v The Greek Orthodox Church and Community of Marrickville & District Ltd (1993) 10 ACSR 134. 21 In determining whether a director is within reach of notice, regard must be had to the modern means of communication and the ability of a director to be present at a meeting of directors by telephone. A director resident in Queensland of a company registered and carrying on business in South Australia would not be out of reach. 22 There can be no question in this case that any of the directors to whom notice had to be given was not within reach of notice. 23 Each and every director of Manna Hill Mining was entitled to notice of any meeting of directors: Bell v Burton (1994) 12 ACLC 1037. 24 Notice of the meeting can be waived or dispensed with if all directors attend and if all directors treat the meeting as a meeting of directors: Roden v International Gas Applications (1995) 18 ACSR 454 at 456 per McLelland CJ. 25 The notice must be reasonable: Toole v Flexihire Pty Ltd (1991) 6 ACSR 455; In Re Homer District Consolidated Gold Mines; Ex parte Smith (1888) 39 Ch D 546. In determining what is reasonable, the practice usually adopted by the Board is a relevant consideration. If reasonable notice is not given to all directors the meeting is not valid unless all directors are present: Barron v Potter (1914) 1 Ch 895. 26 It is not essential that a director be given notice of the business to be conducted at the meeting, although it may be preferable and prudent to give notice of any special business: La Compagnie De Mayville v Whitley (1896) 1 Ch 788; Toole v Flexihire Pty Ltd (supra). 27 Where the company's constitution provides for the number of directors to constitute a quorum, that number must be present. Any resolution purportedly passed at a directors' meeting in the absence of a properly constituted quorum will be void: Clamp v Fairway Investments Pty Ltd (1973) ACLC 40-077 at 27613. In the case of Manna Hill Mining, the constitution does not require the directors to be physically present. They can be present by telephone: Article 100(c). 28 The replaceable rules provide that the remaining directors can act for the purpose of appointing directors to fill a vacancy or vacancies to constitute a quorum: s 201H(i). For the reasons already given, that section does not apply to this company. 29 If the directors refuse, or there are insufficient directors to form a quorum to appoint additional directors, the members can in general meeting appoint additional directors: Barron v Potter.

General Meetings 30 Articles 61-84 of Manna Hill Mining's constitution govern the convening and conduct of general meetings. 31 The directors may, if they think fit, convene an extraordinary general meeting: Article 62. 32 Every member is entitled to notice of a general meeting whether it is annual or extraordinary. Article 63 provides: 'Where it is proposed to pass a special resolution twenty-one clear days' notice and in other cases fourteen clear days' notice specifying the place and hour of meeting and in the case of special business the general nature of such business shall be given to the members entitled to vote by notice sent by post or otherwise served as hereinafter provided; provided always that if all the members entitled to attend and vote at any meeting so agree a resolution may be proposed and passed at such meeting even if shorter notice than abovementioned or no notice shall have been given.' 33 In this case, an extraordinary general meeting was said to have taken place on 20 January 2004 when resolutions were put and passed to remove both applicants as directors. A special resolution is needed to remove a director before the expiration of his or her period of office: Article 89. A special resolution requires the agreement of 75 per cent of members entitled to vote. 34 Not only does notice need to be given by virtue of Article 63, but s 249J of the Act also requires written notice of a meeting of a company's members to be given individually to each member entitled to vote at the meetings and each director. 35 Because the resolution to be put to the meeting was a special resolution, which required 75 per cent of the votes cast by members entitled to vote on the resolution to agree, the notice must set out an intention to propose the special resolution and state the resolution: s 249L(c). 36 The notice must give 'a fair and reasonable intimation of what is actually proposed to be done': Ryan v Edna May Junction Gold Mining Co NL (1916) 21 CLR 487 at 500 per Isaacs J; Devereaux Holdings Pty Ltd v Parry Corporation Ltd (1985) 9 ACLR 837 at 842. 37 The meeting would be validly convened if notice was sent by post to all of the members entitled to vote at least 21 days before the meeting. The notice needs to stipulate the time and date of the meeting and the general nature of the business to be considered. 38 The resolutions could still be considered even if no notice or insufficient notice in time or content had been given if all members entitled to vote and attend agree that the resolutions may be proposed and passed. 39 Resolutions, therefore, may be considered and passed at a general meeting which has been convened otherwise than in accordance with Article 63 only if all members entitled to vote, attend and agree. 40 The Article does not contemplate a resolution being passed at a general meeting unless notice has been given to all members or unless all members are present, notwithstanding notice was not given: Devereaux Holdings Pty Ltd v Pelsart Resources NL (No 2) (1985) 9 ACLR 956. 41 Article 66 of the constitution provides for a quorum of members at any general meeting. If the company has more than one member, two members must be present 'in person'. If, and only if the company has one member can the meeting be conducted with only one member present. 42 Article 63 must be read subject to s 249H. 43 Section 249H(1) provides: '249H(1) General rule. Subject to subsection (2), at least 21 days notice must be given of a meeting of a company's members. However, if a company has a constitution, it may specify a longer minimum period of notice.' 44 In this case, the constitution specifies the same time - 21 days. 45 However, s 249H(2) provides: '249H(2) Calling meetings on shorter notice. A company may call on shorter notice: (a) an AGM, if all the members entitled to attend and vote at the AGM agree beforehand; and (b) any other general meeting, if members with at least 95% of the votes that may be cast at the meeting agree beforehand. A company cannot call an AGM or other general meeting on shorter notice if it is a meeting of the kind referred to in subsection (3) or (4).' 46 Section 249H(2) only applies as an exception to s 249H(1) if, in the case of an AGM, all members agree and, in any other case, members with at least 95 per cent of the votes agree beforehand. However, all members must be given notice of the meeting. Section 249H(2)(b) does not enable a company to convene a meeting having only first given notice to the 95 per cent of members who support a shorter period for the calling of the meeting.

Minutes 47 Section 251A(1) requires the company to keep minute books in which it records within one month, the proceedings and resolutions of members' meetings and directors' meetings. 48 In Re Cawley (1889) 42 Ch D 209 at 226, Lord Esher MR said: 'Minutes of board-meetings are kept in order that the shareholders of the company may know exactly what their directors have been doing, why it was done and when it was done ….'

The Statutory scheme to rectify irregularities 49 Subsections 1322(2), (3) and (3A) of the Act provide: '1322(2) [Proceeding not invalidated] A proceeding under this Act is not invalidated because of any procedural irregularity unless the Court is of the opinion that the irregularity has caused or may cause substantial injustice that cannot be remedied by any order of the Court and by order declares the proceeding to be invalid. 1322(3) [Invalidation of meetings] A meeting held for the purposes of this Act, or a meeting notice of which is required to be given in accordance with the provisions of this Act, or any proceeding at such a meeting, is not invalidated only because of the accidental omission to give notice of the meeting or the non-receipt by any person of notice of the meeting, unless the Court, on the application of the person concerned, a person entitled to attend the meeting or ASIC, declares proceedings at the meeting to be void. 1322(3A) [Member's participation] If a member does not have a reasonable opportunity to participate in a meeting of members, or part of a meeting of members, held at 2 or more venues, the meeting will only be invalid on that ground if: (a) the Court is of the opinion that: (i) a substantial injustice has been caused or may be caused; and (ii) the injustice cannot be remedied by any order of the Court; and (b) the Court declares the meeting or proceeding (or that part of it) invalid.' 50 'Proceeding' is widely defined and includes a meeting: Australian Hydrocarbons NL v Green (1985) 10 ACLR 72. 'Proceeding' and 'procedural irregularity' are defined in subsection 1322(1): '1322(1) ["proceeding" and "procedural irregularity"] In this section, unless the contrary intention appears: (a) a reference to a proceeding under this Act is a reference to any proceeding whether a legal proceeding or not; and (b) a reference to a procedural irregularity includes a reference to: (i) the absence of a quorum at a meeting of a corporation, at a meeting of directors or creditors of a corporation, at a joint meeting of creditors and members of a corporation or at a meeting of members of a registered scheme; and (ii) a defect, irregularity or deficiency of notice or time.' 51 The purpose of s 1322 is to avoid persons' substantive rights being eroded as a result of a procedural irregularity. The provision is remedial and should be applied liberally: NRMA Ltd v Gould (1995) 13 ACLC 1518 at 1520-1521 per Young J. 52 Subsection 1322(3) refers to a particular aspect of a meeting where notice is required to be given in accordance with the Act and s 1322(3A) only refers to a meeting of members. 53 Section 1322 validates what otherwise would be void or invalid: Sydney Aussie Rules Social Club Ltd v Superintendent of Licences (1989) 7 ACLC 991. 54 Section 1322(3) would apply where a director has not been given notice of a directors' meeting because of an accidental omission. It would also apply to a meeting of members where a member has not been given notice of the meeting by reason of an accidental omission. Subsection (3A) addresses the pre-conditions to declare a meeting invalid where the member does not have a reasonable opportunity to participate. 55 Section 1322(3) does not apply where the person who has convened the meeting has deliberately refrained from giving notice to the director or member. 56 Subsection (6) identifies the preconditions that must be met before an order may be made. 57 Subsection (4) provides for the orders which may be made, and subsection (5) elucidates the scope of the power to make orders. 58 Those subsections provide: '1322(4) [Court may make orders] Subjection to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes: (a) an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution of a corporation; (b) an order directing the rectification of any register kept by ASIC under this Act; (c) an order relieving a person in whole or in part from any civil liability in respect of a contravention or failure of a kind referred to in paragraph (a); (d) an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Act or in relation to a corporation (including an order extending a period where the period concerned ended before the application for the order was made) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding; and may make such consequential or ancillary orders as the Court thinks fit. 1322(5) [Scope of power] An order may be made under paragraph (4)(a) or (c) notwithstanding that the contravention or failure referred to in the paragraph concerned resulted in the commission of an offence. 1322(6) [Pre-conditions to making orders] The Court must not make an order under this section unless it is satisfied: (a) in the case of an order referred to in paragraph (4)(a): (i) that the act, matter or thing, or the proceeding, referred to in that paragraph is essentially of a procedural nature; (ii) that the person or persons concerned in or party to the contravention or failure acted honestly; or (iii) that it is just and equitable that the order be made; and (b) in the case of an order referred to in paragraph (4)(c) - that the person subject to the civil liability concerned acted honestly; and (c) in every case - that no substantial injustice has been or is likely to be caused to any person.' 59 Essentially, where notice has not been given or received, the meeting is not invalidated if the failure to give notice was an accidental omission and, in the case of a members' meeting, the Court is of the opinion that a substantial injustice has not been caused and any injustice can be remedied by an order of the Court. 60 For the reasons which follow, the respondents are not entitled to claim the benefit of any of these provisions. The failures in this case, which I will shortly address, were not accidental but deliberate. A substantial injustice would be caused to the applicants if the meetings were validated. 61 In other cases, where there is a procedural irregularity in the convening or conduct of a meeting, the Court must have regard to the preconditions in s 1332(6). 62 I am not satisfied that the person concerned in the contraventions, Mr Moore, has acted honestly. In my opinion, it would not be just and equitable to make any orders validating the irregularities in these proceedings. 63 I will not address this section again. It will be apparent from my reasons why I think it has no application in those proceedings.

EARLY HISTORY 64 Manna Hill Mining was incorporated on 1 October 1996. 65 Its constitution provides that it shall have not less than one and not more than ten directors. The directors have power, from time to time, to appoint any person as a director either to fill a casual vacancy or as an additional member of the board: Article 88. The company can in general meeting by special resolution remove any director before the expiration of the director's period of office: Article 89. The directors can appoint one of their body to be managing director: Article 93. The managing director can be dismissed or removed by the directors: Article 94. 66 The directors are entitled to regulate their meetings of directors as they think fit: Article 96. They may elect a chairman who, if there is an equality of votes, has a second and casting vote: Articles 97 and 99. 67 Directors' meetings can be held with one or more of the directors taking part by telephone: Article 100(c). 68 The directors have the usual powers given to directors of companies of this kind. 69 After acquisition of the company, Mr Moore was an original shareholder and director of Manna Hill Mining. 70 On 21 January 1999, Mr Moore transferred one share to Ms Lawton. The consideration was stated to be $4,500 on the share transfer. However, on the share certificate the stated consideration is '$1.00 nominal plus 0.25 cents' per share. 71 On 20 January 2000, Manna Hill Mining was placed into voluntary administration under Mr Peter Ivan Macks, Chartered Accountant (the administrator). 72 On 19 April 2001, Ms Lawton was appointed a director. 73 On 27 April 2001, Manna Hill Mining entered into a Deed of Company Arrangement to which Mr Moore, the administrator and Bentlee International Pty Ltd were parties. 74 The Deed provided for payments of money and the allotment of shares. The relevant clause of the Deed is clause 9, which provides: '9. PAYMENT BY DAVID MOORE AND/BENTLEE INTERNATIONAL AND BANK ACCOUNT Payment by David Moore and Bentlee International 9.1 David Moore has in accordance with his obligations under the Proposal paid the sum of $23,000 to the Administrator on or before 10 May 2000 receipt of which is acknowledged by the Administrator. 9.2 Bentlee International has paid to the Administrator the sum of $25,000 on 18 April 2001 receipt of which is acknowledged by the Administrator. 9.3 Bentlee International agrees to take up and apply for and Manna Hill Mining agrees to issue and allot to Bentlee International 477 fully paid ordinary shares in the capital of Manna Hill Mining in consideration of Bentlee International making payment to Manna Hill Mining of the total amount of $242,413 (inclusive of the amount referred to in clause 9.2) (exclusive of GST). 9.4 David Moore agrees to take up and apply for and Manna Hill Mining agrees to issue and allot to David Moore 197 fully paid ordinary shares in the capital of Manna Hill Mining and the Wilson Family Trust agrees to take up and apply for and Manna Hill Mining agrees to issue and allot to the Wilson Family Trust 265 fully paid ordinary shares in the capital of Manna Hill Mining.' 75 The Deed also provided for the appointment of Mr Wilson as a director. 76 Manna Hill Mining came out of administration and the shares referred to in clause 9 were issued to Bentlee International Pty Ltd (Bentlee) and to Mr Wilson's family trust. Mr Wilson was appointed a director on 27 April. 77 In due course, a dispute arose between Mr Wilson's family trust and Bentlee, Mr Wilson contending that the shares which had issued to Bentlee ought to have been issued to his family trust and that Bentlee was not entitled to the issue of any shares. 78 On 23 May 2001, Mr Moore was appointed managing director. Article 93 allows for the appointment of a managing director. Article 94 empowers the directors to dismiss or remove a managing director appointed under Article 93. 79 On 23 May 2001, the directors resolved to cancel the shares issued to Bentlee and to allot to Mr Wilson's family trust the same number of shares. Present at that meeting were Mr Moore, Mr Wilson (by telephone) and Ms Lawton. Mr Wilson disclosed his interest in the subject matter of the resolution and did not vote. The directors also noted that three associates of Bentlee had not been properly elected as directors of Manna Hill Mining. 80 Those resolutions led to litigation in the Supreme Court of South Australia. 81 Bentlee brought proceedings against Manna Hill Mining and Mr Moore claiming that its shares in Manna Hill Mining had been wrongly cancelled. Later, Ms Lawton and Mr Wilson and his wife were joined as defendants. 82 On 23 November 2001, Bentlee was ordered to pay $100,000 into the Supreme Court suitors' fund. Half of that sum was paid to the solicitors of Manna Hill Mining as part of a compromise which was reached in early 2002. 83 It was agreed by the parties that all the shares referred to in clause 9.3 which were allotted to Bentlee were entitled to be held by Mr Wilson's family trust and that the share register should be amended accordingly. Consent orders were made in the Supreme Court on 29 January 2002. Thereafter, Mr Wilson's family trust held 742 shares. Mr Moore held 212 shares. Ms Lawton held one share. A further 105 shares were held by the other shareholders. 84 The proceedings in the Supreme Court involved Manna Hill Mining, Mr Moore and Mr Wilson. Significant costs were incurred which were paid by Mr Wilson. It was agreed, and on 11 March 2002 the directors resolved accordingly, that Manna Hill Mining would treat his payment of the costs as a debt due by the company to him. It was also agreed and resolved that Mr Wilson had made an initial contribution to working capital which should also be recognised as a loan. The total of the loans was recorded in the sum of $236,442.25. 85 Mr Moore has continually asserted in these proceedings that the first applicant had, through Bentlee International Pty Ltd, agreed to provide $400,000 for the issue of the shares, some of which was to be used as working capital by Manna Hill Mining. He also claims that, contrary to the resolution of 11 March 2002, Mr Wilson has not contributed $100,000 of that sum. Whether he is right or wrong about that is not an issue in these proceedings and is not relevant to any issues in these proceedings. 86 After the proceedings were settled, Mr Wilson's family trust held 70 per cent of the shareholding and Mr Moore, 20 per cent. The remaining 10 per cent was distributed between 17 other shareholders, who all held a relatively insignificant number of shares. 87 Thereafter, Mr Wilson, Mr Moore and Ms Lawton held office as the directors of Manna Hill Mining. 88 Ms Lawton and Mr Moore lived in a de facto relationship beginning near the end of 1997, early 1998 and lasting for about four or five months. Thereafter, they had a working relationship. After the de facto relationship ended, Mr Moore continued to live in the house that Ms Lawton rented at Tennyson. Manna Hill Mining conducted its business from that address. 89 Manna Hill Mining was always short of working capital. Some time, in late 2002, Mr Moore determined to sell a 50 per cent interest in an exploration licence to Eastgate Corporation Ltd (Eastgate). That company was controlled by an associate of Mr Moore, Mr Nardelli, who was a fellow shareholder and director in Manna Hill Resources Pty Ltd. 90 Ms Lawton did not believe that the sum being paid for the exploration licence reflected its true value and was not agreeable to the transaction. Mr Moore and Ms Lawton discussed selling the exploration licence over six to eight months. Eventually, she said she was overborne by Mr Moore and agreed, albeit unwillingly, to the transfer of the interest in the exploration licence. She said she signed it after an argument with Mr Moore when he had been drinking heavily: 'He was abusing me, yelling. My children were home and they were upset so, in the end, I just signed it'. 91 I accept her evidence in that regard. 92 Between late 2002 and early 2003, Ms Lawton was under significant personal pressures. She rented the premises in which she and her two children lived and in which Mr Moore also lived. I think it is probably clear that Mr Moore and Ms Lawton's children did not get on well together. That also aggravated their working relationship. 93 In my opinion, one of the factors which caused the deterioration of the working relationship was the dispute between Ms Lawton and Mr Moore in relation to the sale of the interest in the exploration licence by Manna Hill Mining to Eastgate on 27 February 2003. I will return to that matter.

THE WITNESSES 94 I have had the opportunity of observing Mr Moore whilst he was giving his evidence, cross-examining witnesses and putting his arguments during the trial of these proceedings. 95 Mr Moore is a very determined man. He is consumed by Manna Hill Mining's activities and the activities of two other mining companies, Manna Hill Resources Pty Ltd and Manna Hill Gold Pty Ltd. He is a shareholder and director of all three companies. He worked extremely hard to take Manna Hill Mining out of administration and to resume trading. He is so consumed by the groups' activities that he will allow nothing to stand in his way. 96 He has a strong personality which he uses to dominate others. He is an aggressive and overbearing man. As I have said, he will allow nothing to stand in his way. I assess him as being ruthless and fearless. He is also, unfortunately, unprincipled. 97 For reasons which follow, I am of the opinion that the breakdown of his working relationship with Ms Lawton led him to claim, untruthfully, that Ms Lawton had resigned as a director of Manna Hill Mining on 24 March 2003. Because of the events on 27 May 2003, which I shall address in some detail, he determined to strip Mr Wilson of his control of Manna Hill Mining which he purported to do on 12 June 2003 and 19 January 2004. He then, methodically and ruthlessly, took steps to remove Mr Wilson as a director of Manna Hill Mining culminating in an extraordinary general meeting on 20 January 2004. He then attempted, on 6 February 2004, to put Manna Hill Mining's assets beyond the reach of Mr Wilson, even if Mr Wilson was successful in these proceedings. Lastly, he purported to put Manna Hill Mining into administration on 11 February 2004 to frustrate Mr Wilson's claims. 98 Mr Moore was a very poor witness. He prevaricated. He refused to address questions directly where a direct answer would embarrass his case. He was garrulous when it suited him. He was also untruthful when it suited him so to be. I am not prepared to act on any of his evidence, unless his evidence is corroborated or consistent with the evidence of the applicants and their witnesses. Wherever his evidence is in conflict with the evidence of any other witness, including the evidence of Mr Spratt, I prefer the evidence of those other witnesses. Wherever his evidence is contradicted by any document, I reject his evidence. 99 I was impressed by Mr Wilson as a witness and I accept his evidence. Ms Lawton gave evidence in trying circumstances. She was subjected to a vigorous cross-examination by Mr Moore. He consistently interrupted her answers and spoke over her. He ignored a number of my directions to allow her to answer the questions which he had put. Ms Lawton handled herself with dignity. I accept her evidence. 100 Mr Hagger was called by the applicants. I think he attempted to assist me. I accept his evidence. I also accept the evidence of Mr Nicholas Iles, the applicants' solicitor. 101 Mr Moore argued that I should reject the applicants' evidence and that of their witnesses because all four witnesses were untruthful. He did not suggest that there was any other reason for the conflict of his evidence and theirs except that the applicants and their three witnesses were liars. I reject that contention. I find that the applicants and Messrs Hagger and Iles were honest witnesses, and their evidence may be relied upon. 102 I think, by and large, Mr Spratt's evidence can also be accepted. I think he has an imperfect memory of some events but I think he was mainly a truthful witness. In any conflict, I would prefer the evidence of Mr Wilson but I do not think there are conflicts of any moment that require me to reject Mr Spratt's evidence.

THE RELEVANT HISTORY 103 I earlier mentioned that on 27 February 2003 Ms Lawton agreed unwillingly to the transfer of Manna Hill Mining's interest in an exploration licence to Eastgate. Eastgate was controlled by Mr Nardelli, who was an associate of Mr Moore's and held shares in Manna Hill Resources Pty Ltd. 104 An instrument of transfer was executed on 27 February 2003 and the company seal of Manna Hill Mining was affixed in the presence of Mr Moore and Ms Lawton. The instrument provided for the transfer of a 50 per cent interest in exploration licence 2553 for a consideration of $6000 to Eastgate Corporation Pty Ltd. 105 I have already made findings about the circumstances in which that document came to be signed. Ms Lawton said at the time she did not tell Mr Wilson of the transaction. She said she was too embarrassed to tell him. I accept that evidence. 106 The company records claim that a meeting of the board of directors took place on 27 February 2003. 107 The minutes record Mr Moore and Ms Lawton in attendance. The minutes also record: 'Mr Moore advised that Mr Wilson had been informed of proposed Joint Venture and so had Ms Lawton. It was stated by Chairman that due to financial constraints, the company did not have the resources to continue as 100% holder of the E.L. and be responsible for future financial commitments. It was tabled all the file of PIRIA and commitments necessary of the E.L. It was resolved by the directors to enter Joint Venture with Mr Nardelis's Company, EASTGATE CORPORATION, thus our company still retained an interest (50%) in a possible very valuable asset. It was resolved to affix the company's common seal to Form 19 of PIRIA there being no further business, the meeting declared closed.' 108 There is also a note at the top of the minutes: 'Mr Wilson phoned earlier by Mr Moore and approved joint venture and seal.' 109 Mr Wilson said that he was not advised of the meeting. He never knew of the transaction. Ms Lawton never told him. I accept that he was not told by Mr Moore or Ms Lawton. Mr Wilson was not advised of the meeting, or of the transaction involving Eastgate, because Mr Moore knew that he would not agree. Ms Lawton disputed that that meeting ever took place. She said that no meeting ever took place on that day. I also accept Ms Lawton's evidence. 110 I find that no meeting of the board of directors took place on 27 February 2003. The minutes are fictitious. 111 The sum of $6000 was never paid. Mr Nardelli paid $1,600 for the annual licence fee. 112 The records of Manna Hill Mining also claim that there was a meeting of the board of directors at the offices of Richards Commercial Lawyers, Victoria Square, Adelaide on 7 March 2003 at 3.30 pm. At that time, Mr Moore was negotiating with Mr Stephen Hunt, who represented an Austrian company, DCM Mining and Marketing (DCM) for the sale of Manna Hill Mining's interest in its leases to that company. Those negotiations were known to Mr Wilson and Ms Lawton. An agreement was entered into with DCM on 7 March 2003. 113 The minutes of that meeting of 7 March 2003 claim that Mr Moore and Mr Wilson were present. The minutes record: 'It was noted that Gayle Lawton had told directors that she did not wish to attend this meeting with Rob Richards and as such is not present.' Ms Lawton said she was never advised of such a meeting. Her evidence was that she learnt of the meeting only very shortly before she gave her evidence in the trial. I accept her evidence. I find that she was not given notice of a meeting of directors of Manna Hill Mining held on 7 March 2003. 114 Mr Wilson denies being present at that meeting or having any knowledge of it. I accept his evidence. There is evidence to support his statement that he was not present at the meeting. Mr Wilson lives on the Gold Coast. The applicants tendered letters from Qantas and Virgin Blue to establish that Mr Wilson did not travel to Adelaide during March of 2003. 115 The minutes record that the directors resolved to affix the company seal to two agreements with DCM. 116 I find that the meeting of 7 March 2003 did not take place. The minutes are fictitious. I find that Mr Moore prepared the minutes. Of course, he knew that no such meeting had ever taken place. 117 No relief is sought in respect of the meeting of 7 March 2003, nor is any needed.

THE CLAIM THAT MS LAWTON RESIGNED 118 There were no doubt a number of factors which gave rise to the breakdown of the relationship between Mr Moore and Ms Lawton, none of which need be explored. In the end result, the break-up was quite acrimonious and involved a number of arguments over a number of days. Mr Moore described the breakdown in the relationship as a series of rolling arguments over a period between 21 and 24 March 2003. 119 Mr Moore addressed Ms Lawton's 'resignation' in his affidavit of 16 February 2004. He also gave oral evidence on the topic. Mr Moore said that during those arguments and, in particular, on Monday, 24 March 2003, Ms Lawton resigned her position as a director of Manna Hill Mining. 120 He said that she said: 'Well, yes?---Gayle had told me that in all these - the arguments probably commenced late Friday and then rolled through the Saturday and Sunday, through the Monday morning, and several times she said that she wanted nothing to do with the company. Get the stuff out of the house and basically, "No, I don't want any more directorships. Nothing to do with you, the companies or anything." What did you say about directorship?---She had said words--- What did she say?---She said, "Fuck the directorships, too, and I don't want anything fucking to do with those either," in amongst--- When did she say that? Over that weekend?---Yes, several times in amongst saying, you know, "Get the fuck out of the house," and dah dah dah dah, so - I was concerned also with my own safety in a sense because there's teenage children there and I had talked to Rick Goode, a chartered accountant, on the Monday morning about 10 or 11 o'clock about it all and he said, "You'd better get out of there," and later that afternoon I did.' 121 Ms Lawton denied saying that, or anything to that effect. She did admit that on Friday, 21 March 2003, she said to him during an argument: 'I can no longer work with you. I want you and the company out of my house'. She also said: 'I can't fucking work with you any more, David'. She said that she did not use the words 'resign' or 'resignation'. 122 This argument, which continued over the weekend, arose because of Ms Lawton's dissatisfaction with the way in which Mr Moore was running the company. Ms Lawton was still unhappy about the Eastgate transaction and kept reminding Mr Moore of that. 123 She said that on 24 March 2003 Mr Moore asked to borrow her car. She agreed but told him to return it by 5.30 pm. He returned at 6.00 pm and Ms Lawton told him he was late. She left with her children to go out to dinner and, when she returned, Mr Moore was 'loading all his stuff and the company's stuff into the taxi'. Nothing was said by either of them. There was no argument, she said, on the Monday evening. 124 Mr Moore said there was never any dispute between Ms Lawton and him about the Eastgate transaction. He said she willingly signed the transfer. 125 I prefer Ms Lawton's evidence to Mr Moore's. I accept her evidence that there were a number of arguments about Eastgate. I accept her evidence there was no argument on the afternoon or evening of 24 March 2003. I accept that she said that she could no longer work with him and that she wanted him and the company out of the house. I reject his evidence that she said: 'Fuck the directorships, too, and I don't want anything to do with those either.' 126 Mr Moore asserts that, with the words which he said she used, Ms Lawton resigned as a director of Manna Hill Mining to take effect immediately. 127 I specifically find that she said nothing which amounted in fact to a resignation or could have led Mr Moore to think that she had resigned. 128 In my opinion, even if she said what Mr Moore ascribes to her, it would not amount to a declaration, to which she could be held, that she was resigning as a director of the Manna Hill Mining. 129 Article 108 of the company's constitution provides for the circumstances in which the office of a director shall become vacant. It provides: '108. The office of a Director shall become vacant if he:- (a) ceases to be a Director by virtue of the Corporations Law or is prohibited from being a Director by an order made under the Law (b) becomes bankrupt (c) becomes physically or mentally incapable of performing his duties (d) is absent from the Directors' meetings (without appointing any alternative Director) for a period of three calendar months without leave of the Directors or (e) resigns by notice in writing to the Company.' 130 It may be that a director could resign without tendering a notice of resignation in writing. A director could, by conduct, constructively resign. Article 108(d) effectively provides for a constructive resignation. A director could make it plain that he or she was resigning but refuse to reduce the resignation to writing. 131 I have no doubt that Ms Lawton did not intend to resign. Nor did she intend Mr Moore to think that she was resigning. 132 In my opinion, whatever was said, Mr Moore did not believe or think that Ms Lawton was resigning. 133 When he left Ms Lawton's Tennyson house on 24 March 2003, Mr Moore was very angry with Ms Lawton. She had evicted him and Manna Hill Mining from her house. He was determined to ensure that she played no further part in the company's affairs. 134 Mr Abbott QC, who led for the applicants, asked me to find that the fictitious minutes of 26 February 2003 and 7 March 2003 were part of a plan by Mr Moore to remove Ms Lawton as a director using Article 108(d). He contended that Mr Moore had determined to take that course of action because of Ms Lawton's opposition to the Eastgate transaction. That might be right, but that was not put directly to Mr Moore and, because he has not had an opportunity of answering the charge, I will not make the finding. 135 In summary on this topic, I find that Ms Lawton did not resign as a director at any time but, in particular, on 21 March or 24 March 2003. I find that Mr Moore did not believe or think that she had resigned. 136 The applicants have not sought any relief in respect to Ms Lawton's status as a director. However, I think, subject to hearing Mr Moore and Mr Spratt, that it would be appropriate to make a declaration that Ms Lawton did not resign as a director. Mr Abbott submitted that if I found that Ms Lawton had not resigned that finding would be enough to decide all of the issues after 24 March 2003. He argued that Ms Lawton did not receive notice of any directors' meeting after that time. Therefore, he said that all directors' meetings after that time had to be invalid and all business transacted at these meetings void or of no effect. I think that is right, but it still would be appropriate to examine all of the events after that time and until 11 February 2004.

THE BOARD MEETING OF 26 MARCH 2003 137 Mr Moore said that a board meeting took place on 26 March 2003, two days after Mr Moore was asked to leave Ms Lawton's Tennyson house. Ms Lawton disputed that there was ever such a meeting. I accept Ms Lawton's evidence that she was not advised that such a meeting was to be held. Mr Moore did not claim to have advised her. But that is not surprising. His case was that she was not entitled to notice of the meeting because she had resigned. The minutes, of course, do not record Ms Lawton being present. Because I have found that she was a director, it follows that, if such a meeting were to be held, she was entitled to notice: Bell v Burton (1994) 12 ACLC 1037. 138 The minutes claim that Mr Wilson was present by telephone. Mr Wilson denied that he attended a meeting of directors by telephone that day. The minutes record: 'Chairman: D Moore took the chair for this meeting. Business: The directors unanimously ratified and approved the company seal being affixed to contract with our company and DCM. Mr Hunt advised of new office move, as at the 11.00 am meeting in his office informed Wayne Wilson and myself approved seal and signing. Further Mr Hunt informed left Tennyson and Gayle Lawton resigned as director and not wanting to work any more in group. Mr Hunt now taking contract overseas.' 139 The time in the minutes has been altered to record a meeting at 12.00 pm. It is not possible to discern the original time on the minutes. The minutes say Mr Wilson was present at the directors' meeting. There is an endorsement on the top right hand corner of the minutes: 'S Hunt phone [sic] Wayne from his office.' 140 When one reads the minutes carefully, it appears that Mr Wilson was not at the meeting. Indeed, he could not have been present by telephone. There was then no telephone at the address at which the meeting was said to have been held. 141 What in fact occurred, on Mr Moore's account, was that Mr Hunt spoke to Mr Wilson about the contract earlier in the day and Mr Moore treated the conversation between Mr Hunt and Mr Wilson as entitling him to claim that Mr Wilson was present at a meeting of directors. In my opinion, there was no meeting of directors on 26 March 2003: Magnacrete Ltd v Douglas-Hill (1988) 15 ACLR 325 at 333. 142 I accept, because Mr Wilson said so, that at some stage he had a conversation with Mr Moore about the desirability of Manna Hill Mining entering into the contract with DCM, but I reject Mr Moore's claim that there was a directors' meeting or that the resolution recorded was ever put or carried. 143 The minutes, like the minutes of the previous 'two meetings', are fictitious. 144 In this case, they were created, not for the purpose of recording the resolution, which was indeed uncontroversial, but for the purpose of recording Ms Lawton's 'resignation'. 145 A meeting of directors could not have taken place in the absence of Mr Wilson or Ms Lawton. 146 Article 98 of Manna Hill Mining's constitution provides: 'Until otherwise determined by the Company in general meeting, the quorum for every meeting of the Directors shall be:- (a) one Director if the company has only one Director or (b) two Directors in any other case.' 147 The company had three directors at the time. On Mr Moore's own case it had two directors. In those circumstances, a quorum required at least two directors to be present. Mr Moore purported to hold a meeting at which he was the only director in attendance. The meeting was invalid and any resolutions passed void and of no effect. 148 No relief was sought in respect of the meeting of 26 March 2003 and, again, none is needed.

the events between 24 MARCH AND 27 MAY 2003 149 Mr Moore and Ms Lawton met twice between 24 March and 27 May 2003. The first occasion was on 15 April 2003 at 12.30 pm. It was a short meeting. Her evidence was: '… I said I wanted to talk to him about my position in the company and he said, "As far as I'm concerned you don't fucking have one." And I said, "Mr Wilson might see things differently." He said, "You're nothing but a fucking bitch and a troublemaker." And I said, "Well, let's phone Wayne now and organise a meeting." He wouldn't pick the phone up and I said, "David, I want you to phone Wayne now to organise a meeting for the three of us." And he just said, "Get out of my fucking office," so I left.' 150 The second meeting was on 28 April 2003. Ms Lawton said that Mr Moore spoke to her about a meeting because Mr Wilson had told Mr Moore that he wanted Ms Lawton involved somehow in the company. Mr Moore offered Ms Lawton work with Mr Stephen Hunt, who by then had apparently been appointed 'marketing manager'. 151 Curiously, Mr Moore took Ms Lawton to the offices of Duncan Basheer Hannon, solicitors for Manna Hill Resources Pty Ltd, to be briefed on High Court proceedings in which that company was involved. As at 24 March 2003 Ms Lawton was also a director of Manna Hill Resources Pty Ltd. Mr Moore said she resigned all directorships on that day. However, Mr Moore took her to Manna Hill Resources Pty Ltd's solicitors for a briefing. Not only that, when he filed a 'Change to Officeholders' with ASIC on 10 June 2003, he asserted that she had ceased to hold the office of director of Manna Hill Resources Pty Ltd on 5 May 2003. 152 He also filed a Change of Officeholder with ASIC on 10 June 2003 in relation to Manna Hill Mining claiming that Ms Lawton had ceased to be a director of that company on 24 March 2003. He was confronted, in his evidence, with the obvious inconsistency in the documents. He said that Ms Lawton had, in fact, resigned from Manna Hill Resources Pty Ltd on 24 March 2003 in the circumstances previously described but, because that company needed three directors, he had therefore recorded her resignation as occurring later. That was an instance of Mr Moore's use of the truth or otherwise when it suited him. 153 On 28 April 2003, Mr Moore also took Ms Lawton to meet Stephen Hunt. Little or nothing was discussed. I think that meeting occurred only to satisfy Mr Wilson's insistence that Ms Lawton continue to be involved with the company. 154 Between 26 March and 27 May 2003, the applicants spoke to each other about Manna Hill Mining's fortunes. 155 Mr Wilson came to realise that little or no efforts were being made to advance the company's interests and, in particular, to bring the company to a position where it could exploit its mine.

THE EVENTS OF 27 MAY 2003 156 Mr Wilson said that, several days prior to 27 May 2003, he telephoned Mr Moore seeking to have a meeting on 27 May. Mr Wilson said that he asked Mr Moore to attend a meeting on 27 May and to put aside the day for it. Mr Moore denied that any such conversation took place, or that he agreed to have such a meeting, or that he had any notice of that meeting. I reject his evidence. His diary shows an appointment with Mr Wilson at 9.30 am on 27 May and a line through the rest of the day. That is consistent with Mr Wilson's evidence. Mr Wilson's evidence was given prior to Mr Moore discovering his diary. The diary entry is corroborative of Mr Wilson's evidence and, in my opinion, strong evidence contrary to Mr Moore's evidence. 157 Shortly prior to 27 May, the applicants spoke to each other about Mr Moore. Mr Wilson deposed in his affidavit of 9 August 2003 tendered at the trial: '8. As a result of discussions in May 2003 between Ms Lawton and myself, I formed the view that it was no longer in the interests of the shareholders of Manna Hill that the first respondent, Mr David Gerald Moore ("Mr Moore"), continue as a director or secretary of Manna Hill. In particular, I had formed the view that Mr Moore's conduct had had, and would continue to have, a deleterious affect [sic] on the capacity of Manna Hill to enter into contracts with third parties for the provision to Manna Hill of much needed working capital and/or sales by Manna Hill to third parties of the albite/feldspar deposits constituting Manna Hill's mining operations.' 158 The applicants determined that Mr Moore should cease to be the managing director of Manna Hill Mining. They agreed that Mr Wilson should become managing director and that Ms Lawton and Mr Hunt should become manager and marketing manager respectively. They intended to convene a meeting of the board on 27 May 2003 and, at that meeting, to resolve to remove Mr Moore as the managing director: Article 94. There is no doubt that they would have had power to divest him of his position as managing director. The directors, however, could not resolve to remove a fellow director at a directors' meeting. The organ which had the capacity to remove a director was the shareholders: Article 89. That Article provided that the company could, in general meeting by special resolution, remove a director. 159 The applicants also intended to obtain the company's records including its statutory records. Originally, Mr Hunt was to accompany them, but eventually they decided to make the meeting a directors' meeting so they telephoned Mr Hunt and told him not to attend. Mr Moore was given no notice of a proposed directors' meeting. 160 A short meeting, or perhaps it could be better described as a confrontation, took place on the morning of 27 May. The applicants and Mr Wilson's wife, Mrs Patti Wilson, attended at Opal House, the premises to which Mr Moore had removed himself and Manna Hill Mining after the separation from Ms Lawton. Mrs Patti Wilson was not a director. I am not sure how she would have been entitled to be present at a directors' meeting. 161 Mr Spratt was present at the premises and so also was a woman who was employed by a secretarial agency, who had been hired by Mr Moore to do some work on that day. 162 When the applicants and Mrs Wilson arrived, Mr Moore was on the telephone. They waited until he had finished on the telephone and entered his office. 163 Shortly after entering the office, Mr Moore said one of the applicants told him that the applicants had agreed that he was no longer to be the managing director or a director of Manna Hill Mining. Mr Wilson denied having said this. 164 Mr Moore said that he was shocked. That part of his evidence I accept. Between 24 March and 27 May 2003, he had denigrated Ms Lawton to Mr Wilson for the purpose of undermining her position. I am sure he did not expect Mr Wilson and Ms Lawton agreeing between them that he should cease to hold office in the company. It was a complete shock to him that Mr Wilson had taken her part and, indeed, had taken the position that Mr Moore should cease to hold office. I am sure he thought that he had complete control of the company, even though he held only 20 per cent of the company's shares. In my opinion, he thought he could control both Mr Wilson and Ms Lawton, and thereby control the company. 165 Mr Wilson said that Mr Moore became very agitated and threatened to throw the parties out of his office. He was yelling, swearing and wandering around the room. The meeting ended when Mr Moore threatened to call the police. I find that Mr Moore became very cross during the meeting. 166 There was no meeting of directors on 27 May 2003. Even if Mr Moore had not reacted as he had, there could have been no valid meeting. Mr Moore would have been entitled to fair and reasonable notice of the meeting and, in this case, the business to be discussed, which the other directors had resolved upon in his absence. The applicants readily admit that no notice was given. To be fair, the applicants did not contend that a meeting of directors was held on 27 May 2003. 167 Later that day, the applicants and Mrs Wilson attended at Attards Transport Service Pty Ltd (Attards) at Wingfield. Attards transport and store goods. On 15 March 2003 Attards had received some samples of albite ore taken from Manna Hill Mining's mine. Attards was still holding those ore samples from Manna Hill Mining's mine. The applicants went to Attards for the purpose of securing the albite samples. They did that, making two payments due to Attards. On 27 May 2003, Mr Wilson paid $66 in cash for the cartage costs. Two days later, on 29 May 2003, Ms Lawton paid $88 for the storage of the pallet for a period of eight weeks. 168 Whilst they were at Attards on 27 May, the applicants instructed Attards not to allow the release of the samples without reference to Ms Lawton. 169 Mr Moore has vigorously complained of the applicants' conduct in relation to the securing of the albite ore samples. He has rightly pointed out that the ore samples are the property of Manna Hill Mining and not the property of any individual or any director. 170 However, I am sure that the applicants did what they did in an endeavour to preserve the company's property. The albite samples were important to the company. If the company were to market its ore, it needed the samples to show to potential purchasers. That was the purpose of obtaining the samples. 171 Whilst I accept that individual directors could not appropriate the company's property, that was not the purpose, in my opinion, of the applicants' conduct on 27 May 2003. The purpose was, and I so find, to preserve the company's assets. 172 Mr Spratt contacted Mr Wilson later that day and asked to meet with him at the Radisson Hotel. 173 I have no doubt that Mr Moore instigated that contact. I am sure that Mr Moore wanted Mr Spratt to ascertain how determined the applicants were in relation to removing him as managing director and taking effective control themselves. He may well have also wanted to mend bridges. 174 Mr Spratt met with Mr and Mrs Wilson at the hotel but the meeting came to an abrupt end when Mr Moore entered the hotel. Mr and Mrs Wilson left immediately. 175 Mr Moore's arrival at the hotel, in my opinion, supports the finding that Mr Spratt was being used for the two purposes which I have mentioned. I think Mr Moore hoped that, by the time he arrived, it would have been possible to communicate with Mr Wilson. 176 On 27 May 2003, Mr and Mrs Wilson also attended upon Iles Selley, solicitors, and although there is no evidence of what communications were had between Mr and Mrs Wilson and the solicitors, I think I can infer that the solicitors were retained to act in relation to the dispute between Mr Wilson and Mr Moore. That inference arises from the date of the meeting and from a letter dated 30 May 2003 written by Iles Selley to Mr Moore.

EVENTS BETWEEN 27 MAY AND 12 JUNE 2003 177 Iles Selley had acted for the defendants in the Supreme Court proceedings instigated by Bentlee. Thus, they had acted for Manna Hill Mining, Mr Wilson, Ms Lawton and Mr Moore. Mr Iles, a principal in the firm, was well known to Mr Moore. They were on first name terms. 178 The letter of 30 May 2003, which was addressed 'Dear David,' was said to have been written on behalf of the 'Wilson Family Trust' on the instructions of Wayne and Patti Wilson. 179 The relevant terms of the letter are: 'Both Wayne and Patti have grown increasingly frustrated at your failure and/or inability to progress the Manna Hill Mine to an operational stage or to effect the realisation of the company's interests in that mine, whether by way of sale or joint venture. The concerns which Wayne and Patti have are shared with Gayle Lawton. I am instructed that recently Wayne, Patti and Gayle attended at the offices of Manna Hill Mining in King William Street and demanded that you: (a) cease representing the interests of Manna Hill Mining in further discussions/negotiations with parties interested in developing the mine and its significant asset; (b) hand over to Gayle the statutory books and records of the company. I am instructed that you refused to do either and, in fact, asked them to leave the office and even threatened to call the Police unless Wayne, Patti and Gayle did so. Wayne and Patti do not believe that you can continue in the role of Director of Manna Hill Mining or that your continuing to do so is in the best interests of the company and its shareholders. Both of them recognise that it may be necessary to force an Extraordinary General Meeting of shareholders to have you removed as a Director. If that can be avoided, they would prefer that you stand down consensually and the purpose of this letter is to secure your resignation in order to avoid that prospect. I have enclosed a pro forma letter which I would grateful [sic] if you would sign and return to me, together with the statutory books and records, within the next seven days. In addition to lodging the necessary Change of Office Holders/Address with ASIC, I would anticipate that the Board of Manna Hill Mining would then convene for the purposes of appointing a new Director. As you know, you are a 20% holder of Manna Hill Mining. Both Wayne and Patti believe that this stop will assist all shareholders in maximising the true value of this company and its significant albite resource. You as a shareholder will benefit in that. I would be grateful if you would carefully consider your position, execute the attached letter of resignation and forward it to me as soon as possible and, in any event, within the next seven days.' 180 A notice tendering Mr Moore's resignation was attached to the letter for him to sign. 181 The events of 27 May 2003 had made Mr Moore extremely angry. I accept his evidence that the receipt of the letter of 30 May 2003 heightened his anger. He was not only angered by the further invitation to resign as a director, but he was also extremely angry that Iles Selley had consented to act for Mr and Mrs Wilson and take a position adverse to his. 182 Mr Moore complained about Iles Selley acting for the applicants in this matter. Initially, he sought to have them cease acting. He abandoned that application. However, in the trial he renewed his complaints about those solicitors acting for the applicants without seeking to have them cease acting. 183 Because it is not relevant to these proceedings, I offer no opinion as to whether those solicitors should have acted for the applicants. 184 On 3 June 2003, Mr Moore and Mr Hagger visited Attards with the intention of obtaining access to the albite samples. Whilst at those premises, they were told by Attards' staff that the samples could not be released to Mr Moore because they had been told that he was no longer a director of the company. 185 Mr Moore became very angry. Mr Hagger telephoned Ms Lawton and told her that the samples were company property and that they belonged to the company. During that conversation, Ms Lawton could hear Mr Moore yelling in the background and she asked to speak to him. He refused. She heard him yelling: 'I am fucking managing director and I'm fucking chairman of this fucking company and I can do what I want with them'. 186 Mr Moore put to Ms Lawton that her evidence in that regard was a fabrication. She responded by saying that Mr Moore could call the female receptionist at Attards. He indicated that she would probably be called. She was not. Mr Hagger, who was at Attards with Mr Moore on 3 June 2003, recalled speaking to Ms Lawton in Mr Moore's presence, but said he did not recall much of the conversation. His evidence was that Mr Moore was 'shocked' by what transpired at Attards. 187 I accept Ms Lawton's evidence of the conversation she had with Mr Hagger and what she heard Mr Moore say. 188 Her evidence is consistent with the surrounding facts. Mr Moore was becoming increasingly angry at the conduct of the applicants. 189 The end result was that Mr Hagger and Mr Moore did not get access to the samples. They were later removed by Ms Lawton and stored elsewhere. Mr Moore claims that the removal of the samples involves some criminal offence. Again, in my opinion, the ore samples were removed by Ms Lawton in order to preserve them. She was concerned that the samples should not be lost whilst the dispute between the applicants and Mr Moore remained unresolved. 190 In June 2003, and probably on 4 June 2003, Mr Moore spoke with Mr Peter Humphries, solicitor of Duncan Basheer Hannon, and instructed that firm to act. 191 Mr Spratt approached Mr Iles requesting him to meet with Mr Moore and himself. That contact was again instigated by Mr Moore. 192 Mr Spratt wrote to Mr Iles on 4 June 2003 enclosing some papers. He advised Mr Iles that at the proposed meeting: '… we will explain the considerable activity carried out in recent weeks to protect the mine and the interests of the company. The mining lease assets are potentially at risk. This has been explained to Wayne Wilson before on several occasions.' 193 Mr Moore's solicitors were aware of the meeting. They wrote to Mr Iles on 5 June 2003 acknowledging that the meeting would take place. 194 Mr Iles agreed to a meeting which took place on 10 June 2003 at Opal House. Mr Moore, in the presence of Mr Hagger and Mr Spratt, prepared some handwritten notes for the purpose of meeting with Mr Iles on 10 June 2003. The handwritten notes were circulated to the persons in attendance. Those attending the meeting were Mr Moore, Mr Spratt, Mr Iles and Ms Felicity Kerr, a solicitor in Mr Iles' office. Mr Moore left the meeting for a short period of time, probably between 20 and 30 minutes. His absence during that time is irrelevant. 195 Mr Moore's notes raised a number of diverse topics. It was proposed in the notes that Mr Hagger become financial director and Mr Hunt, marketing/sales director. Mr Moore's duties were set out. Mr Wilson would remain a director. There would be meetings of directors every two months. The samples at Attards should be returned to the company. The notes indicate that Mr Moore was advised by Attards: 'no longer a director and no longer involved'. 196 The notes include the following: 'David Moore told by Gayle Lawton in March she no longer wanted to be involved, resigned as a director and further reiterated this point early April and refused to work here in the offices.' 197 The notes make reference to the company's involvement with DCM. The notes include a complaint that the company never received the $100,000 of working capital. They conclude: 'David Moore and/or nominee offers Wayne Wilson $500,000 for his share holding.' 198 It was Mr Moore's evidence which was supported by Mr Spratt that all of the matters in the notes were discussed. 199 Ms Kerr made notes of the topics raised at the meeting and of the comments by the various parties. I find that her notes are an accurate record of the matters discussed at the meeting. 200 Relevantly, she has noted that Mr Spratt said: 'Changes that will occur in the company is that Graham Haggart [sic] who is a chartered accountant and involved with Hodgemore Pty Ltd is prepared to become an adviser.' 201 Hodgemore Pty Ltd was appointed by the Federal Court as the corporate trustee of a native title claim over land upon which the mine was located. Hodgemore Pty Ltd was under the control of Mr Hagger and Mr Moore. The meeting was not advised of that matter. 202 There were a number of matters discussed, which are not relevant for the purpose of determination of the issues in this case. 203 However, the notes record that: 'David Moore makes a serious offer for Wayne's shareholding. Offers $500,000.' 204 The last matter recorded by Ms Kerr is: 'Before any direct action is taken in relation to removing Mr Moore from the Board his position needs to be made concrete and the start up and working capital problem needs to be resolved.' 205 I accept Mr Iles' evidence that nothing was resolved at the meeting. I accept his evidence that the matters in Ms Kerr's notes were discussed. 206 As I have already noted, on the same day, 10 June 2003, Mr Moore filed a Notice of Change to Officeholders of Manna Hill Mining and Manna Hill Resources Pty Ltd with ASIC claiming that Ms Lawton had resigned as a director on 24 March 2003 and 5 May 2003 respectively. 207 On or about 11 June 2003, Mr Moore met with Mr Hagger over a period of between three and five hours. 208 The purpose of the meeting was to identify resolutions which needed to be put at a directors' meeting which Mr Moore intended to convene the next day. Mr Spratt was present, from time to time, at the meeting. 209 It was both Mr Moore and Mr Hagger's intention that a meeting of directors would be convened on 12 June 2003. Mr Moore did not intend to give notice to Ms Lawton, whom he considered was no longer a director. It was his intention to call a meeting without warning to Mr Wilson, have himself appointed chairman, have Mr Hagger appointed a director, and then to put the necessary resolutions which would strip Mr Wilson of his majority shareholding and leave him a minority shareholder. I find that the purpose of the meeting between Mr Hagger and Mr Moore was to identify precisely the resolutions and the order in which the resolutions needed to be put to a meeting of directors, so as to obtain Mr Hagger's appointment as a director and the passing of other resolutions which would strip Mr Wilson of his majority interest in the company. 210 That finding can be made without any difficulty. Mr Moore himself said what was done was calculated and cold blooded. That part of his evidence, I accept.

THE MEETING OF 12 JUNE 2003 211 All four persons who were present at the meeting of 12 June 2003 have given evidence. Before addressing the evidence, it is necessary to say something about how the meetings came about. 212 Ms Lawton was not given any notice that there was to be a meeting. That is hardly surprising because Mr Moore wrongly claimed that she was not a director of Manna Hill Mining. Of course, it suited him to say that she had ceased to be a director. If it were otherwise, any meeting which he called, and of which all directors were given notice, would leave him in a minority. He needed her not to be a director, because then if he were appointed chair of the meeting, which invariably he was, he could use his casting vote to his advantage and Mr Wilson's disadvantage. 213 Because of my finding that Ms Lawton was a director of Manna Hill Mining, she was entitled to have proper and adequate notice of any proposed meeting of directors. 214 Mr Wilson was not given any proper notice of the meeting. At about 2.35 pm, Mr Moore telephoned Mr Wilson on Mr Wilson's mobile telephone. During this conversation, which lasted only a few seconds, Mr Wilson told Mr Moore that he was on his other telephone. Mr Moore asked him to ring back and Mr Wilson agreed. 215 Mr Wilson rang back. The second call lasted 2 minutes 17 seconds. It is Mr Moore's contention that the second telephone call constituted a meeting of the board of directors of Manna Hill Mining. If it was a meeting of directors then it was called and convened in circumstances where one director had no notice of the meeting and the other director had inadequate notice. 216 Mr Moore wrote up minutes of the meeting after the meeting. On 10 July 2003, both Mr Hagger and Mr Spratt signed page 2 of the minutes - in Mr Spratt's case, under the words 'True and Correct Record', and in Mr Hagger's case opposite those words. One thing is certain and that is that they are not a true and correct record of the meeting. Mr Moore acknowledged that in his cross-examination. However, it would be appropriate to set out the minutes and address the matters raised: 'Minutes of the Meeting of the Directors of Manna Hill Mining Company Pty Ltd held at 1st floor, Opal Field House 29-31 King William Street Adelaide on 12 June 2003 at 2.35pm PRESENT: David Moore Dene Spratt (present) Wayne Wilson (by telephone) Graham Hagger (by invitation) CHAIRMAN: David Moore took the chair for this meeting APPOINTMENT OF DIRECTOR: In the best interests of the Company it was RESOLVED that GRAHAM DESMOND HAGGER be hereby appointed a DIRECTOR of the Company. The Secretary to attend and update ASIC records. ALLOTMENT OF SHARES: In the best interests of the Company it was RESOLVED to allot and issue to the persons described below and to subsequently enter those details in the Register of Members: ● EAST ADELAIDE COMPANY PTY LTD as the holder of 400 ORDINARY SHARES NUMBERED 1558 to 1957 (INCLUSIVE) at an issue price of $1 - per share. ● HODGEMORE PTY. LTD as the holder of 400 ORDINARY SHARES NUMBERED 1958 to 2357 (INCLUSIVE) at an issue price of $1 - per share. ● DENE ROBERT SPRATT as the holder of 1 ordinary share numbered 2358 at an issue price of $1 - per share. ● STEPHEN JOHN EWEN as the holder of 1 ordinary share numbered 2359 at an issue price of $1 - per share. ● GRAHAM DESMOND HAGGER as the holder of 1 ordinary share numbered 2360 at an issue price of $1 - per share. REGISTERED OFFICE: RESOLVED that the Registered Office continue to be at Level 1, OPAL FIELD HOUSE, 29-31 KING WILLIAM STREET, Adelaide S.A. The SECRETARY, MR MOORE, had recently advised ASIC of CHANGE. ISSUE OF SHARE CERTIFICATES: It was RESOLVED to issue NEW SHARE CERTIFICATES and for the Common Seal of the Company to be affixed in accordance with the CONSTITUTION. RESIGNATION OF DIRECTOR; The CHAIRMAN informed that GAYLE LAWTON RESIGNED as a DIRECTOR on 24 MARCH 2003 AND THAT THE SECRETARY HAD ADVISED ASIC (FORM 304) on 10 June 2003. PREVIOUS MINUTES: The MINUTES of the previous meeting were READ and at the DIRECTION of the Meeting signed by the CHAIRPERSON as a correct record. OTHER BUSINESS: THERE BEING NO further business the Meeting was declared CLOSED.' 217 Mr Hagger swore an affidavit and was called by the applicants to give evidence. He was cross-examined by Mr Moore. 218 Mr Moore complained, on a number of occasions, about Mr Hagger's and Mr Iles' conduct. He asserted that Mr Iles had threatened and intimidated Mr Hagger from a time immediately after the 12 June 2003 meeting with the result that Mr Hagger had co-operated with the applicants and had given false evidence in support of their case. Mr Hagger told Mr Moore that he thought that Mr Iles' telephone calls were intimidatory. 219 The evidence discloses that Mr Iles contacted Mr Hagger immediately after the 12 June meeting. He had what Mr Iles described as a frank discussion with Mr Hagger. I have no doubt that Mr Iles made Mr Hagger aware that he considered the 12 June meeting invalid and the resolutions purportedly put and carried as void and of no effect. I have no doubt that Mr Iles told Mr Hagger that his instructions would be to bring proceedings against Mr Hagger and that Mr Hagger would be at risk for costs. 220 I do not think, however, that Mr Iles' conduct can be described as threatening or intimidatory. I accept that Mr Hagger co-operated with the applicants because he thought that otherwise he would be at the risk of costs in defending the proceedings. I do not think, however, that his evidence was coloured or affected by any conduct of Mr Iles or for any other reason. I thought Mr Hagger was a good witness and, as I have previously said, I accept his evidence. 221 Mr Hagger is a chartered accountant and a shareholder and director of the fourth named respondent, East Adelaide Company Pty Ltd. He has known Mr Moore for more than 20 years. 222 Some time early in 2003, he was approached by Mr Moore seeking his assistance to deal with representatives of the Adnyamathanha people on whose lands Manna Hill Mining and Manna Hill Resources Pty Ltd have mining tenements. He was asked by Mr Moore to become a director of Hodgemore Pty Ltd, which he did on 3 April 2003. 223 ASIC documents show that he ceased to be a director of Hodgemore Pty Ltd on 22 July 2003. He has never resigned as a director. It is likely that Mr Moore advised ASIC that Mr Hagger had resigned following events on 9 July 2003 to which I will refer later. 224 This is, again, an example of Mr Moore's untruthfulness. He was prepared to advise ASIC that Mr Hagger had resigned knowing full well that Mr Hagger had not. 225 Mr Hagger became reasonably well acquainted with the shareholding and the directorships of Manna Hill Mining prior to June 2003. 226 In June 2003, Mr Hagger was advised by Mr Moore and Mr Spratt that Mr Wilson and Ms Lawton were planning to take steps to remove Mr Moore as a director of Manna Hill Mining. Mr Moore told him that Mr Wilson held 70 per cent of the shares in the company and was therefore in a position to effect Mr Moore's removal. 227 Mr Hagger said that on 12 June 2003 Mr Moore informed him, in Mr Spratt's presence, that Mr Moore had decided on a course of action to prevent Mr Wilson and Ms Lawton removing Mr Moore as a director of Manna Hill Mining. Mr Moore told Mr Spratt and Mr Hagger that he was going to appoint Mr Hagger as a director of Manna Hill Mining and that he would allot further shares in Manna Hill Mining to persons associated with Mr Moore 'to dilute the shareholdings of other shareholders'. 228 Mr Hagger said in his affidavit: 'Mr Moore made it clear to me that the objective in these steps was to frustrate Mr Wilson and Ms Lawton's attempts to remove him as a director and secretary of Manna Hill.' 229 Mr Hagger was aware, prior to Mr Moore telephoning Mr Wilson, that Mr Moore intended that Mr Hagger be appointed a director. In fact, Mr Hagger signed a consent to act as a director of Manna Hill Mining about one half hour before the telephone conversation of 12 June 2003. He was also aware that Mr Moore intended to propose to Mr Wilson that sufficient shares be issued which would have the effect of making Mr Wilson a minority shareholder, although he was not sure how Mr Moore intended to go about it. 230 Mr Hagger admitted that prior to the meeting he discussed with Mr Moore becoming finance director of Manna Hill Mining. They also discussed East Adelaide Company Pty Ltd being the vehicle to raise additional capital for the company and the possibility of Hodgemore Pty Ltd obtaining Federal funding. 231 Mr Hagger deposed in his affidavit: '16. To the best of my capacity to recall these matters, the telephone conversation proceeded in the following sequence: 16.1 Mr Moore informed Mr Wilson that "Wayne, this is a directors' meeting"; 16.2 Mr Moore informed Mr Wilson that he was working on the purchase of Mr Wilson's shares and there was some discussion about price; 16.3 Mr Moore informed Mr Wilson that he wished to propose a resolution for the appointment of myself as a director, to which Mr Wilson said words to the effect: "I would like more time to think about that", as a consequence of which Mr Moore did not pursue the matter; 16.4 Mr Moore then said that he wished to propose a resolution to issue some more shares, to which Mr Wilson said that he would not agree to the issue of any more shares and that "these things have to be done properly", as a result of which Mr Moore immediately hung up the phone, ending the conversation. 17. At no time during the course of this telephone conversation did I hear either Mr Moore or Mr Wilson formally put forward a resolution, or vote upon any resolution, in relation to my appointment as a director or the allotment of further shares. 18. Moreover, at no point in this telephone conversation was any vote taken in respect of either or any other matter. 19. Further, at no point in the telephone conversation was there any discussion about how many shares might be allotted or to whom those shares might be allotted.' He did not resile from that evidence in his oral evidence. Indeed, his oral evidence was quite consistent with the matters in his affidavit. 232 The only variation in his oral evidence from that contained in his affidavit was that he said that the word 'resolution' was not used at any time during the telephone conversations. That, however, is not material. 233 In his oral evidence, in cross-examination, he was asked by Mr Spratt: 'At some stage was the subject of Mrs [sic] Lawton mentioned?' He answered: 'Yes, she was, earlier on. Good heavens, it was mentioned just after the sale of the shares that Moore said he would do on Wilson's behalf. Moore said that Gayle had resigned as a director. Wilson said that he had spoken with Gayle and said, "That's not the case". That was it.' 234 He said that Mr Moore did not say that he wanted a directors' meeting in the first telephone call. He said that Mr Moore was speaking loudly and shouting. He said the words 'casting vote' were used by Mr Moore at the end of the conversation, but not earlier. 235 Specifically, he said that Mr Moore did not say at any time how many shares should be issued and to whom they should be issued. He said that his own name was not mentioned as a shareholder, nor was Mr Spratt's or Mr Ewen's. There was no mention of East Adelaide Company Pty Ltd or Hodgemore Pty Ltd. 236 Mr Hagger resigned as a director on 9 July 2003. By then he was well aware that Messrs Iles Selley intended to issue proceedings in relation to the meeting of 12 June 2003. That resignation motivated Mr Moore to falsely advise ASIC that Mr Hagger had resigned as a director of Hodgemore Pty Ltd. Mr Hagger signed the minutes of the meeting of 12 June 2003 on 10 July 2003, the day after he resigned as a director. 237 He could give no reason for signing those minutes as a true and correct record. He said that he did not believe that there was a directors' meeting at all and, in those circumstances, there was no harm in signing the minutes. He knew that the minutes were not accurate, but signed them knowing them not to be true. He said that he regretted his action in that regard. 238 I have given that matter anxious consideration but, in the end, I am not persuaded that his evidence should not be accepted because he signed those minutes knowing them not to be true. 239 I think Mr Hagger was in a position where he was being pressed by an acquaintance of 20 years standing to sign a document. He did not think that it would matter if he signed it. I think he thought that his resignation meant that the meeting could have no effect. 240 Two affidavits sworn by Mr Wilson were tendered and he gave evidence. In an affidavit sworn on 9 August 2003 he deposed: '11. I recall that on Thursday 12 June 2003, in the early afternoon, I received a telephone call from Mr Moore. The call was received on my mobile phone and I immediately told Mr Moore that I would ring him back on his landline. This call was unexpected. I had no previous notice that Mr Moore intended calling me or as to the matters which he wished to discuss. 12. I then rang Mr Moore back. He said "Hello". He then said, "Wayne, Graham Hagger says hello". I believe this to have been a reference to the third named respondent, Graham Desmond Hagger ("Mr Hagger"). I had not, at that time, and still have not, met Mr Hagger. 13. Mr Moore then said words to the effect that: "Wayne, did you know Gayle Lawton has resigned as a director?". I responded by saying that I did not believe that this was the case. Mr Moore then said that Ms Lawton was a liar. 14. Mr Moore then said: "Wayne, I'm appointing Graham Hagger as a director and I'm also issuing more shares." 15. I then said: "David, you can't do that and I don't agree", whereupon Mr Moore replied in words to the effect that he would take these steps whether I liked it or not. He then hung up the telephone. This was the last occasion on which I spoke with Mr Moore. 16. I believe that this conversation lasted no more than 30 or so seconds.' 241 Mr Wilson agreed that he had received the notes of meeting of 9 June 2003 from Mr Iles, some time after 10 June 2003, but he said he had not read the contents of the document prior to speaking to Mr Moore on 12 June 2003. 242 He said he never read the notes of 9 June 2003. 243 In cross-examination, Mr Wilson said that he had never heard of Mr Hagger before 12 June. 244 He denied that Mr Moore said that he wanted to have a directors' meeting or that Mr Moore said he would like to chair the meeting. 245 He denied that Mr Moore proposed a resolution that Mr Hagger be appointed a director or that he said 'that's fine, it's okay'. 246 He admitted that Mr Moore said that he wished to propose a new share issue, but denied that Mr Moore referred to the number of shares to be issued or the price at which the shares would be issued. 247 He said: 'I said words to the effect, "I do not agree with the appointment of Graham Hagger as a director, the issuing of more shares. I have not heard about Ms Lawton resigning as a director. I do not agree and you cannot do it", and you said, "Well, I'm fucking well doing it" and hung up.' 248 He denied that Mr Moore asked Mr Hagger whether he voted for the share issue and Mr Hagger saying that he did. 249 Mr Wilson admitted that Mr Moore hung up abruptly after Mr Wilson said that he did not know that Gayle Lawton was no longer a director and Mr Moore said: 'Another fucking lie she has told you'. 250 Mr Wilson's account of the meeting of 12 June 2003 is consistent with that of Mr Hagger. In my opinion, their account is inherently plausible. Mr Moore tendered three affidavits of his own as part of his case. Only one sheds any light on the events of 12 June 2003. 251 In his affidavit of 29 August 2003, Mr Moore deposed: '34. We had a telephone meeting on 12 June 2003. At that meeting I proposed that Mr Graham Hagger be appointed as a director. I understood from my dealings with Mr Hagger that he had particular skills and experience in capital raising and that he would be in a position to raise a substantial amount of money for the company in order to fund its activities. It was my view that it was in the best interests of the company to have Mr Hagger appointed as a director. Mr Wilson objected to his appointment. I used my casting vote in favour of his appointment. 35. I proposed that shares be allotted to Mr Hagger and his company as an incentive to procure the necessary investment. In my opinion it was in the best interests of the company for those shares to be issued to Mr Hagger. Mr Wilson voted against the resolution. I used by [sic] casting vote as chairman in favour of the resolution. 36. I proposed that a share be issued to Mr Spratt. Mr Spratt is an experienced advocate and negotiator and I believed that he would be able to assist the company to resolve the native titles issues relating to the mining leases. Mr Wilson voted against the resolution. I used my casting vote in favour of the resolution. 37. I proposed that a share be allotted to Mr Stephen John Ewen. Mr Ewen I Aboriginal and has considerable experience in the mining industry and worked for the Mines Department for about 20 years and has considerable knowledge on native title issues and knows the claimants. It was my opinion that it was in the best interests of the company for it to have access to Mr Ewen's skills and experience. Mr Wilson voted against the resolution. I used my casting vote as chairman in favour of the resolution. 38. Hodgemore Pty Limited a company of which I am a director. It was appointed as corporate trustee of the Adnyamathanha people by an Order made by Justice Mansfield in the Federal Court on 2 April 2003 in respect of a dispute involving native title claims in the area in which the company's mining leases are situated. It was in my opinion in the best interests of the company for Hodgemore Pty Limited to be issued with shares in the company. Mr Wilson voted against the issue. I used my casting vote as chairman in favour of the resolution.' 252 His evidence, which is contained in those paragraphs, cannot be reconciled with the evidence of Mr Wilson and Mr Hagger. 253 In cross-examination, Mr Moore agreed that to the extent that his affidavit describes the manner in which the resolutions were put at the 12 June meeting (ie, as individual resolutions), the affidavit is false. He also agreed that there is no reference in his affidavit to Mr Hagger taking any active part in the meeting of 12 June 2003. As will be shown below, Mr Moore's evidence at the trial was that Mr Hagger was actively involved in the resolutions purportedly put on 12 June 2003. 254 At the trial, Mr Moore said that he and Mr Hagger met on 11 June 2003 and spent several hours going through provisions of the Act to identify 'how you can do things as directors'. Mr Moore said that he and Mr Hagger discussed appointing Mr Hagger as a director and also discussed issuing shares to East Adelaide Company Pty Ltd, Mr Hagger, Hodgemore Pty Ltd and Mr Ewen. 255 Mr Moore acknowledged that at this time, Mr Wilson held 70% of Manna Hill Mining's issued share capital but claimed that it did not occur to him that issuing shares would dilute Mr Wilson's shareholding and transfer control of Manna Hill Mining to Mr Moore and Mr Hagger. 256 According to Mr Moore, he and Mr Hagger identified what resolutions would need to be put at the meeting of 12 June 2003. He said: '… And that the first resolution put would be for Graham Hagger to come on board as a director, and then the second resolution would be the resolution to issue the shares …' He continued: '…Graham would be present when we got the meeting organised for Wayne and that was the critical step - the appointment of Hagger as the director in accordance with the constitution - and then if there was any dispute by Wayne, which I expected there was going to be on the share issue, that that was approved because of the appointment of Hagger as a director.' During his evidence, I asked Mr Moore: Q. So you deliberately intended to have Mr Hagger appointed so that you could overrule any objection Mr Wilson might make to the share allotment? A. Yes. Q. Alright. A. It was a deliberate, cold-blooded, calculated plan.' 257 Mr Moore moved to the events of 12 June 2003. He said that he rang Mr Wilson in the presence of Mr Hagger and that before Mr Wilson explained to him that he was on another call, Mr Moore told him why he was ringing. He said: 'I said, "Wayne, I've got Graham Hagger here." He said, "Yes". I said, "Have you got Nick's [Iles] notes of our meeting?". He says, "Yes". He says, "I want 700, not 500", and I said, "Well, I want to have a directors' meeting. I've got Dene Spratt here. Could you?" He said, "I'm on the other line here and I'll ring you back", and I gave him the number.' 258 Mr Moore agreed that this was the only notice he had given to Mr Wilson that there was to be a directors' meeting on 12 June 2003. He said that he gave Mr Wilson's solicitor, Mr Iles, notice of the meeting but had not given Mr Iles copies of the resolutions to be put. 259 His evidence of the way the meeting transpired was in stark contrast to Mr Wilson's evidence. Mr Moore said that when Mr Wilson returned his phone call on 12 June 2003, the following discussion took place: 'I said, "G'day", and he said, "Hi", and I said, "I've got Graham here. We're on speaker phone." He said, "Yes", and Graham said hello and he said, "Hello Graham", and I said, "Dene's present here", and he said, "Okay", and he said, "I want 700 David, not 5." I said, "Well, look, we are trying to propose that, straighten that out. First of all I want to put Graham as a director, have a directors' meeting now and I'll take the chair." He said, "Okay". I said, "I propose that Graham be a director", and he said, "That's okay", and he said, "Graham, I want 700, not 5", and then I said, "Graham's voting for a directorship. I vote. You vote." He said, "Yes", and then I said, "I want to also now propose a share issue to balance the company up and get some shares for Graham", and then I said, "I want you to propose 400 shares to East Adelaide, 400 Hodgemore, one to Spratt, one to Steve Ewen, and one to Graham Hagger", and I said, "I'm proposing that would be a dollar." He said, "I don't know". I said, "Well, I want to put the resolution up", and he says, "I don't know". I said, "Wayne, I want to put the vote up now. Graham, are you voting for it?" and he said, "Yes". I said, "Wayne, I'm voting for it". He said, "I don't know". I said, "I'll record you as not voting for it", and he said, "Okay"'. I said, "I'm also casting my vote as chairman." And then he said, "Well, I don't know", and I said, "We've got to do this in the best interests of the company", and then, "It's a way of getting the 500 up - or you want 7 now but Graham knows what you want, and we think we can do it". Then I think he said then to me, he said, "I think Gayle [Lawton] should be here", and then I said, "Well, Gayle's not a director. You know that", and he said, "I think she should be here." I said, "Look", I said, "she's not a director. You know she's not a director." And then I just said - he said, "Well, I think she's a fucking liar. She's causing a lot of trouble and we've taken this company forward", and I hung up.' 260 Mr Moore then organised the share certificates. 261 Mr Moore maintained in cross-examination that the purpose of the meeting of 12 June 2003 was to stabilise Manna Hill Mining and raise capital. The meeting raised $403 of capital. It is very difficult to see how any substantial amount of capital could have been raised by the resolutions supposedly put at the meeting, in the form they were put. I do not accept this explanation. 262 For reasons I have already given, I do not accept Mr Moore's evidence on this topic except where it is consistent with Mr Wilson's evidence. 263 This meeting took only 2 minutes and 17 seconds. It would not have been possible, with the rest of the exchange, to have put the matters in the minutes. 264 In my opinion, no valid meeting of directors ever took place on 12 June. 265 That follows from the failure by Mr Moore to give any notice of the meeting to Ms Lawton and because he did not give reasonable notice to Mr Wilson. Moreover, for the reasons given, no resolution was put or passed to appoint Mr Hagger as a director. No resolution was put or passed to issue or allot any of the shares referred to in the minutes. 266 It follows, that Mr Hagger was not appointed a director. Nor did the directors ever resolve to issue the shares which were issued and allotted that day. 267 The meeting of 12 June 2003 was invalid and the resolutions purportedly passed at that meeting are void and of no effect. 268 Later that day, Mr Moore filed a Notification of Change of Officeholder with ASIC claiming that Mr Hagger had been appointed a director on 12 June 2003. As well, ASIC was notified by Mr Moore that 803 shares had been issued for $803 cash. All of the parties referred to in the minutes, Messrs Hagger, Ewen and Spratt, and East Adelaide Company Pty Ltd and Hodgemore Pty Ltd, applied for shares in Manna Hill Mining. Shares were allotted in accordance with the 'minutes' and share certificates issued. In my opinion, those shares were not allotted in accordance with the constitution of the company. 269 The number of shares on issue purportedly increased from 1060 to 1863. Mr Wilson's holding stayed the same but the percentage of shares held by him fell from 70 per cent to just less than 40 per cent.

THE EVENTS AFTER 12 JUNE 2003 270 On 13 June 2003, Mr Wilson wrote to Mr Moore in the following terms: 'I refer to our telephone conversation of yesterday's date (Thursday June 12, 2003). Please be advised that I totally disagree with the following:- ● The allocation of more shares ● The appointment of Graham Haggart [sic] as a director Also please be advised that having checked with Gail [sic] Lawton she has no knowledge of ever resigning as a director either verbally or in writing, as you also claimed.' A copy was sent to Mr Hagger. 271 On 13 June 2003, the applicants purported to call an extraordinary general meeting of the shareholders of Manna Hill Mining for the purpose of putting a resolution removing Mr Moore as a director and secretary of the company with immediate effect. 272 On 16 June 2003, Ms Lawton wrote to Mr Moore and Mr Hagger advising that 'at no time have I resigned either verbally or in writing as a Director of Manna Hill … as per your phone conversation with … Wayne Wilson … on Thursday June 12 2003'. 273 On 30 June 2003, the applicants' solicitors wrote to both Mr Moore and Mr Hagger disputing the claim in the ASIC documents that Ms Lawton had resigned as a director and Mr Hagger had been appointed, and disputing the claim of the allotment of 803 shares. 274 The letter to Mr Hagger was in the following terms: 'Dear Sir Manna Hill Mining Company Pty Ltd ("Manna Hill") We enclose a letter which we have sent, today, to Mr David Moore. The contents of this letter will be self-explanatory. You should read it carefully and take legal advice on it. We presume that you have been issued with all or part of the 803 shares purportedly issued by Manna Hill on 12 June 2003. Please tell us if we are wrong in this. If you do not take immediate steps to facilitate the remedying of ASIC and Manna Hill records to reflect the fact that:

1. Ms Gayle Lawton is and remains a Director of Manna Hill;
2. You are not; 3. You have not been issued with shares and/or, in any event, have no entitlement to the issue of shares purportedly made to you we propose to report your conduct to ASIC. If these matters remain unrectified, your conduct will be the basis of an application to the Supreme/Federal Court for declaratory orders and other relief in respect of which you will be a party. We repeat what we have said to Mr Moore in relation to the question of indemnity costs if you force our clients - Mr Wilson, Ms Lawton and the Wilson Family Trust - to make application to the Supreme/Federal Court. Please take immediate action to remedy the situation. Our clients' rights are fully reserved.' 275 The letter is very firm in its terms but no more than necessary. 276 For the reasons already given, the letter did not amount to intimidatory behaviour. 277 On 9 July 2003, Mr Hagger wrote to Iles Selley advising that he had resigned as a director and that he would not deal in the shares issued to him for the period of the dispute. On the same day, he resigned as a director. 278 On 11 July 2003, Mr Moore's solicitors, Duncan Basheer Hannon, wrote to the applicants' solicitors disputing the applicants' right to call an extraordinary general meeting on the ground that there had been no prior resolution of directors. After referring to other matters, the letter concluded: 'Rather than become involved in what is needless litigation, Mr Moore's proposal is as follows: (a) that your clients formally withdraw the Notice of Meeting by writing to all shareholders; (b) that your clients withdraw the threat of litigation; (c) that Ms Lawton confirm forthwith that she has resigned as a director; (d) that a meeting of directors of the Company be convened for Wednesday 30 July 2003; (e) that Mr Wilson in the meantime formulate a proposal to be considered at the meeting in relation to: (i) which persons should be approached to act as directors of the Company; (ii) what proposal he has in relation to raising working capital for the Company. (f) that Mr Wilson immediately authorise the release of the samples to Mr Moore. We look forward to receiving your urgent response in relation to this letter.' 279 Mr Moore contended, when addressing the validity of the 'meeting' of directors on 30 July 2003, that his solicitors' letter of 11 July 2003 constituted proper notice to Mr Wilson of the meeting. I reject that argument. The letter merely proposed that a meeting take place. It did not purport to convene a meeting. It did not give notice of the time and place of the meeting. 280 On 16 July 2003, the applicants' solicitors responded to Mr Moore's solicitors' letter of 11 July 2003 and stated, inter alia: 'With respect to the correspondence of 11 July 2003, our clients' position is, in summary: 1. Mr Moore's actions in appointing Mr Graham Hagger as a director, removing Ms Gayle Lawton as a director and allotting persons associated with/allied to Mr Moore some 803 shares in the Company for no more than $803 consideration are unlawful and we have little doubt that these actions will be set aside on application to the Federal Court. We are instructed on behalf of Mr Wilson, in his capacity as a director of the Company and as Trustee of the Wilson Family Trust, and Ms Lawton in her capacity as a director of and shareholder in the Company, that their rights in this matter are fully reserved. 2. The purported Minutes of Meeting of the directors of the Company written out in Mr Moore's hand and bearing the date 12 June 2003 are a fabrication. The actions of Mr Moore on 10 and 12 June 2003 constitute a barely disguised and ill-timed attempt to defeat the will of the Company's shareholders. They certainly serve no legitimate or any corporate purpose. The overwhelming majority of shareholders wish to see Mr Moore stand down as an officeholder in the Company. An appropriately called EGM, under the supervision of the Court, will establish this. 3. In fact, as will be apparent from proxies which have been lodged to date with the Company in relation to the proposed EGM of the 18 July 2003, it is clear that well over 75% (and possibly as high as 80%) of the shareholders favour the removal of Mr Moore as director and secretary of the Company. We again call upon Mr Moore to immediately rectify the records of the Company and the ASIC Register, to stand down as director and secretary of the Company and to hand over, by return, the books and records of the Company to our clients.' 281 The letter clearly rejects Mr Moore's proposal contained in his solicitors' letter of 11 July 2003.

THE MEETINGS OF 30 JULY, 29 AUGUST, 30 OCTOBER AND 24 NOVEMBER 2003 282 On 14 July 2003, the applicants' solicitors wrote to the shareholders advising that the extraordinary general meeting would not proceed on 18 July 2003 as had been proposed and that, instead, the applicants would pursue legal action. 283 On the same day, the applicants' solicitors wrote to Mr Moore's solicitors confirming their instructions to withdraw the notice calling for an extraordinary general meeting. They indicated that their instructions were to allow Mr Moore 14 days in which to produce an offer from a third party 'capable of acceptance by Mr Wilson'. The price to be paid for Mr Wilson's 742 shares was $850,000. On payment of that sum, Mr Wilson would resign as a director. If no offer was forthcoming, proceedings would be issued in this Court. 284 The applicants were not entitled to call an extraordinary general meeting. No extraordinary general meeting could be called without a resolution of the directors having first been made. No resolution was ever passed to that effect. 285 Manna Hill Mining's records disclose that there was a 'meeting' of directors on 30 July 2003. Mr Moore was the only person in attendance and was appointed chairman. The minutes were written up by Mr Moore on 30 October 2003. Section 251A of the Act requires a company to keep minutes in which it records within one month proceedings and resolutions of directors' meetings: s 251A(1)(b). The company must ensure that the minutes are signed within a reasonable time by the chair of the meeting or the chair of the next meeting: s 251A(2). Any contravention of s 251A(1) or (2) is an offence of strict liability. 286 No notice of this meeting was given to either Mr Wilson or Ms Lawton. 287 There was no point to the meeting. No resolutions were put. The minutes record some of the events to 30 July 2003 connected with the litigation. 288 There was no point in Mr Moore meeting by himself to record those matters. The 'meeting' could only have been held for a different reason. 289 The applicants were directors of the company at the time. Mr Moore still recognised Mr Wilson as a director. Both applicants were entitled to notice of the meeting. 290 The minutes contain 23 handwritten pages. They state, inter alia: 'MINUTES OF MEETING OF DIRECTORS OF MANNA HILL MINING COMPANY PTY. LTD. Held at 1st floor, Opal Field House, 29-31 King William Street ADELAIDE S.A. on WEDNESDAY 30th JULY 2003 at 5.00pm PRESENT: DAVID MOORE ABSENT: WAYNE WILSON CHAIRMAN: DAVID MOORE took the chair for this meeting. BUSINESS:

1. ABSENT DIRECTOR - Wayne Wilson Mr Wayne Wilson is not here, Mr Wilson was given notice by letter of 11th July 2003 from Mr Peter Pedler (Duncan Basheer Hannon, our company lawyers) to Mr Nik [sic]Iles of Iles Selley Lawyers, representing Mr Wilson & Ms Lawton. All during the day I received no fax nor phone call from either Wilson and or Iles informing me of his non-attendance. No communication was received by Mr Pedler in relation to this meeting. I and the company have not given leave for Mr Wilson to not be here. The company has extremely serious issues facing it which I believe are damaging, and I believe actions by Mr Wilson are not in the best interests of the company. Mr Wilson has not appointed an alternative director - we have received no notice of such appointment.' 291 Mr Moore argued that Mr Wilson had received notice because Mr Moore's solicitors had written to Mr Wilson's solicitors on 11 July proposing that a meeting be held on 30 July 2003. It is true that Mr Moore's solicitors' letter proposed that a meeting of directors be convened for 30 July 2003. However, Mr Moore's proposals had been rejected in the applicants' solicitors' letter of 16 July 2003. It is a nonsense to suggest that the letter of 11 July 2003 was proper notice of a meeting of the board of directors. No notice of the time or place or the agenda was ever given to Mr Wilson. The meeting was invalid. Ms Lawton should also have been given reasonable notice of the meeting. The failure to give her notice also made the meeting invalid. 292 Moreover, no meeting could be held because of the provisions of Article 98 of the constitution of Manna Hill Mining. 293 On any understanding of the evidence and, indeed, on Mr Moore's own case, as at 30 July 2003 there were two directors, namely, Mr Moore and Mr Wilson. In those circumstances, there was no quorum present on 30 July 2003. 294 The minutes contain a recital of events from 24 March 2003 when Ms Lawton 'resigned' up to and including 30 July 2003. 295 The minutes record: '9. June 12th Meeting of Directors Mr Hagger had consented to be a director before his appointment on the 12 June 2003, and the shareholders named below had made application for shares properly and validly: EAST ADELAIDE COMPANY P/L 400 shares @ $1 HODGEMORE P/L 400 shares @ $1 DENE SPRATT 1 share @ $1 STEVE EWEN 1 share @ $1 GRAHAM HAGGER 1 share @ $1 At about 2.30pm I phoned Wayne Wilson on his mobile, he said he had my notes of Iles' meeting - I said I want to discuss these issues on a meeting. He phoned me back on his landline, the phone (a speaker phone) in my office is ph no 82119293 at about 2.35pm - present in the office was G. Hagger & D. Spratt - they heard the entire phone conversation of the directors meeting which went for about 3 minutes. I put all resolutions, Mr Wilson accepted & voted for Mr Hagger to become a director, Mr Wilson dissented on the share issue/allotment - Mr Hagger & I voted for it & I also said I was chairman & cast my casting vote also. When finished I raised Lawton's resignation & Mr Wilson started to argue that he believes her and that she says still a director. The conversation become acrimonious and we ended phone call. I also cast my casting vote as chairman with appointment of Hagger even though not necessary. At start of dirs meeting Mr Wilson kept mentioning wanted out wants $700,000 etc. Mr Hagger said could arrange etc & I said may be possible to find a suitable party, difficult at present, I thought figure too high. I directed meeting quickly back to key items for resolutions and key points I'd discussed with Iles, to ensure that the Company's best interests were being focused upon. 10. ASIC notified on 12 June 2003 of new director, Mr Hagger & share issue (Form 207). 11. On 10 July 2003, Mr Graham Hagger & Mr Dene Spratt read & signed & dated the directors minute of 12 June as "True and Correct Record".' 296 No resolutions were put. There was no apparent purpose to the meeting. Clearly, it was not a meeting of any kind at all. In my opinion, no meeting took place on 30 July 2003 at all. The minutes are a fabrication to make it appear that there was a meeting. When I deal with another meeting, purportedly held on 19 January 2004, I will identify the true purpose of this meeting. 297 Mr Moore failed to ensure that the company complied with s 251A(1) and (2) and cause the company to keep proper minutes of the meeting and sign those minutes. 298 The minutes assert that the next meeting of directors was to be on Friday, 29 August 2003 at 4.30 pm. 299 The company records show a meeting of directors was purportedly held on 29 August 2003. That meeting was also called, if it was held, without Mr Wilson or Ms Lawton being given any notice. Mr Moore asserted, in his evidence, that it was up to Mr Wilson to find out when the directors' meetings were to be held. It was not for the director calling the meeting to advise Mr Wilson when the meeting would take place. I reject that argument as patently absurd. 300 Again, the only director present was Mr Moore. The meeting, if it took place, lacked the quorum required by Article 98. 301 The minutes record: 'BUSINESS: 1. Absent director - Wayne Wilson. I have not given leave for Mr Wilson to not be here. Mr Wayne Wilson is not here, the company has received no enquiry about directors meetings times from Mr Wilson and or his lawyer, Mr Iles. Mr Wilson has not appointed an alternate director (under clause 108 of coy constitution) & we have received no notice of such an appointment. 2. Absent director? Ms Lawton claims still a director which I and the company deny & do not recognise such a claim. I have not given leave for Ms Lawton to not be here. Ms Lawton, for the record, is not here, the company has received no enquiry about directors [sic] meetings times from Ms Lawton and or her lawyer, Mr Iles. Ms Lawton has not appointed an alternate director (under clause 108 of coy constitution) & we have received no notice of such an appointment. 3. On 31 July 2003, Mr Iles writes letter to Mr Pedler and amongst other things says - "… Our instructions are to issue proceedings in the Federal Court …".' 302 The reference to Ms Lawton is curious. If she was not a director, as Mr Moore claims, why the further reference? One gets the impression that Mr Moore was attempting to cover all contingencies. 303 Again, the minutes of that meeting were written up on 30 October 2003. Again, Mr Moore failed to ensure that the company complied with s 251A(1) and (2). In my opinion, there was never any such meeting. 304 There was a collateral and improper purpose for the holding of the meeting. 305 The minutes record that the next meeting of directors was to be on 30 October 2003 at 4.30 pm. 306 Again, the records of the company show that a meeting was purportedly held on that day. Again, neither Mr Wilson nor Ms Lawton was given notice. 307 The minutes record: 'BUSINESS:

THE MEETING OF 19 JANUARY 2004 320 The minutes record that 'a meeting' occurred at 5.40 pm at 1st floor, Opal Field House, 29-31 King William Street. The minutes include the statement in the previous minutes that Mr Wilson was not present, has not appointed an alternate director and has not been given leave to not attend, and go on to say: 'I consider his office as director is vacant'. 321 The minutes then record the purported appointment of Mr Ewen as a director. 322 I set out paragraphs 1, 2 and 3 of the minutes: '1. BUSINESS: ABSENT DIRECTOR Mr Wayne Wilson is not here & given past non attendances of directors meetings, that he has never appointed an alternate director & that I have not for those meetings given leave for him to not attend, I consider his office as director is vacant. 2. APPOINTMENT OF DIRECTOR Mr Steve Ewen consented to be a director on Saturday 17th January by telephone with Mr Moore at about 4.00 pm. Mr Ewen had previously consented to be a director in writing on 22 December 2003 and this consent was & is still valid. It was resolved by David Moore as director and chairman, in the best interests of the Company, that since Mr Stephen Ewen (Stephen John Ewen) had consented to act as a director of the Company, that he be appointed. During Mr Moore's telephone conversation on Saturday 17 January 2003 from about 3.50 pm to 4.10 pm (some 15 minutes) he explained the problems facing the Company, how Company paralysed (no ore samples, lack of capital, attitude of Mr Wilson, Court matters etc) & how it may be possible to break the gridlock from this perilous position the Company finds itself. I explained how Mr Wilson had not attended any meetings since 12 June 2003. Also positive position of (MHG) Manna Hill Gold Pty Ltd, where Mr Stephen Duncan is chairman, Mr Frangakis a director and Mr Ewen & myself as directors aware of MHG potential to help develop & assist Manna Hill Mining to go forward in the best interests of the Company. David Moore has tabled his notes attached to minute. Mr Ewen has extensive mining experience & particularly native title issues (some 20 years in the S.A. Mines Dept. & thereafter about 2 years with Normandy Group). Mr Ewen assisted David Moore to get the albite mining leases granted, in particular assisting negotiations with the Aboriginal Elders. The appointment of Mr Ewen, makes a quorum as so needed. 3. It was resolved by the directors that Mr Wilson's office as director had become vacant according to the constitution of the Company, in particular section 108, and also under the Corporations Law. It was noted that the directors have not removed Mr Wilson as a director by resolution.' 323 No notice of this meeting was given to Mr Wilson or to Ms Lawton. It is to be noted that there was no quorum at the commencement of the meeting at 5.40 pm. The only person present was Mr Moore. The meeting is invalid for those two reasons. 324 The purported appointment of Mr Ewen was made in Mr Ewen's absence. The resolution appointing Mr Ewen is void and of no effect. 325 The meeting continued after Mr Ewen's purported appointment with Mr Ewen still absent. 326 Even if Mr Ewen was validly appointed, the meeting continued with less than the required number of directors. 327 The minutes claim that 'the directors resolved to allot and issue shares'. There was only one director present. 328 The minutes record that 2,000 ordinary shares were allotted to Stephen John Ewen, 2,000 ordinary shares to Mr Moore, and 56,000 ordinary shares to Manna Hill Gold Pty Ltd. In all cases, shares were allotted and issued at an issue price of $1 per share but paid only to 1 cent. 329 In my opinion, the shares were not validly allotted. The meeting was not regularly held as notice had not been given to Mr Wilson and Ms Lawton. There was not a quorum of directors present. Mr Ewen's purported appointment did not cure either of those defects. 330 In those circumstances, I do not have to consider whether the purported allotment and issue were in the best interests of the company. The purported allotment had the effect of giving complete control of the company to Manna Hill Gold Pty Ltd for an immediate cash injection of $600. Manna Hill Gold Pty Ltd did not have any cash or resources to develop Manna Hill Mining. The allotment was in respect of a company that, only a few months before, Mr Moore had offered $500,000 for Mr Wilson's shareholding. 331 In summary, therefore, the meeting was invalid; the resolution appointing Mr Ewen a director was void and of no effect; and the resolutions issuing and allotting shares to Stephen John Ewen, Mr Moore and Manna Hill Gold Pty Ltd were void and of no effect. 332 The minutes do not disclose when the next meeting of directors was to be held.

THE FIRST DIRECTORS' MEETING OF 20 january 2004 333 In fact, another two meetings of directors were held the next day at 1st floor, Opal Field House, 29-31 King William Street. 334 The minutes of the meeting of directors of Manna Hill Mining held on 20 January 2004 at 2.42 pm disclose that Mr Moore was present and Mr Ewen was present by telephone. It is permissible, under the constitution of the company, for a director to be present by telephone: Article 100(c). However, for the reasons already given, in my opinion, Mr Ewen's appointment was not valid. For that reason, only one director was actually present - Mr Moore. 335 On 20 January 2004, Mr Moore and Mr Ewen purportedly resolved to appoint Mr Spratt as a director of the company. The resolution appointing Mr Spratt, in my opinion, was void and of no effect. The only validly appointed director (as at 20 January 2004) present at the meeting on 20 January 2004 was Mr Moore. Mr Wilson and Ms Lawton, in my opinion, were also validly appointed directors but they had not been given notice. The failure to give notice invalidates the meeting. Moreover, however, because there was more than one director, any meeting of directors required at least two directors to be present: Article 107(b). The meeting was not a valid meeting of directors. The meeting was invalid. 336 The minutes record that following upon the purported appointment of Mr Spratt as a director: '2. The chairman was advised present in attendance were also shareholders with at least 95% of the votes (& directors of companies) that may be cast at an extraordinary general meeting of shareholders and that all present were all in agreement to call such a meeting on shorter notice pursuant to section 249H(2) at which the resolutions below are to be considered: A. "That Wayne Stephen Wilson be removed as director with immediate effect." B. "That Gayle Lawton be removed as director with immediate effect." It was resolved to convene an extraordinary general meeting of the members of the Company, to be convened immediately at the conclusion of this meeting, to consider given s249H(2) of the Corporations Act (2001) (Cth) and, Articles 62 and 63 of the Company's constitution at which the director of the Company, David Gerald Moore, shall propose the following special resolutions in accordance with Articles 2 and 89 of the Company's Constitution and section 9 of the Corporations Act 2001 (Cth): A. "That Wayne Stephen Wilson be removed as director with immediate effect." B. "That Gayle Lawton be removed as director with immediate effect." OTHER BUSINESS: There being no further business the meeting was declared closed.' 337 The shareholders with at least 95 per cent of the vote presumably included Manna Hill Gold Pty Ltd. No resolution was ever tendered to establish Mr Moore's authority to vote on behalf of Manna Hill Gold Pty Ltd. However, there was even a more fundamental difficulty with the first resolution in paragraph 2. This was a meeting of directors, not of shareholders. If it were also a meeting of shareholders, then all of the other shareholders needed to be given notice. No notice was given to Mr Wilson or Ms Lawton, either as directors or as shareholders. No notice was given to the other shareholders who held 105 of the issued shares. It was never established that notice had been given to East Adelaide Pty Ltd, which was purportedly a shareholder following upon the meeting of 12 June 2003. 338 The constitution of the company and the Act provides that at least 21 days notice must be given of a meeting of a company's members: s 249H(1). 339 Section 249H(2) permits a company to call a meeting on shorter notice if members, with at least 95 per cent of the votes cast at the meeting, agree beforehand. 340 It was Mr Moore's case that notice to the other shareholders could not have affected the result. Manna Hill Gold Pty Ltd had 56,000 shares, and Mr Ewen 2,001. Mr Moore held 2,212 shares and those shares comprised 97 per cent of the 61,863 valid shares. 341 In my opinion, s 249H(2) could not apply to shorten the time within which the company could hold its extraordinary general meeting unless notice was given to all of the shareholders prior to passing of the resolution authorising the shortening of the meeting. 342 It is curious that Mr Moore considered it necessary to hold an extraordinary general meeting for the purpose of the shareholders removing Ms Lawton as a director. On his case, she had resigned on 24 March 2003. 343 In my opinion, the minutes of the purported meeting of 20 January 2004 establish that, contrary to Mr Moore's evidence, Ms Lawton had not resigned on 24 March 2003. 344 The minutes indicate that the shareholders resolved to hold a meeting on shorter notice, being immediately after the conclusion of the meeting of directors. 345 The meeting of directors was invalid. No notice of the meeting had been given to the two other directors, Mr Wilson and Ms Lawton. As well, the quorum required by the company's constitution was not present. The resolutions purportedly passed at that meeting appointing Mr Spratt a director and convening an extraordinary general meeting were void and of no effect.

THE EXTRAORDINARY GENERAL MEETING OF 20 JANUARY 2004 346 An extraordinary general meeting was purportedly held at 2.50 pm on Tuesday, 20 January 2004, eight minutes after the directors' meeting had opened at 1st floor, Opal Field House, 29-31 King William Street. 347 For the reasons already given, the meeting was not validly convened. Nevertheless, I will address the circumstances surrounding the purported meeting. 348 The minutes claim that Mr Moore was present in two capacities. First, as a shareholder and, secondly, as a managing director of Manna Hill Gold Pty Ltd. Also said to be present were Mr Spratt and Mr Ewen. 349 The minutes of the directors' meeting claim that Mr Ewen was present at the directors' meeting but only by telephone. If the minutes of the extraordinary general meeting are accurate, then Mr Ewen must have travelled to this meeting after he had finished the telephone meeting which commenced eight minutes earlier. 350 The minutes claim that the persons present represented 97.3 per cent of the voting stock. Mr Moore was elected chairman. He noted there were no proxies. It is hardly surprising that there was an absence of proxies. No one else had been advised of the meeting. 351 The minutes record that the members purportedly resolved to remove both Mr Wilson and Ms Lawton as directors with immediate effect. Both resolutions were apparently carried unanimously. 352 No other shareholders, apart from Mr Moore, Mr Spratt and Mr Ewen, were advised of the meeting. 353 Mr Moore argued in these proceedings that s 249H(2) allowed for calling of a meeting without notice to the remaining shareholders if 95 per cent of shareholders agreed. 354 Section 249H(2) says nothing of the kind. It allows for the company to hold an extraordinary general meeting with less than 21 days notice if 95 per cent of shareholders agree. Section 249H does not entitle the company not to give notice to persons who are entitled to be present at the meeting. 355 The meeting was not validly convened. No valid resolution of the directors had been passed authorising the calling of an extraordinary general meeting. Nor were the parties present entitled to vote. Mr Spratt is not and was not a shareholder. Mr Ewen is not and was not a shareholder, and Manna Hill Gold Pty Ltd also is not and was not a shareholder. 356 No notice had been given to the shareholders. The resolutions purportedly passed removing Mr Wilson and Ms Lawton as directors are void and of no effect.

THE SECOND DIRECTORS' MEETING OF 20 JANUARY 2004 357 Manna Hill Mining's records disclose that a further meeting of directors was held at 4.20 pm on 20 January 2004. Present were said to be David Moore and Dene Spratt, and Mr Ewen, again by telephone. For some reason, after the extraordinary general meeting, Mr Ewen must have left the premises. Like the other two meetings, this meeting was held at 1st floor, Opal Field House, 29-31 King William Street, Adelaide. No notice was given to Mr Wilson and Ms Lawton. 358 The only business at the meeting was Mr Wilson's debt. The minutes record: '1. WILSON DEBT - $236,442.55? It was resolved that the amount of $236,442.55 described as Wilson debt (Wayne Wilson) with reference to previous directors minute dated 11/3/2002, is not a company debt, based upon recent professional advice given to the chairman. As such the company does not acknowledge the sum & is not responsible for payment.' 359 Of course, the purported resolution was to no effect. If there was an amount owing by the company to Mr Wilson or Mr Wilson's family trust, then no resolution of the company could alter that fact. If, on the other hand, there was no debt to Mr Wilson or Mr Wilson's family trust, then a resolution of the kind passed took the matter nowhere. 360 In any event, the meeting was invalid. The resolution was void and of no effect. 361 Manna Hill Gold Pty Ltd's records show that a meeting of directors of that company took place on 30 January 2004. The directors present were Mr Moore and Mr Ewen.

THE MEETING OF 31 JANUARY 2004 362 That meeting of Manna Hill Gold Pty Ltd's directors, if it occurred, anticipated the business of the next meeting of Manna Hill Mining which was held on 31 January 2004 when the directors present, Mr Moore and Mr Spratt, purported to carry the following resolution: 'BUSINESS: In the best interests of the company (MHM) it was resolved that the company transfers (and or assigns) the rights to mine on all mining leases to Manna Hill Gold (MHG) Pty Ltd for the consideration of $A1 - , and Manna Hill Gold Pty Ltd agrees to pay the price of $A20 - per tonne. At the 1st January each year, the price per tonne is to increase by 4%, representing inflationary pressures. It was resolved that this sole exclusive right to mine the Feldspar ore (albite & other) will be terminated if Manna Hill Gold does not extract any ore within the first 12 months from today, being 31st January 2004. The company has received $1 - from Manna Hill Gold Pty Ltd. It was resolved that Manna Hill Gold will make payment within 30 days of each 6 month period commencing 1st February 2004. It was resolved this exclusive transfer of right to conduct mining operations applies to all existing Feldspar mining leases and all future leases of the company. It was resolved that Manna Hill Gold Pty Ltd in conducting mining operations is subject to the provisions of the Mining Act 1971 and the terms and conditions of the lease (and or leases). This mining right conferred by a lease is represented by clause or section 39(a) "confers an exclusive right upon the holder of the lease to conduct mining operations subject to the provisions of this Act and the terms and conditions of the lease for the recovery of minerals from the land comprised in the lease;-" It was resolved that the company accept a penalty if the company in any way breaches and or terminate this agreement. The company will incur a penalty of $A2,000,000 - , and this penalty will be due and payable within 30 days from the notice filed on the company from Manna Hill Gold of such a breach. The breach must be material and standing. It is resolved that the company will keep leases in good order.' 363 It is impossible to see how the directors could resolve to pay a penalty of $2 million and, at the same time, claim that it was in the best interests of the company. 364 In any event, the resolution is void and of no effect. Notice was not given to two of the directors, Mr Wilson and Ms Lawton. Mr Spratt was not validly appointed as a director. Because only one director was present, there was no quorum for the holding of the meeting. I am prepared to make a declaration that the 'meeting' of directors on 31 January 2004 was invalid, and that any resolutions purportedly passed at that meeting are void and of no effect. 365 On 31 January 2004, Mr Moore submitted an account to Manna Hill Mining for consulting fees for the period 1 January 2004 to 31 January 2004 in the sum of $6,400. Payment was due within seven days. 366 On 6 February 2004, Mr Moore wrote to Mr Wilson, with a copy to Mr Iles, advising that Manna Hill Mining believed that the sum of $236,442.55 was not a company debt 'and as such does now not acknowledge it and nor is the company responsible to pay such an amount to Mr Wilson (and/or his trust and/or his family)'.

THE MEETING OF 6 FEBRUARY 2004 367 On the same day, the company records disclose that yet another board meeting took place at which Mr Moore, Mr Spratt and Mr Ewen were present. It was resolved that the company would indemnify all directors (Mr Moore, Mr Ewen and Mr Spratt) 'against all legal and other costs presently involving the Court case before Justice Lander No S3004 of 2003'. 368 It is not clear how this resolution was in the best interests of Manna Hill Mining but I do not need to decide that matter because no notice was given to either of the applicants and, as a result, the meeting was not validly convened. It follows that the resolution is void and of no effect.

THE MEETING OF 11 FEBRUARY 2004 369 The last meeting of the board of directors of Manna Hill Mining was said to have been held on 11 February 2004. It is said that Mr Moore was present and Mr Spratt was present by telephone. Mr Terry Frangakis was said to be present by invitation. 370 The minutes disclose: 'IT WAS RESOLVED that, in the opinion of the Directors, the Company is insolvent or is likely to become insolvent at some future time. IT WAS FURTHER RESOLVED that Administrators be appointed to the Company pursuant to s 436A of the Corporations Act. IT WAS FURTHER RESOLVED that the attached document entitled "Instrument of Appointment of Administrators" be executed.' 371 The document referred to was executed by Mr Moore and the common seal was affixed but not in conformity with the constitution of the company. John Ronald Hart and Martin David Lewis of Ferrier Hodgson, chartered accountants, were appointed administrators of the company. 372 Mr Spratt has no recollection of the meeting, although he does have a recollection of speaking to Mr Moore about the company's solvency or otherwise. 373 That meeting, like all of the other meetings after 12 June 2003, was invalidly convened and lacked a quorum. The meeting was, therefore invalid. The resolutions passed were void and of no effect. 374 In their final submissions, the applicants sought other declarations and orders: 'A Declarations that Mr David Moore: (i) Has engaged in conduct which amounts to the falsification of the books and records relating to the affairs of the company contrary to section 1307(1) of the Corporations Act, 2001; (ii) Has in a document required to be lodged with the ASIC made a statement which to his knowledge was false and misleading in a material particular and as such has engaged in conduct contrary to section 1308(2) of the Corporations Act, 2001. (iii) Has failed to take reasonable steps to ensure that in a document required to be lodged with ASIC that statement was not false or misleading and as such has engaged in conduct contrary to section 1308(4) of the Corporations Act, 2001. (iv) Has engaged in conduct forbidden by the Corporations Act, 2001 and as such has engaged in conduct in contravention of section 1211(1) of the said Act; B A Declaration pursuant to section 1317E that Mr David Moore has contravened section 180 of the Corporations Act, 2001. C The Calling of an Extraordinary General Meeting by the Court (i) Pursuant to section 249G of the Act, this Court has the power to order that a meeting of the company's members be called where it is impracticable to call the meeting in any other way. In addition pursuant to section 249G(2) of the Act, such an order may be made on the application by any director or any member who would be entitled to vote at the meeting. (ii) It is submitted that the Applicants are directors within the meaning of section 249G(2)(a), and both Applicants are members of the company within the meaning of section 249G(2)(b). (iii) In the light of the purported resolutions passed at the various invalid meetings held by Mr Moore, it would be impracticable for the meeting to be called in any other way. (iv) Further, pursuant to section 1319 of the Act, this Court has power to give directions with respect to the issues of the convening, holding, or conduct of the meeting including ancillary or consequential directions in relation thereto as it thinks fit. (v) In circumstances it is submitted by the applicant that this Court should give the following directions: 1. date for the meeting to be held, namely within 21 days of the date of the order made; 2. an order that all members be notified of the meting in proper form together with notice of the business to be conducted thereat; 3. an order that the business to be conducted at the EGM include the proposed removal of Mr Moore as a director of the company; 4. and otherwise directions that the meeting be held in accordance with the Constitution of the company. 5. That Mr Spratt, Mr Ewen, and Mr Hagger are neither directors nor members of the company; and 6. That neither Hodgemore Pty Ltd nor Manna Hill Gold Pty Ltd are members of the company for the purposes of such a meeting. D Orders Sought in Relation to the Correction of the ASIC Register (i) Pursuant to section 1322(4)(b) this Court has the power to rectify any register kept by ASIC under the Act. (ii) Further, it is submitted that pursuant to section 1322(6)(c), no substantial injustice will be caused or is likely to be caused to any person if the ASIC Registers at issue are rectified. In particular it is submitted that the following rectification orders ought to be made: (iii) that ASIC document 019158507 ("NJI12") be removed from the Register. That document purports to be a document lodged by Mr David Moore at ASIC on 12 June 2003 whereby he purported to notify ASIC of a change to the officeholders of the company. It is submitted that the purported document was not lodged upon the making of any valid resolution. In particular it is submitted that the purported resolution passed at the meeting of directors of 12 June 2003 whereby Mr Hagger purportedly appointed was not a valid resolution. For these reasons and for the reasons referred to above, it is submitted that Mr Moore had no or no proper authority to lodge the said document; (iv) that ASIC document 019333364 ("NJI11") be removed from the Register. By that document Mr David Moore purported to notify ASIC of a change to officeholders, namely the cessation to hold office by Ms Gayle Lawton. As referred to above, it is submitted that there was no or valid authority in Mr Moore to lodge the said document. Further, as submitted above, at no stage did Ms Lawton resign as a director in writing as required by the Constitution or indeed at all. It is submitted that there will be no injustice caused to any person if such a rectification order were made. (v) that ASIC document 019212322 ("NJI13") be removed from the Register. It is submitted that Mr David Moore had no authority to lodge the said document. It is submitted further for the reasons mentioned above that the purported meeting of the directors at which the same share issue was made was an invalid director's meeting and any business transacted thereat, or any resolution passed thereat, is void and or of no effect. As such, it is submitted that any share issue is not a valid share issue and that as such the said document should be removed from the Register.' 375 The orders sought in paragraph A are directed only to Mr Moore's conduct. Mr Moore was not put on notice at any time prior to the final submissions that such declarations would be sought. 376 It would seem to me that he was entitled to have notice of the declarations sought prior to his giving evidence and, certainly, much earlier than in the applicants' final addresses. 377 The same comments apply, in my opinion, to paragraph B of the orders sought. I am not prepared to make those orders. 378 I am not prepared to make orders calling an extraordinary general meeting. The effect of the declarations and orders which will be made will mean that all three directors will be entitled to meet together and, if a majority is of the opinion that it is in the best interests of the company that the resolution proposed in paragraph C(v)3 be put to an extraordinary general meeting, then the majority can so resolve. As I have already indicated, any one director can convene a meeting of directors provided the director complies with the director's obligations in giving notice to the other directors of the time and place of meeting, and, I would have thought in this case, of the business to be considered. 379 Lastly, the applicants sought an order pursuant to s 249G(1) that there be a meeting of the members of Manna Hill Mining and that a chartered accountant practising in Adelaide be appointed chairman and that the meeting consider the resolution: 'That Mr David Gerald Moore be removed as Director and Secretary of Manna Hill Mining company Pty Ltd with immediate effect.' 380 For the reasons already given, in my opinion, it would be appropriate that the directors, if that is their view, convene a meeting to consider that resolution. 381 There is an urgent need for the directors to meet. The directors must consider whether the company is solvent or otherwise. They must consider whether or not the resolution appointing the administrator which, for the reasons given, I have found is void and of no effect, should be reconsidered. 382 That will depend upon whether the company is able to pay its debts as and when they fall due, and that will, of course, depend upon the level of support offered to the company by the directors and members. 383 I am prepared to make the orders contemplated in paragraphs D(iii), (iv) and (v). Those orders are consistent with the orders and declarations which would follow from my reasons and would give effect to those declarations and orders. 384 I direct the applicants to bring in short minutes of orders to reflect these reasons. I certify that the preceding three hundred and eighty-four (384) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.

Associate: Dated: 14 July 2004 Counsel for the Applicants: M Abbott QC with D Agresta

Counsel for the Second Respondent: D G Moore in person

Counsel for the Third Respondent: G D Hagger in person

Counsel for the Fourth Respondent: G D Hagger in person

Counsel for the Fifth Respondent: D R Spratt in person

Date of Hearing: 17, 18, 19, 20 February 2004; 5, 6, 7, 8, 19, 20, 21 April 2004